The 'Fair Value' measurement is a key feature of: MCQ with Answer and Explanation

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The 'Fair Value' measurement is a key feature of:

A. Income Tax Act

B. Ind AS

C. Cash basis accounting

D. Partnership Act

Answer: Option B

Solution (By JKSSB Mock Tests)

Ind AS extensively uses fair value for financial instruments, investment property, etc.

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

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Question #1

Capital expenditure is recorded in:

A. Trading Account

B. Manufacturing Account

C. Profit & Loss Account

D. Balance Sheet

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Correct Answer: Option D

Explanation:
Capital expenditure results in acquisition of assets, shown on the asset side of Balance Sheet.

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

Question #2

The 'Income Tax (Ind AS 12)' requires deferred tax on:

A. All temporary differences

B. No deferred tax

C. Only timing differences

D. Permanent differences

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Correct Answer: Option A

Explanation:
Deferred tax is recognised for temporary differences between carrying amount and tax base.

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

Question #3

Which of the following transactions leaves the total of the accounting equation unchanged?

A. Introduction of fresh capital

B. Paying electricity bill

C. Purchasing machinery on credit

D. Collection of cash from debtors

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Correct Answer: Option D

Explanation:
Collecting cash from debtors increases one asset (Cash) and decreases another (Debtors) by the same amount, leaving total assets unchanged.

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

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