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

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam

Question #: 104
Topic #: 1

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?

AThe annual depreciation charge reduces EFG's profit for the year.

BThe cost of insurance for the factory is debited to the PPE asset account.

CThe loss on the disposal of PPE reduces EFG's profit for the year

DThe cost of repainting the office is credited to the repairs expense account

EThe loss on the disposal of PPE is recorded in a liability account

FThe annual depreciation charge reduces the carrying value of PPE

Show Suggested Answer

Suggested Answer: A, C, F

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

Limited Time Offer

25%

Off

Get Premium CIMAPRA17-BA3-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Tayna

6 days 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.

upvoted 0 times

...

Eve

8 days 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!

upvoted 0 times

...

Rikki

10 days 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!

upvoted 0 times

Evan

3 days ago

A) The annual depreciation charge reduces EFG's profit for the year.

upvoted 0 times

...

1 months ago

I think statement A is true because depreciation does reduce profit.

upvoted 0 times

...