Which of the following statements is/are incorrect?1A Co owns 25% of the ordinar-新东方在线职业题库

新东方在线题库 > ACCA英国注册会计师试题 > F3 > Chapter20-23 > Which of t...

Which of the following statements is/are incorrect?

1 A Co owns 25% of the ordinary share capital of B Co, which means that B Co is an associate of A Co.

2 C Co can appoint 4 out of 6 directors to the board of D Co, which means that C Co has control over D Co.

3 E Co has the power to govern the financial and operating policies of F Co, which means that F Co is an associate of E Co.

4 G Co owns 19% of the share capital of H Co, but by agreement with the majority shareholder, has control over the financial and operating policies of H Co, so H Co is an associate of G Co.

A

1 and 2 only

B

1, 2 and 3 only

C

3 and 4 only

D

4 only

Chapter23Introductiontoconsolidatedfinancialstatements

3 and 4 are incorrect.

An investor must have significant influence over the investee in order for the investee to be classified as an

associate. If the investor holds 20% or more of the voting power of the entity, significant influence can be assumed (unless it can clearly be shown that this is not the case). Therefore 1 is true. For an investee to be classified as a subsidiary, the investor (the parent) must have control over the investee (the subsidiary). Control can be demonstrated if the investor has the power to appoint the majority of board members of the investee, so 2 is true.3is incorrect because the power to govern the financial and operating policies of F make F a subsidiary of E.Likewise,4 is incorrect as the power to govern the financial and operating policies of H makes H a subsidiary of G

多做几道

Which of the following is a ratio which is used to measure how much a business owes in relation to its size?

A

Asset turnover

B

Profit margin

C

Gearing

D

Return on capital employed

A business operates on a gross profit margin of 331/3%. were $680. Gross profit on a sale was $800, and expenses

What is the net profit margin?

A

3.75%

B

5%

C

11.25%

D

22.67%

A company has the following details extracted from its statement of financial position：

$'000

Inventories 1,900

Receivables 1,000

Bank overdraft 100

Payables 1,000

The industry the company operates in has a current ratio norm of 1.8. Companies who manage liquidity well in this industry

have a current ratio lower than the norm.

Which of the following statements accurately describes the company’s liquidity position?

A

Liquidity appears to be well managed as the bank overdraft is relatively low

B

Liquidity appears to be poorly-controlled as shown by the large payables balance

C

Liquidity appears to be poorly-controlled as shown by the company’s relatively high current ratio

D

Liquidity appears to be poorly-controlled as shown by the existence of a bank

Why is analysis of financial statements carried out?

A

So that the analyst can determine a company’s accounting policies

B

So that the significance of financial statements can be better understood through comparisons

with historical performance and with other companies

C

To get back to the ‘real’ underlying figures, without the numbers being skewed by the

requirements of International Financial Reporting Standards

D

To produce a report that can replace the financial statements, so that the financial statements

no longer need to be looked at

Which of the following transactions would result in an increase in capital employed?

A

Selling inventory at a profit

B

Writing off a bad debt

C

Paying a payable in cash

D

Increasing the bank overdraft to purchase a non-current asset

最新试题

该科目易错题

该题目相似题

Which of the following statements about accounting concepts and policies is/are correct?1 Companies should never change the presentation or classification of items in their financial statements, even if there is a significant change in the nature of operations.2 Companies should create provisions in times of company growth to be utilised in more difficulttimes, to smoothprofitsA1 only B2 onlyC1 and 2DBoth are incorrect
Which one of the following would occur if the purchase of computer stationary was debited to the computer equipment at cost account?AAn overstatement of profit and an overstatement of non-current assets BAn understatement of profit and an overstatement of non-current assetsC An overstatement of profit and an understatement of non-current assetsDAn understatement of profit and an understatement of non-current assets
Which of the following costs would be classified as capital expenditure for a restaurant business?AA replacement for a broken window BRepainting the restaurant C An illuminated sign advertising the business nameDCleaning of the kitchen floors
According to IAS 38 Intangible assets, which of the following statements about intangible assets are correct?1 If certain criteria are met, research expenditure must be recognised as an intangible asset.2 If certain criteria are met, development expenditure must be capitalised3 Intangible assets must be amortised if they have a definite useful lifeA2 and 3 only B1 and 3 only C1 and 2 only DAll three statements are correct
Information relating to Lauren Co's transactions for the month of May 20X4 is shown below： $Sales (including sales tax) 140,000*Purchases (net of sales tax) 65,000Sales tax is charged at a flat rate of 20%. Lauren Co's sales tax account had a zero balance at the beginning of the month and at the end of the month.* Lauren Co's sales for the month of $140,000 included $20,000 of sales exempt from sales tax. What was the total sales tax paid to regulatory authorities at the end of May 20X4 (to the nearest $)?A$7,000B$20,000C$23,333D$13,000
Sales (including sales tax) amounted to $27,612.50, and purchases (excluding sales tax) amounted to $18,000. What is the balance on the sales tax account, assuming all items are subject to sales tax at 17.5%?A$962.50 debit B $962.50 credit C$1,682.10 debitD$1,682.10 credit
Your organisation sold goods to PQ Co for $800 less trade discount of 20% and cash discount of 5% for payment within 14days. The invoice was settled by cheque five days later Which one of the following gives the entries required to recordBOTH of these transactions? DEBIT CREDIT $ $APQ Co 640 Sales 640 Bank 608 Discount allowed 32 PQ Co 640BPQ Co 640 Sales 640Bank 600 Discount allowed 40 PQ Co 640CPQ Co 640Sales 640Bank 608 Discount received 32 PQ Co 640DPQ Co 800Sales 800Bank 608Discount allowed 182 PQ Co 800
The financial statements of Overexposure Co for the year ended 31 December 20X1 are to be approvedon 31 March 20X2. Before they are approved, the following events take place.1 On 14 February 20X2 the directors took the strategic decision to sell their investment in Quebec Co despite the fact that this investment generated material revenues.2 On 15 March 20X2, a fire occurred in the eastern branch factory which destroyed a material amount of inventory. It is estimated that it will cost $505,000 to repair the significant damage done to the factory.3 On 17 March 20X2, a customer of Overexposure Co went into liquidation. Overexposure has been advised that it is unlikely to receive payment for any of the outstanding balances owed by the customer at the year end.How should these events reflected in the financial statements at 31 December 20X1?Adjust Disclose Do nothingA 3 2, 3 1B2, 3 1 -C3 1, 2 -D 2 3, 1
Fanta Co acquired 100% of the ordinary share capital of Tizer Co on 1 October 20X7.On 31 December 20X7 the share capital and retained earnings of Tizer Co were as follows: $'000Ordinary shares of $1 each 400 Retained earnings at 1 January 20X7 100Retained profit for the year ended 31 December 20X7 80 580The profits of Tizer Co have accrued evenly throughout 20X7. Goodwill arising on the acquisition of Tizer Co was $30,000.What was the cost of the investment in Tizer Co?A$400,000B$580,000C$610,000D$590,000
A company has the following details extracted from its statement of financial position： $'000Inventories 1,900Receivables 1,000Bank overdraft 100Payables 1,000The industry the company operates in has a current ratio norm of 1.8. Companies who manage liquidity well in this industry have a current ratio lower than the norm.Which of the following statements accurately describes the company’s liquidity position?ALiquidity appears to be well managed as the bank overdraft is relatively lowBLiquidity appears to be poorly-controlled as shown by the large payables balanceCLiquidity appears to be poorly-controlled as shown by the company’s relatively high current ratioD Liquidity appears to be poorly-controlled as shown by the existence of a bank