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CIMA Advanced Financial Reporting Sample Questions:
1. 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?
A) Cash-settled immediately
B) Neither cash nor equity-settled
C) Equity-settled immediately
D) Equity-settled in the future
E) Cash-settled in the future
2. 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
A) 2, 3 & 4
B) 1, 2 & 3
C) 1
D) All of the above
E) 1&4
F) 1, 2, 3 & 4
3. Which of the following statements are INCORRECT with regards to impairment of financial instruments; Select ALL that apply.
A) Held to maturity instruments and available for sale assets are both measured at amortised cost and are therefore impacted by impairment.
B) In the result of an impairment loss, the carrying amount of the asset is directly reduced, or reduced through an allowance account.
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 loss is suspected following an impairment review, a financial asset is written down to its fair value.
E) If a contract relating to a financial instrument is breached then this might be an indication of impairment.
4. Which of the following defines the calculation of interest cover?
A) Finance costs divided by profit after tax
B) Finance costs divided by profit before interest and tax
C) Profit after tax divided by finance costs
D) Profit before interest and tax divided by finance costs
5. The capital structure of ST is summarised in the table below:
What is the weighted average cost of capital of ST?
Give your answer as a percentage to one decimal place.
? %
Solutions:
| Question # 1 Answer: E | Question # 2 Answer: C | Question # 3 Answer: A,D | Question # 4 Answer: D | Question # 5 Answer: Only visible for members |


