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CIMA Certificate Financial Reporting — practice questions

Explore 30 free Financial Reporting questions in CIMA Certificate Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Financial Reporting questions and exercises with answers

Showing questions 1–30 of 30.

An owner pays for a family holiday from her own pocket. That payment stays out of the business records under the business:Read the answer and worked solution →A single individual runs a bakery with no partners and no shares issued. That structure is a:Read the answer and worked solution →Two friends pool money and skills to run a design studio as co-owners. That structure is a:Read the answer and worked solution →A company collapses owing money, yet its shareholders lose only what they invested. That protection is called:Read the answer and worked solution →A company pays tax on its profits, then shareholders pay tax again on the dividends. This drawback is called:Read the answer and worked solution →A statement showing how a business performed across a given period of time is the:Read the answer and worked solution →A landscaper earned 1,400 and spent 1,150 in August. Her net income for the month is:Read the answer and worked solution →The value of goods and services a business provides to customers over a period is its:Read the answer and worked solution →The cost of providing those goods and services to customers is recorded as an:Read the answer and worked solution →A firm's revenues come to 90,000 and its expenses to 96,000. The firm has recorded a net:Read the answer and worked solution →A landscaper sells a spare plot bought for 1,500 for 2,000. The extra 500 is recorded as a:Read the answer and worked solution →An analyst prefers profit that comes from sustainable trading rather than one-off sales. She is judging earnings:Read the answer and worked solution →A delivery van that will serve the business for eight years is classified as a:Read the answer and worked solution →Inventory expected to be sold within six months is classified as a:Read the answer and worked solution →A supplier's bill falling due in ninety days appears on the balance sheet as a:Read the answer and worked solution →The balance sheet is the accounting equation in statement form: assets equal liabilities plus:Read the answer and worked solution →A shop has assets of 18,700 and liabilities of 1,850. Its owner's equity is:Read the answer and worked solution →The ability of a business to turn assets into cash to meet short-term needs is its:Read the answer and worked solution →Current assets of 6,200 less current liabilities of 1,850 gives working capital of:Read the answer and worked solution →Dividing current assets of 6,200 by current liabilities of 1,850 gives a current ratio of about:Read the answer and worked solution →A firm reports a current ratio of 0.8. This tells a lender the firm should watch its short-term:Read the answer and worked solution →Managers at Waste Management deferred expenses to hit earnings targets and were charged in 2002 by the:Read the answer and worked solution →Catch the current assetsRead the answer and worked solution →Pop the statement wordsRead the answer and worked solution →Run the accounting gatesRead the answer and worked solution →Slice the equation termsRead the answer and worked solution →Asset or liabilityRead the answer and worked solution →Sort the reporting wordsRead the answer and worked solution →Type the numberRead the answer and worked solution →Accounting bingoRead the answer and worked solution →

Worked practice questions

An owner pays for a family holiday from her own pocket. That payment stays out of the business records under the business:

  1. Entity concept
  2. Equity concept
  3. Escrow concept
  4. Expense concept
Show answer and solution

Correct answer: A. Entity concept

1. Business records are meant to show the business alone. 2. A private holiday is the owner's affair, not the firm's trading. 3. The business entity concept keeps it out of the books. _Source: OpenStax Principles of Financial Accounting, Chapter 2, Introduction to Financial Statements._

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A single individual runs a bakery with no partners and no shares issued. That structure is a:

  1. Sole partnership
  2. Sole proprietorship
  3. Sole subscription
  4. Sole underwriting
Show answer and solution

Correct answer: B. Sole proprietorship

1. Ownership rests with exactly one person. 2. No co-owners and no shareholders are involved. 3. That structure is a sole proprietorship. _Source: OpenStax Principles of Financial Accounting, Chapter 2, Introduction to Financial Statements._

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Two friends pool money and skills to run a design studio as co-owners. That structure is a:

  1. Partnership
  2. Proprietary
  3. Prospectus
  4. Preference
Show answer and solution

Correct answer: A. Partnership

1. Two or more people contribute and share the ownership. 2. That is the defining shape of the arrangement. 3. The studio is a partnership. _Source: OpenStax Principles of Financial Accounting, Chapter 2, Introduction to Financial Statements._

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