CIMAPRA19-F01-1 Exam Questions & Answers

XYZ operates in Country P where the tax rules state entertaining costs and accounting depreciation are disallowable for tax purposes.

In year ending 31 March 20X4, XYZ made an accounting profit of $240,000.

Profit included $14,500 of entertaining costs and $5,000 of income exempt from taxation.

XYZ has plant and machinery with accounting depreciation amounting to $26,300 and tax depreciation amounting to $35,200.

Calculate the taxable profit for the year ended 31 March 20X4.

XYZ operates in Country A where tax rules state that entertaining costs and donations to political parties are disallowable for tax purposes.

XYZ calculated both its accounting and taxable profits for the year ended 31 December 20X2 after deducting $10,000 of entertaining costs.

It is considering what impact the ruling that "entertaining costs are disallowable for tax purposes" will have on its two profit figures.

Which of the following correctly states the impact of the ruling on the profits already calculated?

The International Accounting Standards Board's "The Conceptual Framework for Financial Reporting" identifies fundamental and enhancing qualitative characteristics of financial statements.

Which of the following is included within the fundamental characteristics?

In Country X, trading losses in any year can be carried back and set off against trading profits in the previous year, with any unrelieved losses carried forward to set against the first available trade profits in future years.

GH had the following taxable profits and losses in years 20X1 to 20X4:

What are the taxable profits for 20X4, assuming the most efficient use of the loss is made?

DEF is considering introducing a Pay-As-You-Earn (PAYE) system but unsure of the advantages of using it.

Which of the following statements are advantages from the employees perspective of an entity using a PAYE system for collecting taxes from employees.

Select ALL that apply.