Question 1

_______________ are the financial statements of a group of companies.

Accepted Answer

Group Accounts are the financial statements that consolidate the accounts of a parent company and its subsidiaries, providing an overall financial picture of the entire group of companies.

Question 2

___________ establishes principles for presenting and preparing consolidated financial statements when an entity controls one or more other entities.

Accepted Answer

IFRS 10 establishes the principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.

Question 3

A _________ includes the income and expenses of a subsidiary in the consolidated financial statements from the date it gains control until the date when the reporting entity ceases to control the subsidiary.

Accepted Answer

The correct term is "Reporting Entity." This term refers to the entity that prepares consolidated financial statements, including the income and expenses of a subsidiary from the date it gains control until the control ceases.

Question 4

___________ transactions are transactions between entities within a group of entities and that group is consolidated into one set of Consolidated Financial Statements.

Accepted Answer

Intra-group transactions are transactions between entities within a group that is consolidated into one set of Consolidated Financial Statements. These transactions are eliminated during the consolidation process to avoid double counting of revenues, expenses, and balances within the group.

Question 5

The _____________ account appear in the Balance Sheet of the Holding company at the time of consolidation.

Accepted Answer

Share premium is a part of the equity share capital of a company. It is the excess of the issue price of shares over their par value. Share premium is credited to the share premium account, which is a part of the shareholders' equity. At the time of consolidation, the share premium account of the subsidiary company is eliminated against the share premium account of the holding company.

Question 6

__________ is the corporate management term for the act of reorganizing the legal, ownership, operational or other structures of a company for the purpose of making it more profitable or better organized for its present needs.

Accepted Answer

Restructuring is the process of reorganizing a company's structure to make it more profitable or better suited to its current needs. This can involve changes in legal, ownership, operational, or other structures.

Question 7

A merger is defined as the joining of two or more companies to form a single legal entity.

Accepted Answer

A merger involves the combination of two or more companies into a single entity, where they operate as one legal entity, which aligns with the definition provided.

Question 8

All business combinations must be treated as _________ for accounting purposes.

Accepted Answer

Under current accounting standards, all business combinations are treated as acquisitions. This means that one entity is identified as the acquirer and the other as the acquiree, regardless of the legal form of the combination.

Question 9

In external reconstruction, the liquidated company is called ______________________.

Accepted Answer

In external reconstruction, the liquidated company is referred to as the Vendor Company because it sells its assets to the newly formed company.

Question 10

The tax effect on the timing differences is termed as ___________________.

Accepted Answer

Deferred Tax is the tax effect on timing differences between the accounting income and taxable income. It accounts for the differences that will reverse in future periods.

Question 11

The objective of ________________is to prescribe, for lessees and lessors, the appropriate accounting policies and disclosures to apply in relation to finance and operating leases.

Accepted Answer

IAS 17, "Leases," was the International Accounting Standard that prescribed the accounting policies and disclosures lessees and lessors should follow regarding finance and operating leases.

Question 12

In finance lease agreement, the option for the lessee to purchase the property or equipment at a specific price is known as __________________________.

Accepted Answer

A balloon payment in a finance lease agreement refers to a large, final payment at the end of the lease term, which can give the lessee the option to purchase the leased asset. This allows the lessee to acquire the asset at a predetermined price, often significantly lower than the market value at the time of purchase.

Question 13

________________ provides information to the management regarding human resource cost and value.

Accepted Answer

Human Resource Accounting provides information to the management regarding human resource cost and value, focusing on measuring the investment in human resources and its impact on organizational performance.

Question 14

______________________is the assistance of finance professionals to settle disputes concerning allegations, fraudulence, suspicion of fraud and misconduct in business.

Accepted Answer

Forensic accounting involves the use of accounting expertise to investigate financial discrepancies and anomalies, often in the context of legal disputes or allegations of fraud. This field is specifically tailored to uncovering financial fraud, assisting in the investigation of financial crimes, and providing expert witness testimony in court cases.

Question 15

____________ aims to measure and inform the general public about the social welfare activities undertaken by the enterprise and their effects on the society

Accepted Answer

Social Audit aims to measure and inform the general public about the social welfare activities undertaken by an enterprise and their effects on society. It focuses on the social impact of an organization's operations.

Question 16

________________ also called green accounting.

Accepted Answer

Environmental accounting, also known as green accounting, involves incorporating environmental costs into financial decisions and reporting. It tracks the environmental impacts of a company's financial operations.

Question 17

______________manages business finances effectively, make the right decisions and maximize your profits.

Accepted Answer

Proactive Accounting involves anticipating financial challenges and opportunities, allowing businesses to make informed decisions and maximize profits.

Question 18

_____________ refers to the process of adjusting the financial statements of a company to show the real financial position of the company during the inflationary period.

Accepted Answer

Inflation Accounting is the process used to adjust the financial statements of a company to reflect the effects of inflation. This approach helps in showing a more accurate financial position of the company during periods of inflation.

Question 19

Increase in the price of various goods and services over a period of time is known as ___________________

Accepted Answer

Inflation is the term used to describe the increase in the price of various goods and services over a period of time.

Question 20

Price for changes accounting can be done by the following method__________________.

Accepted Answer

Both methods mentioned in options A and B are valid for adjusting accounting practices for changes in price levels. Current purchasing power and current value accounting focus on adjusting financial statements to reflect changes in the purchasing power of money. Replacement cost accounting and current cost accounting adjust asset values to their current replacement or acquisition costs.

Quiz 1: Accounting and Financial Statements