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The tax rules in a country state that all tax returns must be filed by 31 March each year and that any outstanding tax balance must be paid by 14 April each year. An entity filed its tax return on 10 April 20X2 and paid the outstanding tax on 20 April 20X2.

Which TWO of the following powers is the tax authority likely to have in respect of these actions by the entity?

A.

Charge a fixed penalty for late submission of the tax return.

B.

Charge interest for non-payment of the outstanding tax balance between 14 April 20X2 and 20 April 20X2.

C.

Charge interest for non-payment of the outstanding tax balance between 31 March 20X2 and 20 April 20X2.

D.

Charge interest for non-payment of the outstanding tax balance between 10 April 20X2 and 20 April 20X2.

E.

Seize the assets of the entity.

The auditor has identified a material but not pervasive mis-statement whilst undertaking the external audit of an entity's financial statements.

This will result in a modified audit report with the opinion being .

Which of the following would NOT be assessed for tax under a Pay-As-You-Earn system?

A.

Profit-sharing payments received by an employee.

B.

Benefits in kind received by an employee.

C.

Commissions received by an employee.

D.

The wealth of an employee.

Which THREE of the following are included in the International Accounting Standards Board's "The Conceptual Framework for Financial Reporting"?

A.

The objective of financial statements

B.

Specification of the financial statements that must be presented

C.

Qualitative characteristics of financial statements

D.

Definition of the headings to use in financial statements

E.

The elements of financial statements

F.

The formats of financial statements

The following information is extracted from the statement of financial position for ZZ at 31 March 20X3:

Included within cost of sales in the statement of profit or loss for the year ended 31 March 20X3 is $20 million relating to the loss on the sale of plant and equipment which had cost $100 million in June 20X1.

Depreciation is charged on all plant and equipment at 25% on a straight line basis with a full year's depreciation charged in the year of acquisition and none in the year of sale.

The revaluation reserve relates to the revaluation of ZZ's property.

The total depreciation charge for property, plant and equipment in ZZ's statement of profit of loss for the year ended 31 March 20X3 is $80 million.

The corporate income tax expense in ZZ's statement of profit or loss for year ended 31 March 20X3 is $28 million.

ZZ is preparing its statement of cash flows for the year ended 31 March 20X3.

What figure should be included within cash flows from investing activities for the proceeds of sale of plant and equipment?

A.

$55 million

B.

$95 million

C.

$80 million

D.

$120 million

The Conceptual Framework for Financial Reporting issued by the International Accounting Standards Board (known as the IASB's conceptual framework) includes one underlying assumption about the preparation of financial statements and two fundamental qualitative characteristics for financial information.

Identify the underlying assumption and one of the fundamental characteristics by placing one of the options in each of the boxes below.

Which of the following is a type of short-term finance?

A.

Trade payables

B.

Trade receivables

C.

Interest bearing bank deposit

D.

Loan repayable in five years

An entity acquires 100% of the equity shares in another entity.

The consideration paid for the shares is less than the fair value of the net assets acquired.

Which of the following is the correct accounting treatment for the difference between the consideration paid and the fair value of the net assets acquired, in accordance with IFRS 3 Business Combinations?

A.

Recognise as a gain in the consolidated statement of profit or loss.

B.

Recognise as a deferred credit and release to consolidated profit or loss over its useful economic life.

C.

Recognise as a deduction from goodwill in the consolidated statement of financial position.

D.

Recognise as a gain in the statement of changes in equity.

UV has recently been having cash flow issues due to its credit customers paying after the credit period they have been granted.

UV is looking into factoring the receivables to a factoring company on a recourse basis to improve its cash flow.

Which TWO of the following will UV encounter as a result of employing the factoring company?

A.

No irrecoverable debts

B.

Reduction in payables days

C.

Reduction in the need for management control

D.

Reduction in bank overdraft charges

E.

Increase in cash sales

AA manufactures computers. These are sold to BB at $100 a computer plus a 5% sales tax. BB subsequently sells the computers to CC for $200 a computer plus a 5% sales tax. C sells the computers to customers at $300 a computer plus a 5% sales tax.

The total tax received by the tax authority is $30.

Which type of tax is described above?

A.

Single-stage sales tax

B.

Value added tax

C.

Retail tax

D.

Multi-stage cumulative sales tax