CIMA Exam CIMAPRA17-BA3-1 Topic 1 Question 84 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam

Question #: 84
Topic #: 1

Which of the following would meet the definition of a liability in accordance with the Conceptual Framework's definition?

AAn amount due from a customer for goods dispatched two weeks ago

BAn amount due to a supplier for goods to be purchased in one month's time

CAn amount which was paid to a supplier in relation to a dispute

DAn amount due to a supplier for goods purchased one month ago

Show Suggested Answer

Suggested Answer: B

by Kanisha at Apr 10, 2024, 09:37 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA17-BA3-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Rebecka

5 months ago

I see your point, User 3. It's important to consider the timing and nature of the transactions.

upvoted 0 times

...

Rasheeda

6 months ago

Actually, I think both answers could be correct. It depends on the specific circumstances.

upvoted 0 times

...

Huey

6 months ago

I disagree, I believe it is A) An amount due from a customer for goods dispatched two weeks ago.

upvoted 0 times

...

Rebecka

6 months ago

I think the answer is D) An amount due to a supplier for goods purchased one month ago.

upvoted 0 times

...

Keshia

7 months ago

That's a good point, Tien. It's important to consider both sides of the argument when defining liabilities on a financial statement.

upvoted 0 times

...

Tien

7 months ago

I see your point, Belen. But I think option A could also be considered a liability since it represents an obligation to receive payment for goods already dispatched.

upvoted 0 times

...

Belen

7 months ago

I disagree, option B could also be considered a liability because it represents an obligation to pay for goods to be purchased in the future.

upvoted 0 times

...

Keshia

7 months ago

I think option D would meet the definition of a liability because it represents an obligation to pay for goods purchased.

upvoted 0 times

Carmen

6 months ago

I think option B could also be considered a liability since it's a future obligation.

upvoted 0 times

...

Willie

6 months ago

But what about option A? It's also an amount due, just not as recent.

upvoted 0 times

...

Cruz

7 months ago

I agree. Option D reflects an existing obligation.

upvoted 0 times

...

Breana

8 months ago

You got that right, Elina. They're like mad scientists, concocting these devious accounting questions. I bet they're cackling maniacally as we debate this.

upvoted 0 times

...

Haha, yeah, the exam question writers really want to trip us up with those tricky wordings, don't they? They're probably sitting in their office, rubbing their hands together, thinking 'let's see if they can spot the real liability here.'

upvoted 0 times

...

Anthony

8 months ago

Absolutely, that's exactly what I was thinking. If we had an option that said 'An amount which will be paid to a supplier in one month's time,' then that could potentially be considered a liability too. But the way these options are phrased, D is the only one that unambiguously meets the criteria.

upvoted 0 times

...

Loise

8 months ago

You both make a good point. I think the key here is the 'present obligation' part of the definition. Option D clearly fits that, whereas the others are more future-oriented or not directly related to the entity's own obligations.

upvoted 0 times

...

Cherelle

8 months ago

I agree with you, Janna. Option D is the clear winner here. The other options don't quite meet the criteria. A is just an amount due from a customer, not a liability. B is an amount due for future purchases, not a present obligation. And C seems to be a payment related to a dispute, not a regular liability.

upvoted 0 times

...

Janna

8 months ago

Hmm, this question is testing our understanding of the Conceptual Framework's definition of a liability. Let's see, I think the correct answer is D. An amount due to a supplier for goods purchased one month ago. That fits the definition of a liability, which is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of resources.

upvoted 0 times

...