CIMA CIMAPRA17-BA3-1 Exam Practice Test Instant Access

Question 1

Which ONE of the following statement is true?

AFraud arises due to deliberate misrepresentation

BInternal auditors are appointed by the external auditors

CAudit trails are meant to trace fraud

DExternal auditors are responsible to detect fraud

Answer : A

Question 2

Refer to the exhibit.

A company has the following equity balances at the beginning of the year

During the year the company made a bonus issue of 1 for 4 shares

What are the equity balances after this issue?

Answer : B

Question 3

Which of the following are kinds of performance ratios?

AGross profit margin

BReturn on capital ratios

CQuick ratio

DWorking capital cycle

Answer : A, B

Question 4

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 5

Which of the following is not a correct definition of the accounting equation?

AAssets = Capital + Liabilities

BCapital = Assets + Liabilities

CLiabilities = Assets - Capital

DCapital = Assets - Liabilities

Answer : B

Question 6

Which of the following explains the concept of capital maintenance?

Athe cost of maintaining an entity's non-current assets in good working condition

Bthe cost of replacing an entity's non-current assets

Cthe raising of new capital by the issue of shares

Dretaining sufficient profits to ensure that closing net assets are at least equal in value to net assets at the beginning of the period

Answer : D

Question 7

Entity HJ is a small business. In the period. Entity Hj earned revenue of 24,300, had opening inventories of 1,500 and closing inventories of 8,000. Purchases came to 13,200.

What was Entity Hj's gross profit or loss for this period?

A17,600 profit

B6,700 loss

C17,600 loss

D6,700 profit

E31,000 profit

Answer : A

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