CIMA CIMAPRA19-F02-1 Exam Practice Test Instant Access

Question 1

What figure will be presented inGHI's consolidated statement of changes in equity for the year ended 31 December 20X4, in respect ofdividends paidtonon-controlling interest?

A$25,000

B$125,000

C$100,000

D$0

Answer : A

Question 2

GH acquired3,000,000 of the 12,000,000 equity shares of JK. All shares carried equal voting rights and no other single shareholder of JK held more than 10% of the equity shares. GH has the power to participate in the financial and operating policy decisions but not control them.

Based on the information provided above, how would GH's investment in JK be accounted for in its consolidated financial statements?

AAssociate

BJoint venture

CJoint arrangement

DFinancial asset

Answer : A

Question 3

FG has a weighted average cost of capital of 12% based on its existing:

* level of gearing of 30% (measured as debt/(debt + equity)); and

* business operations.

This would be used as an appropriatediscount factor to assess which of the following significant projects?

AA project in an industry in which FG does not currently operate, funded wholly by equity.

BA project to extend FG's existing operations, funded wholly by debt.

CA project in an industry in which FG does not currently operate, funded 30% with debt and 70% with equity.

DA project to extend FG's existing operations, funded 30% with debt and 70% with equity.

Answer : D

Question 4

On 1 January 20X4 EF grants each of its 125 employees500 share options on the condition that they remain in employment for 3 years. During the year to 31 December 20X4 10 employees left and It is expected that a further 25 will leave before the end of the vesting period.

The fair value of each shareoption is $30 on 1 January 20X4 and $45 on 31 December 20X4.

What is the journal entry in respect of these share options in EF's financial statements for the year ended 31 December 20X4?

AOption A

BOption B

COption C

DOption D

Answer : A

Question 5

Which of the following defines the calculation of interest cover?

AProfit before interest and tax divided by finance costs

BFinance costs divided by profit before interest and tax

CProfit after tax divided by finance costs

DFinance costs divided by profit after tax

Answer : A

Question 6

What is the total comprehensive incomeattributable to the shareholders of GHI that will be presented in GHI's consolidated statement of changes in equity for the year ended 31 December 20X4?

A$2,780,000

B$2,880,000

C$2,875,000

D$3,260,000

Answer : A

Question 7

You are a Financial Controller at BCD and are in the process of preparing the year-end financial statements. A member of your finance team has come to see you about her provisions balance at year-end.

She says that the Managing Director has asked her to increase the provisions balance by $1 million overall. She thinks this is because BCD has had a very good year in terms of profit, and the Managing Director wants to put some profit aside to protect against any future reductions in profit. $1 million is material to BCD.

Youbelieve that the provisions balance wasfairly stated without the additional $1 million.

Which TWO of the following would be appropriate actions in this scenario?

ADiscuss the matter with the Finance Director as he is your immediate line manager.

BSpeak to the Managing Director to explain that the level of provisions is governed by financial reporting standards.

CTell the member of your finance team to ignore the Managing Director and to leave the provisions balance as it was.

DContact the external auditors of BCD and tell them that the Managing Director wants to change the provisions balance.

ESpeak to the shareholders at the upcoming annual general meeting about this issue.

Answer : A, B

CIMAPRA19-F02-1 F2 Advanced Financial Reporting Exam Practice Test