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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 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

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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

Which THREE of the following statements about government grants are INCORRECT?

Options:

A.

A grant is recognised as revenue

B.

Grants must not be deducted from the related expenses in financial statements

C.

Capital grants relate to cash inflow and outflow

D.

A compensatory grant should be recognised in statements when it is received, not when the expenses it applies to occurred

E.

A grant is recognised only when there is reasonable assurance that the entity will comply with any conditions attached to the grant