Pass Financial Reporting and Taxation exam in just 24 HOURS! 100% REAL EXAM QUESTIONS ANSWERS Financial Reporting and Taxation Buy Complete Questions Answers File from http://www.exams4sure.com/CIMA/F1-practice-exam- dumps.html 100% Exam Passing Guarantee & Money Back Assurance
Sample Questions Question # 1: Which of the following methods could be used by a tax authority to reduce tax evasion and avoidance? A. Increase tax rates to compensate for losses due to evasion. B. Reduce penalties for avoidance. C. Reduce requirements to have tax returns audited. D. Simplify the tax structure, minimizing allowances and exemptions. Answer: D Question # 2: Which of the following is NOT a principle in the CIMA Code of Ethics for Professional Accountants? A. Integrity B. Professional competence and due care C. Timeliness D. Objectivity Answer: C Question # 3: Which THREE of the following must an auditor consider in order to form an opinion on the truth and fairness of an entity's financial statements? A. Whether the entity has kept proper accounting records. B. Whether the entity has complied with the relevant legislator requirements in respect of the necessary disclosures.
C. Whether all the information and explanations necessary for the purposes of the audit have been received. D. Whether every transaction that underpins the financial statements has been correctly recorded. E. Whether the entity has been exposed to any fraud. Answer: A, B, C Question # 4: HOTSPOT Whilst undertaking an external audit, the auditor has identified that there is insufficient evidence to support the financial statements. As a result the auditors consider these financial statements to be wholly unreliable for decision making purposes. This will result in a modified audit report with the opinion being . Answer: Question # 5: 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. Confidentiality threat B. Self-interest threats
C. Self-review threats D. Familiarity threats E. Integrity threats F. Objectivity threats Answer: B, C, D Question # 6: Which THREE of the following are included in the International Accounting Standards Board's "The Conceptual Framework for Financial Reporting"? A. The objective of financial statements B. Specification of the financial statements that must be presented C. Qualitative characteristics of financial statements D. Definition of the headings to use in financial statements E. The elements of financial statements F. The formats of financial statements Answer: A, C, E Question # 7: A specialized product was commissioned by a customer and the agreed price was $38,000. The product was completed at a cost of $34,000. It was then discovered that new regulations meant that the specialized product now failed health and safety requirements. The specialized product had to be modified to meet the new regulations at a cost of $9,000. The customer agreed to pay an extra $3,000 towards the modifications. At 31 December 20X5 the specialized product was still in inventory and had not been modified. Calculate the value of the specialized product that should be included in inventory as at 31 December 20X5. Give your answer to the nearest whole $000.
Answer: $32000 Question # 8: 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 within cash flows from investing activities for the proceeds of sale of plant and equipment? A. $55 million B. $95 million C. $80 million D. $120 million Answer: A Question # 9: Statements of financial position for FG, IJ and KL at 31 December 20X5 include the following balances: FG acquired 90% of IJ's equity shares for $358,000 on 1 July 20X5 when IJ's retained earnings were $98,000. FG acquired 100% of KL's equity shares for $360,000 on 1 January 20X5 when KL's retained earnings were $155,000.
FG used the proportion of net assets method to value non-controlling interests at acquisition. KL sold a piece of land to FG for $130,000 on 1 September 20X5. At the date of transfer the land had a carrying value of $50,000. The management of FG expect KL to make profits in the future and no impairment ot its goodwill was proposed at 31 December 20X5. Calculate the total goodwill to be included in FG's consolidated statement of financial position as at 31 December 20X5. Give your answer to the nearest whole $. Answer: $144800 Question # 9: DRAG DROP Identify whether the scenarios below are examples of tax evasion or tax avoidance, by placing either tax evasion of tax avoidance against each one.
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