Quiz
Theoretical Test - Joint Arrangement Accounting
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Questions in this quiz (20)
1It arises where two or more entities have an arrangement between each other such that these entities have joint control over the arrangement
- AJoint Arrangement
- BJoint Operation
- CJoint Venture
- DJoint Account
2The characteristics of a joint arrangement includes the following, except:
- AThe parties are bound by a contractual arrangement
- BThe contractual arrangement gives two or more parties joint control over the arrangement
- CThere is a unanimous consent of the parties over the arrangement
- DThere should be 50% interest over the corporate arrangement.
3Joint control exists when there are the following items, except
- AThere exists a contractually agreed sharing of control
- BThere must be a unanimous consent of the parties
- CThere is no single party that has control over the arrangement
- DThe party that holds the substantial portion over the company must have a sole control over the arrangement.
4A Corporation and B Corporation made an arrangement. A has a 50% interest over the entity. B has a share of 50%. The contract requires that 70 percent of the entity's interest must agree before making a decision over a particular activity. The contract is:
- APartnership
- BIncorporation
- CJoint Arrangement
- DSales
5A, B and C made an entity with agreed sharing in the entity's interest: 50%,20% and 30%. They agreed that a company can make a decision if at least 50% of the interest had been exercised. The contract has:
- Aa joint control
- Bno joint control
- Cjoint management
- Dabsolute control of party - C
6A, B, C and D had decided to make an arrangement. The parties require that there may be unanimous vote for all the activities they are going to take. The contract has:
- AJoint Control
- BSignificant Influence
- CAbsolute Control of one party
- DFinancial Interest only but no control
7The accounting method for joint venture is:
- ACost Method
- BFair Value through profit or loss
- CEquity Method
- DFair Value through Other Comprehensive Income
8An example of a credit to Investment in Joint Venture account.
- AInitial Investment
- BShare in Net Income
- CDividend Received
- DChange in accounting estimate
9An example of debit to Investment in Joint Venture account.
- AShare in Net Loss
- BShare in Other Comprehensive Loss
- CDividend Received
- DInitial Investment
10Recording the share of net income from a joint venture will result to:
- ADecrease in Investment in Joint Venture account
- BIncrease in Investment in Joint Venture account
- CNo effect in Investment in Joint Venture account
- DDecrease in total equity
11A joint arrangement may be:
- AA Corporation
- BA Partnership
- CA Financial Structure
- DAll of the choices are correct
12If the joint arrangement has no separate vehicle. The arrangement is a:
- AJoint Venture
- BJoint Operation
- CCorporation
- DPartnership
13A Joint Arrangement that has a separate vehicle is a:
- AJoint Management
- BJoint Account
- CJoint Operation
- DJoint Venture
14Which of the following statement is false:
- AUnder the Equity Method, a share in net income will result to an increase in the Investment account.
- BUnder Equity Method, initial investment to a joint venture will result to an increase in the Investment account.
- CUnder Equity Method, dividend received from a joint venture will result to a decrease in the Investment account.
- DUnder Equity Method, dividend received from a joint venture will result to an increase in the Investment account.
15Dividend received from a joint venture shall be treated in the Investor's books as
- AA Dividend Income
- BExpense
- CReturn of Investment
- DOther Comprehensive Income
16The method of accounting for joint operation
- Athe Equity Method
- BFair Value Method
- CCost Method
- DThe joint operator shall record his separate assets, liabilities, revenue and expenses in his separate books.
17When the contractual arrangement establishes the allocation of revenues and expenses on the basis of the relative performance of each party to the joint arrangement. The arrangement is a:
- AJoint Venture
- BJoint Operation
- CJoint Account
- Dnone of the choices
18When the contractual arrangement establishes that the parties to the joint arrangement are liable to the arrangement only to the extent of their respective investments. The arrangement is a:
- AJoint Venture
- BJoint Operation
- CJoint Account
- DJoint Management
19The accounting for joint operation includes the following, except:
- AThe joint operator must recognize the assets it controls in the arrangement
- BThe joint operator must recognize the liabilities it incurs in the arrangement
- CThe joint operator must recognize the share of revenue over the operation and the expenses that he incur
- DThe joint operator must only recognize his share in the net assets over the arrangement
20Which of the following statement is false:
- AIn a joint arrangement, the control may be joint but profit sharing is not necessarily equal
- BA party that participates in, but does not have joint control nor a significant influence, a joint venture shall account for its interest in the arrangement in accordance with PAS 39/PFRS 9 Financial Instruments
- CA joint venture accounting uses consolidation method in the financial statement preparation
- DA cash settlement may also be represented by the joint operator's account balance after recording investments, withdrawals and share in joint operation profit.
Information
- Description
- Multiple choice type for accounting theories and concepts
- Author
- simon_pisano
- Language
- English
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