Auditing and Assurance Services
Study Guide Questions
Course Introduction
Auditing and Assurance Services introduces students to the principles, procedures, and practices of auditing in the context of the external and internal assurance environment. This course covers the framework and legal environment of auditing, focusing on the audit process, risk assessment, evidence gathering, and issues of ethics and professional responsibility. Students will learn about the key standards and regulations governing assurance services, methodologies for evaluating internal controls, and the latest developments in audit technology. The course also explores different types of audits, including financial, operational, and compliance audits, giving students the analytical skills necessary to assess compliance, identify risks, and improve organizational governance.
Recommended Textbook
Understanding Australian Accounting Standards 1st Edition by Janice Loftus
Available Study Resources on Quizplus
29 Chapters
798 Verified Questions
798 Flashcards
Source URL: https://quizplus.com/study-set/3535
Page 2
Chapter 1: Accounting Regulation and the Conceptual Framework
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/70225
Sample Questions
Q1) Which of the followings are the three essential criteria in the definition of an asset? \(\begin{array}{ll}
\text { I. Future economic benefits}&\text {IV.Present obligation }\\ \text {II.Future sacrifices of economic benefits. }&\text {V. Control. }\\ \text {III.Past event }&\text{VI.Ownership} \\ \end{array}\)
A) I, III, IV.
B) II, III, V.
C) I, IV, VI.
D) I, III, V.
Answer: D
Q2) An independent body established in 2006 to resolve disputes between ASIC and companies is:
A) APRA
B) FRP
C) FRC
D) ASX
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Application of Accounting Theory
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70224
Sample Questions
Q1) When market is in the semi-strong form of market efficiency:
A) investors would be able to earn abnormal returns by using publicly available information.
B) a security's price at a particular time fully reflects the information contained in its sequence of past prices.
C) investors would be able to earn abnormal returns by trading on private information.
D) a security's price at a particular time fully reflects both publicly and not publicly available information.
Answer: C
Q2) Which form of market efficiency is the most relevant to financial reporting?
A) The weak form of market efficiency.
B) The semi-strong form of market efficiency.
C) The strong form of market efficiency.
D) None of the options is correct.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Shareholders Equity: Share Capital and Reserves
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/70223
Sample Questions
Q1) Which of the following journal entries demonstrates the appropriate accounting treatment for share issue costs?
A) Dr Deferred asset: Cr Cash;
B) Dr Cash: Cr Deferred asset;
C) Dr Share capital: Cr: Cash;
D) Dr Cash: Cr Share capital.
Answer: C
Q2) Which of the following statements is incorrect?
A) Each share in a company carries a right to share in the assets on the liquidation of the company
B) Each share in a company carries a right to share proportionately in all new share issues of a company
C) A share represents an ownership right in a company
D) Each share in a company carries a right to vote for directors of the company
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Fair Value Measurement
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/70222
Sample Questions
Q1) Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date are an example of:
A) a Level 2 input
B) a Level 1 input
C) a Level 3 input
D) a Level 4 input
Q2) The fair value of an equity instrument is based on determining a/an _________ price which may relate to the price paid for an entity to repurchase its shares.
A) transfer
B) settlement
C) entry
D) exit.
Q3) The market with the greatest volume and level of activity for the asset or liability is defined as the:
A) active market
B) principal market
C) liquid market
D) most advantageous market
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: Revenue
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70221
Sample Questions
Q1) In terms of revenue related disclosures on the face of the statement of profit or loss and other comprehensive income:
A) AASB 101 Presentation of Financial Statements requires revenue by category to be disclosed on the face of the statement of profit or loss and other comprehensive income.
B) AASB 118 Revenue requires revenue by category to be disclosed on the face of the statement of profit or loss and other comprehensive income.
C) AASB 101 Presentation of Financial Statements requires total revenue to be disclosed on the face of the statement of profit or loss and other comprehensive income.
D) AASB 118 Revenue requires total revenue to be disclosed on the face of the statement of profit or loss and other comprehensive income.
Q2) Which of the following events took place in December 2008?
A) The IASB issued an Exposure Draft proposing amendments to AASB 118.
B) The FASB formally adopted AASB 118.
C) The IASB and FASB jointly issued a Discussion Paper on revenue recognition.
D) The IASB issued an amended AASB 118.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Provisions, Contingent Liabilities and Contingent Assets
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70220
Sample Questions
Q1) Which of the following statements is correct?
A) a provision is a class of liabilities
B) a contingent liability is a class of liabilities
C) a provision is a class of contingent liabilities
D) contingent liabilities and provisions are classes of liabilities
Q2) McCann Limited announced its plans for a major restructuring of its operations. Under AASB 137 Provisions, Contingent Liabilities and Contingent Assets, the entity is able to:
A) capitalise all direct and indirect restructuring costs;
B) set up a provision for the best estimate of all restructuring costs;
C) provide only for restructuring costs that are directly and necessarily caused by the restructuring;
D) provide for restructuring costs that are associated with the ongoing activities of the entity.
Q3) Which of the following is not within the scope of AASB 137?
A) The treatment of future operating losses
B) The treatment of contingent assets
C) The treatment of restructuring provisions arising from a business combination
D) The treatment of onerous contracts
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Income Taxes
Available Study Resources on Quizplus for this Chatper
22 Verified Questions
22 Flashcards
Source URL: https://quizplus.com/quiz/70219
Sample Questions
Q1) Differences between the carrying amounts of an entity's net assets determined under accounting standards and accrual accounting, and the tax bases of those net assets determined under the Income Tax Assessment Act, are described as:
A) temporary differences
B) permanent differences
C) tax losses
D) the current income tax liability.
Q2) To the extent that tax payable exists and has NOT yet been paid a company will recognise:
A) current tax asset
B) non-current asset
C) non-current liability
D) current tax liability.
Q3) The deferred tax asset is:
A) $1500
B) $4500
C) $5000
D) $25 500.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Financial Instruments
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/70218
Sample Questions
Q1) All of the following would be regarded as financial instruments except:
A) bank overdraft;
B) notes payable;
C) cash;
D) equipment.
Q2) Which of the following events provide objective evidence that a financial asset has been impaired:
I A default in interest payments.
II The borrower enters into bankruptcy.
III Significant financial difficulty of the issuer.
IV The downgrade of an entity's credit rating.
A) I, II and III only;
B) II, III and IV only;
C) I, III and IV only;
D) II and IV only.
Q3) Which of the following items is classified as a financial asset?
A) ordinary shares of the issuer;
B) loans payable (owed by the borrower);
C) accounts receivable;
D) inventory.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Share-Based Payments
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70217
Sample Questions
Q1) What is the fair value of the cash alternative?
A) $240 000
B) $250 000
C) $288 000
D) $300 000
Q2) What is the fair value of the equity alternative?
A) $240 000
B) $250 000
C) $288 000
D) $300 000
Q3) This is an example of:
A) an equity-settled share-based payment transaction
B) a cash-settled share-based payment transaction
C) a share-based payment transaction where the counterparty has the settlement choice
D) a share-based payment transaction where the entity has the settlement choice
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Translation of the Financial Statements of Foreign Entities
Available Study Resources on Quizplus for this Chatper
19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/70216
Sample Questions
Q1) According to AASB 121 The Effects of Changes in Foreign Exchange Rates, the currency in which an entity primarily generates and expends cash is considered to be the: A) economic currency; B) domestic currency; C) presentation currency; D) functional currency.
Q2) When translating the revenue and expenses in the statement of profit or loss and other comprehensive income, theoretically each item of revenue and expense should be translated using the spot exchange rate between the: A) functional currency and the foreign currency on the reporting date; B) presentation currency and the functional currency on the reporting date; C) functional currency and the foreign currency on the date the transaction occurred; D) presentation currency and the local currency on the transaction date.
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Employee Benefits
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70215
Sample Questions
Q1) The offer to pay termination benefits can no longer be withdrawn when the entity has communicated to affected employees a plan of termination that meets which of the following criteria?
A) actions required to complete the plan indicate that significant changes to the plan are unlikely
B) the plan identifies the location, function or job classification, the number of employees whose services are to be terminated, and the expected completion date
C) the plan establishes the termination benefits payable in sufficient detail to enable employees to determine the type and amount of benefits they will receive D) all of the above
Q2) Which of the following types of employee benefits are required to be measured at the present value of expected future cash flows?
A) annual leave
B) accumulating non-vesting sick leave
C) maternity leave
D) long service leave
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Inventories
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/70214
Sample Questions
Q1) Ming Limited had the following items of inventory at reporting date: \(\begin{array}{lccc}\text { Item } & \text { Quantity } & \text { Cost/unit \$ } & \text { NRV/unit } \\
& & \$ & \$ \\
\text { Refrigerators } & 10 & 100 & 95 \\
\text { Stoves } & 20 & 80 & 85 \end{array}\)
The adjustment necessary at reporting date is:
A) DR Inventory $ 50;
B) DR Inventory $100;
C) CR Inventory $ 50;
D) CR Inventory $0.
Q2) Under AASB 102 Inventories, items of inventory that are used by business enterprise as components in a self-constructed property asset are required to be:
A) aggregated into the 'cost of goods sold' expense in the period in which the items are used;
B) expensed directly into equity in the period in which the items are used;
C) capitalised and depreciated;
D) added to a 'property construction' provision account.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Property, Plant and Equipment
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/70213
Sample Questions
Q1) When a company recognises a depreciation credit resulting from a review of the estimated residual value of a depreciable asset, the depreciation debit should be recognised in accumulated depreciation and the depreciation credit should be recognised:
A) in the opening balance of retained earnings
B) in the depreciation expense
C) directly in the depreciable asset account
D) as a gain in the current period.
Q2) Property, plant and equipment are assets that:
A) are expected to be used up within the current financial period
B) are held for resale within the current period
C) are physical in nature
D) have a remaining productive life of less than one financial year.
Q3) Depreciation is a process that is designed to:
A) reduce the carrying amount of an asset to reflect the diminishing fair value of the asset;
B) spread the cost of an asset across a period no greater than 5 years;
C) reflect the change in value of an asset as a result of obsolescence;
D) allocate the cost of an asset across its useful life to an entity.
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Leases
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/70212
Sample Questions
Q1) On 30 June 2013, Mala Ltd leased a vehicle to Tango Ltd. Mala Ltd had purchased the vehicle on that day for its fair value of $89 721. The lease agreement cost Mala Ltd $1457 to have drawn up and requires Tango to reimburse Mala for annual insurance costs of $1050. The amount recorded as a lease receivable by Mala Ltd at the inception of the lease is:
A) $88 264
B) $89 721
C) $90 771
D) $91 178
Q2) The user of a leased asset is referred to as the:
A) vendor
B) purchaser
C) lessor
D) lessee
Q3) Which of the following is NOT an example of a risk of ownership of an asset?
A) idle capacity
B) gains on the eventual sale of the asset
C) uninsured damage
D) technical obsolescence
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Understanding Australian Accounting Standards
Available Study Resources on Quizplus for this Chatper
24 Verified Questions
24 Flashcards
Source URL: https://quizplus.com/quiz/70211
Sample Questions
Q1) For an asset to be classified as an identifiable intangible, AASB 138 Intangibles requires that it meet which of the following criteria?
I. It arises from a contractual or legal right.
II. Its fair value must be able to be reliably measured.
III. It is separable from the entity.
IV. Its cost must reliably measurable.
A) I or IV only
B) I or II only
C) II or III only
D) I or III only.
Q2) Under AASB 138 Intangibles, an intangible asset with an indefinite useful life is:
A) not able to be recognised by an entity as an asset
B) not subject to annual amortisation charges
C) amortised using the straight-line method over a period of no more than 20 years
D) amortised using the reducing balance method over a period not exceeding 5 years.
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: Impairment of Assets
Available Study Resources on Quizplus for this Chatper
23 Verified Questions
23 Flashcards
Source URL: https://quizplus.com/quiz/70210
Sample Questions
Q1) An impairment loss occurs when:
A) the recoverable amount of an asset exceeds the carrying amount
B) the carrying amount of an asset exceeds the recoverable amount
C) the asset has a zero residual value
D) the recoverable amount of an asset exceeds its initial cost.
Q2) Candy Limited expected future cash flows from the use of Equipment as follows: End of Year 1 $4000; End of Year 2 $5000; End of Year 3 $2000. The discount rate was determined as 5%. The value in use of the equipment is:
A) $10 073
B) $10 576
C) $11 000
D) $11 550.
Q3) The impairment test must be applied to tangible assets:
A) at each balance date
B) every three years
C) at each reporting date including interim reporting dates such as half-year
D) only if there is an indication that the asset may be impaired
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: Accounting for Mineral Resources
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70209
Sample Questions
Q1) Subsequent to initial recognition E&E assets are required to be measured:
A) under the cost model
B) under the revaluation model
C) either under the cost model or revaluation model
D) at the lower of the cost and fair value
Q2) Accounting policies for exploration and evaluation costs should be determined:
A) in accordance with AASB 6
B) in accordance with AASB 108
C) in accordance with AASB 106
D) in accordance with AASB 8
Q3) Which of the following is NOT within the scope of the IASB extractive activities project?
A) the definition of reserves and resources
B) whether to expense or capitalize costs recognised after recognition of reserves and resources as assets
C) measurement of reserves and resources on initial recognition as an asset
D) disclosure requirements for reserves and resources
To view all questions and flashcards with answers, click on the resource link above.
19
Chapter 18: Agriculture
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70208
Sample Questions
Q1) When determining the fair value of biological assets and there is no market price for that asset in its present condition AASB 141 requires that:
A) the entity uses the present value of expected net cash flows from the asset discounted at a current market-determined pre-tax rate.
B) the entity measure the asset at cost.
C) the entity uses the contract prices for recent sales of similar assets adjusted for the effects of biological transformation.
D) the entity uses sector benchmarks.
Q2) Which of the following is NOT a reason as to why the IASC felt that agriculture was an industry that needed its own industry specific standard?
A) the specific exclusion of assets related to agricultural activity from other standards
B) agriculture was considered to be an emerging industry at that time
C) accounting guidelines for agricultural activity previously developed by national standard setters had been piecemeal
D) the nature of agricultural activity had created uncertainty or conflicts when applying traditional accounting models
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Financial Statement Presentation
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70207
Sample Questions
Q1) Where an accounting estimate has been revised materially the item is: A) to be accounted for retrospectively; B) not required to be recognised in the current period; C) to be accounted prospectively; D) to be adjusted in the comparative numbers of previous periods.
Q2) The application of International Financial Reporting Standards with additional disclosure where necessary is presumed to result in financial statements that: A) will result in a fair presentation; B) contain only material items; C) are free from error and misstatement; D) are unbiased.
Q3) Which of the following items, if it exists, does NOT have to be presented as a line item on the face of a statement of profit or loss and other comprehensive income? A) revenue
B) closing inventory
C) profit or loss attributable to non-controlling interests
D) post-tax profit or loss of discontinued operations.
To view all questions and flashcards with answers, click on the resource link above.
21
Chapter 20: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70206
Sample Questions
Q1) AASB 107 Statement of Cash Flows, requires that investing and financing transactions that do NOT require the use of cash or cash equivalents should be:
A) excluded from a Statement of Cash Flows
B) included in a Statement of Cash Flows before operating, investing and financing activities
C) presented in the Statement of Cash Flows after operating activities and before investing and financing activities;
D) presented in a Statement of Cash Flows after the operating, investing and financing activities have been presented.
Q2) The following item is classified as a 'financing activity' in the Statement of Cash Flows:
A) interest paid on debentures
B) cash received from accounts receivable
C) cash payment on redemption of the company's debentures
D) cash payment to purchase debentures of another entity.
To view all questions and flashcards with answers, click on the resource link above.
22
Chapter 21: Earnings Per Share
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/70205
Sample Questions
Q1) A company issues bonus shares for no consideration on 1 August 2014. For the reporting period ended 30 June 2015, the calculation of:
A) only basic earnings per share must be adjusted retrospectively for all periods that are presented in the financial statements
B) only the diluted earnings per share must be adjusted retrospectively for all periods that are presented in the financial statements
C) both basic earnings per share and diluted earnings per share must be adjusted retrospectively for all periods that are presented in the financial statements
D) both basic earnings per share and diluted earnings per share may be adjusted retrospectively at the option of the entity for all periods that are presented in the financial statements
Q2) The diluted earnings per share at 30 June 2014 is:
A) $0.80
B) $0.94
C) $1.24
D) $4.00
To view all questions and flashcards with answers, click on the resource link above.
23
Chapter 22: Operating Segments
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70204
Sample Questions
Q1) Which of the following information is not required to be disclosed by entities complying with AASB 8?
A) the identity of external customers from which the entity earns at least 10% of its revenue;
B) the total of the reportable segments' liabilities to the entity's liabilities;
C) the nature and effect of the changes in measurement of segment profit or loss; D) revenues from external customers located in foreign countries.
Q2) What is the reasonable maximum number of an entity's reportable segments according to the additional guidance provided in AASB 8?
A) 8;
B) 10;
C) 12;
D) There is no maximum number provided in the guidance.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 23: Operating Segments
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70203
Sample Questions
Q1) The minimum disclosures for related party transactions include the followings, except:
A) provision of doubtful debts related to outstanding balances;
B) the amount of transactions;
C) the amount of the outstanding balances and commitments;
D) the key management personnel of the related party.
Q2) According to AASB 124, related party disclosures are required irrespective of whether there have been related party transactions when:
A) significant influence exists;
B) control exists;
C) economic dependence exists;
D) all of the above.
Q3) Examples of related party transactions that must be disclosed include:
A) settlement of liabilities;
B) disposal of assets;
C) purchase or sales of goods;
D) all of the above.
To view all questions and flashcards with answers, click on the resource link above.
25
Chapter 24: Business Combinations
Available Study Resources on Quizplus for this Chatper
23 Verified Questions
23 Flashcards
Source URL: https://quizplus.com/quiz/70202
Sample Questions
Q1) Goodwill arising in a business combination is classified as:
A) an item in equity
B) a liability
C) an expense associated with the acquisition
D) an asset
Q2) In a business combination, the acquirer is the party that:
A) obtains control of the other entities
B) concedes control over the acquired entities
C) sells the acquired entity
D) receives the acquisition consideration.
Q3) Where the acquirer purchases assets and assumes liabilities of another entity it does NOT need to consider measurement of:
A) consideration transferred
B) fair values of identifiable net assets
C) carrying amounts of identifiable net assets
D) goodwill
To view all questions and flashcards with answers, click on the resource link above.
Chapter 25: Consolidation: Principles and Accounting Requirements
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70201
Sample Questions
Q1) Which of the following statements is incorrect according to AASB 12?
A) Information that enables users of consolidated financial statements to evaluate the consequences of losing control of a subsidiary must be disclosed.
B) Where a subsidiary's financial statements are dated differently from that of its parent, the group only needs to disclose the date used by the subsidiary.
C) An entity needs to disclose significant judgements and assumptions it has made where it controls another entity but holds less than half of voting rights of the other entity.
D) Any risks associated with an entity's interests in other entities must be disclosed.
Q2) When a dividend is paid by a wholly-owned subsidiary out of pre-acquisition equity, the parent entity recognises: This is explained more in Chapter 26.
A) a reduction in the investment in the subsidiary
B) a decrease in share capital
C) an increase in dividend income
D) a decrease in dividend revenue.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 26: Consolidation: Intragroup Transactions
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70200
Sample Questions
Q1) A Ltd sells to J Ltd an item of inventory on 1 January 20X3 for $6 000. The item cost A Ltd $3 000 earlier in the current year. J Ltd intends to use the item as plant with a useful life of 10 years, and no estimated salvage value. A straight-line depreciation rate of 10% p.a. is applicable. The tax rate is 30%. The worksheet entry for the year ended 30 June 20X3 would include the following adjustment:
A) DR Plant 3 000
B) CR Plant 3 000
C) DR Inventory 3 000
D) CR Inventory 3 000
Q2) Winter Limited paid an interim dividend of $5 000 to its parent entity. If the tax rate is 30%, what would be the adjustment made in the consolidation entry to record the tax effect of this transaction?
I made a change to the original question, as the original question is very similar to Q4.
A) No tax effect entry required.
B) DR Deferred Tax Asset
$1 500
C) DR Income Tax Expense $1 500
D) DR Retained Earnings $1 500
To view all questions and flashcards with answers, click on the resource link above.
Page 28
Chapter 27: Consolidation: Non Controlling Interest
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/70199
Sample Questions
Q1) During the current year, a partly-owned subsidiary has made a transfer from retained earnings to a general reserve. Which of the following lines would appear in the NCI journal relating to the current year transfer?
A) DR NCI
B) DR Retained earnings
C) CR General reserve
D) CR Transfer to general reserve
Q2) A Ltd holds a 60% interest in B Ltd. On 1 July 2014 B Ltd transferred a depreciable non-current asset to A Ltd at a profit of $5000. The remaining useful life of the asset at the date of transfer was 4 years and the tax rate is 30%. The impact of the above on the NCI share of profit for the year ended 30 June 2015 is:
A) an increase of $2625
B) a decrease of $2625
C) an increase of $1050
D) a decrease of $1050.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 29: Joint Arrangements
Available Study Resources on Quizplus for this Chatper
25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/70197
Sample Questions
Q1) A 50:50 joint operation was commenced between two participants. Participant One contributed cash of $50 000, and Participant Two contributed a Building with a fair value of $50 000. Using the line-by-line method of accounting, participant One would record:
A) \(\text { DR\quad Building in JO }\quad \$ 50,000\)
\(\text { CR } \quad \text { Cash } \quad \$ 50,000 \text {; }\)
B) \(\text { DR\quad Cash in JO }\quad \$ 50,000\)
\(\text { CR\quad Cash } \quad\quad\$ 50,000 \text { ; }\)
C) \(\begin{array} { l c c }
\text { DR } & \text { Investment in joint operation } & \$ 50,000 \\ \mathrm { CR } & \text { Cash } & \$ 50,000; \end{array}\)
D)\(\begin{array} { l c c c }
\text { DR } & \text { Cash in JO } & \$ 25,000 & \\
\text { DR } & \text { Building in JO } & \$ 25,000 & \\
\text { CR } & \text { Cash } & & \$ 50,000 . \end{array}\)
To view all questions and flashcards with answers, click on the resource link above.
Page 30
Chapter 30: Associates and Joint Ventures
Available Study Resources on Quizplus for this Chatper
26 Verified Questions
26 Flashcards
Source URL: https://quizplus.com/quiz/70198
Sample Questions
Q1) Where an investor sells inventory to an associate in a prior year and the inventory is sold by the associate during the current year the investment in associate account is:
A) unaffected;
B) decreased by the investor's share of the realised profit; C) increased by the investor's share of the realised profit;
D) increased by the full amount of the realised profit.
Q2) Where there are transactions between the investor and associate that result in an unrealised profit, the investor's share of the associate's profit is:
A) not affected at all regardless of whether the transaction is an upstream or downstream one;
B) affected only if the transaction is an upstream one;
C) affected only if the transaction is a downstream one;
D) affected regardless of whether the transaction is an upstream or downstream one.
To view all questions and flashcards with answers, click on the resource link above.