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CIMA BA3 Exam
Fundamentals of Financial Accounting (Page 37 )

Updated On: 26-Jan-2026
Page 16 of 80
PDF with 393 Questions

The system of double entry book keeping relies upon accuracy of entries

Which of the following combinations represent credit balances?

  1. Property, plant & equipment, accruals, bank overdraft & discount received
  2. Payables, accruals, share capital & loan stock(debentures)
  3. Share premium, prepayments, payables & bad debts
  4. Accruals, payables, drawings & discount allowed

Answer(s): B



The phrase 'net book value', when applied to the statement of financial position figure for non-current assets, indicates that the figure represents:

  1. The current market value of the assets
  2. The current market value of the assets, less accumulated depreciation
  3. The original cost or valuation of the assets, less accumulated depreciation
  4. The replacement cost of the assets

Answer(s): C



ABC Limited had a gross profit margin of 55%, while a direct competitor, XYZ Limited, has a gross profit margin of 60%.

Which THREE of the following would be an acceptable explanation for this?

  1. ABC Limited has a higher selling price than XYZ Limited
  2. ABC Limited has a lower selling price than XYZ Limited
  3. ABC Limited has better control of its production costs than XYZ Limited
  4. XYZ Limited has better control of its production costs than ABC Limited
  5. ABC Limited has a lower profit mark-up than XYZ Limited
  6. ABC Limited has a higher profit mark-up than XYZ Limited

Answer(s): B,D,E



A company has total equity of $350,000 and a 5% debenture of $150,000. The net profit before interest for the period was $60,000.

The return on equity is

  1. 12%
  2. 17.14%
  3. 15%
  4. 10.5%

Answer(s): C



Which THREE of the following would be shown in the statement of changes in equity?

  1. Dividends paid
  2. Dividends received
  3. Share issues
  4. Loan stock(debenture) issues
  5. Profit for the year
  6. Taxation for the year

Answer(s): A,C,E



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