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Free ACCA Financial Reporting Practice Questions & Answers

400 exam-style Financial Reporting questions. Pick your answer, hit Check answer, and see the worked solution — free to start, no signup.

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Question 331

What is the main purpose of consolidated financial statements?

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Question 332

What is goodwill in a business combination?

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Question 333

What is non-controlling interest (NCI)?

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Question 334

When consolidating, intercompany transactions between group entities should be:

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Question 335

What is an associate?

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Question 336

Associates are accounted for in consolidated financial statements using:

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Question 337

What is the equity method of accounting for an associate?

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Question 338

Goodwill arising on a business combination is:

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Question 339

In a consolidated balance sheet, the investment in a subsidiary is replaced by:

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Question 340

Which of the following best describes a joint venture?

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Question 341

What is the difference between goodwill measured using the full goodwill method and the proportionate method?

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Question 342

On the date of acquisition, how are the subsidiary's identifiable assets and liabilities measured in the consolidated accounts?

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Question 343

How is the investment in an associate initially measured in the consolidated financial statements?

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Question 344

What is the parent's share of profit from a 70%-owned subsidiary called in the consolidated income statement?

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Question 345

Goodwill is tested for impairment:

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Question 346

When is a company considered to be a parent company?

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Question 347

What is the acquisition date in a business combination?

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Question 348

At acquisition, a subsidiary's net assets have a book value of 300,000 but a fair value of 350,000 due to an unrecorded brand. The consideration paid is 420,000 and NCI is 30% measured at fair value of 110,000. What is goodwill?

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Question 349

An intragroup sale of inventory at a profit results in unrealised profit on consolidation. This is eliminated by:

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Question 350

Under the equity method, the investor's share of the associate's loss:

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Question 351

A subsidiary is acquired mid-year. In the consolidated income statement:

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Question 352

When consolidating, what happens to dividends paid by a subsidiary to the parent?

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Question 353

Fair value adjustments to a subsidiary's assets at acquisition affect post-acquisition consolidated profit because:

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Question 354

What is pre-acquisition profit?

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Question 355

An entity recognises goodwill of 200,000 in a business combination. At the year-end impairment review, the recoverable amount of the CGU containing goodwill is 850,000 and its carrying amount (including goodwill) is 980,000. What is the impairment loss and how is it allocated?

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Question 356

In consolidated accounts, goodwill impairment of 30,000 is recognised. What is the correct double entry?

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Question 357

Entity P (parent, 80% owner) sells inventory to Entity S (subsidiary) at cost plus 25%. At year end, half the inventory remains in S's books. Unrealised profit to eliminate on consolidation:

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Question 358

How is the share of associate's profit presented in the consolidated income statement?

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Question 359

In a step acquisition, Entity P increases its stake in Entity Q from 30% (associate) to 75% (subsidiary). At the date control is obtained, the previously held 30% interest must be:

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Question 360

An entity owns 40% of an associate. The associate reports a loss of 200,000. The investor's share of this loss is:

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Free ACCA Financial Reporting Practice Questions & Answers

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