CIMA Exam CIMAPRA17-BA3-1 Topic 1 Question 72 Discussion

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

Question #: 72
Topic #: 1

[All CIMAPRA17-BA3-1 Questions]

Which of the following is an example of where the historic cost convention should be applied?

AA potential bad debt of 8,000.

BRaw materials purchased for $2.50 per kg now costing $2.60 per kg.

CExpenditure on research and development.

DA change to the method used to value inventory and work in progress.

Show Suggested Answer

Suggested Answer: D, E

by Loreta at Jul 25, 2023, 06:05 AM

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Ciara

1 months ago

I'm going with option B, because I'm historicLOLly inclined to stick to the original costs. Get it? 'Historicly'? Okay, I'll see myself out.

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Latanya

15 days ago

User 1: I think option B is the right choice.

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Iola

1 months ago

Research and development? Come on, that's clearly a cost that should be expensed, not capitalized under the historic cost convention.

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Werner

2 months ago

Haha, the bad debt question is a classic trick! You can't use historic cost for that, it's all about estimating future losses.

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Celeste

16 days ago

User 3: Actually, I believe the correct answer is D) A change to the method used to value inventory and work in progress.

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Shaniqua

26 days ago

User 2: No, that's not right. It should be C) Expenditure on research and development.

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Scarlet

1 months ago

User 1: I think the answer is B) Raw materials purchased for $2.50 per kg now costing $2.60 per kg.

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Timmy

2 months ago

Definitely option B. The historic cost convention requires us to use the original purchase price, not the current market value.

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Timmy

19 days ago

It's crucial to follow the guidelines of the historic cost convention to accurately reflect the financial position of the company.

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Curtis

21 days ago

Using the original purchase price is important in maintaining consistency with the historic cost convention.

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Rodrigo

1 months ago

I agree, option B is the correct choice for applying the historic cost convention.

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Magda

2 months ago

I think the historic cost convention should be applied to the raw materials purchased for $2.50 per kg. The cost hasn't changed, so we should stick to the original price.

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Kara

I think option C is not a suitable example, as expenditure on research and development is not typically subject to the historic cost convention.

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Margart

17 days ago

I see your point, but I believe option B is the most straightforward example for applying the historic cost convention.

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Martha

25 days ago

I think option A could also be a valid example, as it involves a potential bad debt that was recorded at its original cost.

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Sylvie

1 months ago

I agree, option B is the correct example for applying the historic cost convention.

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Rima

2 months ago

Why do you think that?

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Vincent

2 months ago

I disagree, I believe it should be applied to option A.

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Rima

3 months ago

I think the historic cost convention should be applied to option B.

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