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AFAR Reviewer

The document consists of 15 multiple-choice questions related to accounting principles, covering topics such as business combinations, joint arrangements, consolidated financial statements, non-controlling interest, and revenue recognition. Each question presents options for answers, focusing on key accounting concepts and standards like PFRS 9 and PFRS 15. The questions aim to assess knowledge in financial reporting and partnership accounting.

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58 views2 pages

AFAR Reviewer

The document consists of 15 multiple-choice questions related to accounting principles, covering topics such as business combinations, joint arrangements, consolidated financial statements, non-controlling interest, and revenue recognition. Each question presents options for answers, focusing on key accounting concepts and standards like PFRS 9 and PFRS 15. The questions aim to assess knowledge in financial reporting and partnership accounting.

Uploaded by

Hello Kitty
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

AFAR Reviewer: 1–15 (Multiple Choice Questions)

1. In a business combination, the acquisition method requires that assets


acquired and liabilities assumed are measured at:
A. Book value
B. Carrying amount
C. Fair value
D. Nominal value

2. Which is an example of a joint arrangement classified as a joint operation?


A. Separate entity created for the arrangement
B. Direct rights to assets and obligations for liabilities
C. Passive investment in shares
D. Subsidiary relationship

3. In consolidated financial statements, intra-group transactions are:


A. Eliminated in full
B. Eliminated partially
C. Recognized in the normal way
D. Deferred until realized outside the group

4. Non-controlling interest (NCI) is presented in the consolidated statement of


financial position as:
A. A liability
B. Part of equity
C. A contra-asset
D. An expense

5. When a parent loses control of a subsidiary, it shall:


A. Continue consolidating
B. Derecognize assets, liabilities, and NCI of the subsidiary
C. Record a gain or loss in OCI
D. Ignore the transaction

6. Which of the following is a capital transaction?


A. Purchase of inventory
B. Issuance of shares
C. Payment of salaries
D. Payment of utilities

7. Under PFRS 9, financial assets are classified into:


A. FVOCI, FVPL, amortized cost
B. Held-to-maturity, available-for-sale, loans and receivables
C. Trading, non-trading, investments
D. Short-term and long-term

8. In partnership accounting, when a partner invests non-cash assets, the asset


is recorded at:
A. Historical cost to partner
B. Partner’s book value
C. Fair value
D. Assessed value

9. In branch accounting, the "home office" account in the branch books is:
A. Asset
B. Liability
C. Equity
D. Revenue

[Link] a liquidation of a partnership, losses are allocated to partners:


A. Based on their capital balances
B. Based on profit and loss ratio
C. Equally
D. Based on agreement only

[Link] of the following is not eliminated in preparing consolidated financial


statements?
A. Parent’s investment in subsidiary
B. Intra-group receivables and payables
C. Dividends paid to NCI
D. Goodwill

[Link] a corporation issues shares in exchange for property, the property is


recorded at:
A. Nominal value
B. Par value of shares issued
C. Fair value of property or shares, whichever is more clearly evident
D. Book value of property

[Link] PFRS 15, revenue is recognized when:


A. Contract is signed
B. Control of goods or services passes to customer
C. Cash is received
D. Invoice is issued

[Link] the functional currency differs from the presentation currency, translation is
made using:
A. Historical rate for all items
B. Closing rate for assets and liabilities; average rate for income and
expenses
C. Average rate for all items
D. Spot rate for all items

[Link] an installment sale, gross profit rate is computed as:


A. Gross profit ÷ Net sales
B. Gross profit ÷ Cost of sales
C. Net income ÷ Sales
D. Collections ÷ Gross profit

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