CIMA Exam CIMAPRA19-F01-1 Topic 4 Question 97 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 97
Topic #: 4

[All CIMAPRA19-F01-1 Questions]

LM is preparing its cash forecast for the next three months.

Which of the following items should be left out of its calculations?

ATax payment due, that relates to last year's profits.

BReceipt of a new bank loan raised for the purpose of purchasing new machinery.

CExpected loss on the disposal of a piece of land.

DRental payment on a leased vehicle.

Show Suggested Answer

Suggested Answer: C

by Raymon at Sep 13, 2024, 07:24 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F01-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Rashad

2 months ago

Is this a trick question? I mean, who forgets to include rental payments in their cash forecast? That's like Accounting 101!

upvoted 0 times

Lili

25 days ago

Jade: Yeah, I see your point. It's important to focus on cash inflows and outflows that are directly related to the business operations.

upvoted 0 times

...

Gracia

26 days ago

User 3: I'm not sure, but I think the tax payment due from last year's profits should be left out.

upvoted 0 times

...

Jade

27 days ago

User 2: I think the item that should be left out is the expected loss on the disposal of the piece of land.

upvoted 0 times

...

Kent

1 months ago

User 1: I agree, rental payments should definitely be included in the cash forecast.

upvoted 0 times

...

Mariann

2 months ago

I'm going with D. Rental payments are an operating expense and are crucial for the cash forecast.

upvoted 0 times

Annette

28 days ago

C) Expected loss on the disposal of a piece of land.

upvoted 0 times

...

Refugia

29 days ago

B) Receipt of a new bank loan raised for the purpose of purchasing new machinery.

upvoted 0 times

...

Rozella

1 months ago

A) Tax payment due, that relates to last year's profits.

upvoted 0 times

...

Joye

2 months ago

Ha! Rental payments on a leased vehicle? That's a no-brainer. Of course that should be included in the cash forecast.

upvoted 0 times

...

Hubert

2 months ago

Hmm, I'm not sure. But I do know that taxes and losses on disposals are definitely cash flow items that should be included.

upvoted 0 times

Ocie

1 months ago

D) Rental payment on a leased vehicle.

upvoted 0 times

...

Donte

2 months ago

C) Expected loss on the disposal of a piece of land.

upvoted 0 times

...

Elenor

2 months ago

B) Receipt of a new bank loan raised for the purpose of purchasing new machinery.

upvoted 0 times

...

Chantay

2 months ago

A) Tax payment due, that relates to last year's profits.

upvoted 0 times

...

Janessa

3 months ago

But what about the tax payment due? Shouldn't we include that in our calculations?

upvoted 0 times

...

Lili

3 months ago

I agree with Yasuko. It's a one-time loss that shouldn't affect our cash forecast.

upvoted 0 times

...

Yasuko

3 months ago

I think we should leave out the expected loss on the disposal of the land.

upvoted 0 times

...

Louann

3 months ago

I think the answer is B. A new bank loan is a financing activity and should not be included in the cash forecast.

upvoted 0 times

Bernadine

2 months ago

C is a non-cash item and should be excluded from the calculations.

upvoted 0 times

...

Reita

2 months ago

A is definitely important to consider for cash forecast.

upvoted 0 times

...

Leonardo

2 months ago

I think D should also be left out, as it is a regular expense.

upvoted 0 times

...

Andree

2 months ago

I agree, B should be left out of the calculations.

upvoted 0 times

...

Roosevelt

2 months ago

Yes, it is a financing activity and not part of the operating cash flow.

upvoted 0 times

...

Kallie

2 months ago

I agree, the new bank loan should not be included in the cash forecast.

upvoted 0 times

...