F9 (FM) – PART A – Section B – CBE MCQs – ACCA

These are ACCA F9 (FM) Financial Management MCQs for Part-A of the Syllabus “Financial management function”.

These multiple-choice questions (MCQs) are designed to help ACCA F9 students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

  • Students should not attempt these MCQs until they have finished the entire chapter.
  • All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F9 (FM) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:ACCA – Association of Chartered Certified Accountants
Fundamental Level:Applied Skills
Subject:Financial Management
Paper:F9 – FR
Chapter and Topic
  • The nature and purpose of financial management,
  • Financial objectives and relationship with corporate strategy,
  • Stakeholders and impact on corporate objectives,
  • Financial and other objectives in not-for-profit organisations
Questions:
  1. ABC Co
Syllabus Area:A – “Financial management function”
Questions Type:CBE MCQs
Exam Section:Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part A of the Syllabus; “Financial management function” of ACCA F9 (FM) Financial Management Module.

Time

These MCQs are not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate

Result

Students will get their F9 CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “(select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

QUESTION – ABC Co – (01/01)

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F9 (FM) - Part A - MCQs - ABC Co

Course: ACCA - Association of Chartered Certified Accountants
Subject:
F9 (FM) - Financial Management
Syllabus Area: A - Financial management function
Chapter: Financial management and financial objectives
Exam Section: Section B
Question Name: ABC Co
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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REQUEST

  1. Please rate the quiz and give us feedback once you completed the quiz.
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1 / 5

The following scenario relates to questions 1–5.

Summary financial information for ABC Co is given below, covering the last two years.

STATEMENT OF PROFIT OR LOSS (EXTRACT)

20X8
$'000
20X7
$'000
Revenue 74,521 68,000
Cost of sales 28,256 25,772
Salaries and wages 20,027 19,562
Other costs  11,489   9,160 
Profit before interest and tax 14,749 13,506
Interest 1,553 1,863
Tax  4,347   3,726 
Profit after interest and tax 8,849 7,917
Dividends payable 4,800 3,100
20X8 20X7
STATEMENT OF FINANCIAL POSITION (EXTRACT) $'000 $'000
Shareholders' funds 39,900 35,087
Long-term debt 14,000 17,500


53,900 52,587
Other information
Number of shares in issue ('000) 14,000 14,000
P/E ratio (average for year)
   ABC Co 14.0 13.0
   Industry 15.2 15.0
Shareholders' investment
   EPS $0.63 $0.57
   Share price $8.82 $7.41
   Dividend per share $0.34 $0.22

Accounting profits may not be the best measure of a company's performance.

Which of the following statements support this theory?

  1. Profits are affected by accounting policies.
  2. Profits take no account of risk.
  3. Profits take no account of the level of investment made during the year.
  4. Profits are measures of short-term historic performance.

2 / 5

The following scenario relates to questions 1–5.

Summary financial information for ABC Co is given below, covering the last two years.

STATEMENT OF PROFIT OR LOSS (EXTRACT)

20X8
$'000
20X7
$'000
Revenue 74,521 68,000
Cost of sales 28,256 25,772
Salaries and wages 20,027 19,562
Other costs  11,489   9,160 
Profit before interest and tax 14,749 13,506
Interest 1,553 1,863
Tax  4,347   3,726 
Profit after interest and tax 8,849 7,917
Dividends payable 4,800 3,100
20X8 20X7
STATEMENT OF FINANCIAL POSITION (EXTRACT) $'000 $'000
Shareholders' funds 39,900 35,087
Long-term debt 14,000 17,500


53,900 52,587
Other information
Number of shares in issue ('000) 14,000 14,000
P/E ratio (average for year)
   ABC Co 14.0 13.0
   Industry 15.2 15.0
Shareholders' investment
   EPS $0.63 $0.57
   Share price $8.82 $7.41
   Dividend per share $0.34 $0.22

Requirement

As well as the information above, the following extra data is available:

20X8 20X7
Gearing (debt/equity) 35.1% 49.9%
Interest cover (PBIT/interest) 9.5 7.2
Inflation 3% 3%

Based on all of the information available, are the following statements true or false?

  1. Employees may be unhappy with their wages in 20X8.
  2. Financial risk for shareholders appears to be a problem area.

3 / 5

The following scenario relates to questions 1–5.

Summary financial information for ABC Co is given below, covering the last two years.

STATEMENT OF PROFIT OR LOSS (EXTRACT)

20X8
$'000
20X7
$'000
Revenue 74,521 68,000
Cost of sales 28,256 25,772
Salaries and wages 20,027 19,562
Other costs  11,489   9,160 
Profit before interest and tax 14,749 13,506
Interest 1,553 1,863
Tax  4,347   3,726 
Profit after interest and tax 8,849 7,917
Dividends payable 4,800 3,100
20X8 20X7
STATEMENT OF FINANCIAL POSITION (EXTRACT) $'000 $'000
Shareholders' funds 39,900 35,087
Long-term debt 14,000 17,500


53,900 52,587
Other information
Number of shares in issue ('000) 14,000 14,000
P/E ratio (average for year)
   ABC Co 14.0 13.0
   Industry 15.2 15.0
Shareholders' investment
   EPS $0.63 $0.57
   Share price $8.82 $7.41
   Dividend per share $0.34 $0.22

What is the total shareholder return?

4 / 5

The following scenario relates to questions 1–5.

Summary financial information for ABC Co is given below, covering the last two years.

STATEMENT OF PROFIT OR LOSS (EXTRACT)

20X8
$'000
20X7
$'000
Revenue 74,521 68,000
Cost of sales 28,256 25,772
Salaries and wages 20,027 19,562
Other costs  11,489   9,160 
Profit before interest and tax 14,749 13,506
Interest 1,553 1,863
Tax  4,347   3,726 
Profit after interest and tax 8,849 7,917
Dividends payable 4,800 3,100
20X8 20X7
STATEMENT OF FINANCIAL POSITION (EXTRACT) $'000 $'000
Shareholders' funds 39,900 35,087
Long-term debt 14,000 17,500


53,900 52,587
Other information
Number of shares in issue ('000) 14,000 14,000
P/E ratio (average for year)
   ABC Co 14.0 13.0
   Industry 15.2 15.0
Shareholders' investment
   EPS $0.63 $0.57
   Share price $8.82 $7.41
   Dividend per share $0.34 $0.22

What is the operating profit margin for 20X8 ? (to one decimal place)

_______ %

5 / 5

The following scenario relates to questions 1–5.

Summary financial information for ABC Co is given below, covering the last two years.

STATEMENT OF PROFIT OR LOSS (EXTRACT)

20X8
$'000
20X7
$'000
Revenue 74,521 68,000
Cost of sales 28,256 25,772
Salaries and wages 20,027 19,562
Other costs  11,489   9,160 
Profit before interest and tax 14,749 13,506
Interest 1,553 1,863
Tax  4,347   3,726 
Profit after interest and tax 8,849 7,917
Dividends payable 4,800 3,100
20X8 20X7
STATEMENT OF FINANCIAL POSITION (EXTRACT) $'000 $'000
Shareholders' funds 39,900 35,087
Long-term debt 14,000 17,500


53,900 52,587
Other information
Number of shares in issue ('000) 14,000 14,000
P/E ratio (average for year)
   ABC Co 14.0 13.0
   Industry 15.2 15.0
Shareholders' investment
   EPS $0.63 $0.57
   Share price $8.82 $7.41
   Dividend per share $0.34 $0.22

What is the percentage increase in return on capital (ROCE) for ABC Co between 20X7 and 20X8? (to one decimal place)

_______ %

Your score is

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