CIMA Exam CIMAPRA19-F02-1 Topic 4 Question 101 Discussion

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

Question #: 101
Topic #: 4

[All CIMAPRA19-F02-1 Questions]

Which of the followingreduce the usefulnessof ratio analysis when comparing entities that operate in the same industry?

Select ALL that apply.

AThe revenue figure being aggregated from many different activities and sources.

BAccounting estimates in respect of depreciation being different between entities.

CThe effect of a material and unusual item being disclosed separately in the notes.

DAn entity adopting a policy of revaluing its non current assets.

ERatio calculations being based on historical information.

FRatios being quick and easy to calculate.

Show Suggested Answer

Suggested Answer: A, B, D, E

by Chun at Sep 14, 2024, 02:04 AM

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Carolann

2 months ago

I'm starting to think the person who wrote this question has a vendetta against ratio analysis. Where's the love?

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Ressie

2 months ago

This question is giving me a headache. I'd rather be analyzing financial ratios than taking this exam.

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Jesus

18 days ago

E) Ratio calculations being based on historical information.

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Melvin

22 days ago

B) Accounting estimates in respect of depreciation being different between entities.

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Lorrine

1 months ago

A) The revenue figure being aggregated from many different activities and sources.

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Chaya

2 months ago

F? Really? Ratios being quick and easy to calculate is a disadvantage? What kind of question is this?

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Lenna

2 months ago

D and E are also important factors. Revaluing assets and using historical data can really skew the ratios.

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Tyisha

1 months ago

C) The effect of a material and unusual item being disclosed separately in the notes.

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Titus

1 months ago

B) Accounting estimates in respect of depreciation being different between entities.

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Benedict

2 months ago

A) The revenue figure being aggregated from many different activities and sources.

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Shantay

2 months ago

But what about option C? I think disclosing material and unusual items separately can also impact the comparison.

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Bettyann

3 months ago

A and B for sure. How can you compare entities when they have different accounting practices? That's just ridiculous.

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Catalina

2 months ago

A and B for sure. How can you compare entities when they have different accounting practices?

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Jackie

2 months ago

B) Accounting estimates in respect of depreciation being different between entities.

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Eloisa

2 months ago

A) The revenue figure being aggregated from many different activities and sources.

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Slyvia

3 months ago

I agree with Donte. Different accounting estimates and revaluing assets can definitely skew the ratios.

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Donte

3 months ago

I think options A, B, and D reduce the usefulness of ratio analysis.

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