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F2
F2 Advanced Financial Reporting Questions and Answers

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Viewing questions 61-70 out of questions

Questions # 61:

Which of the following is the correct calculation for basic earnings per share in accordance with IAS 33 Earnings Per Share?

Options:

Answer

Answer:

Questions # 62:

JK has calculated its inventory holding period:

Question # 62

Which THREE of the following would have contributed to the above movement in inventory holding period?

Options:

JK's main supplier offered a significant one-off discount for purchases made in March 20X8.

In January 20X8 a major competitor entered the market in which JK operates.

A substantial contract is due to be dispatched early in April 20X8.

JK is enforcing stringent inventory control techniques following management instructions.

JK suffered industrial action by its production staff in the period December 20X7 to February 20X8.

It has been difficult to obtain one of JK's main components due to import issues with its overseas supplier.

Answer

A, B, C

Questions # 63:

Mr. Rodgers is an accountant for JK Pic. He is asked to record a particular share-based payment in the company's accounts and obliges by debiting as an expense the first relevant account and crediting the

corresponding double-entry as a liability.

Which type of share-based payment has Mr. Rodgers recorded?

Options:

Cash-settled in the future

Cash-settled immediately

Equity-settled immediately

Equity-settled in the future

Neither cash nor equity-settled

Answer

Questions # 64:

The dividend yield of ST has fallen in the year 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.

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

Options:

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

Surplus cash was used to pay a special dividend in addition to the normal dividend in the year.

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

To compensate investors for the reduction in share price a higher dividend per share was paid.

Answer

Questions # 65:

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

Options:

A current period exchange gain or loss is shown within the consolidated statement of comprehensive income within other comprehensive income.

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.

Assets and liabilities of the subsidiary are translated at each reporting date using the average exchange rate for the period.

Goodwill is reflected in the consolidated statement of financial position translated at the exchange rate on the date of acquisition.

The statement of profit or loss of the subsidiary is translated for the reporting period using the closing exchange rate.

Answer

A, B

Questions # 66:

The yield to maturity of a redeemable bond is calculated as the internal rate of return of the relevant cash flows associated with the bond.

Which TWO of the following are considered relevant cash flows in this calculation?

Options:

The annual interest payments net of tax relief.

The redemption value of the bond at the date of redemption.

The market value of the bond now.

The nominal value of the bond now.

The value of the conversion premium on conversion to equity shares.

Answer

B, C

Questions # 67:

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 is equal to its fair value and was immediately leased back under an operating lease agreement.

Which of the following journals will record this transaction?

Question # 67

Options:

Option A

Option B

Option C

Option D

Answer

Questions # 68:

In the year ended 31 December 20X7, FG leased a piece of machinery. The accountant of FG had prepared the financial statements for the year to 31 December 20X7 on the basis of the lease being an operating lease.

However, following the end of year audit it has been agreed that the machinery is in fact held under a finance lease and therefore the financial statements need to be corrected.

The correction will have which THREE of the following affects on the financial statements?

Options:

Non-current assets will increase.

Finance costs will increase.

Current liabilities will increase.

Non-current liabilities will decrease.

Depreciation costs will decrease.

Non-current assets will decrease.

Answer

A, B, C

Questions # 69:

What is the total comprehensive income attributable to the non-controlling interest that will be presented in GHI's consolidated statement of changes in equity for the year ended 31 December 20X4?