The 'Expected Credit Loss' model (Ind AS 109) requires recognition of impairment on: MCQ with Answer and Explanation

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The 'Expected Credit Loss' model (Ind AS 109) requires recognition of impairment on:

A. Only when default occurs

B. No provision

C. 12-month expected credit losses or lifetime expected credit losses depending on credit risk

D. Only incurred losses

Answer: Option C

Solution (By JKSSB Mock Tests)

ECL model recognises either 12-month ECL (Stage 1) or lifetime ECL (Stage 2/3) based on deterioration in credit risk.

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Question #1

Which of the following is not a function of ICAI?

A. Issuing accounting standards

B. Conducting CA examinations

C. Collecting taxes

D. Regulating the profession of chartered accountants

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Correct Answer: Option C

Explanation:
ICAI is a professional body, not a tax collection agency.

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Question #2

The concept of 'Materiality' implies that:

A. Only large companies follow materiality

B. Only material items need to be disclosed as per accounting standards

C. All transactions are material

D. All items must be disclosed irrespective of amount

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Correct Answer: Option B

Explanation:
Materiality means that items of significant value or nature should be disclosed; trivial items may be ignored.

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Question #3

A debenture is a:

A. Short-term asset

B. Document of ownership

C. Form of preference share

D. Instrument acknowledging a debt

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Correct Answer: Option D

Explanation:
A debenture is a written instrument issued under the common seal of the company acknowledging a long-term debt to the holders.

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

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