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CIMA Fundamentals of Financial Accounting Sample Questions:

1. The accumulated fund is equal to:

A) The excess of receipts over payments in a not-for-profit organization
B) The book value of net assets in a not-for-profit organization
C) The bank balances of an organization
D) Retained profits in a limited company

2. Which ONE of the following statements is true?

A) It is the responsibility of the internal auditors to detect fraud
B) It is the responsibility of the shareholders to detect fraud
C) It is the responsibility of the management to detect fraud
D) It is the responsibility of the external auditors to detect fraud

3. The valuation of inventory in a manufacturing company will consist of:

A) All direct costs plus a share of production and non-production overheads
B) Direct material and direct labor only
C) All direct costs plus a share of production overheads
D) Direct material, direct labor and direct expenses only

4. In times of rising prices, the historical cost convention results in:

A) Assets being overstated and profits being understated
B) Assets being understated and profits being overstated
C) Assets and profits being understated
D) Assets and profits being overstated

5. The Framework is described as a conceptual framework when used in the creation of new accounting standards.
Which ONE of the following describes the approach of the Framework?

A) Principles based
B) Regulatory
C) Rules based
D) Statutory

Solutions: