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CIMA BA3 Exam
Fundamentals of Financial Accounting (Page 14 )

Updated On: 1-Feb-2026
Page 14 of 80
PDF with 393 Questions

DEF has the following equity balances at 1 June 20X7.



On 30 June 20X7 DEF issued 200.000 new shares at their full market price of $1 75.

What are the equity balances of DEF after issuing these shares?

A)



B)



C)



D)

  1. Option A
  2. Option B
  3. Option C
  4. Option D

Answer(s): A



Refer to the exhibit.



ABC has the equity balances at the end of year 1.

During year 2 ABC issues 100,000 new shares at a price of $1.10

What is the balance on share premium at the end of year 2?

  1. $80,000
  2. $90,000
  3. $140,000
  4. $190,000

Answer(s): C



CORRECT TEXT

The petty cash imprest is restored to $500 at the end of each week. The following amounts are paid out of petty cash during week 23:

(a) Stationery - $70.50 (including VAT at 17.5%)

(b) Travelling costs - $127.50

(c) Office refreshments - $64.50

(d) Sundry payables - $120.00 plus VAT at 17.5%

The amount required to restore the imprest to $500.00 is:

Give your answer to 2 decimal places.

  1. See Explanation section for answer.

Answer(s): A

Explanation:

CORRECT TEXT IS: $403.47



A company's payables days has reduced from 60 days to 55 days.

Which of the following could be a possible explanation for this?

  1. Improved payment terms offered by supplier.
  2. Cash flow problems.
  3. Discounts offered by suppliers for early settlement.
  4. Improved credit control.

Answer(s): C



Refer to the Exhibit.



Berber Limited is preparing its year-end accounts and is reviewing the method used to estimate the allowance for receivables.

An aged receivables schedule shows the following position:

The company believes that the previous percentages used were not prudent enough and it has decided to increase the percentages on 2-3 months debt to 10% and on 3 months plus debt to 50%. The current allowance for receivables is $1,500.
What would be the effect on the income statement of the change in accounting policy

  1. Reduction in profit of $1,080
  2. Reduction in profit of $900
  3. Reduction in profit of $2,580
  4. Increase in profit of $1,080

Answer(s): B



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