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CIMA OCS > F1 > Flashcards

F1 Flashcards

1
Q

What is direct tax

A

Paid to gov by person liable

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2
Q

What is indirect tax

A

Borne by one person but paid and collected by others

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3
Q

What is incidence of tax

A

Distribution of tax burden

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4
Q

What is formal incidence

A

Person with direct contact with tax authroity

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5
Q

What is actual incidence

A

Person who ends up bearing the costs

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6
Q

What is a tax base

A

Identifies what’s Subject to tax

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7
Q

What is hypothecation

A

Certain taxes devoted to certain expenditure

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8
Q

What is capital taxes?

A

Gains made on disposal of investments and other nc assets

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9
Q

What is unit taxes?

A

Based on number or weight of items

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10
Q

What is ad valorem taxes?

A

Based on value of items

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11
Q

What are benefits in kind?

A

Non cash benefits in lieu of cash payment

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12
Q

What is tax avoidance?

A

Tax planning to arrange affairs within the scope of the law to minimise tax liability

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13
Q

What is tax evasion

A

Illegal manipulation of tax system to minimise liability

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14
Q

What is balancing allowance

A

Tax loss on disposal

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15
Q

What is balancing charge

A

Tax profit on disposal

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16
Q

What is GAAP

A

Generally accepted accounting practices
Encompasses rules and procedures necessary to define accepted accounting practice

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17
Q

What are the ethical threats?

A

Self interest
Intimidation
Familiarity
Advocacy
Self review

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18
Q

What are the fundamental qualitative characteristics

A

Relevance
Faithful representation

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19
Q

What are the enhancing qualitative characteristics

A

Compatability
Verifiablity
Timeliness
Understandility

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20
Q

What are assets

A

Present economic resource controlled by entity as a result of a past event

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21
Q

What are historical costs

A

Price paid at acquisition

22
Q

What is current value

A

Value at measurement date

23
Q

What is IAS 1

A

Presentation of financial statements

24
Q

What is the going concern

A

Entity considered to trade for the foreseeable future

25
Q

What is IAS 16

A

Plant property and equipment

26
Q

What is the cost model

A

Carrying amount = cost

27
Q

What is revaultion model

A

Carrying amount = fair value

28
Q

What is IAS 36

A

Impairment of assets
When carrying amount exceeds its recoverable amount

29
Q

What is IFRS 5

A

Non current assets held for sale and discontinued operations

30
Q

What is iFRS 16

A

Leases

31
Q

What is a lease

A

Contract that concerns the right to use an underlying asset for a period of time in exchange for consideration

32
Q

What is lease liability?

A

Present value of lease payment not yet made

33
Q

What is IAS 2

A

Inventories

34
Q

What is inventories value at

A

Lower of cost or net releasable value

35
Q

What two methods are permitted in inventories?

A

FIFO and AvCO

36
Q

What is IAS 7?

A

Statement of cash flows

37
Q

What are the three cash flow groups

A

Operating activities
Investing activities
Financing activities

38
Q

What is factoring

A

Outsourcing credit control department to third party

39
Q

What is invoice discounting?

A

Invoices used as security against which the entity may borrow funds

40
Q

What is a bank loan?

A

Contractual agreement for a specified sum loaned for a fixed terms at an agreed interest rate

41
Q

What is documentary credit

A

Issued by bank on behalf of customer authorising supplier to withdraw amount from branches

42
Q

What is working capital

A

Capital expenditure for conducting day to day operations of an org

43
Q

What is the working capital cycle

A

Cash
Raw materials
WIP
Finished goods
Receivables

44
Q

What is the current ratio

A

Measures how much of total current assets are financed by current liabilities

45
Q

What is quick ratio

A

Measures how well current liabilities are covered by liquid assets

46
Q

What is an aggressive policy

A

Reduced costs by holding low levels of assets

47
Q

What is a Conservative policy

A

Reduces risk by holding high levels of cash

48
Q

What is a moderate policy

A

Middle ground balance between cost and risk

49
Q

What is economic order quantity

A

How many items should be ordered when order is placed

50
Q

What is the optimum reorder level

A

How many items should be left in inventory when next order is placed

51
Q

What is buffer stock

A

Stock you hold above and beyond the known demand

52
Q

What is cash forecasts for?

A

Used to assess operating budgets, plan for cash shortages and surpluses, compare with actual spending

CIMA OCS (3 decks)

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