2024 Valid F1 Real Exam Questions (Updated) 100% Dumps & Practice Exam
[UPDATED 2024] CIMA F1 Questions Prepare with Free Demo of PDF
CIMA F1 exam is divided into two sections: Section A and Section B. Section A focuses on the principles of financial reporting, covering topics such as the regulatory framework, financial statements, and accounting concepts. Section B, on the other hand, tests candidates' understanding of the application of financial reporting concepts to real-world scenarios, such as financial analysis, interpretation of financial statements, and forecasting.
NEW QUESTION # 36
Mr AM is the owner of Waxco Ltd. Mr AM was born in India, but currently resides in the USA. He has gained dual Indian and American citizenship.
Mr AM first registered Waxco Ltd in the USA when he started the company ten years ago. However, because of lower costs, the company moved its central management station to Germany two years ago. Waxco Ltd has other smaller offices such as call centres across Asia, in locations such as Pakistan and Cambodia, however Waxco Ltd only currently sell goods in the USA.
Which of the countries mentioned are relevant for determining Waxco Ltd's competent jurisdiction?
- A. Pakistan
- B. Cambodia
- C. India
- D. Germany
- E. The USA
Answer: D,E
NEW QUESTION # 37
It costs PWR £7.50 to produce product H, per product. Product H is typically sold for £89.99. It costs
£5.00 to package product H and £15 to deliver product H to customers.
PWR is currently selling faulty versions of product H from a defunct batch, (let's call this version product I), for 25% of the original price.
Which of the below options represent the correct inventory price for product I?
- A. £7.50
- B. £20.00
- C. £2.50
- D. £3.50
Answer: C
NEW QUESTION # 38
The IV Group is formed of I Ltd and its subsidiary company V Ltd. I Ltd purchased 67% of V Ltd's ordinary share capital on 31 March 20X3.
The purchase cost I Ltd £129,000. At the date of purchase V Ltd's net assets were £155,000 while its share capital was £37,000. NCI fair value on the date of acquisition was £31,000.
What was the amount of goodwill I Ltd paid as part of the acquisition. Calculate this figure using both the proportion of net assets method and the full good will method for valuing the non-controlling interest.
- A. Full goodwill method = £25,150
- B. Proportion of net assets method = £77,150
- C. Proportion of net assets method = £25,150
- D. Full goodwill method = £5,000
- E. Proportion of net assets method = £5,000
- F. Full goodwill method = £57,000
Answer: C,D
NEW QUESTION # 39
The following information relates to ABC.
Which of the following would be a reason for the movement in the trade receivable days?
- A. A system of early settlement discount was introduced during the year ended 30 June 20X3 which was taken up by quite a few customers.
- B. One customer who regularly took 120 days to pay their invoices stopped buying goods from ABC during the year ended 30 June 20X3.
- C. A new credit controller was appointed during the year ended 30 June 20X3 who has been chasing customers for payment.
- D. It was decided during the year ended 30 June 20X3 to stop undertaking credit checks on new customers.
Answer: D
NEW QUESTION # 40
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:
Explanation:
$32000
NEW QUESTION # 41
GH's tax liability at 30 June 20X3 in respect of the tax charge on the profits for the year ended 30 June 20X3 is $876,000.
There was an over provision of $105,000 that related to the tax charge on the profits for the year ending 30 June 20X2.
What amount should be shown in GH's statement of profit or loss for the year ending 30 June 20X3?
Give your answer to the nearest $.
Answer:
Explanation:
$771000
NEW QUESTION # 42
A conservative policy for financing working capital is one where short-term finance is used to fund:
- A. Part of the fluctuating current assets, but no part of the permanent current assets.
- B. Part of the fluctuating current assets and part of the permanent current assets.
- C. All of the fluctuating current assets and part of the permanent current assets.
- D. All of the fluctuating current assets, but no part of the permanent current assets.
Answer: A
NEW QUESTION # 43
LM received notification on 10 November 20X4 from one of its customers stating they had ceased trading as they had gone into liquidation. The balance outstanding at 31 October 20X4 was $150,000.
In accordance with IAS 10 Events after the Reporting Date this event will be treated as:
Answer:
Explanation:
NEW QUESTION # 44
YZ has $40,000 of plant and machinery which was acquired on 1 June 20X1.Tax depreciation rates on plant and machinery are 25% reducing balance. All plant and machinery was sold for $24,000 on 1 June 20X3.
Calculate the tax balancing allowance or charge on disposal for the year ended 31 May 20X3 and state the effect on the taxable profit.
- A. A balancing allowance of $1,500 increases taxable profit.
- B. A balancing allowance of $1,500 reduces taxable profit.
- C. A balancing charge of $1,500 increases taxable profit.
- D. A balancing charge of $1,500 reduces taxable profit.
Answer: C
NEW QUESTION # 45
The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:
1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September
20X0.
2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.
3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.
4. PQ uses the fair value method for non-controlling interest at acquisition.
What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 31 December 20X0?
- A. $3,333
- B. $2,000
- C. $1,667
- D. $4,000
Answer: C
NEW QUESTION # 46
QR purchased a property for its investment potential on 1 January 20X3 for $2.5 million.
The total property cost is split as follows: land $1 million and buildings $1.5 million. The buildings were expected to have a remaining useful life of 40 years.
The local property index at 31 December 20X3 indicates that the fair value of the property has risen by 10%.
What is the balance that QR will include in its statement of financial position at 31 December 20X3 for this property, assuming that it uses the IAS 40 Investment Properties fair value model?
Give your answer in $million to two decimal places.
Answer:
Explanation:
2.75 million
NEW QUESTION # 47
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?
- A. $65,000
- B. $70,000
- C. $95,000
- D. $100,000
Answer: C
NEW QUESTION # 48
The following data relates to Company AB.
Statement of Profit or Loss for the year ended 30 June 20X4:
During the year ending 30 June 20X4, which was not a leap year, the average stock holding period was 102 days.
Calculate the working capital cycle in days.
Give your answer to the nearest full day.
Answer:
Explanation:
56 days
NEW QUESTION # 49 
Answer:
Explanation:
NEW QUESTION # 50
The following data relates to Company AB.
Statement of Profit or Loss for the year ended 30 June 20X4:
During the year ending 30 June 20X4, which was not a leap year, the average stock holding period was
102 days.
Calculate the working capital cycle in days.
Give your answer to the nearest full day.
Answer:
Explanation:
56 days
NEW QUESTION # 51
Country X levies corporate income tax at a rate of 25% and charges income tax on all profits irrespective of whether they are distributed by way of dividend. Country Y levies corporate income tax at a rate of 20%.
A, who is resident in Country X, pays a divided to B, who is resident in Country Y. B is required to pay corporate income tax on the dividend received from A, but a deduction can be made for the tax suffered on this dividend restricted to a rate of 20%.
Which method of relief for foreign tax does this describe?
- A. Restricted
- B. Exemption
- C. Tax credit
- D. Deduction
Answer: C
NEW QUESTION # 52
Which of the following is not a possible tax rate structure?
- A. Proportional
- B. Progressive
- C. Regressive
- D. Direct
Answer: D
NEW QUESTION # 53
Which THREE of the following are included in the International Accounting Standards Board's "The Conceptual Framework for Financial Reporting"?
- A. The formats of financial statements
- B. Specification of the financial statements that must be presented
- C. Definition of the headings to use in financial statements
- D. Qualitative characteristics of financial statements
- E. The elements of financial statements
- F. The objective of financial statements
Answer: D,E,F
NEW QUESTION # 54
Which THREE of the following actions, considered in isolation, would increase the working capital cycle of an entity?
- A. Reduce the selling prices charged to customers.
- B. Increase the credit period available to customers.
- C. Take advantage of new bulk purchase discounts available.
- D. Remove a prompt payment discount available to customers.
- E. Change to a Just-in-Time approach to manage inventory.
- F. Take longer to pay suppliers for purchases.
Answer: B,C,D
NEW QUESTION # 55
On 1 May 20X8 DEF enters into a contract to lease plant with a fair value of $200,000. Annual lease payments of $50,000 are to be paid in advance and DEF incurred direct costs to arrange the lease of S2.000 The present value of future lease payments at 1 May 20X8 is $190,000.
What is the amount to be recognised as a right-of-use asset on 1 May 20X8?
- A. $200,000
- B. $192 000
- C. $242000
- D. $240,000
Answer: C
NEW QUESTION # 56
An entity has a working capital cycle of 120 days which has been calculated in part from the following data:
What is the stock holding period on the basis of 365 days in a year?
Give your answer to the nearest whole day.
Answer:
Explanation:
101 days
NEW QUESTION # 57
ABC has the following working capital ratios at 31 December 20X2:
During the year ended 31 December 20X4 credit purchases were $1,700,000 and at 31 December 20X4 the outstanding trade payables balance was $340,000
Calculate the working capital cycle for ABC.
Give your answer to the nearest whole number of days and assume there are 365 days in a year.
Answer:
Explanation:
Pending
NEW QUESTION # 58
Below are extracts from LLL's financial statements for the year ended 31 December 20X2.
Depreciation of $25,000 was charged on properly, plant and equipment in the year and there were no disposals What is the cash generated from operations for inclusion in LLL's statement of cash flows for the year ended
31 December 20X2?
- A. $355 000
- B. $390,000
- C. $415,000
- D. $435,000
Answer: A
NEW QUESTION # 59
The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:
1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September
20X0.
2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.
3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.
4. PQ uses the fair value method for non-controlling interest at acquisition.
What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 31 December 20X0?
- A. $3,333
- B. $2,000
- C. $1,667
- D. $4,000
Answer: C
NEW QUESTION # 60
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