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CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 91 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 91
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

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.

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

Show Suggested Answer Hide Answer
Suggested Answer: B

by Jestine at Jul 01, 2024, 09:03 PM

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Willow
5 days ago
I'm feeling confident about this one. A, B, and C are definitely the correct answers. Though I'm a little curious to see what kind of humorous comment my fellow candidates might come up with.
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Willow
6 days ago
Hmm, let's see. Non-current assets go up, finance costs go up, and current liabilities go up. Sounds like a classic finance lease situation to me.
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Laurel
8 days ago
Ah, the old finance lease vs. operating lease conundrum. This one's tricky, but I think A, B, and C are the winners here.
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Carey
8 days ago
But won't non-current assets also increase as a result of the correction?
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Johnathon
10 days ago
I agree with Elbert, current liabilities will definitely increase.
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Elbert
13 days ago
I think the correction will increase current liabilities.
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