CIMA F1 Exam Questions Free Practice Test

Viewing page 1 out of 8 pages

Viewing questions 1-10 out of questions

Questions # 1:

In accordance with IAS 1 Presentation of Financial Statements, which of the following will be shown in the statement of changes in equity?

Options:

Proceeds from share issue, dividends received and profit for the period.

Proceeds from share issue, other income and profit for the period.

Proceeds from share issue, dividends paid and revaluation surplus.

Other income, dividends paid and revaluation surplus.

Questions # 2:

The following information relates to ABC.

Question # 2

Which of the following would be a reason for the movement in the trade receivable days?

Options:

A new credit controller was appointed during the year ended 30 June 20X3 who has been chasing customers for payment.

A system of early settlement discount was introduced during the year ended 30 June 20X3 which was taken up by quite a few customers.

One customer who regularly took 120 days to pay their invoices stopped buying goods from ABC during the year ended 30 June 20X3.

It was decided during the year ended 30 June 20X3 to stop undertaking credit checks on new customers.

Questions # 3:

Which THREE of the following statements about government grants are INCORRECT?

Options:

A grant is recognised as revenue

Grants must not be deducted from the related expenses in financial statements

Capital grants relate to cash inflow and outflow

A compensatory grant should be recognised in statements when it is received, not when the expenses it applies to occurred

A grant is recognised only when there is reasonable assurance that the entity will comply with any conditions attached to the grant

Questions # 4:

Country J is a newly formed independent country and it's accounting professionals are considering adopting international financial reporting standards (IFRS).

Which of the following is a disadvantage to Country J of adopting IFRS as their local generally accepted accounting practice (GAAP)?

Options:

IFRS are quick to implement which reduces the costs involved.

Specific local variations that might be needed will not be accommodated.

Facilitates comparability with other countries who use IFRS as their local GAAP.

Easier to adopt standards which have already been developed.

Questions # 5:

On 1 July 20X8 JKL has 100 units of inventory, which cost $8 each. The following transactions arose during the month of July:

Question # 5

JKL values inventory using the first in. first out method.

What is the value of JKL's inventory at 31 July 20X8?

Give your answer to the nearest $.

Question # 5

Questions # 6:

In accordance with IAS 16 Property, Plant and Equipment, in which of the following situations would subsequent expenditure on a non-current asset be capitalised?

Options:

An entity purchased an aircraft five years ago, when its engines were separately identified in the accounting records. The engines now need to be replaced at a cost of $2 million each. When the engines are replaced the aircraft is expected to be airworthy for a further 5 years.

An entity's head office building suffered a major fire, the upper floors and roof were completely destroyed. The entity proposes to restore the building at a cost of $1 million and move back in to the building to use it as a head office again.

An entity's delivery vehicle was in a car park when the car park was flooded. The engine and interior of the vehicle needed extensive repair and renovation costing $25,000.

A manufacturing entity closes its factory for two weeks each summer for routine maintenance and repairs. The current year's cost of maintenance and repairs was $62,000.

Questions # 7:

In an entity's statement of profit or loss and other comprehensive income, which of the following would be presented as other comprehensive income?

Options:

An increase in the depreciation charge resulting from the revaluation of a non-current asset.

An impairment loss relating to a non-current asset that had not previously been revalued.

The increase in the value of a non-current asset following a revaluation.

The profit on the disposal of a non-current asset

Questions # 8:

XYZ operates in Country A where tax rules state that entertaining costs and donations to political parties are disallowable for tax purposes.

XYZ calculated both its accounting and taxable profits for the year ended 31 December 20X2 after deducting $10,000 of entertaining costs.

It is considering what impact the ruling that "entertaining costs are disallowable for tax purposes" will have on its two profit figures.

Which of the following correctly states the impact of the ruling on the profits already calculated?

Options:

Accounting profit will not be affected but taxable profit will increase by $10,000.

Both accounting and taxable profits will increase by $10,000.

Accounting profit will decrease by $10,000 and taxable profit will increase by $10,000.

Both accounting and taxable profits will decrease by $10,000.

Questions # 9:

The following information is extracted from QQ's statement of financial position at 31 March:

Question # 9

Included in other payables is interest payable of $80,000 at 31 March 20X2 and $73,000 at 31 March 20X1.

The following information if included within QQ's statement of profit or loss for the year ended 31 March 20X2.

Included within finance cost is $124,000 which relates to interest paid on a finance lease. QQ includes finance lease interest within financing activities on its statement of cash flows.

QQ is preparing its statement of cash flows for the year ended 31 March 20X2.

What cash outflow figure should be included for corporate income tax paid within the cash flow from operating activities section of the statement?

Give your answer to the nearest $000.

Questions # 10:

Refer to the exhibit.

Question # 10

An entity sells 2,000 bags of product X each year. It has been estimated that the cost of holding one bag of product X is £4.

The cost of placing an order is £250.

where:

Co = cost of placing an order

Ch = cost of holding one unit in inventory for one year

D = annual demand

Calculate the Economic Order Quantity (EOQ) for bags of product X.

Give your answer to the nearest whole number of bags.

Viewing page 1 out of 8 pages

Viewing questions 1-10 out of questions

Pass the CIMA CIMA Operational F1 Questions and answers with CertsForce