📑 Financial Reporting (FR)
MCQ Practice

✅ Correct!
IFRS 16 requires use of the implicit rate if known; otherwise, the incremental borrowing rate is used. Option A is false: discretion is not allowed. Option C is incorrect: if the implicit rate is not known, it cannot be used. Option D introduces a non-authoritative rate.

✅ Correct!
An increase in trade receivables means sales revenue has been recognised but cash not yet received, so it is deducted from profit before tax to arrive at cash generated from operations. Option A is wrong because it should be deducted, not added. Option C is wrong because it misstates the reason. Option D is wrong because it is not a cash outflow; it's a non-cash increase in an asset.

✅ Correct!
Using the treasury stock method, the number of shares from options = 200,000 - [(200,000 × $2.00) / $2.50] = 200,000 - 160,000 = 40,000. So total shares for diluted EPS = 1,000,000 + 40,000 = 1,040,000. Option A is wrong because it adds all options. Option B is wrong because dilution depends on exercise price vs market price, not par value. Option D is wrong because it adds all potential shares without considering proceeds.