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Free CIMA BA4 Practice Exam with Questions & Answers | Set: 8

Questions 106

Which of the following statements is incorrect in relation to the Memorandum of Association of a company which is registered after the Companies Act 2006 is fully in force?

Options:
A.

The Memorandum of Association will no longer be a company's superior constitutional document.

B.

The Memorandum of Association must state that the subscribers wish to form a company under the Act.

C.

The Memorandum of Association must state that the subscribers agree to become members of the company.

D.

The Memorandum of Association must contain a statement of the company's authorized share capital.

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Questions 107

Which of the following statements is incorrect in relation to the revised derivative action under section 260 of the Companies Act 2006? 

(i) The action may be brought by a single shareholder.

(ii) The action may be brought in relation to an act of negligence by the directors.

(iii) The action cannot be brought in respect of a proposed act by the directors.

Options:
A.

(i) only

B.

(ii) only

C.

(iii) only

D.

(ii) and (iii) only

Questions 108

Alan, Ben, Chris and Debbie are the only shareholders in ABCD Ltd, each holding 100 ordinary £1 shares. Alan, who is the company's sole director, has recently learned that Ben, Chris and Debbie are intending to remove him as a director by passing an ordinary resolution. In consequence Alan sold his computer to the company in return for 1,000 ordinary £1 shares. The company was in need of a computer, which was of equal value to the 1,000 ordinary £1 shares.

 

Which of the following is correct?

Options:
A.

The share issue is valid and Alan may use his 1,100 votes to defeat the resolution proposed by Ben, Chris and Debbie.

B.

The share issue is invalid as it has had the effect of manipulating the voting structure within the company.

C.

The share issue is invalid as the shares should have been offered to all the existing members first.

D.

The share issue is valid as long as Alan has the necessary authority to issue shares.

Questions 109

One of your colleagues is running an event to raise money for a local charity. One evening, you see her taking boxes of pens, notepads and post-it notes. When you challenge her, she says that she is taking them for her fundraising and, although she has not asked permission to take them, she is sure the company will not mind. Is this an ethical issue and why?

Options:
A.

Yes - she is using company property for other purposes without permission

B.

Yes - she should not be undertaking charitable initiatives

C.

No - it is just stationery and nothing valuable

D.

No - the company would undoubtedly not mind her using the stationery for charitable purposes, so there is nothing wrong with her taking it

Questions 110

An auditor would trace copies of sales invoices lo shipping documents in order to check for which of the following errors?

Options:
A.

Goods which have been invoiced have not been sent to customers

B.

Goods which were sent to customers have not been recorded in the individual customer's ledger account

C.

Goods which have been invoiced have not been recorded in the sales ledger.

D.

Goods sent to customers have not been invoiced

Questions 111

M's client has asked her to 'leave out' a few figures as he is applying for a bank loan and he wants his management accounts to, in his words, 'look better'.  If M does as he asks, he promises to pay her double her fee when the loan money comes through. M is tempted by his offer, her mother has been ill and she would love to take her away on holiday. What should she do?

Options:
A.

Tell the client she is unable to do as he asks, but she would be happy to write a letter to the bank explaining his financial position

B.

Tell the client she is unable to do as he asks, but that she knows another accountant who is happy to do that kind of thing

C.

Do as the client asks, after all the banks can afford it

D.

Do as the client asks; her mother's health is more important than her professional standing

Questions 112

An external auditor has concluded that the financial statements of a company fairly reflect the financial position of a company. The report which the auditor issues will include which of the following?

1. Details of the company's directors

2. Details of managements' responsibilities.

3. Details of the company's performance.

Options:
A.

1 and 3 only

B.

1,2 and 3

C.

2 only

D.

1 and 2 only

Questions 113

On 1st October X Ltd wrote to Y Ltd offering to sell a machine at a price of £5,000. The letter stated that Y Ltd must give X Ltd “notice in writing” of its acceptance of the offer by 8th October. Y Ltd posted its acceptance on 5th October and this reached X Ltd on 7th October. In the meantime X Ltd sent a letter to Y Ltd on 4th October revoking its offer, and this reached Y Ltd on 8th October.

 

Which of the following is correct?

Options:
A.

There is no contract between X Ltd and Y Ltd because the offer was withdrawn on 4th October when the revocation was sent to Y Ltd.

B.

There is no contract between X Ltd and Y Ltd because the offer was withdrawn on 8th October when the revocation was received by Y Ltd.

C.

X Ltd and Y Ltd contracted on 5th October.

D.

X Ltd and Y Ltd contracted on 7th October.

Questions 114

Which of the following is correct in relation to the purchase by a company of its own shares?

(i) If a company wishes to purchase its own shares it must have authority in its Articles of Association.

(ii) A private company may purchase its own shares out of capital.

(iii) It is not possible for a company to purchase all its own shares. 

Options:
A.

(i) only

B.

(i) and (ii) only

C.

(ii) and (iii) only

D.

(i), (ii) and (iii).

Questions 115

Which of the following statements is correct?

Options:
A.

The Articles of Association of a private company limited by shares may be altered by ordinary resolution.

B.

The Articles of Association of a private company limited by shares may be altered by a written ordinary resolution.

C.

The Articles of Association of a private company limited by shares may be altered by a special resolution.

D.

The Articles of Association of a private company limited by shares may be altered by a board resolution.

Questions 116

X owns 51% of the shares in X Ltd. Y and Z are the only directors of X Ltd. Which ONE of the following is CORRECT?

Options:
A.

X can give directions to Y and Z by passing ordinary resolutions ordering them to comply with his wishes

B.

X can dismiss Y and Z for any reason by using his majority vote

C.

X can use his votes to amend the articles and impose new obligations on Y and Z

D.

X can force Y and Z to declare a dividend

Questions 117

Company A has recently been having problems matching the views of its employees to its own. Which of the following might help their situation? Select ALL that apply.

Options:
A.

Only hire those who share the company's views.

B.

Ensure management level employees follow the actions and behaviour of those higher up.

C.

Teach employees the company's values and train them to follow them.

D.

Remove any barriers that might prevent an employee from adhering to the company's ethics.

E.

Reward those who consistently recognise and and adhere to the company's values.

F.

Discipline those who regularly ignore the company's rules and values.

G.

Threaten legal action against those who regularly ignore the company's ethics.

Questions 118

Which of the following is INCORRECT in relation to a claim for wrongful dismissal?

Options:
A.

A claim for wrongful dismissal is barred after 3 months.

B.

There is no requirement for a qualifying period of continuous employment.

C.

Damages for wrongful dismissal may be awarded by an employment tribunal.

D.

Evidence of serious misconduct discovered after the employment has ceased is admissible as part of the employers' defence.

Questions 119

Which of the following statements is correct in relation to the civil law?

Options:
A.

All civil cases commence in the County Court.

B.

A breach of the civil law does not enable an injured party to claim compensation.

C.

A person may be prosecuted for a breach of the civil law.

D.

A tort is a civil wrong.

Questions 120

Seller Ltd is a wholesaler of electrical goods which it sells to retailers only Which one of the following statements is correct in relation to the exclusion of the conditions which are implied into contracts for the sale of goods by sections 12 to 15 of the Sale of Goods Act 1979?

Options:
A.

As Seller Ltd is only involved in non-consumer sales it may exclude all the conditions implied by sections 12 to 15 of the Sale of Goods Act 1979

B.

Seller Ltd cannot exclude section 12 but can exclude sections 13 to 15 where reasonable

C.

Seller Ltd may exclude section 12 where reasonable but not sections 13 to 15

D.

Sections 12 to 15 of the Sale of Goods Act cannot be excluded in any non-consumer sales

Exam Code: BA4
Certification Provider: CIMA
Exam Name: Fundamentals of Ethics, Corporate Governance and Business Law
Last Update: Jul 13, 2025
Questions: 661

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