Cima F1 Exam Question No 45

Question No 45:

An external audit of VH’s financial statements has discovered that a customer who, at 31 March 2014, owed VH $250,000 was declared bankrupt on 8 April 2014. VH has not provided for the bad debt in its financial statements for the year ended 31 March 2014. This is regarded as material but not pervasive.
Assuming that the auditors find everything else satisfactory, which ONE of the following is the appropriate audit report for the auditors of VH to issue?

A. The external audit report should be a modified report, with a qualified “except for” opinion.
B. The external audit report should be an unmodified report with an emphasis of matter paragraph relating to the bad debt.
C. The external audit report should be a modified report, with a disclaimer of opinion.
D. The external audit report should be a modified report, with an adverse opinion.

Answer: A

Cima F1 Exam Question No 44

Question No 44:

(i) Power to arrest individuals.
(ii) Power of entry and search of premises.
(iii) Power to exchange information with other tax authorities.
(iv) Power to confiscate assets of the entity.

Which TWO of the above are statutory powers that a tax authority may be granted to ensure compliance with tax regulations?
 
A. (i) and (iii)
B. (i) and (iv)
C. (ii) and (iii)
D. (ii) and (iv)

Answer: C

Cima F1 Exam Question No 43

Question No 43:

A withholding tax is?

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

Answer: A

Cima F1 Exam Question No 42

Question No 42:

Countries are subject to a variety of economic, social and political factors. In some countries
accounting rules are largely driven by taxation laws. The legal system in these countries is
known as:

A. Case law
B. Common law
C. Code law
D. Tax law

Answer: C

Cima F1 Exam Question No 41

Question No 41:

IAS 18 Revenue sets out criteria for the recognition of revenue from the sale of goods. Which ONE of the following is NOT a criterion specified by IAS 18 for recognising revenue
from the sale of goods?

A. The seller no longer retains any influence or control over the goods.
B. The cost to the seller can be measured reliably.
C. The buyer has paid for the goods.
D. The significant risks and rewards of ownership have been transferred to the buyer.

Answer: C