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

27 days 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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Iluminada

16 days ago

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

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Gilbert

1 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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Venita

1 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

9 days ago

Farrah: Exactly, it all makes sense now.

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Jerry

18 days ago

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

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Farrah

20 days ago

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

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Iluminada

22 days ago

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

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Barney

2 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

2 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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