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CIMA F1 Financial Reporting Exam
F1 Financial Reporting (Page 4 )

Updated On: 12-Feb-2026
Page 4 of 40
PDF with 194 Questions

Which THREE of the following statements about government grants are INCORRECT?

  1. A grant is recognised as revenue
  2. Grants must not be deducted from the related expenses in financial statements
  3. Capital grants relate to cash inflow and outflow
  4. A compensatory grant should be recognised in statements when it is received, not when the expenses it applies to occurred
  5. A grant is recognised only when there is reasonable assurance that the entity will comply with any conditions attached to the grant

Answer(s): A,B,C



Which of the following does the phrase 'events after the reporting period' refer to?

  1. Material events which occur between the statement of financial position date and the date on which the financial statements are approved
  2. Material events which occur after the release of the statement of financial position
  3. Material events which occur before the statement of financial position date
  4. Material events which occur between the income statement date and the statement of financial position date

Answer(s): A



Which of the following is the most appropriate definition of the term 'factoring'?

  1. Where a business sells its accounts receivable to a third party at a discount
  2. Where a business borrows a loan with short-term conditions from a third party
  3. Where a business sells equity to third parties to gain short-term finance
  4. Where a business is provided with a highly flexible regular source of short-term finance by a bank

Answer(s): A



Company Y is using some of the money from a share issue to purchase a new office building. The company is also using some of the money to purchase inventories.
Which method of financing is this?

  1. Conservative financing
  2. Matching financing
  3. Aggressive financing

Answer(s): A



Which of the following are techniques that can be used by a company to ensure they receive timely payment of receivables? Select ALL that apply:

  1. Offering cash or early payment discount
  2. Charging interest on late payments
  3. Assessing credit risk of customers before they are given credit
  4. Offering extended credit to return customers
  5. Offering free items

Answer(s): A,B,C






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