CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 42 Discussion

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

Question #: 42
Topic #: 1

LM acquired an asset under a 5-year non-cancellable operating lease agreement on 1 January 20X8. Under the terms of the agreement, LM paid nothing for the first year and then made fourpayments of $50,000 in each subsequent year. LM adopted the provisions of IAS 17 Leases when accounting for this agreement.

Which of the following is correct in respect of this operating lease in LM's financial statements for the year to 31December 20X8?

AAn accrual of $40,000 was recognised.

BAn accrual of $50,000 was recognised.

CA prepayment of $10,000 was recognised.

DAn expense of $50,000 was recognised.

Show Suggested Answer

Suggested Answer: A

by Lashandra at May 06, 2022, 07:31 PM

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