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