CIMA Exam CIMAPRA19-F01-1 Topic 5 Question 96 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 96
Topic #: 5

The subsidiary company of Group XY has purchased 150,00 worth of goods its parent company. However the goods purchased have yet to arrive at the subsidiary at the end of the financial year 20X4, meaning there is a disagreement in the current account balances between the parent and subsidiary.

With Group XY looking to produce its CSOFP for the end of the financial year, which of the following statements are true in relation to accounting for this disagreement? Select ALL that apply.

AThe adjustments to resolve this disagreement, need to be accelerated, so they can be included in the consolidation of assets for the CSOFP for 20X4

B150,000 worth of inventory will be debited into the subsidiary's inventory account

CAs the goods have not reached the subsidiary by the end of the financial year 20X4, they will be included in the CSOFPfor the next financial year

D150,000 worth of inventory will be credited into the subsidiary's inventory account

E150,000 will be debited to the payables account of the parent company

F150,000 will be credited to the payables account of the subsidiary company

G150,000 will be credited into the receivables account of the parent company

Show Suggested Answer

Suggested Answer: A

by Lili at Sep 11, 2024, 02:53 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F01-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Kenneth

17 days ago

I'm feeling pretty good about this one. The correct answers are B, C, and F. The subsidiary should debit the inventory account, the goods will be included in the next year's CSOFP, and the payables account of the subsidiary should be credited. Easy peasy, right? Now, where's the snack bar?

upvoted 0 times

...

Jennifer

19 days ago

Hmm, this question is making my head spin. I think I need to consult the accounting gods for guidance on this one. Maybe they can send me a sign in the form of a calculator or a really sharp pencil.

upvoted 0 times

...

Nenita

20 days ago

I'm pretty confident that the correct answers are B, E, and G. The subsidiary should debit the inventory account, and the parent company should debit the payables account and credit the receivables account. That seems to make the most sense to me.

upvoted 0 times

...

Willetta

1 months ago

Wow, this is a complex question. I'm not sure about the right answer, but I think it has something to do with the timing of the transaction and how it affects the accounts. Maybe I should re-read the question a few times to make sure I understand it.

upvoted 0 times

Devora

2 days ago

I think the adjustments need to be accelerated to include them in the consolidation of assets for the CSOFP for 20X4.

upvoted 0 times

...

2 months ago

I think option A is true because we need to resolve the disagreement quickly for the CSOFP.

upvoted 0 times

...