MCQ for CA Intermediate ACCOUNTING - Chapter 2 - FRAMEWORK FOR PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

Sample Multiple Choice Questions (MCQ's) for CA Intermediate - Paper 1 - ACCOUNTING - Chapter 2: FRAMEWORK FOR PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS - For Practice relevant for May/November 23 Examinations

 

Q1.   The 'going concern' concept assumes that 

  1. The business can continue in operational existence for the foreseeable future.
  2. The business cannot continue in operational existence for the foreseeable future.
  3. The business is continuing to be profitable.

Answer: 1

 

Q2.   An accounting policy can be changed if the change is required

  1. By statute or accounting standard
  2. For more appropriate presentation of financial statements
  3. Both (a) and (b)

Answer: 3

Q3.   Value of equity may change due to

  1. Contribution from or Distribution to equity participants
  2. Income earned/expenses incurred 
  3. Both (a) and (b)

Answer: 3

Q4.  An item that meets the definition of an element of financial statements should be recognised in the financial statements if:

  1. It is probable that any future economic benefit associated with the item will flow to the enterprise
  2. Item has a cost or value that can be measured with reliability
  3. Both (a) and (b) 

Answer: 3

 

Q5.  A machine was acquired in exchange of an old machine and ₹ 20,000 paid in cash. The carrying amount of old machine was ₹ 2,00,000 whereas its fair value was ₹ 1,50,000 on the date of exchange. The historical cost of the new machine will be taken as 

  1. ₹ 2,00,000
  2. ₹ 1,70,000
  3. ₹ 2,20,000

Answer: 2

Q6.  Liabilities are recorded at the undiscounted amount of cash expected to be paid on settlement of liability in the normal course of business under:

  1. Present value.
  2. Realizable value
  3. Current cost.

Answer: 2

 

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