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CIMA BA3 - Fundamentals of financial accounting

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Total 393 questions

In a manufacturing company, prime costs is the total of

A.

Purchases of raw materials + opening inventories of raw materials - closing inventories of raw materials + direct wages + direct expenses + production overheads

B.

Purchases of raw materials + direct wages + direct expenses + production overheads

C.

Purchases of raw materials - opening inventories of raw materials + closing inventories of raw materials + direct wages + direct expenses

D.

Purchases of raw materials + opening inventories of raw materials - closing inventories of raw materials + direct wages + direct expenses

An invoice for electricity has been debited to the supplier's account and credited to the electricity account. This would result in:

A.

An overstatement of profit and an overstatement of current liabilities

B.

An overstatement of profit and an understatement of current liabilities

C.

An understatement of profit and an overstatement of current liabilities

D.

An understatement of profit and an understatement of current liabilities

Refer to the exhibit.

The following extracts from the statement of financial position and income statement for Company S are available:

Included in operating profit was depreciation of $120,000 and a loss on disposal of non-current assets of $48,000.

The cash generated from operations for year 2 would be:

A.

$1,092,000

B.

$972,000

C.

$1,068,000

D.

$876,000

IAS 2 Inventories does not permit the use of the last in. first out (LIFO) method of valuing inventory In a time of rising prices, which of the following is a reason for this?

A.

Purchases are overstated

B.

Closing inventory is understated.

C.

Cost of sales are understated

D.

Gross profit is overstated

Company H receives a 10% discount on its order from supplier GD. Which ONE of the following does the discounted amount count as for Company H?

A.

Revenue

B.

Profit

C.

Income

D.

Capital

Which of the following statements about revenue is CORRECT?

A.

Revenue is claimed when received, not earned

B.

Revenue cannot be claimed until the end of the period

C.

Revenue is claimed when earned, not received

D.

Revenue is never earned

The Subscriptions Receivable account of a club commenced the year with subscriptions in arrears of £250 and subscriptions in advance of £375.

During the year £62,250 was received in subscriptions, including £200 of the arrears, and £600 for next year's subscriptions. Subscriptions still owing at the end of the year amounted to £180.

The amount to be taken to the Income and Expenditure for the year is

Refer to the exhibit.

A company has the following current assets and liabilities at its most recent year end:

When measured against standard acceptable levels for liquidity, the company can be said to have:

A.

An ideal acid test ratio, but a high current ratio

B.

An ideal current ratio, but a low acid test ratio

C.

A high current ratio and a low acid test ratio

D.

Ideal current and acid test ratios

An organization restores its petty cash balance to £350 at the end of each month.

During October, the total expenditure column in the petty cash book was calculated as being £310, and hence the impress was restored by this amount. The analysis columns, which had been posted to the nominal ledger, totaled only £300.

This error would result in:

A.

The trial balance being £10 higher on the debit side

B.

The trial balance being £10 higher on the credit side

C.

No imbalance in the trial balance

D.

The petty cash balance being £10 lower than it should be

Which TWO of the following are principles of the Integrated Reporting Framework?

A.

Focus solely on financial KPIs

B.

Forward-looking

C.

For entity's internal use

D.

Rules-based

E.

Reports on governance