[Mar-2024] CIMA Certification F1 Exam Practice Dumps
2024 F1 Premium Files Test pdf - Free Dumps Collection
NEW QUESTION # 99
In Country X, trading losses in any year can be carried back and set off against trading profits in the previous year, with any unrelieved losses carried forward to set against the first available trade profits in future years.
GH had the following taxable profits and losses in years 20X1 to 20X4:
What are the taxable profits for 20X4, assuming the most efficient use of the loss is made?
- A. $70,000
- B. $100,000
- C. $95,000
- D. $65,000
Answer: C
NEW QUESTION # 100
FG purchased 40% of the equity shares of QR and exerted significant influence over the board of the directors.
QR will be classified as____of FG.
Answer:
Explanation:
NEW QUESTION # 101
Mr AM is the owner of Waxco Ltd. Mr AM was born in India, but currently resides in the USA. He 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?
- A. Germany
- B. The USA
- C. Pakistan
- D. India
- E. Cambodia
Answer: A,B
NEW QUESTION # 102
To apply the fundamental principles of the Code of Ethics, existing and potential threats to the entity first need to be identified and evaluated.
Which THREE of the following are identified in the Code as threats?
- A. Objectivity threats
- B. Confidentiality threat
- C. Self-interest threats
- D. Self-review threats
- E. Integrity threats
- F. Familiarity threats
Answer: C,D,F
NEW QUESTION # 103
A building was purchased on 1 January 20X1 for $300,000 and had a useful economic life of 40 years. On
1 January 20X5 the building was revalued by a professional surveyor at $450,000. Directors decided to incorporate the revalued amount into the financial statements.
The accounting entries to record the initial revaluation of the building in the financial statements for the year ended 31 December 20X5 will be to debit building cost $150,000 and then:
- A. debit accumulated depreciation $30,000 and credit revaluation reserve $180,000.
- B. credit accumulated depreciation $30,000 and credit revaluation reserve $120,000.
- C. credit accumulated depreciation $37,500 and credit revaluation reserve $112,500.
- D. debit accumulated depreciation $37,500 and credit revaluation reserve $187,500.
Answer: A
NEW QUESTION # 104
You work in the finance department of an entity. A director has approached you and asked you to falsify sales invoices which would significantly inflate revenue. The CIMA Code of Ethics suggests that you should deal with such an ethical dilemma by following a number of stages.
Place each of the stages identified below into chronological order.
Answer:
Explanation:
NEW QUESTION # 105
An entity bought a capital item for $110,000 on 1 March 20X4 incurring legal fees at the date of purchase of
$2,500.
On 1 May 20X4 additional costs classified as capital expenditure by the tax rules of the country of $25,000 were incurred in respect of the asset. On 1 June 20X4 repairs not classified as capital expenditure were incurred at a cost of $15,000.
The asset was sold for $250,000 on 30 November 20X8 and costs to sell were incurred of $4,300.
Calculate the chargeable gain on the disposal.
Give your answer to the nearest $.
Answer:
Explanation:
$108200
NEW QUESTION # 106 
Answer:
Explanation:
NEW QUESTION # 107
From the list below identify the item that appears in the statement of financial position.
- A. The amount of interest charged on loans during the year.
- B. The amount of loans repaid during the year.
- C. The amount of interest actually paid during the year.
- D. The amount of loans outstanding at the year end.
Answer: D
NEW QUESTION # 108
The following information is extracted from the trial balance of YY at 30 September 20X3.
i. Included in revenue is a refundable deposit of $20 million for a sales transaction that is due to take place on 14 October 20X3.
ii. The cost of closing inventory is $28 million, however, the net realisable value is estimated at $25 million.
iii. The interest free loan was obtained on 1 January 20X3. The loan is repayable in 12 quarterly installments starting on 31 March 20X3. All installments to date have been paid on time.
Calculate the cost of sales that would be shown in YY's statement of profit or loss for the year ended 30 September 20X3.
Give your answer to the nearest $ million.
Answer:
Explanation:
$150000000
NEW QUESTION # 109
On 1 January 20X2 an entity began work on constructing a factory. It purchased the land for $14 million, built the factory buildings for $11 million and installed plant and equipment for $7 million. The project was completed on 31 December 20X3 when the factory was deemed ready to use, however, the factory did not start operations until 1 June 20X4.
To fund the project the entity borrowed $25 million on 1 January 20X2, with interest at 10% per year.
The loan was repaid in full on 31 December 20X4.
Calculate the total amount to be added to the cost of property, plant and equipment in respect of the above development.
Give your answer to the nearest $ million.
Answer:
Explanation:
$37 million
NEW QUESTION # 110
Identify whether the scenarios below are examples of tax evasion or tax avoidance, by placing either tax evasion of tax avoidance against each one.
Answer:
Explanation:
NEW QUESTION # 111 
Answer:
Explanation:
NEW QUESTION # 112
Which of the following is NOT a reason why financial reporting information needs to be regulated?
- A. So that shareholders of a quoted company can make informed decisions about their investments
- B. So that a bank can assess the amount of finance it is prepared to lend to a company.
- C. So that the managers of a company can make decisions about its operations.
- D. So that potential investors can compare the financial information of different companies.
Answer: C
NEW QUESTION # 113
Which of the following is NOT a primary need for regulating financial reporting information of incorporated entities?
- A. To make information more comparable.
- B. To improve the reliability of information for users.
- C. To make information more consistent.
- D. To ensure that information is consistent with its legal form.
Answer: D
NEW QUESTION # 114
Statements of financial position for YZ, BC and DE at 31 March 20X2 include the following balances:
YZ purchased 90% of BC's equity shares for $508,000 on 1 January 20X2. On 1 January 20X2 BC's retained earnings were $183,000. YZ uses the proportion of net assets method to value non-controlling interest at acquisition.
YZ purchased 30% of DE's equity shares on 1 April 20X1 for $112,000. DE's retained earnings at 1 April
20X1 were $88,000.
On 1 February 20X2 YZ sold goods to BC for $28,000 at a mark up of 25% on cost. All the goods were still in BC's inventory at 31 March 20X2.
Calculate the value of inventory that will be included in YZ's consolidated statement of financial position at 31 March 20X2.
Give your answer to the nearest whole $.
Answer:
Explanation:
$182400
NEW QUESTION # 115
For an incorporated business, the taxation of trading income is a form of direct taxation which is based on:
- A. dividends paid to shareholders where the tax is paid by the shareholders to the tax authorities.
- B. dividends paid to shareholders where the tax is paid by the business to the tax authorities.
- C. business profits where the tax is paid by the shareholders to the tax authorities.
- D. business profits where the tax is paid by the business to the tax authorities.
Answer: D
NEW QUESTION # 116
XY is an entity incorporated in Country B but operates in several countries. Monthly management meetings to decide on strategic matters take place in Country A, where the majority of its production happens. XY sells most of its goods to Country C.
In accordance with the Organization for Economic Co-operation and Development (OECD) rules on corporate residence which of the following statements is true?
- A. XY is resident in Country A because this is the country where XY undertakes most of its production.
- B. XY is resident in Country C because this is the country where XY generates most of its revenue.
- C. XY is resident in Country A because this is the country of its effective management.
- D. XY is resident in Country B because this is the country of its incorporation.
Answer: C
NEW QUESTION # 117
Statements of financial position as at 31 December 20X8 for JK, LM and PQ are as follows:
[1] JK purchased 80% of LM's $1 equity shares on 1 January 20X8 for $260,000 when the retained earnings of JK were $110,000. At that date the non-controlling interest had a fair value of $63,000.
[2] JK purchased 25% of PQ's $1 equity shares on 1 January 20X8 for $90,000 when the retained earnings of PQ were $96,000.
[3] During the year JK sold goods to LM for $32,000 at a mark up of 33.33% on cost. Half of the goods were still in LM's inventory at 31 December 20X8.
[4] LM transferred $32,000 to JK on 30 December 20X8 in settlement of the inter-group trade. JK did not record the cash in its financial records until 2 January 20X9.
Calculate the value of inventory that would be included in JK's consolidated statement of financial position at 31 December 20X8.
Give your answer to the nearest $.
Answer:
Explanation:
$224000
NEW QUESTION # 118
Which of the following would be capitalized as an intangible asset in accordance with IAS 38 Intangible Assets?
- A. The cost of market research into a new geographical market.
- B. The cost of testing a new process which will create efficiency savings of 10% once implemented.
- C. The cost of assets used in the research and development department.
- D. The cost of advertising the launch of a new product.
Answer: B
NEW QUESTION # 119
You work in the finance department of an entity. A director has approached you and asked you to falsify sales invoices which would significantly inflate revenue. The CIMA Code of Ethics suggests that you should deal with such an ethical dilemma by following a number of stages.
Place each of the stages identified below into chronological order.
Answer:
Explanation:
NEW QUESTION # 120
Which of the following is the most appropriate definition of the term 'factoring'?
- A. Where a business sells its accounts receivable to a third party at a discount
- B. Where a business is provided with a highly flexible regular source of short-term finance by a bank
- C. Where a business borrows a loan with short-term conditions from a third party
- D. Where a business sells equity to third parties to gain short-term finance
Answer: A
NEW QUESTION # 121
MN recently took out a 5 year term loan to buy raw materials to take advantage of a supplier's bulk discount that had been offered to them.
What approach to financing working capital has MN undertaken?
- A. Aggressive
- B. Moderate
- C. Conservative
- D. Permanent
Answer: C
NEW QUESTION # 122
The following information is extracted from the statement of financial position for ZZ at 31 March 20X3:
Included within cost of sales in the statement of profit or loss for the year ended 31 March 20X3 is $20 million relating to the loss on the sale of plant and equipment which had cost $100 million in June 20X1.
Depreciation is charged on all plant and equipment at 25% on a straight line basis with a full year's depreciation charged in the year of acquisition and none in the year of sale.
The revaluation reserve relates to the revaluation of ZZ's property.
The total depreciation charge for property, plant and equipment in ZZ's statement of profit of loss for the year ended 31 March 20X3 is $80 million.
The corporate income tax expense in ZZ's statement of profit or loss for year ended 31 March 20X3 is
$28 million.
ZZ is preparing its statement of cash flows for the year ended 31 March 20X3.
What figure should be included for corporate income tax paid in order to arrive at the net cash flow from operating activities?
Give your answer to the nearest $ million.
Answer:
Explanation:
$21 million
NEW QUESTION # 123
YZ has $40,000 of plant and machinery which was acquired on 1 June 20X1.Tax depreciation rates on plant and machinery are 25% reducing balance. All plant and machinery was sold for $24,000 on 1 June 20X3.
Calculate the tax balancing allowance or charge on disposal for the year ended 31 May 20X3 and state the effect on the taxable profit.
- A. A balancing charge of $1,500 increases taxable profit.
- B. A balancing allowance of $1,500 increases taxable profit.
- C. A balancing charge of $1,500 reduces taxable profit.
- D. A balancing allowance of $1,500 reduces taxable profit.
Answer: A
NEW QUESTION # 124
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