CIMA CIMAPRA19-F01-1 F1 Financial Reporting Exam Exam Practice Test Questions

• Question 1

  What does the deduction method of giving double taxation relief mean?

  • Tax relief is gained by adding the foreign tax from the foreign income so that the gross amount will be subject to tax in the country of residency.
  • Tax paid in one country may be allowed as a tax deduction another country. Relief is normally restricted to the lower of the foreign or country of residency tax.
  • Tax relief is gained by deducting the foreign tax from the foreign income so that only the 'net' amount will be subject to tax in the country of residency.
  • Tax paid in one country may be allowed as a tax credit in another country. Relief is normally restricted to the higher of the foreign or country of residency tax.

  Show Answer Answer: C Next

• Question 2

  While conducting their audit, auditor 0 did not encounter issues which significantly limited the scope of their audit, however they did run into problems in that they disagreed with the management on facts in the statements.These disagreements were somewhat material, but they did not affect the auditor's overall opinion of the business. Which of the following statements should auditor 0 issue?

  • Emphasis of matter
  • Unqualified report
  • 'Except for' qualification
  • Adverse audit opinion
  • Disclaimer of opinion

  Show Answer Answer: A Next

• Question 3

  An entity's policy is to finance the investment in working capital using short-term financing to fund all of its investment in fluctuating net current assets as well as some of its investment in permanent net current assets.What is this working capital financing policy known as?

  • Conservative
  • Moderate
  • Aggressive
  • Short term

  Show Answer Answer: C Next

• Question 4

  Which of the following is NOT a type of supply for value added tax (VAT)?

  • Fixed
  • Standard-rated
  • Exempt
  • Zero-rated

  Show Answer Answer: A Next

• Question 5

  Which THREE of the following matters should an entity consider when determining the credit terms granted to a customer?

  • Typical credit terms operating within the industry
  • Risk of non-payment
  • Selling price of the goods being sold to the customer
  • Bargaining power of the customer
  • Number of suppliers
  • Discount offered by suppliers for early payment

  Show Answer Answer: A, B, D Next