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CIMAPRA19-F02-1 Exam - Topic 1 Question 22 Discussion

HJ is currently in dispute with an employee, who is claiming $400,000 in a legal case against them.HJ's legal advisors have stated that it is probable that they willlose the case and will have to pay the amount claimed.Also, HJ areclaiming $250,000 from a supplierof defective goods and the legal advisors have stated that it is probable that HJ will besuccessful in this claim.What is the correct accounting treatment for these two items in HJ'sfinancial statements?
A) Provide for the $400,000 potential outflow and disclose the $250,000 potential inflow.
B) Provide for the $400,000 potential outflow and recognise the $250,000 potential inflow.
C) Disclose the $400,000 potential outflow and disclose the $250,000 potential inflow.
D) Disclose the $400,000 potential outflow and recognise the $250,000 potential inflow.

CIMAPRA19-F02-1 Exam - Topic 1 Question 22 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 22
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

HJ is currently in dispute with an employee, who is claiming $400,000 in a legal case against them.

HJ's legal advisors have stated that it is probable that they willlose the case and will have to pay the amount claimed.

Also, HJ areclaiming $250,000 from a supplierof defective goods and the legal advisors have stated that it is probable that HJ will besuccessful in this claim.

What is the correct accounting treatment for these two items in HJ'sfinancial statements?

Show Suggested Answer Hide Answer
Suggested Answer: A

by Tarra at May 07, 2022, 03:44 PM

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Ollie
10 months ago
$400k is a huge amount, wow!
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Gilma
10 months ago
I think B is risky, better to disclose the inflow instead.
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Chandra
11 months ago
Wait, how can they recognize the inflow if it's not guaranteed?
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Pete
11 months ago
Definitely agree with A, that makes the most sense.
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Lore
11 months ago
HJ should provide for the $400k outflow.
upvoted 0 times
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Olene
11 months ago
I'm pretty confident on this one. The purpose of a Sprint is to produce a done Increment of product, so the answer is clearly True.
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Skye
11 months ago
I feel pretty confident about this one. I think the most likely explanation is that remote JMX functionality is disabled by default. I'll make sure to investigate that further.
upvoted 0 times
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Shalon
11 months ago
I'm a little confused by the options here. I'm not sure if Dashboards or Microsoft Customer Voice would be the right choice for an interactive checklist. I'll need to think this through a bit more.
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