SAICA ITC Practice Questions - SAICA Initial Assessment of Competence (IAC ITC) Exam - SAICA ITC Practice Questions - SAICA Initial Assessment of Competence (IAC ITC) Exam

Question 1

Company X acquires 80% of Company Y on 1 January 2025 for R80 000 000. At acquisition date, Company Y's net identifiable assets have a book value of R70 000 000 and fair value of R90 000 000. NCI is measured at fair value, which is valued at R20 000 000. Under IFRS 3, what is the goodwill recognized at acquisition date?

R10 000 000 R20 000 000 R30 000 000 R0

Correct Answer:

R10 000 000

Question 2

Under IAS 16 Property, Plant and Equipment, an entity acquires machinery for R2 000 000, incurs initial delivery costs of R100 000, installation costs of R150 000, administrative overheads of R50 000, and initial operating losses of R80 000 before reaching full capacity. What is the initial cost of the machinery recognized under IAS 16?

R2 250 000 R2 300 000 R2 380 000 R2 000 000

Correct Answer:

R2 250 000

Question 3

Under ISA 315 (Revised), what is a 'significant risk' in audit planning?

An identified and assessed risk of material misstatement that, in the auditor's judgment, requires special audit consideration Any risk that causes stock prices to fluctuate by more than 5% A risk that relates exclusively to petty cash disbursements A risk that management refuses to discuss during audit planning

Correct Answer:

An identified and assessed risk of material misstatement that, in the auditor's judgment, requires special audit consideration

Question 4

A South African company has taxable income of R8 000 000. It qualifies for the Section 12C manufacturing asset allowance on a machine purchased for R4 000 000 (40% in Year 1). Accounting depreciation is 20% per year (R800 000). Corporate tax rate is 27%. What is the temporary difference and deferred tax liability created in Year 1 under IAS 12 Income Taxes?

Temporary difference R800 000; Deferred tax liability R216 000 Temporary difference R1 600 000; Deferred tax liability R432 000 Temporary difference R400 000; Deferred tax liability R108 000 Temporary difference R0; Deferred tax liability R0

Correct Answer:

Temporary difference R800 000; Deferred tax liability R216 000

Question 5

Under Marginal Costing vs Absorption Costing principles in managerial accounting, why does net profit under absorption costing exceed net profit under marginal costing when production volume exceeds sales volume?

Absorption costing defers a portion of fixed manufacturing overheads in ending inventory balances Absorption costing expenses all fixed manufacturing overheads immediately in full Marginal costing includes administrative overheads in product cost Marginal costing overvalues closing inventory

Correct Answer:

Absorption costing defers a portion of fixed manufacturing overheads in ending inventory balances

Question 1

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Prepare with the SAICA ITC Practice Questions - SAICA Initial Assessment of Competence (IAC ITC) Exam practice quiz. This question bank includes 100 questions covering income, cost, south, african, and section. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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SAICA ITC Practice Questions - SAICA Initial Assessment of Competence (IAC ITC) Exam

This practice set contains 100 questions from the matching question bank and focuses on income, cost, south, african, and section. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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SAICA ITC Practice Questions - SAICA Initial Assessment of Competence (IAC ITC) Exam

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