Free Practice CIMA CIMAPRO19-F02-1-ENG Exam Questions 2025

Stay ahead with 100% Free F2 Advanced Financial Reporting CIMAPRO19-F02-1-ENG Dumps Practice Questions

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Total 270 Questions | Updated On: Jan 28, 2025

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Question 1

KL sells luxury leather handbags and has 3 stores in exclusive shopping areas. Following years of static revenues and margins, in August 20X6KLopened a fourth store at a busy airport terminal which is proving to be successful.

The revenue and gross profit of KL for the years ended 31 March 20X7 and 20X6 are as follows:

Which of the following would be a contributing factor to the movement in the gross profit margin of KL?

A : A worldwide shortage of leather resulting in increased prices from suppliers.

B : The opportunity to sellhandbags in the airport store at a premium price.

C : KL locating a new supplier prepared to supply handbags at a cheaper price.

D : KL locating a new supplier closer to the warehouse, reducing distribution costs.

Answer: A

Question 2

Information from the financial statements of an entity for the year to 31 December 20X5:

The gearing ratio calculated as debt/equity and interest cover are:

A : gearing of 15% andinterest cover of 6.

B : gearing of 16% and interest cover of 6.

C : gearing of 15% and interest cover of 4.

D : gearing of 16% and interest cover of 4.

Answer: A

Question 3

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

The rental expense to be included in the statement of profit or loss for the year ended 31 December 20X3 will be:

A : $4,200

B : $5,000

C : $6,800

D : $5,600

Answer: A

Question 4

An entity undertakes an issue of new debt which has the effect of reducing the entity's weighted average cost of capital (WACC).

Which of the following would best explain why the WACC will have fallen?

A : The entity was 100% equity financed prior to the issue of the debt.

B : The risk to the shareholders has reduced leading to a fall in the cost of equity.

C : The new debt is being used to replace existing debt that had a lower cost.

D : The new debt is being used to replace existing debt that had the same cost.

Answer: A

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?

A : Fair value excluding transaction costs.

B : Fair value including transaction costs.

C : Present value including transaction costs.

D : Present value excluding transaction costs.

Answer: B

Page: 1 / 54

Total 270 Questions | Updated On: Jan 28, 2025

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