CIMA Exam CIMAPRA17-BA3-1 Topic 4 Question 100 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam

Question #: 100
Topic #: 4

What will be the effect on the financial statements if the closing inventory figure is decreased?

AAn increase in cost of sales, an increase in gross profit and a decrease in the inventory figure in the statement of financial position.

BA decrease in cost of sales, a decrease in gross profit and a decrease in the inventory figure in the statement of financial position.

CA decrease in cost of sales, an increase in gross profit and a decrease in the inventory figure in the statement of financial position.

DAn increase in cost of sales, a decrease in gross profit and a decrease in the inventory figure in the statement of financial position.

Show Suggested Answer

Suggested Answer: A

by Cherelle at Sep 19, 2024, 12:44 PM

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Cora

2 months ago

Ah, the old closing inventory conundrum. Let me think this through... Decrease in inventory, increase in cost of sales, decrease in gross profit. Yep, gotta be D. Now, if only I could find a way to decrease my grocery bill like that!

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Nikita

1 months ago

I wish decreasing my grocery bill was as easy as decreasing inventory!

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Amira

1 months ago

Yeah, that makes sense. It's all about the financial statements.

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Iluminada

2 months ago

I think it's D. Decrease in inventory, increase in cost of sales, decrease in gross profit.

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Gilbert

2 months ago

Aha! I remember this from my last accounting class. Decrease in closing inventory equals increase in cost of sales, which means a decrease in gross profit. Easy peasy, option D it is.

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Bernardine

22 days ago

So, the correct option is D - An increase in cost of sales, a decrease in gross profit and a decrease in the inventory figure in the statement of financial position.

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Tonette

25 days ago

That's correct, it will also result in a decrease in gross profit.

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Jacob

26 days ago

I think you're right, a decrease in closing inventory will lead to an increase in cost of sales.

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Venita

2 months ago

Okay, I've got this. If the closing inventory goes down, that means the cost of sales goes up, and the gross profit goes down. That's just basic accounting, right? I'll go with option D.

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Ma

1 months ago

Farrah: Exactly, it all makes sense now.

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Jerry

2 months ago

User 3: So, the correct option would be D then.

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Farrah

2 months ago

User 2: Yeah, and that will lead to a decrease in gross profit.

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Iluminada

2 months ago

User 1: I think you're right. If the closing inventory decreases, the cost of sales will increase.

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Barney

3 months ago

I think option D is correct. It will result in an increase in cost of sales and a decrease in gross profit.

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Britt

3 months ago

Hmm, let's see. If the closing inventory figure decreases, that means the cost of goods sold will increase, right? So, I think the answer is D. Hey, maybe I should keep an inventory of my socks to avoid this problem!

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