F1 CIMA Financial Reporting exact Exam Questions

Financial Reporting

Last Update 19 hours ago Total Questions : 248

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Question # 4

If an entity makes a capital loss in a period, which of the following is the most likely way that will be allowed for relieving that capital loss?

Carry forward and set against future capital gains.

Use group loss relief to transfer the capital loss to another group entity.

Carry backwards and set against previous years trading profits.

Carry forward and set against future trading profits

Question # 5

An entity acquires 100% of the equity shares in another entity.

The consideration paid for the shares is less than the fair value of the net assets acquired.

Which of the following is the correct accounting treatment for the difference between the consideration paid and the fair value of the net assets acquired, in accordance with IFRS 3 Business Combinations?

Recognise as a gain in the consolidated statement of profit or loss.

Recognise as a deferred credit and release to consolidated profit or loss over its useful economic life.

Recognise as a deduction from goodwill in the consolidated statement of financial position.

Recognise as a gain in the statement of changes in equity.

Question # 6

The development of an international financial reporting standard generally goes through a number of stages.

Which of the following is NOT a stage of development?

Producing an exposure draft for public comment

Establishing an advisory committee

Developing and publishing a discussion paper

Establishing an interpretations committee

Question # 7

What does the tax credit method of giving double taxation relief mean?

Tax paid in one country may be allowed as a tax credit in another country. Relief is normally restricted to the lower of the foreign or country of residency tax.

Tax paid in one country may be allowed as a tax credit in another country. Relief is normally restricted to the higher of the foreign or country of residency tax.

Tax relief is gained by deducting the foreign tax from the foreign income so that only the "net" amount will be subject to tax in the country of residency.

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

Question # 8

XY is an entity incorporated in Country B but operates in several countries. Monthly management meetings to decide on strategic matters take place in Country A, where the majority of its production happens. XY sells most of its goods to Country C.

In accordance with the Organization for Economic Co-operation and Development (OECD) rules on corporate residence which of the following statements is true?

XY is resident in Country B because this is the country of its incorporation.

XY is resident in Country C because this is the country where XY generates most of its revenue.

XY is resident in Country A because this is the country of its effective management.

XY is resident in Country A because this is the country where XY undertakes most of its production.

Question # 9

The following information has been extracted from GHI's statement of financial position:

Which of the following is the total cash flow for working capital changes to be recorded in GHI's statement of cash flows for the year ended 31 December 20X5?

Outflow of $240,000

Inflow of 5120,000

Inflow of $240,000

Outflow of $120,000