CIMA Exam CIMAPRA19-F02-1 Topic 2 Question 106 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 106
Topic #: 2

PQis a retail business.In recent years they have improved their financial performance andincreased their revenue. The following ratios have been calculated for the years ended 31 December20X4 and 20X3:

Which of the following explanations of PQ's financial performanceis consistent with these ratios?

AIn 20X4 PQ reduced the unit selling price resulting in an increase in volumes sold and an increase in overall revenue.

BPQ changed suppliers early in 20X4 because the new supplieragreed tosupply the same goods at a cheaper price.

CIn 20X4taxation legislation wasamended which reduced the rate of corporate income tax by 3.5%.

DIn 20X4 PQ sold a retail outlet resulting in a significantgain on disposal which has beendeducted from administrative expenses.

Show Suggested Answer

Suggested Answer: A, B, C, D

by Latricia at Jan 22, 2025, 03:37 AM

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Lore

9 hours ago

I don't know, option B about changing suppliers sounds a bit too simple. Wouldn't that just shift the costs around rather than improve the bottom line? I'd be cautious about picking that one.

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Phung

12 days ago

Option D seems plausible too. A significant gain on disposal could definitely boost the revenue numbers. Although the wording is a bit vague, so I'd want to double-check the details.

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Elke

23 days ago

Hmm, I'm leaning towards option A. The increase in revenue and volumes sold points to a price reduction strategy. But I'd need more info on the inventory turnover and gross margin to be sure.

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