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QUESTION: 86

Mr K is being pressured by his manager to change figures in his report so that it will improve his manager's bonus.
His manager has promised Mr K a promotion if he agrees to do this.
What threats is Mr K facing?

Intimidation and familiarity
Familiarity and self-interest
Self-review and advocacy
Intimidation and self-interest

Answer(s): D

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QUESTION: 87

UV has recently been having cash flow issues due to its credit customers paying after the credit period they have been granted.
UV is looking into factoring the receivables to a factoring company on a recourse basis to improve its cash flow.
Which TWO of the following will UV encounter as a result of employing the factoring company?

No irrecoverable debts
Reduction in payables days
Reduction in the need for management control
Reduction in bank overdraft charges
Increase in cash sales

Answer(s): C,D

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QUESTION: 88

On 31 March 20X1 OP decided to sell a property. On that date this property was correctly classified as held for sale in accordance with IFRS 5 Non-Current Assets Held For Sale And Discontinued Operations.
In the draft financial statements of OP for the year ended 31 October 20X1 this property has been included at its fair value, which was $520,000 lower than its carrying value. This has resulted in a charge to profit or loss, the result of which is that the draft financial statements show a loss of $450,000 for the year to 31 October 20X1.
When the management board of OP reviewed the draft financial statements it was unhappy about the loss and decided that the property should be reclassified as a non-current asset and reinstated to its original value, despite the fact that its plans for the property had not changed.
In accordance with the ethical principle of professional competence and due care, which THREE of the following statements explain how this property should be accounted for in the financial statements of OP for the year ended 31 October 20X1?

The property should be treated as a non-current asset held for sale from 31 March 20X1.
The property should be treated as a non-current asset held for sale from 1 November 20X1.
The property should not be depreciated after 31 March 20X1.
The impairment of $520,000 should be shown as an expense in the statement of profit or loss.
The property should be depreciated until 31 October 20X1.
The property impairment should not be recorded until the sale has completed.

Answer(s): A,C,D

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QUESTION: 89

Country X levies a duty on alcoholic drinks.
Where the alcohol content is above 40% by volume the duty levied is $5 per 1 litre bottle.
What type of tax is this duty?

Specific unit tax
Ad valorem tax
Direct tax
Single-stage sales tax

Answer(s): A

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QUESTION: 90

In most developed countries employers deduct the tax from employees' pay each month and then pay the tax to the tax authorities on behalf of the employee on a monthly basis.
Which THREE of the following are advantages of this system to the employee?

The tax is collected earlier than systems that assess earnings at the end of the year.
The payment of tax is easier as the tax is deducted before the net salary is paid to the employee.
Most of the administration costs are borne by the employees.
The responsibility for the tax calculations rests with the employer and therefore there is less chance of mistakes being made.
There is less chance of interest and penalties being levied on the employee by the tax authorities.

Answer(s): B,D,E

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Free F1 Exam Braindumps Financial Reporting Questions 86–90 (page: 19)

QUESTION: 86

QUESTION: 87

QUESTION: 88

QUESTION: 89

QUESTION: 90

Free F1 Exam Braindumps
Financial Reporting Questions 86–90 (page: 19)