Advanced Accounting Theory
Exam Bank
Course Introduction
Advanced Accounting Theory explores the conceptual frameworks, principles, and current debates that underpin modern accounting practices. The course examines the development and application of accounting theories, the role of accounting in society, and the regulation of financial reporting. Students analyze the impact of accounting choices on stakeholders, review empirical and normative research, and critically assess the ethical dimensions of accounting practices. Emphasis is placed on understanding contemporary issues such as fair value measurement, accounting for financial instruments, sustainability reporting, and the influence of global accounting standards. This course prepares students for advanced professional roles and research in the accounting field.
Recommended Textbook
Accounting for Corporate Combinations and Associations 7th Australian Edition by Neal Arthur
Available Study Resources on Quizplus 11 Chapters
368 Verified Questions
368 Flashcards
Source URL: https://quizplus.com/study-set/3411 Page 2
Chapter 1: Text Objectives and Introduction to Consolidation
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/67731
Sample Questions
Q1) Investments in associates(other than those classified as held for sale)will be measured at cost in the consolidated financial statements.
A)True
B)False
Answer: False
Q2) In the separate financial statements of a parent entity investments not classified as held for sale are accounted for:
A) at cost
B) at fair value
C) at either cost or fair value
D) not recorded
Answer: C
Q3) Equity investments falling within the scope of AASB 139 Financial Instruments can be measured at fair value.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Principles of Consolidation
Available Study Resources on Quizplus for this Chatper
42 Verified Questions
42 Flashcards
Source URL: https://quizplus.com/quiz/67732
Sample Questions
Q1) There is no limit to the amount of impairment loss write down of the assets of a cash generating unit (CGU)
A)True
B)False
Answer: False
Q2) A gain on bargain purchase will be recognised in the financial statements of the acquiring company in a business combination relating to the acquisition of a controlling interest in a company.
A)True
B)False Answer: False
Q3) Changes in fair value of contingent consideration in a business combination will affect the calculation of goodwill/gain on bargain purchase
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Fair Value Adjustments and Tax Effects
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/67733
Sample Questions
Q1) Where the value of an investment in a subsidiary increases,a deferred tax liability is generally not required to be recognised when:
A) it is unlikely that profits of the subsidiary will be distributed as dividends
B) it is unlikely that the subsidiary investment will be sold
C) both A and B
D) none of the above
Answer: C
Q2) Accounting standard AASB3 Business Combinations does not apply to:
A) joint ventures
B) acquisition of assets not constituting a business
C) business combinations involving entities under common control
D) all the above
Answer: D
Q3) All assets acquired in a business combination must be recognised at fair value
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Intra-Group Transactions
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/67734
Sample Questions
Q1) P Ltd provides management services to its subsidiary company S Ltd for $100,000 per year.At the end of the current year S Ltd owes $20,000 of this fee.The entry required on consolidation is:
A) DR Management Fee Revenue $100,000 CR Management Fee Expense $100,000
B) DR Management Fee Revenue $100,000 CR Management Fee Expense $100,000
DR Accrued Fees Payable $20,000
CR Accrued Fees Receivable $20,000
C) DR Management Fees Revenue $80,000 CR Management Fees Expense $80,000
D) None of the above
Q2) Where a parent entity sells inventories to a subsidiary this is called an 'upstream' sale
A)True
B)False
Q3) A consolidation adjustment will have a tax effect if:
A) it adjusts the carrying amount of an asset
B) it adjusts the carrying amount of a liability
C) it recognises assets and liabilities not recorded in accounting records of group companies
D) all of the above
Q4) Explain why cash will never be adjusted in consolidation journal entries
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Non-Controlling Interest
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/67735
Sample Questions
Q1) In preparing a consolidated financial report,the parent entity consolidates:
A) The financial statements of all entities over which it has the power to exercise control.
B) The financial statements of only those entities over which it has the power to control and in which it holds more than 50% of the voting shares.
C) The financial statements of only those entities in which it holds more than 50% of the ordinary share capital; as a result of which it necessarily has the power to exercise control.
D) None of the above.
Q2) The parent interest (PI)in equity will be calculated as follows:
A) consolidated equity less non controlling interest
B) parent equity plus PI share of subsidiary equity
C) parent equity plus non controlling interest
D) none of the above
Q3) The shareholders of the parent entity in a group are entitled to:
A) total profits of all group members
B) parent entity interest in consolidated group profit
C) non controlling interest in consolidated group profit
D) none of the above
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Partly-Owned Subsidiaries: Indirect
Non-Controlling Interest
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/67736
Sample Questions
Q1) Circular shareholdings are allowed under the Corporations Act
A)True
B)False
Q2) When a parent does not have an ownership interest in a subsidiary the NCI is 100%
A)True
B)False
Q3) Why does the multiple consolidation method adopt a revaluation approach to the net assets of subsubsidiaries?
Q4) A subsubsidiary provides the following information: The subsubsidiary is owned 60% by its parent which is owned 80% by the ultimate parent Retained profits at the date of acquisition $400 Profit for the year first $200
The total indirect NCI is:
A) $72
B) $48
C) $24
D) none of the above
Q5) Discuss the disadvantages of the sequential consolidation method.
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Consolidated Cash Flow Statements
Available Study Resources on Quizplus for this Chatper
25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/67737
Sample Questions
Q1) Discuss the treatment of subsidiaries acquired and disposed of in the consolidated statement of cash flows.
Q2) Cash payments to buy back shares will be classified as:
A) cash flow from operating activities
B) cash flow from investing activities
C) cash flow from financing activities
D) none of the above
Q3) The issue of shares to purchase non current assets will be disclosed:
A) as a financing activity
B) as an investment activity
C) as both a financing and investment activity
D) in the note disclosure to the statement of cash flows
Q4) The following items must be separately disclosed in a statement of cash flows:
A) interest paid and received
B) dividends paid and received
C) Both A and B
D) No separate disclosure required
Q5) Discuss why Australia moved from a requirement to prepare a statement of sources and application of funds to a statement of cash flows.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Accounting for Joint Arrangements
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/67738
Sample Questions
Q1) On November 1 20X6,a parent entity Helios Ltd acquired 25% (500,000 shares)of the share capital of Havers Ltd and the power to significantly influence the operating and financial policies of that company for $4,000,000 cash.In the period from the date of acquisition to June 30 20X7,Havers Ltd earned a profit for the period of $500,000 (after tax of $200,000)and declared a dividend of $100,000.At June 30 20X7,Helios Ltd recognised its equity in the dividend.At June 30 20X7,the quoted market value of the shares in Havers was $10 per share.At June 30 20X7,in the separate balance sheet of Helios Ltd and in the consolidated balance sheet of the group controlled by Helios Ltd,the investment in Havers Ltd would be reported as:
A) $4,000,000 and $4,100,000 respectively.
B) $5,000,000 and $4,100,000 respectively.
C) $5,000,000 and $5,100,000 respectively.
D) None of the above.
Q2) The equity carrying amount of an investment will always be equal to the investor's proportional share of the net assets of the investee.
A)True
B)False
Q3) Discuss whether equity accounting profits are 'realised' from the viewpoint of the investor
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Accounting for Associates and Joint Ventures: the Equity Method
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/67739
Sample Questions
Q1) A 40% venturer in a jointly controlled operation sells an asset to the joint venture.The asset has a fair value of $5,000,000.The carrying amount in the books of the venture was $4,000,000.The profit to be recognised by the venturer is:
A) $5,000.000
B) $4,000,000
C) $1,000,000
D) $600,000
Q2) The one line method of reporting jointly controlled operations and jointly controlled assets:
A) discloses joint venture liabilities
B) offsets joint venture liabilities against assets
C) does not recognise liabilities
D) none of the above
Q3) Accounting Standard AASB131 Interests in Joint Ventures does not apply to investments in joint ventures:
A) by venture capital organisations
B) by unit trusts
C) which are held for sale
D) all of the above
11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Translation and Consolidation of Foreign Currency Financial Statements
Available Study Resources on Quizplus for this Chatper
31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/67740
Sample Questions
Q1) At June 30 20X7 Johnson Ltd recognised its equity in the dividends declared by Plantations Berhad in its income statement.When the dividend was subsequently received from Plantations Berhad,the exchange rate was AUD 1 = R 1.78.The exchange gain or loss recognised by Johnson Ltd on receiving that dividend was (rounded to the nearest dollar)
A) A gain of $6,242
B) A loss of $3,121
C) A gain of $3,121
D) None of the above.
Q2) The transactions of a foreign company must be recorded in:
A) its functional currency
B) its presentation currency
C) either functional or presentation currency
D) none of the above
Q3) The translation gain or loss on a foreign operation using the current rate method represents the effect of exchange rate movements on net assets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Segment Reporting by Diversified Entities
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/67741
Sample Questions
Q1) On revenue criteria only,the reportable business segments are:
A) Piebalds, Pintos and Crillos.
B) Piebalds, Skewbalds, Pintos and Crillos.
C) Piebalds, Skewbalds, Pintos, Crillos and Others.
D) None of the above.
Q2) As part of the consolidation process,any unrealised profits arising from intra-group merchandising transactions are eliminated.If the intra-group transactions are inter-segment transactions,the effect of this elimination on the segment data reported by subsidiaries will be to:
A) Reduce the relevant segment result reported by the subsidiary.
B) Have no effect on the segment result reported by the subsidiary.
C) Reduce both the segment result reported by the subsidiary and reduce the consolidated profit of the group.
D) None of the above.
Q3) The definition of operating segments requires recognition of components of the entity that:
A) are cost centres
B) are production units
C) have similar gross margins
D) none of the above
To view all questions and flashcards with answers, click on the resource link above. Page 13