CIMA Financial Reporting and Analysis

Question 1

Which financial statement reports a company's assets, liabilities, and equity at a specific point in time?

Accepted Answer

Balance Sheet

Answer

The Balance Sheet (Statement of Financial Position) presents assets, liabilities, and equity as of a specific date.

Question 2

Under IFRS, intangible assets acquired through a business combination are recognized at:

Accepted Answer

Fair value at the acquisition date

Answer

IFRS 3 requires intangible assets acquired in a business combination to be recognized at fair value at the acquisition date.

Question 3

The current ratio is calculated as:

Accepted Answer

Current assets divided by current liabilities

Answer

The current ratio measures short-term liquidity by dividing current assets by current liabilities.

Question 4

Deferred tax liabilities arise when:

Accepted Answer

Accounting profit exceeds taxable profit in the current period

Answer

Deferred tax liabilities arise when accounting profit exceeds taxable profit, creating a temporary difference that will reverse in future periods.

Question 5

Which inventory valuation method is prohibited under IFRS?

Accepted Answer

Last-In, First-Out (LIFO)

Answer

IAS 2 prohibits the use of LIFO because it does not represent a reliable estimate of the actual flow of inventory items.

CIMA - Chartered Institute of Management Accountants Aptitude Test Practice Test