2024 Valid F1 Exam Updates - 2024 Study Guide
F1 Certification - The Ultimate Guide [Updated 2024]
CIMA F1 exam covers a wide range of topics, including the regulatory framework for financial reporting, financial statements, accounting concepts and principles, and financial analysis. F1 exam is computer-based, consisting of 60 multiple-choice questions that must be completed within 90 minutes. Candidates are expected to demonstrate their ability to apply their knowledge to real-world scenarios and business situations. Passing the CIMA F1 exam is an essential step towards achieving the CIMA Professional Qualification, which is recognized globally as a mark of excellence in the field of management accounting.
NEW QUESTION # 32
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 gain in the statement of changes in equity.
- B. Recognise as a deduction from goodwill in the consolidated statement of financial position.
- C. Recognise as a gain in the consolidated statement of profit or loss.
- D. Recognise as a deferred credit and release to consolidated profit or loss over its useful economic life.
Answer: C
NEW QUESTION # 33
Statements of financial position for YZ, BC and DE at 31 March 20X2 include the following balances:
YZ purchased 90% of BC's equity shares for $508,000 on 1 January 20X2. On 1 January 20X2 BC's retained earnings were $183,000. YZ uses the proportion of net assets method to value non-controlling interest at acquisition.
YZ purchased 30% of DE's equity shares on 1 April 20X1 for $112,000. DE's retained earnings at 1 April
20X1 were $88,000.
On 1 February 20X2 YZ sold goods to BC for $28,000 at a mark up of 25% on cost. All the goods were still in BC's inventory at 31 March 20X2.
Calculate the goodwill arising on the acquisition of BC.
Give your answer to the nearest whole $.
Answer:
Explanation:
$118300
NEW QUESTION # 34
According to IAS 21 The Effects of Changes in Foreign Exchange Rates, an entity should determine its functional currency.
Which of the following is NOT a factor that should be considered by an entity when determining its functional currency?
- A. The currency that mainly influences labour, material and other costs.
- B. The currency used for published financial reports.
- C. The currency that mainly influences selling prices of the entity's goods and services.
- D. The currency of the country whose competitive forces determine prices of goods and services.
Answer: B
NEW QUESTION # 35
OP is considering investing in government bonds. The current price of a $100 bond with 8 years to maturity is $88.
The bonds have a coupon rate of 6% and repay face value of $100 at the end of the 8 years.
Calculate the yield to maturity.
Give your answer to one decimal place.
Answer:
Explanation:
8.2%
NEW QUESTION # 36
EFG purchased an asset on 1 January 20X5 for $24,000. On that date its useful life was 5 years and residual value was expected to be nil. EFG calculates depreciation on a pro-rata basis.
The asset is reclassified as held for sale on 1 October 20X8 and is unsold on 31 December 20X8.
It is expected that the asset will be sold for S6;300 and that selling costs will be S500.
What is the amount that this asset will be included at in EFG's statement of financial position at 31 December 20X8?
Give your answer to the nearest $.
Answer:
Explanation:
$5,800
NEW QUESTION # 37
CDO is an entity that is preparing to apply to its local stock market for a listing. CDO is currently run by a board of ten directors, each of whom manages a department of CDO. The board is chaired by Ms E who is also CDO's Chief Executive Officer.
Which TWO of the following actions would assist CDO to meet corporate governance regulations?
- A. Separate the roles of Chair of the Board and Chief Executive Officer and appoint different individuals to each role
- B. Allow all directors to vote on their own remuneration increases
- C. Ensure that no part of any director's remuneration is linked to corporate or individual performance
- D. Appoint a number of non-executive directors to the board of CDO.
- E. Allow the Chief Executive Officer to appoint all new directors when a vacancy arises
Answer: A,D
NEW QUESTION # 38
AAA has the following working capital ratios at 30 March 20X4:
During the year ended 30 March 20X4 credit purchases were $3,600 and at 30 March 20X4 the outstanding trade payables amounted to $522.
The year ended 30 March 20X4 was not a leap year.
Calculate the working capital cycle for AAA.
Give your answer to one decimal place.
Answer:
Explanation:
26.2 Days
NEW QUESTION # 39
EFG prepares financial statements to 31 December each year. EFG has the following receivable days based on the year end receivable balances:
Which of the following would be a reason for this decrease in receivable days?
- A. EFG transferred collection of all receivables to a factoring agency during 20X2.
- B. EFG's largest customer negotiated an increase in credit terms during 20X2.
- C. EFG employed an inexperienced credit controller in November 20X2.
- D. EFG's revenue for 20X2 increased as a result of competitive pricing.
Answer: A
NEW QUESTION # 40
XYZ has the following data relating to the forecast sale of goods for the quarter to 31 December 20X2:
XYZ expects trade receivables to be settled as follows:
* 20% in the month of sale, by offering a settlement discount of 5%;
* 30% in the month following sale, and
* the remainder, after allowing for irrecoverable debts, in the subsequent month
$10,000 of the sales made in October 20X2 are expected to be irrecoverable What is the forecast amount to be received by XYZ from trade receivables in December 20X2?
- A. $123 000
- B. $133 000
- C. $132,000
- D. $122000
Answer: B
NEW QUESTION # 41
An entity had a current tax liability of $187,000 in its statement of financial position as at 30 September 20X5.
It was subsequently negotiated and eventually agreed with the tax authorities that the entity would pay $192,000 and this was paid on 6 January 20X6.
The entity's management estimate that the tax due on profits for the year to 30 September 20X6 is $231,000.
Calculate the entity's corporate income tax expense included in its statement of profit or loss for the year ended 30 September 20X6.
Give your answer to the nearest whole $000.
Answer:
Explanation:
$236000
NEW QUESTION # 42
Country ZZ allows the cost of a capital asset to be adjusted for an indexation allowance which takes into consideration the effect of inflation, although the indexation allowance cannot convert a chargeable gain into a chargeable loss.
The following data relates to the sale of an asset ABC has the following working capital ratios at 31 December
20X2:
Dunng the year ended 31 December 20X4 credit purchases wefe $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. March 20X4:
Calculate the chargeable gain or loss in respect of the sale of this asset.
Give your answer to the nearest $.
Answer:
Explanation:
$0
NEW QUESTION # 43
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 # 44
Statements of financial position for FG, IJ and KL at 31 December 20X5 include the following balances:
FG acquired 90% of IJ's equity shares for $358,000 on 1 July 20X5 when IJ's retained earnings were $98,000.
FG acquired 100% of KL's equity shares for $360,000 on 1 January 20X5 when KL's retained earnings were $155,000.
FG used the proportion of net assets method to value non-controlling interests at acquisition.
KL sold a piece of land to FG for $130,000 on 1 September 20X5. At the date of transfer the land had a carrying value of $50,000.
The management of FG expect KL to make profits in the future and no impairment ot its goodwill was proposed at 31 December 20X5.
Calculate the total goodwill to be included in FG's consolidated statement of financial position as at 31 December 20X5.
Give your answer to the nearest whole $.
Answer:
Explanation:
$144800
NEW QUESTION # 45
The Conceptual Framework for Financial Reporting issued by the International Accounting Standards Board (known as the IASB's conceptual framework) includes one underlying assumption about the preparation of financial statements and two fundamental qualitative characteristics for financial information.
Identify the underlying assumption and one of the fundamental characteristics by placing one of the options in each of the boxes below.
Answer:
Explanation:
NEW QUESTION # 46
Which of the following is a feature of a direct tax?
- A. It cannot be related to the individual circumstances of the tax payer.
- B. It is levied on one part of the economy with the intention that it will be passed on to another.
- C. It is not levied on the eventual payer of the tax.
- D. The formal incidence and effective incidence are usually the same.
Answer: D
NEW QUESTION # 47
Corporate governance is the means by which an entity is operated and
Answer:
Explanation:
NEW QUESTION # 48
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. A new credit controller was appointed during the year ended 30 June 20X3 who has been chasing customers for payment.
- C. It was decided during the year ended 30 June 20X3 to stop undertaking credit checks on new customers.
- D. One customer who regularly took 120 days to pay their invoices stopped buying goods from ABC during the year ended 30 June 20X3.
Answer: C
NEW QUESTION # 49
XY acquired 75% of the equity shares of CD on 1 January 20X2 for $230,000.
On 1 January 20X2 CD had the following balances:
XY uses the proportionate share of net assets method to value non controlling interest at acquisition.
Calculate the goodwill arising on the acquisition of CD.
Give your answer to nearest whole number.
Answer:
Explanation:
$5000
NEW QUESTION # 50
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