ACCA FA Practice Test

ACCA FA Consolidated Financial Statements Practice Questions

Consolidated Financial Statements makes up 4 of every 50 questions on a Tigertest ACCA FA practice test. Here are 10 of the 16 questions on it, each with the answer and the reason.

Updated 2026-11-10 by the Tigertest team. Based on ACCA's FA syllabus and study guide for 2026-27, with IFRS 18 formats. Original Section A style questions; Section B not included. Not affiliated with ACCA.

1. 1. A subsidiary is an entity that is:

   • A.Jointly controlled by two investors
   • B.Controlled by another entity
   • C.Significantly influenced by another
   • D.Owned 20% to 50% by one investor

   Answer: B. Under IFRS 10, a parent consolidates the entities it controls. Significant influence, usually 20% to 50% of the votes, gives an associate.

2. 2. An investor controls an investee when it has power over it, exposure to variable returns from it and:

   • A.A seat on its audit committee
   • B.The investee's consent to consolidation
   • C.Ownership of all of its shares
   • D.The ability to use its power to affect those returns

   Answer: D. IFRS 10 requires all three elements. Control can exist with less than 100%, or even less than 50%, of the shares.

3. 3. P owns 45% of S's voting shares. Under an agreement with other shareholders, P can appoint most of S's board. S is:

   • A.A subsidiary of P
   • B.Unrelated to P
   • C.An associate of P
   • D.A trade investment of P

   Answer: A. Control does not depend on holding over half the shares. The power to appoint a majority of the board gives P control, so S is consolidated.

4. 4. P bought 80% of S for $640,000 cash plus 120,000 of its own shares with a fair value of $2.40 each. The non-controlling interest's fair value was $230,000. S's net assets had a carrying amount of $845,000, and its land was worth $55,000 more than its carrying amount. Goodwill is:

   • A.$28,000
   • B.$313,000
   • C.$258,000
   • D.$90,000

   Answer: C. Consideration is $640,000 + $288,000 = $928,000. Goodwill = $928,000 + $230,000 - ($845,000 + $55,000) = $258,000. Valuing the shares at $1 each would give $90,000.

5. 5. At acquisition, the non-controlling interest (20%) in S was measured at its fair value of $230,000. S has made post-acquisition profits of $135,000. The non-controlling interest in the consolidated statement of financial position is:

   • A.$365,000
   • B.$203,000
   • C.$257,000
   • D.$230,000

   Answer: C. NCI = fair value at acquisition + NCI share of post-acquisition profits = $230,000 + 20% x $135,000 = $257,000.

6. 6. P's receivables are $84,000 and S's are $57,000. S's receivables include $6,500 owed by P, and the current accounts agree. Consolidated receivables are:

   • A.$134,500
   • B.$128,000
   • C.$147,500
   • D.$141,000

   Answer: A. Intra-group balances are cancelled: $84,000 + $57,000 - $6,500 = $134,500. P's matching $6,500 payable is removed from consolidated payables.

7. 7. P sold goods to S for $36,000 at a mark-up of 20% on cost. A quarter of the goods are still in S's inventory at the year end. The unrealised profit to remove is:

   • A.$9,000
   • B.$1,800
   • C.$6,000
   • D.$1,500

   Answer: D. Goods still held cost S $9,000. Profit within them at a 20% mark-up is $9,000 x 20/120 = $1,500. Taking 20% of $9,000 treats the mark-up as a margin.

8. 8. P sold goods to its subsidiary S at a profit, and some are still in S's inventory. The unrealised profit is removed from:

   • A.Goodwill and inventory
   • B.Group retained earnings and inventory
   • C.NCI and inventory
   • D.Group revenue only

   Answer: B. Because the parent was the seller, the profit sits in the parent's retained earnings. It is removed from there and from inventory, and the NCI is not affected.

9. 9. P's revenue is $960,000 and S's is $540,000. During the year S sold goods for $75,000 to P. Consolidated revenue is:

   • A.$1,465,000
   • B.$1,425,000
   • C.$1,500,000
   • D.$1,350,000

   Answer: B. The group cannot sell to itself, so intra-group sales are removed: $960,000 + $540,000 - $75,000 = $1,425,000. The same amount is removed from cost of sales.

10. 10. P acquired S on 1 October. The year end is 31 December. S's revenue for the year was $480,000, earned evenly. The amount of S's revenue in the consolidated statement of profit or loss is:

    • A.$360,000
    • B.$40,000
    • C.$480,000
    • D.$120,000

    Answer: D. Only results after acquisition are consolidated: three months, $480,000 x 3/12 = $120,000. The first nine months were earned before P owned S.