The 'Derecognition of Financial Assets' under Ind AS 109 is based on: MCQ with Answer and Explanation

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The 'Derecognition of Financial Assets' under Ind AS 109 is based on:

A. Title

B. Transfer of risks and rewards of ownership

C. Possession

D. Legal ownership

Answer: Option B

Solution (By JKSSB Mock Tests)

Derecognition occurs when risks and rewards are substantially transferred.

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

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Question #1

Which of the following is a 'Qualifying Asset' for borrowing cost capitalisation under AS 16?

A. A power plant under construction

B. Assets ready for use

C. Investment property measured at fair value

D. Inventories routinely manufactured

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Correct Answer: Option A

Explanation:
A qualifying asset requires a substantial period to get ready for intended use/sale.

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

Question #2

The 'Double Taxation Avoidance Agreement' (DTAA) aims to:

A. Tax income twice

B. Unify all taxes

C. Avoid double taxation of same income in two countries

D. Increase tax rates

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Correct Answer: Option C

Explanation:
DTAA provides relief from double taxation through exemption or credit method.

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

Question #3

Which of the following is not a fundamental accounting assumption under Indian Accounting Standards?

A. Accrual

B. Consistency

C. Going Concern

D. Materiality

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Correct Answer: Option D

Explanation:
Materiality is a modifying principle, not a fundamental accounting assumption. The three fundamental accounting assumptions as per AS 1 are Going Concern, Consistency, and Accrual.

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