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21) Do you agree that prior management decisions affect cost management? A) Yes. Managers should always follow prior management decisions, for example, in the determination of the EOQ. B) No. Managers should ignore prior management decisions. C) Yes. Managers should always strive to lower the costs incurred last year, as their number 1.
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21. The journal entry to record the distribution of cash to shareholders includes which of the following? a. DR Shareholders’ distribution b. DR Cash c. CR Liquidation d. CR Shareholders’ distribution 22. The details below were extracted from the accounting records of Great South East Ltd (a company in the process of liquidation). 40 000 $1.
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Multiple-choice questions 1. For the purposes of equity accounting, it is presumed that the investor has significant influence over the other entity where the investor holds: a.100% of the voting power of the investee. b.between 5% and 10% of the voting power of the investee. c.20% or more of the voting power of the.
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11.On 1 July 2014, Peter Limited acquired all the issued shares of Kerri Limited for $100 000 when the equity of Kerri Limited consisted of: Share capital$70 000 Retained earnings 30 000 The pre-acquisition entry at 1 July 2014 is: a. Shares in Kerri Limited Dr 100 000 Retained earnings Cr 30 000 Share capital Cr 70 000 *b. Retained earnings Dr 30 000 Share capital Dr 70 000 Shares in Kerri Limited Cr 100 000 c. Retained earnings Dr 70 000 Share capital Dr 30 000 Shares in.
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11.The key characteristic that determines when consolidated financial statements should be prepared is: a.the existence of transactions between the entities. b.control. c.substance over form. d.significant influence. 12.In a consolidated group of entities, control over the subsidiaries in the group: a.may not be shared control. b.can be shared with other entities. c.requires 100% ownership of the subsidiaries’ shares. d.can exist.
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Multiple-choice questions 1.Ownership interests in a subsidiary entity that do not belong to the parent entity are known as: a.unowned interests. b.non-controlling interests. c.external equity interests. d.non-parent interests. 2.According to AASB 10 Consolidated Financial Statements, the term ‘non-controlling interest’ is defined as: a.equity in a parent that is owned, directly or indirectly, by a subsidiary. b.the equity in.
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41.When a depreciable non-current asset is sold between entities within a group, any gain recognised on the sale is eliminated and realised through the future use of the asset by               the group. This results in reduced depreciation and income tax expenses in future               periods. 42.Where an intragroup sale of.
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Multiple-choice questions 1.Which of the following statements is incorrect? a.Joint arrangements can be classified into joint operations and joint ventures. b.A joint arrangement has two main characteristics. c.Joint arrangements are always structured as companies. d.The key feature of a joint arrangement is that the parties involved have joint control over the decision making in relation.
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11. Unrealised profit in the opening inventory of a financial period is adjusted in the consolidation worksheet by a: a. debit to retained earnings. b. credit to retained earnings. c. credit to inventory. d. debit to inventory. 12. A subsidiary sold inventory to its parent for $50 000.  The inventory originally cost the subsidiary $38.
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32) Describe management accounting and financial accounting. 33) Generally, companies follow one of two broad strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition. Assume you are opening a small food outlet across the street from your campus..
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True/false questions 31.Consolidated financial statements must be prepared using uniform accounting policies for like transactions and other events in similar circumstances. 32. In preparing the consolidated financial statements, no adjustments are made in the accounting records of the individual entities that comprise the group. 33.An acquisition analysis is prepared at acquisition.
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Classify each cost item into one of the business functions of the value chain listed. A) production B) customer service C) marketing D) distribution 32) cost of samples mailed to promote sales of a new product 33) labour cost of workers in the manufacturing plant 34) bonus paid to a person with a 90% satisfaction rating in.
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Multiple-choice questions 1.The preparation of consolidated financial statements involves: a.adding together the financial statements of the investor and the associate. b.adjusting entries in the accounting records of the subsidiary. c.adding together the financial statements of the parent and the subsidiaries. d.adjusting entries in the accounting records of the parent. 2.If a subsidiary’s reporting date does not.
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21. Where the consideration transferred is less than the fair value of the identifiable net assets and contingent liabilities acquired, the item must be recognised in the consolidation worksheet as: a. a transfer to the business combination valuation reserve. b. goodwill. c. an increase in the ‘Shares in subsidiary’ asset. d. a gain on.
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41.Where the carrying amount of an associate’s depreciable assets is lower than their fair values at the date of acquisition, an adjustment is required to be made to restate the assets to their fair values. 42.Any excess of the investor’s share of the net fair value of an associate’s identifiable assets.
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11. When presenting a consolidated statement of comprehensive income, the non-controlling interest is shown as: a. a separate component of each individual line item. b. a separate portion of profit or loss attributable to the non-controlling interest. c. part of the total revenue of the group. d. part of the total expenses of the.
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21.When translating into the presentation currency, all assets and liabilities are translated using the: a.average exchange rate for the financial period. b.exchange rate applicable when the original transaction was recorded. c.exchange rate current at the date of the statement of financial position. d.exchange rate as at the start of the reporting period. 22.Dividends declared.
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True/false questions 31.The shareholders of a company are liable for prosecution under the Corporations Act 2001 if they allow the company to trade while it is insolvent. 32.Winding up of a company only ever arises from the issuing of an order from the court. 33.Past holders of shares in a company are.
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True/false questions 31.The NCI is a contributor of equity to the group. 32.The NCI is entitled to a share of the consolidated equity of the group. 33.The consolidated statement of comprehensive income must separately disclose the consolidated profit for the period attributable to equity holders of the parent and the NCI. 34.The NCI.
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21.According to AASB 10 Consolidated Financial Statements, all parent entities are required to present consolidated statements unless which of the following conditions apply to them? IThe parent is a wholly owned subsidiary. IIThe parent is a partly owned subsidiary and its other owners do not object to the non-presentation of consolidated financial.
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28) List and briefly describe each function in the value chain. Provide an example for each of the value chain functions identified. 29) Customers are demanding that companies use the value chain and supply chain to deliver ever-improving levels of performance regarding key success factors. Briefly describe each of the following.
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True/false questions 31.A subsidiary is defined in AASB 10 Consolidated Financial Statements as a company that is controlled by another entity. 32.The financial statements of a group are referred to as consolidated financial statements. 33.The consolidation process involves making adjustments to the individual financial statements and ledger accounts of the entities within the.
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Multiple-choice questions 1.The entity that is represented by a single set of consolidated financial statements is: a.an economic entity. b.a parent entity. c.a subsidiary entity. d.a consolidated entity. 2.AASB 10 Consolidated Financial Statements defines a ‘parent’ and a ‘subsidiary’ as which of the following? Parent Subsidiary a. An entity which is controlled by another entity. An entity that controls one or.
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21.A parent entity sold a depreciable non-current asset to a subsidiary entity for $5600. The asset originally cost $6000 and at the date of sale accumulated depreciation was $1000. The amount of the unrealised gain on sale to be eliminated is: a.$5600. b.$1000. c.$600. d.$400. 22. When an entity sells a non-current asset at a.
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41.The NCI is not allocated a share of any BCVR balances where business combination valuation entries are recorded on consolidation, rather than in the subsidiary’s books. 42.The calculation of the NCI share of equity at a point in time is done in three steps. 43.Consequential depreciation adjustments in relation to assets that.
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Multiple-choice questions 1. Consider the following economic entity structure: 90% 60% The direct non-controlling interest (DNCI) and indirect non-controlling interest (INCI) are as follows. DNCI in A Ltd INCI in A Ltd DNCI in B Ltd INCI in B Ltd a. 10% Nil 40% 6% b. 10% 14% 40% 6% c. 40% Nil 10% 6% d. 40% Nil 10% 54% 2. Kerri Limited has a 60% ownership interest in Emily Limited.  Emily Limited has an 80% ownership interest in.
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41.It is the responsibility of the directors of the company to realise the assets, and pass the proceeds to the liquidator to enable distributions to be made to creditors. 42.A liquidator is required to keep proper records, containing entries and proceedings of meetings. 43.The liquidator must arrange for their statement of receipts.
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True/false questions 31.An associate is defined in AASB 128 Investments in Associates as an entity over which the investor has control. 32.A joint arrangement is defined in AASB 128 Investments in Associates as an arrangement between two or more entities whereby the entities have joint control of another entity. 33. The classification.
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True/false questions 31.The elimination of the full effects of intragroup transactions is required in the preparation of consolidated financial statements. 32.The effect of an intragroup sale of inventory at a profit where the inventory is still on hand at the end of the reporting period is that both profit and the.
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11. The pre-acquisition entry for the Baxter group in order to consolidate a 60% interest in a subsidiary contained the following debits.  Retained earnings $6000, share capital $12 000, general reserve $2400, BCVR $1200.  The direct non-controlling interest’s share of the subsidiary’s equity at the date of acquisition is: a.$8640. b.$14 400. c.$12.
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  1.1   Explain how management accounting data are essential to the process of rational operating and strategic decision making. 1) Management accounting is guided by generally accepted accounting principles. 2) Managerial accounting and cost accounting both measure and report financial and non-financial information relating to the cost of acquiring or utilizing resources. 3) Cost.
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34) Generally, companies follow one of two broad strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition. Is it possible to follow a strategy that is "in the middle"? 35) What competitive advantage could a company obtain from.
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41.Potential voting rights that cannot be exercised or converted until a future date or until the occurrence of a future event are not taken into account when determining an entity’s capacity to control another entity. 42.Power is defined in AASB 10 Consolidated Financial Statements as the current ability to direct the.
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11. Broncos Limited acquired a 30% interest in Bennett Limited for $54 000.  Broncos holds other equity investments but does not prepare consolidated financial statements. Bennett Limited revalued its buildings upwards by $20 000 during the current financial period.  The balance of the investment in associate account at the end.
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Multiple-choice questions 1.When an administrator is appointed to a company they must give an opinion as to the best of three options available to creditors. Which of the following is not one of the options available? a.To end the voluntary administration and return the company to the director’s control. b.To end the voluntary.
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21. Kanga Limited acquired a 35% investment in Roo Limited for $20 000. Kanga Limited also owns two subsidiaries and prepares consolidated financial statements. Roo Limited declared and paid a dividend of $5000 during the current financial year. The appropriate consolidation adjustment to record this transaction will include which of.
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11.Which of the following statements is incorrect? a.Accounting records do not need to be prepared for the joint operation itself. b.Accounting for a joint venture is the same from that of a joint operation. c.AASB 11 Joint Arrangements do not provide standards on accounting for the joint operation itself. d.The statement of financial position.
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21) Whose perceptions of the company's products or services are the most important to the manager? A) board of directors' perception B) customers' perception C) president's perception D) stockholders' perception E) competitors' perception 22) Place the five business functions in the order they appear along the value chain: A = Customer service B = Design C = Distribution D =.
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21. Caloundra Limited has an ownership interest of 60% in a subsidiary Aroona Limited. Aroona owns 70% of Bribie Limited.  Since acquisition date the retained earnings of Bribie Limited have increased from $100 000 to $150 000. The direct non-controlling interest in the retained earnings of Bribie is: a. $0. b. $105.
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30) Describe the value chain and how it can help organizations become more effective. 31) Cyclone Car Company tries to assign appropriate responsibilities to all of its managers. Production managers receive reports which accumulate information of the shop operations for each plant. Plant operations are further aggregated in the report received.
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21. Which of the following statements is incorrect? a.A joint operator contributing assets other than cash cannot transfer the asset at fair value to the joint operation and recognise a full profit on the transaction. b.Where an operator contributes a non-current asset to a joint operation, the value of the contribution is.
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11) Key success factors include time management. 12) What aspect of business analysis focuses on the sequence of business functions? A) customer service B) value chain C) quality D) research and development E) product design 13) Which of the following is TRUE concerning the value chain of business functions? A) Managers should always proceed sequentially through the value.
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11) The Global Reporting Initiative (GRI) is a nonprofit organization established to develop guidelines so that reporting on economic, environmental and social performance by all organizations is as routine and comparable as financial reporting. 12) Corporate social responsibility is now mandatory for all publicly traded companies in Canada. 13) In what way.
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1.2   Explain how business functions help management accountants organize accounting information. 1) In the value chain, research and development generates and experiments with new ideas related to new products. 2) The value chain includes the following functions: research and development; design of products, services, or processes; production; marketing; distribution; customer service; and.
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Multiple-choice questions 1.AASB 10 Consolidated Financial Statements requires that intragroup transactions be: a.eliminated on consolidation to the extent of the parent’s interest in the subsidiary. b.eliminated in the books of the parent and subsidiary to the extent of the parent’s interest in the subsidiary. c.eliminated in full in the books of the parent and.
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21.Beach Limited is a subsidiary of Golden Limited. When Golden acquired its 70% interest in Beach, the retained earnings of Beach Limited were $40 000. At the beginning of the current period, Beach Limited’s retained earnings had increased to $100 000. Beach also earned profit of $20 000 during the.
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