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Question 1
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True/False

IFRS 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.

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False

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Question 2
Free
True/False

IFRS 10 Consolidated Financial Statements prescribes that intragroup balances,transactions,income and expenses be eliminated in full on consolidation even where the parent entity holds only a fraction of the issued equity.

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Question 3
Free
True/False

If a subsidiary makes a dividend payment out of pre-acquisition earnings,the parent entity should consider whether its investment in the subsidiary is impaired.

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Question 4
Free
True/False

Intragroup profits are eliminated in consolidation to reduce consolidated profits.

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Question 5
Free
True/False

Intragroup profits are eliminated in consolidation to exclude intragroup transactions in the parent entity's financial statements.

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False

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Question 6
True/False

Parent Plc sells inventories to Child Plc amounting to €200 000 during the financial year.The inventories are no longer in the hands of Child Plc at year-end.Parent Plc is no longer required to eliminate these intragroup transactions because these transactions have been realised by sale to external parties.

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True
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Question 7
True/False

Transactions between entities that form an economic group should be eliminated in proportion to the level of control between the parent entity and the subsidiary entity.

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True
False
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Question 8
True/False

The level of equity ownership is not a factor in deciding what proportion of a transaction between entities in a group should be eliminated.

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True
False
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Question 9
True/False

Dividends may be identified as being paid out of pre-acquisition or post-acquisition profits by a subsidiary company.Where dividends are paid out of post-acquisition profits the investment in the subsidiary should be decreased by the amount of the dividend.

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True
False
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Question 10
True/False

The value of inventory on hand for the economic group at the end of the period will always equal the sum of the inventory on hand at the end of the period for each of the entities in the group.

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True
False
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Question 11
True/False

In the absence of an election to be a 'tax consolidated group',the taxation authorities typically assess income earned by individual legal entities in an economic group and does not take into consideration consolidation adjustments required for group accounts.

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True
False
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Question 12
True/False

If we simply aggregate the sales of the parent and subsidiary companies,without adjustment,when there have been intragroup sales,total income would be overstated.

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True
False
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Question 13
True/False

The fact that consolidation worksheets start 'afresh' each year means that the tax entry for eliminating unrealised profit in opening inventory requires a 'Dr' to deferred tax assets,rather than income tax expense.

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True
False
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Question 14
Multiple Choice

Examples of intragroup transactions include:

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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.
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Question 15
Multiple Choice

Intragroup transactions that are to be eliminated in the consolidated accounts include:

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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 given answers.
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Question 16
Multiple Choice

Little Company declared a dividend of €90 000 for the period ended 30 June 2014.Big Company owns 100% of the equity of Little Company.Big Company accrues dividends when they are declared by its subsidiaries.What elimination entry would be required to prepare the consolidated financial statements for the group for the period ended 30 June 2014?

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A
image
B
image
C
image
D
image
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Question 17
Multiple Choice

Monster Co Plc owns 100% of the issued shares of Mini Co Plc.Mini Co Ltd declared a dividend of €100 000 for the period ended 30 June 2014.Monster Co Plc accrues dividends when they are declared by its subsidiaries.What elimination entry would be required to prepare the consolidated financial statements for the group for the period ended 30 June 2015?

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A
image
B
image
C
image
D
image
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Question 18
Multiple Choice

Stormy Ltd has purchased all the issued capital of Cloud Ltd at the beginning of the current period.At the end of the period Cloud Ltd declares a dividend of €50 000 that is identified as being paid out of pre-acquisition profits.What entries would Stormy Ltd and Cloud Ltd make in their own books? (Assume Stormy Ltd accrues the dividends of subsidiaries when they are declared.)

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A
image
B
image
C
image
D
image
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Question 19
Multiple Choice

Forest Ltd purchased all the issued capital of Shrub Ltd on 1 July 2013 for cash consideration of $1 million.The fair value of Shrub Ltd's net assets at that date was $1 million made up of: image During the period ended 30 June 2014,Shrub Ltd declare a dividend of $100 000 out of pre-acquisition earnings.What consolidation journal entries would be required to prepare group accounts for the period?

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A
image
B
image
C
image
D
image
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Question 20
Multiple Choice

Radio Ltd acquired all the issued capital of Wave Ltd on 1 July 2014 for cash consideration of $2 million.The fair value of the net assets of Wave Ltd at that date was $1.8 million as follows: image During the period ending 30 June 2015,Wave Ltd declare a dividend of $300 000 that is identified as being paid out of pre-acquisition profits.Goodwill had been determined to have impaired by $20 000 during the period.What consolidation journal entries would be required to prepare group accounts for the period ended 30 June 2015?

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A
image
B
image
C
image
D
image
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