onsolidated financial statements are I. The financial statements of a group presented as those of a single economic entity. II. Those presented by parent, an investor in an associate or a venturer in jointly controlled entity, in which the investment are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investee. I only II only Both I and II Neither I nor II

onsolidated financial statements are I. The financial statements of a group presented as those of a single economic entity. II. Those presented by parent, an investor in an associate or a venturer in jointly controlled entity, in which the investment are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investee. I only II only Both I and II Neither I nor II

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 12P

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Consolidated financial statements are: I. The financial statements of a group presented as those of a single economic entity. II. Those presented by parent, an investor in an associate or a venturer in jointly controlled entity, in which the investment are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investee. A. I only B. II only C. Neither I or II D. Both I and II
In financial statements that are not separate financial statements, how should a joint venturer account for its interest in a joint arrangement? a. As an investment measured either at cost, fair value or using equity method b. As an investment measured using the equity method c. By using a T-account d. By recognizing its share in the assets, liabilities, income and expenses of the join venture and adding them line by line to similar accounts
Which of the following statements are true?(i) Equity accounting method is used to account for investor-associate relationship(ii) Full consolidation is used to account for investor-associate relationship.(iii) Equity accounting method is used to account for parent-subsidiary relationship.(iv) The equity accounting method is used to account for investor-joint venture relationship.Select one:a.(i) and (iv) onlyb.(ii) and (iii) onlyc.(ii) and (iv) onlyd.(iii) and (iv) only
Q1 According to IAS 28, Investments in Associates and Joint Ventures, an investment classified as a joint venture should be equity accounted in the consolidated financial statements of the investor company. Which statement below can be used to describe the Equity accounting method? Select one: a. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for post-acquisition changes in the investor’s share of the net assets of the investee. b. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for amortization over an agreed period of time. c. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for post-acquisition changes in the investor’s share of the net assets of the investee. d. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for amortization over…
Differentiate the SCE (Statement of Changes in Equity) of a sole proprietorship, a partnership and a corporation.
Consider the following statements.I. In applying the Equity Method of accounting for investments in associates, dividends received from the investee are considered a return of capital and should be credited to stockholders’ equity of the investor.II. A subsidiary is an affiliate that is not controlled by an enterprise directly, or indirectly, through one or more intermediaries.State whether the foregoing statements are correct.a. Only I is correctb. Only II is correctc. I and II are correctd. Neither I nor II is correct
Which of the following statements regarding IFRS consolidated financial statements is/are correct: (i) An entity that has equity investments in one or more other entities is required to present consolidated financial statements (ii) A parent whose debt or equity instruments are not traded in a public market is not required to present consolidated financial statements (iii) Consolidated financial statements present the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries as those of a single economic entity
When an entity prepares separate financial statements, it shall account for investments in associates A. At cost. B. Any of the choices. C. In accordance with PFRS 9. D. Using the equity method as described in PAS 28.
Which of the following statement(s) is / are correct on the accounting for an associate in the consolidated statement of profit or loss? PLEASE PROVIDE EXPLAINATION THANK YOU. (I) The associate's income and expenses are added to those of the group on a line-by-line basis. (II) The group share of the associate's income and expenses is added to the group figures on a line-by-line basis. (III) Only dividends received from the associate are recorded in the consolidated statement of profit or loss. A) (I) B) (I) and (II) C) (I) and (III) D) (II) and (III) E) None of the above.
The proprietary theory, the entity theory, and the funds theory are three approaches to accounting for equities. Required: a. Describe briefly each of these theories b. State your reasons for emphasizing the application of one of these theories to each of the following: i. Single proprietorship ii. Partnership iii. Financial institutions (banks) iv. Consolidated statements v. Estate accounting
Explain common forms of business ownership—soleproprietorship, partnership, and corporation—and demonstrate how they differ in terms of their pre-sentation in the statement of financial position.
When two or more investors exercise joint control over an investee, the investors must use the equity method of accounting to recognise the investee in their consolidated financial statements. Select one: True False