Cima F1 Exam Question No 22

Question No 22:

ABC is registered for tax in Country X.
ABC purchases goods and services from suppliers, including VAT at standard rate and sells goods to customers, including VAT at standard rate.
The formal incidence of the VAT is on:

A. ABC’s customers
B. ABC’s suppliers
C. ABC
D. Country X’s tax authority

Answer: C

Cima F1 Exam Question No 21

Question No 21:

PH purchased 100,000 of its own $1 equity shares on the stock market for $105,000. PH classified the shares as “treasury shares”. PH still held the treasury shares at the year end.
How should PH present the treasury shares according to IAS 32 Financial Instruments, Presentation?

A. As a non-current asset investment $100,000
B. As a non-current asset investment $105,000
C. As a deduction from equity $100,000
D. As a deduction from equity $105,000

Answer: D

Cima F1 Exam Question No 20

Question No 20:

According to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, which ONE of the following is a change in accounting policy?

A. The depreciation method of vehicles being changed from straight line to reducing balance.
B. The provision for warranty claims being recalculated using a different method.
C. Recognising a provision for a legal claim which had been disclosed as a contingent liability in the previous year’s financial statements.
D. Presenting depreciation in cost of sales which had previously been presented in administrative expenses.

Answer: D