hitechpathshala

Q. 1

Cash amounting to ` 4 lakhs, stolen by the cashier in the month of March 20X1, was detected in April, 20X1. The financial statements for the year ended 31st March, 20X1 were approved by the Board of Directors on 15th May, 20X1. As per Accounting Standards, this is for the financial statements year ended on 31st March, 20X1.

An Adjusting event.

Non-adjusting event.

Contingency.

Provision

Q. 2

AS 4 does not apply to

Obligation under retirement benefit plans.

Commitments arising from long term lease contracts

liabilities of life assurance and general insurance enterprises arising from policies issued

Both (a) & (b).

Q. 3

A Ltd. sold its building for ` 50 lakhs to B Ltd. and has also given the possession to B Ltd. The book value of the building is ` 30 lakhs. As on 31st March, 20X1, the documentation and legal formalities are pending. For the financial year ended 31st March, 20X1.

The company should record the sale.

The company should recognise the profit of ` 20 lakhs in its profit and loss account.

Both (a) and (b).

The company should disclose the profit of ` 20 lakhs in notes to accounts.

Q. 4

What will be the treatment of the balance in the foreign currency translation reserve on disposal of the foreign operation?

Transfer the balance in foreign currency translation reserve to reserves without impacting P/L

Record the balance in foreign currency translation reserve as income or expense in P/L

Foreign currency translation reserve will continue; no change will be made to the balance and it will continue to appear as such even after disposal of the foreign operation

Any method from the above can be adopted

Q. 5

There was an omission of Rs. 23,000 purchases from last year books and this error is traced in current year. This will be called as

Exceptional item.

Prior period item

Event occurring after balance sheet date.

Change in accounting estimates

Q. 6

Deferred payment liabilities will be shown in the balance sheet of a company under the heading

Other long term liability

Long term borrowings.

Short term borrowings

Current Liabilities

Q. 7

Cash amounting to ` 4 lakhs, stolen by the cashier in the month of March 20X1, was detected in April, 20X1. The financial statements for the year ended 31st March, 20X1 were approved by the Board of Directors on 15th May, 20X1. As per Accounting Standards, this is for the financial statements year ended on 31st March, 20X1.

An Adjusting event.

Non-adjusting event.

Contingency.

Provision

Q. 8

As per Accounting Standards, events occurring after the balance sheet date are

Only favourable events that occur between the balance sheet date and the date when the financial statements are approved by the Board of directors.

Only unfavourable events that occur between the balance sheet date and the date when the 4:financial statements are approved by the Board of directors.

Those significant events, both favourable and unfavourable, that occur between the balance sheet date and the date on which the financial statements are approved by the Board of directors.

Those significant events, both favourable and unfavourable, that occur between the balance sheet date and the date on which the financial statements are not approved by the Board of directors.

Q. 9

AS 4 does not apply to

Obligation under retirement benefit plans.

Commitments arising from long term lease contracts.

liabilities of life assurance and general insurance enterprises arising from policies issued

Both (a) & (b).

Q. 10

A Ltd. sold its building for ` 50 lakhs to B Ltd. and has also given the possession to B Ltd. The book value of the building is ` 30 lakhs. As on 31st March, 20X1, the documentation and legal formalities are pending. For the financial year ended 31st March, 20X1

The company should record the sale.

The company should recognise the profit of ` 20 lakhs in its profit and loss account.

Both (a) and (b).

The company should disclose the profit of ` 20 lakhs in no tes to accounts.

Q. 11

Which one of the following is an example of extraordinary item?

The write down of inventories to their net realisable value

Reversal of write down of inventories

Government grants become refundable

Reversal of provisions.

Q. 12

Extraordinary items are income or expenses

That arise from events clearly distinct from the ordinary activities of the enterprise.

That are not expected to recur frequently or regularly.

Both (a) and (b).

None of the three.

Accounting Standards Based on Items Impacting Financial Statements

Marks: 12

Deferred payment liabilities will be shown in the balance sheet of a company under the heading

As per Accounting Standards, events occurring after the balance sheet date are

AS 4 does not apply to

A Ltd. sold its building for ` 50 lakhs to B Ltd. and has also given the possession to B Ltd. The book value of the building is ` 30 lakhs. As on 31st March, 20X1, the documentation and legal formalities are pending. For the financial year ended 31st March, 20X1

Extraordinary items are income or expenses