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CIMA BA3 Exam
Fundamentals of Financial Accounting (Page 15 )

Updated On: 1-Feb-2026
Page 15 of 80
PDF with 393 Questions

CORRECT TEXT

Refer to the exhibit.



A company has the following equity balances at the beginning of the year

During the year the company made a rights issue of 1 for 5 at a price of $1.50

The balance of share premium after this issue is

  1. See Explanation section for answer.

Answer(s): A

Explanation:

CORRECT TEXT IS: $100000



An increase in work-in-progress will:

  1. Decrease the factory cost of goods completed
  2. Increase the prime cost
  3. Decrease the prime cost
  4. Increase the cost of goods sold

Answer(s): A



Office equipment store Officework Ltd has made the following purchase from supplier GX:

50 printers costing $3,500 $6,400

worth ofA4 paper $101,500

worth of general stationary

This purchase has been made on credit. Which TWO of the following show how the transaction should be recorded in Officework Ltd's documents?

  1. $111,400 debit to payables
  2. $111,400 debit to purchases
  3. $111,400 credit to purchases
  4. $111,400 credit to payables
  5. $111,400 credit to stock
  6. $111,400 debit to stock
  7. $111,400 credit to receivables

Answer(s): B,D



Which one of the following is an error of original entry?

  1. An electricity bill debited and credited to the correct accounts but duplicated
  2. A credit sale debited to the bank account and credited to the sales account
  3. The purchase of a non-current asset debited to the inventory account and credited to the suppliers account
  4. An invoice for $592 debited and credited to the correct accounts, but for $529

Answer(s): D



Refer to the Exhibit.



Ax minster Limited is calculating its irrecoverable debt charge and allowance for receivables for inclusion in its year-end accounts. The current allowance for receivables is $28,600 and it is estimated that this needs to be raised to $30,400. There are also bad debts of $3,600 which should be written off.

Which is the correct entry to be made to the accounts to record these transactions?

The correct entry to be made to the accounts to record these transactions is:

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

Answer(s): C



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