CIMA F1 Exam Syllabus Topics:

CIMA Financial Reporting Sample Questions:

1. Which THREE of the following statements about government grants are INCORRECT?

A) Capital grants relate to cash inflow and outflow
B) Grants must not be deducted from the related expenses in financial statements
C) A grant is recognised only when there is reasonable assurance that the entity will comply with any conditions attached to the grant
D) A compensatory grant should be recognised in statements when it is received, not when the expenses it applies to occurred
E) A grant is recognised as revenue

2. AB has been asked to analyze the receivables days of an entity with a view to improving the working capital cycle.
The following results have been produced for receivable days:

Which of the following is NOT an explanation of why the days have increased?

A) The entity has transferred all receivables collections to a factoring agency during 20X2.
B) An inexperienced credit controller was employed in the last few months of year ended 31 December and requires substantial training.
C) The entity has increased turnover for year ended 31 December 20X2 by offering extended credit terms.
D) The entity has made substantial sales to overseas entities in the last few months of the year ended 31 December 20X2.

3. Which of the following correctly identifies the order of the steps involved in the development of an International Financial Reporting Standard prior to it being issued?

A) Set up an advisory committee, then issue a discussion document and then issue an exposure draft.
B) Set up an advisory committee then issue an exposure draft and then issue a discussion document.
C) Issue a discussion document, then issue an exposure draft and then set up an advisory committee.
D) Issue an exposure draft, then set up an advisory committee and then issue a discussion document.

4. Which of the following is NOT a primary need for regulating financial reporting information of incorporated entities?

A) To make information more consistent.
B) To ensure that information is consistent with its legal form.
C) To improve the reliability of information for users.
D) To make information more comparable.

5. The following information relates to AA.
Extract of Trial Balance at 31 December 20X4;

Notes
(i) Inventory at 31 December 20X4 was valued at cost at $30.
(ii) The loan which was received on 1 July 20X4 is repayable in 20X9.
(iii) Corporate income tax represents an over-provision of tax for the year ended 31 December 20X3. AA reported a loss for tax purposes for the year ended 31 December 20X4 and a tax refund is expected amounting to $20.
(iv) Cost of sales, administration and distribution costs need to be adjusted for the following:
What figures should be entered in the Statement of Profit or Loss for the year ended 31 December 20X4 in relation to Administration and Distribution costs?

A) Administration $146 Distribution $114
B) Administration $120 Distribution $87
C) Adminsitration $136 Distribution $120
D) Administration $141 Distribution $117

Solutions: