CIMA CIMAPRA17-BA3-1 Exam Practice Test Instant Access

Question 1

In the year ended 31 December 20X1, XYZ receives an email confirming that a major customer has gone into liquidation and will be unable to pay its suppliers.

Which of the following is the impact of adjusting for this event?

AProfits increase and allowance increases.

BReceivables decrease and allowance increases

CReceivables unchanged and profits decrease

DReceivables decrease and profits decrease

Answer : D

Question 2

The Finance Director of EFG company has made the following statements regarding the recording of expenditure relating to the entity's property, plant and equipment (PPE) in the nominal ledger.

Which THREE of the following statements are true?

AThe annual depreciation charge reduces EFG's profit for the year.

BThe cost of insurance for the factory is debited to the PPE asset account.

CThe loss on the disposal of PPE reduces EFG's profit for the year

DThe cost of repainting the office is credited to the repairs expense account

EThe loss on the disposal of PPE is recorded in a liability account

FThe annual depreciation charge reduces the carrying value of PPE

Answer : A, C, F

Question 3

GG has the following statement of profit or loss extract for the year ended 31 December 20X3

What is the interest cover for GG for the year ended 31 December 20X3?

A2.8 times

B4.0 times.

C4.5 times

D3.5 times

Answer : B

Question 4

The following are extracts from CD's financial statements for the year to 31 December 20X2:

What is the return on capital employed percentage (ROCE) for CD for the year ended 31 December 20X2?

A28 0%

B30 5%

C33.9%

D25.2%

Answer : C

Question 5

UVW is preparing its manufacturing account for the year ended 30 June 20X7 The following information is available:

What is UVWs prime cost for year ended 30 June 20X7?

A$352,000

B$344,000

C$389,000

D$397,000

Answer : A

Question 6

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?

APurchases are overstated

BClosing inventory is understated.

CCost of sales are understated

DGross profit is overstated

Answer : B

Question 7

Before lending to an entity, which TWO of the following pieces of information would a potential lender want to consider?

APast tax payments made by the entity

BSocial policies of the entity

CDividend policy of the entity

DAbility of the entity to meet interest payments

ELong term business plans of the entity

Answer : D, E

CIMAPRA17-BA3-1 BA3 - Fundamentals of Financial Accounting Exam Practice Test