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Free ACCA Financial Reporting Practice Questions & Answers

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Question 271

An entity has a factory with carrying amount 800,000. Due to a fall in demand, value in use is 600,000 and fair value less costs of disposal is 650,000. Calculate the impairment loss.

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Question 272

A building is revalued from carrying amount 400,000 to fair value 550,000. The tax rate is 25% and the gain gives rise to a taxable temporary difference. What deferred tax liability arises on revaluation?

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Question 273

An entity has two CGUs with a shared corporate asset allocated based on relative carrying amounts. CGU A carrying amount = 300,000; CGU B = 200,000; corporate asset = 100,000. CGU A's recoverable amount is 320,000. Calculate the impairment loss for CGU A.

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Question 274

An entity purchases an investment property for 2,000,000 and classifies it under the fair value model. At year end, the fair value is 2,350,000. What is recorded and where?

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Question 275

Entity M borrows 1,000,000 specifically for a qualifying asset construction project at 5%. During the construction year, 200,000 of the loan was temporarily invested at 3% for 6 months. What is the borrowing cost eligible for capitalisation?

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Question 276

Entity P owns a factory with carrying amount 2,000,000 and a revaluation surplus of 300,000. An impairment review determines the recoverable amount is 1,600,000. How is the impairment loss of 400,000 treated?

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Question 277

An entity constructs a qualifying asset, spending 500,000 on 1 Jan and a further 300,000 on 1 July. General borrowings total 2,000,000 at 6%. What are borrowing costs eligible for capitalisation for the year?

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Question 278

An asset classified as held for sale under IFRS 5 must be measured at:

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Question 279

Which of the following ratios assesses a company's ability to pay interest from operating profits?

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Question 280

A high inventory days ratio compared to the industry average suggests:

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Question 281

A rising receivables days trend over three years most likely indicates:

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Question 282

Which of the following is a profitability ratio?

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Question 283

Gearing is MOST relevant to assessing:

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Question 284

Which of the following would indicate POOR short-term liquidity?

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Question 285

Asset turnover measures:

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Question 286

Which of the following ratios best measures operating efficiency?

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Question 287

Which financial statement would you examine first to assess whether a profitable company might have a cash flow problem?

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Question 288

Dividend yield measures:

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Question 289

Which of the following would be most useful for comparing the profitability of companies of very different sizes?

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Question 290

Which of the following is the most appropriate use of the P/E ratio?

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Question 291

What does a negative working capital position indicate?

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Question 292

Which of the following is a limitation of ratio analysis?

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Question 293

What does a high price-to-earnings (P/E) ratio generally indicate?

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Question 294

What is the book value per share?

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Question 295

What does a declining gross profit margin indicate?

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Question 296

Which of the following is a limitation of using historic financial ratios for decision-making?

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Question 297

An entity's ROCE has fallen from 18% to 11% over two years. Which of the following could explain this?

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Question 298

A company's gross margin falls from 45% to 38% while net margin is stable. The most likely explanation is:

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Question 299

Working capital ratio analysis: A company has current ratio 1.8 and quick ratio 0.9. What does this suggest?

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Question 300

Which of the following best describes the DuPont analysis of return on equity?

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Free ACCA Financial Reporting Practice Questions & Answers

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