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Free F2 Exam Braindumps (page: 25)

Page 24 of 68
PDF with 268 Questions

Which of the following is NOT an example of an unconsolidated structured entity as defined in IFRS12 Disclosure of Interests in Other Entities?

  1. A post-employment benefit plan
  2. A securitisation vehicle
  3. An asset-backed financing scheme
  4. An investment fund

Answer(s): A



If you were asked to express the overall performance of an entity as a percentage of its total investment in net assets which of the following ratios would you calculate?

  1. Return on capital employed
  2. Asset utilisation
  3. Dividend yield
  4. Non-current asset turnover

Answer(s): A



KL acquired 2 million $1 equity shares in MN on 18 July 20X0 for $1.65 a share and classified this investment as available for sale (AFS) in accordance with IAS 39 Financial instruments: Recognition and Measurement.



KL paid a 0.5% transaction fee to its broker on this transaction. MN's shares were trading at $1.78 on 31 December 20X0.
Which of the following journals records the subsequent measurement of this investment at 31 December 20X0?

  1. Option
  2. Option
  3. Option

Answer(s): A



JK is seeking to raise finance for a project and the directors would prefer to take out a fixed rate bank loan repayable over the next 5 years. The project will increase the profit of JK even after taking into account the additional interest costs.
Which of the following statements about the use of a bank loan in this situation is true?

  1. In the long term servicing a bank loan is more expensive than servicing equity shares due to the higher risk for the lender.
  2. The interest on a bank loan is deducted from profit before dividends can be declared to equity shareholders each year.
  3. Because the assets of a business belong to the equity shareholders, a bank loan should NOT be secured on the assets of the business.
  4. A bank loan has high issue costs compared to an issue of equity shares because it takes longer to arrange.

Answer(s): B






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