McqMate
Chapters
| 201. |
Under Ind AS 16, which of the following is not allowable as a directly attributable cost of a machine? |
| A. | delivery |
| B. | site preparation |
| C. | estimated dismantling costs |
| D. | initial test batches |
| Answer» D. initial test batches | |
| 202. |
What is the amount an asset could achieve if sold between knowledgeable, willing parties in an arm’s length transaction? |
| A. | current value |
| B. | net present value |
| C. | written down value |
| D. | fair value |
| Answer» D. fair value | |
| 203. |
Which of the following is covered by Ind AS 16 Property, Plant and Equipment? |
| A. | office buildings |
| B. | assets held for sale |
| C. | exploration assets |
| D. | biological assets related to agricultural activity |
| Answer» A. office buildings | |
| 204. |
Which of the following disclosures is not required when an asset is revalued? |
| A. | name of valuer |
| B. | revaluation surplus |
| C. | effective date of revaluation |
| D. | whether valuer was independent |
| Answer» A. name of valuer | |
| 205. |
Under Ind AS 16, which two subsequent accounting treatments are allowed subsequently to initial recognition? |
| A. | cost model and present value model |
| B. | cost model and revaluation model |
| C. | fair value model and revaluation model |
| D. | fair value model and cost model |
| Answer» B. cost model and revaluation model | |
| 206. |
When an asset is sold or disposed of, where is the gain or loss recognised? |
| A. | asset disposal account |
| B. | profit and loss |
| C. | revaluation reserve |
| D. | depreciation |
| Answer» B. profit and loss | |
| 207. |
Which of the following is not a component of cost of an asset? |
| A. | purchase price |
| B. | refundable sales tax |
| C. | import duties |
| D. | estimate of compulsory future dismantling costs |
| Answer» B. refundable sales tax | |
| 208. |
When an item of property, plant and equipment is revalued, what should be revalued? |
| A. | a selection of assets decided by management |
| B. | a selection of assets picked at random |
| C. | the whole class of assets to which it belongs |
| D. | the individual asset |
| Answer» C. the whole class of assets to which it belongs | |
| 209. |
Which of the following is not an asset that falls under the scope of Ind AS 16? |
| A. | assets held for sale in the normal course of business |
| B. | tangible assets |
| C. | assets expected to be used for more than one period |
| D. | assets held for the production or supply of goods or services |
| Answer» A. assets held for sale in the normal course of business | |
| 210. |
How should an asset be initially recognised in the financial statements? |
| A. | measure at market value |
| B. | measure at cost |
| C. | measure at net realisable value |
| D. | measure at fair value |
| Answer» B. measure at cost | |
| 211. |
Where is the amortisation of an intangible asset recognised? |
| A. | equity |
| B. | profit or loss |
| C. | statement of financial position |
| D. | statement of cash flows |
| Answer» B. profit or loss | |
| 212. |
Which of the following is not a requirement to capitalise development costs under Ind AS 38 Intangible Assets? |
| A. | the commercial feasibility for the asset may be uncertain |
| B. | it must be technically feasible |
| C. | the entity intends to sell the completed intangible asset |
| D. | the entity can demonstrate how the asset will generate future economic benefits |
| Answer» A. the commercial feasibility for the asset may be uncertain | |
| 213. |
An intangible asset with a finite useful life should be amortised over |
| A. | a period determined by management |
| B. | five years |
| C. | its expected useful life |
| D. | no foreseeable limit |
| Answer» C. its expected useful life | |
| 214. |
What are intangible assets? |
| A. | nonmonetary assets without physical substance |
| B. | monetary assets without physical substance |
| C. | monetary assets with physical substance |
| D. | nonmonetary assets with physical substance |
| Answer» A. nonmonetary assets without physical substance | |
| 215. |
Which of the following is an intangible asset under Ind AS 38? |
| A. | patent rights |
| B. | market share |
| C. | customer loyalty |
| D. | technical knowledge training |
| Answer» A. patent rights | |
| 216. |
Which of the following measurement models is not permitted for the subsequent measurement of intangible assets under Ind AS 38? |
| A. | revaluation model |
| B. | fair value model |
| C. | cost model |
| D. | capital assets pricing model |
| Answer» D. capital assets pricing model | |
| 217. |
What is the correct treatment for all eligible borrowing costs under Ind AS 23? |
| A. | expensed |
| B. | capitalised |
| C. | invested |
| D. | none of the above |
| Answer» B. capitalised | |
| 218. |
Which of the following is not a qualifying asset under Ind AS 23 Borrowing Costs? |
| A. | manufacturing plants |
| B. | made to order inventory |
| C. | mass produced inventory |
| D. | investment property |
| Answer» C. mass produced inventory | |
| 219. |
Which of the following items should be disclosed as per the requirements of Ind AS 2? |
| A. | carrying amount of inventories pledged as security for liabilities |
| B. | average lead time of procurement for major classes of inventories |
| C. | list of major customers to whom the inventories were sold during the reporting period |
| D. | average holding period of inventories of the entity as at the end of the reporting period |
| Answer» A. carrying amount of inventories pledged as security for liabilities | |
| 220. |
Which of the following items are excluded from the scope of Ind AS 2 Inventories? |
| A. | inventories that are stated at net realisable value |
| B. | assets held for sale in the ordinary course of business |
| C. | inventories whose fair value is more than the cost |
| D. | agricultural produce at the point of harvest |
| Answer» D. agricultural produce at the point of harvest | |
| 221. |
Under Ind AS 2, fixed production overheads should be allocated to items of inventory on the basis of ____ production capacity. |
| A. | actual |
| B. | abnormal |
| C. | normal |
| D. | estimated |
| Answer» C. normal | |
| 222. |
Which of the following cost models is not permitted under Ind AS 2? |
| A. | fifo |
| B. | lifo |
| C. | actual cost |
| D. | simple average |
| Answer» B. lifo | |
| 223. |
Which of the below mentioned formula are covered by Ind AS 2? (i) FIFO, (ii) LIFO, (iii) Weighted Average. |
| A. | i, ii |
| B. | i, iii |
| C. | ii, iii |
| D. | all |
| Answer» B. i, iii | |
| 224. |
Which of the following costs must be expensed under Ind AS 2? |
| A. | selling and distribution overheads incurred in the ordinary course of business |
| B. | variable production overheads that are allocated to each unit based on actual usage |
| C. | import duties on raw materials that are paid to the authorities |
| D. | costs of purchase that are paid to the suppliers of raw materials |
| Answer» A. selling and distribution overheads incurred in the ordinary course of business | |
| 225. |
How are unallocated overheads treated as per Ind AS 2? |
| A. | recognise as an expense in the period in which they are incurred |
| B. | recognise as an expense so long as there is a profit in the current period |
| C. | treated as deferred expenditure |
| D. | capitalised with the cost of inventories |
| Answer» A. recognise as an expense in the period in which they are incurred | |
| 226. |
After convergence of Indian accounting standards with IFRS, new standard issued for preparing the cash flow statement is: |
| A. | ind as 10 |
| B. | ind as 3 |
| C. | ind as 7 |
| D. | ind as 12 |
| Answer» C. ind as 7 | |
| 227. |
Under Ind AS 12 a temporary difference is defined as |
| A. | the difference between the tax base of an item and that items carrying amount in the balance sheet |
| B. | the difference between the carrying amount of an item and that items fair value less costs to sell |
| C. | the difference between the carrying amount of an item and that items revalued amount |
| D. | a difference which will reverse in the next accounting period |
| Answer» C. the difference between the carrying amount of an item and that items revalued amount | |
| 228. |
Activities that result in changes in the size and composition of the equity capital and borrowings of an entity are called |
| A. | financing activities |
| B. | operating activities |
| C. | investing activities |
| D. | none of these |
| Answer» A. financing activities | |
| 229. |
The principal revenue-producing activities of an entity are called |
| A. | investing activities |
| B. | operating activities |
| C. | financing activities |
| D. | none of these |
| Answer» B. operating activities | |
| 230. |
Cash payments to and on behalf of employees is an example of cash flows from |
| A. | operating activities |
| B. | financing activities |
| C. | investing activities |
| D. | none of these |
| Answer» A. operating activities | |
| 231. |
Which of the following is not a heading for cash flows under Ind AS 7? |
| A. | cash flows from normal activities |
| B. | cash flows from operating activities |
| C. | cash flows from investing activities |
| D. | cash flows from financing activities |
| Answer» A. cash flows from normal activities | |
| 232. |
Activities that result in changes in the size and composition of the equity capital and borrowings of an entity are called: |
| A. | operating activities |
| B. | investing activities |
| C. | financing activities |
| D. | none of these |
| Answer» C. financing activities | |
| 233. |
Increase in share capital of a firm in the current year as compared to previous year should be recorded in the final cash flow statement under |
| A. | investing activities |
| B. | financing activities |
| C. | operating activities |
| D. | all of the above |
| Answer» B. financing activities | |
| 234. |
When presenting discontinued operations in the cash flow statement |
| A. | they are pooled with other current assets |
| B. | they are added to non-cash items |
| C. | they are ignored |
| D. | they are shown separately |
| Answer» D. they are shown separately | |
| 235. |
An entity shall explain how the transition from previous GAAP to IFRSs __________ its reported financial position, financial performance and cash flows. |
| A. | adjusted |
| B. | corroborated |
| C. | affected |
| D. | benefited |
| Answer» C. affected | |
| 236. |
How does an entity adopt IFRSs for the first time? |
| A. | by reporting on its financial position, financial performance and cash flows in accordance with ifrss |
| B. | by issuing its first financial statements in which the entity adopts ifrss, by an explicit and unreserved statement of compliance with ifrss |
| C. | by reporting on its financial position, financial performance and cash flows in accordance with national requirements, which do not contradict ifrss |
| D. | by issuing its first financial statements in accordance with national requirements, which contain explicit and unreserved statement of compliance with ifrss |
| Answer» B. by issuing its first financial statements in which the entity adopts ifrss, by an explicit and unreserved statement of compliance with ifrss | |
| 237. |
Which of the following is the starting point for an entity accounting in accordance with IFRSs? |
| A. | the date when the decision about adopting ifrs has been made |
| B. | the date of issuance of the first financial statement in accordance with ifrs |
| C. | the date of transition to ifrss |
| D. | the date when the explicit and unreserved statement of compliance with ifrss has been made |
| Answer» C. the date of transition to ifrss | |
| 238. |
Accounting in India is governed by the |
| A. | rbi |
| B. | company law board |
| C. | income tax department |
| D. | icai |
| Answer» D. icai | |
| 239. |
The convergence of the Indian Accounting Standards with IFRS began in |
| A. | april 2010 |
| B. | april 2012 |
| C. | april 2015 |
| D. | april 2000 |
| Answer» C. april 2015 | |
| 240. |
Ind AS will apply to |
| A. | both consolidated as well as standalone financials of the company |
| B. | only consolidated financials |
| C. | only standalone financials |
| D. | optional |
| Answer» A. both consolidated as well as standalone financials of the company | |
| 241. |
Total Number of Ind AS which are notified as of date? |
| A. | 40 |
| B. | 41 |
| C. | 42 |
| D. | 43 |
| Answer» C. 42 | |
| 242. |
Total Number of IFRSs which are notified as of date? |
| A. | 16 |
| B. | 17 |
| C. | 18 |
| D. | 19 |
| Answer» A. 16 | |
| 243. |
Total Number of IFRIC Interpretations which are notified as of date? |
| A. | 23 |
| B. | 24 |
| C. | 25 |
| D. | 26 |
| Answer» A. 23 | |
| 244. |
Total Number of SIC Interpretations which are notified as of date? |
| A. | 30 |
| B. | 31 |
| C. | 32 |
| D. | 33 |
| Answer» D. 33 | |
| 245. |
What items of inventories are outside the scope of Ind AS 2? |
| A. | work in progress arising under construction contracts |
| B. | raw materials including maintenance supplies |
| C. | share, debentures held as stock-in-trade |
| D. | machinery spares exclusively used with fixed assets |
| Answer» A. work in progress arising under construction contracts | |
| 246. |
A provision is |
| A. | a liability of uncertain timing or amount |
| B. | a possible obligation as a result of past events that is of uncertain timing or amount |
| C. | an adjustment to the carrying amount of assets |
| D. | none of these |
| Answer» A. a liability of uncertain timing or amount | |
| 247. |
When Redeemable Preference shares are due for redemption, the entry passed is |
| A. | debit redeemable preference share capital a/c; credit cash a/c |
| B. | debit redeemable preference share capital a/c; credit preference shareholders a/c |
| C. | debit preference shareholders a/c; credit cash a/c |
| D. | debit preference shareholders a/c; credit capital reduction a/c |
| Answer» B. debit redeemable preference share capital a/c; credit preference shareholders a/c | |
| 248. |
Which of the following can be utilized for the redemption of preference shares of a company out of profit: |
| A. | shares forfeited account |
| B. | development rebate reserve account |
| C. | capital redemption reserve account |
| D. | dividend equalization reserve |
| Answer» D. dividend equalization reserve | |
| 249. |
Which of the following cannot be utilized for the redemption of preference shares of a company |
| A. | securities premium on fresh issue of shares |
| B. | general reserve |
| C. | profit and loss account |
| D. | dividend equalization reserve |
| Answer» A. securities premium on fresh issue of shares | |
| 250. |
A company cannot issue redeemable preference shares for a period exceeding _________. |
| A. | 6 years |
| B. | 7 years |
| C. | 8 years |
| D. | 20 years |
| Answer» D. 20 years | |
| 251. |
Which of the following cannot be used for the purpose of creation of capital redemption reserve account? |
| A. | profit and loss account (credit balance) |
| B. | general reserve account |
| C. | dividend equalization reserve account |
| D. | unclaimed dividends account |
| Answer» D. unclaimed dividends account | |
| 252. |
The Capital Redemption reserve is created for the following reasons: |
| A. | to maintain the capital intact |
| B. | to safeguard the interest company’s creditors |
| C. | both of the above |
| D. | none of the above |
| Answer» C. both of the above | |
| 253. |
Which of the following accounts can be transferred to capital redemption reserve account? |
| A. | general reserve account |
| B. | forfeited shares account |
| C. | profit prior to incorporation |
| D. | securities premium account |
| Answer» A. general reserve account | |
| 254. |
The technique of converting figures into percentage in some common base is called _____. |
| A. | ratio analysis |
| B. | common size statement analysis |
| C. | trend percentages |
| D. | none of these |
| Answer» A. ratio analysis | |
| 255. |
The ratio which depicts the relationship between two items, one of which is drawn from the Balance Sheet and the other from the revenue account |
| A. | current ratio |
| B. | equity ratio |
| C. | net profit ratio |
| D. | debtors turnover ratio |
| Answer» D. debtors turnover ratio | |
| 256. |
The ratio of liquid asset to current liabilities |
| A. | quick ratio |
| B. | current ratio |
| C. | absolute liquid ratio |
| D. | combined ratio |
| Answer» A. quick ratio | |
| 257. |
The ratio which shows the relationship b/w shareholder’s fund and total assets |
| A. | debit equity ratio |
| B. | proprietary ratio |
| C. | solvency ratio |
| D. | fixed asset |
| Answer» B. proprietary ratio | |
| 258. |
Long term solvency of a firm can be measured by |
| A. | current ratio |
| B. | net profit ratio |
| C. | gross profit ratio |
| D. | debt equity ratio |
| Answer» D. debt equity ratio | |
| 259. |
The ratio that shows the relationship between fixed asset to shareholders fund |
| A. | fixed asset to net worth |
| B. | fixed asset ratio |
| C. | fixed assets turnover ratio |
| D. | net worth ratio |
| Answer» A. fixed asset to net worth | |
| 260. |
The index of efficiency and profitability of the business |
| A. | operating ratio |
| B. | operating profit ratio |
| C. | expense ratio |
| D. | net profit ratio |
| Answer» D. net profit ratio | |
| 261. |
The ratio that includes whether investment in inventory is efficiently used or not |
| A. | inventory turnover ratio |
| B. | working capital turnover ratio |
| C. | fixed asset turnover ratio |
| D. | activity ratio |
| Answer» A. inventory turnover ratio | |
| 262. |
The main aim of the ratio analysis is to help the ______ of the firm |
| A. | owners |
| B. | officials |
| C. | departments |
| D. | management |
| Answer» D. management | |
| 263. |
Ratios indicate trends in important items and this helps in _________ |
| A. | forecasting |
| B. | reporting |
| C. | analyzing |
| D. | interpreting |
| Answer» A. forecasting | |
| 264. |
Ratios help the management in evolving market strategies through ________ |
| A. | inter firm comparison |
| B. | intra firm comparison |
| C. | ratios |
| D. | none of the above |
| Answer» A. inter firm comparison | |
| 265. |
Ratios may be used as a measure of ________ |
| A. | efficiency |
| B. | solvency |
| C. | profitability |
| D. | none of the above |
| Answer» A. efficiency | |
| 266. |
An example of Balance Sheet ratio is _______ |
| A. | net profit ratio |
| B. | inventory turnover ratio |
| C. | current ratio |
| D. | fixed asset turnover ratio |
| Answer» C. current ratio | |
| 267. |
Income statement ratios are also called |
| A. | operating ratio |
| B. | liquidity ratio |
| C. | activity ratio |
| D. | trend ratio |
| Answer» A. operating ratio | |
| 268. |
Leverage ratios are also known as _______ ratios |
| A. | short term solvency ratios |
| B. | long term solvency ratios |
| C. | solvency ratio |
| D. | liquidity ratio |
| Answer» B. long term solvency ratios | |
| 269. |
The ratios that shows the capacity of the business unit to meet its short term obligation out of its short term resources is known as ______ |
| A. | solvency ratio |
| B. | leverage ratio |
| C. | liquidity ratio |
| D. | trend ratio |
| Answer» C. liquidity ratio | |
| 270. |
The ratio that highlight the end result of business activities are known as ________ ratios |
| A. | liquidity |
| B. | leverage |
| C. | activity |
| D. | profitability |
| Answer» D. profitability | |
| 271. |
The ideal current ratio is |
| A. | 2:1 |
| B. | 1:1 |
| C. | 1:2 |
| D. | 1:3 |
| Answer» A. 2:1 | |
| 272. |
In a sound business, acid test ratio ________ is considered satisfactory |
| A. | 1:2 |
| B. | 2:1 |
| C. | 1:1 |
| D. | 0.5:1 |
| Answer» C. 1:1 | |
| 273. |
Satisfactory level of debt equity ratio is _________. |
| A. | 1:1 |
| B. | 3:1 |
| C. | 2:1 |
| D. | 1:2 |
| Answer» C. 2:1 | |
| 274. |
The ratio which indicates how quickly debtors are converted into cash is ________. |
| A. | receivable turnover ratio |
| B. | inventory turnover ratio |
| C. | working capital turnover ratio |
| D. | creditors turnover ratio |
| Answer» A. receivable turnover ratio | |
| 275. |
Net capital employed is equal to ______. |
| A. | total assets minus liabilities |
| B. | fixed asset plus net working capital |
| C. | total asset minus long-term liabilities |
| D. | total assets |
| Answer» B. fixed asset plus net working capital | |
| 276. |
Lower stock turnover ratio indicates ________. |
| A. | solvency position |
| B. | monopoly situation |
| C. | over investment in inventory |
| D. | none of these |
| Answer» C. over investment in inventory | |
| 277. |
Market price per share divided by earnings per share is ________. |
| A. | price earning ratio |
| B. | return on equity |
| C. | market test ratio |
| D. | book value per share |
| Answer» A. price earning ratio | |
| 278. |
When all debentures are redeemed, balance in the Debenture Redemption Fund Account is transferred to: |
| A. | capital reserve |
| B. | general reserve |
| C. | profit & loss appropriation a/c |
| D. | none of these |
| Answer» B. general reserve | |
| 279. |
According to SEBI guidelines, a Company will have to create debenture redemption reserve equivalent to the amount of the following percentage of debenture issued: |
| A. | 50% |
| B. | 25% |
| C. | 70% |
| D. | 100% |
| Answer» B. 25% | |
| 280. |
Premium on redemption of debentures is a |
| A. | personal a/c |
| B. | real a/c |
| C. | nominal a/c |
| D. | suspense a/c |
| Answer» A. personal a/c | |
| 281. |
Debentures cannot be redeemed at |
| A. | par |
| B. | premium |
| C. | discount |
| D. | more than 10% premium |
| Answer» C. discount | |
| 282. |
Sources of finance of the redemption of debentures are: |
| A. | redemption out of profits |
| B. | redemption out of capital |
| C. | the proceeds from fresh issue of shares/debentures |
| D. | all the above |
| Answer» D. all the above | |
| 283. |
Which of the following is not shown on the liability side of a balance sheet of a company |
| A. | authorized capital |
| B. | issued capital |
| C. | paid up capital |
| D. | reserve capital |
| Answer» D. reserve capital | |
| 284. |
Share application account is a…. |
| A. | nominal |
| B. | real |
| C. | personal |
| D. | none of these |
| Answer» C. personal | |
| 285. |
Penalty for delay in refunding application money |
| A. | 6% |
| B. | 5% |
| C. | 15% |
| D. | 20% |
| Answer» C. 15% | |
| 286. |
Conversion of physical shares in to electronic securities is called…. |
| A. | dematerialization |
| B. | price rigging |
| C. | re-materialization |
| D. | none of these |
| Answer» A. dematerialization | |
| 287. |
Public limited companies cannot issue …. |
| A. | equity shares |
| B. | deferred shares |
| C. | preference shares |
| D. | right shares |
| Answer» B. deferred shares | |
| 288. |
Preference shareholders are …. of the company |
| A. | creditors |
| B. | owners |
| C. | customers |
| D. | borrowers |
| Answer» B. owners | |
| 289. |
The minimum share application money is…. |
| A. | Re.1 /share |
| B. | 5% of the face value of share |
| C. | 10% of the issue price of share |
| D. | none of these |
| Answer» B. 5% of the face value of share | |
| 290. |
The difference between subscribed capital and called capital is known as….. |
| A. | calls in advance |
| B. | paid up capital |
| C. | uncalled capital |
| D. | calls in arrear |
| Answer» C. uncalled capital | |
| 291. |
The rate of discount on issue of shares should not exceed …. % of the nominal value of shares. |
| A. | 10 |
| B. | 2 |
| C. | 4 |
| D. | 5 |
| Answer» A. 10 | |
| 292. |
On calls in advance, interest is payable @ …. |
| A. | 5% |
| B. | 6% |
| C. | 4% |
| D. | Nil |
| Answer» B. 6% | |
| 293. |
Right shares are those shares which are issued to |
| A. | directors |
| B. | promoters |
| C. | existing shareholders |
| D. | none of these |
| Answer» C. existing shareholders | |
| 294. |
After completing ….years a company can issue shares at discount. |
| A. | 2 |
| B. | 3 |
| C. | 1 |
| D. | 4 |
| Answer» C. 1 | |
| 295. |
The profit on reissue of shares is transferred to …. |
| A. | general reserve |
| B. | capital reserve |
| C. | P/L Account |
| D. | P/L Appropriation account |
| Answer» B. capital reserve | |
| 296. |
Voluntary return of shares by shareholders to the company for cancellation is called |
| A. | transfer of shares |
| B. | forfeiture of shares |
| C. | surrender of shares |
| D. | buyback of shares |
| Answer» C. surrender of shares | |
| 297. |
The minimum amount of capital which must be subscribed by the public before allotment is called |
| A. | allotment money |
| B. | Minimum subscription |
| C. | subscribed capital |
| D. | None of these |
| Answer» B. Minimum subscription | |
| 298. |
Stock is a consolidation of …..Shares. |
| A. | partly paid shares |
| B. | fully paid shares. |
| C. | equity shares |
| D. | Sweat shares |
| Answer» B. fully paid shares. | |
| 299. |
That part of the capital which will be called up only in the event of winding up of the company is called ------- capital |
| A. | issued |
| B. | paid-up |
| C. | reserve |
| D. | uncalled |
| Answer» C. reserve | |
| 300. |
Preference share holders are entitled to a fixed rate of ------- |
| A. | interest |
| B. | dividend |
| C. | coupon |
| D. | capital |
| Answer» B. dividend | |
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