CIMA CIMAPRA19-F01-1 Exam Questions Instant Access

Question 1

Which of the following is a type of short-term finance?

ATrade payables

BTrade receivables

CInterest bearing bank deposit

DLoan repayable in five years

Answer : A

Question 2

In accordance with IAS 16 Property, Plant and Equipment, in which of the following situations would subsequent expenditure on a non-current asset be capitalised?

AAn entity purchased an aircraft five years ago, when its engines were separately identified in the accounting records. The engines now need to be replaced at a cost of $2 million each. When the engines are replaced the aircraft is expected to be airworthy for a further 5 years.

BAn entity's head office building suffered a major fire, the upper floors and roof were completely destroyed. The entity proposes to restore the building at a cost of $1 million and move back in to the building to use it as a head office again.

CAn entity's delivery vehicle was in a car park when the car park was flooded. The engine and interior of the vehicle needed extensive repair and renovation costing $25,000.

DA manufacturing entity closes its factory for two weeks each summer for routine maintenance and repairs. The current year's cost of maintenance and repairs was $62,000.

Answer : A

Question 3

Which THREE of the following must an auditor consider in order to form an opinion on the truth and fairness of an entity's financial statements?

AWhether the entity has kept proper accounting records.

BWhether the entity has complied with the relevant legislator requirements in respect of the necessary disclosures.

CWhether all the information and explanations necessary for the purposes of the audit have been received.

DWhether every transaction that underpins the financial statements has been correctly recorded.

EWhether the entity has been exposed to any fraud.

Answer : A, B, C

Question 4

Mr K is being pressured by his manager to change figures in his report so that it will improve his manager's bonus.

His manager has promised Mr K a promotion if he agrees to do this.

What threats is Mr K facing?

AIntimidation and familiarity

BFamiliarity and self-interest

CSelf-review and advocacy

DIntimidation and self-interest

Answer : D

Question 5

Mr AM is the owner of Waxco Ltd. Mr AM was born in India, but currently resides in the US

AHe has gained dual Indian and American citizenship.
Mr AM first registered Waxco Ltd in the USA when he started the company ten years ago. However, because of lower costs, the company moved its central management station to Germany two years ago. Waxco Ltd has other smaller offices such as call centres across Asia, in locations such as Pakistan and Cambodia, however Waxco Ltd only currently sell goods in the USA.
Which of the countries mentioned are relevant for determining Waxco Ltd's competent jurisdiction?

AThe USA

BGermany

CIndia

DPakistan

ECambodia

Answer : A, A, B

Question 6

In accordance with IFRS 3 Business Combinations, acquisition accounting of an investment in another entity within the consolidated statement of financial position means that the:

AParent's and 100% of the other entity's assets and liabilities are added together line by line.

BGroup's share of the net assets of the other entity are shown as one line under non-current assets.

CParent's and group share of the other entity's assets and liabilities are added together line by line.

DGroup's share of the net assets of the other entity are shown as one line within equity.

Answer : A

Question 7

Which of the following is NOT an appropriate description of the meaning of the term incidence of tax?

AIt refers to the distribution of the tax burden.

BIt only relates to the person or entity that actually pays the tax authorities.

CIt can be formal or actual.

DIt relates to the person or entity that ultimately bears the cost of the tax.

Answer : B

CIMA F1 Financial Reporting CIMAPRA19-F01-1 Exam Questions