,1. When preparing consolidated financial statements, which of
the following adjustments would you typically make?
a. Eliminate intercompany sales transactions.
b. Recognize unrealized intercompany profits.
c. Treat non-controlling interest as an expense.
d. Convert all sub-ledger accounts to fair value.
Answer: a. Eliminate intercompany sales transactions.
Rationale: Intercompany sales create transactions within the
group that should not appear in consolidated statements, ensuring
only external transactions are shown.
, 3. In the context of accounting for leases under IFRS 16, which of
the following is NOT classified as a right-of-use asset?
a. Vehicle leases
b. Building leases
c. Land use leases
d. Short-term equipment rentals
Answer: d. Short-term equipment rentals.
Rationale: Short-term rentals are typically excluded from the
right-of-use asset definition.
4. According to IFRS 3, for a business combination, the acquirer
should recognize identifiable assets acquired and liabilities assumed
at:
a. Carrying amount
b. Fair value
c. Historical cost
d. Amortized cost
Answer: b. Fair value.
Rationale: IFRS 3 requires assets and liabilities in a business
combination to be recognized at their fair values at the acquisition
date.
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