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CIMA Exam CIMAPRA17-BA3-1 Topic 1 Question 104 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam
Question #: 104
Topic #: 1
[All CIMAPRA17-BA3-1 Questions]

The Finance Director of EFG company has made the following statements regarding the recording of expenditure relating to the entity's property, plant and equipment (PPE) in the nominal ledger.

Which THREE of the following statements are true?

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Suggested Answer: A, C, F

by Kayleigh at Dec 10, 2024, 08:02 PM

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Tayna
1 months ago
Hmm, I'm not sure about D. Wouldn't the cost of repainting be capitalized rather than expensed? Better double-check the accounting standards on that one.
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Eve
1 months ago
Ha, I bet the exam writer was trying to trick us with that office painting one. Nice try, but I'm not falling for it!
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Dalene
2 days ago
F) The annual depreciation charge reduces the carrying value of PPE
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Sophia
10 days ago
B) The cost of insurance for the factory is debited to the PPE asset account.
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Lynelle
28 days ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Rikki
1 months ago
B is wrong, insurance should be an expense. And E is just silly, the loss would go to the income statement, not a liability. Easy peasy!
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Paz
14 days ago
F) The annual depreciation charge reduces the carrying value of PPE
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Galen
29 days ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
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Evan
1 months ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Edna
2 months ago
Definitely A, C, and F. Can't believe they're asking about office painting though - that's just maintenance, not PPE!
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Celia
20 days ago
I always get confused with these types of questions, but it's good practice to review the basics.
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Kerrie
23 days ago
Yeah, it's important to understand how different expenses are recorded in the nominal ledger.
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Georgene
30 days ago
Absolutely, proper accounting for PPE is crucial for financial reporting and decision-making.
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Xochitl
1 months ago
It's important to accurately record these transactions to reflect the true financial position of the company.
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Marguerita
1 months ago
Yeah, the office painting should be classified as a repair expense, not PPE.
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Fanny
1 months ago
I agree, A, C, and F are the correct statements. Office painting should be under repairs expense.
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Lavonne
2 months ago
I agree, A, C, and F are the correct statements.
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Kizzy
2 months ago
I believe statement B is false because insurance cost should be expensed, not capitalized.
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Blair
2 months ago
I agree with you, Charlena. Statement F is also true because depreciation does reduce the carrying value of PPE.
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Charlena
2 months ago
I think statement A is true because depreciation does reduce profit.
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