Question 1

IAS 24 and Ind AS 24 are deal with……
A)Reporting
B)Joint control
C)Subsidiary
D)Related party

Accepted Answer

IAS 24 and Ind AS 24 deal with related party disclosures.

Question 2

In a land lease, if title does not pass at the end of a lease to the lessee, it is normally treated as 'Finance lease'.
A)Statement is true
B)Statement is false
C)Statement is not relevant
D)none

Accepted Answer

The statement is false because when title does not pass at the end of a lease to the lessee, it is normally treated as an 'Operating lease', not a 'Finance lease'. In a Finance lease, the title may eventually pass to the lessee.

Question 3

Specific principles, bases, conventions, rules and practices applied in presenting financial statements, are called,
A)Accounting estimates
B)Accounting policies
C)Prospective application
D)Accounting estimates.

Accepted Answer

Accounting policies refer to the specific principles, bases, conventions, rules, and practices applied by an entity in preparing and presenting financial statements.

Question 4

Adjustment of the carrying amount of an asset or liability or the consumption of an asset is defined as,
A)A change in the accounting estimate
B)Accounting policies
C)Misstatements
D)Error

Accepted Answer

A change in the accounting estimate involves adjustments to the carrying amount of an asset or liability, or the amount of the periodic consumption of an asset, reflecting new information or developments. This is distinct from accounting policies, which are the specific principles and methods a firm adopts for preparing its financial statements, and from misstatements or errors, which are inaccuracies resulting from oversight or misunderstanding.

Question 5

In selecting an accounting policy, we should review ________,
A)The standard only
B)The interpretation only
C)Framework only
D)All of the above

Accepted Answer

When selecting an accounting policy, it is important to review the standard, interpretation, and framework to ensure comprehensive understanding and compliance.

Question 6

IAS 8 deals with…..
A)Selection and application of accounting policies
B)Changes in accounting estimates
C)Correction of prior period errors
D)All the above

Accepted Answer

IAS 8 addresses the selection and application of accounting policies, changes in accounting estimates, and the correction of errors from previous periods.

Question 7

Which of the following is not a minimum item on the face of the statement of comprehensive income?
A)Revenue
B)Finance cost
C)Deferred tax
D)Profit or Loss

Accepted Answer

Deferred tax is not a minimum item required on the face of the statement of comprehensive income according to IAS 1. Items such as revenue, finance cost, and profit or loss are explicitly required to be presented.

Question 8

Which of the following is not a requirement for current liabilities?
A)Expected to be settled in entity's operating cycle
B)Held primarily for trading
C)Expected to be settled within 12 months from the reporting period
D)Entity holds an unconditional right to defer settlement for over 12 months after

Accepted Answer

Current liabilities are obligations expected to be settled within the entity's operating cycle or within 12 months. If an entity holds an unconditional right to defer settlement for over 12 months, it would not be classified as a current liability.

Question 9

Which of the following are cash and cash equivalents?
A)Cash in hand
B)Foreign currency in hand
C)Bank balance
D)All of the above

Accepted Answer

All of the options listed (cash in hand, foreign currency in hand, and bank balance) are considered cash and cash equivalents because they are highly liquid assets that can be readily converted into a known amount of cash without significant loss of value.

Question 10

Cash receipts from customers for the sale of goods are cash flows from:
A)Operating activities
B)Investing activities
C)Operating or financing activities
D)Financing activities

Accepted Answer

Cash receipts from customers for the sale of goods are considered cash flows from operating activities because they result from the primary revenue-producing activities of the business.

Question 11

When after the end of the reporting period an event occurs that is indicative of conditions that arose after the end of the reporting period:
A)The entity discloses the nature and effect of the event in the financial statements.
B)The entity adjusts the related amounts recognised in the financial statements.
C)Both of the above statements are true.
D)None of the above

Accepted Answer

Events after the reporting period that indicate conditions that arose after the end of the reporting period do not lead to adjustments in the financial statements. Instead, entities are required to disclose the nature of the event and its financial effect, if estimable.

Question 12

Events after the end of the reporting period are defined as:
A)Events, favourable and unfavourable, that, occur between the end of the reporting period and the date of the entity's next annual financial statements.
B)Events, favourable and unfavourable, that, occur between the end of the reporting period and the date of the entity's next interim (or annual) financial statements.
C)Events, favourable and unfavourable, that, occur between the end of the reporting period and the date when the financial statements are authorised for issue.
D)None of the above

Accepted Answer

Events after the end of the reporting period are those events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue.

Question 13

Adjusting events are those that:
A)Provide evidence of conditions that existed at the end of the reporting period.
B)Are indicative of conditions that arose after the end of the reporting period.
C)Are favourable or unfavourable, and indicative of conditions that arose after the end of the reporting peri

Accepted Answer

Adjusting events are those that provide evidence of conditions that existed at the end of the reporting period, allowing for adjustments to the financial statements to accurately reflect the financial position at that time.

Question 14

A change of estimate should be made to the income statement of ……..
A)Current period and future period
B)Prior period
C)Current year
D)None of the above

Accepted Answer

A change in estimate is accounted for prospectively, meaning it affects the current period and future periods, but not past periods.

Question 15

Liquidation of a major customer after the end of the period end is….
A)Adjusting events
B)Non adjusting event
C)Error
D)Changes in estimate

Accepted Answer

Liquidation of a major customer after the end of the period is an adjusting event because it provides evidence of conditions that existed at the end of the period and that affect the estimates of amounts reported in the financial statements.

Question 16

Cash equivalents do not include
A)Demand deposit
B)Goodwill
C)Money at call
D)Bank overdraft

Accepted Answer

Goodwill is an intangible asset and not a cash equivalent, which typically includes short-term, highly liquid investments.

Question 17

Ind AS 1 deals with……………
A)Presentation of financial statements
B)Cash flow statement
C)Intangible assets
D)Accounting policies, changes in accounting estimates and errors

Accepted Answer

Ind AS 1 is specifically concerned with the presentation of financial statements, providing a framework for their structure and minimum requirements for their content.

Question 18

Indian accounting standards converged with IFRS is known as……….
A)IASs
B)ASs
C)IFRSIC
D)Ind Ass

Accepted Answer

Indian accounting standards that are converged with IFRS are known as Ind AS.

Question 19

IASC head quartered at….
A)Delhi
B)London
C)New York
D)Tokyo

Accepted Answer

The International Accounting Standards Committee (IASC) was originally headquartered in London, United Kingdom.

Quiz 2: Accounting Standards and Principles: Part B

IAS 24 and Ind AS 24 are deal with……

In a land lease, if title does not pass at the end of a lease to the lessee, it is normally treated as 'Finance lease'.

Specific principles, bases, conventions, rules and practices applied in presenting financial statements, are called,

Adjustment of the carrying amount of an asset or liability or the consumption of an asset is defined as,

In selecting an accounting policy, we should review ________,

IAS 8 deals with…..

Which of the following is not a minimum item on the face of the statement of comprehensive income?

Which of the following is not a requirement for current liabilities?

Which of the following are cash and cash equivalents?

Cash receipts from customers for the sale of goods are cash flows from:

When after the end of the reporting period an event occurs that is indicative of conditions that arose after the end of the reporting period:

Events after the end of the reporting period are defined as:

Adjusting events are those that:

A change of estimate should be made to the income statement of ……..

Liquidation of a major customer after the end of the period end is….

Cash equivalents do not include

Ind AS 1 deals with……………

Indian accounting standards converged with IFRS is known as……….

IASC head quartered at….