The 'Component Accounting' is required under: MCQ with Answer and Explanation

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The 'Component Accounting' is required under:

A. AS 15

B. AS 13

C. AS 2

D. Ind AS 16 / AS 10

Answer: Option D

Solution (By JKSSB Mock Tests)

Ind AS 16 requires significant parts of an asset to be depreciated separately.

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

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Question #1

In cost accounting, the 'Re-order Level' is calculated as:

A. Maximum consumption rate x Maximum re-order period

B. Minimum consumption rate x Minimum re-order period

C. Normal consumption rate x Normal re-order period

D. Average consumption rate x Average re-order period

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Correct Answer: Option A

Explanation:
The Re-order Level is the level at which a new order is placed. To ensure stock doesn't run out during the maximum lead time, it is calculated as Maximum consumption rate multiplied by Maximum re-order period.

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Question #2

Expenditure incurred on overhauling a second-hand machinery purchased recently to put it in working condition is:

A. Deferred Revenue Expenditure

B. Loss

C. Revenue Expenditure

D. Capital Expenditure

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Correct Answer: Option D

Explanation:
All costs incurred before a fixed asset is ready for its intended use are capitalized.

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Question #3

S1: In a cash flow statement under Ind AS 7, dividends paid can be classified as either operating or financing activities. S2: Interest paid can be classified as either operating or financing activities. Which statement(s) is/are correct?

A. S2 only

B. Neither S1 nor S2

C. Both S1 and S2

D. S1 only

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Correct Answer: Option C

Explanation:
Ind AS 7 allows flexibility. Dividends paid can be classified as financing (cash outflow for financing) or operating (to assist in determining cash from operations). Interest paid can be operating or financing. Both are correct.

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