Free CIMA F1 Practice Exam with Questions & Answers | Set: 5

A conservative policy for financing working capital is one where short-term finance is used to fund:

An asset cost $250,000 on 1 January 20X1 and on that date was assessed to have a residual value of $40,000 and a useful economic life of six years. On 1 January 20X4 management assessed that the remaining useful economic life of the asset was five years and that the asset had a residual value of nil.

What is the depreciation charge for this asset in the year ended 31 December 20X4?

Give your answer to the nearest whole number.

Country X levies a duty on alcoholic drinks. Where the alcohol content is above 40% by volume the duty levied is $5 per 1 litre bottle.

What type of tax is this duty?

You work in the finance department of an entity. A director has approached you and asked you to falsify sales invoices which would significantly inflate revenue. The CIMA Code of Ethics suggests that you should deal with such an ethical dilemma by following a number of stages.

Place each of the stages identified below into chronological order.

There are two main approaches that a country could adopt in respect of corporate governance regulation - a rules based approach and a principles based approach. Match the following statements with the appropriate approach by placing either rules based or principles based against each of them.

Which of the following is a type of short-term finance?

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?

ABC uses an aggressive approach to managing its working capital. XYZ uses a conservative approach to managing its working capital.

Which of the following is ABC more at risk of compared to XYZ?

An entity bought a capital item for $110,000 on 1 March 20X4 incurring legal fees at the date of purchase of $2,500.

On 1 May 20X4 additional costs classified as capital expenditure by the tax rules of the country of $25,000 were incurred in respect of the asset. On 1 June 20X4 repairs not classified as capital expenditure were incurred at a cost of $15,000.

The asset was sold for $250,000 on 30 November 20X8 and costs to sell were incurred of $4,300.

Calculate the chargeable gain on the disposal.

Give your answer to the nearest $.