Free CIMA F2 Practice Exam with Questions & Answers | Set: 4

AB and EF are located in the same country and prepare their financial statements to 31 October in accordance with International Accounting Standards. EF supplies AB with a component that is vital to AB's product range. AB is considering acquiring a controlling interest in EF by 31 December 20X4 in order to guarantee future supply. The Board of EF has indicated that such an approach would be postively considered. AB would use its control to make AB the sole customer of EF.

The Finance Director of AB has been granted access to EF's management accounts and has conducted some initial analysis from the financial press. The results togther with comparisons for AB for the year to 31 October 20X4 are presented below:

AB and EF are forecasting revenues of S1,500,000 and $700,000 respectively for the year ended 31 October 20X5.

Which of the following independent options would explain the difference between the gearing ratios of AB and EF at 31 October 20X4?

Which of the following is a related party according to the definition of a related party in IAS24 Related Party Disclosures?

Which of the following examples would be classed as related parties ofJH Ltd due to the power they possess to directly influence the company?

1: JH Ltd's managing director

2: The son of JH Ltd's managing director, who is an intern in the company's office

3: The brother of JH Ltd's managing director, whose business supplies a large amount of production material for the company

4: JH Ltd's subsidiary company, AL Ltd

5: BR PLC, one of JH Ltd's regular customers

Which of the following principles are the basic principles followed by the consolidated income statement?

Select ALL that apply.

MN had the following profit figures for the year ended 30 November 20X6:

MN's statement of financial position at 30 November 20X6 included the following:

Calculate return on capital employed for MN for the year ended 30 November 20X6.

Give your answer to one decimal place.

 ?  %

FG and RS operate in the same retail sector within the same country and are of a similar size. The following ratios have been calculated based on the financial statements for the year ended 30 September 20X4:

Which of the following factors would limit the usefulness of these ratios as a basis for assessing the comparative performances of FG and RS?

Which TWO of the following are true in relation to IAS21 The Effects of Changes in Foreign Exchange Rates when consolidating an overseas subsidiary?

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. 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 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 four means that the financial statements will be more easily understood by shareholders.

Which accounting treatment should BC adopt?

When accounting for a finance lease under IAS 17 Leases, which TWO of the following are recognised in the statement of profit or loss?

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: