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

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Wayne

2 days ago

I agree with Sheridan. Option A seems like the correct approach to take in this situation.

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Sheridan

4 days ago

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

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