CIMA CIMAPRA17-BA3-1 Exam Practice Test Instant Access

Question 1

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 2

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

Question 3

HJK has maintained minimal accounting records during the year but has the following information available:

HJK charges a mark-up on all goods sold of 25%. What is HJK's gross profit for the year?

A$77,500

B$62,000

C$57,500

D$46,000

Answer : B

Question 4

The total of the debit column of a trial balance is $800 bigger than the credit column.

Which of the following is the entry recorded in the suspense account?

A$800 Debit

B$1,600 Debit

C$1,600 Credit

D$800 Credit

Answer : D

Question 5

LMN's totals for its sales day book and its cash receipts book for the month ended 31 January 20X6 are as follows

What is the total value for sales that LMN will post to the sales account in the nominal ledger for January 20X6?

A$51,000

B$45,000

C$36,000

D$30,000

Answer : C

Question 6

In internal auditing, detection of fraud is an important objective. The auditors will best be able to detect frauds if they are knowledgeable in the most common methods of fraud.

Which THREE of the following are common methods of fraud?

AGhost employees

BTaking stationary home

CTeeming and lading

DUsing a company car for personal use

ECollusion with external parties

FUsing company phones for private calls

Answer : A, C, F

Question 7

The suspense account of a company was opened with a credit balance of $360 when the trial balance failed to agree.

This could have arisen because

Aan electricity bill of $840 was entered in the electricity account as $480.

Ban electricity bill of $480 was entered in the electricity account as $840.

Can electricity bill of $360 was duplicated.

Dan electricity bill of $180 was duplicated.

Answer : B

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