Question - 8 : If a parent company sells goods to its subsidiary at a profit and the inventory is still on the
subsidiary’s balance sheet at the year-end, how should the consolidated financial statements be
adjusted?
A : Increase in inventory value and profit
B : Decrease in inventory value and profit
C : No adjustment required
D : Increase in inventory value and decrease in profit

Question - 9 : When preparing consolidated financial statements, how should intercompany receivables
and payables between the parent and a wholly owned subsidiary be treated?
A : Only the receivables should be eliminated
B : Only the payables should be eliminated
C : Both receivables and payables should be eliminated
D : Neither should be eliminated

Question - 10 : When a parent company and its subsidiary use different methods for valuing inventories,
how should the inventories be valued in the consolidated financial statements?
A : Using the parent's method
B : Using the subsidiary's method
C : Using the weighted average of both methods
D : Revaluing the inventories to fair value

Question - 11 : A Limited ceases to be an investment entity and holds an 80% stake in B Limited. The
carrying value of the investment is ₹400,000, and the fair value of non-controlling interest is ₹100,000.
Calculate the value of goodwill and pass the journal entry.
A : Goodwill of ₹50,000; Dr. Net Identifiable Assets ₹450,000, Dr. Goodwill ₹50,000, Cr. Investment ₹400,000, Cr.
Non-controlling interest ₹100,000
B : Goodwill of ₹100,000; Dr. Net Identifiable Assets ₹400,000, Dr. Goodwill ₹100,000, Cr. Investment ₹400,000, Cr.
Non-controlling interest ₹100,000
C : Goodwill of ₹500,000; Dr. Net Identifiable Assets ₹450,000, Dr. Goodwill ₹500,000, Cr. Investment ₹400,000, Cr.
Non-controlling interest ₹100,000
D : No goodwill; Dr. Net Identifiable Assets ₹500,000, Cr. Investment ₹400,000, Cr. Non-controlling interest ₹100,000

Question - 12 : Company P owns 75% of Company Q, which holds 40% in Company R. If R makes a profit
of ₹200,000, how much of this profit reflects in P's consolidated statement of profit and loss?
A : ₹60,000
B : ₹75,000
C : ₹150,000
D : ₹30,000

Question - 13 : Ram Ltd. acquires 60% of Krishan Ltd. with a fair value adjustment of ₹200,000 for land
and buildings. The carrying amount in Krishan Ltd. is ₹360,000. What is the consolidated amount for
land and buildings?

A : ₹560,000
B : ₹360,000
C : ₹760,000
D : ₹200,000

IND AS 113: Fair Value Measurement

Question - 1: A fair value measurement assumes that the transaction to sell the asset or transfer the
liability takes place either:
A : In the principal market or in the most advantageous market
B : In the principal market or in the primary market
C : In the primary market or in the secondary market
D : In the primary market or in the most advantageous market

Question - 2: The basic rule related to inputs to valuation techniques as per IND AS 113 are
A : Maximising the use of relevant observable and unobservable inputs
B : Minimising the use of relevant observable and unobservable inputs
C : Maximising the use of relevant observable inputs and minimising the use of unobservable inputs
D : Minimising the use of relevant observable inputs and maximising the use of unobservable inputs

Question - 3: As per IND AS 113, which of the followings is not a widely used valuation technique?
A : Net present value approach
B : Cost approach
C : Income approach
D : Market approach