2024 Valid F1 FREE EXAM DUMPS QUESTIONS & ANSWERS

Free F1 Exam Braindumps CIMA  Pratice Exam

CIMA F1 exam is one of the fundamental levels of the CIMA Professional Qualification. F1 exam focuses on financial reporting and provides candidates with a solid understanding of the principles of financial statements, their preparation, and their analysis. It is designed to equip candidates with the skills and knowledge required to interpret and communicate financial information to stakeholders, both internal and external.

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 # 103
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.
Calculate the profit attributable to the non-controlling interests disclosed in PQ's consolidated statement of profit or loss for the year ended 31 December 20X0.
Give your answer to the nearest whole $.

Answer:

Explanation:
$8000

NEW QUESTION # 104
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.
Calculate the amount that will be shown as the share of profit of associate in PQ's consolidated statement of profit or loss for the year ended 31 December 20X0.

• A. $4,000
• B. $2,000
• C. $3,200
• D. $10,000

Answer: B

NEW QUESTION # 105
Mr K is being pressured by his manager to change figures in his report so that it will improve his manager's bonus.
His manager has promised Mr K a promotion if he agrees to do this.
What threats is Mr K facing?

• A. Intimidation and familiarity
• B. Intimidation and self-interest
• C. Self-review and advocacy
• D. Familiarity and self-interest

Answer: B

NEW QUESTION # 106
The financial statements of JK for the year ended 31 August 20X4 were approved on 10 November 20X4.
Within these financial statements which of the following would have been treated as a non-adjusting event in accordance with IAS 10 Events After the Reporting Period?

• A. The completion of a court case on 5 November 20X4 in which JK was ordered to pay damages of
  $150,000.
• B. A fire in JK's main warehouse on 3 September 20X4 destroying 60% of the inventory that had been held at the year end.
• C. Inventory which was originally valued at its cost of $45,000 being sold for $37,000 in September 20X4.
• D. Notification received on 31 August that one of JK's major customers had gone into liquidation and was unlikely to pay any outstanding invoices.

Answer: B

NEW QUESTION # 107
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 = £57,000
• B. Proportion of net assets method = £25,150
• C. Full goodwill method = £5,000
• D. Full goodwill method = £25,150
• E. Proportion of net assets method = £77,150
• F. Proportion of net assets method = £5,000

Answer: B,C

NEW QUESTION # 108
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 # 109
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. Take advantage of new bulk purchase discounts available.
• C. Remove a prompt payment discount available to customers.
• D. Change to a Just-in-Time approach to manage inventory.
• E. Increase the credit period available to customers.
• F. Take longer to pay suppliers for purchases.

Answer: B,C,E

NEW QUESTION # 110
Which THREE of the following would be included in a cash budget?

• A. Dividends received from associate
• B. Depreciation on machinery
• C. Profit on disposal of motor vehicle
• D. Salaries paid to staff
• E. Impairment of goodwill
• F. Interest payments

Answer: A,D,F

NEW QUESTION # 111
In Country X corporate income tax is levied on profits as follows:

Which of the following describes the tax rate structure in Country X?

• A. Progressive
• B. Proportional
• C. Regressive
• D. Competent

Answer: A

NEW QUESTION # 112
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?

• A. XY is resident in Country B because this is the country of its incorporation.
• B. XY is resident in Country A because this is the country where XY undertakes most of its production.
• C. XY is resident in Country C because this is the country where XY generates most of its revenue.
• D. XY is resident in Country A because this is the country of its effective management.

Answer: D

NEW QUESTION # 113
An entity purchased an asset for $375,000 on 1 November 20X0 incurring legal fees of $33,000.
Improvements were made to the asset for $65,000 on 1 December 20X2 which qualified as capital expenditure under the local tax rules. The entity also incurred repair costs on the asset on 1 February 20X3 amounting to
$10,000.
The asset was sold for $680,000 on 1 December 20X5 incurring allowable costs on disposal of $15,000.
Indexation on the purchase cost and the improvement are allowable.
The index increased by 20% between November 20X0 and December 20X5,15% between December 20X2 and December 20X5 and 10% between February 20X3 and December 20X5 Calculate the chargeable gain on the disposal of the asset on 1 December 20X5.

• A. $107,250
• B. $100,650
• C. $89,650
• D. $90,650

Answer: B

NEW QUESTION # 114
Which THREE of the following are potential implications to a manufacturing business of holding insufficient inventory of raw materials?

• A. Purchasing inventory at a higher price
• B. Increased risk of obsolescence
• C. Wasted production
• D. Additional storage costs
• E. Lost sales

Answer: A,C,E

NEW QUESTION # 115

Answer:

Explanation:

NEW QUESTION # 116
Statements of financial position as at 31 December 20X8 for JK, LM and PQ are as follows:

[1] JK purchased 80% of LM's $1 equity shares on 1 January 20X8 for $260,000 when the retained earnings of JK were $110,000. At that date the non-controlling interest had a fair value of $63,000.
[2] JK purchased 25% of PQ's $1 equity shares on 1 January 20X8 for $90,000 when the retained earnings of PQ were $96,000.
[3] During the year JK sold goods to LM for $32,000 at a mark up of 33.33% on cost. Half of the goods were still in LM's inventory at 31 December 20X8.
[4] LM transferred $32,000 to JK on 30 December 20X8 in settlement of the inter-group trade. JK did not record the cash in its financial records until 2 January 20X9.
Calculate the goodwill arising on the acquisition LM.
Give your answer to the nearest $.

Answer:

Explanation:
$13000

NEW QUESTION # 117
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?

• A. Recognise as a deduction from goodwill in the consolidated statement of financial position.
• B. Recognise as a deferred credit and release to consolidated profit or loss over its useful economic life.
• C. Recognise as a gain in the statement of changes in equity.
• D. Recognise as a gain in the consolidated statement of profit or loss.

Answer: D

NEW QUESTION # 118
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 # 119
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 increased turnover for year ended 31 December 20X2 by offering extended credit terms.
• 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 made substantial sales to overseas entities in the last few months of the year ended 31 December 20X2.
• D. The entity has transferred all receivables collections to a factoring agency during 20X2.

Answer: D

NEW QUESTION # 120
LM is preparing its cash forecast for the next three months.
Which of the following items should be left out of its calculations?

• A. Receipt of a new bank loan raised for the purpose of purchasing new machinery.
• B. Tax payment due, that relates to last year's profits.
• C. Rental payment on a leased vehicle.
• D. Expected loss on the disposal of a piece of land.

Answer: D

NEW QUESTION # 121
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 # 122
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. Adminsitration $136 Distribution $120
• B. Administration $141 Distribution $117
• C. Administration $146 Distribution $114
• D. Administration $120 Distribution $87

Answer: A

NEW QUESTION # 123
On 1 July 20X8 JKL has 100 units of inventory, which cost $8 each. The following transactions arose during the month of July:

JKL values inventory using the first in. first out method.
What is the value of JKL's inventory at 31 July 20X8?
Give your answer to the nearest $.

Answer:

Explanation:
Pending

NEW QUESTION # 124
The legislation in Country S provides for an indexation allowance in the calculation of capital tax. STU operates in Country S where the indexation factor for the period 1 January 20X1 to 31 December 20X6 is 20% STU purchased a building for $64,000 on 1 January 20X1, incurring legal fees of $4,000. STU sold the building for $86,000 on 31 December 20X6 before selling fees of $3,500 What is the chargeable capital gam arising on STU's disposal of the building?

• A. $200
• B. S11,600
• C. S900
• D. $5,700

Answer: C

NEW QUESTION # 125
Indicate the possible reasons for the changes identified below to working capital ratios by placing the appropriate reason against each change.

Answer:

Explanation:

NEW QUESTION # 126
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To be eligible for the CIMA F1 certification exam, candidates must have a basic understanding of accounting and financial principles. They must also have completed the CIMA Certificate in Business Accounting or hold an equivalent qualification.

 

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