Last Attempt F1 Questions

Financial Reporting Questions and Answers

Question 17

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

Options:

All of the fluctuating current assets and part of the permanent current assets.

Part of the fluctuating current assets, but no part of the permanent current assets.

All of the fluctuating current assets, but no part of the permanent current assets.

Part of the fluctuating current assets and part of the permanent current assets.

Question 18

The subsidiary company of Group XY has purchased £150,00 worth of goods its parent company. However the goods purchased have yet to arrive at the subsidiary at the end of the financial year 20X4, meaning there is

a disagreement in the current account balances between the parent and subsidiary.

With Group XY looking to produce its CSOFP for the end of the financial year, which of the following statements are true in relation to accounting for this disagreement? Select ALL that apply.

Options:

The adjustments to resolve this disagreement, need to be accelerated, so they can be included in the consolidation of assets for the CSOFP for 20X4

£150,000 worth of inventory will be debited into the subsidiary's inventory account

As the goods have not reached the subsidiary by the end of the financial year 20X4, they will be included in the CSOFPfor the next financial year

£150,000 worth of inventory will be credited into the subsidiary's inventory account

£150,000 will be debited to the payables account of the parent company

£150,000 will be credited to the payables account of the subsidiary company

£150,000 will be credited into the receivables account of the parent company

Question 19

UK purchased an asset, with a useful economic life of 10 years, on 1 January 20X5 for $40,000. The asset was revalued on 31 December 20X6 to 544,000 and the directors believed its total useful economic life remained unchanged On 31 December 20X7 UK sells the asset for $50,000

How much will be recorded as a profit on disposal of the asset in UK's statement of profit or loss for the year ended 31 December 20X7?

Give your answer to the nearest $.

Options:

Question 20

Which of the following is correct?

The primary purpose of a cash budget prepared on a monthly basis is to determine:

Options:

next month's sales volumes.

the amount of inventory to purchase in the following month.

when to pay employees salaries.

whether there will be sufficient cash in the bank to meet requirements.

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Financial Reporting Questions and Answers

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