Tag: accounting standards: concept and objectives

Questions Related to accounting standards: concept and objectives

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

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

  1. Roads

  2. Bridges, culverts

  3. Wells and tubewells

  4. All of the above

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Correct Option: D

The purpose of Accounting Standards is to ___________.

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

  1. harmonize accounting policies

  2. eliminate the non-comparability of financial statements

  3. improve the reliability of financial statements

  4. all of the above

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Correct Option: D

Accounting Standards refer to specific accounting _________.

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

  1. principles

  2. methods of applying those principles

  3. both (A) and (B)

  4. none of these

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Correct Option: C

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

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

  1. Consistency

  2. Business entity

  3. Going concern

  4. All of these

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Correct Option: B

Which is/are limitation of Accounting Standards?

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

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Correct Option: D

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

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

  1. 25

  2. 32

  3. 29

  4. 30

Show answer
Correct Option: B
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.

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

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

  1. Net realizable value

  2. Net realizable value less a normal profit margin

  3. Current replacement cost

  4. Discounted present value

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Correct Option: A
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. 


Closing stock is valued at ______________.

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

  1. Market price

  2. Cost price

  3. Cost price or market price, whichever is lower

  4. Cost price or market price, whichever is higher

Show answer
Correct Option: C
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."

Accounting Standard Board was set up by __________________.

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

  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

Show answer
Correct Option: B
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.

Accounting Standard Board was set up by __________.

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

  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

Show answer
Correct Option: A
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.