According to PFRS 10, which of the following statements is true?

a. A parent entity is required to consolidate its subsidiaries only for internal reporting purposes.
b. A parent entity is encouraged but not required to consolidate its subsidiaries.
c. A parent entity is required to consolidate its subsidiaries.
d. A parent need not consolidate its subsidiaries if the businesses of the subsidiaries are different and
not related to the business of the parent.
2. According to PFRS 10, which of the following is not an element of control?
a. ability to affect return. c. major holdings
b. power d. exposure, or rights, to variable returns
3. Non-controlling interests shall be presented in the consolidated statement of financial position
a. within equity, separately from the equity of the owners of the parent.
b. within equity, not distinguished from the equity of the owners of the parent
c. as a mezzanine item between liabilities and equity
d. any of these as a matter of accounting policy choice
4. Kiwi, Inc. acquired Mori Co. on December 31, 20x0 in a business combination. Both Kiwi and Mori were
incorporated and began business on January 1, 1999. Both Kiwi and Mori reported net income for 1999 and 20x0.
Consolidated retained earnings for Kiwi, Inc and Subsidiary as of December 31, 20x0 will include the net income of
Mori Co., from what date?
a. It will not include the net income of Mori Co.
b. January 1, 20x0 to December 31, 20x0 only
c. January 1, 20x0
d. January 1, 1999

5. Which of the following statements is true?

a. Consolidation is performed by adding line by line similar items of assets, liabilities, income and expenses of
both the parent and its subsidiaries.
b. In a consolidated statement of financial position prepared immediately after a business combination, the
consolidated total equity is always equal to the parent’s total equity.
c. The amount of goodwill is not affected when non-controlling interest is measured at fair value rather than at
the non-controlling interest’s proportionate share in the net assets of the acquiree.
d. All of these statements are true.

6. According to the PFRS for SMEs a parent entity shall present

a. consolidated financial statements and separate financial statements
b. separate financial statements
c. consolidated financial statements
d. none of these

7. A subsidiary shall be excluded from consolidation when

a. There is evidence that control is intended to be temporary because the subsidiary is acquired with the intention
to dispose of it within twelve months from the date of acquisition.
b. The business activities of the subsidiary are dissimilar from those of the other entities within the group.
c. The investor is a venture capital organization, mutual fund, unit trust or similar entity.
d. The subsidiary is operating under severe long-term restrictions that significantly impair its ability to transfer
funds to the parent.

8. A "group" for consolidation purposes is

a. An entity that obtains control over entities or businesses.
b. An entity, including an unincorporated entity such as partnership that is controlled by another
entity.
c. An entity that has one or more subsidiaries.