CIMAPRA19-F02-1 Exam Questions - Real Practice Questions for Guaranteed Success

Question 1

RST sells computer equipment and prepares its financial statements to 31 December.

On 30 September 20X5 RST soldcomputer software along with a two year maintenance package to a customer. The customer is given the right to return the goods within six months and claim a full refund if they are not satisfied with the computer software. The risk of return is considered to be insignificant for RST.

How should the revenue from this transaction and the right of return be recognised in thefinancial statements for the year ended 31 December 20X5?

ARecognise 100% of the revenue from both the sale of goods and the maintenance contract and create aprovision for the anticipated level of returns.

BDo not recognise any revenue from the sale of goods or the maintenance contract and do not create aprovision for the anticipated level of returns.

CRecognise 12.5% of the revenue from both the sale of goods and the maintenance contract and do not create aprovision for the anticipated level of returns.

DRecognise 100% of the revenue from the sale of goods,12.5% of the revenue from the maintenance contract and create aprovision for the anticipated level of returns.

Correct : D

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ARecognise 100% of the revenue from both the sale of goods and the maintenance contract and create aprovision for the anticipated level of returns.

BDo not recognise any revenue from the sale of goods or the maintenance contract and do not create aprovision for the anticipated level of returns.

CRecognise 12.5% of the revenue from both the sale of goods and the maintenance contract and do not create aprovision for the anticipated level of returns.

DRecognise 100% of the revenue from the sale of goods,12.5% of the revenue from the maintenance contract and create aprovision for the anticipated level of returns.

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Question 3

AB acquired a financial investment on 1 January 20X9, incurring $5,000 related agency fees. AB initially classified the investment as held for trading, in accordance with IAS 32 Financial Instruments: Presentation.

Which of the following statements reflects the accounting treatment that AB adopted in respect of this investment when it prepared its financial statements to 31 December 20X9?

AAgency fees were recorded as an expense and the gain/loss on the remeasurement of the investment at the year end was recorded in profit or loss for the year.

BAgency fees were recorded as an expense and the gain/loss on the remeasurement of the investment at the year end was recorded in other comprehensive income.

CAgency fees were added to the cost of the investment and the gain/loss on the remeasurement of the investment at the year end was recorded in profit or loss for the year.

DAgency fees were added to the cost of the investment and the gain/loss on the remeasurement of the investment at the year end was recorded in other comprehensive income.

Correct : A

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AAgency fees were recorded as an expense and the gain/loss on the remeasurement of the investment at the year end was recorded in profit or loss for the year.

BAgency fees were recorded as an expense and the gain/loss on the remeasurement of the investment at the year end was recorded in other comprehensive income.

CAgency fees were added to the cost of the investment and the gain/loss on the remeasurement of the investment at the year end was recorded in profit or loss for the year.

DAgency fees were added to the cost of the investment and the gain/loss on the remeasurement of the investment at the year end was recorded in other comprehensive income.

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Question 4

ST has sold its main office property, which had a carrying value of $360,000,to AB, a property management entity.

The property was sold for $400,000 which isequal to itsfair value and was immediately leased back under an operating lease agreement.

Which of the following journals will record this transaction?

AOption

BOption

COption

Correct : A

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AOption

BOption

COption

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Question 5

Operating segments are separately reportable where they exceed 15% of revenue / profits / assets. These must in total cover 80% of total revenue. Is this statement true or false?

ATrue

BFalse

Correct : B

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ATrue

BFalse

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Master CIMAPRA19-F02-1 Exam with Reliable Practice Questions

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