CIMA Exam CIMAPRA19-F01-1 Topic 4 Question 97 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 97
Topic #: 4

[All CIMAPRA19-F01-1 Questions]

LM is preparing its cash forecast for the next three months.

Which of the following items should be left out of its calculations?

ATax payment due, that relates to last year's profits.

BReceipt of a new bank loan raised for the purpose of purchasing new machinery.

CExpected loss on the disposal of a piece of land.

DRental payment on a leased vehicle.

Show Suggested Answer

Suggested Answer: C

by Raymon at Sep 13, 2024, 07:24 PM

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Rashad

10 months ago

Is this a trick question? I mean, who forgets to include rental payments in their cash forecast? That's like Accounting 101!

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Lili

9 months ago

Jade: Yeah, I see your point. It's important to focus on cash inflows and outflows that are directly related to the business operations.

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Gracia

9 months ago

User 3: I'm not sure, but I think the tax payment due from last year's profits should be left out.

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Jade

9 months ago

User 2: I think the item that should be left out is the expected loss on the disposal of the piece of land.

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Kent

9 months ago

User 1: I agree, rental payments should definitely be included in the cash forecast.

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Mariann

10 months ago

I'm going with D. Rental payments are an operating expense and are crucial for the cash forecast.

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Annette

9 months ago

C) Expected loss on the disposal of a piece of land.

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Refugia

9 months ago

B) Receipt of a new bank loan raised for the purpose of purchasing new machinery.

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Rozella

10 months ago

A) Tax payment due, that relates to last year's profits.

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Joye

11 months ago

Ha! Rental payments on a leased vehicle? That's a no-brainer. Of course that should be included in the cash forecast.

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Hubert

11 months ago

Hmm, I'm not sure. But I do know that taxes and losses on disposals are definitely cash flow items that should be included.

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Ocie

10 months ago

D) Rental payment on a leased vehicle.

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Donte

10 months ago

C) Expected loss on the disposal of a piece of land.

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Elenor

10 months ago

B) Receipt of a new bank loan raised for the purpose of purchasing new machinery.

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Chantay

10 months ago

A) Tax payment due, that relates to last year's profits.

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Janessa

11 months ago

But what about the tax payment due? Shouldn't we include that in our calculations?

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Lili

11 months ago

I agree with Yasuko. It's a one-time loss that shouldn't affect our cash forecast.

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Yasuko

11 months ago

I think we should leave out the expected loss on the disposal of the land.

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Louann

11 months ago

I think the answer is B. A new bank loan is a financing activity and should not be included in the cash forecast.

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Bernadine

10 months ago

C is a non-cash item and should be excluded from the calculations.

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Reita

10 months ago

A is definitely important to consider for cash forecast.

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Leonardo

11 months ago

I think D should also be left out, as it is a regular expense.

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Andree

11 months ago

I agree, B should be left out of the calculations.

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Roosevelt

11 months ago

Yes, it is a financing activity and not part of the operating cash flow.

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Kallie

11 months ago

I agree, the new bank loan should not be included in the cash forecast.

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