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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Kenneth

1 months ago

I'm feeling pretty good about this one. The correct answers are B, C, and F. The subsidiary should debit the inventory account, the goods will be included in the next year's CSOFP, and the payables account of the subsidiary should be credited. Easy peasy, right? Now, where's the snack bar?

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Talia

3 days ago

So, the payables account of the subsidiary should be credited, correct?

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Cassi

4 days ago

Yes, the goods not arriving by the end of the financial year means they will be included in the next year's CSOFP.

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Herschel

10 days ago

I think you're right, the subsidiary should debit the inventory account.

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Jennifer

1 months ago

Hmm, this question is making my head spin. I think I need to consult the accounting gods for guidance on this one. Maybe they can send me a sign in the form of a calculator or a really sharp pencil.

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Nenita

1 months ago

I'm pretty confident that the correct answers are B, E, and G. The subsidiary should debit the inventory account, and the parent company should debit the payables account and credit the receivables account. That seems to make the most sense to me.

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Bok

2 days ago

That makes sense. So the correct answers are B, E, and G.

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Dana

10 days ago

Yes, and the parent company should debit the payables account and credit the receivables account.

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Jolene

13 days ago

I think you're right. The subsidiary should debit the inventory account.

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Willetta

2 months ago

Wow, this is a complex question. I'm not sure about the right answer, but I think it has something to do with the timing of the transaction and how it affects the accounts. Maybe I should re-read the question a few times to make sure I understand it.

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Jina

14 days ago

I'm not sure about the other statements, maybe we should carefully review the question again.

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Rocco

15 days ago

I believe 150,000 worth of inventory will be debited into the subsidiary's inventory account.

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Devora

18 days ago

I think the adjustments need to be accelerated to include them in the consolidation of assets for the CSOFP for 20X4.

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Jina

2 months ago

Hmm, this is a tricky one. I think the correct answers are B, C, and F. The subsidiary should debit the inventory account, and since the goods haven't arrived, they'll be included in the next year's CSOFP. And the payables account of the subsidiary should be credited.

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Nikita

9 days ago

That makes sense. It's important to accurately account for these transactions in the consolidation process.

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Yasuko

15 days ago

So, the payables account of the subsidiary should be credited with 150,000.

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Floyd

1 months ago

Yes, and since the goods haven't arrived by the end of the financial year, they will be included in the CSOFP for the next year.

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Royal

2 months ago

I think you're right, the subsidiary should debit the inventory account for 150,000 worth of goods.

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Derrick

2 months ago

I'm not sure about option A. I think option B might also be true because the inventory should be debited into the subsidiary's account.

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Wayne

2 months ago

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

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Sheridan

2 months ago

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

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