MCQ for CA Intermediate ACCOUNTING - Chapter 3 - OVERVIEW OF ACCOUNTING STANDARDS

Sample Multiple Choice Questions (MCQ's) for CA Intermediate - Paper 1 - ACCOUNTING - Chapter 3: OVERVIEW OF ACCOUNTING STANDARDS - For Practice relevant for May/November 23 Examinations

 

 UNIT 1:  APPLICABILITY OF ACCOUNTING STANDARDS

 

Q1.   Non-corporate entities which are not Level I entities whose turnover (excluding other income) exceeds rupees ___________ but does not exceed rupees two-fifty crores in the immediately preceding accounting year are classified as Level II entities.

  1. five crores.
  2. two crores.
  3. fifty crores.

Answer: 3

 

Q2. The following Accounting Standard is not applicable to Non-corporate Entities falling in Level II in its entirety   

  1. AS 10.
  2. AS 17.
  3. AS 2.

Answer: 2

Q3. All non-corporate entities engaged in commercial, industrial and business reporting entities, whose turnover (excluding other income) exceeds rupees 250 crores in the immediately preceding accounting year, are classified as 

  1. Level II entities
  2. Level I entities.
  3. Level III entities

Answer: 2

Q4. All non-corporate entities engaged in commercial, industrial or business activities having borrowings (including public deposits) in excess of rupees two crores but does not exceed rupees ten crores at any time during the immediately preceding accounting year.

  1. Level II entities.
  2. Level IV entities.
  3. Level III entities.

Answer: 3

Q5. “Small and Medium Sized Company” (SMC) means, a company-

  1. which may be a bank, financial institution or an insurance company.
  2. whose turnover (excluding other income) does not exceed rupees twofifty crores in the immediately preceding accounting year;
  3. whose turnover (excluding other income) does not exceed rupees fifty crores in the immediately preceding accounting year;

Answer: 2

 

 UNIT 2: OVERVIEW OF ACCOUNTING STANDARDS

 

Q1.   Which item of inventory is under the scope of AS 2 (Revised)?

  1. WIP arising under construction contracts
  2. Raw materials
  3. Shares, Debentures held as stock in trade. 

Answer: 2

Q2.   Crown Ltd. wants to prepare its cash flow statement. It sold equipment of book value of ₹ 60,000 at a gain of ₹ 8,000. The amount to be reported in its cash flow statement under operating activities is 

  1. Nil
  2. ₹ 8,000
  3. ₹ 68,000

Answer: 1

Q3.   While preparing cash flows statement, an entity (other than a financial institution) should disclose the dividends received from its investment in shares as

  1. operating cash inflow
  2. investing cash inflow
  3. financing cash inflow

Answer: 2

Q4. As per AS 11 assets and liabilities of non-integral foreign operations should be converted at __________ rate. 

  1. Opening
  2. Average
  3. Closing

Answer: 3

Q5. To encourage industrial promotion, IDCI offers subsidy worth Rs. 50 lakhs to all new industries set up in the specified industrial areas. This grant is in the nature of promoter’s contribution. How such subsidy should be accounted in the books?

  1. Credit it to capital reserve
  2. Credit it as ‘other income’ in the profit and loss account in the year of commencement of commercial operations
  3. Both (a) and (b) are permitted

Answer: 1

 

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