Corporate Accounting Set 3 MCQs

Q1 | Activities that result in changes in the size and composition of the equity capital andborrowings of an entity are called:

operating activities

investing activities

financing activities

none of these

Q2 | Increase in share capital of a firm in the current year as compared to previous year should berecorded in the final cash flow statement under

investing activities

financing activities

operating activities

all of the above

Q3 | When presenting discontinued operations in the cash flow statement

they are pooled with other current assets

they are added to non-cash items

they are ignored

they are shown separately

Q4 | An entity shall explain how the transition from previous GAAP to IFRSs __________ itsreported financial position, financial performance and cash flows.

adjusted

corroborated

affected

benefited

Q5 | How does an entity adopt IFRSs for the first time?

by reporting on its financial position, financial performance and cash flows in accordance with ifrss

by issuing its first financial statements in which the entity adopts ifrss, by an explicit and unreserved statement of compliance with ifrss

by reporting on its financial position, financial performance and cash flows in accordance with national requirements, which do not contradict ifrss

by issuing its first financial statements in accordance with national requirements, which contain explicit and unreserved statement of compliance with ifrss

Q6 | Which of the following is the starting point for an entity accounting in accordance withIFRSs?

the date when the decision about adopting ifrs has been made

the date of issuance of the first financial statement in accordance with ifrs

the date of transition to ifrss

the date when the explicit and unreserved statement of compliance with ifrss has been made

Q7 | Accounting in India is governed by the

rbi

company law board

income tax department

icai

Q8 | The convergence of the Indian Accounting Standards with IFRS began in

april 2010

april 2012

april 2015

april 2000

Q9 | Ind AS will apply to

both consolidated as well as standalone financials of the company

only consolidated financials

only standalone financials

optional

Q10 | Total Number of Ind AS which are notified as of date?

40

41

42

43

Q11 | Total Number of IFRSs which are notified as of date?

16

17

18

19

Q12 | Total Number of IFRIC Interpretations which are notified as of date?

23

24

25

26

Q13 | Total Number of SIC Interpretations which are notified as of date?

30

31

32

33

Q14 | What items of inventories are outside the scope of Ind AS 2?

work in progress arising under construction contracts

raw materials including maintenance supplies

share, debentures held as stock-in-trade

machinery spares exclusively used with fixed assets

Q15 | A provision is

a liability of uncertain timing or amount

a possible obligation as a result of past events that is of uncertain timing or amount

an adjustment to the carrying amount of assets

none of these

Q16 | When Redeemable Preference shares are due for redemption, the entry passed is

debit redeemable preference share capital a/c; credit cash a/c

debit redeemable preference share capital a/c; credit preference shareholders a/c

debit preference shareholders a/c; credit cash a/c

debit preference shareholders a/c; credit capital reduction a/c

Q17 | Which of the following can be utilized for the redemption of preference shares of a companyout of profit:

shares forfeited account

development rebate reserve account

capital redemption reserve account

dividend equalization reserve

Q18 | Which of the following cannot be utilized for the redemption of preference shares of acompany

securities premium on fresh issue of shares

general reserve

profit and loss account

dividend equalization reserve

Q19 | A company cannot issue redeemable preference shares for a period exceeding _________.

6 years

7 years

8 years

20 years

Q20 | Which of the following cannot be used for the purpose of creation of capital redemptionreserve account?

profit and loss account (credit balance)

general reserve account

dividend equalization reserve account

unclaimed dividends account

Q21 | The Capital Redemption reserve is created for the following reasons:

to maintain the capital intact

to safeguard the interest company’s creditors

both of the above

none of the above

Q22 | Which of the following accounts can be transferred to capital redemption reserve account?

general reserve account

forfeited shares account

profit prior to incorporation

securities premium account

Q23 | The technique of converting figures into percentage in some common base is called _____.

ratio analysis

common size statement analysis

trend percentages

none of these

Q24 | The ratio which depicts the relationship between two items, one of which is drawn from theBalance Sheet and the other from the revenue account

current ratio

equity ratio

net profit ratio

debtors turnover ratio

Q25 | The ratio of liquid asset to current liabilities

quick ratio

current ratio

absolute liquid ratio

combined ratio