Tag: accounting standards: concept and objectives

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Questions Related to accounting standards: concept and objectives

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

Which of these are included in building for the purpose of rates of depreciation?

  1. Roads

  2. Bridges, culverts

  3. Wells and tubewells

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

For the purpose of depreciation rates, the classification of 'building' often includes related infrastructure such as roads, bridges, culverts, and wells, as these are integral to the utility of the building.

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

The purpose of Accounting Standards is to ___________.

  1. harmonize accounting policies

  2. eliminate the non-comparability of financial statements

  3. improve the reliability of financial statements

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Accounting Standards are designed to harmonize policies, improve reliability, and ensure comparability of financial statements across different entities.

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 refer to specific accounting _________.

  1. principles

  2. methods of applying those principles

  3. both (A) and (B)

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Accounting Standards define both the underlying principles and the specific methods for applying those principles to ensure consistency in financial reporting.

Multiple choice elements of accounts accounting standards: concept and objectives accounting standards accounting standards (as) and ifrs accounting systems and reporting standards

Which of the following items is not a fundamental accounting assumption?

  1. Consistency

  2. Business entity

  3. Going concern

  4. All of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The three fundamental accounting assumptions are Going Concern, Consistency, and Accrual. The Business Entity concept is a basic accounting principle, but it is not classified as a fundamental accounting assumption under AS-1.

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

Which is/are limitation of Accounting Standards?

  1. The choice between different alternative accounting treatments is difficult.

  2. There may be trend towards rigidity.

  3. Accounting Standards cannot override the statute.

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

Accounting standards have limitations including the difficulty of choosing between alternatives, the potential for rigidity, and the fact that they cannot override legal statutes.

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

How many Accounting Standards have been issued by the Institute of Chartered Accountants of India? 

  1. 25

  2. 32

  3. 29

  4. 30
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In India, Standards of Accounting is issued by the Institute of Chartered Accountants of India (ICAI). The Council of the Institute of Chartered Accountants of India constituted Accounting Standards Board (ASB) on 21st April, 1977 recognising the need for Accounting Standards in India.


The Council of the Institute of Chartered Accountants of India has so far issued thirty two accounting standards.

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

When valuing inventory at lower of cost or market value, what is the meaning of the term market value?

  1. Net realizable value

  2. Net realizable value less a normal profit margin

  3. Current replacement cost

  4. Discounted present value
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

As per AS-2, Valuation of inventories prescribed the accounting treatment for inventories and sets the guidance to determine the value at which the inventories are carried in the financial statement. 

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs. 

The cost of inventories should comprise all costs of purchase, Costs of conversion and other costs incurred in bringing  the inventories to their present location and condition. 


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

Closing stock is valued at ______________.

  1. Market price

  2. Cost price

  3. Cost price or market price, whichever is lower

  4. Cost price or market price, whichever is higher
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

As per AS-2, Valuation of inventories prescribed the accounting treatment for inventories and sets the guidance to determine the value at which the inventories are carried in the financial statement. 

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs. 

The cost of inventories should comprise all costs of purchase, Costs of conversion and other costs incurred in bringing  the inventories to their present location and condition. 

Hence, as per AS-2, "Inventories should be valued at the lower of cost and net realisable value."

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

Accounting Standard Board was set up by __________________.

  1. Government of India

  2. Institute of chartered accountants of India

  3. Institute of cost and works accountants of India

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

In India, Standards of Accounting is issued by the Institute of Chartered Accountants of India (ICAI). 

The Council of the Institute of Chartered Accountants of India constituted Accounting Standards Board (ASB) on 21st April, 1977 recognising the need for Accounting Standards in India.

The Council of the Institute of Chartered Accountants of India has so far issued thirty two accounting standards.

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

Accounting Standard Board was set up by __________.

  1. Institute of Chartered Accountants of India

  2. Institute of Cost and Works Accountants of India

  3. Institute of Company Secretaries of India

  4. Government of India
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Institute of Chartered Accountants of India (ICAI) constituted the Accounting Standards Board (ASB) on 21st April, 1977 ) to harmonise the diverse accounting policies and practices in use in India. ASB of the ICAI has been issuing accounting standards. 

Since then, it has issued 32 Accounting Standards.