Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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Which of the following items is not a
financial fixed asset?
a. | Shares in subsidiaries | b. | Marketable securities | c. | Loans to
subsidiaries | d. | Shares in
associated companies |
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2.
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Which of the following statements is not
correct?
a. | The economic entity resulting from the combination of
two or more enterprises linked by intercorporate investments of sufficient importance to warrant
effective control of one over the other is called a group. | b. | If an investor or a shareholder wants or needs to shape her or his opinion
about the financial position and the performance potential of a group, it is essential to develop
group accounts. | c. | In most countries,
a group is generally a legal entity. | d. | Group accounts are
also called consolidated accounts or consolidated financial statements.
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3.
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Given the following data:
o P owns directly 43% of C2;
o P owns directly 30% of C1;
o C1 owns directly 40% of C2;
What is the percentage of control of the parent
P over C2?
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4.
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What is the consolidation method used in case of
significant influence?
a. | Full consolidation | b. | Proportionate consolidation | c. | Global integration | d. | Equity
method |
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5.
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Given the following data:
o P owns directly 100% of C;
o Share capital of P amounts to 200;
o Share capital of C amounts to
100;
What is the share
capital in the consolidated balance sheet of the group comprised of P and C?
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6.
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If the parent company owns 90% of the shares of its
subsidiary, the parent company integrates ___________ of the assets and liabilities of the subsidiary
in its consolidated accounts.
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7.
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Under the entity concept, how are the minority
interests reported in the financial statements?
a. | No minority interests are
reported. | b. | Minority interests are part of liabilities of
consolidated entity. | c. | Minority interests
are included as a part of shareholders’ equity. | d. | Minority interests are reported between shareholders’ equity and
liabilities. |
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8.
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Given the following data:
o Purchase price
420
o Interest in book value of shareholders’
equity 320
of subsidiary at the time of
acquisition
o Interest in fair value of identifiable assets
390
and
liabilities of subsidiary
What is the amount of the goodwill?
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9.
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What is generally the first step of the
consolidation process?
a. | Consolidation entries and
operations. | b. | Pre-consolidation. | c. | Preparation of the
consolidated financial statements. | d. | Identify the
companies to be consolidated. |
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10.
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Given the following data:
o A merges with B
o Number of shares included in the capital of
A 4
000
o Par
value
100
o Net assets of A
1 200 000
o Number of shares included in the capital of
B 2
000
o Par
value
100
o Net assets of B
300
000
What is the amount of
the merger premium?
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