Free Access CIMA.BA2.v2022-02-11.q137 Practice Test (Page 15)

Question 66

Refer to the exhibit.

The management accountant has completed the appraisal of a project which is forecast to generate the following cash flows.
It has now been discovered that the cash inflow in year 3 has been overestimated.
What will be the effect on the calculated net present value (NPV) and the payback period?

A.NPV increase; payback period increase

B.NPV decrease; payback period stay the same

C.NPV decrease; payback period increase

D.NPV decrease; payback period decrease

Question 67

Refer to the exhibit.

Which type of cost do the following figures represent?

A.Variable

B.Fixed

C.Curvi-linear

D.Semi-variable

Question 68

Which of the following definitions best describes Zero based budgeting?

A.A method of budgeting where the sum of revenues and expenditures in each budget centre must equal zero

B.A method of budgeting where an attempt is made to make the expenditure under each cost heading as close to zero as possible

C.A method of budgeting whereby every item of expenditure does not have to be justified before its inclusion in the budget

D.A method of budgeting whereby all activities are re-evaluated each time a budget is formulated

Question 69

In order to provide information that is suitable for control purposes, the budget must be:

A.Fixed

B.Computer generated

C.Flexed

D.Ideal

Question 70

In an integrated cost and financial accounting system, the accounting entries for the cost of production units completed in the period would be:

A.Debit: Cost of sales accountCredit: Finished goods control account

B.Debit: Work in progress control accountCredit: Finished goods control account

C.Debit: Finished goods control accountCredit: Work in progress control account

D.Debit: Finished goods control accountCredit: Cost of sales account

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Question 66

Question 67

Question 68

Question 69

Question 70

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