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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

AB sells to ST, a group entity, 10,000 units at $2.50 each. The market value was $6 each.

The effect on AB of the transfer pricing legislation on this transaction would be to: .

Options:

Question 3

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.

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

B.

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

C.

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

D.

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