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CIMA Fundamentals of Financial Accounting Sample Questions:

1. Refer to the exhibit.

A suspense account shows a credit balance of $230 which has arisen because of the recording of a gas bill twice in the gas account.
In order to correct the error, which one of the following journal entries is required?
The correct journal entry is

A) B
B) C
C) A
D) D

2. Refer to the Exhibit.

John Taylor commenced business on 1 March 2006, paying $1,000 cash into a business bank account. During the next month the following transactions took place.
The balance on the bank account at the end of the month is:

A) $1,200 debit
B) $1,200 credit
C) $700 credit
D) $700 debit

3. Refer to the Exhibit.

On 1 May year 1 a company pays insurance of $1,800 for the period to 30 April year 2 What is the charge to the income statement and the entry in the statement of financial position for year 1 ended
30 November?

A) B
B) C
C) A
D) D

4. What will be the effect on the financial statements if the closing inventory figure is decreased?

A) A decrease in cost of sales, a decrease in gross profit and a decrease in the inventory figure in the statement of financial position.
B) A decrease in cost of sales, an increase in gross profit and a decrease in the inventory figure in the statement of financial position.
C) An increase in cost of sales, a decrease in gross profit and a decrease in the inventory figure in the statement of financial position.
D) An increase in cost of sales, an increase in gross profit and a decrease in the inventory figure in the statement of financial position.

5. The external auditor seeks to provide an opinion on whether the accounts show a true and fair view What is the international term for 'true and fair view'?

A) Fair presentation
B) Completeness
C) Prudence
D) Going concern

Solutions: