The 'Fair Value Measurement' (Ind AS 113) defines fair value as: MCQ with Answer and Explanation

The 'Fair Value Measurement' (Ind AS 113) defines fair value as:
A. Liquidation value
B. Historical cost
C. Replacement cost
D. Price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date
Answer: Option D
Solution (By JKSSB Mock Tests)
It is an exit price.

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Practice More Accountancy and Book Keeping Questions

Question #1
In the Balance Sheet, 'Patents' are shown under:
A. Investments
B. Fixed assets – Intangible
C. Current assets
D. Current liabilities

Correct Answer: Option B


Explanation:
Patents are intangible fixed assets.

Question #2
The 'Substantive Analytical Procedure' involves:
A. Evaluating financial information through analysis of plausible relationships
B. Physical verification only
C. Inquiry only
D. Detailed testing of samples

Correct Answer: Option A


Explanation:
Substantive analytical procedures use ratios, trends, and relationships to detect misstatements.

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. Both S1 and S2
C. Neither S1 nor S2
D. S1 only

Correct Answer: Option B


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.