MCQ Financial reporting First semester PDF

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MBA first semester Financial reporting MCQs. All units are covered in this MCQs. Especially on financial statements and IND AS....

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Question Bank for MCQ: Chapter 1 1. The notes to accounts shall contain information in addition to that presented in the Financial Statements and shall provide where required (a) narrative descriptions or disaggregations of items recognized in those statements; (b) information about items that do not qualify for recognition in those statements; (c) these items normally include contingent liabilities and commitments which are not shown on the face of the Balance Sheet. (d) All of the above 2. Financial statements are the basic sources of information to the shareholders and other external parties for understanding the ---------------------of any business concern. (a) profitability and financial position (b) Sustainability and Financial position (c) Government liability (d) none of the above 3. Investments in Financial Statement are also classified into (a) Fixed and variable (b) Long term and short term (c) current and non-current categories. (d) all of the above

4. All inventories are always treated as (a) long term (b) current (c) Fixed (d) none of the above

5. Which report gives a review on the profitability of a business? (a) Statement of changes in equity (b) Cash flow statement (c) Balance sheet (d) Income statement 6. When assets are subtracted from liabilities it will be equal to? (a) Capital (b) Net income

(c) Working capital (d) Goodwill Answer: a 7. A current asset that can be transferred into cash within three months is known as: (a) Cash equivalent (b) Intangible asset (c) Operating asset (d) Cash asset 8 The financial statements of a business enterprise include: (a) Balance sheet (b) Statement of Profit and loss account (c) Cash flow statement (d) All the above

9. Which statement shows the flow of cash and cash equivalents during the financial period? (a) Statement of changes in equity (b) Cash flow statement (c) Balance sheet (d) Income statement 10. An Annual Report is issued by a company to its: (a) Directors (b) Auditors (c) Shareholders (d) Management Chapter 2. 1. Accounting Standard Board was set up by (a) (b) (c) (d)

Institute of Chartered Accountants of India Institute of Cost and Works Accountants of India Institute of Company Secretaries of India Government of India

2. In reference to the accounting standards, choose the correct statement: (a) Accounting standards codify the generally accepted accounting principles (b) They lay down the norms of accounting policies and practices by way of codes or guidelines (c) The main purpose of accounting standards is to provide information to the user as to the basis on which the accounts have been prepared (d) All of the above 3. How many mandatory accounting standards are there in India 2020? (a) 29 (b) 32 (c) 41

(d) 112 4. What is aim of accounting standards in India? (a) To make Financial Statements more compatible (b) To ensure uniformity in accounting policies (c) To guide judgement of accounting professionals (d) All of the above 5. As per Indian GAAP Financial statement are presented at (a) Market value (b) Fair value (c) Historical cost (d) All of the above 6. Which one of the following is not a consideration in selection of accounting policies. (a) Prudence (b) Substance over form (c) Materiality (d) Full disclosure 7. Which one of the following is a fundamental accounting assumption? (a) Going concern (b) Accrual (c) Consistency (d) All of the above 8. Total no of IFRS is (a) 15 (b) 16 (c) 17 (d) 18 9. IASB was established in the year (a) 1977 (b) 2001 (c) 2013 (d) 2019 10. How many Ind AS are there in India 2020? (a) 29 (b) 32 (c) 41 (d) 17 Chapter 3. 1. Cash receipt received from the sales fixed assets are recorded under the head of: (a) Other activities (b) Investing activities (c) Financing activities (d) Operating activities 2. The main operation expenses of a business are termed as: (a) Operating expenses (b) Non-administration expense (c) Selling expenses (d) Administration expense 3. P&L statement is also known as? (a) Statement of earnings (b) Statement of balance sheet (c) Statement of operations (d) Statement of income 4. Which of the following options is not recorded in the Balance sheet?

(a) Cash (b) Rent expenses (c) Building (d) Goodwill 5. Balance Sheet provides information about financial position of the enterprise: (a) At a point in time (b) Over a period of time (c) For a period of time (d) None of the above 6. Which of the following is not required to be prepared under the Companies Act: (a) Statement of Profit & Loss (b) Balance Sheet (c) Auditor’s Report (d) Fund Flow Statement 7. The reserve which is created for a particular (specific) purpose and which is a charge against revenue is called: (a) Capital Reserve (b) General Reserve (c) Secret Reserve (d) Specific Reserve 8. Balance Sheet is a : (a) Account (b) Statement (c) Both (a) and (b) (d) All the above 9. Statement of Profit & Loss is also called………: (a) Operating Profit (b) Balance Sheet (c) Income Statement (d) Trading Account 10. Patents and copyrights fall under the category of: (a) Current Assets (b) Liquid Assets (c) Intangible Assets (d) None of these Chapter 4: 1. The original cost at which an asset or liability is acquired is known as — (a) Replacement cost (b) Historical cost (c) Carrying cost (d) Amortization 2. The global key professional accounting body is — (a) The International Accounting Standards Committee (b) The Institute of Chartered Accountants of India (c) The Financial Accounting Standards Board (d) The International Accounting Standards Board 3. The process of converting foreign-subsidiary financial statements into the home currency is known as — (a) Consolidation (b) Reconstruction (c) Transmission

(d) Translation 4. The accounting process in which the financial statements of a parent company and its subsidiaries are added together to yield a unified set of financial statements is called — (a) Translation (b) Amalgamation (c) Consolidation (d) Amortization 5. A price on goods and services sold by one member of a corporate family to another, such as from a parent to its subsidiary in a foreign country, is known as — (a) Export price (b) Transfer price (c) Import price (d) Arm’s length price 6. Which of the following is not a tax haven? (a) Bermuda Islands (b) England (c) Cayman Islands (d) Mauritius 7. The abbreviation "GAAP" stands for: (a) Globally accepted accounting principles (b) Generally accepted accounting practice (c) Globally accepted accounting practice (d) Generally accepted accounting principles 8. One of the main advantages of standardisation in financial reporting is: (a) The use of creative accounting practices (b) The production of prudent financial statements (c) Increased flexibility in financial reporting (d) Comparability between accounting periods and between entities 9. The word "entity" as used by the IASB refers to: (a) Corporations only (b) Profit-oriented organisations only (c) Not-for-profit organisations only (d) Companies only 10. Gibson Ltd. has investments in a number of businesses. Each of the investments is individually immaterial. How should IFRS 3 disclosures be made for these investments? (a) Since the investments are individually immaterial, no disclosures are required. (b) Disclosures only need to be made for any investments that are in excess of 5%. (c) The disclosures should be made for these investments in the aggregate. (d) The disclosures should be made separately for each investment.

Chapter 5: 1. Adoption means application of IFRS issued by IASB as it is in entirety. Convergence means using IFRS issued by IASB with some carve in and carve outs. (a) True (b) False (c) only carve ins (d) only carve outs 2. Companies covered in Phase I should have net worth (a) Equal to 500 crores (b) Equal and more than 500 crores

(c) Less than 500 crores (d) more than 250 crores but less than 500 crores 3. (a) (b) (c) (d)

Ind AS will apply to both consolidated as well as standalone financials of the company. Only consolidated financials Only standalone financials Optional

4. Ind AS once adopted either voluntarily or mandatorily can not be revoked in prospective years even in case of net worth goes down from specified limit or any other criteria given in roadmap. (a) True (b) False (c) Can adopt IFRS (d) Can adopt Indian GAAP 5. (a) (b) (c) (d)

As part of Ind AS transition process, companies covered in first phase will have to prepare: Opening Ind AS Balance sheet as at 1 April 2015. Equity reconciliation b/w Ind AS and Indian GAAP on 1 April 2015 & 31 Mar 2016. Income Reconciliation b/w Ind AS and Indian GAAP for the year ending 31 Mar 2016. All of the above

6. (a) (b) (c) (d)

As part of Ind AS transition process, companies covered in first phase will have to prepare: Ind AS financial statements as at and for the year ending 31 Mar 2016 for comparative. Ind AS Financial statements as at and for year ending 31 Mar 2017. Equity reconciliation b/w Ind AS and Indian GAAP on 1 April 2015 & 31 Mar 2016. All of the above

7. The net worth shall be calculated in accordance with the………………………………. of the company as on……………………… or the first audited financial statements for accounting period which ends after that date; (a) stand-alone financial statements,31st March, 2014 (b) consolidated financial statements,31st March, 2014 (c) consolidated financial statements,1st April, 2015 (d) consolidated financial statements,1st April, 2014 8. (a) (b) (c) (d)

For companies covered in phase I, the transition date would be: 1 April 2015 31 March 2014 31 March 2015 1 Apr 2016

9. For companies covered in phase I , the company would be required to prepare opening balance sheet at which date: (a) 1 April 2015 (b) 31 March 2014 (c) 31 March 2015 (d) 1 April 2016 10. The convergence of the Indian Accounting Standards with IFRS began in — (a) Dec-11 (b) Aug -09 (c) April- 11 (d) April -10...