CIMA Advanced Financial Reporting Sample Questions:

1. What figure will be presented for "dividend paid to shareholders of GHI" in GHI's consolidated statement of changes in equity for the year ended 31 December 20X4?
Give your answer to the nearest $000.
$ ? 000

2. Which of the following statements are INCORRECT with regards to impairment of financial instruments; Select ALL that apply.

A) In the result of an impairment loss, the carrying amount of the asset is directly reduced, or reduced through an allowance account.
B) Held to maturity instruments and available for sale assets are both measured at amortised cost and are therefore impacted by impairment.
C) The impairment loss on held to maturity instruments is the difference between the assets carrying amount and the present value of its future cashflows.
D) If a contract relating to a financial instrument is breached then this might be an indication of impairment.
E) If a loss is suspected following an impairment review, a financial asset is written down to its fair value.

3. PQ entered into a $300,000 contract on 1 January 20X9 to provide computer hardware to WX with support services for the 3 years from the date of installation.
The contract is made up as follows:

The hardware was delivered to WX on 1 January 20X9 and installed immediately. WX paid the full value of the contract on 30 June 20X9.
What journal entry records PQ's revenue from this contract for the year ended 31 December 20X9?

A) Option D
B) Option B
C) Option C
D) Option A

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

A) A current period exchange gain or loss is shown within the consolidated statement of comprehensive income within other comprehensive income.
B) The statement of profit or loss of the subsidiary is translated for the reporting period using the closing exchange rate.
C) Goodwill is reflected in the consolidated statement of financial position translated at the exchange rate on the date of acquisition.
D) Goodwill is re-translated at the end of each reporting period and reflected at the period end exchange rate in the consolidated statement of financial position.
E) Assets and liabilities of the subsidiary are translated at each reporting date using the average exchange rate for the period.

5. On 1 January 20X8 XY, a listed entity, had 10,000,000 ordinary shares in issue each with a par value of 50 cents. On 1 July 20X8 XY raised $6,000,000 by issuing ordinary shares at a price of £1.50 each which was the full market price.
Place the correct figure into the box below to show the number that XY will use as its weighted average number of ordinary shares in the calculation of earnings per share for the year to 31 December 20X8.

Solutions: