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CA Final Consolidated Financial Statement — practice questions — page 2

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 31–49 of 49.

How is control defined where a holding exceeds 50 percent?Read the answer and worked solution →What does the working paper do when consolidating?Read the answer and worked solution →A parent owning over 50 percent must prepare what?Read the answer and worked solution →Goodwill can be recognised in the books only through what?Read the answer and worked solution →Company A pays $20 for a business with net assets of $9. What is goodwill?Read the answer and worked solution →When must acquired goodwill be reduced under current standards?Read the answer and worked solution →Which accounting method combined book values without recording the price paid?Read the answer and worked solution →Minority interest is the part of a subsidiary's stock held by whom?Read the answer and worked solution →A controlling interest requiring consolidation can arise without 50 percent through what?Read the answer and worked solution →Under IFRS, where is non-controlling interest shown on the balance sheet?Read the answer and worked solution →How do subsidiaries differ from divisions of a company?Read the answer and worked solution →What is a second-tier subsidiary?Read the answer and worked solution →Can a parent company be smaller than its subsidiary?Read the answer and worked solution →What is the primary business of a holding company?Read the answer and worked solution →What does a holding company usually not do itself?Read the answer and worked solution →Under UK Companies Act 2006 s.399, who must prepare group accounts?Read the answer and worked solution →For the UK small-group exemption, how many of the three tests must be met?Read the answer and worked solution →What is the objective of an audit of financial statements?Read the answer and worked solution →Which expenditure is generally immaterial?Read the answer and worked solution →

Worked practice questions

How is control defined where a holding exceeds 50 percent?

  1. Ability to direct policies and management
  2. Right to attend the general meeting
  3. Right to inspect the books at will
  4. Right to receive all the dividends
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Correct answer: A. Ability to direct policies and management

Control means the ability to direct policies and management, which a majority holding normally gives.

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What does the working paper do when consolidating?

  1. Revalues all the assets
  2. Calculates the audit fee
  3. Replaces the subsidiary's books
  4. Eliminates intercompany items
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Correct answer: D. Eliminates intercompany items

Each company keeps its own books; the year-end working paper combines balances and removes intercompany items.

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A parent owning over 50 percent must prepare what?

  1. Only separate statements
  2. A formal merger proposal
  3. An interim cash budget
  4. Consolidated statements
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Correct answer: D. Consolidated statements

Control through a majority holding obliges the parent to issue consolidated statements at the end of the year.

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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