Tag: accounting standards: concept and objectives

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Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

In accordance with IAS 1 Presentation of Financial Statements, which one of the following items must not be separately presented in the statement of financial position? 

  1. Net Assets

  2. Non financial Assets

  3. Asset revaluation surplus

  4. Issued capital and reserves
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In accordance with IAS 1 Presentation of financial statements, Issued share capital and reserves are not to be separately presented in the statement of financial position. 

Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

Which one of the following statements is correct? When creditors' velocity or creditors' turnover is higher as compared to debtors' velocity, it would ______________.

  1. improve liquidity

  2. reduce liquidity

  3. have no effect on liquidity

  4. improve financial position
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Creditors' velocity refers to how quickly a firm pays its creditors, while debtors' velocity refers to how quickly it collects from debtors. Changes in these relative speeds affect working capital management but do not inherently change the liquidity position of the firm in a direct, predictable way.

Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

If book value is greater than market value comparison with investors for future stock are considered as _____________.

  1. pessimistic

  2. optimistic

  3. experienced

  4. inexperienced
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When the book value (accounting value) exceeds the market value, it suggests that the market does not value the company's assets as highly as the accounting records, which is typically viewed as a pessimistic signal for future growth.

Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

X & Y entered a Joint Venture for export of Indian Handicraft items to overseas customers. X sends goods worth Rs. 2,00,000 to Y for export to USA. Y exported goods Worth Rs. 1,75,000 to USA for Rs. 2,10,000 and agreed to take away the remaining goods at the same gross profit as in the case of other exports. The goods will be valued at _______________.

  1. Rs. 25,000

  2. Rs. 30,000

  3. 27,500

  4. 22,500
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Total goods = 2,00,000. Goods exported = 1,75,000. Remaining goods = 25,000. The profit margin on 1,75,000 is 35,000 (2,10,000 - 1,75,000), which is 20%. Applying this 20% profit to the remaining 25,000 gives 5,000. Total value = 25,000 + 5,000 = 30,000.

Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

The objective of accounting standard is to ___________.

  1. bring uniformity in financial reporting

  2. ensure consistency and comparability of data with earlier years on with similar organizations

  3. both a & b

  4. establishment of law
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Accounting standards are designed to ensure uniformity in financial reporting and to facilitate consistency and comparability across different periods and organizations.

Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

The first account standard (AS-I) issued by the Institute of Chartered Accountants of India is _________________.

  1. Valuation of Inventories

  2. Revenue Recognition

  3. Change in Financial Position

  4. Disclosure of Accounting Policies
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation


To ensure proper understanding of financial statements, it is necessary that all significant accounting policies adopted in the preparation and presentation of financial statements must be disclosed.
Such disclosure should form part of the financial statements.
It would be helpful to the reader of financial statements if they are all disclosed in one place instead of being scattered over several statements, schedules and notes.

Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

Accounting policies followed by organizations ______________.

  1. Can be changed every year

  2. Should be consistently followed from year to year

  3. Can be changed after 5 year

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The principle of consistency in accounting requires that policies be applied consistently from year to year to ensure that financial statements are comparable.

Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

Accounting standards are issued for the purpose of :
(a) Improving dependability of financial statements
(b) Auditing work becomes easy task for the auditor
(c) Elimination of non-comparability between financial statements 
The correct answer is :-

  1. (a) only

  2. (b) only

  3. (c) only

  4. All of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Accounting standards are primarily aimed at eliminating non-comparability between financial statements by providing a common framework for reporting.

Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

The ICAI so far has issued ______ accounting standards.

  1. 29

  2. 30

  3. 32

  4. 35
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Accounting Standards (i.e. AS 1~32) have been issued/ amended by the Accounting Standards Board of ICAI from time to time, to establish uniform standards for preparation of financial statements, in accordance with generally accepted accounting practices (GAAP) in India and for better understanding of the users.

Multiple choice book keeping and accountancy accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

According to _____ Dictionary for Accountants, an account has been defined as a formal record of a particular type of transactions expressed in money. 

  1. Kohler's

  2. Oxfords

  3. Chate

  4. Taxmann
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Kohler's Dictionary for Accountants is a standard reference that defines an account as a formal record of transactions expressed in money.