CIMA CIMAPRA17-BA4-1 Exam Practice Test Instant Access

Question 1

ABC Ltd has resolved to purchase the business of ST Ltd for 500,000. ABC Ltd is to pay ST Ltd for the business by issuing ordinary 1 shares rather than cash. As the market value of ABC Ltd's shares is 5 per share, ABC Ltd is to issue to ST Ltd 100,000 ordinary 1 shares. Which of the following is incorrect?

AThe issue is lawful as ABC Ltd may issue its shares for a non-cash consideration.

BThe issue is lawful because ABC Ltd does not need to first offer the new shares to its existing members.

CThe issue is only lawful if the directors have the necessary authority to issue the shares.

DThe issue is only lawful if ABC Ltd arranges to have the business valued by the company's auditor.

Answer : D

Question 2

Bill is conducting an audit on a furniture manufacturer. There doesn't appear to be any major issues with the company and its finances. However, Bill has noticed that the company has adopted a new set of accounting standards unusually early.

What should Bill do?

ADocument this finding in an 'emphasis of matter' statement

BIssue a modified audit report as he is satisfied the elements examined.

CIssue a modified audit report as he is unsatisfied with the elements examined.

DIssue an adverse opinion due to concerns raised during the audit.

Answer : A

Question 3

T is a senior accountant, but knows he needs to update himself on recent changes in accounting practice. He has been too busy; his manager is off sick and T is taking responsibility for his work load. T decides to let his CPD slide.Another year won't matter.Is this an ethical issue?

AYes. T has a duty to maintain his professional knowledge

BNo. T has a contractual duty to his employer; he can't take time off for CPD at this time

CYes. T should not be doing two people's work

DNo. T is an experienced accountant and doesn't need training

Answer : A

Question 4

On 1st October X Ltd wrote to Y Ltd offering to sell a machine at a price of 5,000. The letter stated that Y Ltd must give X Ltd ''notice in writing'' of its acceptance of the offer by 8th October. Y Ltd posted its acceptance on 5th October and this reached X Ltd on 7th October. In the meantime X Ltd sent a letter to Y Ltd on 4th October revoking its offer, and this reached Y Ltd on 8th October.

Which of the following is correct?

AThere is no contract between X Ltd and Y Ltd because the offer was withdrawn on 4th October when the revocation was sent to Y Ltd.

BThere is no contract between X Ltd and Y Ltd because the offer was withdrawn on 8th October when the revocation was received by Y Ltd.

CX Ltd and Y Ltd contracted on 5th October.

DX Ltd and Y Ltd contracted on 7th October.

Answer : D

Question 5

You are concerned that your boss may have been putting together misleading financial statements for some time. As a well known and well respected accountant, you are concerned that your boss might bring the profession into disrepute. Which TWO of the CIMA Code of Ethics fundamental principles does this affect?

AObjectivity and impartiality

BIntegrity and reliability

CProfessional behavior and integrity

DObjectivity and professional competence and due care

Answer : C

Question 6

Jo is employed as management accountant of a large retailer. Jo has been asked to make a payment to a bogus supplier that she believes would constitute money laundering. If Jo accepts the request, which of the following 'fundamental principles' of CIMA's Code of Ethics will be compromised?

AIntegrity

BObjectivity

CConfidentiality

DProfessional behavior

Answer : D

Question 7

Which of the 'fundamental principles' of CIMA's Code of Ethics is defined as follows?

"A professional accountant should act diligently and in accordance with applicable technical and professional standards"

AIntegrity

BObjectivity

CProfessional competence and due care

DProfessional behavior

Answer : C

CIMA BA4 - Fundamentals of Ethics, Corporate Governance and Business Law CIMAPRA17-BA4-1 Exam Practice Test