Tag: accounting standards: concept and objectives

Questions Related to accounting standards: concept and objectives

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

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

  1. Transparency

  2. Profitability

  3. Reputation

  4. All of the above

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Correct Option: A

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

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

  1. Recognition

  2. Measurements

  3. Presentation and disclosure

  4. Any of the above

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Correct Option: D

Accounting Standard 2 deals with valuation of ____________.

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

  1. fixed assets

  2. inventory

  3. cash flow statement

  4. none of these

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Correct Option: B

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:

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

  1. 2, 3 and 4

  2. 1, 2 and 3

  3. 1, 2 and 4

  4. 1, 3 and 4

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Correct Option: A

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

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

  1. original trading

  2. liquidity

  3. offline trading

  4. fixed price trading

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Correct Option: B

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?

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

  1. Fixed Deposit Account

  2. Saving Bank Account

  3. Current account

  4. Recurring Account

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Correct Option: D

Added value is the change in ____________.

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

  1. Market Value

  2. Cost

  3. Income

  4. None of the Above

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Correct Option: A
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.

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


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

  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)

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Correct Option: A
Explanation:

Matching revenue-Income measurement

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

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

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

  1. Replacement Cost

  2. Realizable Value

  3. Historical Cost

  4. Standard Cost

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Correct Option: C
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.

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

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

  1. Stock-in-trade

  2. Fixed assets

  3. Current assets

  4. All of these

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Correct Option: A
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."