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Question 1 of 60
1. Question
Which of the following are characteristics of Preference Shares?
Select all that apply.
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Question 2 of 60
2. Question
IFRS 9 stipulates three different measures: Amortised Cost, FVOCI or FVPL.
An organisation, applies the fair value option to eliminate an accounting mismatch, has the business model of holding onto the financial asset to collect contractual payments that represent solely the principal and interest.
Which method of measurement must be used?
CorrectIncorrect -
Question 3 of 60
3. Question
Below you have an extract of the Parent and Subsidiary’s Financial Statements, the Parent purchased 100% of the Subsidiary for £7.5m, the goodwill will be amortised straight line over five years.
Parent Subsidary SoFP at 31 December 2019 £’000 £’000 Non-current assets 1,875 3,750 Goodwill on consolidation Goodwill amortised Investment in Sunsidary 7,500 Current assets Due from group company 3,225 1,125 Other current assets 2,400 3,375 Current liabilities Due to group company (1,350) (3,000) Other current liabilities (900) (125) 12,750 5,125 Ordinary shares 3,000 1,250 P & L account pre 31.12.18 7,950 3,000 y/e 31.12.19 1,800 875 12,750 5,125 Calculate the Group’s Total Equity figure:
Input your answer in the format “£X,XXX”.
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Question 4 of 60
4. Question
Below are extracts from an organisation’s Financial Statements:
Income Statement Statement of Financial Position Revenue £657,300 Non-current Assets £715,000 Cost of Sales £377,300 Current Assets Gross Profit £280,000 Inventory £43,800 Expenses £65,500 Receivables £84,100 Operating Profit £214,500 Bank £270,200 Interest Expense £41,000 Equity Profit before tax £173,500 Share Capital £250,000 Tax expense £44,000 Retained Earnings £303,900 Net Profit £129,500 Non-current Liabilities £500,000 Current Liabilities Accruals £4,500 Payables £42,700 Deferred tax £12,000 Calculate the Acid Test Ratio:
Input your answer in the format “X.XX:1”.
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Question 5 of 60
5. Question
Another name for the quantity of money the bondholder receives as interest payments, which is usually expressed as a percentage of the par value is called which one of the following?
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Question 6 of 60
6. Question
With reference to IFRS 9, if both of the following conditions are met, the default measurement is?
- The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
CorrectIncorrect -
Question 7 of 60
7. Question
An organisation acquired 25% of the equity of a supplier for £40m on the 1 July 2019 . The Supplier made a profit of £12m for the year ended 31 December 2019.
How much will the Organisation record in its financial statements in relation to profit from the Supplier?
Input your answer in the format “£X,XXX”.
CorrectIncorrect -
Question 8 of 60
8. Question
Below are extracts from an organisation’s Financial Statements:
Income Statement Statement of Financial Position Revenue £657,300 Non-current Assets £715,000 Cost of Sales £377,300 Current Assets Gross Profit £280,000 Inventory £43,800 Expenses £65,500 Receivables £84,100 Operating Profit £214,500 Bank £270,200 Interest Expense £41,000 Equity Profit before tax £173,500 Share Capital £250,000 Tax expense £44,000 Retained Earnings £303,900 Net Profit £129,500 Non-current Liabilities £500,000 Current Liabilities Accruals £4,500 Payables £42,700 Deferred tax £12,000 Calculate the Inventory Days:
Input your answer in the format “X.XX”.
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Question 9 of 60
9. Question
Which one of the following statements is true regarding the Bid-Ask Spread of a listed stock?
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Question 10 of 60
10. Question
IFRS 9 makes reference to the definitions found in IAS 39, this standard defines a financial asset as:
a contractual right…
How does this sentence conclude?
Select two.
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Question 11 of 60
11. Question
The Subsidiary purchases an item of PP&E on 1 January 2019. The Subsidiaries functional and presentation currency is the EUR, the invoice for the PP&E is for GBP 1,000. EUR/GBP rate on 1 January 20X1 is 0.9. The invoice is paid on 1 May 2019 when the EUR/GBP rate is 0.95.
What is the exchange rate difference?
CorrectIncorrect -
Question 12 of 60
12. Question
Below you have an extract from an organisation’s Financial Statements:
2018 2019 Statement of Financial Position PPE £150,000 £170,000 Inventory £50,000 £55,000 Receivables £40,000 £45,000 Cash £80,000 £90,000 Share Capital £220,000 £220,000 Retained Earnings £35,000 £70,000 Bank Loan £15,000 £25,000 Payables £50,000 £45,000 Income Statement Sales £720,000 £750,000 Cost of Sales £490,000 £500,000 Gross Profit £230,000 £250,000 Expenses £125,000 £120,000 Operating Profit £105,000 £130,000 Interest expense £900 £1,500 Profit before tax £104,100 £128,500 Income tax £26,000 £28,000 Profit after tax £78,100 £100,500 Select which of the following is true:
CorrectIncorrect -
Question 13 of 60
13. Question
Calculate the cost of equity using the dividend valuation model:
A company has 1,000,000 shares in issue each with a par value of £1, currently trading for £12.50 per share and pays a constant dividend of £3.25.
Input your answer in the format “X.X%”.
CorrectIncorrect -
Question 14 of 60
14. Question
When would an organisation remove an intangible asset from its financial statements?
Select all that apply.
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Question 15 of 60
15. Question
A Parent owns 100% of a Subsidiary, the subsidiary sold $5,000 of stock (costing $4,500) to the parent on 31 October 2019. The goods remain in stock and the parent has yet to pay the subsidiary. A dividend was paid on 31 July 2019.
Below are extracts from the Parent and Subsidiary’s Income Statements:
Parent Subsidiary Sales £750,000 $130,000 Intergroup sales – $5,000 Cost of Sales £500,000 $110,000 Depreciation £30,000 $5,000 Other expenses £55,000 $5,000 Dividend received £1,360 – Interest expense £2,000 $500 Profit before tax £164,360 $14,500 Income tax £10,000 $5,000 Profit after tax £154,360 $9,500 Exchange Rates:
31-Dec-18 £/$ 0.8 31-Jul-19 £/$ 0.85 31-Oct-19 £/$ 0.86 31-Dec-19 £/$ 0.87 Average £/$ 0.83 Calculate the Profit Before Tax figure to be used in the consolidated cashflow statement, after all necessary intra-company adjustment:
CorrectIncorrect -
Question 16 of 60
16. Question
Below you have an extract from an organisation’s Financial Statements:
2018 2019 Statement of Financial Position PPE £700,000 £810,000 Inventory £120,000 £110,000 Receivables £300,000 £325,000 Cash £610,000 £430,000 Share Capital £1,000,000 £1,000,000 Retained Earnings £124,000 £100,000 Bank Loan £250,000 £250,000 Payables £356,000 £325,000 Income Statement Sales £8,450,000 £9,250,000 Cost of Sales £2,535,000 £2,960,000 Gross Profit £5,915,000 £6,290,000 Expenses £4,732,000 £5,346,500 Operating Profit £1,183,000 £943,500 Interest expense £30,000 £30,000 Profit before tax £1,153,000 £913,500 Income tax £300,000 £310,000 Profit after tax £853,000 £603,500 Select which of the following is true:
CorrectIncorrect -
Question 17 of 60
17. Question
Calculate the cost of equity using the dividend valuation model:
A company has 1,000,000 shares in issue each with a face value of £1.00, currently trading for £3.95 per share and paid a dividend of £1.65, dividends were 1.50 last year. The company can re-invest at a rate of 15%.
Input your answer in the format “X.X%”.
CorrectIncorrect -
Question 18 of 60
18. Question
An organisation has the following extracted Income Statement:
Revenue £8,750,000 Cost of Sales £3,250,000 Gross Profit £5,500,000 Depreciation £145,000 Fines £205,000 Professional Fees £125,000 Rent £700,000 Salaries £2,250,000 Operating Profit £2,075,000 Interest £100,000 Profit before Tax £1,975,000 Notes:
Professional Fees: £25,000 for accounting, £20,000 for general legal work, £80,000 for a trade dispute with a supplier.
Fine: Health and Safety fine
Depreciation: Relates to Plant & Equipment which has a Capital Allowance of £80,000Tax rate is 19%.
Calculate the tax expense for the year:
Input your answer in the format “£X,XXX”.
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Question 19 of 60
19. Question
A Parent owns 100% of a Subsidiary, the subsidiary sold $5,000 (costing $4,000) to the parent on 31 October 2019. The Subsidiary, the goods remain in stock and the parent has yet to pay the subsidiary. A dividend of $1,600 was paid on 31 July 2019.
Below are extracts from the Parent and Subsidiary’s SoFP:
Parent Subsidiary 2018 2019 2018 2019 PPE £150,000 £170,000 $75,000 $80,000 Inventory £50,000 £55,000 $20,000 $25,000 Receivables £40,000 £45,000 $20,000 $30,000 Cash £80,000 £90,000 $25,000 $20,000 Share Capital £220,000 £220,000 $100,000 $100,000 Retained Earnings £35,000 £70,000 $20,000 $30,000 Bank Loan £15,000 £25,000 $10,000 $15,000 Payables £50,000 £45,000 $10,000 $5,000 Exchange Rates:
31-Dec-18 £/$ 0.8 31-Jul-19 £/$ 0.85 31-Oct-19 £/$ 0.86 31-Dec-19 £/$ 0.87 Average £/$ 0.83 Calculate the Effect of exchange rate changes arising from the intergroup sale to be used in the consolidated cashflow statement, after all necessary intra-company adjustment:
Input your answer in the format “£X,XXX”.
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Question 20 of 60
20. Question
Below you have an extract from an organisation’s Financial Statements:
2018 2019 Statement of Financial Position PPE £700,000 £810,000 Inventory £120,000 £110,000 Receivables £300,000 £325,000 Cash £610,000 £250,000 Share Capital £1,000,000 £1,000,000 Retained Earnings £124,000 -£5,000 Bank Loan £250,000 £100,000 Payables £356,000 £400,000 Income Statement Sales £8,450,000 £9,250,000 Cost of Sales £2,366,000 £2,405,000 Gross Profit £6,084,000 £6,845,000 Expenses £4,867,200 £5,346,500 Operating Profit £1,216,800 £1,498,500 Interest expense £30,000 £12,000 Profit before tax £1,186,800 £1,486,500 Income tax £300,000 £310,000 Profit after tax £886,800 £1,176,500 Which category of ratios is of most concern?
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Question 21 of 60
21. Question
An organisation has secured a loan from a lender at a rate of 10% fixed per annum, on a loan of £1,500,000. If the tax rate in the country is 25%, what is the post tax cost of the debt as a percentage ?
Input your answer in the format “X.X%”.
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Question 22 of 60
22. Question
An organisation has acquired a new asset costing £50,000, which is to be depreciated straight line over four years. The capital allowances for this asset over the four years are: £25,000, £4,500, £3,690 and £16,810 respectively.
If the tax rate is 20%, what is the necessary deferred tax adjustment for the end of the year 2?
Input your answer in the format “£X,XXX”.
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Question 23 of 60
23. Question
Under IAS 24, which of he following must be disclosed for key management personnel:
Select all that apply
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Question 24 of 60
24. Question
A Manager has received a Statement of Profit and Loss, it appears that the cost of sales have increased significantly, with reference to Gartner’s Data Analytics maturity model, what is the next step for this Manager?
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Question 25 of 60
25. Question
An organisation has two loans, one with an interest rate of 4% and a debt of £500,000 and a second at a rate of 6% with a debt of £1,500,000.
If the organisation pays tax on profits at 17%, what is the cost of the debt post tax?
Input your answer in the format “£X,XXX”.
CorrectIncorrect -
Question 26 of 60
26. Question
An organisation has a credit trial balance figure of £1,000 for deferred tax liability. At the year-end, it was determined that an increase in the deferred tax liability of £1,500 was required.
Calculate the Closing Deferred Tax Liability for the year.
Input your answer in the format “£X,XXX”.
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Question 27 of 60
27. Question
Organisation A starts a Joint Venture with Organisation B, and both hold 50% equity in Organisation C.
Who is a related party to Organisation A?
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Question 28 of 60
28. Question
Which of the following are examples of the descriptive level of Gartner’s Analytics maturity model?
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Question 29 of 60
29. Question
An investor is considering a bond with a par value of £75 and a coupon rate at 8%, which can be redeemed in four years for £100. The investor requires a return of 13%.
What is the yield of the bond?
Working to four decimal places, input your answer in the format “X.XX%”.
CorrectIncorrect -
Question 30 of 60
30. Question
A UK based organisation, which has GBP as its functional currency, is preparing its group accounts to 31 December 2019, with a subsidiary that is based in the US and uses the US Dollar as its functional currency.
Which exchange rate should the parent use for the Income Statement?
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Question 31 of 60
31. Question
An organisation makes a Net Profit of £1,000,000, tax of £250,000 and Preference share dividend of £150,000.
The organisation has 1,000,000 authorised shares and 800,000 in issue.
What is the earnings per share?
Inout your answer in the format “£X.XX”.
CorrectIncorrect -
Question 32 of 60
32. Question
A highly profitable organisation has managed to achieve similar ratios across their Financial Statements, apart from a deteriorating in the gearing ratio, it has increased from 54% to 67% in the last financial year.
Which one of the following would reverse the deterioration?
CorrectIncorrect -
Question 33 of 60
33. Question
An organisation has a 10% convertible bond which is currently trading for £110, which can be redeemed, either by:
- Cash, 20% premium on par value in four years, or
- 20 ordinary shares, currently trading for £6 and expected to grow by 2% indefinitely.
The tax rate is 25%.
Calculate the cost of the debt for the convertible bond:
Which band does the cost of debt for the convertible bond fit into?
CorrectIncorrect -
Question 34 of 60
34. Question
The Profit for the Year of the group is £2,500,000, the parent owns 70% of the equity.
With reference to IAS 1, how much would be reported as being attributable to the Non-Controlling interest in the group accounts?
Input your answer in the format “£X,XXX”
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Question 35 of 60
35. Question
An organisation has a profit attributable to shareholders of £1,000,000, and it has 2,000,000 common shares outstanding that sell on the open market for an average of £12 per share. In addition, there are 60,000 options outstanding that can be converted to the organisation’s common stock at £10 each.
Calculate the Diluted Earnings per Share.
Input your answer in the format “£X.XXX”.
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Question 36 of 60
36. Question
Which one of the following would have an adverse effect on the Working Capital Cycle?
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Question 37 of 60
37. Question
An organisation has a 10% convertible bond which is currently trading for £100, which can be redeemed:
- Cash, 10% premium on par value in four years, or
- 20 ordinary shares, currently trading for £5 and expected to grow by 2% indefinitely.
The tax rate is 20%.
Calculate the cost of the debt for the convertible bond:
Which band does the cost of debt for the convertible bond fit into?
CorrectIncorrect -
Question 38 of 60
38. Question
Which of the following are acceptable methods for valuing a joint venture?
Select two
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Question 39 of 60
39. Question
There are three underpinning principles of Integrated Reporting, which three?
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Question 40 of 60
40. Question
The two components of Working Capital are:
Select two:
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Question 41 of 60
41. Question
A listed company has the following Equity Structure:
Ordinary Shares (£0.50): £10,000,000
4% Redeemable Bonds: £5,000,000
4% Bank Loan: £4,000,000The current trading price of the stock is £15 (ex-div) and has just paid a dividend of £1.50, the dividend four years ago was £1.20.
The 4% Redeemable Bonds are trading at £102 (ex-int) and are redeemable in seven years time.
Tax rate is 20%.
Calculate the WACC:
Which band does the WACC fit into?
CorrectIncorrect -
Question 42 of 60
42. Question
Which one of the following is not a limitation of financial ratio analysis?
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Question 43 of 60
43. Question
Which one of the following is not a guiding principle of Integrated Reporting?
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Question 44 of 60
44. Question
Below you have an extract of an organisation’s Financial Statements:
Income Statement Statement of Financial Position Revenue £767,000 Non-current Assets £312,000 Cost of Sales £612,000 Current Assets Gross Profit £155,000 Inventory £23,500 Expenses £82,000 Receivables £54,000 Operating Profit £73,000 Bank £177,000 Interest Expense £13,500 Equity Profit before tax £59,500 Share Capital £250,000 Tax expense £12,000 Retained Earnings £32,300 Net Profit £47,500 Non-current Liabilities £225,000 Current Liabilities Accruals £4,500 Payables £42,700 Deferred tax £12,000 Calculate the Trade Receivable Days:
Input your answer in the format “X.XX”.
CorrectIncorrect -
Question 45 of 60
45. Question
A listed company has the following Equity Structure:
Ordinary Shares (£1): £5,000,000
9% Bank Loan: £4,000,000The current trading price of the stock is £4 (ex-div) and has just paid a dividend of £0.50, the dividend four years ago was £0.40.
Tax rate is 20%.
Calculate the WACC:
Which band does the WACC fit into?
CorrectIncorrect -
Question 46 of 60
46. Question
Rearrange the following in order of a Goodwill calculation:
-
Parent
-
+
-
NCI
-
–
-
Fair Value of Net Assets
-
=
-
Goodwill
CorrectIncorrect -
-
Question 47 of 60
47. Question
The two most citied benefits of Integrated Reporting are:
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Question 48 of 60
48. Question
Below you have an extract of an organisation’s Financial Statements:
Income Statement Statement of Financial Position Revenue £767,000 Non-current Assets £312,000 Cost of Sales £612,000 Current Assets Gross Profit £155,000 Inventory £23,500 Expenses £82,000 Receivables £54,000 Operating Profit £73,000 Bank £177,000 Interest Expense £13,500 Equity Profit before tax £59,500 Share Capital £250,000 Tax expense £12,000 Retained Earnings £32,300 Net Profit £47,500 Non-current Liabilities £225,000 Current Liabilities Accruals £4,500 Payables £42,700 Deferred tax £12,000 Calculate the ROCE:
Input your answer in the format “X.XX%”.
CorrectIncorrect -
Question 49 of 60
49. Question
According to IFRS 15, what would the Revenue figure be for this scenario?
An organisation sells 100 units at a selling price per unit of £20. The organisation has cost of sales of £14 per unit. The organisation believes 6 of the 100 units will be returned.
CorrectIncorrect -
Question 50 of 60
50. Question
Match the answers to the question:
Sort elements
- A joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement
- A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
- Recognises: • its assets, including its share of any assets held jointly • its liabilities, including its share of any liabilities incurred jointly • its revenue from the sale of its share of the output of the joint operation • its share of the revenue from sale of output by the joint operation • its expenses, including its share of any expenses incurred jointly
- Recognises its interest as an investment using the equity method in accordance with IAS 28
-
Define Joint Operation?
-
Define Joint Venture?
-
Accounting treatment of Joint Operation?
-
Accounting treatment of Joint Venture?
CorrectIncorrect -
Question 51 of 60
51. Question
Which Integrated Reporting Capital is being defined below:
the knowledge, systems, and processes that an SME has at its disposal that provide it with a competitive advantage and positively affect its future earning potential
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Question 52 of 60
52. Question
Which of the following would be categorised as a lease for an organisation that is deemed a large?
Select all that apply.
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Question 53 of 60
53. Question
Below you have an extract of a Parent and a Subsidiary, where the parent owns 80%:
Parent Subsidary Statement of Financial Position at 31 December 2019 £’000 £’000 Non-current assets 2,000 6,000 Goodwill on consolidation to be amortised over five years Investment in Subsidiary 8,000 Current assets Due from group company 4,800 1,800 Other current assets 5,200 5,400 Current liabilities Due to group company -1,800 -4,800 Other current liabilities -1,200 -200 17,000 8,200 Ordinary shares 4,000 2,000 P & L account pre 31.12.18 10,600 4,900 y/e 31.12.19 2,400 1,300 17,000 8,200 Income Statement Year ended 31 December 2019 Sales external 20,000 8,000 inter group 3,200 4,000 Cost of sales external -15,000 -6,200 inter group -4,000 -3,200 Gross profit 4,200 2,600 Admin expenses -1,400 -1,000 Net profit before tax 2,800 1,600 Taxation -400 -300 Net profit after tax 2,400 1,300 Calculate the Gross Profit which would be included on the Income Statement.
Input your answer in the format “£X,XXX”
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Question 54 of 60
54. Question
Which one of the following is not what is considered as part of Natural Capital and Integrated Reporting?
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Question 55 of 60
55. Question
A Lessee remeasures lease liability using revised lease payments and an unchanged discount rate when:
Select all that apply.
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Question 56 of 60
56. Question
Below you have an extracts from the Parent and Subsidiary:
Parent Subsidary Revenue £1118,950 £50,830 Cost of Sales £82,485 £30,498 Gross Profit £36,465 £20,332 The Subsidiary made a sale to the Parent during the year of £10,000. The Subsidiary originally purchased the goods at a cost of £7,000. Half of these items remained in the inventory of the Parent at the year end.
What should the consolidated Cost of Sales figure for the group accounts?
Input your answer in the format “£X,XXX”
CorrectIncorrect -
Question 57 of 60
57. Question
Below are extracts from an organisation’s Financial Statements:
Income Statement Statement of Financial Position Revenue £657,300 Non-current Assets £715,000 Cost of Sales £377,300 Current Assets Gross Profit £280,000 Inventory £43,800 Expenses £65,500 Receivables £84,100 Operating Profit £214,500 Bank £270,200 Interest Expense £41,000 Equity Profit before tax £173,500 Share Capital £250,000 Tax expense £44,000 Retained Earnings £303,900 Net Profit £129,500 Non-current Liabilities £500,000 Current Liabilities Accruals £4,500 Payables £42,700 Deferred tax £12,000 Calculate the Operating Profit Margin:
Input your answer in the format “X.XX%”.
CorrectIncorrect -
Question 58 of 60
58. Question
With regards to IAS 16, which of the following needs to be disclosed?
Select all that apply.
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Question 59 of 60
59. Question
Below you have an extract of a Parent than owns 60% of the Subsidiary
Income Statement Parent Subsidiary Year ended 31 December 2019 Sales external £15,000 £5,000 inter group £2,400 £3,000 Cost of sales external (£11,250) (£3,875) inter group (£3,000) (£2,400) Gross profit £3,150 £1,725 Admin expenses (£1,050) (£625) Net profit before tax £2,100 £1,100 Taxation (£300) (£600) Net profit after tax £1,800 £500 Calculate the group Net Profit after tax:
Input your answer in the format “£X,XXX”.
CorrectIncorrect -
Question 60 of 60
60. Question
Below are extracts from an organisation’s Financial Statements:
Income Statement Statement of Financial Position Revenue £657,300 Non-current Assets £715,000 Cost of Sales £377,300 Current Assets Gross Profit £280,000 Inventory £43,800 Expenses £65,500 Receivables £84,100 Operating Profit £214,500 Bank £270,200 Interest Expense £41,000 Equity Profit before tax £173,500 Share Capital £250,000 Tax expense £44,000 Retained Earnings £303,900 Net Profit £129,500 Non-current Liabilities £500,000 Current Liabilities Accruals £4,500 Payables £42,700 Deferred tax £12,000 Calculate the Gearing (either method):
Input your answer in the format “X.XX%”.
CorrectIncorrect