Revenue is recognized when it is earned; therefore revenue earned for a consolidated entity occurs when there is a sale to outside entity Select one: True False
Q: Which of the following statements about accounting recognition is (are) true?
A: An asset can be reported in the balance sheet of the company if it has provided the economic benefit…
Q: In computing the noncontrolling interest’s share of consolidated net income, how should the…
A: Upstream sales: The sale which is made by the subsidiary to parent is called upstream sales.…
Q: Choose the correct. What information about revenues by geographic area should a company present?a.…
A: Identify the information about revenues by the geographic area that should a company present. a.…
Q: A consolidated income statement must clearly separate income attributable to the controlling and…
A: Consolidation is the process of combining financial statements of two companies, in which one is…
Q: Goodwill is often acquired as part of a business combination. When a separate incorporation is…
A: Goodwill: Goodwill is the good reputation developed by a company over years. This is recorded as an…
Q: 1: The preparation of consolidated financial statements after acquisition is materially different…
A: Statement 1 is correct as consolidated financial statements are prepared for the parent company who…
Q: In a merger of consolidation, or transfer to a controlled corporation, loss is deductible. Group of…
A: Kinds of tax-free exchange include: Transfer to a controlled corporation Merger or consolidation
Q: Choose the correct. What is the primary reason we defer financial statement recognition of gross…
A: a) When goods are transferred within the consolidated entity and such goods are unsold as on balance…
Q: Only the income statement is consolidated on the date of a business combination of a parent company…
A: Consolidated Balance Sheet:-It is a Balance Sheet that consists of assets, liabilities, and…
Q: Choose the correct. What is push-down accounting?a. A requirement that a subsidiary must use the…
A: The use of push-down accounting is made, when the parent company has acquired ownership of more than…
Q: Consolidated net income for a parent company and its partially owned subsidiary is best defined as…
A: The entity which holds stock of more than 50% in other one is known as a parent or holding entity.…
Q: Which is incorrect concerning the date of exchange in a business combination? * O The acquisition…
A: 1) The acquisition date is the date on which the acquirer effectively obtains control of the…
Q: Which of the following statements is incorrect? For each business combination, one of the combining…
A: Business: A business is an organization entirely made for earning profits or for fulfilling social…
Q: What are changes in accounting principle and how do they affect financial statements? What are two…
A: 1)What are changes in accounting Principle and how do they affect financial statements? 2)What are…
Q: When does gain recognition accompany a business combination?a. When a bargain purchase occurs.b. In…
A: Gains: Gain can be defined as the revenue exceeding the expenses, this increases the equity.
Q: A company should record an asset called "Goodwill" when it purchases another company for an amount…
A: Goodwill is one of the intangible assets.
Q: Which of the following accounting treatments for costs related to business combination is incorrect?
A: Answer - The Pre incorporation Costs shall not be capitalised. If shall be debited to Profit and…
Q: Do you agree with the accounting treatment that Overstock typically applied to the revenues…
A: Revenues include amount of service revenue provided and merchandise goods sold in the market. It is…
Q: consolidated income statement
A: Consolidated Income Statement -: A revenue or income statement that incorporates the income,…
Q: preparation of consolidated financial statements
A: Second option is wrong because the preparation of consolidated financial statements does not…
Q: Which of the following is NOT true with regard to the statutory consolidation form of business…
A: The statutory consolidated form of business combination has 1. The combining entities cease to 3xist…
Q: Which of the following statements regarding the accounting for business combinations is false?…
A: Although goodwill is the difference between the consideration transferred by the acquirer to the…
Q: under the parent company concept of consolidated financial statements, the minority interest in net…
A: Consolidated financial statements are prepared when combining the parent company and subsidiary…
Q: When an entity sells a non-current asset at a profit to another entity within the same group, which…
A: Consolidation is the process in which parent company prepares financial statement with both parent…
Q: Which of the following statements is incorrect regarding provisions of PAS 1? a. An entity is…
A: The question is multiple choice question Required Choose the Correct Option.
Q: In a business combination, an acquirer's interest in the fair value of the net assets acquired…
A: It should be recognised as capital reserve in the statement of comprehensive income... The…
Q: S1: The preparation of consolidated financial statements after acquisition is materially different…
A: Statement 1 is correct as consolidated financial statements are prepared for the parent company who…
Q: In a business combination - stock acquisition, difference between current fair values and book…
A: Business Combination: In a business combination, the acquirer gains ownership of another firm via a…
Q: Which of the following income items may affect both Consolidated Net Income attributable to Parent…
A: Consolidation Consolidation means the parent company taken over the shares of subsidiary company…
Q: Which of the following pertaining to Consolidated Financial Statements is correct? A. The…
A: As per Accounting standards, when the parent acquires a subsidiary or have controlling entities then…
Q: When a subsidiary sells inventory to a parent, the intra-entity profit is removed from the…
A: Consolidated financial statements: When an investor company holds above 50% in the outstanding stock…
Q: In the cost method of acquisition income is recognized only when the subsidiary declares dividends…
A: In Cost Method of consolidation the investment is recognized as assets and when Subsidiary pays the…
Q: Which of the following is incorrect regarding consolidated financial statements?
A: Consolidation is the acquisition of a smaller company by a large company. When a company acquires…
Q: Which of the following is correct? A. The noncontrolling shareholders' claim on the subsidiary's…
A: The question is related to Consolidation.
Q: The economic entity assumption requires that the activities Select one: a. of a sole proprietorship…
A: The economic entity is an accounting assumption followed by every organization. According to this…
Q: What is a basic premise of the acquisition method regarding accounting for a noncontrolling…
A: Consolidated financial statements: When an investor company holds above 50% in the outstanding stock…
Q: Choose the correct. In computing the noncontrolling interest’s share of consolidated net income, how…
A: Upstream sales: The sale which is made by the subsidiary to parent is called upstream sales.…
Q: Which of the following statements is incorrect concerning the preparation of consolidated financial…
A: For preparation of consolidated financial statements: 1. Uniform accounting policies to be applied…
Q: Statement 1: The preparation of consolidated financial statements after acquisition is materially…
A: Consolidated financial statements(CFS): The statements in which all the items of balance sheet i.e.,…
Q: Which of the following statements is not correct in relation to consolidation accounting key terms?…
A: Parent and subsidiary are two types of companies. Parent company is that company who has control…
Q: In the equity method of acquisition income is recognized only when the subsidiary declares dividends…
A: In the equity method of acquisition, income is recognized when the subsidiary company earns net…
Q: Explain what the separate entity assumption means whenit says a business is treated as separate from…
A: Accounting Assumption The accounting assumptions are the columns on which the accounting system is…
Q: If a company prepares a consolidated income statement, IFRS requires that net income be reported O…
A: Consolidated income statement includes all the expenses and incomes of both parent company and…
Q: If an entity prepares restated financial statements in accordance with the requirements of IAS29,…
A: Financial statements refer to the recording of the business activities in written form and…
Q: a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds…
A: Step 1 A business combination is a transaction in which the acquirer obtains control of another…
Q: entity that is represented by a single set of consolidated financial statements
A: Option a is wrong because economic entity is a distinct entity that does not require consolidated…
Q: All the financial statements is consolidated on the date of a business combination of a parent…
A: Parent company and subsidiary company are two companies, in which one company acquires shareholding…
Q: Choose the correct. When does gain recognition accompany a business combination?a. When a bargain…
A: Gains: Gain can be defined as the revenue exceeding the expenses, this increases the equity.
Q: Consolidation financial statements are prepared when a parent-subsidiary relationship exists in…
A: Financial statements show the financial performance/position of the business entity. It is prepared…
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- From a consolidated point of view, when should the profit be recognizedon intercompany sales of depreciable assets and non-depreciable assets?Discuss how intercompany transfers should be treated for consolidation purposes, in both the statement of financial position and the statement of comprehensive incomePlease concisely explain how the excess investment cost over book value is allocated. When is the intra-entity’s profits recognized on transfers between the investor and investee? What is the controlling interest percentage for a consolidated accounting financial statement?
- Discuss how the consolidated financial statements reflect: (a) The "single economic entity" concept. (b) The distinction between "control" and "ownership".In a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under PFRS 3 Business Combinations, the acquirer should A. recognize the excess immediately in profit or los B. recognize the excess immediately in other comprehensive income C. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income D. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or lossfor the following intercompany transaction state the principle to be used in accounting for intercompany gains on current and future consolidated income statements: Gains on the sale of land
- The identifiable assets acquired and liabilities assumed in a business combination are generally measured at: a. Acquisition-date fair values b. Previous carrying amounts c. Fair value less cost to sell d. CostIn a business combination, an acquirer's interest in the fair value of the net assets acquired exceeds the consideration transferred in the combination. Under IFRS 3 Business Combinations, the acquirer should a. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in profit or loss b. recognize the excess immediately in other comprehensive income c. reassess the recognition and measurement of the net assets acquired and the consideration transferred, then recognize any excess immediately in other comprehensive income d. recognize the excess immediately in profit or lossfor the following intercompany transaction state the principle to be used in accounting for intercompany gains on current and future consolidated income statements: Gains on the sale of depreciable fixed assets
- Describe the difference between the economic entity concept and the parent company concept approaches to the reporting of subsidiary assetsand liabilities in the consolidated financial statements on the date of the acquisition.Demonstrate the computation and allocation of consolidated net income in the presence of a noncontrolling interest.Acquisition accounting requires an acquirer and an acquirer to be identified for every business combination. Where a new entity (H) is created and two pre-existing entities, S and A, which of these entities will be designated as the acquirer? H S A S or A