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CIMA BA4 Exam Syllabus Topics:

CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:

1. Which of the following statements are correct regarding companies'?
1. Both public and private companies must have a minimum amount of share capital before they can commence trading.
2. The shareholders of both public and private companies cannot interfere in the management of the company.
3. The minimum number of directors for both public and private companies is two

A) 1 and 2 only
B) 2 and 3 only
C) 1 only
D) 2 only

2. According to Carroll's model of CSR, which of the following is TRUE of a company's legal responsibility?

A) It equates with doing what is right. just and fair
B) It provides a base line for operating within society
C) It provides a rule book for ensuring a reasonable return for shareholders
D) It provides guidance relating to philanthropic responsibility

3. Which of the following has overall responsibility for enforcing the Health and Safety at Work Act 1974 and its related legislation?
i. The Health and Safety Commission
ii. The Health and Safety Executive
iii. The Health and Safety Inspectorate

A) (ii) only
B) (i) only
C) (i) and (ii) only
D) (iii) only

4. Which of the following is NOT a correct distinction between shares and debentures?

A) If a company is in insolvent liquidation debenture holders are paid in priority to shareholders.
B) Debenture interest is deductible from gross profit in order to determine taxable profit. Dividends are profits.
C) Unlike dividends, debenture interest must be paid, even if a company is trading at a loss.
D) Both share and debenture holders are members of the company and entitled to vote.

5. Jimmy wants to sell his scooter, so he puts an advert on the internet with a price of £50.
He quickly gets an offer for the full amount, but then decides that he doesn't want to sell his scooter after all!
The buyer complains and threatens to report jimmy to the police.
This doesn't worry Jimmy as he knows he is not legally obliged to sell his scooter. Why is this?

A) Because the advertisement was an open offer.
B) Because jimmy only stated that he intended to sell the scooter.
C) Actually, jimmy does have to sell the scooter.
D) Because a seller can choose to withdraw their item whenever they want.

Solutions: