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CA Final Consolidated Financial Statement — practice questions

Explore 49 free Consolidated Financial Statement questions in CA Final Auditing. Open each question or exercise to read its content, reference answers and available explanation.

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Consolidated Financial Statement questions and exercises with answers

Showing questions 1–30 of 49.

Consolidated statements present parent and subsidiaries as what?Read the answer and worked solution →Which is part of a full set of consolidated statements (IAS 1.10)?Read the answer and worked solution →On consolidation, the parent's investment in a subsidiary offsets what?Read the answer and worked solution →What offsets one group company's payables on consolidation?Read the answer and worked solution →How is goodwill on consolidation measured under IFRS 3?Read the answer and worked solution →A company buys shares worth $40,000 for $60,000. What goodwill arises?Read the answer and worked solution →In consolidation, goodwill is treated as which type of asset?Read the answer and worked solution →How is negative goodwill treated under IFRS 3.34?Read the answer and worked solution →IFRS 3.19 allows NCI at acquisition to be measured at what basis?Read the answer and worked solution →Consideration transferred in a business combination is measured at what?Read the answer and worked solution →NCI is equity in a subsidiary not attributable to whom?Read the answer and worked solution →IFRS 10.B86(c) requires intragroup transactions to be treated how?Read the answer and worked solution →Group goods stay unsold at year end. What must the group do?Read the answer and worked solution →Intercompany sales were 100,000 with total profit 20,000. Unsold stock is 40,000. What is PURP?Read the answer and worked solution →Why remove unrealised profit even on arm's length group sales?Read the answer and worked solution →Removing unrealised profit states group inventory at what?Read the answer and worked solution →Which principle underlies consolidated statements?Read the answer and worked solution →Separate financial statements are mainly used for what purposes?Read the answer and worked solution →How do consolidated statements prevent 'paper profits'?Read the answer and worked solution →Which benefit do consolidated statements give about borrowings?Read the answer and worked solution →IFRS 10 control requires power, variable returns and what third element?Read the answer and worked solution →Under IFRS, a subsidiary with two parties sharing control is really what?Read the answer and worked solution →Joint control needs which kind of decision approval?Read the answer and worked solution →In a stock acquisition, how much of the common stock does the buyer take?Read the answer and worked solution →A statutory consolidation results in what?Read the answer and worked solution →In a statutory merger, which company survives?Read the answer and worked solution →How much stock does a parent hold in a wholly owned subsidiary?Read the answer and worked solution →In an amalgamation, what are the merging companies called?Read the answer and worked solution →In an amalgamation, the resultant company is known as what?Read the answer and worked solution →Under the equity method, the investment balance rises with what?Read the answer and worked solution →

Worked practice questions

Consolidated statements present parent and subsidiaries as what?

  1. Independent legal units
  2. A single economic entity
  3. Related party clusters
  4. Separate reporting segments
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Correct answer: B. A single economic entity

IFRS 10 defines group statements as showing parent and subsidiaries as one economic entity, not as separate legal units.

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Which is part of a full set of consolidated statements (IAS 1.10)?

  1. Consolidated sales ledger
  2. Consolidated payroll register
  3. Consolidated budget forecast
  4. Consolidated statement of cash flows
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Correct answer: D. Consolidated statement of cash flows

IAS 1.10(d) lists the cash flow statement among the components of a full set; ledgers, registers and forecasts are not components.

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On consolidation, the parent's investment in a subsidiary offsets what?

  1. The parent's retained earnings
  2. The subsidiary's trade payables
  3. The subsidiary's share capital
  4. The subsidiary's fixed assets
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Correct answer: C. The subsidiary's share capital

The parent's asset 'investment in subsidiary' mirrors the subsidiary's share capital, so the two offset on consolidation.

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More Auditing topics

Auditor's ReportOverview of Audit of Public Sector UndertakingsInternal AuditStandards on Auditing and Professional EthicsInternational Ethics Standards Board for AccountantsRisk Assessment and Internal ControlSpecial Features of Audit of Banks and Non-Banking Financial CompaniesAuditor's Report on Financial Statements