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:	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.

Keywords

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

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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?

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

1, 2, 3 and 4

2 and 4 only

1 only

2 and 3 only

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?

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

Both statements are false.

Statement 1 is false and statement 2 is true.

Statement 1 is true and statement 2 is false.

Both statements are true.

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?

19.8%

23.6%

14.4%

19.0%

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