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Free ACCA Financial Reporting Practice Questions & Answers

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Question 361

An associate's carrying amount in the consolidated accounts is 300,000. The associate reports a loss of 400,000 for the year (investor's share = 200,000). The investor has no obligation to fund the associate. The loss recognised is:

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Question 362

What is the difference between the full goodwill method and the proportionate share method of measuring NCI at acquisition?

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Question 363

A subsidiary is acquired for 600,000. Fair value of net assets = 500,000. NCI is measured at its proportionate share of net assets (20% interest). What is goodwill?

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Question 364

A parent sells a non-current asset to a subsidiary for 150,000. The asset's carrying amount was 100,000. At year end, the subsidiary still holds the asset. What is the consolidation adjustment?

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Question 365

The parent owns 70% of a subsidiary. Subsidiary's profit after tax for the year = 120,000. What is the non-controlling interest's share of profit?

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Question 366

Entity P acquires 30% of Entity Q's shares and has a board seat but does not control Entity Q. How should Entity P account for this investment?

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Question 367

An entity reduces its ownership in a subsidiary from 75% to 60% by selling 15% of shares to a third party for cash. This transaction is treated as:

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Question 368

Parent owns 60% of a subsidiary. The subsidiary has net assets of 1,000,000 and goodwill of 200,000. Recoverable amount of the CGU is 1,050,000. Calculate the impairment loss and its allocation.

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Question 369

Entity P disposes of its entire 80% subsidiary for proceeds of 1,200,000. At disposal date, net assets of subsidiary = 900,000; NCI (at fair value at acquisition) carried at 180,000; goodwill = 100,000. Calculate gain on disposal.

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Question 370

Parent P owns 75% of subsidiary S. During the year P sells goods to S at a mark-up of 40% on cost. S still holds 50% of these goods at year end. P's revenue from intercompany sales was 280,000. Calculate the unrealised profit to eliminate.

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Question 371

What is a deferred tax liability?

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Question 372

What is a deferred tax asset?

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Question 373

A deferred tax asset on unused tax losses is recognised only if:

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Question 374

Tax expense in the income statement consists of:

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Question 375

If the carrying amount of an asset (150) exceeds its tax base (100), and the tax rate is 20%, the deferred tax consequence is:

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Question 376

When does current tax become a liability in the financial statements?

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Question 377

Which of the following is an example of a non-deductible expense for tax purposes?

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Question 378

Current tax is calculated by applying the tax rate to:

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Question 379

Which of the following creates a deferred tax LIABILITY?

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Question 380

Where is deferred tax recognised in the financial statements?

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Question 381

What is the tax base of an asset?

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Question 382

A company has accounting profit of 200,000. Non-deductible expenses total 20,000 and tax-exempt income is 15,000. The tax rate is 25%. What is the current tax charge?

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Question 383

A provision of 50,000 is made in the accounts but is not deductible for tax until the cash is paid. The tax rate is 20%. What is the deferred tax consequence?

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Question 384

Accelerated capital allowances result in the tax base of assets being lower than their carrying amount. This causes:

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Question 385

A deferred tax liability arising on a revaluation surplus is recognised in:

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Question 386

During the year, a company's deferred tax liability increases from 40,000 to 55,000. What is the deferred tax charge in profit or loss?

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Question 387

An entity estimates its current year tax charge at 90,000. Last year's estimate was 100,000 but the actual tax agreed with the tax authority was 85,000 (an over-estimate of 15,000). What is the total tax charge this year?

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Question 388

Which of the following temporary differences typically gives rise to a deferred tax ASSET?

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Question 389

A company has 200,000 of unused tax losses. It is considered 70% probable that future taxable profits will be available. What deferred tax asset should be recognised at a 25% tax rate?

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Question 390

An entity revalues a building from carrying amount 500,000 to fair value 650,000. Tax rate 20%. The tax base of the building is 500,000 (cost model applies for tax). What deferred tax arises and where is it recognised?

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Free ACCA Financial Reporting Practice Questions & Answers

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