CIMA CIMAPRA17-BA3-1 Exam Practice Test Instant Access

Question 1

In the year ended 31 December 20X1, XYZ receives an email confirming that a major customer has gone into liquidation and will be unable to pay its suppliers.

Which of the following is the impact of adjusting for this event?

AProfits increase and allowance increases.

BReceivables decrease and allowance increases

CReceivables unchanged and profits decrease

DReceivables decrease and profits decrease

Answer : D

Question 2

On 31 December 20X6 GHI makes a bonus issue of 50,000 shares On this dale the nominal value of the shares is $1 and the market value is $3 GHI has a share premium account with a substantial credit balance. The share capital account is credited correctly in the nominal ledger. Which of the following statements is TRUE?

AThe bonus issue is valued at $3 per share and the debit entry is to the cash account

BThe bonus issue is valued at $1 per share and the debit entry is to the share premium account

CThe bonus issue is valued at $1 per share and the debit entry is to the cash account

DThe bonus issue is valued at $3 per share and the debit entry is to the share premium account

Answer : B

Question 3

Which of the following is the correct double entry for a prepayment?

ADebit expense Credit prepayment (current asset)

BDebit prepayment (current liability) Credit expense

CDebit prepayment (current asset) Credit expense

DDebit expense Credit prepayment (current liability)

Answer : A

Question 4

Fraud will only be prevented successfully if potential fraudsters perceive the risk of detection as high.

Which THREE of the following are ways to prevent fraud?

ASufficient internal control systems

BComputerized accounting systems

CContinuous supervision of all employees

DRegular reconciliations

ESurprise audit visits

FMaintaining books of prime entry

Answer : A, C, E

Question 5

Which of the following would be a good method of segregating the duties of staff?

AEmploying separate persons to maintain the sales and purchase ledgers

BEmploying a wages specialist to calculate and deal with the payment of wages

CEmploying an experienced cashier to deal with all bank transactions

DEmploying a separate person to maintain and reconcile control accounts

Answer : D

Question 6

Which ONE of the following statements is true?

AIt is the responsibility of the internal auditors to detect fraud

BIt is the responsibility of the external auditors to detect fraud

CIt is the responsibility of the management to detect fraud

DIt is the responsibility of the shareholders to detect fraud

Answer : A

Question 7

Which one of the following internal controls is designed to prevent errors and fraud?

AConfirmation of payables balances with suppliers.

BRequiring cheques over a certain amount to be signed by two signatories.

CBank reconciliations.

DExternal audit.

Answer : B

CIMAPRA17-BA3-1 BA3 - Fundamentals of Financial Accounting Exam Practice Test