Thursday, 29 October 2015

Cima F1 Exam Question No 27

Question No 27:

Assume that Countries M; N; O and P each has a double tax treaty with each other based on the OECD model tax convention.
  • JZ is incorporated in Country M
  • JZ earns the majority of its revenue from Country N
  • JZ holds its management board meetings in Country O
  • JZ raises most of its finance and operating capital in Country P
In which country will JZ be deemed to be resident for tax purposes?

Country M
Country N
Country O
Country P

Answer: C

Tuesday, 20 October 2015

Cima F1 Exam Question No 26

Question No 26:

R, a trainee management accountant is employed by JH. R has prepared the draft annual
financial statements for JH and presented them to JH’s Chief Executive prior to the executive
board meeting. The Chief Executive has told R that the profit reported in the financial
statements is too low and must be increased by $500,000 before the financial statements can
be approved by the executive board.
Which ONE of the threats listed below would apply to R in this situation, according to the
CIMA code of ethics for professional accountants?

Advocacy threat
Self-review threat
Intimidation threat
Self-interest threat

Answer: C

Thursday, 15 October 2015

Cima F1 Exam Question No 25

Question No 25:

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?

As a non-current asset investment $100,000
As a non-current asset investment $105,000
As a deduction from equity $100,000
As a deduction from equity $105,000

Answer: D

Thursday, 8 October 2015

Cima F1 Exam Question No 24

Question No 24:

Taxes commonly used by many countries include:

(i) import duty payable on specific types of imported goods;
(ii) individual income tax, usually deducted at source;
(iii) corporate income tax;
(iv) value added tax.

Which of the above would normally be defined as direct taxation?

(i) and (ii)
(i) and (iv)
(ii) and (iii)
(ii) and (iv)

Answer: C

Thursday, 1 October 2015

Cima F1 Exam Question No 23

Question No 23:

A withholding tax is:

Tax deducted at source before payment to a recipient in a foreign country.
Tax on profits that is then paid out net as a dividend to equity shareholders.
Tax paid to local tax authorities with an amount withheld from payment.
Tax withheld from employees’ salaries with salaries paid to them net of tax.

Answer: A