Deck 3: Accounting Standards and Principles: Borrowing Costs, Asset Measurement, Employee Benefits, and More

Question 1

Borrowing cost are,

A)Interest and other cost that an entity incurs in connection with borrowing of funds
B)Dividend payments
C)Fine on delayed payments
D)None of the above

Answer 1

Interest and other cost that an entity incurs in connection with borrowing of funds

Question 2

Borrowing cost do not include,

A)Interest on debentures
B)Incremental administrative fees for raising loans
C)Dividend declared to equity shareholders
D)All of the above

Answer 2

Dividend declared to equity shareholders

Question 3

Total borrowings used for construction of an office building are Rs.30, 00000. Entity issued 8% debentures worth 10,00000 for this purpose and balance amount was utilized from its common pool including 10% bank loan of Rs.1000000 and 9.5% bank loan of Rs.1000000. What is the amount of borrowing cost to be capitalized?

A)275000
B)300000
C)250000
D)265000

Answer 3

275000

Question 4

An entity shall cease capitalizing borrowing cost when

A)Expenditure on the asset is being incurred
B)Borrowing cost are being incurred
C)The asset is materially ready for its intended use
D)All of the above

Question 5

Capitalization of borrowing cost should not cease when

A)There is a delay and that delay is inherent in the asset acquisition process
B)There is a delay in payment of interest on loan
C)There is a permanent interruption
D)None of the above

Question 6

Carrying amount of an asset as on 1st April 2015 is Rs. 1500000 and depreciation for the year 2015 - 2016 is 15000. Fair value of the asset less cost of disposal as on 31 March 2016 is Rs. 120000. Which of the following is the carrying amount at 1st April 2106?

A)120000
B)135000
C)150000
D)165000

Question 7

Ind AS 2 deals with…

A)Inventories
B)Depreciation
C)Employee benefits
D)Financial reporting

Question 8

An item of property , plant and equipment that qualifies for recognition as an asset shall be measured at

A)Cost
B)Market price
C)Replacement value
D)Opportunity cost

Question 9

Inventory allocated to the construction of fixed asset should be……

A)Capitalized
B)Expensed
C)Reduced from value of inventory
D)None of the above

Question 10

Ind AS 38 deals with…….

A)Tangible assets
B)Impairment
C)Intangible assets
D)Borrowing cost.

Question 11

…………. are the amount of income tax payable in future period for taxable temporary differences.

A)Deferred tax asset
B)Deferred tax liability
C)Current tax
D)Tax base

Question 12

……………….is the price at which goods or services would be sold separately to a customer

A)Stand - alone price
B)Contract price
C)Individual price
D)Sales price

Question 13

……………..are employee benefits that are payable after the completion of employment

A)Retirement benefits
B)Post employee benefits
C)Share based payments
D)None of the above

Question 14

As per IFRS15, an agreement between two or more parties that creates enforceable right and obligation is called….

A)Agreement
B)Contract
C)Performance obligation
D)Liability

Question 15

Which of the following is not an exception for application of IFRS 15

A)Lease contract
B)Insurance contract
C)None monetary exchanges
D)All the above

Question 16

A……………………..is the liability of uncertain timing and uncertain amount.

A)Provision
B)Reserve
C)Current liability
D)None of the above

Question 17

Operating lease is

A)Short term agreement
B)Long term agreement
C)Medium term agreement
D)Any of the above

Question 18

Finance leases are accounted for in a similar manner to:

A)Cash transaction
B)Credit transaction
C)Lease back transaction
D)Long forgiveness

Question 19

Which of the following securities do not influence diluted EPS?

A)Equity shares not entitled to dividend, but which may in the future
B)Ordinary preference share
C)Convertible loan stock
D)Share option

Question 20

Which of the following is not an example of a potential ordinary share?

A)Standard preference share
B)Convertible preference share
C)Stock warrant
D)Convertible debt

Question 21

Theoretical ex-rights price ('TERP') is calculated when there is a:

A)Bonus issue
B)Right issue
C)Stock split
D)All of these

Question 22

A biological asset used in agricultural activity whose fair value is readily determinable without undue cost or effort is accounted for using:

A)The fair value model.
B)The cost model or the fair value model (an accounting policy choice).
C)The cost model.
D)Any of the above

Question 23

At the point of harvest an entity measures fruits (agricultural produce) that it picks from its orchards (biological assets):

A)At fair value.
B)At fair value less costs to sell.
C)At cost.
D)At the lower of cost and estimated selling price less costs to complete and sell.

Question 24

Two entities are not necessarily related parties if:

A)One entity has significant influence over the other.
B)One entity has control over the other.
C)The entities share joint control over a third entity
D)One entity has joint control over the other.