hitechpathshala

Q. 1

1. Which of the following is NOT a major consideration in selection and application of accounting policies?

(a) Prudence

(b) Comparability

(c) Materiality

(d) Substance over form

Q. 2

2. Adoption of different accounting policies by different companies operating in the same industry affects which of the qualitative characteristics the most?

(a) Comparability

(b) Relevance

(c) Faithful representation

(d) Reliability

Q. 3

3. Which of the following statement would not be correct in relation to disclosures to be made in the financial statements after making any change in an accounting policy?

(a) Any change in an accounting policy which has a material effect should be disclosed.

(b) The amount by which any item in the financial statements is affected by such change should be disclosed to the extent ascertainable. Where such amount is not ascertainable, wholly or in part, the fact should be indicated.

(c) If a change is made in the accounting policies which has no material effect on the financial statements for the current period but which is reasonably expected to have a material effect in later periods, the fact of such change should be appropriately disclosed in the period in which the change is adopted.

(d) If a change is made in an accounting policy which has material effect on the financial statements for the current period and is reasonably expected to have a material effect in later periods, the fact of such change should be appropriately disclosed only in the later periods i.e. year(s) next to the year in which the change is adopted.

Abhishek Testing

Marks: 100