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

1. Which of the following does not apply to a private company which is about to declare a dividend?

A) The company must take account of accumulated realized losses.
B) The company must have accumulated realized profits.
C) There must be profits available for distribution as a dividend.
D) The company's net assets must equal the total of called up share capital plus un-distributable reserves.

2. Demonstrating an attitude of esteem, deference, regard or admiration of others reflects the personal quality identified by the CIMA Code of Ethics as:

A) Respect
B) Reliability
C) Responsiveness
D) Reverence

3. Wye Ltd is considering appointing Anne as a director of the company. Which of the following is incorrect?
(i) If Anne is an un-discharged bankrupt, she cannot act as a company director.
(ii) If Anne is the subject of a disqualification order, she cannot act as a company director.
(iii) If Anne has already been appointed a director of another company, she cannot also act as a director of Wye Ltd.

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

4. B is employed by Zed plc and has suffered an occupational injury.
Which of the following is correct?
Zed plc may be liable to B for:
i. breach of an implied term in B's contract of employment
ii. breach of the duty to take care in the tort of negligence
iii. breach of statutory duty

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

5. Which of the following are likely advantages of being a sole trader? Select ALL that apply.

A) Greater degree of independence.
B) They have limited personal responsibility in regards to the debts of the business.
C) No formal procedures required to set up the business.
D) Expansion is likely to be fast.
E) Working hours will be relatively short.
F) They retain all profits.

Solutions: