{"id":5164,"date":"2024-03-22T08:37:30","date_gmt":"2024-03-22T03:07:30","guid":{"rendered":"https:\/\/gstguntur.com\/?p=5164"},"modified":"2024-03-25T17:21:51","modified_gmt":"2024-03-25T11:51:51","slug":"overview-of-accounting-standards-corporate-and-management-accounting-mcq","status":"publish","type":"post","link":"https:\/\/gstguntur.com\/overview-of-accounting-standards-corporate-and-management-accounting-mcq\/","title":{"rendered":"Overview of Accounting Standards \u2013 Corporate and Management Accounting MCQ"},"content":{"rendered":"

Students should practice Overview of Accounting Standards \u2013 Corporate and Management Accounting CS Executive MCQ<\/a> Questions with Answers based on the latest syllabus.<\/p>\n

Overview of Accounting Standards \u2013 Corporate and Management Accounting MCQ<\/h2>\n

Question 1.
\nAS-2 is on:
\n(A) Disclosure of Accounting Policies
\n(B) Valuation of Inventories
\n(C) Revenue Recognition
\n(D) Depreciation Accounting
\nAnswer:
\n(B) Valuation of Inventories<\/p>\n

Question 2.
\nConsistency with reference to the application of accounting principles refer to the:
\n(A) All the companies in the same industries should use identical procedures and methods.
\n(B) Income and assets have not been overstated.
\n(C) Accounting methods and procedures used have to be consistently applied from year to year.
\n(D) Any accounting method or procedure can be utilized.
\nAnswer:
\n(C) Accounting methods and procedures used have to be consistently applied from year to year.<\/p>\n

Question 3.
\nAccounting Standards_____the statue:
\n(A) Can over-ride
\n(B) Cannot over-ride
\n(C) May over-ride
\n(D) None of the above
\nAnswer:
\n(B) Cannot over-ride<\/p>\n

Question 4.
\nThe global key professional accounting body is the_______
\n(A) International Accounting Standards Board
\n(B) Financial Accounting Standards Board
\n(C) Institute of Chartered Accountants of India
\n(D) International Accounting Standards Committee
\nAnswer:
\n(A) International Accounting Standards Board<\/p>\n

Question 5.
\nThe original cost at which an asset or liability is acquired is known as –
\n(A) Carrying cost
\n(B) Replacement cost
\n(C) Amortization
\n(D) Historical cost
\nAnswer:
\n(D) Historical cost<\/p>\n

Question 6.
\nAs per AS-11, the process of converting foreign-subsidiary financial statements into the home currency is known as___
\n(A) Consolidation
\n(B) Translation
\n(C) Transmission
\n(D) Reconstruction
\nAnswer:
\n(B) Translation<\/p>\n

Question 7.
\nAs 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____
\n(A) Amalgamation
\n(B) Amortization
\n(C) Consolidation
\n(D) Translation
\nAnswer:
\n(C) Consolidation<\/p>\n

Question 8.
\nThe council of ICAI has so far issued_____accounting standards. However, AS-8 has been withdrawn. Thus, effectively there are_____accounting standards
\n(A) 33; 32
\n(B) 32; 31
\n(C) 31; 30
\n(D) 34; 33
\nAnswer:
\n(B) 32; 31<\/p>\n

Question 9.
\nWhich section of the Companies Act, 2013 provides that the financial statements of every company shall comply with the accounting standards?
\n(A) Section 129
\n(B) Section 130
\n(C) Section 131
\n(D) Section 132
\nAnswer:
\n(A) Section 129<\/p>\n

Question 10.
\nIn the case of charitable trusts and co-operative societies:
\n(A) If their activities are purely charitable or non-commercial then accounting standards are not applicable.
\n(B) Even if a very small proportion of the activities of trusts\/co-operative societies are considered to be commercial, industrial, or business in nature, then accounting standards are applicable.
\n(C) Both (A) and (B)
\n(D) None of the above
\nAnswer:
\n(C) Both (A) and (B)<\/p>\n

Question 11.
\nWhich of the following is Level-I enterprise?
\n(A) All commercial, industrial, and business reporting enterprises having borrowings, including public deposits, in excess of \u20b9 1 Crore but not in excess of \u20b9 10 Crore.
\n(B) All commercial, industrial, and business reporting enterprises, whose turnover for the immediately preceding accounting period exceeds \u20b9 50 Crore.
\n(C) All commercial, industrial, and business reporting enterprises, whose turnover for the immediately preceding accounting period \u20b9 5 Crore but not in excess of \u20b9 25 Crore.
\n(D) None of the above
\nAnswer:
\n(D) None of the above<\/p>\n

Question 12.
\nWhich of the following is a Level-II enterprise?
\nI. Listed enterprises outside India.
\nII. All commercial, industrial, and business reporting enterprises, whose turnover for the immediately preceding accounting period exceeds \u20b9 50 Crore.
\nIII. Financial institutions
\nIV. Enterprises carrying on insurance business.
\nSelect the correct answer from the options given below.
\n(A) I&III
\n(B) II&IV
\n(C) III only
\n(D) II only
\nAnswer:
\n(D) II only<\/p>\n

Question 13.
\nWhich aspect of Financial Instruments is death by AS-31?
\n(A) Recognition & Measurement
\n(B) Presentation
\n(C) Disclosures
\n(D) Limited Revision
\nAnswer:
\n(B) Presentation<\/p>\n

Question 14.
\nWhich of the following are fundamental accounting assumptions?
\nA. Going Concern
\nB. Matching
\nC. Consistency
\nD. Dual Aspect
\nE. Materiality
\nF. Accrual
\nSelect the correct answer from the options given below:
\n(A) A, C & E
\n(B) B, D&F
\n(C) A C&F
\n(D) A D&F
\nAnswer:
\n(C) A C&F<\/p>\n

Question 15.
\nWhich of the following is NON-SMC as per the Companies (Accounting Standards) Rules?
\n(A) Whose equity or debt securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India
\n(B) Which is not a bank, financial institution, or an insurance company
\n(C) Whose turnover excluding other income does exceed \u20b9 50 Crore in the immediately preceding accounting year
\n(D) All of the above
\nAnswer:
\n(C) Whose turnover excluding other income does exceed \u20b9 50 Crore in the immediately preceding accounting year<\/p>\n

Question 16.
\nConsider the following cases:
\n(i) A (P) Ltd., a subsidiary of a multinational company listed on the London Stock Exchange. Does it have a turnover of \u20b9 12 Crores and borrowings of \u20b9 5 Crores?
\n(ii) B (P) Ltd. has a turnover of \u20b9 45 Crores, other income of \u20b9 7 Crores, and bank borrowings of \u20b9 9 Crores.
\n(zzz) C Ltd. has appointed Merchant Bankers to prepare a Red-herring prospectus for the purpose of filing the same with SEBI.
\nClassify above enterprises as SMC or NON-SMC and select the correct option given below:
\n(i) (ii) (iii)
\n(A) Non-SMC Non-SMC SMC
\n(B) SMC Non-SMC Non-SMC
\n(C) Non-SMC SMC Non-SMC
\n(D) Non-SMC SMC SMC
\nAnswer:
\n(C) Non-SMC SMC Non-SMC<\/p>\n

Question 17.
\nAs 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:
\n(A) Three consecutive accounting periods
\n(B) Four consecutive accounting periods
\n(C) Two consecutive accounting periods
\n(D) Five consecutive accounting periods
\nAnswer:
\n(C) Two consecutive accounting periods<\/p>\n

Question 18.
\nAS-20 deals with:
\n(A) Earnings Per Share
\n(B) Lease
\n(C) Segment Reporting
\n(D) Taxes on Income
\nAnswer:
\n(A) Earnings Per Share<\/p>\n

Question 19.
\nWhich of the following is treated as Potential Equity Share as per AS-20?
\n(A) Convertible debentures
\n(B) Share warrants
\n(C) Employee Stock Options
\n(D) All of the above
\nAnswer:
\n(D) All of the above<\/p>\n

Question 20.
\nIf 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 –
\n(A) Prudence
\n(B) Substance over from
\n(C) Materiality
\n(D) Realization
\nAnswer:
\n(B) Substance over from<\/p>\n

Question 21.
\nWhich of the following is included in the cost of inventory as per AS-2?
\n(A) Duties and taxes subsequently re-coverable from taxing authorities
\n(B) Freight inwards
\n(C) Rebates
\n(D) Duty drawbacks
\nAnswer:
\n(B) Freight inwards<\/p>\n

Question 22.
\nPayment of penalties\/fines for violation of law should be disclosed separately. It should not be clubbed with \u201cOffice Expenses\u201d or “Miscellaneous Expenses\u201d. This the example of –
\n(A) Prudence
\n(B) Substance over from
\n(C) Materiality
\n(D) Realization
\nAnswer:
\n(C) Materiality<\/p>\n

Question 23.
\nAs per AS-3, unrealized gains and losses arising from changes in foreign exchange rates are –
\n(A) Cash flows
\n(B) Cash equivalents
\n(C) Cash inflows
\n(D) Not cash flows
\nAnswer:
\n(D) Not cash flows<\/p>\n

Question 24.
\nProvisions for doubtful debts, provision for discount on debtors are based on:
\n(A) Prudence
\n(B) Substance over from
\n(C) Materiality
\n(D) Realization
\nAnswer:
\n(A) Prudence<\/p>\n

Question 25.
\nWhich of the following required to be disclosed as per AS-1?
\n(A) Significant accounting policies
\n(B) Fundamental accounting as-sumptions
\n(C) Change in accounting policies
\n(D) All of the above
\nAnswer:
\n(D) All of the above<\/p>\n

Question 26.
\nAs per AS-2, inventories should be valued at:
\n(1) Cost
\n(2) Net Realizable Value
\nSelect the correct answer from the options given below.
\n(A) (1) only
\n(B) Higher of (1) and (2)
\n(C) (2) only
\n(D) Lower of (1) and (2)
\nAnswer:
\n(D) Lower of (1) and (2)<\/p>\n

Question 27.
\nAs per AS-2, the historical cost of inventories should normally be determined by using ……………………
\n(A) FIFO and LIFO Method
\n(B) LIFO and Weighted Average Cost Method
\n(C) FIFO and Weighted Average Cost Method
\n(D) FIFO and Simple Average Cost Method
\nAnswer:
\n(C) FIFO and Weighted Average Cost Method<\/p>\n

Question 28.
\nAs 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.
\n(A) Two months or less
\n(B) Four months or less
\n(C) Three months or less
\n(D) Six months or less
\nAnswer:
\n(C) Three months or less<\/p>\n

Question 29.
\nNRV or net realizable value of inventory is the expected selling price or market value less………………….
\n(A) Carry value of the inventory
\n(B) Expenses necessary to complete the sale
\n(C) Cost of the stock
\n(D) replacement cost
\nAnswer:
\n(B) Expenses necessary to complete the sale<\/p>\n

Question 30.
\nAS-6: Depreciation applies to:
\n(A) Goodwill and other intangible assets
\n(B) Forests, plantations, and similar regenerative natural resources
\n(C) Wasting assets including expenditure on the exploration for and extraction of minerals, oils, natural gas, and similar non-regenerative resources
\n(D) None of the above
\nAnswer:
\n(D) None of the above<\/p>\n

Question 31.
\nDue to which of the following concept inventory is valued at cost or net realizable value, whichever is less?
\n(A) Going Concern
\n(B) Separate Entity
\n(C) Prudence
\n(D) Matching
\nAnswer:
\n(C) Prudence<\/p>\n

Question 32.
\nAS-7: Construction Contracts should be applied in accounting for construction contracts in the financial statements of:
\n(A) Contractor
\n(B) Contractors
\n(C) Both (A) and (B)
\n(D) Only (A) not (B)
\nAnswer:
\n(B) Contractors<\/p>\n

Question 33.
\nWhile 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……………
\n(A) Previous year profit is overstated and current year profit is also overstated.
\n(B) Previous year profit is understated and current year profit is overstated
\n(C) Previous year profit is understated and current year profit is also understated.
\n(D) Previous year profit is overstated and current year profit is under-stated.
\nAnswer:
\n(D) Previous year profit is overstated and current year profit is under-stated.<\/p>\n

Question 34.
\nAs per AS-7: Construction Con-tracts, an expected loss on the construction contract should be –
\n(A) Charged to other profitable contracts
\n(B) Charged to that contract itself
\n(C) Recognized as an expense immediately Le. debited to P & L A\/c.
\n(D) Should be carried forward.
\nAnswer:
\n(C) Recognized as an expense immediately Le. debited to P & L A\/c.<\/p>\n

Question 35.
\nWhich of the following method of inventory valuation is not recommended by AS – 2?
\n(A) Specific Identification Method
\n(B) Last-in-First Out Method
\n(C) Weighted Average Cost Method
\n(D) First-in-First Out Method
\nAnswer:
\n(B) Last-in-First Out Method<\/p>\n

Question 36.
\nWhich of the following is not a method of determining the stage of completion of a contract as per AS-7?
\n(A) Physical completion method
\n(B) Residual completion method
\n(C) Surveys of work performed method
\n(D) Proportionate cost method
\nAnswer:
\n(B) Residual completion method<\/p>\n

Question 37.
\nIf closing stock is overstated…………………
\n(A) Profit will increase and current assets will decrease
\n(B) Profit will decrease and current assets will increase
\n(C) Both profit & current assets will increase
\n(D) Both profit & current assets will decrease
\nAnswer:
\n(C) Both profit & current assets will increase<\/p>\n

Question 38.
\nAS-9 is concerned with the recognition of revenue arising in the course of the ordinary activities of the enterprise from:
\n(A) Sale of goods
\n(B) Rendering of services
\n(C) Use by others of enterprise resources yielding interest, royalties, and dividends
\n(D) All of the above
\nAnswer:
\n(D) All of the above<\/p>\n

Question 39.
\nWhich of the following is \u2018revenue\u2019 as per AS-9?
\n(A) Realized gains from the disposal of non-current assets
\n(B) Natural increases in herds and agricultural and forest products
\n(C) Realized or unrealized gains resulting from changes in foreign exchange rates
\n(D) None of the above
\nAnswer:
\n(D) None of the above<\/p>\n

Question 40.
\nWhich of the following statements is correct with respect to inventories?
\n(A) The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold.
\n(B) It is generally good business management to sell the most recently acquired goods first.
\n(C) Under FIFO, the ending inventory is based on the latest units purchased.
\n(D) FIFO seldom coincides with the actual physical flow of inventory.
\nAnswer:
\n(C) Under FIFO, the ending inventory is based on the latest units purchased.<\/p>\n

Question 41.
\nRevenue from service transactions is usually recognized as the service is performed, by the:
\n(A) Proportionate completion method
\n(B) Completed service contract method
\n(C) Both (A) and (B)
\n(D) Neither (A) nor (B)
\nAnswer:
\n(C) Both (A) and (B)<\/p>\n

Question 42.
\nAs per AS-9, revenue from interest should be recognized –
\n(A) On-time proportion basis.
\n(B) On an accrual basis as per the term of the agreement
\n(C) When the right to receive is established
\n(D) Any of the above
\nAnswer:
\n(A) On-time proportion basis.<\/p>\n

Question 43.
\nAS-13 deals with:
\n(A) Accounting for borrowings
\n(B) Accounting for investments
\n(C) Finance lease
\n(D) Operating lease
\nAnswer:
\n(B) Accounting for investments<\/p>\n

Question 44.
\nAs per AS-13 shares, debentures and other securities held for sale in the ordinary course of business are –
\n(A) Disclosed as stock-in-trade under the head Current Assets.
\n(B) Disclosed as temporary investments under the head Current Assets.
\n(C) Debited to Investment A\/c
\n(D) Disclosed as long-term investments under the head Non-Current Assets.
\nAnswer:
\n(A) Disclosed as stock-in-trade under the head Current Assets.<\/p>\n

Question 45.
\nAs per AS-13, where, long-term investments are reclassified as current investments, transfers are made at the:
\n(A) Higher of Cost or Fair Value at the date of transfer.
\n(B) Lower of Cost or Carrying Amount at the date of transfer.
\n(C) Lower of Cost or Fair Value at the date of transfer.
\n(D) Higher of Cost or Carrying Amount at the date of transfer.
\nAnswer:
\n(B) Lower of Cost or Carrying Amount at the date of transfer.<\/p>\n

Question 46.
\nX Ltd. purchased goods at the cost of \u20b9 40 lakhs in October 2018. Till March 2019, 75% of the stocks were sold. The company wants to disclose closing stock at \u20b9 10 lakhs. The expected sale value is \u20b9 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?.
\n(A) 10 lakhs
\n(B) 9.9 lakhs
\n(C) 11 lakhs
\n(D) 12 lakhs
\nHint:
\nAs per AS -2, Inventories should be valued at the lower of:<\/p>\n