The 'Cost of Control' (Goodwill) arises on consolidation when: MCQ with Answer and Explanation

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The 'Cost of Control' (Goodwill) arises on consolidation when:

A. Subsidiary makes loss

B. Purchase consideration is more than net assets acquired

C. Parent company pays less

D. Net assets are more than purchase consideration

Answer: Option B

Solution (By JKSSB Mock Tests)

Goodwill on consolidation arises when cost of investment exceeds the fair value of net assets of subsidiary.

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The 'Integrated Reporting' framework is developed by:

A. International Integrated Reporting Council (IIRC)

B. IFRS Foundation

C. FASB

D. ICAI

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Correct Answer: Option A

Explanation:
IIRC (now part of IFRS Foundation) developed the International Framework.

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Question #2

In the Indian financial system, SEBI regulates:

A. Foreign exchange

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Correct Answer: Option B

Explanation:
The Securities and Exchange Board of India (SEBI) is the regulatory body for the securities and capital markets in India.

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Question #3

A: Standard costing is used for cost control. R: It involves setting predetermined costs and analyzing variances. Choose the correct option.

A. A is false but R is true

B. A is true but R is false

C. Both A and R are true and R is the correct explanation of A

D. Both A and R are true but R is NOT the correct explanation of A

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Correct Answer: Option C

Explanation:
Standard costing is a management tool for cost control. It achieves this by establishing standard (predetermined) costs and comparing them with actual costs to identify and analyze variances for corrective action. R correctly explains A.

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