CIMAPRA19-F01-1 Exam - Topic 5 Question 44 Discussion

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

Question #: 44
Topic #: 5

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?

AAccounting profit will not be affected but taxable profit will increase by $10,000.

BBoth accounting and taxable profits will increase by $10,000.

CAccounting profit will decrease by $10,000 and taxable profit will increase by $10,000.

DBoth accounting and taxable profits will decrease by $10,000.

Show Suggested Answer

Suggested Answer: A

by Arlette at May 08, 2022, 09:29 AM

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5 months ago

A is correct, accounting profit stays the same!

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Hmm, I'm a bit unsure about this one. I know Denial of Service attacks can disrupt the network, but I'm not sure if that's considered a "partitioning" attack. I'll have to think this through carefully.

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Cletus

5 months ago

This looks straightforward. The first option about recording property, plant, and equipment at cost and using the straight-line method for depreciation seems like the kind of accounting policy information that should be included in the summary. I'll go with that.

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Asha

5 months ago

This question covers a lot of ground - the binomial model, the Black-Scholes-Merton assumptions, and the impact of dividends on option pricing. I'll need to carefully read through all the details and think through each part systematically.

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Glendora

5 months ago

I'm pretty sure the purpose of a Compliance Assessment is to govern the architecture throughout its implementation process, so I'll go with option B.

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Bernardine

5 months ago

Hmm, this seems like a tricky one. I'll need to think through the default cluster behavior carefully.

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CIMAPRA19-F01-1 Exam - Topic 5 Question 44 Discussion

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Abraham

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