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  • Exam Name: Financial Reporting
  • Last Update: 22-Jun-2024
  • Questions and Answers: 248
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F1 Questions and Answers

Question # 1

PP supplies zero-rated and standard-rated goods. During the year ended 30 March 20X3, the standard-rated goods made up 50% of the total supplies. During the year ended 30 March 20X4 this percentage increased to 60%.

What percentage of input tax suffered can PP claim back in the year ended 30 March 20X4?

Give your answer as a whole number.

Question # 2

Entity RH has an recognised a taxable profit of $1.Smillion for 20X1'. In Entity RH's resident country. Country M, depreciation charges and entertaining expenses are disallowed expenses. Below is some information on

Entitry RH's outgoings for the period:

Depreciation charged on PPE: $450,000

Political donations: $155,000

Staff parties: $3,200

Cost of updating assets: $10,000

Other expenses: $83,500

In Country M, there is a standard corporation tax of 12% charged on all corporation profits. What is Entity RH's total tax liability for this period?

A.

$234,384

B.

$125,616

C.

$254,184

D.

$252,984

Question # 3

The Conceptual Framework for Financial Reporting issued by the International Accounting Standards Board (known as the IASB's conceptual framework) includes one underlying assumption about the preparation of financial statements and two fundamental qualitative characteristics for financial information.

Identify the underlying assumption and one of the fundamental characteristics by placing one of the options in each of the boxes below.

F1 question answer

Question # 4

While conducting their audit, auditor 0 did not encounter issues which significantly limited the scope of their audit, however they did run into problems in that they disagreed with the management on facts in the

statements.

These disagreements were somewhat material, but they did not affect the auditor's overall opinion of the business. Which of the following statements should auditor 0 issue?

A.

Emphasis of matter

B.

Unqualified report

C.

'Except for' qualification

D.

Adverse audit opinion

E.

Disclaimer of opinion

Question # 5

Which of the following methods could be used by a tax authority to reduce tax evasion and avoidance?

A.

Increase tax rates to compensate for losses due to evasion.

B.

Reduce penalties for avoidance.

C.

Reduce requirements to have tax returns audited.

D.

Simplify the tax structure, minimizing allowances and exemptions.

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