S1: AS 1 mandates the disclosure of all accounting policies used. S2: AS 3 deals with the preparation of cash flow statements. Which statement(s) is/are correct? MCQ with Answer and Explanation

S1: AS 1 mandates the disclosure of all accounting policies used. S2: AS 3 deals with the preparation of cash flow statements. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. Both S1 and S2
C. S2 only
D. S1 only
Answer: Option B
Solution (By JKSSB Mock Tests)
AS 1 requires the disclosure of significant accounting policies. AS 3 mandates the preparation and presentation of cash flow statements. Both statements are correct.

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Practice More Accountancy and Book Keeping Questions

Question #1
Under 'Operating Lease', the asset is shown in the books of:
A. Lessee
B. None
C. Lessor
D. Both

Correct Answer: Option C


Explanation:
In operating lease, lessor retains ownership and asset is in his books.

Question #2
Heavy advertisement expenditure to launch a new product, whose benefit will last for 3-5 years, is an example of:
A. Deferred Revenue Expenditure
B. Capital Expenditure
C. Revenue Expenditure
D. Fictitious Expenditure

Correct Answer: Option A


Explanation:
It is revenue in nature but deferred because the benefit spans multiple years, written off partially each year.

Question #3
The 'Direction of Testing' for existence of assets is from:
A. Accounting records to physical asset
B. Both ways
C. No testing
D. Physical asset to accounting records

Correct Answer: Option A


Explanation:
To verify existence, select from records and verify physically. Completeness is opposite.