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Study Resources (Accounting)

19.Examples of intragroup transactions include:   A. dividends payable to group members. B. the payment of taxation. C. the recognition of minority interests. D. the sale of inventories to external parties. 20.Intragroup transactions that are to be eliminated in the consolidated accounts include:   A. inter-entity loans. B. inter-entity sales of non-current assets. C. the payment of management fees to a member of the group. D. all of the.
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15.Two common approaches to accounting for acquisition of additional shares in a subsidiary include:   A. the combined tranche method and the single-date method. B. the step-by-step method and the combined tranche method. C. the step-by-step method and the single-date method. D. the step-by-step method and the equity method. 16.Under the single-date method goodwill would be recognised:   A. at the point in.
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31.Equity accounting is argued to provide:   A. a more accurate measure of value of the associate than the market value of the shares. B. an easier to understand measure of value than the lower of cost and net realisable value method. C. a better reflection of the performance and value of the associate company than the.
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11.It is not possible for one entity to control another entity without any direct ownership interest. 12.In calculating indirect non-controlling interests, intragroup transactions need not be eliminated. 13.When a parent acquires its interest in an intermediate subsidiary after the intermediate subsidiary acquires an interest its own subsidiary, this is referred.
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32. The following is an extract from the non-controlling interest memorandum, used to calculate non-controlling interests. Both subsidiaries became members of the economic entity at the same time at the start of this current period. What is the parent's indirect equity (percentage) interest in Barbie Limited?   A. .
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48.Provide reasons for not recognising any gain or loss on subsequent changes in ownership after control has been achieved as outlined in the Basis for Conclusions that accompanied the release of IFRS 10 Consolidated Financial Statements. 49.Discuss what happens when a parent loses control over a subsidiary .
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32.AASB 121 requires that foreign currency monetary items outstanding at reporting date must be:   A. translated at the spot rate at the transaction date. B. reported at the forward-exchange rate based on the 90-day bank bill rate at that date. C. translated at the spot rate at reporting date. D. translated at the spot rate at settlement date. 33.Examples.
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1. The non-controlling interest in post-acquisition movement in reserves and post-acquisition profits is based on the combined sum of both direct non-controlling interest and indirect non-controlling interest.  2. The non-controlling interest in post-acquisition capital and reserves will be based on direct non-controlling interest.  3.Non-sequential acquisition is when a parent acquires.
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11.When two or more venturers combine their operations, resources and expertise to manufacture, market and distribute jointly a particular product this is likely to be categorised as a jointly controlled entity under AASB 11 Joint Arrangements. 12.As prescribed in AASB 11 Joint Arrangements, where a separate entity is formed the.
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64.When group members do not apply the same accounting methods, the consolidation process requires which of the following to be done?   A. All group members must change their accounting policies to be consistent. B. Adjustments must be made on consolidation to remove the effects of the different policies. C. Two sets of consolidated accounts need to.
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21.The treatment of equity investments depends on a number of factors, including:    A. the date of purchase. B. whether the investee entity is in the life or general insurance industry. C. whether or not the investor has significant influence over the investee. D. whether the investee entity is in the life or general insurance.
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15.Where the parent entity holds less than 100 per cent interest in a subsidiary, AASB 10 requires the remaining shareholders' interests in what items to be disclosed?   A. the subsidiary's share capital and reserves B. the subsidiary's profit or loss C. the subsidiary's current and non-current assets D. the subsidiary's share capital and reserves and the subsidiary's profit.
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84.Discuss the treatment as required in AASB 10 Consolidated Financial Statements for potential voting rights when considering whether one entity controls another entity. 86.AASB 3 requires entities to account for business combinations using the acquisition method. Describe the steps required to implement the acquisition method. 87.Discuss how the subsidiary's post-acquisition earnings are.
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49.Discuss why it is necessary to differentiate between direct and indirect non-controlling interests in a group. 51.Describe a non-sequential acquisition and explain the process of consolidation for this type of business combination. 52.Discuss how it is possible for one entity to control another entity without any direct ownership interest. 1 .
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34.Which consolidation concept mainly underlies the approach adopted in AASB 10?   A. proprietary concept B. accrual concept C. entity concept D. parent-entity concept 35.AASB 10 defines control as:   A. governing the financial, operating and sustainability policies of an entity so as to benefit from its activities. B. the capacity of an entity to dominate the decision making of another entity by virtue of.
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22.A foreign currency transaction shall be recorded on initial recognition in the:   A. presentation currency. B. local currency. C. foreign currency. D. functional currency. 23.There are two broad categories of foreign currency issues that arise in financial reporting. They are:   A. reporting purchase price parity and reporting foreign interest rate adjustments. B. accounting for foreign currency debt and offshore financing. C. accounting for foreign currency.
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54.Which of the following statements is not correct?   A. A group comprises a parent and all of its subsidiaries. B. Consolidated financial statements are financial statements of a group of entities presented as if that group was acting as a single economic entity. C. A subsidiary is an entity that is controlled by another entity. D. A parent.
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59.Discuss the reasoning behind the elimination all dividends receivable/payable between entities within the group during the consolidation process. 60.Explain why gains recognised on sale of assets between entities within a group are reversed on consolidation. .
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1.AASB 10 Consolidated and Separate Financial Statements prescribes that non-controlling interests be presented in the consolidated statement of financial position as a liability. 2.Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit.
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24.One important aim of releasing AAS 24 in 1991 and amendments made to The Corporations Law in the same year was to:   A. require parent entities to consolidate companies that they controlled into one set of financial statements for the first time. B. change the treatment of non-controlling interests to be reflected in the.
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46.Summarise the calculations for recognising non-controlling interests, where both direct and indirect interests exist, in relation to: (a) pre-acquisition share capital and reserves; (b) post-acquisition profits; and (c) post-acquisition movements in reserves. 47.A acquires a controlling interest of less than 100% ownership in B, who in turn acquires a controlling interest.
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11.In selecting the appropriate foreign currency exchange rates to apply in translating foreign currency transactions, the accountant exercises an important element of judgment about whether the rates are overvaluing or undervaluing the reporting currency. 12.If the foreign currency exchange rate between Australia and the US was A$1.00 = US$0.55 on.
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1.Monetary items are units of currency held and assets and liabilities to be received or paid in a fixed or determinable number of units of currency. 2.Inventory is an example of a monetary item. 3.Management may exercise its judgment to determine the functional currency that most faithfully represents the economic.
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41.In determining the existence of 'significant influence', and considering voting power, consideration must be given to:    A. the voting power directly related to the voting rights attaching to the equity interests. B. the distribution of the balance of the voting power. C. excluding voting power that applies only in contingent circumstances. D. the voting.
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25.Which of the following is not one of the stages used to determine non-controlling interest?   A. the non-controlling interest in the current period's profit or loss B. the non-controlling interest in share capital at the date of acquisition of the subsidiary by the parent entity C. the non-controlling interest in the goodwill at acquisition D. the non-controlling interest.
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1.Under the single-date method, the aggregate costs of the investments would be eliminated against the parent's share of capital and reserves at the date control of the subsidiary has been ultimately established and only one amount of goodwill (or bargain gain on purchase) is calculated.  2.AASB 10 Consolidated Financial Statements.
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11.A subsidiary is an entity that is controlled by a parent entity. 12.The consolidation concept adopted in AASB 10 is to include all the assets and liabilities of the parent entity and subsidiaries in the consolidation and to treat non-controlling interests as part of the equity of the group. 13.Non-controlling.
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1.AASB 10 Consolidated Financial Statements prescribes that intragroup balances, transactions, income and expenses be eliminated in full on consolidation. This requirement is consistent with the parent entity concept of consolidation.  2.AASB 10 Consolidated Financial Statements prescribes that intragroup balances, transactions, income and expenses be eliminated in full on consolidation even.
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77.Discuss, and provide an example of the 'partition' effect that existed under the previous Corporations Law, prior to 1991. 78.Briefly outline the three main concepts of consolidation and how they differ. Identify the concept used in Australia and the implications this has for the consolidation accounting process. .
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46.Discuss the accounting treatment for the current year's profit and loss earned by the subsidiary from the start of the financial period to the date the parent loses control of this subsidiary. 47.Explain how goodwill is determined in the case of a parent entity obtaining control over successive acquisitions of another.
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39.Which of the following statements describes the reasons why tax adjustments may be required when eliminating the unrealised profit from intragroup sales of inventory?    A. Tax is paid on a group perspective and therefore one taxable income figure must be derived for the group. B. Tax will be adjusted at the request.
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