The 'Contract Costs' under Ind AS 115 include: MCQ with Answer and Explanation

The 'Contract Costs' under Ind AS 115 include:
A. Only direct labour
B. Incremental costs of obtaining a contract and costs to fulfil a contract that are not covered by other standards
C. All costs
D. Only material
Answer: Option B
Solution (By JKSSB Mock Tests)
Incremental costs (like sales commissions) are capitalised if expected to be recovered.

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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Sales Book' total is posted to:
A. Credit side of Debtors Account
B. Debit side of Sales Account
C. Debit side of Creditors Account
D. Credit side of Sales Account

Correct Answer: Option D


Explanation:
Sales book total is credited to Sales Account (revenue) and individual debtors are debited.

Question #2
When converting Single Entry to Double Entry, the Bills Receivable dishonored will be:
A. Ignored
B. Debited to Total Debtors A/c
C. Credited to Total Debtors A/c
D. Debited to Cash A/c

Correct Answer: Option B


Explanation:
Dishonor of a bill reinstates the debtor's liability, thus the Total Debtors Account is debited to increase the balance.

Question #3
S1: In the case of admission of a partner, if the new partner brings his share of goodwill in cash, the existing partners' capital accounts are credited in their sacrificing ratio. S2: If the new partner is unable to bring his share of goodwill in cash, the goodwill account is opened in the books of the firm. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. Both S1 and S2
C. S2 only
D. S1 only

Correct Answer: Option D


Explanation:
S1 is correct. S2 is incorrect because AS 26 prohibits the recognition of self-generated goodwill in the books; hence, the goodwill account cannot be opened. Instead, the adjustment is passed through the partners' capital accounts.