题库·ACCA/CAT
财会类ACCA/CAT
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解答题

(ii) Explain how the inclusion of rental income in Coral’s UK income tax computation could affect the

income tax due on her dividend income. (2 marks)

You are not required to prepare calculations for part (b) of this question.

Note: you should assume that the tax rates and allowances for the tax year 2006/07 and for the financial year to

31 March 2007 will continue to apply for the foreseeable future.

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题目答案

(ii) The effect of taxable rental income on the tax due on Coral’s dividend incomeRemitting rental income to the UK may cause some of Coral’s dividend income currently falling within the basic rateband to fall within the higher rate band. The effect of th

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4 (a) A company may choose to finance its activities mainly by equity capital, with low borrowings (low gearing) or by

relying on high borrowings with relatively low equity capital (high gearing).

Required:

Explain why a highly geared company is generally more risky from an investor’s point of view than a company

with low gearing. (3 marks)

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(a) A highly-geared company has an obligation to pay interest on its loans regardless of its profit level. It will show high profits ifits overall rate of return on capital is greater than the rate of interest being paid on its borrowings, but a low profi

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(b) Ratio analysis in general can be useful in comparing the performance of two companies, but it has its limitations.

Required:

State and briefly explain three factors which can cause accounting ratios to be misleading when used for

such comparison. (6 marks)

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题目答案

(b) (i) One company may have revalued its assets while the other has not.(ii) Accounting policies and estimation techniques may differ. For example, one company may use higher depreciation ratesthan the other.(iii) The use of historical cost accounting ma

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4 (a) Explain the meaning of the term ‘working capital cycle’ for a trading company. (4 marks)

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题目答案

(a) The working capital cycle illustrates the changing make-up of working capital in the course of the trading operations of abusiness:1 Purchases are made on credit and the goods go into inventory.2 Inventory is sold and converted into receivables3 Credi

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解答题

(c) State one advantage to a business of keeping its working capital cycle as short as possible.

(2 Marks)

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题目答案

(c) The advantage to a company of keeping its working capital cycle short is that fewer resources are tied up in working capital,thus freeing them for other purposes.(Other answers considered on their merits)

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(b) Explain the major benefits of pursuing a policy of internal development. (4 marks)

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题目答案

(b) The major benefits of pursuing a policy of internal development that may accrue to Taliesin Ltd are as follows:– By confining their activities to its internal environment the company avoids the need to manage the integration ofbusinesses which is nece

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(b) Explain how the adoption of residual income (RI) using the annuity method of depreciation might prove to

be a superior basis for the management incentive plan operated by NCL plc.

(N.B. No illustrative calculations should be incorporated into your explanation). (4 marks)

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题目答案

(b) The use of residual income as a basis for the management incentive plan operated by NCL plc would have the followingadvantages:Divisional management would be more willing to accept a project with a positive residual income and this would contributeto

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解答题

(b) (i) Advise the directors of GWCC on specific actions which may be considered in order to improve the

estimated return on their investment of ￡1,900,000. (8 marks)

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题目答案

(b) (i) The directors of GWCC might consider any of the following specific actions in order to improve the return on theinvestment:– Attempt to raise the selling price of the Mighty Ben cake to Superstores plc. Much will depend on the nature of therelatio

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(ii) Briefly discuss FOUR non-financial factors which might influence the above decision. (4 marks)

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题目答案

(ii) Four factors that could be considered are as follows:(i) The quality of the service provided by NSC as evidenced by, for example, the comfort of the ferries, on-boardfacilities, friendliness and responsiveness of staff.(ii) The health and safety trac

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(ii) Briefly discuss TWO factors which could reduce the rate of return earned by the investment as per the

results in part (a). (4 marks)

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题目答案

(ii) Two factors which might reduce the return earned by the investment are as follows:(i) Poor product qualityThe very nature of the product requires that it is of the highest quality i.e. the cakes are made for humanconsumption. Bad publicity via a ‘pro

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(c) Explain the term ‘target costing’ and how it may be applied by GWCC. Briefly discuss any potential

limitations in its application. (8 marks)

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题目答案

(c) Target costing should be viewed as an integral part of a strategic profit management system. The initial consideration in targetcosting is the determination of an estimate of the selling price for a new product which will enable a firm to capture its

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