CIMA CIMAPRA17-BA3-1 Exam Questions Instant Access

Question 1

What will be the effect on the financial statements if the closing inventory figure is decreased?

AAn increase in cost of sales, an increase in gross profit and a decrease in the inventory figure in the statement of financial position.

BA decrease in cost of sales, a decrease in gross profit and a decrease in the inventory figure in the statement of financial position.

CA decrease in cost of sales, an increase in gross profit and a decrease in the inventory figure in the statement of financial position.

DAn increase in cost of sales, a decrease in gross profit and a decrease in the inventory figure in the statement of financial position.

Answer : D

Question 2

Internal controls are used to prevent errors occurring, as well as to detect errors which may have already occurred.

Which one of the following is an example of a 'prevent' control?

AReconciling control accounts with the ledger accounts

BPreparing the trial balance

CMatching purchase invoices with Goods Received Notes

DPreparing a bank reconciliation

Answer : C

Question 3

A company's financial statements show a gross profit of $15 million. A major error in the inventory value system has been discovered resulting in an overstatement on opening inventory of $1.2 million and an understatement in closing inventory of $1.5 million.

What is the correct gross profit figure for the period?

A$17.7 million

B$15.3 million

C$14.7 million

D$12.3 million

Answer : A

Question 4

Refer to the Exhibit.

Transactions are often categorized between capital and revenue

Which of the following combinations are correct?

Answer : B

Question 5

The format of the financial statements and the disclosure notes are prescribed by accounting standards and Company Law.

Which THREE of the following are headings within the statement of financial position?

AProfit from operations

BNon-current assets

CCurrent assets

DCost of sales

EEquity & liabilities

FProfit before tax

Answer : B, C, E

Question 6

Which TWO of the following statements are correct?

AOrdinary shares carry compulsory dividends

BOrdinary shares carry voting rights

CPreference shares carry voting rights

DPreference shares are the lowest priority when winding up

EPreference shares usually carry a fixed dividend

Answer : B, E

Question 7

Refer to the exhibit.

A company's gross profit margin has fallen from 40% to 38% in the last period.

Which three of the following would be possible explanations for this?

AA, B and C

BD, E and F

CB, C and F

DA, D and E

Answer : D

CIMA BA3 - Fundamentals of Financial Accounting CIMAPRA17-BA3-1 Exam Questions