The 'Investment in Associates' (Ind AS 28) is accounted for using: MCQ with Answer and Explanation

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The 'Investment in Associates' (Ind AS 28) is accounted for using:

A. Consolidation

B. Equity method

C. Fair value through profit or loss

D. Cost method

Answer: Option B

Solution (By JKSSB Mock Tests)

Equity method is applied for associates, except when held for sale.

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

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Question #1

Which of the following is a fixed cost?

A. Direct material

B. Depreciation on plant

C. Direct labor

D. Power consumed

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Correct Answer: Option B

Explanation:
Depreciation on plant (usually calculated on a straight-line basis) is a fixed cost as it does not vary with the level of production in the short term.

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Question #2

Under single entry system, opening capital is ascertained by preparing:

A. Profit and loss account

B. Trading account

C. Income and expenditure account

D. Statement of affairs

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Correct Answer: Option D

Explanation:
In single entry, a statement of affairs (similar to balance sheet) is prepared to ascertain opening and closing capital.

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Question #3

The 'Activity Based Costing' (ABC) is more suitable for:

A. Labour-intensive industries

B. Only service industries

C. Organisations with high product diversity and complex overhead structures

D. Only small businesses

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Correct Answer: Option C

Explanation:
ABC works best where overheads are high and diverse, and products consume resources differently.

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

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