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

• Question 1

  When preparing a consolidated statement of cash flows, which of the following describes thecorrectpresentationof an associate's dividends?

  • Dividends received from the associate in cash flows from investing activities
  • Dividends received from the associate in cash flows from operating activities
  • Dividends paid by the associate in cash flows from financing activities
  • Dividends paid by the associate in cash flows from investing activities

  Show Answer Answer: A Next

• Question 2

  On 1 January 20X7 GH purchased plant and equipment at a cost of $400,000. The temporary differences in respect of this plant and equipment at 31 December 20X7 and 20X8 have been calculated as follows:Assume that there are no other temporary differences in the periods and that the corporate income tax rate is 25%. GH is expected to have significant taxable profits in the future.Which of the following is the correct impact in GH's statement of financial position at 31 December 20X8 in respect of deferred tax?

  • Increase in the deferred tax asset.
  • Increase in the deferred tax liability.
  • Decrease in the deferred tax asset.
  • Decrease in the deferred tax liability.

  Show Answer Answer: A Next

• Question 3

  Which of the following is a related partyaccording tothe definition of a related partyin IAS24 Related Party Disclosures?

  • Major customer
  • Provider of finance
  • Managing Director
  • Major supplier

  Show Answer Answer: C Next

• Question 4

  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?

  • AB's return on capital employed would be lower as a result of this sale being recorded.
  • AB's current ratio would be lower as a result of this sale being recorded.
  • AB's non-current asset turnover would be lower as a result of this sale being recorded.
  • AB's gearing ratio would be lower as a result of this sale being recorded.

  Show Answer Answer: D Next

• Question 5

  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?

  • Fair value excluding transaction costs.
  • Fair value including transaction costs.
  • Present value including transaction costs.
  • Present value excluding transaction costs.

  Show Answer Answer: B Next