CIMA F1 - Financial Reporting

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Total 248 questions

Question # 31

Which THREE of the following are conditions that must be met to allow an asset to be categorised as held for sale?

Management is committed to a plan to sell

The asset is being actively marketed at a reasonable price

The asset is available for immediate sale

A buyer has already expressed interest

The sale of the asset is likely to generate a significant profit

Question # 32

HI commenced business on 1 April 20X3. Sales in April 20X3 were $30,000. This is forecast to increase by 2% per month.

Credit sales accounted for 50% of sales. Credit sales customers are allowed one month to pay; 75% of April credit customers paid on time. A further 20% are expected to pay after more than one month, but before two months. The remaining 5% are not expected to pay. All these percentages are expected to continue in the near future.

Calculate the total amount of cash HI should forecast to be received in June 20X3.

Give your answer to the nearest whole $.

Question # 33

In 20X4, DEF closed its business having made a trading loss of $160,000. In DEF's country of residence, trading losses may be carried back three years on a LIFO basis.

The profits for the last four years of trading were:

What are the taxable profits or losses for years 20X1 and 20X2?

20X1 $10,000, 20X2 $113,000

20X1 $143,000, 20X2 $ nil

20X1 $150,000, 20X2 $133,000

20X1 $150,000, 20X2 $nil

Question # 34

An entity has a number of subsidiary and associate investments.

Which of the following must be disclosed in the entity's separate financial statements if it is exempt from presenting consolidated financial statements?

The bases on which significant investments in subsidiaries and associates have been accounted for in those separate financial statements.

A copy of the summarised financial statements of each of its subsidiaries.

A list of all its significant investments in subsidiaries and associates which includes the date of acquisition and the price paid.

A list of its top ten shareholdings including number of shares held and their market value.

Question # 35

Which THREE of the following must an auditor consider in order to form an opinion on the truth and fairness of an entity's financial statements?

Whether the entity has kept proper accounting records.

Whether the entity has complied with the relevant legislator requirements in respect of the necessary disclosures.

Whether all the information and explanations necessary for the purposes of the audit have been received.

Whether every transaction that underpins the financial statements has been correctly recorded.

Whether the entity has been exposed to any fraud.

Question # 36

Which THREE of the following are included in the International Accounting Standards Board's "The Conceptual Framework for Financial Reporting"?

The objective of financial statements

Specification of the financial statements that must be presented

Qualitative characteristics of financial statements

Definition of the headings to use in financial statements

The elements of financial statements

The formats of financial statements

Question # 37

An entity opens a new factory and receives a government grant of $25,000 towards the cost of new plant and equipment. This new plant and equipment originally costs $100,000.

The entity uses the net cost method allowed by IAS 20 Accounting for Government Grants and Disclosure of Government Assistance to record government grants of this nature. All plant and equipment is depreciated at 20% a year on a straight line basis.

Calculate the amount of depreciation to be included for this plant and equipment in the statement of profit of loss for the factory's first year of operation.

Give your answer to the nearest whole $.