Free CIMA CIMAPRO19-F02-1-ENG Exam Questions

Become CIMA Certified with updated CIMAPRO19-F02-1-ENG exam questions and correct answers

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Total 270 Questions | Updated On: Aug 19, 2026

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Question 1

AB sold the majority of its operating equipment to LM for cash on 30 December 20X9 and then immediately leased it back under an operating lease.

AB used the cash proceeds from the sale to reduce its long term borrowings significantly. No early repayment charge was levied by the lender.

Which of the following statements is truein respect of AB's ratios calculated at 31 December 20X9?

A : 's return on capital employed would be lower as a result of this sale being recorded.

B : 's current ratio would be lower as a result of this sale being recorded.

C : 's non-current asset turnover would be lower as a result of this sale being recorded.

D : 's gearing ratio would be lower as a result of this sale being recorded.

Answer: D

Question 2

Which of the following are limitations of financial statement figures for ratio analysis? Select the ALL that apply.

A : ly provides historic data

B : ly provides financial information

C : mited information to identify trends over time

D : ovide only summarised information

E : ntains complicated information that needs to be summarised

F : ly provides forecast data

Answer: A,B,C,D

Question 3

An entity undertakes an issue of new debt which has the effect of reducing the entity's weighted average cost of capital (WACC).

Which of the following would best explain why the WACC will have fallen?

A : entity was 100% equity financed prior to the issue of the debt.

B : risk to the shareholders has reduced leading to a fall in the cost of equity.

C : new debt is being used to replace existing debt that had a lower cost.

D : new debt is being used to replace existing debt that had the same cost.

Answer: A

Question 4

GG's gearing is currently 50% compared to the industry average of 40% (both measured as debt/equity). GG's debt is all in the form of a single bank loan that is repayable in five years' time. The directors of GG are seeking to raise finance for a new project and they are considering an additional bank loan from the same bank.

Which of the following would prevent the bank from lending the finance for the project in the form of a new bank loan?

A : covenant on the existing bank loan that restricts the level of dividend that can be paid.

B : projected decrease in interest cover that would breach a covenant on the existing loan.

C : revaluation of GG's property that shows an increase in its value since the existing bank loan was taken out.

D : projected lack of profits to be able to claim tax relief on the additional interest arising from the new loan.

Answer: B

Question 5

Entity A entered into a 3 year operating lease on 1 April 20X3. The rentals are 5,000 a year payable in advance with an additional payment of $1,800 payable on 1 April 20X3

The rental expense to be included in the statement of profit or loss for the year ended 31 December 20X3 will be:

A : $4,200

B : $5,000

C : $6,800

D : $5,600

Answer: A

Page: 1 / 54

Total 270 Questions | Updated On: Aug 19, 2026

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