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CIMA BA3 - Fundamentals of financial accounting

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Total 393 questions

A business may have thousands of transactions in any one accounting year. To trace the details of one of those transactions could be very difficult

Which of the following would be a way to make this easier?

A.

Efficient filing

B.

Effective coding

C.

Audit trail

D.

Complete record keeping

In internal auditing, detection of fraud is an important objective. The auditors will best be able to detect frauds if they are knowledgeable in the most common methods of fraud.

Which THREE of the following are common methods of fraud?

A.

Ghost employees

B.

Taking stationary home

C.

Teeming and lading

D.

Using a company car for personal use

E.

Collusion with external parties

F.

Using company phones for private calls

Which one of the following is an error of principle?

A.

A gas bill credited to the gas account and debited to the bank account

B.

The purchase of a non-current asset credited to the asset at cost account and debited to the payable's account

C.

The purchase of a non-current asset debited to the purchases account and credited to the payable's account

D.

The payment of wages debited and credited to the correct accounts, but using the wrong amount

The purpose of charging the income statement with depreciation on non-current assets is:

A.

To set aside monies to replace the assets when required

B.

To reduce the figure shown in the statement of financial position to the true value of non-current assets

C.

To ensure that the profit is not understated

D.

To allocate the cost of the assets to the accounting periods in which they are used to earn profits

Which of the following would be a good method of segregating the duties of staff?

A.

Employing separate persons to maintain the sales and purchase ledgers

B.

Employing a wages specialist to calculate and deal with the payment of wages

C.

Employing an experienced cashier to deal with all bank transactions

D.

Employing a separate person to maintain and reconcile control accounts

An asset may best be defined as:

A.

An obligation to transfer economic benefits as a result of past transactions or events

B.

A resource which may be used to derive income in the future

C.

A person or entity to whom money is owed by the business

D.

The amount of money invested in the business by the shareholders

What will be the effect on the draft financial statements if the closing inventory figure is increased?

A.

An increase in cost of sales and an increase in the inventory figure in the balance sheet

B.

A decrease in cost of sales, a decrease in gross profit and an increase in the inventory figure in the balance sheet

C.

A decrease in cost of sales, an increase in gross profit and an increase in closing inventory in the balance sheet

D.

An increase in cost of sales, a decrease in gross profit and an increase in closing inventory in the balance sheet

A company purchases a piece of machinery for $180,000. It is estimated that the machinery will produce 450,000 units over its useful life of 10 years. The residual value at the end of 10 years is nil. After eight years, the machine has produced 340,000 units and is sold for $30,000.

The profit/loss arising on disposal of the asset is

A.

$6,000 loss

B.

$14,000 loss

C.

$14,000 profit

D.

$6,000 profit

On 1 April 2006, a company was owed $13,560 by a customer. During the month of April the customer purchased goods for $6,800 and returned goods valued at $1,200. A cheque for $8,480 was received from the customer but was subsequently dishonored by the bank. The balance on the customer's account at the end of the month is:

A.

$20,360

B.

$19,160

C.

$10,680

D.

$11,880

Select the THREE INCORRECT statements from the following list of statements about memorandum accounts:

A.

A memorandum ledger is an account that is not part of the bookkeeping system as a whole

B.

All transactions in a memorandum account have to be balanced with a corresponding entry in the nominal ledger

C.

A memorandum account is part of the nominal ledger

D.

A memorandum account is a daybook