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F2 Advanced Financial Reporting CIMAPRA19-F02-1-ENG Practice Test Questions

PassQuestion provides you the latest F2 Advanced Financial Reporting CIMAPRA19-F02-1-ENG Practice Test Questions from all the topics and exam syllabus that will solve all the confusion for preparing the Exam.

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F2 Advanced Financial Reporting CIMAPRA19-F02-1-ENG Practice Test Questions

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  1. CIMAPRA19-F02-1-ENG Free CIMAPRA19-F02-1-ENG Free Questions Questions F2 Advanced Financial Reporting (Online) F2 Advanced Financial Reporting (Online) https://www.passquestion.com/ https://www.passquestion.com/CIMAPRA19-F02-1-ENG CIMAPRA19-F02-1-ENG.html .html

  2. Question 1 Question 1 JKL measure gearing as debt:equity, based on book values. At 31 December 20X5 the JKL measure gearing as debt:equity, based on book values. At 31 December 20X5 the ratio is 2:3 and JKL would like this to be 2:5. ratio is 2:3 and JKL would like this to be 2:5. Which of the following transactions individually would achieve this? Which of the following transactions individually would achieve this? A. Bonus issue from the share premium account. A. Bonus issue from the share premium account. B. Revaluation of investment property to an increased fair value. B. Revaluation of investment property to an increased fair value. C. Repayment of a 6 year term loan with the issue of 5 year redeemable debentures. C. Repayment of a 6 year term loan with the issue of 5 year redeemable debentures. D. Issue of redeemable preference shares at par. D. Issue of redeemable preference shares at par. Answer: B Answer: B

  3. Question 2 Question 2 LM acquired an asset under a 5-year non-cancellable operating lease agreement on 1 January 20X8. LM acquired an asset under a 5-year non-cancellable operating lease agreement on 1 January 20X8. Under the terms of the agreement, LM paid nothing for the first year and then made four payments Under the terms of the agreement, LM paid nothing for the first year and then made four payments of $50,000 in each subsequent year. LM adopted the provisions of IAS 17 Leases when accounting of $50,000 in each subsequent year. LM adopted the provisions of IAS 17 Leases when accounting for this agreement. for this agreement. Which of the following is correct in respect of this operating lease in LM's financial statements for Which of the following is correct in respect of this operating lease in LM's financial statements for the year to 31 December 20X8? the year to 31 December 20X8? A. An accrual of $40,000 was recognised. A. An accrual of $40,000 was recognised. B. An accrual of $50,000 was recognised. B. An accrual of $50,000 was recognised. C. A prepayment of $10,000 was recognised. C. A prepayment of $10,000 was recognised. D. An expense of $50,000 was recognised. D. An expense of $50,000 was recognised. Answer: A Answer: A

  4. Question 3 Question 3 Entity A entered into a 3 year operating lease on 1 April 20X3. The rentals are £5,000 a year payable Entity A entered into a 3 year operating lease on 1 April 20X3. The rentals are £5,000 a year payable in advance with an additional payment of $1,800 payable on 1 April 20X3. in advance with an additional payment of $1,800 payable on 1 April 20X3. The rental expense to be included in the statement of profit or loss for the year ended 31 December The rental expense to be included in the statement of profit or loss for the year ended 31 December 20X3 will be: 20X3 will be: A. $4,200 A. $4,200 B. $5,000 B. $5,000 C. $6,800 C. $6,800 D. $5,600 D. $5,600 Answer: A Answer: A

  5. Question 4 Question 4 RS has issued an instrument with a nominal value of $1 million, at a discount of 2.5%, and a coupon RS has issued an instrument with a nominal value of $1 million, at a discount of 2.5%, and a coupon rate of 6%. The terms of the issue are that the instrument must either be redeemed at par, at the rate of 6%. The terms of the issue are that the instrument must either be redeemed at par, at the option of the holder, in three years' time, or alternatively converted into equity shares in RS. option of the holder, in three years' time, or alternatively converted into equity shares in RS. The characteristics of this instrument taken as a whole indicates that it would be classified as which of The characteristics of this instrument taken as a whole indicates that it would be classified as which of the following? the following? A. Compound instrument A. Compound instrument B. Debt instrument B. Debt instrument C. Equity instrument C. Equity instrument D. Discounted instrument D. Discounted instrument Answer: A Answer: A

  6. Question 5 Question 5 Which THREE of the following actions should improve the cash position of an entity? Which THREE of the following actions should improve the cash position of an entity? A. Substituting a bonus issue for the final dividend. A. Substituting a bonus issue for the final dividend. B. Selling non current assets and leasing them back under operating leases. B. Selling non current assets and leasing them back under operating leases. C. Implementing an efficient inventory ordering system. C. Implementing an efficient inventory ordering system. D. Revaluing all non-current assets. D. Revaluing all non-current assets. E. Revising the depreciation policy of non-current assets. E. Revising the depreciation policy of non-current assets. F. Offering extended credit terms to existing customers. F. Offering extended credit terms to existing customers. Answer: A,B,C Answer: A,B,C

  7. Question 6 Question 6 Which of the following reduce the usefulness of ratio analysis when comparing entities that operate Which of the following reduce the usefulness of ratio analysis when comparing entities that operate in the same industry? Select ALL that apply. in the same industry? Select ALL that apply. A. The revenue figure being aggregated from many different activities and sources. A. The revenue figure being aggregated from many different activities and sources. B. Accounting estimates in respect of depreciation being different between entities. B. Accounting estimates in respect of depreciation being different between entities. C. The effect of a material and unusual item being disclosed separately in the notes. C. The effect of a material and unusual item being disclosed separately in the notes. D. An entity adopting a policy of revaluing its non current assets. D. An entity adopting a policy of revaluing its non current assets. E. Ratio calculations being based on historical information. E. Ratio calculations being based on historical information. F. Ratios being quick and easy to calculate. F. Ratios being quick and easy to calculate. Answer: A,B,D,E Answer: A,B,D,E

  8. Question 7 Question 7 BC are currently seeking to establish an accounting policy for a particular type of transaction. BC are currently seeking to establish an accounting policy for a particular type of transaction. There are four alternative ways in which this transaction can be treated. There are four alternative ways in which this transaction can be treated. Each treatment will have a different outcome on the financial statements as follows: Each treatment will have a different outcome on the financial statements as follows: • Treatment one means that the financial statements will be easier to prepare. • Treatment one means that the financial statements will be easier to prepare. • Treatment two will give a fair representation of the transaction in the financial statements. • Treatment two will give a fair representation of the transaction in the financial statements. • Treatment three will maximise the profit figure presented in the financial statements. • Treatment three will maximise the profit figure presented in the financial statements. • Treatment four means that the financial statements will be more easily understood by shareholders. • Treatment four means that the financial statements will be more easily understood by shareholders. Which accounting treatment should BC adopt? Which accounting treatment should BC adopt? A. One A. One B. Two B. Two C. Three C. Three D. Four D. Four Answer: B Answer: B

  9. Question 8 Question 8 On 1 January 20X4 JK had 1,500,000 ordinary shares in issue. On 1 September 20X4 JK issued On 1 January 20X4 JK had 1,500,000 ordinary shares in issue. On 1 September 20X4 JK issued 600,000 ordinary shares at the market value of $2.50 a share. For the financial year ended 31 600,000 ordinary shares at the market value of $2.50 a share. For the financial year ended 31 December 20X4 the statement of profit or loss shows profit before tax of $625,000 and profit after December 20X4 the statement of profit or loss shows profit before tax of $625,000 and profit after tax of $500,000. tax of $500,000. What is the earnings per share for the year ended 31 December 20X4? What is the earnings per share for the year ended 31 December 20X4? A. 23.8 cents A. 23.8 cents B. 36.8 cents B. 36.8 cents C. 26.3 cents C. 26.3 cents D. 29.4 cents D. 29.4 cents Answer: D Answer: D

  10. Question 9 Question 9 Which TWO of the following statements about bonds and their issue are true? Which TWO of the following statements about bonds and their issue are true? A. Credit rating agencies assign risk categories to bond issues. A. Credit rating agencies assign risk categories to bond issues. B. Bonds are a form of loan capital, traded on stock exchanges. B. Bonds are a form of loan capital, traded on stock exchanges. C. Bonds are a risk-free form of investing because they will always be repaid. C. Bonds are a risk-free form of investing because they will always be repaid. D. All bonds have the same terms and conditions when issued. D. All bonds have the same terms and conditions when issued. E. A bond issue is never underwritten because the return is fixed and guaranteed. E. A bond issue is never underwritten because the return is fixed and guaranteed. Answer: A,B Answer: A,B

  11. Question 10 Question 10 As at 31 October 20X7 TU's financial statements show the entity having profit after tax of $600,000 As at 31 October 20X7 TU's financial statements show the entity having profit after tax of $600,000 and 900,000 $1 ordinary shares in issue. There have been no issues of shares during the year. At 31 and 900,000 $1 ordinary shares in issue. There have been no issues of shares during the year. At 31 October 20X7 TU have 300,000 share options in issue, which allow the holders to purchase ordinary October 20X7 TU have 300,000 share options in issue, which allow the holders to purchase ordinary shares at $2 a share in 3 years' time. The average price of the ordinary shares throughout the year was shares at $2 a share in 3 years' time. The average price of the ordinary shares throughout the year was $5 a share. $5 a share. What is the diluted earnings per share for the year ended 31 October 20X7? What is the diluted earnings per share for the year ended 31 October 20X7? A. 66.7 cents A. 66.7 cents B. 58.8 cents B. 58.8 cents C. 50.0 cents C. 50.0 cents D. 55.6 cents D. 55.6 cents Answer: D Answer: D

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