CIMA CIMAPRA17-BA4-1-ENG Practice Exam Killtest V8.02

2. The safer , easier way to help you pass any IT exams. 1.How can a company help employees make the right decision when faced with a difficult situation? A. Offer guiding values and principles to underpin decision-making B. Threaten them with disciplinary procedures C. Give them a rule book D. Have a strong rules-based culture Answer: A 2.Which of the following statements is incorrect? (i) A term may be implied into a contract on the basis of previous dealings between the parties. (ii) A term may be implied into a contract by statute. (iii) A term may be implied into a contract by a court where it would be reasonable to imply it. A. (i) only B. (i) and (ii) only C. (ii) only D. (iii) only Answer: D 3.Although no-one has reason to suspect, you have taken a violent dislike to a particular assurance client. This could severely affect your independence: A. Of belief B. In appearance C. Of mind D. In competence Answer: C 4.Which of the following is not valid consideration? A. Payment to be made upon delivery of the goods. B. Payment handed over at the time of the contract. C. Past consideration. D. A promise to make an early repayment of a debt. Answer: C 5.Which of the following are TWO reasons why new legislation might be introduced in response to corporate scandals? A. To prevent this type of unethical behavior by making it illegal B. To punish individuals for adhering to codes of ethics C. To encourage companies to make their own decisions about ethical matters D. To enforce minimum standards of behavior Answer: A,D 6.Which of the following is NOT one of the main requirements of the UK Corporate Governance Code? A. The separation of the roles of Chairman and Managing Director B. The appointment of competent accountants in the finance function C. The establishment of an audit committee CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 1 / 11

3. The safer , easier way to help you pass any IT exams. D. The reporting to shareholders of risks and internal controls Answer: B 7.Which of the following is a 'financial stakeholder' of an organization? A. Media B. Employee C. Non-governmental organizations D. Competitor Answer: B 8.Which of the following is incorrect? A. All courts below the Supreme Court may refer a case involving European Law to the European Court of Justice for a preliminary ruling. B. Supreme Court must refer a case involving European Law to the European Court of Justice for a preliminary ruling. C. An English court is not bound to give effect to a preliminary ruling of the European Court of Justice. D. A preliminary ruling of the European Court of Justice is sent back to the Court which referred the question and must be given effect by that court. Answer: C 9.Maintaining professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service demonstrates the CIMA Code of Ethics fundamental principle of: A. Integrity B. Objectivity C. Professional competence and due care D. Professional behavior Answer: C 10.B agreed in his contract that he would not work for a competitor of Gee Ltd for a period of 12 months after leaving the company's employment. On leaving Gee Ltd, B worked for Zed Ltd, a competitor of Gee Ltd. If the restriction in B's contract with Gee Ltd should be found to be reasonable, which of the following remedies is Gee Ltd entitled to? (i) A decree of specific performance forcing B to comply with his contract with Gee Ltd. (ii) Damages in respect of any loss caused by B's breach of contract. (iii) An injunction to stop B working for Zed Ltd. A. (i) only B. (i) and (ii) only C. (ii) and (iii) only D. (i), (ii) and (iii) Answer: C 11.Which ONE of the following statements is correct in relation to the UK Corporate Governance Code? A. If the Code is ignored by any company, no action may be taken as it has no legal status B. If any company fails to comply with the Code, the directors may be sued for breach of duty by the CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 2 / 11

4. The safer , easier way to help you pass any IT exams. company on behalf of the shareholders C. If a public company fails to comply with the Code, it may be sued for breach of statutory duty by those who have suffered loss as a result D. If a listed public company fails to produce a report explaining why it has not implemented the Code's recommendations, it has acted in breach of the Code Answer: D 12.Which of the following reasons for dismissal are NOT deemed to be automatically unfair? A. Serious misconduct B. Refusing to join an independent trade union. C. Pregnancy D. Selection for redundancy because of membership of a trade union. Answer: A 13.Which of the following is not financial assistance for the purchase of a public company's own shares? A. A loan by a company outside the ordinary course of business B. Allowing the use of a company's assets as security for a loan C. The payment of a dividend which has the effect of putting a shareholder in funds and enabling him to purchase the company's shares D. Releasing a shareholder from a debt owed to the company Answer: C 14.While working as an accountant, you are asked to overlook certain irregularities in your company's accounts. This is likely to result in tensions described by which TWO of the following four options: A. Personal and societal values B. Personal and corporate values C. Professional and corporate values D. Professional and societal values Answer: B,C 15.Wye has borrowed £10,000 from Exe and the loan has now become repayable in full. Exe has received a cheque from Wye for £9,000 stated to be “in full and final settlement of the loan.” What is the position if Exe cashes the cheque? (i) Exe will have accepted £9,000 in full and final settlement and will not be able to claim the other £1,000 from Wye. (ii) Exe is legally entitled to cash the cheque and pursue Wye for the balance of £1,000. (iii) Exe will have accepted £9,000, but at law payment of less than the amount due cannot satisfy the full debt. A. (i) only B. (ii) only C. (iii) only D. (ii) and (iii) only Answer: D CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 3 / 11

5. The safer , easier way to help you pass any IT exams. 16.Which of the following is INCORRECT in relation to business names? A. The business name of a private company limited by shares must end in “Limited” or “Ltd”. B. Both public and private companies may use a business name. C. If a business name is used, the name of the proprietor must be stated on business correspondence and at the premises where the business is carried on. D. If a business name is used which is the same or very similar to that of an existing business, an action in the tort of passing off may be brought by the existing business. Answer: A 17.In the UK, the body responsible for taking an appropriate role in the development of statutes, regulations and accounting standards which affect the conduct of auditing and assurance services, both domestically and internationally is: A. The Professional Oversight Board for Accountancy B. The International Federation of Accountants C. The Auditing Practices Board D. The Financial Review Board Answer: C 18.The code of ethics of the professional body to which M belongs is very clear about the importance of non-discrimination on the grounds of race, gender, sexual orientation and religion. But, because of her particular religious convictions, M believes that homosexuality is wrong. This is an example of a tension between: A. Corporate and professional values B. Personal and professional values C. Societal and professional values D. Personal and corporate values Answer: B 19.B is employed by Zed plc and has suffered an occupational injury. Which of the following is correct? Zed plc may be liable to B for: i. breach of an implied term in B's contract of employment ii. breach of the duty to take care in the tort of negligence iii. breach of statutory duty A. (i) only B. (ii) only C. (iii) only D. (i), (ii) and (iii) Answer: D 20.Which of the following may be liable to contribute to the assets of the company in the event of the company carrying on business at a time when it appeared that insolvency was inevitable? A. The current directors and shareholders of the company. CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 4 / 11

6. The safer , easier way to help you pass any IT exams. B. The current and former directors of the company. C. The current directors of the company. D. The current directors and former shareholders of the company. Answer: B 21.Which of the following is presumed not to be intended to create legal relations? A. A commercial transaction. B. An agreement by Exe Ltd to make a gift to Wye Ltd. C. A social arrangement. D. A contract between father and son. Answer: C 22.T contracted to buy a washing machine from AB (Retailers) Ltd for his personal use at home. The contract contained a term excluding liability for any breach of the condition implied by the Sale of Goods Act 1979 that the goods should be of "satisfactory quality". The contract was on AB (Retailers) Ltd's standard form contract. Which of the following is correct? (i) Conditions implied by the Sale of Goods Act 1979 cannot be excluded in any sale. (ii) This is a consumer sale and the clause excluding liability is void. (iii) This is a non-consumer sale and the clause is void unless reasonable. A. (i) only B. (ii) only C. (iii) only D. (i) and (ii) only Answer: B 23.Which of the following terms can be defined as follows? "...the way an organization manages its relationships" A. Ethics B. Social responsibility C. Corporate governance D. Professional behavior Answer: B 24.Which of the following need NOT be submitted in order to register a private company limited by shares? (i) Articles of association (ii) The name of the company secretary (iii) A statement of share capital A. (i) only B. (i) and (ii) only C. (ii) only D. (ii) and (iii) only Answer: B CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 5 / 11

7. The safer , easier way to help you pass any IT exams. 25.Which of the following is an example of a safeguard created by the profession, legislation or regulation as opposed to a safeguard in the work environment? A. Leadership of the organization which stresses the importance of compliance with the fundamental principles B. Leadership of the organization which establishes the expectation that members of an assurance team will act in the public interest C. Professional standards D. An organization having documented internal policies and procedures requiring compliance with the fundamental principles Answer: C 26.According to the UK Corporate Governance Code, who is responsible for setting the company's values and standards? A. The Chairman B. The Board C. The Managing Director D. The shareholders Answer: B 27.In relation to the law of misrepresentation, which of the following is correct? A. The innocent party is entitled to claim damages under the tort of negligence for all types of misrepresentation. B. A person is not entitled to rescind a contract which was induced by an innocent misrepresentation. C. A person is only entitled to a remedy under the Misrepresentation Act where the person who made the misrepresentation is a party to the contract. D. The Misrepresentation Act may be used to obtain damages for fraudulent misrepresentation. Answer: C 28.Which of the following correctly describes the circumstances in which directors may be held liable to contribute to the assets of insolvent companies in respect of "wrongful trading"? A. Where the directors have the intention of defrauding creditors. B. Where directors knew or ought to have known that insolvency was inevitable. C. Whenever a company becomes insolvent. D. Whenever a company's liabilities exceed its assets. Answer: B 29.A company's board of directors is found to have committed widespread fraud and engaged in a wide range of unethical practices. Which of the following is the LEAST likely consequence of this? A. Insolvency or bankruptcy for the company B. Prison sentences for company directors C. Loss of credibility D. A significant rise in the company's share price CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 6 / 11

8. The safer , easier way to help you pass any IT exams. Answer: D 30.Which ONE of the following was NOT a recommendation of the Cadbury Committee Report 1992? A. Independent non-executive directors should be appointed to the boards of listed companies B. An audit committee consisting of a majority of non-executive directors should be established to oversee the company's finances C. Executive directors should not be offered service contracts for more than five years unless approved by the shareholders in a general meeting D. The remuneration packages of executive directors should be agreed by a remuneration committee wholly or mainly comprising non-executive directors Answer: C 31.In relation to the Unfair Contract Terms Act 1977, which of the following is correct? (i) A clause which attempts to exclude liability for death or personal injury caused by negligence is only valid if it is reasonable. (ii) A clause which attempts to exclude liability for damage to property is void unless it is reasonable. (iii) The Unfair Contract Terms Act applies to contractual terms and to occupiers' liability. A. (i) only B. (ii) only C. (i) and (iii) only D. (ii) and (iii) only Answer: D 32.What can companies do in order to minimize the likelihood of future legislation? A. Maintain effective self regulation B. Insist on the highest standards of ethical behavior from their company and its employees C. Understand and address what the public expects of companies in terms of ethical behavior and social responsibilities D. All of the above Answer: D 33.Which of the following is NOT one of the main requirements of the UK Corporate Governance Code? A. The separation of roles of Chairman and Chief Executive B. The appointment of a senior Government representative to the Board C. The appointment of independent non-executive directors to the Board D. The establishment of an audit committee Answer: B 34.In relation to registering a company limited by shares, which of the following is correct? A. If the promoters fail to submit Articles of Association to the Registrar of Companies, the company cannot be registered. B. If the promoters fail to submit Articles of Association to the Registrar of Companies, the provisions of Table A automatically apply. C. If the promoters fail to submit Articles of Association to the Registrar of Companies, the documents will CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 7 / 11

9. The safer , easier way to help you pass any IT exams. be returned to the promoters with a request for Articles to be submitted. D. If the promoters fail to submit Articles of Association to the Registrar of Companies, the company will be registered but will have no Articles of Association applicable to it. Answer: B 35.Which of the following is correct? A. A fixed charge is a charge over a specific asset of the company which it is unable to deal with freely in the ordinary course of business. B. A fixed charge is a charge over a specific asset of the company which it is able to deal with freely in the ordinary course of business. C. A fixed charge is a charge over a class of company assets which the company can deal with freely in the ordinary course of business. D. A fixed charge is a charge over a class of company assets which the company is unable to deal with freely in the ordinary course of business. Answer: A 36.Which of the following types of committee is NOT required by the UK Corporate Governance Code? A. Remuneration Committee B. Audit Committee C. Risk Management Committee D. Appointments Committee Answer: C 37.Which of the following is correct? (i) A liquidated damages clause will be void if it amounts to a penalty clause. (ii) A liquidated damages clause will apply where it is a genuine attempt to pre-estimate the loss caused by a breach of contract. (iii) A liquidated damages clause is void if it is for an amount in excess of the actual loss caused by the breach of contract. A. (i) and (ii) only B. (ii) only C. (i), (ii) and (iii) D. (iii) only Answer: A 38.In the UK, the body responsible for promoting confidence in corporate reporting and governance is: A. The Professional Oversight Board for Accountancy B. The International Federation of Accountants C. The Financial Reporting Council D. The Financial Review Board Answer: C 39.Which of the following is incorrect? A. A ratio decidendi of the Supreme Court is binding on the Court of Appeal. CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 8 / 11

10. The safer , easier way to help you pass any IT exams. B. The Supreme Court is bound by a previous House of Lords ratio decidendi. C. A ratio decidendi of the Court of Appeal is binding on the High Court. D. A ratio decidendi of the Supreme Court is binding on the High Court. Answer: B 40.Which of the following is NOT one of the main requirements of the UK Corporate Governance Code? A. The separation of the roles of Chairman and Chief Executive B. The appointment of independent non-executive directors to the Board C. The establishment of a Risk Committee D. The appointment of a competent Company Secretary Answer: C 41.The articles of association of Zed Ltd provide that Z is to be an executive director for life. Zed is also a shareholder in the company. Which ONE of the following is CORRECT? A. Despite the provision in the articles Z can be dismissed at any time by an ordinary resolution. B. As an executive director Z is an employee of Zed Ltd and is entitled to employment protection rights. C. Z may sue the company for breach of contract in respect of the provision in the articles of association as they form a contract between the members and the company. D. Z is entitled to vote as a shareholder in relation to a proposed resolution to dismiss him as a director. Answer: C 42.AB Ltd contracted to deliver two desks and three filing cabinets to CD Ltd. On the day when delivery was due to take place AB Ltd did not have a vehicle with sufficient capacity to hold all the goods. As a result AB Ltd delivered the two desks only Which of the following is correct? A. The contract between AB Ltd and CD Ltd is frustrated. B. CD Ltd is legally entitled to refuse delivery of the desks C. The failure to deliver the filing cabinets is a breach of a warranty which entitles CD Ltd to claim damages D. The delivery of the desks amounts to substantial performance of the contract and CD Ltd is obliged to pay the contract price less an amount for the defects in performance Answer: B 43.Adam, Brian, Charles and David each held 25% of the issued share capital of ABCD Ltd. Adam has recently issued further shares to himself in order to increase his voting power. Which of the following is incorrect? A. The share issue is automatically invalid. B. The shareholders may ratify the share issue by ordinary resolution. C. The shareholders may challenge the validity of the share issue using Section 994 of the Companies Act 2006, on the ground that the issue is "unfairly prejudicial to the interests of the shareholders". D. The company may proceed against Adam for breach of fiduciary duty. Answer: A CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 9 / 11

11. The safer , easier way to help you pass any IT exams. 44.Which of the following is NOT one of the fundamental principles of CIMA's Code of Ethics? A. Materiality B. Integrity C. Objectivity D. Professional behavior Answer: A 45.Which of the following statements are correct? (i) A claim for unfair dismissal must be made to an industrial tribunal within 3 months of the effective date of termination. (ii) A claim for wrongful dismissal must be made to an industrial tribunal within 6 years of the effective date of termination. (iii) A claim for wrongful dismissal must be made to an industrial tribunal within 3 months of the effective date of termination. A. (i) and (ii) B. (i) C. (ii) D. (i) and (iii) Answer: A 46.S Ltd has an issued share capital of 1000 ordinary shares of £1 each. Some of the shareholders would like to change the name of the company. What is the minimum number of votes which must be cast in favor of the resolution to make it effective? A. 501 B. 500 C. 750 D. 1,000 Answer: C 47.P contracted to buy a computer from CD (Retailers) Ltd. The contract contained a term excluding liability for any breach of the condition implied by the Sale of Goods Act 1979 that the goods should be of "satisfactory quality". Which of the following is correct? A. If this is a consumer sale the clause is void. B. If this is a non-consumer sale the clause is valid. C. Conditions implied by the Sale of Goods Act 1979 cannot be excluded in any kind of sale. D. If this is a consumer sale the clause is void unless it can be shown to be reasonable. Answer: A 48.In which country are accountants legally required to speak up about certain ethical concerns? A. United Kingdom B. Italy C. United States of America CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 10 / 11

12. The safer , easier way to help you pass any IT exams. D. China Answer: C 49.Which of the following do CIMA members NOT have a specific duty to do? A. Observe the highest standards of conduct and integrity B. Uphold the good standing and reputation of the profession C. Refrain from any conduct which might discredit the profession D. Uphold the good standing and reputation of their employer Answer: D 50.Rank the following, starting with the highest court: (i) Court of Appeal (Civil) (ii) Supreme Court (iii) County Court (iv) High Court A. (ii), (i), (iv), (iii) B. (i), (ii), (iv), (iii) C. (i), (ii), (iii), (v) D. (ii), (iv), (i), (iii) Answer: A CIM APRA17-BA4-1-EN G Certi fi cate i n Busi ness Accounti ng CIM A Q uesti ons Ki l l test 11 / 11