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Question 1 of 17
1. Question
1. On the acquisition of a subsidiary, purchased goodwill should:
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Question 2 of 17
2. Question
6. IFRS 10 Consolidated Financial Statements sets out how to determine whether one entity has control over another entity.
Which one of the following statements is in accordance with the IFRS 10 requirements and guidance for control to exist over another entity?
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Question 3 of 17
3. Question
7. Which one ofthe following statements is consistent with the principle of control as defined by FRS 10 Consolidated FinancialStatements?
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Question 4 of 17
4. Question
8. Select the correct statement with regards to intragroup balances and transactions during consolidation:
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Question 5 of 17
5. Question
9. According to IFRS 10, the basis for consolidation is …
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Question 6 of 17
6. Question
10. According to IFRS 10, which types of entities are defined as exceptions when consolidating particular subsidiaries?
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Question 7 of 17
7. Question
11. Investor that holds only protective rights can have power over an investee in exceptional circumstances.
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Question 8 of 17
8. Question
12. During an accounting period, a parent company sells goods to one of its subsidiaries for £10,000. These goods cost the parent company £6,000. At the end of the accounting period, three-quarters of the goods have been sold by the subsidiary to customers outside the group but the remaining one-quarter of the goods are still held in inventories. The adjustments required when preparing the group statement of comprehensive income are:
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Question 9 of 17
9. Question
13. During an accounting period, a parent company sells goods to one of its subsidiaries for £200,000. This represents cost plus 25%. At the end of the accounting period, one-fifth of these goods are still held in the subsidiary’s inventories.
The cost of sales figures reported in the parent’s and the subsidiary’s financial statements are £890,000 and £530,000 respectively.
The parent company has a 60% interest in the subsidiary’s ordinary shares. The cost of sales figure that should appear in the consolidated statement of comprehensive income for the year is:CorrectIncorrect -
Question 10 of 17
10. Question
14. A parent company owns 73% of a subsidiary’s ordinary shares. The non-controlling interest in the group statement of financial position is measured at the appropriate proportion of the subsidiary’s identifiable net assets.
An impairment loss in relation to goodwill arising on consolidation should be accounted for in the group statement of comprehensive income as follows:CorrectIncorrect -
Question 11 of 17
11. Question
15. The amount of profit attributable to the non-controlling interest in a 90% subsidiary is generally equal to:
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Question 12 of 17
12. Question
16. When preparing a set of group financial statements, the correct treatment of dividends paid by a subsidiary company to its non-controlling shareholders is to:
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Question 13 of 17
13. Question
17. In an accounting period, a parent company has sales of £867,000 and its 80% subsidiary has sales of £121,000. The group sales figure for the period is £963,800. True or False?
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Question 14 of 17
14. Question
18. In an accounting period, a parent company has pre-tax profits of £5m. Its 75% subsidiary has pre-tax profits of £2m. The tax expense for both companies is equal to 30% of profit before tax. The profit attributable to the non-controlling interest is:
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Question 15 of 17
15. Question
19. If a subsidiary company is acquired part of the way through an accounting period, the group’s share of the subsidiary’s pre-acquisition profit is included in the statement of comprehensive income for the period. True or False?
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Question 16 of 17
16. Question
20. Which of the following is an example of an intra-group item which is cancelled out when preparing the group statement of comprehensive income?
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Question 17 of 17
17. Question
21. A parent company and its subsidiaries form a single entity for legal purposes. True or False?
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