The 'Hedge Accounting' under Ind AS 109: MCQ with Answer and Explanation

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The 'Hedge Accounting' under Ind AS 109:

A. Only for foreign exchange

B. Is prohibited

C. Only for derivatives

D. Aligns accounting with risk management activities, with three types: fair value, cash flow, net investment

Answer: Option D

Solution (By JKSSB Mock Tests)

Ind AS 109 provides hedge accounting models.

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

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Question #1

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The 'Activity Based Costing' (ABC) method focuses on:

A. Identifying activities and assigning costs based on usage of those activities

B. Only direct costs

C. Allocating overheads based on labour hours

D. Budgeting

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Correct Answer: Option A

Explanation:
ABC assigns overheads more accurately by tracing them to activities.

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Question #2

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A 'Cost Centre' is:

A. A location, person, or item of equipment for which costs are accumulated

B. A method of pricing

C. A unit of product

D. A sales territory

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Correct Answer: Option A

Explanation:
Cost centre is a segment of the organization where costs are collected, e.g., department, machine.

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Question #3

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In a BRS, when a cheque is issued but not presented, the cash book balance is:

A. Higher than the pass book balance

B. Equal to the pass book balance

C. Lower than the pass book balance

D. Unaffected

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Correct Answer: Option C

Explanation:
Issuing a cheque immediately reduces the cash book balance, but the bank balance (pass book) remains high until the cheque is cleared.

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

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