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F1 Exam Dumps : Financial Reporting

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Financial Reporting Questions and Answers

Question 1

In accordance with The Conceptual Framework for Financial Reporting, faithful representation is a fundamental qualitative characteristic.

To be a faithful representation financial information must be as far as possible which THREE of the following?

Options:

A.

Timely

B.

Understandable

C.

Free from error

D.

Complete

E.

Comparable

F.

Neutral

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Question 2

ABC uses an aggressive approach to managing its working capital. XYZ uses a conservative approach to managing its working capital.

Which of the following is ABC more at risk of compared to XYZ?

Options:

A.

Inventory obsolescence

B.

Running out of cash

C.

High finance costs

D.

Receivables not paying on time

Question 3

Which of the following would be the most immediate impact of overtrading?

Options:

A.

An inability to pay trade payables.

B.

Having to offer bulk discounts to customers.

C.

An inability to pay dividends to shareholders.

D.

A shortage of inventory