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F1 Exam Dumps : Financial Reporting

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Financial Reporting Questions and Answers

Question 1

Which of the following would NOT be a risk or impact of overtrading?

Options:

A.

Increase in interest payments

B.

Increased borrowings

C.

Shortage of working capital

D.

Expanding too quickly

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Question 2

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?

Options:

A.

Specific unit tax

B.

Ad valorem tax

C.

Direct tax

D.

Single-stage sales tax

Question 3

The legislation in Country S provides for an indexation allowance in the calculation of capital tax. STU operates in Country S where the indexation factor for the period 1 January 20X1 to 31 December 20X6 is 20%

STU purchased a building for $64,000 on 1 January 20X1, incurring legal fees of $4,000. STU sold the building for $86,000 on 31 December 20X6 before selling fees of $3,500

What is the chargeable capital gam arising on STU's disposal of the building?

Options:

A.

S11,600

B.

$5,700

C.

S900

D.

$200