Q1:

Bill Limited holds a 60% interest in Bob Limited. Bill Limited sells inventory to Bob Limited during the year for $10,000. The inventory originally cost $7,000. At the end of the year 50% of the inventory is still on hand. The tax rate is 30%. The NCI adjustment required in relation to this transaction is a debit of:

		NIL.
		$420.
		$600.
		$1,050.

Q2:

The statement of cash flows is not used to:

		Assess the ability of an entity to generate cash.
		Help predict future cash flows.
		Check the accuracy of past assessments of future cash flows.
		Indicate significant changes in asset, liability and equity accounts for the year.

Q3:

The carrying amount of property, plant and equipment is $1,000 at the start of the year and $1,400 at the end of the year. During the year, the following occurred:

• Sale of equipmentcarrying amount $40
• Acquisition of equipmentfinanced by share issue $200
• Depreciation expense for year$120

Investing cash flow is:

		($400).
		($200).
		($160).
		($360).

Q4:

Which of the following statements is incorrect?

		Significant influence requires the investor to have the power or capacity to participate in the investees financial and operating policy decision.
		The key criterion for identifying a joint arrangement is that the joint venturers have joint control over the joint venture.
		Significant influence requires the investor to actually exercise its power over the investee.
		The assessment of the existence of significant influence requires judgement on the part of the accountants.

Q5:

Warriors Limited acquired a 20% share in Tomkins Limited for $36 000. Warriors Limited has no other investments. At the date on which it became an associate, Tomkins Limited had the following equity: - share capital $100 000 - retained earnings $80 000. At the end of the financial year following the investment, Tomkins Limited generated a profit after tax of $12 000. After applying the equity method of accounting, Warriors Limited will have which of the following carrying amounts for the investment?

		$38 400.
		$36 000.
		$33 600.
		$18 400.

Q6:

A decrease in the direct rate of US$1 to A$# results in:

		an increase in US$ amount for a payable in A$.
		a decrease in A$ amount for a payable in US$.
		an exchange loss.
		an increase in A$ amount for receivable in US$.

Q7:

Foreign exchange risk may relate to:

		recognised assets and liabilities.
		planned foreign currency transactions.
		unrecognised firm commitments.
		all of the above.

Q8:

The currency of the country in which the foreign operation is based is referred to as the:

		local currency.
		presentation currency.
		operational currency.
		functional currency.

Q9:

Translating from the functional currency to the presentation currency involves which of the following procedures?

		Recognise exchange differences in other comprehensive income.
		Translate the income and expenses at the exchange rates at the dates of the transactions.
		Translate the assets and liabilities at the closing rate at the date of the statement of financial position.
		All of the above.