BCOM-AFM-1 MCQ

Question 1 : Following is the example of accounting policy

1. Realisation
2. Accrual
3. Accounting period
4. Recognition of profit on contract

Question 2 : As per AS1, disclosure of accounting policies should form part of

1. Financial statements
2. Directors Report
3. Auditors Report
4. Books of accounts

Question 3 : Accounting policies are not _____ for all organisations.

1. Compulsory
2. Different
3. None of the above
4. Same

Question 4 : As per AS1, disclosure of accounting policies should be made

1. At all relevant places
2. At one place
3. In Profit & Loss Account
4. In Balance Sheet

Question 5 : Compliance of accounting standards is optional.

1. True
2. False

Question 6 : It is difficult to follow a _____ accounting policy in all the circumstances.

1. uniform
2. Transperancy
3. None of the above

Question 7 : AS 1 is _____.

1. Optional
2. Recommendatory
3. Mandatory
4. None of the above

Question 8 : Materiality has to be considered in selection of accounting policies.

1. True
2. False

Question 9 : Following is an example of an accounting policy

1. Going concern
2. Entity
3. Conservatism
4. Conversion of foreign currency items

Question 10 : No purpose is served by issuing accounting standards by ICAI.

1. True
2. False

Question 11 : There is a need to disclose change in accounting policies.

1. True
2. False

Question 12 : Following is an example of accounting policy

1. Realisation
2. Accrual
3. Entity
4. Valuation of fixed assets

Question 13 : It is necessary to standardise the accounting principles and policies for ensuring

1. Consistency
2. Transperancy
3. Comparability
4. All of the above

Question 14 : Accrual is a fundamental accounting assumption.

1. True
2. False

Question 15 : Accounting assumptions should be disclosed in auditors report.

1. True
2. False

Question 16 : Following is an example of an accounting policy

1. Consistency
2. Depreciation
3. Accrual
4. Going concern

Question 17 : There is need to _____ change in accounting policies

1. Accural
2. Realisation
3. disclose
4. All of the above

Question 18 : There is no need to establish accounting standards.

1. True
2. False

Question 19 : The purpose of AS 1 is to establish a Standard as to

1. The preparation of final statements
2. Fundamental accounting assumptions
3. Desirable accounting policies
4. Disclosure of accounting policies

Question 20 : Inventories may be valued by the _____ methods.

1. different
2. Written down
3. Stright
4. None of the above

Question 21 : Accounting standards are issued by _____.

1. CEO
2. Director
3. All of the above
4. ICAI

Question 22 : Accounting Standard 1 is

1. Mandatory
2. Optional
3. Recommendatory
4. No longer valid

Question 23 : Disclosure should form part of

1. Directors report
2. Auditor's report
3. Final accounts
4. Books of accounts

Question 24 : In the following areas different Accounting policies should be followed :

1. Provision of Depreciation
2. Valuation of Investments
3. Valuation of Inventories
4. All of the above

Question 25 : A company should select accounting policy which helps to hide losses.

1. True
2. False

Question 26 : As per AS 1 disclosure is needed if the following concept is not followed :

1. Going concern
2. Realisation
3. Matching
4. Cost

Question 27 : Disclosure of Accounting Policies should form part of _____ _____.

1. Directors report
2. Auditor's report
3. Final Accounts
4. Books of accounts

Question 28 : According to AS 1 the purpose of accounting assumptions should be disclosed.

1. True
2. False

Question 29 : A company should select accounting policy which brings down the burden of taxes.

1. True
2. False

Question 30 : GAAP are included in

1. Accounting standards
2. Accounting rules
3. Guidance Notes
4. Framework of Accounting

Question 31 : Compliance of Accounting Standards

1. Makes financial statements comparable
2. Makes financial statements reliable
3. Harmonises accounting policies
4. All the above

Question 32 : The factors to be considered while selecting accounting policies include

1. Morale of staff
2. Materiality
3. Liquidity
4. Inflation

Question 33 : Following is the example of accounting policy

1. Going Concern
2. Accrual
3. Treatment of retirement benefits
4. Disclosure

Question 34 : In case of conflict between Accounting Standards and law

1. Accounts should be prepared as per law
2. Accounts should be prepared as per Accounting Standards
3. Either law or AS should be followed
4. Both should be followed

Question 35 : Materiality has to be considered in selection of _____ _____.

1. Final Statements
2. Fundamental accounting assumptions
3. Accounting Policies
4. None of the above

Question 36 : Factors to be considered while selecting accounting policies

1. Consistency
2. Prudence
3. Dual aspect
4. Cost

Question 37 : ASB uses the following process in establshment of Accounting Standards

1. Preliminary draft, Exposure draft, Final draft, Standard
2. Standard, Exposure draft, Preliminary draft, Final draft
3. Exposure draft, Preliminary draft, Standard and final draft
4. None of the above

Question 38 : As per AS 1 the effect of any change in accounting policy on the value of any item in the final accounts should

1. Be reported to directors
2. Be reported to CEO
3. Be disclosed
4. Be ignored

Question 39 : A change in accouning policy requires sanction of the Central government.

1. True
2. False

Question 40 : GAPPS are not included in accounting standards.

1. True
2. False

Question 41 : Accounting policies are

1. Prescribed by AS1
2. Same for all the organisations
3. Change from concern to concern
4. Laid down by law

Question 42 : If standards are not followed, the _____ has to make a disclosure in the accounting report in case of failure.

1. Manager
2. Employee
3. auditor
4. None of the above

Question 43 : AS _____ deals with disclosure of accounting policies.

1. GAAP
2. AS 1
3. ASB
4. None of the above

Question 44 : Accounts must be prepared as per _____.

1. Organisation
2. All of the above
3. Law
4. None of the above

Question 45 : There is _____ to establish accounting standards.

1. No need
2. Important
3. None of the above
4. need

Question 46 : Disclosure of accounting policies should form part of final accounts.

1. True
2. False

Question 47 : There is a need to recognise and disclose contingent liabilities.

1. True
2. False

Question 48 : _____ _____ are laid down by law.

1. Auditor's report
2. Directors report
3. Accounting Standards
4. None of the above

Question 49 : Following is the example of accounting policy

1. Consistency
2. Goodwill treatment
3. Cost
4. Conservatism

Question 50 : Significant accounting policies are disclosed

1. Along with financial statementss
2. In the books of accounts
3. Along with balance sheet
4. In the accounting software

Question 51 : Standardisation of accounting policies is necessary to ensure.

1. Comparability
2. Transperancy
3. All of the above
4. Consistency

Question 52 : Following factors should be considered in selection of accounting policies

1. Going concern
2. Growth of business
3. Substance over form
4. Solvency

Question 53 : The _____ statements are prepared from the books of accounts and other records maintained by the enterprise.

1. Leagal
2. NonLeagal
3. None of the above
4. financial

Question 54 : Following factors should be considered in selection of accounting policies

1. Consistency
2. Prudence
3. Dual aspect
4. Cost

Question 55 : Different firms follow different accounting policies.

1. True
2. False

Question 56 : Accounting policies are laid down by law.

1. True
2. False

Question 57 : Accounting policies are not same for all concerns.

1. True
2. False

Question 58 : Compliance of Accounting Standard is _____.

1. Recommendatory
2. Optional
3. None of the above
4. Mandatory

Question 59 : The Rule followed in disclosure of accounting policies

1. All significant policies should be disclosed
2. Only a few policies should be disclosed
3. Accounting policies should not be disclosed
4. None of the above

Question 60 : It is necessary to standardise the accounting principles to ensure consistency.

1. True
2. False

Question 61 : The limitations of AS are

1. AS may be applied mechanically
2. Choice between treatments is difficult
3. AS cannot supercede the law
4. All the above

Question 62 : There is a need of notes to accounts.

1. True
2. False

Question 63 : Accounting Standards laid down by IAS only are followed in India.

1. True
2. False

Question 64 : Accounting standards are issued by Government of India.

1. True
2. False

Question 65 : As per AS 1 significant accounting policies

1. Need not be disclosed at one place
2. Should be disclosed at one place
3. May be disclosed as per the choice of the management
4. Should not be disclosed in public accounts

Question 66 : As per AS1, disclosure should be made of

1. Significant accounting policies
2. Assumptions in accounting
3. Accounting principles
4. Accounting policies

Question 67 : Different firms follow _____ policies.

1. Same
2. leagal
3. None of the above
4. Different

Question 68 : As per AS1, any change in accounting policy

1. Should be disclosed
2. Should not be disclosed
3. Requires permission from ICAI
4. Requires permission from the Government

Question 69 : There is need of _____ to accounts.

1. Report
2. Data
3. notes
4. None ot the above

Question 70 : Following factors should be considered in selection of accounting policies

1. Liquidity
2. Cost
3. Materiality
4. Morale of employees

Question 71 : Depreciation can be calculated either by ____ line method or _____ value methods.

1. None of the above
2. straight, written down

Question 72 : As per AS 1 significant accounting policies should be disclosed at one place.

1. True
2. False

Question 73 : There is a need to disclose accounting policies.

1. True
2. False

Question 74 : Main product is the target product of insignificant value.

1. True
2. False

Question 75 : While calculating cost of inventory abnormal loss of material

1. Should not be included in cost of inventories
2. Should be added to cost of inventories
3. Should be deducted from cost of inventories
4. None of the above

Question 76 : As per AS 2 inventories include investment held as stock by a finance company.

1. True
2. False

Question 77 : As per AS 2 inventories should be valued at cost or at N.R.V. whiver is less.

1. True
2. False

Question 78 : AS per AS 2 cost of inventory should not include

1. Interest on loan
2. Direct Material
3. Direct Labour
4. Overheads

Question 79 : Overvaluation of stock inflates profit.

1. True
2. False

Question 80 : Assets held for sale in the normal course of business are inventories.

1. True
2. False

Question 81 : Inventories do _____ include machinery.

1. Partialy
2. not
3. Mostly
4. None of the above

Question 82 : AS2 (Revised) is applicable to all enterprises.

1. True
2. False

Question 83 : Direct costing approach for costing inventories has been eliminated.

1. True
2. False

Question 84 : Weighted Average method can be used under

1. Only periodic inventory system
2. Periodic and perpetual inventory systems
3. Only perpetual inventory system
4. None of the above

Question 85 : As per AS2, inventory covers

1. Machinery spares
2. WIP in case of service providers
3. Materials or suppliers used in production
4. Stock of mineral oil

Question 86 : Cost of Inventory should include

1. Import duties
2. Taxes
3. Canriage
4. All of the above

Question 87 : Undervaluation of stock _____ profits.

1. Inflates
2. Deflates
3. All of the above
4. Maximise

Question 88 : Retail method of inventory valution is

1. Sales less gross profit
2. Cost plus net profit
3. Sales plus gross profit
4. Sales less net profit

Question 89 : As per AS2, inventory should be valued at

1. Cost
2. Lower of cost and net realisable value
3. Realisable value
4. Retail price

Question 90 : As per AS, goods and services produced and kept aside for specific projects should be valued at

1. Contract price
2. Net realisable value
3. Identified individual cost
4. Pre-placement cost

Question 91 : Inventory consists of finished goods held for sale in the _____ course of business.

1. ordinary
2. Legal
3. None of the above
4. Compulsory

Question 92 : AS2 defines inventory as

1. Current assets
2. Current liabilities
3. Fixed assets
4. Assets held for sale in the ordinary course of business

Question 93 : Inventories of finished goods are not held for sale in the ordinary course of business.

1. True
2. False

Question 94 : Inventories are valued at _____ of cost and net realisable value.

1. lower
2. Upper
3. Exact
4. None of the above

Question 95 : Machinery spare parts are included in inventories.

1. True
2. False

Question 96 : Assets invented by the proprietor are called as inventories.

1. True
2. False

Question 97 : AS 2 is not applicable to mineral oils.

1. True
2. False

Question 98 : AS2 is not applicable to _____ _____.

1. Mineral Oils
2. Machinery Spares
3. Live stock
4. None of the above

Question 99 : _____ method is recognised by AS2.

1. LIFO
2. None of the above
3. Both (a) and (d)
4. FIFO

Question 100 : Under perpetual inventory system inventory is valued

1. Continuously
2. Periodically
3. Annually
4. Quarterly