Free Access CIMA.F1.v2022-03-02.q69 Practice Test (Page 5)

Question 16

Extreme nepotism within Company E shows a failure to correctly observe which of the following principles of corporate governance?

A.Disclosure and transparency

B.Integrity and ethical behaviour

C.Role and responsibilities of the board

D.Interests of other stakeholders

E.Rights and equitable treatment of shareholders

Question 17

Which THREE of the following statements are true?

A.Tax depreciation increases the taxable profit.

B.Balancing allowances reduce the taxable profit.

C.Balancing charges increase the taxable profit.

D.Balancing allowances increase the taxable profit.

E.Balancing charges reduce the taxable profit.

F.Tax depreciation replaces accounting depreciation when calculating the taxable profit.

Question 18

Which THREE of the following are part of the International Accounting Standards Committee (IASC) Foundation structure?

A.Standards Advisory Council

B.International Financial Reporting Interpretations Committee

C.International Organisation of Securities Commission

D.International Financial Reporting Evaluations Committee

E.Standards Application Council

F.International Accounting Standards Board

Question 19

The financial statements of JK for the year ended 31 August 20X4 were approved on 10 November 20X4.
Within these financial statements which of the following would have been treated as a non-adjusting event in accordance with IAS 10 Events After the Reporting Period?

A.A fire in JK's main warehouse on 3 September 20X4 destroying 60% of the inventory that had been held at the year end.

B.Inventory which was originally valued at its cost of $45,000 being sold for $37,000 in September 20X4.

C.Notification received on 31 August that one of JK's major customers had gone into liquidation and was unlikely to pay any outstanding invoices.

D.The completion of a court case on 5 November 20X4 in which JK was ordered to pay damages of
$150,000.

Question 20

An entity opens a new factory and receives a government grant of $25,000 towards the cost of new plant and equipment. This new plant and equipment originally costs $100,000.
The entity uses the net cost method allowed by IAS 20 Accounting for Government Grants and Disclosure of Government Assistance to record government grants of this nature. All plant and equipment is depreciated at 20% a year on a straight line basis.
Calculate the amount of depreciation to be included for this plant and equipment in the statement of profit of loss for the factory's first year of operation.
Give your answer to the nearest whole $.

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Question 16

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Question 20

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