1.When is a parent required to prepare CFS?
A If the parent itself is a wholly owned subsidiary and its parent produces CFS that comply with IFRS
B If its other owners have been informed and do not object.
C Only if (IFRS 5) the non-current assets are held for sale or discontinued operations
D if the current assets are immaterial
2 Green Co owns the following investments in other companies:
Equity shares Non-equity shares held
Violet Co 30% Nil
Amber Co 90% 10%
Black Co 45% 60%
Which of the following investments are accounted for as subsidiaries in the consolidated accounts of Green Co Group?
A Violet only
BAmber only
CViolet and Black
DAll of them
3 Which is NOT Date of acquisition
A P obtains control of S
B P pays for shares and controls assets and assumes responsibility for liabilities
C Written agreement
D P started business and financial policies. P accounts for a minority of BOD
4 which definaition is true about control
AControl is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
B Control is the power to manage the entity's management and operating policies in order to benefit from its activities
C Control is the power to manage the entity's financial and operating policies in order to profit from its activities.
D None of the above
5 what behaviour is true about control.
A to govern the financial and operating policies
B to appoint or remove the majority of the members of the board of directors
C to cast the majority of the votesat meetings of the board of directors.
D all of the above
6 Which of the following does not form control between the parent company and the subsidiary？
A to govern the financial and operating policies
B appoint or remove the majority of the members of the board of directors
C cast the majority of the votes at meetings of the board of directors
D less than 50% of the voting rights by virtue of agreement with other investors
7 When is a parent not required to prepare CFS?
A If the parent itself is a wholly owned subsidiary and its parent produces CFS that comply with IFRS
B If its other owners have been informed and do not object
C Only if the non-current assets are held for sale or discontinued operations
D if the non current assets are material
8Which of the following creates NCI equals zero?
A Parent controls 75% of Subsidiary Voting shares
B Parent controls 25% of Subsidiary Voting shares
C Parent controls 100% of Subsidiary Voting shares
D Parent controls 0% of Subsidiary Voting shares
9 Which of the following is false?
A A group of companies includes at a minimum, a parent and its subsidiary
B S is an entity that is controlled by P
C P owns little ordinary shares in S
D P’s investment in S is not a group asset, it is cancelled out when goodwill arises on consolidation.
10Which of the following is false ?
A Positive goodwill is a premium and is recorded as an intangible asset
B The share capital of the group is that of the P only, ever and always
C Group retained earnings are P’s plus P’s % of S’s post-acquisition profits
D Negative goodwill is a premium and recorded for as a group profit
11In which of the following does the parent control subsidiary?
a)Holding more than 50% of the voting rights.
b)Holding less than 60% of the voting rights, but the remainder are widely distributed.
c)Holding more than 60% of the voting rights.
d)Holding less than 50% of the voting rights.
12How many key workings to consider the situation of a parent and subsidiary?
a)7
b)6
c)5
d)4
13Which of the following is false regarding goodwill?
a)Positive goodwill reflects reputation of the business.
b)If goodwill is positive, the future profits will be good.
c)If goodwill is positive, the workforce will be skilled.
d)Negative goodwill reflects good future prospects.
14In group accounting, what share capital do you use?
a)Parent
b)Subsidiary
c)Both a) and b)
d)None
15Which of the following is false about the reasons for group accounts?
a)Toprevent preparing misleading accounts.
b)To provide a more meaningful EPS ratio.
c)To ensure comparability of FS.
d)To improve the company's earnings.
16group accounting is acquire to see
A only the subsidiary compnany’s financing statement
B only the parent company’s financing statement
C overall results of a group
D eirher parent or subsidiary
17According to IAS 27, consolidated financial statements means
Athe financial statements of a group presented as those of a single economic entity
B the financial statements of a single economic entity
C the financial statements of a parent economic entity
Dthe financial statements of a susidiary economic entity
18 when consolidating financial statements, one should include
A Consolidated Income Statement
B Consolidated balance sheet
C Consolidated statement of changes in owners' equity
D all of them
19 Curry Co owns the following investment in other companies
Equity shares Non-equity shares held
Durant Co 85% Nil
Green Co 25% 80%
Amber Co 45% 25%
Curry Co also has appointed five of the seven directors of Amber Co.
Which of the following investments are accounted for as subsidiaries in the consolidated accounts of Curry Co Group?
A Durant only
BAmber only
CDurant and Amber
DAll of them
20The reason why we prepare a group account
A prevent preparing misleading accounts
B provide a more meaningful EPS ratio
C To prevent to produce desired accounting results
D all of them
21The following descriptions of parent and subsidiary companies are true
- the financial statements of a group presented as those of a single economic entity.
B. A group is made up of a parent and its subsidiary.
C. We will focus on enterprises, e.g. companies
D. All of these are
22The definition for ‘Control = Power’ is all of the following except
A. more than 45% of the voting rights by virtue of agreement with other investors
B. holds <50% of the voting rights, but the remainder are widely distributed
C. to govern the financial and operating policies
D. to govern the financial and operating policies
23 Red Co owns the following investments in other companies:
Equity shares Non-equity shares held
MOB Co 80% Nil
Amber Co 25% 80%
Black Co 45% 25%
Red Co also has appointed five of the seven directors of Black Co.
Which of the following investments are accounted for as subsidiaries in the consolidated accounts of Red Co Group?
- MOB only
B. Amber only
C. MOB and Black
D. All of them
24The following order is true
A. Goodwill, Non-controlling interest, Group retained earnings, The Group structure, Net assets of subsidiary at date of acquisitionThe Group structure, Net assets of subsidiary at date of acquisition
B. Non-controlling interest, Group retained earnings, Goodwill, The Group structure, Net assets of subsidiary at date of acquisition
C. Group retained earnings, Goodwill, The Group structure, Net assets of subsidiary at date of acquisition, Non-controlling interest
D. The Group structure, Net assets of subsidiary at date of acquisition, The Group structure, Net assets of subsidiary at date of acquisition
25.The following option is false
A. A group of companies includes at a minimum, a parent (P) and its subsidiary (S).
B. S is an entity that is controlled by P.
C. P owns a majority of the ordinary shares in S. When P acquires control of another entity, it is done by acquiring shares rather than individual assets and liabilities.
D. S’s investment in P is not a group asset, it is cancelled out when goodwill arises on consolidation.
26Which one is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities?
- Agreement B.Control C.Policy D.Vote
27What percentage need to exceed of the voting rights by virtue of agreement with other investors that Parent can control Subsidiary?
A.20% B.100% c.80% D.50%
28.When is a parent not required to prepare CFS?
A.To govern the financial and operating policies
B.To appoint or remove the majority of the members of the board of directors
C.If the parent itself is a wholly owned subsidiary and its parent produces CFS that comply with IFRS
D.To cast the majority of the votes at meetings of the board of directors.
29.Blue Co owns the following investments in other companies:
Equity shares Non-equity shares held
Light Co 80% Nil
Shine Co 20% 90%
Queen Co 49% 25%
Blue Co also has appointed five of the seven directors of Shine Co.
Which of the following investments are accounted for as subsidiaries in the consolidated accounts of Blue Co Group?
A Shine only
B Light only
C Light and Queen
D Light and Shine
30There are five workings when considering the situation of a Parent and its Subsidiary we must determine .Which is the third one?
- Net assets of subsidiary at date of acquisition
- Goodwill
- Group retained earnings
- The Group structure
31. A group is made up of
A)Parent
B)Some subsidiaries
C)A parent and its subsidiary
D)None of the above
32In which situation a parent can control the subsidiarity
A)Have more than 50% of the voting rights
B)hold 40% of the voting rights, but has appointed five of the seven directors
C)to govern the financial and operating policies
D)to appoint or remove the majority of the members of the board of directors
33Which situation is right after the date of acquisition
A)Parent obtains power to govern the financial
B)Subsidiaries still assume responsibility for liabilities
C)Subsidiaries do not has its finance statement
D)All of the above
34Post-acquisition profits is used in calculating
A)W2
B)W3
C)W4
E)None of the above
35Which of the following statements about goodwill is incorrect?
A)Goodwill per W3 is included as Intangible asset
B)Negative goodwill is a bargain and recorded for as a group profit.
C)When recognized impairment loss can be reversed
D)Negative goodwill reflects poor future prospects
36、In the process of acquiring companies, what is the goodwill?
A.If P’s investment S’s net assets, then the difference is purchase of Goodwill.
B.If P’s investment S’s net assets, then the difference is purchase of Goodwill.
C. The P's investment add the NIC.
D. None of above.
37、Which is right about the goodwill?
A. Positive goodwill is a premium and is recorded as an intangible asset and subject to an annual impairment review
B. Positive goodwill is a bargain and recorded for as a group profit.
C. It reflects reputation of the business
D. A and C.
38、After acquiring, the retained earning should be filled in(if it has the NCI)?
A. The P's retained earning.
B. The S's retained earning.
C.The P's retained earning add the S's retained earning.
D.The P's retained earning add the NCI.
39、Which one is true?
A. A group of companies includes at a minimum, a parent (P) and its subsidiary (S).
B.S is an entity that is controlled by P.
C.P owns a majority of the ordinary shares in S.
D.All of above.
40、What is the reasonfor group accouts?
A.Prevent preparing misleading accounts (true and fair reporting)
B.Provide a more meaningful EPS ratio
C.ensure comparability of FS and remove temptation to structure combinations to produce desired accounting results
D.All of above.
41How to calculate Net assets of a Subsidiary?
- Non-current assets＋Current assets
- Ordinary shares＋Retained earnings
- Equity＋Ordinary shares
- Retained earnings＋Equity
42Which of the following should be cancelled when combining financial statement?
- Tangible assets
- Retained earnings
- Investment in subsidiary
- Ordinary shares
43Which of the following is true about Positive goodwill and Negative goodwill?
- About Positive goodwill , When recognized impairment loss can be reversed
- Negative goodwill in some cases can treated as a profit immediately and don't include in group retained earnings
- Positive goodwill must be subject to annual impairment tests (IAS 36)
- Negative goodwill reflects good future prospects
44 Which of the following words is false?
- S is an entity that is controlled by P.
- The share capital of the group is that of the P only, ever and always.
- When P controls 100% of voting shares, fair value of the P’s investment is compared to fair value of S’s net assets at the date of acquisition
- P’s investment in S is a group asset, it is cancelled out when goodwill arises on consolidation.
45Which of the following is true about retained earnings？
- Group retained earnings is P’s plus S’s post-acquisition profits.
- The accumulation of the internal accumulation of an enterprise from the profits achieved through the years.
- The retained earnings of the subsidiary are also the retained earnings of the group company.
- Retained earnings originate from the net profit achieved by the enterprise's investment activities
46Which of the following relationships can be regarded as control
- Rose company holds 30% of the voting rights of Bird
- Rose has 80% of the voting rights of Bird by virtue of agreement with other investors
- Rose holds 25% of the voting rights of Bird,but appoints the majority of the members of the directors
- Both B and C
47The group statement of financial position include
- Combining retained earnings included P and S’s share capital
- Goodwill and P’s investment in S
- Only P’s assets and liabilities
- Retained earnings per W5 and the Non-controlling interest per W4
48Which of the following is TRUE about goodwill
- Positive goodwill is a premium and is recorded as a group profit.
- Negative goodwill is a bargain and recorded as an intangible asset.
- Positive goodwill is subject to an annual impairment review.
- All of above.
49WHICH IS FALSE
- P’s investment in S is nota group asset
- P’s investment is cancelled out when goodwill arises on consolidation.
- When P acquires control of another entity, it is done by acquiring individual assets and liabilities.
- The share capital of the group is that of the P only.
50If Rose company acquired 300 m of Bird’s shares,and the value of Bird’s ordinary shares($0.5) is $200m,how much is the control percentage?
- 70%
- 55%
- 80%
- 75%