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CIMA F1 Exam Syllabus Topics:

CIMA Financial Reporting Sample Questions:

1. What is the correct classification of a 90-day government bond?

2. A building was purchased on 1 January 20X1 for $300,000 and had a useful economic life of 40 years. On 1 January 20X5 the building was revalued by a professional surveyor at $450,000. Directors decided to incorporate the revalued amount into the financial statements.
The accounting entries to record the initial revaluation of the building in the financial statements for the year ended 31 December 20X5 will be to debit building cost $150,000 and then:

A) debit accumulated depreciation $37,500 and credit revaluation reserve $187,500.
B) debit accumulated depreciation $30,000 and credit revaluation reserve $180,000.
C) credit accumulated depreciation $30,000 and credit revaluation reserve $120,000.
D) credit accumulated depreciation $37,500 and credit revaluation reserve $112,500.

3. 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 amount of retained earnings that will be included in FG's consolidated statement of financial position as at 31 December 20X5.
Give your answer to the nearest whole $.

4. 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 $.

5. Which of the following is NOT a reason why financial reporting information needs to be regulated?

A) So that potential investors can compare the financial information of different companies.
B) So that shareholders of a quoted company can make informed decisions about their investments
C) So that a bank can assess the amount of finance it is prepared to lend to a company.
D) So that the managers of a company can make decisions about its operations.

Solutions: