Introduction To Accounting Standards(Advance Accountancy ) Questions and Answers

Question 1. The global key professional accounting body is
  1.    The International Accounting Standards Board
  2.    The Institute of Chartered Accountants of India
  3.    The Financial accounting standard boa
  4.    None
Explanation:-
Answer: Option A. -> The International Accounting Standards Board


Question 2. International Public Sector Accounting Standards were issued by
  1.    International Accounting Standards Board.
  2.    International Auditing Practices Committee.
  3.    International Federation of Accountants.
  4.    None of the above
Explanation:-
Answer: Option C. -> International Federation of Accountants.


Question 3. The process of recording financial data up to trial balance is
  1.    Book keeping
  2.    Classifying
  3.    Summarizing
  4.    Analyzing
Explanation:-
Answer: Option A. -> Book keeping


Question 4. In which of the following cases, accounting estimates are needed?
  1.    Employs benefit schemes
  2.    Impairment of losses
  3.    Inventory obsolescence
  4.    All of the above
Explanation:-
Answer: Option D. -> All of the above


Question 5. The long term assets that have no physical existence but, possess a value is known as,
  1.    Current assets
  2.    Fixed assets
  3.    Intangible assets
  4.    Investments
Explanation:-
Answer: Option C. -> Intangible assets


Question 6. Which of these best explains fixed assets?
  1.    Are bought to be used in the business.
  2.    Are expensive items bought for the business
  3.    Are items which will not wear out quickly
  4.    Are of long life and are not purchased specifically for resale
Explanation:-
Answer: Option B. -> Are expensive items bought for the business


Question 7. The assets that can be easily converted into cash within a short period (i.e., 1 year or less is known as,
  1.    Current assets
  2.    Fixed assets
  3.    Intangible assets
  4.    Investments
Explanation:-
Answer: Option A. -> Current assets


Question 8. Which of the following statement is correct?
  1.    The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only
  2.    The amount of Goodwill or Capital Reserve is found out in the books of vendor company only.
  3.    Goodwill = Net Assets – Purchase price
  4.    The face value of shares of purchasing company will be taken in to account while calculating purchase consideration.
Explanation:-
Answer: Option C. -> Goodwill = Net Assets – Purchase price


Question 9. Post Acquisition dividend received by Holding Company is debited to :
  1.    Bank A/c
  2.    profit & loss A/c
  3.    Dividend A/c
  4.    Investment A/c
Explanation:-
Answer: Option B. -> profit & loss A/c


Question 10. Which Exchange rate will be considered for conversion of share capital of subsidiary company.
  1.    Opening Rate
  2.    Closing rate
  3.    Average Rate
  4.    Rate of which date share acquired (actual)
Explanation:-
Answer: Option D. -> Rate of which date share acquired (actual)


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