CIMA CIMAPRA19-F02-1 Exam Practice Test Instant Access

Question 1

Which of the following are limitations of financial statement figures for ratio analysis? Select the ALL that apply.

AOnly provides historic data

BOnly provides financial information

CLimited information to identify trends over time

DProvide only summarised information

EContains complicated information that needs to be summarised

FOnly provides forecast data

Answer : A, B, C, D

Question 2

A group presents its financial statements in A$.

The goodwill of its only foreign subsidiary was measured at B$100,000 at acquisition. There have been no impairments to this goodwill.

Exchange rates (where A$/B$ is the number of B$'s to each A$) are as follows:

The value of goodwill to be included in the group's statement of financial position in respect of its foreign subsidiary for the year ended 31 December 20X4 is:

AA$75,758.

BA$66,667.

CA$150,000.

DA$132,000.

Answer : A

Question 3

LM acquired 80% of the equity shares of ST when ST's retained earnings were $50 million. The fair value of the net assets of ST included a contingent liability with a fair value of $100 million at the date of acquisition and a fair value of $40 million at 31 December 20X6. No other fair value adjustments were required at the date of acquisition.

LM and ST had retained earnings of $200 million and $80 million respectively at 31 December 20X6.

The consolidated retained earnings of LM at 31 December 20X6 were:

A$164 million

B$176 million

C$272 million

D$284 million

Answer : C

Question 4

JJ's current share price is $1.80,with a dividend of $0.20 a share just about to be paid.

Dividends have increased at an average annualgrowth rate of 4.5% and this is expected to continue into the future.

What is JJ'scost of equity?

A17.6%

B16.1%

C12.5%

D11.1%

Answer : A

Question 5

Which of the followingreduce the usefulnessof ratio analysis when comparing entities that operate in the same industry?

Select ALL that apply.

AThe revenue figure being aggregated from many different activities and sources.

BAccounting estimates in respect of depreciation being different between entities.

CThe effect of a material and unusual item being disclosed separately in the notes.

DAn entity adopting a policy of revaluing its non current assets.

ERatio calculations being based on historical information.

FRatios being quick and easy to calculate.

Answer : A, B, D, E

Question 6

When accounting for a finance lease under IAS 17 Leases, which TWO of the following are recognised in the statement of profitor loss?

AFinance cost element of the lease payments

BDepreciationof the leased asset

CLease payments paid

DLease payments payable

ECapital repayment element of the lease payments

Answer : A, B

Question 7

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

BOption

COption

Answer : A

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