Free CIMAPRA19-F02-1-ENG Exam Questions - Easiest Way for Success

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Total 270 Questions | Updated On: Sep 11, 2024

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Question 1

The dividend yield of ST hasfallen in theyear to 31 May 20X5, compared to the previous year.

The share price on 31 May 20X4 was $4.50 and on 31 May 20X5 was $4.00. There were no issues of share capital during the year.

Whichof the following should explain the reduction in the dividend yield for the year to 31 May 20X5 compared to the previous year?

A : The dividend paid in the year was reduced in order to pay for new assets.

B : Surplus cash was used to pay a special dividend in additionto the normal dividend in the year.

C : The profit for the year fell significantly and the dividend per share stayed the same.

D : To compensate investors for thereduction in share price a higher dividend per share was paid.

Answer: A

Question 2

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 fourpayments of $50,000 in each subsequent year. LM adopted the provisions of IAS 17 Leases when accounting for this agreement.

Which of the following is correct in respect of this operating lease in LM's financial statements for the year to 31December 20X8?

A : An accrual of $40,000 was recognised.

B : An accrual of $50,000 was recognised.

C : A prepayment of $10,000 was recognised.

D : An expense of $50,000 was recognised.

Answer: A

Question 3

When consolidating for group accounts, a number of calculations and adjustments are required to properly combine the entities into a single group. Which of the following processes are involved in this consolidation method?

Select ALL that apply:

A : Add together the assets and liabilities of parent and subsidiary

B : Adjust for investment in subsidiaries

C : Adjustment for equity

D : Adjustment for profits

E : Adjustment for depreciation and amortisation

Answer: A,B,C

Question 4

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 eitherbe redeemed at par, at the option of the holder, in three years' time, or alternativelyconverted into equity shares in RS.

The characteristics of this instrument taken as a whole indicates that it would be classifed as which of the following?

A : Compound instrument

B : Debt instrument

C : Equity instrument

D : Discounted instrument

Answer: A

Question 5

AB and FGincorporated on 1 January 20X1 in the same country and had similar investment in net assets. Both entities are financed entirely by equity. In the year to31 December 20X1 both entitiesgenerated the same volume of sales.

Which of the following, takenindividually, would explainwhy AB's return on capital employed ratio was lower than that of FG?

A : AB revalued its non current assets upwards on 31 December 20X1; FG's non current assets were stated at historic cost.

B : FG issuedbonds on 31 December 20X1; AB remains ungeared.

C : AB paid a lower dividend to its shareholders than FG in the year.

D : AB's deferred tax provision at the year end ishigher than that of FG.

Answer: A

Page: 1 / 54

Total 270 Questions | Updated On: Sep 11, 2024

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