CIMA Exam CIMAPRA19-F02-1 Topic 2 Question 114 Discussion

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

Question #: 114
Topic #: 2

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 andMeasurement.

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?

AOption

BOption

COption

Show Suggested Answer

Suggested Answer: A

by Coral at Jul 14, 2025, 04:53 PM

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Georgeanna

22 hours ago

Ah, the age-old debate of Profit and Loss vs. Other Comprehensive Income. I'm just glad I don't have to deal with these accounting technicalities in my day-to-day life. Pass the coffee, please!

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Sherell

4 days ago

That makes sense, thanks for explaining.

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Ronald

9 days ago

This question is a no-brainer. Of course, the answer is Option C! Didn't they teach us this in Accounting 101?

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Candra

11 days ago

Because the investment is classified as available for sale, so it should be measured at fair value.

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Sherell

13 days ago

Why do you think it's Option C?

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Kirk

14 days ago

Option B seems more logical to me. The investment is measured at fair value, so the change in fair value should be recorded in the Profit and Loss account.

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Angella

6 days ago

User1: I think Option A is the correct journal entry.

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Candra

15 days ago

I disagree, I believe it should be Option C.

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Dion

23 days ago

I think the correct answer is Option C. The investment is classified as available-for-sale, so the subsequent measurement at fair value should be recorded in the Other Comprehensive Income account.

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Fausto

11 days ago

I agree with you, Option C is the correct answer. The fair value adjustment for available-for-sale investments goes to Other Comprehensive Income.

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Sherell

1 months ago

I think the answer is Option A.

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