Cima P1 Exam Question No 19

Question No 19:

In finance, a bond is described as?

A. A negotiable instrument offering a fixed rate of interest over a fixed period of time and with a fixed redemption value.
B. A negotiable instrument which provides evidence of a fixed term deposit with a bank. Maturity is normally within 90 days but can be longer.
C. A document which sets out a commitment to pay a sum of money at a specified point in time.
D. An unsecured short term loan note issued by companies and generally maturing within a period of up to one year.

Answer: A

Cima P1 Exam Question No 18

Question No 18:

The material yield variance for August is:

A. $200 Adverse
B. $1,740 Adverse
C. $200 Favorable
D. $1,740 Favorable

Answer: B

Cima P1 Exam Question No 17

Question No 17:

BC had trade receivables of $242,000 at the start of the year. BC forecasts that the sales revenue for the year will be $1,500,000. All sales are on credit.
Trade receivable days at the end of the year are expected to be 60 days based on a 365 day year.
The expected receipts from customers during the year are closest to:

A. $1,495,425
B. $1,742,000
C. $1,253,425
D. $1,504,575

Answer: A

Cima P1 Exam Question No 16

Question No 16:

A company is considering offering its customers an early settlement discount. The company currently receives payments from customers on average 65 days after the invoice date. The company is considering offering a 2% early settlement discount for payment within 30 days of the invoice date.
The effective annual interest rate of the early settlement discount using compound interest methodology and assuming a 365 day year is:

A. 22.94%
B. 20.86%
C. 23.45%
D. 27.85%

Answer: C

Cima P1 Exam Question No 15

Question No 15:

AB is preparing its cash budget for the next quarter.
Which of the following items should NOT be included in the cash budget?

A. Payment of tax due on last year’s profits
B. Gain on the disposal of a piece of machinery
C. Repayment of the capital amount of a loan
D. Receipt of interest from short term investments

Answer: B

Cima P1 Exam Question No 14

Question No 14:

When using absorption costing method, what should you focus on?
When using absorption costing to determine the cost per unit, we focus on the production costs only. These costs can be summarized into a cost card:

Direct Materials per unit X
Direct Labour per unit X
Production overhead per unit X
_______________________________
Full production cost per unit X

Cima P1 Exam Question No 13

Question No 13:

What is the aim of traditional absorption costing?

The aim of traditional absorption costing is to determine the full production cost per unit.