Overview of Accounting Standards – Corporate and Management Accounting MCQ


Overview of Accounting Standards – Corporate and Management Accounting MCQ

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On 1.1.2019, 7,200 equity shares outstanding in the books of X Ltd.On 31.5.2019, 2,400 shares issued for cash.1.11.2019, the company made a buyback of 1,200 shares.Net profit for the year ended 31.12.2019 is ₹ 6,30,000.Basic EPS as per AS-20 =?

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An Ltd. is absorbed by B Ltd., the consideration being the takeover of liabilities, the payment of the cost of absorption as part of purchase consideration not exceeding ₹ 20,000, the payment of the 9% Debenture of ₹ 1,00,000 at a premium of 10% to the debenture holders of A Ltd. Equity shareholders of A Ltd. is entitled to ₹ 16 per share in cash and allotment of one 14% Preference Share of ₹ 10 each and 6 equity share of ₹ 10 each fully paid for every 4 shares in A Ltd. The numbers of shares of A Ltd. are 2,00,000 of ₹ 10 each fully paid. Purchases consideration as per AS-14 =?

3 / 60

N Ltd. acquired certain investments by giving its machinery having WDV ₹ 47,000 and cash ₹ 16,000. The realizable value of machinery was ₹ 20,000. Calculate the cost of investment acquired as per AS-13.

4 / 60

P Ltd. purchased 10,000 shares of Q Ltd. and issued its 5,000 shares. The nominal value of shares of both P Ltd. & Q Ltd. is ₹ 10. The fair value of shares of P Ltd. & Q Ltd. is ₹ 11.5 & ₹ 12 respectively. Calculate the cost of investment acquired as per AS-13.

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Z Ltd. purchased 10,000 shares of N Ltd. @ ₹ 300. Brokerage @2% and stamp duty was 10 paisa per ₹ 100. What is the value of the investment as per AS-13?

6 / 60

The following details determine the expected profit or loss that should be recognized in the accounts for the year.Contract price = ₹ 12,50,000 Cost incurred till date = ₹ 10,90,000Cost expected to be incurred to complete the contract = ₹ 3,60,000

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An amount of ₹ 9,90,000 was incurred on a contract work up to 31.3.2018. Certificates have been received to date to the value of ₹ 12,00,000 against which ₹ 10,80,000 has been received in cash. The cost of work done but not certified amounted to ₹ 22,500. It is estimated that by spending an additional amount of ₹ 60,000 the work can be completed in all respects in another two months. The agreed contract price of work is ₹ 12,50,000. Compute a profit to be taken to the P&L A/c as per AS-7.

8 / 60

NS Ltd., a dealer in second-hand cars has the following five vehicles of different models and makes in their stock at the end of the financial year 2018-2019:

Car Cost NRV
Fiat 90,000 95,000
Ambassador 1,15,000 1,55,000
Maruti Esteem 2,75,000 2,65,000
Maruti 800 1,00,000 1,25,000
Zen 2,10,000 2,00,000Value of stock included in the balance sheet of the company as on March 31, 2019 was:

9 / 60

Books of T Ltd. revealed the following information:Opening inventory ₹ 6,00,000Purchases during the year ₹ 34,00,000 Sales during the year ₹ 48,00,000At year-end, the value of inventory as per physical stock-taking was ₹ 3,25,000. The company’s gross profit on sales has remained constant at 25%. The management of the company suspects that some inventory might have been pilfered by a new employee. What is the estimated cost of missing inventory?

10 / 60

Best Ltd. deals in five products, P, Q, R, S, and T which are neither similar nor interchangeable. At the time

of closing of its accounts for the year ending 31st March 2019, the historical cost and net realizable value of the items of the closing stock are determined as follows:

Items Historical Cost Net Realizable Value
P 5,70,000 4,75,000
Q 9,80,000 10,32,000
R 3,16,000 2,89,000
S 4,25,000 4,25,000
T 1,60,000 2,15,000What will be the value of closing stock for the year ending 31 st March 2019 as per AS – 2 “Valuation of Inventories”?

11 / 60

Z Ltd. operates retails business. For the financial year following data is given.

At Retail Price At Cost

Opening stock ₹ 80,000 ₹ 60,000
Purchases ₹ 1,40,000 ₹ 1,20,000Calculate the cost of closing stock, if sales made during the year are ₹ 2,00,000.

12 / 60

In the process, 100 units of raw materials were introduced at a cost of ₹ 1,000. The other expenditure incurred by the process was ₹ 600. Of the units introduced, 10% are normally lost in the course of manufacturing and they possess a scrap value of ₹ 3 each. The output of Process was only 75 units. Calculate the value of the final output.

13 / 60

X Ltd. manufactures a product and details of costs are as under:

Raw material ₹ 4,00,000
Direct labor ₹ 2,50,000
Variable production overheads ₹ 1,50,000
Fixed production overheads (including interest ₹ 1,00,000) ₹ 2,90,000The normal production capacity is ₹ 55,000 units. At the year-end closing, the stock was 2,500 units. Compute the value of the closing stock.

14 / 60

On 31.3.2018 a business firm finds that the cost of a partly finished unit on that date is ₹ 530. The unit can be finished in 2018-2019 by an additional expenditure of ₹ 310. The finished unit can be sold for ₹ 750 subjects to payment of 4% brokerage on the selling price. Does the firm seek your advice regarding the amount at which the unfinished unit should be valued as of 31.3.2019 for the preparation of final accounts?

15 / 60

X Ltd. purchased goods at the cost of ₹ 40 lakhs in October 2018. Till March 2019, 75% of the stocks were sold. The company wants to disclose closing stock at ₹ 10 lakhs. The expected sale value is ₹ 11 lakhs and a commission of 10% on sale is payable to the agent. What is the correct closing stock to be disclosed as of 31.3.2019 as per AS-2?.

16 / 60

As per AS-13, where, long-term investments are reclassified as current investments, transfers are made at the:

17 / 60

As per AS-13 shares, debentures and other securities held for sale in the ordinary course of business are –

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AS-13 deals with:

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As per AS-9, revenue from interest should be recognized –

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Revenue from service transactions is usually recognized as the service is performed, by the:

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Which of the following statements is correct with respect to inventories?

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Which of the following is ‘revenue’ as per AS-9?

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AS-9 is concerned with the recognition of revenue arising in the course of the ordinary activities of the enterprise from:

24 / 60

If closing stock is overstated…………………

25 / 60

Which of the following is not a method of determining the stage of completion of a contract as per AS-7?

26 / 60

Which of the following method of inventory valuation is not recommended by AS – 2?

27 / 60

As per AS-7: Construction Con-tracts, an expected loss on the construction contract should be –

28 / 60

While finalizing the current year’s profit, the company realized that there was an error in the valuation of closing stock of the previous year. In the previous year, the closing stock was overvalued. As a result……………

29 / 60

AS-7: Construction Contracts should be applied in accounting for construction contracts in the financial statements of:

30 / 60

Due to which of the following concept inventory is valued at cost or net realizable value, whichever is less?

31 / 60

AS-6: Depreciation applies to:

32 / 60

NRV or net realizable value of inventory is the expected selling price or market value less………………….

33 / 60

As per AS-3, an investment normally qualifies as a cash equivalent only when it has a short maturity of, say,_____from the date of acquisition.

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As per AS-2, the historical cost of inventories should normally be determined by using ……………………

35 / 60

As per AS-2, inventories should be valued at:(1) Cost(2) Net Realizable Value

36 / 60

Which of the following required to be disclosed as per AS-1?

37 / 60

Provisions for doubtful debts, provision for discount on debtors are based on:

38 / 60

As per AS-3, unrealized gains and losses arising from changes in foreign exchange rates are –

39 / 60

Payment of penalties/fines for violation of law should be disclosed separately. It should not be clubbed with “Office Expenses” or “Miscellaneous Expenses”. This the example of –

40 / 60

Which of the following is included in the cost of inventory as per AS-2?

41 / 60

If rights and beneficial interest in property are transferred but documentation and legal formalities are pending then seller & purchaser should record in their accounts as sale & purchase. This the example of –

42 / 60

Which of the following is treated as Potential Equity Share as per AS-20?

43 / 60

AS-20 deals with:

44 / 60

As per the Companies (Accounting Standards) Rules, an existing company, which was previously Non-SMC and subsequently becomes an SMC, shall not be qualified for exemption or relaxation in respect of Accounting Standards available to an SMC until the company remains an SMC for:

45 / 60

Consider the following cases:(i) A (P) Ltd., a subsidiary of a multinational company listed on the London Stock Exchange. Does it have a turnover of ₹ 12 Crores and borrowings of ₹ 5 Crores?(ii) B (P) Ltd. has a turnover of ₹ 45 Crores, other income of ₹ 7 Crores, and bank borrowings of ₹ 9 Crores.(zzz) C Ltd. has appointed Merchant Bankers to prepare a Red-herring prospectus for the purpose of filing the same with SEBI.Classify above enterprises as SMC or NON-SMC and select the correct option given below:(i) (ii) (iii)

46 / 60

Which of the following is NON-SMC as per the Companies (Accounting Standards) Rules?

47 / 60

Which of the following are fundamental accounting assumptions?A. Going ConcernB. MatchingC. ConsistencyD. Dual AspectE. MaterialityF. AccrualSelect the correct answer from the options given below:

48 / 60

Which aspect of Financial Instruments is death by AS-31?

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Which of the following is a Level-II enterprise?I. Listed enterprises outside India.II. All commercial, industrial, and business reporting enterprises, whose turnover for the immediately preceding accounting period exceeds ₹ 50 Crore.III. Financial institutionsIV. Enterprises carrying on insurance business.

50 / 60

Which of the following is Level-I enterprise?

51 / 60

In the case of charitable trusts and co-operative societies:

52 / 60

Which section of the Companies Act, 2013 provides that the financial statements of every company shall comply with the accounting standards?

53 / 60

The council of ICAI has so far issued_____accounting standards. However, AS-8 has been withdrawn. Thus, effectively there are_____accounting standards

54 / 60

As per AS-21, the accounting process in which the financial statements of a parent company and its subsidiaries are added together to yield a unified set of financial statements is called____

55 / 60

As per AS-11, the process of converting foreign-subsidiary financial statements into the home currency is known as___

56 / 60

The original cost at which an asset or liability is acquired is known as –

57 / 60

The global key professional accounting body is the_______

58 / 60

Accounting Standards_____the statue:

59 / 60

Consistency with reference to the application of accounting principles refer to the:

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AS-2 is on:

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