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CIMA
CIMA Operational
F1
Financial Reporting Questions and Answers

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Viewing questions 21-30 out of questions

Questions # 21:

Which THREE of the following are included in the International Accounting Standards Board's "The Conceptual Framework for Financial Reporting"?

Options:

The objective of financial statements

Specification of the financial statements that must be presented

Qualitative characteristics of financial statements

Definition of the headings to use in financial statements

The elements of financial statements

The formats of financial statements

Answer

A, C, E

Questions # 22:

An entity acquires 100% of the equity shares in another entity.

The consideration paid for the shares is less than the fair value of the net assets acquired.

Which of the following is the correct accounting treatment for the difference between the consideration paid and the fair value of the net assets acquired, in accordance with IFRS 3 Business Combinations?

Options:

Recognise as a gain in the consolidated statement of profit or loss.

Recognise as a deferred credit and release to consolidated profit or loss over its useful economic life.

Recognise as a deduction from goodwill in the consolidated statement of financial position.

Recognise as a gain in the statement of changes in equity.

Answer

Questions # 23:

Which of the following are techniques that can be used by a company to ensure they receive timely payment of receivables? Select ALL that apply:

Options:

Offering cash or early payment discount

Charging interest on late payments

Assessing credit risk of customers before they are given credit

Offering extended credit to return customers

Offering free items

Answer

A, B, C

Questions # 24:

Which TWO of the following are functions of the International Financial Reporting Standards (IFRS) Advisory Council?

Options:

To give advice to the International Accounting Standards Board on agenda decisions and priorities in its work

To inform the International Accounting Standards Board of the views of organizations on major standard setting projects

To approve IFRSs for publication

To review new financial reporting issues not already covered by IFRS

To appoint the members of the International Accounting Standards Board

Answer

A, B

Questions # 25:

Which THREE of the following statements are true?

Options:

Tax depreciation replaces accounting depreciation when calculating the taxable profit.

Tax depreciation increases the taxable profit.

Balancing allowances increase the taxable profit.

Balancing charges increase the taxable profit.

Balancing charges reduce the taxable profit.

Balancing allowances reduce the taxable profit.

Answer

A, D, F

Questions # 26:

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

Options:

It refers to the distribution of the tax burden.

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

It can be formal or actual.

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

Answer

Questions # 27:

In accordance with the Conceptual Framework for Financial Reporting, which TWO of the following qualitative characteristics of useful financial information should be considered when selecting a measurement basis?