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CIMAPRA17-BA3-1-ENG
BA3 - Fundamentals of Financial Accounting
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Question: 74
The valuation of inventory in a manufacturing company will consist of: A . Direct material and direct labor only
B . Direct material, direct labor and direct expenses only C . All direct costs plus a share of production overheads
D . All direct costs plus a share of production and non-production overheads
Answer: C
Question: 75
Which one of the following book-keeping errors does not affect the view given by the financial accounts? A . An error of omission
B . An error of commission C . An error of principle
D . An error of original entry
Answer: B
Question: 76
IAS 2 Inventories does not permit the use of the last in. first out (LIFO) method of valuing inventory In a time of rising prices, which of the following is a reason for this?
A . Purchases are overstated
B . Closing inventory is understated. C . Cost of sales are understated
D . Gross profit is overstated
Answer: B
Question: 77
5 times
Answer: B Question: 78 Refer to the Exhibit.
John, an employee of Kelt Ltd, earns gross wages for a week of �425.76.
Income tax is deducted at a rate of 25% on all earnings in excess of �85.00 per week and he is also liable to pay National Insurance contributions of 9% of his total earnings. Employers national insurance contributions are at a rate of 10.5%.
What are the correct ledger entries in the accounts of Kelt Ltd? The answer is:
A . Option A
B . Option B C . Option C D . Option D
Answer: A
Question: 79
DEF prepares its financial statements to 30 September each year On 1 March 20X5 DEF acquires an office and immediately rents it to a tenant charging $2,400 a quarter payable in advance.
The tenant pays $2,400 on each of the following days 1 March 20X5, 6 June 20X5, 4 September 20X5 and 1 December 20X5.
What is the liability reported in the statement of financial position relating to the rent at 30 September 20X5? A . $7,200
B . $1,600 C . $4,000 D . $5,600
Answer: D
Question: 80
Which ONE of the following does the Statement of Cash Flows show: A . The assets, equity and liabilities of a business
B . The revenue and expenses of a business over a period of time C . The cash usage of a business over a period of time
D . Notes to go with the statements that explain the practices used
Answer: C
Question: 81
Company X is a private limited oil company.
Which of the following are relevant for Company X�s integrated report? A . Risk of oil prices falling
B . Risk of share prices falling
C . Risk posed by competing oil companies and sustainable energy sources D . Need for report to be concise
Answer: A,C,D
Question: 82
Which of the following transactions would be classified as a revenue transaction? A . Purchase of plant and machinery
B . Issue of share capital
C . Payments made to trade payables D . Purchase of inventory for resale
Answer: D Question: 83 Refer to the Exhibit.
Which of the following items should be included in the valuation of inventory in a manufacturing company? A . A, C and F
B . B, D and E
C . A, C, D and E D . B, D, E and F
E . A, C, D, E and F
F . A, B, D, E and F
Answer: E
Question: 84
The Framework is described as a conceptual framework when used in the creation of new accounting standards. Which ONE of the following describes the approach of the Framework?
A . Rules based
B . Principles based C . Statutory
D . Regulatory
Answer: B

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BA3 - Fundamentals of Financial Accounting Practice Test

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