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Financial Reporting Questions and Answers

Question 5

KL has S90.000 of plant and machinery which was acquired on 1 June 20X4. Tax depreciation rates on plant and machinery are 20% reducing balance. All plant and machinery was sold for 560,000 on 1 June 20X6

Calculate the tax balancing allowance or charge on disposal tor the year ended 31 May 20X7 and state the effect on the taxable profit.

Options:

A balancing allowance of $2,400 reduces taxable profit.

A balancing charge of $2,400 reduces taxable profit.

A balancing charge of $2,400 increases taxable profit.

A balancing allowance of $2,400 increases taxable profit.

Question 6

The following data has been extracted from GH's accounting records:

What is GH's average inventory days for the year ended 31 March 20X3?

Options:

39 days

43 days

25 days

28 days

Question 7

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?

Options:

Emphasis of matter

Unqualified report

'Except for' qualification

Adverse audit opinion

Disclaimer of opinion

Question 8

Which of the following is a characteristic of a defined contribution post-employment benefit scheme?

Options:

The amount of the post-employment benefits paid to former employees depends on how well the scheme's investments have performed.

The employer would make additional contributions into the scheme if the actuary predicted a shortfall in the funds available to pay post-employment benefits.

The amount of the post-employment benefits paid to former employees is determined at the date of their retirement using a predefined formula.

The employer may take a contributions holiday and stop paying contributions for a period, if the scheme's assets appear to be more than are required to meet the scheme's obligations.

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Financial Reporting Questions and Answers

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