Practice CIMAPRO19-F02-1-ENG Exam Online

Question 1

WX acquired60% of theequitysharesof CD on 1 January 20X3. WX sold5% of the equityshares it heldfor $60,000on 31 December 20X5. At that datethe net assetsof CD were $120,000and thefair value of the non-controlling interestin CDwas measured at$21,000.No goodwill arose on the original acquisition of CD.

When preparing its consoldiated financial statements, WX will process which of the following adjustments to its group retained earnings?

A : A debit of $39,000

B : A credit of $54,000

C : A credit of $39,000

D : A debit of $54,000

Answer: B

Question 2

On 30 November 20X9 OPQ acquires a financial asset that is classified as Available for Sale.

Which of the following describes the value of the financial asset on the date ofacquisition?

A : Fair value excluding transaction costs.

B : Fair value including transaction costs.

C : Present value including transaction costs.

D : Present value excluding transaction costs.

Answer: B

Question 3

Which THREE of the followingwould typically indicate a finance lease?

A : An asset with a useful life of ten years is being leased for ten years.

B : The lessor is responsible for the annual maintenance of the asset.

C : The lessee has the option to buy the asset at the end of the lease for $1.

D : The lease contract for an asset includes an upgrade to the asset every two years.

E : A leased asset has been specifically modified for the lessee's use.

Answer: A,C

Question 4

Which TWO of the following are true in relation to IAS21 The Effects of Changes in Foreign Exchange Rates when consolidating an overseas subsidiary?

A : Acurrent period exchange gain or loss is shown within the consolidated statement of comprehensive income within other comprehensive income.

B : Goodwill is re-translated at the end of each reporting period and reflected at the period end exchange rate in the consolidated statement of financial position.

C :

Assets and liabilities of the subsidiary are translated at each reporting date using the average exchange rate for the period.

D : Goodwill is reflected in the consolidated statement of financial position translated at the exchange rate on the date of acquisition.

E : The statement of profit or loss of the subsidiary is translated for the reporting period using the closing exchange rate.

Answer: A,B

Question 5

AB sold the majority of its operating equipment to LM for cash on 30 December 20X9 and then immediately leased it back under an operating lease.

AB used the cash proceeds from the sale to reduce its long term borrowings significantly. No early repayment charge was levied by the lender.

Which of the following statements is truein respect of AB's ratios calculated at 31 December 20X9?

A : AB's return on capital employed would be lower as a result of this sale being recorded.

B : AB's current ratio would be lower as a result of this sale being recorded.

C : AB's non-current asset turnover would be lower as a result of this sale being recorded.

D : AB's gearing ratio would be lower as a result of this sale being recorded.

Answer: D

Name:	F2 Advanced Financial Reporting
Exam Code:	CIMAPRO19-F02-1-ENG
Certification:	CIMA Professional Qualification
Vendor:	CIMA
Total Questions:	270
Last Updated:	Apr 23, 2024

CIMA CIMAPRO19-F02-1-ENG