CIMA CIMAPRA19-F01-1 Exam Practice Test Instant Access

Question 1

The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:

1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September 20X0.

2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.

3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.

4. PQ uses the fair value method for non-controlling interest at acquisition.

Calculate the amount that will be shown as the share of profit of associate in PQ's consolidated statement of profit or loss for the year ended 31 December 20X0.

A$10,000

B$2,000

C$4,000

D$3,200

Answer : B

Question 2

Which TWO of the following are functions of the International Financial Reporting Standards (IFRS) Advisory Council?

ATo give advice to the International Accounting Standards Board on agenda decisions and priorities in its work

BTo inform the International Accounting Standards Board of the views of organizations on major standard setting projects

CTo approve IFRSs for publication

DTo review new financial reporting issues not already covered by IFRS

ETo appoint the members of the International Accounting Standards Board

Answer : A, B

Question 3

The following data has been extracted from GH's accounting records:

What is GH's average inventory days for the year ended 31 March 20X3?

A39 days

B43 days

C25 days

D28 days

Answer : A

Question 4

UV's financial statements for the year ended 31 March 20X8 were approved for publication on 30 June 20X8.

In accordance with IAS 10 Events After the Reporting Period, which of the following material events would have been classified as a non-adjusting event in these financial statements?

AOn 1 June 20X8 UV's auditors discovered that an error in valuation had caused the closing inventory to be overvalued by $150,000.

BOn 10 April 20X8 UV received a communication stating that one of its customers had ceased trading and gone into liquidation. The balance outstanding at 31 March 20X8 was unlikely to be paid.

COn 1 June 20X8 UV was awarded damages of $70,000 in respect of a legal claim that it had made against the local government authority in October 20X7.

DOn 28 April 20X8 a fire destroyed half of UV's main production facility. Output was severely reduced for six months.

Answer : D

Question 5

An entity has a number of subsidiary and associate investments.

Which of the following must be disclosed in the entity's separate financial statements if it is exempt from presenting consolidated financial statements?

AThe bases on which significant investments in subsidiaries and associates have been accounted for in those separate financial statements.

BA copy of the summarised financial statements of each of its subsidiaries.

CA list of all its significant investments in subsidiaries and associates which includes the date of acquisition and the price paid.

DA list of its top ten shareholdings including number of shares held and their market value.

Answer : A

Question 6

According to IAS 21 The Effects of Changes in Foreign Exchange Rates, an entity should determine its functional currency.

Which of the following is NOT a factor that should be considered by an entity when determining its functional currency?

AThe currency that mainly influences selling prices of the entity's goods and services.

BThe currency that mainly influences labour, material and other costs.

CThe currency used for published financial reports.

DThe currency of the country whose competitive forces determine prices of goods and services.

Answer : C

Question 7

Which of the following would be found under the heading "other comprehensive income" in the statement of total comprehensive income?

AGain or loss on revaluation of a non-current asset

BIncome from investments

CDividends paid

DIncrease or decrease in provision for irrecoverable debts

Answer : A

CIMAPRA19-F01-1 F1 Financial Reporting Exam Practice Test