Tag: accounting systems and reporting standards

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Questions Related to accounting systems and reporting standards

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

It is essential to standardize the accounting principles and policies in order to ensure _______________.

  1. Transparency

  2. Profitability

  3. Reputation

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

Standardizing accounting principles ensures that financial information is reported in a clear, consistent manner, which directly enhances the transparency of financial statements.

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 cover the aspects of ________ of accounting transactions in the financial statements.  

  1. Recognition

  2. Measurements

  3. Presentation and disclosure

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

Accounting standards provide guidelines for the recognition, measurement, presentation, and disclosure of accounting transactions to ensure uniformity.

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 the following pairs are correctly matched?
1. Business entity - Accounting Standard
2. Stock valuation - Consistency
3. Capital - Drawing
4. Going concern - Assumption
Select the correct answer using the codes given below:

  1. 2, 3 and 4

  2. 1, 2 and 3

  3. 1, 2 and 4

  4. 1, 3 and 4
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Stock valuation is typically based on the principle of 'lower of cost or net realizable value', not consistency. Business entity is a concept, not an AS. Going concern is an assumption. Capital/Drawing is a basic accounting equation relationship.

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

Ability to trade at net price very quickly is classified as _____________.

  1. original trading

  2. liquidity

  3. offline trading

  4. fixed price trading
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Liquidity is defined as the ability to convert an asset into cash or trade it at a net price quickly without significant loss of value.

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

Under which of the following type of account is a specified amount deposited every month for a specified period, says, 12, 24, 36 and 60 months?

  1. Fixed Deposit Account

  2. Saving Bank Account

  3. Current account

  4. Recurring Account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A Recurring Deposit account allows a customer to deposit a fixed amount every month for a specified period, earning interest on the accumulated balance.

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

Added value is the change in ____________.

  1. Market Value

  2. Cost

  3. Income

  4. None of the Above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Added Value can  be defined as the difference between a particular product's final selling price and the direct and indirect input used in making that particular product.This will effect the market value and help in more customer recognition.

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

Match List-I with List-II and select the correct answer using the codes given the lists.

List-I List-II
I. Income measurement (a) Accrues to owner's equity
II. Expense recognition (b) Revenue recognition
III. Basis for realisation in accounting (c) Matching revenues
IV. Recognised revenue (d) Accounting period


  1. I-(c), II-(d), III-(b), IV-(a)

  2. I-(c), II-(d), III-(a), IV-(b)

  3. I-(b), II-(c), III-(d), IV-(a)

  4. I-(b), II-(c), III-(a), IV-(d)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Matching revenue-Income measurement

Accounting period-Expenses recognition
Revenue recognition-Basis of realization in accounting
Accrues to owners equity-Recognized revenue

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

If no information is available, the General Rule for valuation of stock for balance sheet is _______________.

  1. Replacement Cost

  2. Realizable Value

  3. Historical Cost

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

Historical cost is a measure of value used in accounting in which the price of of stock on the balance sheet is based on its nominal or original cost when acquired by the company.

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

Market price or actual cost, whichever is less, is the generally accepted accounting principle for valuation of___________.

  1. Stock-in-trade

  2. Fixed assets

  3. Current assets

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

As per AS-2, Valuation of inventories (stock-in-trade) 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. 

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