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CIMA Exam CIMAPRA17-BA3-1 Topic 1 Question 88 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam
Question #: 88
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 Alline at May 22, 2024, 03:50 PM

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Lindy
3 months ago
Wait, so the Finance Director is basically testing us on our ability to differentiate between capital and revenue expenditures? Sounds like a real *asset* of a question!
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Nguyet
3 months ago
E is just plain wrong. The loss on disposal is not recorded in a liability account, that's ridiculous!
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Brent
3 months ago
D is a good one. The cost of repainting the office should be expensed, not capitalized.
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Barrett
2 months ago
D) The cost of repainting the office is credited to the repairs expense account.
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Roosevelt
2 months ago
B) The cost of insurance for the factory is debited to the PPE asset account.
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Margurite
2 months ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Dusti
3 months ago
B is a strange one. Why would the cost of insurance be debited to the PPE account? That doesn't make any sense.
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Donte
2 months ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
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Domonique
2 months ago
E) The loss on the disposal of PPE is recorded in a liability account
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Gilma
2 months ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
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Amber
2 months ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Lynelle
2 months ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
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Cecilia
2 months ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Sherly
2 months ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Pearly
3 months ago
A, C, and F are correct. The depreciation charge and loss on disposal reduce profit, and depreciation reduces the carrying value of PPE.
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Shad
3 months ago
The cost of repainting the office is credited to the repairs expense account.
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Dorthy
3 months ago
F) The annual depreciation charge reduces the carrying value of PPE
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Pansy
3 months ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
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Shad
3 months ago
The depreciation charge and loss on disposal reduce profit, and depreciation reduces the carrying value of PPE.
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Clorinda
3 months ago
A) The annual depreciation charge reduces EFG's profit for the year.
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