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F1 Exam Dumps - CIMA Operational Questions and Answers

Question # 24

While conducting their audit, auditor 0 did not encounter issues which significantly limited the scope of their audit, however they did run into problems in that they disagreed with the management on facts in the

statements.

These disagreements were somewhat material, but they did not affect the auditor's overall opinion of the business. Which of the following statements should auditor 0 issue?

Options:

A.

Emphasis of matter

B.

Unqualified report

C.

'Except for' qualification

D.

Adverse audit opinion

E.

Disclaimer of opinion

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Question # 25

From the list below identify the item that appears in the statement of financial position.

Options:

A.

The amount of interest charged on loans during the year.

B.

The amount of loans outstanding at the year end.

C.

The amount of loans repaid during the year.

D.

The amount of interest actually paid during the year.

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Question # 26

In Country X, trading losses in any year can be carried back and set off against trading profits in the previous year, with any unrelieved losses carried forward to set against the first available trade profits in future years.

GH had the following taxable profits and losses in years 20X1 to 20X4:

What are the taxable profits for 20X4, assuming the most efficient use of the loss is made?

Options:

A.

$65,000

B.

$95,000

C.

$100,000

D.

$70,000

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Question # 27

In accordance with IFRS 3 Business Combinations, acquisition accounting of an investment in another entity within the consolidated statement of financial position means that the:

Options:

A.

Parent's and 100% of the other entity's assets and liabilities are added together line by line.

B.

Group's share of the net assets of the other entity are shown as one line under non-current assets.

C.

Parent's and group share of the other entity's assets and liabilities are added together line by line.

D.

Group's share of the net assets of the other entity are shown as one line within equity.

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Question # 28

For an incorporated business, the taxation of trading income is a form of direct taxation which is based on:

Options:

A.

business profits where the tax is paid by the shareholders to the tax authorities.

B.

dividends paid to shareholders where the tax is paid by the business to the tax authorities.

C.

dividends paid to shareholders where the tax is paid by the shareholders to the tax authorities.

D.

business profits where the tax is paid by the business to the tax authorities.

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Question # 29

Which of the following is an example of a progressive tax?

Options:

A.

Personal income tax of 10% on earnings up to $10,000, then at 15% over $10,001

B.

Corporate income tax of 20% on earnings up to $100,000, then at 10% over $100,000

C.

Corporate income tax of 20% on all earnings

D.

Personal income tax of 10% and corporate income tax of 20%

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Question # 30

Which THREE of the following are included in the International Accounting Standards Board's "The Conceptual Framework for Financial Reporting"?

Options:

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

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Question # 31

What does the exemption method of giving double taxation relief mean?

Options:

A.

The countries agree that all types of income will be exempt or partially exempt in one country or the other.

B.

The countries agree on certain types of income which will be exempt or partially exempt in one country or the other.

C.

The countries agree on certain types of income which will be exempt or partially exempt in both countries.

D.

The countries agree that all types of income will be exempt or partially exempt in both countries.

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Question # 32

WX is considering an investment in ST.

At 31 December 20X2 ST had the following balances in its statement of financial position:

Which of the following would cause ST to become an associate investment of WX?

Options:

A.

WX purchases 15,000 of ST's $1 equity shares and 20,000 of ST's $1 preference shares.

B.

WX purchases 25,000 of ST's $1 equity shares.

C.

WX purchases 75,000 of ST's $1 equity shares.

D.

WX purchases 50,000 of ST's $1 preference shares.

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Question # 33

Country X charges corporate income tax at the rate of 20% on all income irrespective of whether it is paid out as a dividend. Country Y charges corporate income tax at the rate of 25% on all income.

An entity, AA, which is resident in Country X pays a dividend of $100,000 to another entity, BB, which is resident in Country Y.

Countries X and Y have a double taxation treaty which adopts the exemption method in respect of this type of transaction.

What is BB's liability to tax in Country Y in respect of the dividend income received?

Options:

A.

No tax will be payable.

B.

Tax will be payable at 20%.

C.

Tax will be payable at 25%.

D.

Tax will be payable at 25% less a credit given for the 20% already paid by AA in Country X.

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Exam Code: F1
Exam Name: Financial Reporting
Last Update: Feb 22, 2025
Questions: 248
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