Consolidation Basics MCQs 2026

Master budget in accounting refers to

1. A difference between actual and standard price ✓
2. B difference between actual and standard wage rate ✓
3. C comprehensive plan for entire organization ✓
4. D difference between actual and budgeted overhead ✓

Flexible budget in accounting refers to

1. A difference between actual and standard quantity ✓
2. B budget adjusted for actual activity level ✓
3. C difference between actual and standard hours ✓
4. D effect of selling more or fewer units than budgeted ✓

Fixed budget in accounting refers to

1. A budget prepared for single planned activity ✓
2. B difference between actual and standard wage rate ✓
3. C difference between actual and budgeted overhead ✓
4. D budget built from zero without prior year base ✓

Material price variance in accounting refers to

1. A difference between actual and standard hours ✓
2. B difference between actual and standard price ✓
3. C effect of selling more or fewer units than budgeted ✓
4. D comprehensive plan for entire organization ✓

Material usage variance in accounting refers to

1. A difference between actual and standard quantity ✓
2. B difference between actual and budgeted overhead ✓
3. C budget built from zero without prior year base ✓
4. D budget adjusted for actual activity level ✓

Labour rate variance in accounting refers to

1. A effect of selling more or fewer units than budgeted ✓
2. B difference between actual and standard wage rate ✓
3. C comprehensive plan for entire organization ✓
4. D budget prepared for single planned activity ✓

Labour efficiency variance in accounting refers to

1. A budget built from zero without prior year base ✓
2. B budget adjusted for actual activity level ✓
3. C difference between actual and standard price ✓
4. D difference between actual and standard hours ✓

Overhead spending variance in accounting refers to

1. A comprehensive plan for entire organization ✓
2. B difference between actual and budgeted overhead ✓
3. C budget prepared for single planned activity ✓
4. D difference between actual and standard quantity ✓

Sales volume variance in accounting refers to

1. A budget adjusted for actual activity level ✓
2. B difference between actual and standard price ✓
3. C effect of selling more or fewer units than budgeted ✓
4. D difference between actual and standard wage rate ✓

Zero-based budgeting in accounting refers to

1. A budget built from zero without prior year base ✓
2. B budget prepared for single planned activity ✓
3. C difference between actual and standard quantity ✓
4. D difference between actual and standard hours ✓

Parent company in accounting refers to

1. A excess of consideration over net identifiable assets ✓
2. B group applies consistent policies where practicable ✓
3. C recognize assets and liabilities at acquisition fair values ✓
4. D entity that controls one or more subsidiaries ✓

Subsidiary in accounting refers to

1. A entity controlled by another company ✓
2. B equity in subsidiary not owned by parent ✓
3. C removing intra-group balances and transactions ✓
4. D power over investee, exposure to returns, ability to use power ✓

Consolidated financial statements in accounting refers to

1. A combined statements of group as single economic entity ✓
2. B removing intra-group balances and transactions ✓
3. C power over investee, exposure to returns, ability to use power ✓
4. D older method replaced by full consolidation under IFRS ✓

Non-controlling interest in accounting refers to

1. A group applies consistent policies where practicable ✓
2. B equity in subsidiary not owned by parent ✓
3. C recognize assets and liabilities at acquisition fair values ✓
4. D entity controlled by another company ✓

Goodwill on consolidation in accounting refers to

1. A power over investee, exposure to returns, ability to use power ✓
2. B older method replaced by full consolidation under IFRS ✓
3. C entity that controls one or more subsidiaries ✓
4. D excess of consideration over net identifiable assets ✓

Intercompany elimination in accounting refers to

1. A recognize assets and liabilities at acquisition fair values ✓
2. B entity controlled by another company ✓
3. C combined statements of group as single economic entity ✓
4. D removing intra-group balances and transactions ✓

Uniform accounting policies in accounting refers to

1. A older method replaced by full consolidation under IFRS ✓
2. B entity that controls one or more subsidiaries ✓
3. C group applies consistent policies where practicable ✓
4. D equity in subsidiary not owned by parent ✓

Control definition IFRS 10 in accounting refers to

1. A entity controlled by another company ✓
2. B combined statements of group as single economic entity ✓
3. C excess of consideration over net identifiable assets ✓
4. D power over investee, exposure to returns, ability to use power ✓

Acquisition method in accounting refers to

1. A entity that controls one or more subsidiaries ✓
2. B equity in subsidiary not owned by parent ✓
3. C removing intra-group balances and transactions ✓
4. D recognize assets and liabilities at acquisition fair values ✓

Proportionate consolidation (legacy) in accounting refers to

1. A older method replaced by full consolidation under IFRS ✓
2. B combined statements of group as single economic entity ✓
3. C excess of consideration over net identifiable assets ✓
4. D group applies consistent policies where practicable ✓

Consolidation scenario 20: a Pakistani step acquisition group must correctly handle goodwill calculation

1. A ignore the transaction until next fiscal year ✓
2. B record only one side of the entry ✓
3. C debit and credit both affected so the equation stays balanced ✓
4. D post directly to retained earnings without analysis ✓