AS 5 (Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies) requires that extraordinary items should be: MCQ with Answer and Explanation

Question

AS 5 (Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies) requires that extraordinary items should be:

A. Disclosed separately in the profit and loss statement

B. Shown as appropriation

C. Not disclosed

D. Clubbed with regular income

Answer: Option A

Solution (By JKSSB Mock Tests)

Extraordinary items are disclosed separately to show their nature and amount.

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

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Question #1

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PFMS is implemented by which ministry?

A. Ministry of Commerce

B. Ministry of Finance

C. Ministry of Home Affairs

D. Ministry of Corporate Affairs

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Correct Answer: Option B

Explanation:
PFMS (Public Financial Management System) is under the Office of the Controller General of Accounts, Ministry of Finance.

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Question #2

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A 'Debit Note' is sent by the buyer when returning goods to the supplier. It is used to:

A. Inform the supplier that his account has been credited

B. Record sales return

C. Record cash receipt

D. Inform the supplier that his account has been debited

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Correct Answer: Option D

Explanation:
The debit note informs the supplier that the buyer has debited the supplier's account.

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Question #3

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A reserve created out of normal operating profits is called a:

A. Secret Reserve

B. Capital Reserve

C. Specific Reserve

D. Revenue Reserve

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Correct Answer: Option D

Explanation:
Revenue reserves are built from day-to-day operational net profits and can be utilized for distributing dividends.

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

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