According to IFRS 3

question 10

Multiple Choice

According to IFRS 3,

• A) the cost method must be used instead of the equity method.
• B) amortization of goodwill is allowed
• C) companies may choose between issuing parent company or consolidated financial statements.
• D) the pooling of interests method may not be used.

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Definitions:

Sales Journal

A specialized accounting journal used to record all sales of merchandise on credit.

Accrual Basis

A financial recording technique that documents incomes and expenses as they are incurred or earned, without taking into account the timing of cash transactions.

Cash Basis

An accounting method wherein revenues and expenses are recorded when they are actually received or paid, rather than when they are incurred.