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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?

Show Suggested Answer Hide Answer
Suggested Answer: A, C, F

by Alline at May 22, 2024, 03:50 PM

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Lindy
1 years 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
1 years 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
1 years ago
D is a good one. The cost of repainting the office should be expensed, not capitalized.
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Barrett
12 months ago
D) The cost of repainting the office is credited to the repairs expense account.
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Roosevelt
12 months ago
B) The cost of insurance for the factory is debited to the PPE asset account.
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Margurite
1 years ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Dusti
1 years 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
1 years ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
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Domonique
1 years ago
E) The loss on the disposal of PPE is recorded in a liability account
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Gilma
1 years ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
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Amber
1 years ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Lynelle
1 years ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
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Cecilia
1 years ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Sherly
1 years ago
A) The annual depreciation charge reduces EFG's profit for the year.
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Pearly
1 years 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
1 years ago
The cost of repainting the office is credited to the repairs expense account.
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Dorthy
1 years ago
F) The annual depreciation charge reduces the carrying value of PPE
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Pansy
1 years ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
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Shad
1 years ago
The depreciation charge and loss on disposal reduce profit, and depreciation reduces the carrying value of PPE.
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Clorinda
1 years ago
A) The annual depreciation charge reduces EFG's profit for the year.
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