State which statement is true and false!

Answer all the question

State True or False and the reasons for your response. For multiple-choice questions, give the most appropriate answer. CQ5.1 Payables and receivables in the group statement of financial position include balances with associate companies. CQ5.2 Dividend income in the profit or loss of a parent company should be eliminated against dividend payable in the statement of financial position of a subsidiary company. CQ5.3 A profit from an intercompany sale would result in either a higher cost of sales in the income statement or a higher inventory balance in the statement of financial position of the buying company. CQ5.4 An adjustment needs to be made to the unrealized profit included in the inventory balance to avoid the understatement of group profits and the overstatement of group assets. CQ5.5 Revenue is recognized in group accounts only when the control of inventory are transferred to a third party. CQ5.6 The parent's theory underlies the procedure for reducing non-controlling interests' share of current profit with their share of unrealized profit arising from an upstream sale. CQ5.7 In a downstream sale, when a parent sells to its subsidiary, non-controlling interests' share of current profit is reduced by the latter's share of the unrealized profit. CQ5.8 If an item purchased at a marked-up price from a group company in the previous year remains unsold at the end of the current year, group inventory and gross profit will have to be reduced. CQ5.9 If an item purchased at a marked-up price from a group company in the previous year is resold in the current year, group gross profit will increase and group beginning retained earnings wil. reduce. CQ5.10 If a subsidiary sells equipment to its parent and recognizes a loss on sale in the previous year and the loss is not indicative of an impairment loss, which of the following is true? (a) A consolidation adjustment to reduce retained earnings and fixed assets is required. CQ5.8 If an item purchased at a marked-up price from a group company in the previous year remains unsold at the end of the current year, group inventory and gross profit will have to be reduced. CQ5.9 If an item purchased at a marked-up price from a group company in the previous year is resold in the current year, group gross profit will increase and group beginning retained earnings will reduce. CQ5.10 If a subsidiary sells equipment to its parent and recognizes a loss on sale in the previous year and the loss is not indicative of an impairment loss, which of the following is true? (a) A consolidation adjustment to reduce retained earnings and fixed assets is required. (b) A consolidation adjustment to reduce gain on sale and fixed assets is required. (c) A consolidation adjustment to increase retained earnings and fixed assets is required. CQ5.11 Assuming the situation in CQ5.10, group depreciation expense in each subsequent year of sale will (a) Not be subject to any adjustment. (b) Be the sum of the parent's and subsidiary's depreciation adjusted downwards for the depreciation. (c) Be the sum of the parent's and subsidiary's depreciation adjusted upwards for the depreciation. CQ5.12 If a subsidiary sells equipment to its parent in the current year at a loss because the value of the equipment is impaired, which of the following is true? (a) A consolidation adjustment to reverse loss on sale and increase fixed assets is required. (b) A consolidation adjustment to reverse loss on sale and decrease fixed assets is required. (c) Loss on sale is reclassified as an impairment loss. CONCEPT QUESTIONS State True or False and the reasons for your response. For multiple-choice questions, give the most appropriate answer. CQ5.1 Payables and receivables in the group statement of financial position include balances with associate companies. company. position of the buying company. CQ5.4 An adjustment needs to be made to the unrealized profit included in the inventory balance to avoid the understatement of group profits and the overstatement of group assets. CQ5.5 Revenue is recognized in group accounts only when the control of inventory are transferred to a third party. upstream sale. CQ5.7 In a downstream sale, when a parent sells to its subsidiary, non-controlling interests' share of current profit is reduced by the latter's share of the unrealized profit will have to be reduced. CQ5.9 If an item purchased at a marked-up price from a group company in the previous year is resold in the current year, group gross profit will increase and group beginning retained earnings will reduce. following is true? (a) A consolidation adjustment to reduce retained earnings and fixed assets is required. (b) A consolidation adjustment to reduce gain on sale and fixed assets is required. (c) A consolidation adjustment to increase retained earnings and fixed assets is required. CQ5.11 Assuming the situation in CQ5.10, group depreciation expense in each subsequent year of sale will (a) Not be subject to any adjustment. (b) Be the sum of the parent's and subsidiary's depreciation adjusted downwards for the depreciation. (c) Be the sum of the parent's and subsidiary's depreciation adjusted upwards for the depreciation. CQ5.12 If a subsidiary sells equipment to its parent in the current year at a loss because the value of the equipment is impaired, which of the following (a) A consolidation adjustment to reverse loss on sale and increase fixed assets is required. (b) A consolidation adjustment to reverse loss on sale and decrease fixed assets is required. (c) Loss on sale is reclassified as an impairment loss. State True or False and the reasons for your response. For multiple-choice questions, give the most appropriate answer. CQ5.1 Payables and receivables in the group statement of financial position include balances with associate companies. CQ5.2 Dividend income in the profit or loss of a parent company should be eliminated against dividend payable in the statement of financial position of a subsidiary company. CQ5.3 A profit from an intercompany sale would result in either a higher cost of sales in the income statement or a higher inventory balance in the statement of financial position of the buying company. CQ5.4 An adjustment needs to be made to the unrealized profit included in the inventory balance to avoid the understatement of group profits and the overstatement of group assets. CQ5.5 Revenue is recognized in group accounts only when the control of inventory are transferred to a third party. CQ5.6 The parent's theory underlies the procedure for reducing non-controlling interests' share of current profit with their share of unrealized profit arising from an upstream sale. CQ5.7 In a downstream sale, when a parent sells to its subsidiary, non-controlling interests' share of current profit is reduced by the latter's share of the unrealized profit. CQ5.8 If an item purchased at a marked-up price from a group company in the previous year remains unsold at the end of the current year, group inventory and gross profit will have to be reduced. CQ5.9 If an item purchased at a marked-up price from a group company in the previous year is resold in the current year, group gross profit will increase and group beginning retained earnings wil. reduce. CQ5.10 If a subsidiary sells equipment to its parent and recognizes a loss on sale in the previous year and the loss is not indicative of an impairment loss, which of the following is true? (a) A consolidation adjustment to reduce retained earnings and fixed assets is required. CQ5.8 If an item purchased at a marked-up price from a group company in the previous year remains unsold at the end of the current year, group inventory and gross profit will have to be reduced. CQ5.9 If an item purchased at a marked-up price from a group company in the previous year is resold in the current year, group gross profit will increase and group beginning retained earnings will reduce. CQ5.10 If a subsidiary sells equipment to its parent and recognizes a loss on sale in the previous year and the loss is not indicative of an impairment loss, which of the following is true? (a) A consolidation adjustment to reduce retained earnings and fixed assets is required. (b) A consolidation adjustment to reduce gain on sale and fixed assets is required. (c) A consolidation adjustment to increase retained earnings and fixed assets is required. CQ5.11 Assuming the situation in CQ5.10, group depreciation expense in each subsequent year of sale will (a) Not be subject to any adjustment. (b) Be the sum of the parent's and subsidiary's depreciation adjusted downwards for the depreciation. (c) Be the sum of the parent's and subsidiary's depreciation adjusted upwards for the depreciation. CQ5.12 If a subsidiary sells equipment to its parent in the current year at a loss because the value of the equipment is impaired, which of the following is true? (a) A consolidation adjustment to reverse loss on sale and increase fixed assets is required. (b) A consolidation adjustment to reverse loss on sale and decrease fixed assets is required. (c) Loss on sale is reclassified as an impairment loss. CONCEPT QUESTIONS State True or False and the reasons for your response. For multiple-choice questions, give the most appropriate answer. CQ5.1 Payables and receivables in the group statement of financial position include balances with associate companies. company. position of the buying company. CQ5.4 An adjustment needs to be made to the unrealized profit included in the inventory balance to avoid the understatement of group profits and the overstatement of group assets. CQ5.5 Revenue is recognized in group accounts only when the control of inventory are transferred to a third party. upstream sale. CQ5.7 In a downstream sale, when a parent sells to its subsidiary, non-controlling interests' share of current profit is reduced by the latter's share of the unrealized profit will have to be reduced. CQ5.9 If an item purchased at a marked-up price from a group company in the previous year is resold in the current year, group gross profit will increase and group beginning retained earnings will reduce. following is true? (a) A consolidation adjustment to reduce retained earnings and fixed assets is required. (b) A consolidation adjustment to reduce gain on sale and fixed assets is required. (c) A consolidation adjustment to increase retained earnings and fixed assets is required. CQ5.11 Assuming the situation in CQ5.10, group depreciation expense in each subsequent year of sale will (a) Not be subject to any adjustment. (b) Be the sum of the parent's and subsidiary's depreciation adjusted downwards for the depreciation. (c) Be the sum of the parent's and subsidiary's depreciation adjusted upwards for the depreciation. CQ5.12 If a subsidiary sells equipment to its parent in the current year at a loss because the value of the equipment is impaired, which of the following (a) A consolidation adjustment to reverse loss on sale and increase fixed assets is required. (b) A consolidation adjustment to reverse loss on sale and decrease fixed assets is required. (c) Loss on sale is reclassified as an impairment loss