Online Access Free F1 Practice Test

Which THREE of the following matters should an entity consider when determining the credit terms granted to a customer?

• A.Selling price of the goods being sold to the customer
• B.Risk of non-payment
• C.Bargaining power of the customer
• D.Number of suppliers
• E.Typical credit terms operating within the industry
• F.Discount offered by suppliers for early payment

Country J is a newly formed independent country and it's accounting professionals are considering adopting international financial reporting standards (IFRS).
Which of the following is a disadvantage to Country J of adopting IFRS as their local generally accepted accounting practice (GAAP)?

• A.Facilitates comparability with other countries who use IFRS as their local GAAP.
• B.Specific local variations that might be needed will not be accommodated.
• C.Easier to adopt standards which have already been developed.
• D.IFRS are quick to implement which reduces the costs involved.

Which of the following statements about trade payables management is false?

• A.When goods are in short supply customers who pay immediately are likely to be given priority over customers who take credit.
• B.Goods or services may be more costly if extended credit is required.
• C.Trade payables should be paid as quickly as possible.
• D.Trade payables are an important source of finance.

CDO is an entity that is preparing to apply to its local stock market for a listing. CDO is currently run by a board of ten directors, each of whom manages a department of CDO. The board is chaired by Ms E who is also CDO's Chief Executive Officer.
Which TWO of the following actions would assist CDO to meet corporate governance regulations?

• A.Allow all directors to vote on their own remuneration increases
• B.Allow the Chief Executive Officer to appoint all new directors when a vacancy arises
• C.Appoint a number of non-executive directors to the board of CDO.
• D.Ensure that no part of any director's remuneration is linked to corporate or individual performance
• E.Separate the roles of Chair of the Board and Chief Executive Officer and appoint different individuals to each role

EFG purchased an asset on 1 January 20X5 for $24,000. On that date its useful life was 5 years and residual value was expected to be nil. EFG calculates depreciation on a pro-rata basis.
The asset is reclassified as held for sale on 1 October 20X8 and is unsold on 31 December 20X8.
It is expected that the asset will be sold for S6;300 and that selling costs will be S500.
What is the amount that this asset will be included at in EFG's statement of financial position at 31 December 20X8?
Give your answer to the nearest $.