1. Home
  2. Discussions
  3. CIMA
  4. CIMA Management
  5. F2 Discussions
  6. F2 Exam Topic 6 Question 50 Discussion

CIMA F2 Advanced Financial Reporting F2 Question # 50 Topic 6 Discussion

 CIMA Discussions      Browse All Questions      Go to Exam Detail      Get Premium Access
 Previous
Next  

CIMA F2 Advanced Financial Reporting F2 Question # 50 Topic 6 Discussion

F2 Exam Topic 6 Question 50 Discussion:
Question #: 50
Topic #: 6

HJ is currently in dispute with an employee, who is claiming $400,000 in a legal case against them.

HJ's legal advisors have stated that it is probable that they will lose the case and will have to pay the amount claimed.

Also, HJ are claiming $250,000 from a supplier of defective goods and the legal advisors have stated that it is probable that HJ will be successful in this claim.

What is the correct accounting treatment for these two items in HJ's financial statements?
A.

Provide for the $400,000 potential outflow and disclose the $250,000 potential inflow.

B.

Provide for the $400,000 potential outflow and recognise the $250,000 potential inflow.

C.

Disclose the $400,000 potential outflow and disclose the $250,000 potential inflow.

D.

Disclose the $400,000 potential outflow and recognise the $250,000 potential inflow.

Get Premium F2 Questions
Actual exam question for CIMA F2 exam by Blaise79201 at Aug 3, 2025, 12:00:00 AM

Contribute your Thoughts:


Chosen Answer:
This is a voting comment (?). It is better to Upvote an existing comment if you don't have anything to add.

Submit
 Previous
Next