Guide (New 2024) Actual CIMA F1 Exam Questions
F1 Exam Dumps Pass with Updated 2024 Certified Exam Questions
NEW QUESTION # 61
A non-executive director of a company is somebody who:
- A. can be appointed Chief Executive Officer of the company.
- B. need not have experience of the industry in which the company operates
- C. is involved in making operational decisions m the company
- D. does not earn remuneration from the company
Answer: D
NEW QUESTION # 62
MN recently took out a 5 year term loan to buy raw materials to take advantage of a supplier's bulk discount that had been offered to them.
What approach to financing working capital has MN undertaken?
- A. Aggressive
- B. Moderate
- C. Conservative
- D. Permanent
Answer: C
NEW QUESTION # 63
Identify whether the scenarios below are examples of tax evasion or tax avoidance, by placing either tax evasion of tax avoidance against each one.
Answer:
Explanation:
NEW QUESTION # 64
The United Kingdom (UK) uses a principle based approach to corporate governance which means:
Answer:
Explanation:
NEW QUESTION # 65 
Answer:
Explanation:
NEW QUESTION # 66
Identify whether the scenarios below are examples of tax evasion or tax avoidance, by placing either tax evasion of tax avoidance against each one.
Answer:
Explanation:
NEW QUESTION # 67
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 $.
Answer:
Explanation:
$15000
NEW QUESTION # 68
Corporate governance is the means by which an entity is operated and
Answer:
Explanation:
NEW QUESTION # 69
On 1 July 20X8 JKL has 100 units of inventory, which cost $8 each. The following transactions arose during the month of July:
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 $.
Answer:
Explanation:
Pending
NEW QUESTION # 70
On 31 March 20X1 OP decided to sell a property. On that date this property was correctly classified as held for sale in accordance with IFRS 5 Non-Current Assets Held For Sale And Discontinued Operations.
In the draft financial statements of OP for the year ended 31 October 20X1 this property has been included at its fair value, which was $520,000 lower than its carrying value. This has resulted in a charge to profit or loss, the result of which is that the draft financial statements show a loss of $450,000 for the year to 31 October
20X1. When the management board of OP reviewed the draft financial statements it was unhappy about the loss and decided that the property should be reclassified as a non-current asset and reinstated to its original value, despite the fact that its plans for the property had not changed.
In accordance with the ethical principle of professional competence and due care, which THREE of the following statements explain how this property should be accounted for in the financial statements of OP for the year ended 31 October 20X1?
- A. The impairment of $520,000 should be shown as an expense in the statement of profit or loss.
- B. The property impairment should not be recorded until the sale has completed.
- C. The property should be depreciated until 31 October 20X1.
- D. The property should be treated as a non-current asset held for sale from 31 March 20X1.
- E. The property should be treated as a non-current asset held for sale from 1 November 20X1.
- F. The property should not be depreciated after 31 March 20X1.
Answer: A,D,F
NEW QUESTION # 71
XY is an entity incorporated in Country B but operates in several countries. Monthly management meetings to decide on strategic matters take place in Country A, where the majority of its production happens. XY sells most of its goods to Country C.
In accordance with the Organization for Economic Co-operation and Development (OECD) rules on corporate residence which of the following statements is true?
- A. XY is resident in Country C because this is the country where XY generates most of its revenue.
- B. XY is resident in Country A because this is the country of its effective management.
- C. XY is resident in Country A because this is the country where XY undertakes most of its production.
- D. XY is resident in Country B because this is the country of its incorporation.
Answer: B
NEW QUESTION # 72
Which THREE of the following are conditions that must be met to allow an asset to be categorised as held for sale?
- A. The sale of the asset is likely to generate a significant profit
- B. The asset is available for immediate sale
- C. The asset is being actively marketed at a reasonable price
- D. Management is committed to a plan to sell
- E. A buyer has already expressed interest
Answer: B,C,D
NEW QUESTION # 73
In Country X, trading losses in any year can be carried back and set off against trading profits in the previous year, with any unrelieved losses carried forward to set against the first available trade profits in future years.
GH had the following taxable profits and losses in years 20X1 to 20X4:
What are the taxable profits for 20X4, assuming the most efficient use of the loss is made?
- A. $100,000
- B. $70,000
- C. $95,000
- D. $65,000
Answer: C
NEW QUESTION # 74
Which of the following is NOT a reason why financial reporting information needs to be regulated?
- A. So that the managers of a company can make decisions about its operations.
- B. So that shareholders of a quoted company can make informed decisions about their investments
- C. So that potential investors can compare the financial information of different companies.
- D. So that a bank can assess the amount of finance it is prepared to lend to a company.
Answer: A
NEW QUESTION # 75
Which of the following would NOT be a source of taxation rules for a country?
- A. International accounting standards
- B. Directives from international bodies
- C. Precedents based on previous legislation
- D. Double tax treaties
Answer: A
NEW QUESTION # 76
Which of the following is the responsibility of the International Financial Reporting Standards Interpretations Committee?
- A. To advise the International Accounting Standards Board on the agenda and priorities for future work.
- B. The development and publication of new international financial reporting standards.
- C. To provide authoritative guidance on the application of international financial reporting standards where conflicting practice has developed.
- D. To provide a forum for interested parties to participate in the formulation of international financial reporting standards.
Answer: C
NEW QUESTION # 77
Which THREE of the following are costs that a business might incur as a result of holding insufficient inventory of raw materials?
- A. Additional storage costs
- B. Increased risk of obsolescence
- C. Lost production
- D. Purchasing inventory at a higher price
- E. Loss of sales
Answer: C,D,E
NEW QUESTION # 78
An entity had a current tax liability of $187,000 in its statement of financial position as at 30 September 20X5.
It was subsequently negotiated and eventually agreed with the tax authorities that the entity would pay $192,000 and this was paid on 6 January 20X6.
The entity's management estimate that the tax due on profits for the year to 30 September 20X6 is $231,000.
Calculate the entity's corporate income tax expense included in its statement of profit or loss for the year ended 30 September 20X6.
Give your answer to the nearest whole $000.
Answer:
Explanation:
$236000
NEW QUESTION # 79
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 $.
Answer:
Explanation:
$30081
NEW QUESTION # 80
The following data has been extracted from GH's accounting records:
What is GH's average inventory days for the year ended 31 March 20X3?
- A. 28 days
- B. 25 days
- C. 39 days
- D. 43 days
Answer: C
NEW QUESTION # 81
To apply the fundamental principles of the Code of Ethics, existing and potential threats to the entity first need to be identified and evaluated.
Which THREE of the following are identified in the Code as threats?
- A. Self-review threats
- B. Familiarity threats
- C. Integrity threats
- D. Self-interest threats
- E. Confidentiality threat
- F. Objectivity threats
Answer: A,B,D
NEW QUESTION # 82
Which of the following would be classified as a parent and subsidiary relationship in accordance with IFRS 10 Consolidated Financial Statements?
- A. Entity D owns 25% of another entity's equity shares and associated voting rights and 100% of its preference shares.
- B. Entity B owns 20% of another entity's equity shares and has an agreement with other equity shareholders of that entity that gives it power over a further 20% of the equity voting rights.
- C. Entity C owns 45% of another entity's equity shares and can exercise significant influence over that entity's financial and operating policy decisions.
- D. Entity A owns 30% of another entity's equity shares and has the power to appoint or remove the majority of the members of the board of directors and control of the entity is through that board.
Answer: D
NEW QUESTION # 83
The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:
1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September
20X0.
2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.
3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.
4. PQ uses the fair value method for non-controlling interest at acquisition.
What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 31 December 20X0?
- A. $1,667
- B. $3,333
- C. $2,000
- D. $4,000
Answer: A
NEW QUESTION # 84
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