Accountancy MCQs | Chapter-wise Multiple Choice Questions with Answers

Question #1721

Share Report

The 'Subsequent Events' review period extends to:

A. Date of approval of financial statements (if auditor's report is dated later) or date of auditor's report

B. No fixed date

C. One month after

D. Balance sheet date

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
The auditor's responsibility for subsequent events covers the period up to the date of auditor's report.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1722

Share Report

The 'Dual-purpose Test' in audit is:

A. Only compliance

B. A test that serves both as a test of control and a substantive test

C. Only substantive

D. Two separate tests

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
A single procedure can provide evidence on both controls and substantive assertions.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1723

Share Report

The 'Roll-forward Procedures' in audit are performed to:

A. Replace interim testing

B. Postpone audit

C. Update audit findings from an interim date to the period end

D. Start audit early

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Roll-forward extends the conclusions from interim date to year-end.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1724

Share Report

The 'Independence' of an auditor is required because:

A. To reduce fees

B. To maintain objectivity and impartiality in the audit opinion

C. To comply with company law only

D. To increase revenue

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Independence ensures unbiased opinion.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1725

Share Report

The 'Ethical Requirements' for professional accountants include:

A. Only integrity

B. Integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour

C. Only confidentiality

D. Only competence

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
The Code of Ethics outlines five fundamental principles.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1726

Share Report

The 'Threats to Independence' include:

A. Only self-interest

B. No threats

C. Self-interest, self-review, advocacy, familiarity, and intimidation threats

D. Only intimidation

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
The Code identifies five categories of threats.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1727

Share Report

The 'Safeguards' against threats to independence may be:

A. Only internal

B. Created by the profession, legislation, or within the client's organisation

C. None

D. Only regulatory

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Safeguards are measures that eliminate or reduce threats to an acceptable level.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1728

Share Report

The 'Rotation of Audit Partners' for listed companies is required every:

A. No rotation

B. 10 years

C. 5 years

D. 7 years (as per Companies Act 2013, audit firm rotation for certain companies, partner rotation for listed companies)

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Companies Act 2013 mandates partner rotation for listed companies.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1729

Share Report

The 'Cooling-off Period' for an audit partner after rotation is:

A. No period

B. 1 year

C. 2 years

D. 5 years (as per Companies Act for partner of listed company)

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
A cooling-off period of 5 years is required before re-appointment.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1730

Share Report

Under Ind AS 116, if a lease contract is modified and the modification is not accounted for as a separate lease, how should the lessee remeasure the lease liability?

A. By using the original implicit rate in the lease

B. By using the prevailing market rate for similar leases at the end of the lease term

C. By using the revised discount rate at the effective date of the modification

D. By using the lessee's incremental borrowing rate at the inception of the lease

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Under Ind AS 116, a lease modification not treated as a separate lease requires the lessee to remeasure the lease liability using a revised discount rate at the effective date of the modification.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1731

Share Report

S1: Under Ind AS 109, the Expected Credit Loss (ECL) model requires recognition of 12-month ECL for all financial assets initially. S2: If there is a significant increase in credit risk since initial recognition, lifetime ECL must be recognized. Which statement(s) is/are correct?

A. Neither S1 nor S2

B. Both S1 and S2

C. S1 only

D. S2 only

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Ind AS 109 mandates a three-stage ECL model. Stage 1 requires 12-month ECL initially, and Stage 2 requires lifetime ECL if there is a significant increase in credit risk. Both statements are correct.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1732

Share Report

In the context of AS 28 (Impairment of Assets), if a Cash Generating Unit (CGU) is impaired, the impairment loss is allocated to reduce the carrying amount of assets in what order?

A. Equally to all tangible assets, ignoring intangible assets

B. First to other assets, then to goodwill

C. Pro-rata based on carrying amounts of all assets

D. First to goodwill, then to other assets pro-rata based on carrying amounts

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
AS 28 dictates that an impairment loss for a CGU must first reduce the carrying amount of any goodwill allocated to the CGU, and then to the other assets pro-rata based on their carrying amounts.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1733

Share Report

A partnership firm is dissolved. Partner A's capital is ₹1,00,000, B's is ₹80,000, and C's is ₹60,000. They share profits in 2:2:1 ratio. Using the Surplus Capital Method for piecemeal distribution, what is the sequence of partners receiving cash after their capitals are made proportionate to profit-sharing ratios?

A. A, then B, then C

B. A, then C, then B

C. B, then A, then C

D. C, then B, then A

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
In the Surplus Capital Method, we calculate the surplus capital by comparing actual capital with proportionate capital. The partner with the highest surplus capital receives cash first. Here, A has the highest surplus, followed by B, then C.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1734

Share Report

Under Ind AS 115, if an entity receives a non-refundable upfront fee and has no further performance obligations, when should the revenue be recognized?

A. Recognized immediately upon receipt of cash

B. Amortized over the contractual period of the agreement

C. Over the expected life of the customer relationship

D. At the point in time when the entity transfers control of the good/service

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Ind AS 115 states that if an upfront fee relates to a good or service and there are no further performance obligations, revenue is recognized when control of that good or service is transferred.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1735

Share Report

S1: In marginal costing, the Margin of Safety can be calculated as (Profit / P/V Ratio). S2: If the P/V ratio is 40% and the Margin of Safety is ₹50,000, the profit is ₹20,000. Which statement(s) is/are correct?

A. S1 only

B. S2 only

C. Neither S1 nor S2

D. Both S1 and S2

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Margin of Safety = Profit / P/V Ratio. If MOS is 50,000 and P/V is 40%, Profit = 50,000 * 0.40 = ₹20,000. Both statements are mathematically and conceptually correct.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1736

Share Report

Under GST, if a registered person makes both taxable and exempt supplies, the input tax credit (ITC) on common inputs must be reversed. Which rule prescribes the methodology for this reversal?

A. Rule 42 and 43

B. Rule 36 and 37

C. Rule 89 and 90

D. Rule 54 and 55

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Rule 42 and 43 of the CGST Rules prescribe the methodology for determining and reversing ITC attributable to exempt and non-business supplies.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1737

Share Report

A company issues 10% debentures of ₹100 each at a discount of 5%, redeemable at a premium of 10%. What is the total loss on issue per debenture to be written off over the life of the debenture?

A. ₹15

B. ₹10

C. ₹0

D. ₹5

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Loss on issue = Discount on issue + Premium on redemption = ₹5 + ₹10 = ₹15 per debenture. This total loss is written off over the tenure of the debentures.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1738

Share Report

S1: Under the Companies Act 2013, a company can buy back its shares up to 25% of its total paid-up equity capital in a financial year. S2: The debt-equity ratio should not exceed 2:1 after a buyback of shares. Which statement(s) is/are correct?

A. Neither S1 nor S2

B. Both S1 and S2

C. S1 only

D. S2 only

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Section 68 of the Companies Act 2013 limits buyback to 25% of total paid-up equity capital in a year and mandates that the post-buyback debt-to-equity ratio must not exceed 2:1. Both are correct.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1739

Share Report

In standard costing, if the actual material mix is changed due to a shortage of a specific material, how should the Material Mix Variance be calculated?

A. Using the revised standard mix

B. Using the actual mix

C. It cannot be calculated

D. Using the original standard mix

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
When there is a shortage of a material and the actual mix is altered, the Material Mix Variance must be calculated using the Revised Standard Mix, not the original standard mix.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #1740

Share Report

Assertion (A): The Public Financial Management System (PFMS) integrates with the Core Banking Solutions (CBS) of banks. Reason (R): This integration ensures that funds are credited directly to the beneficiary's account, eliminating leakages. Choose the correct option.

A. A is true but R is false

B. Both A and R are true but R is NOT the correct explanation of A

C. Both A and R are true and R is the correct explanation of A

D. A is false but R is true

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
PFMS integrates with CBS to enable Direct Benefit Transfer (DBT). This direct credit to beneficiary accounts ensures transparency and eliminates middlemen, correctly explaining the purpose of the integration.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Accountancy and Book Keeping MCQs

Practice Questions

More Accountancy and Statistics Topics