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

Question
The 'Investment in Associates' (Ind AS 28) is accounted for using:
A. Equity method
B. Fair value through profit or loss
C. Cost method
D. Consolidation
Answer: Option A
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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Practice More Accountancy and Book Keeping Questions

Question #1
CSR (Corporate Social Responsibility) is mandatory under the Companies Act 2013 for companies with a net profit of at least:
A. Rs 50 Crores
B. Rs 10 Crores
C. Rs 1 Crore
D. Rs 5 Crores
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Correct Answer: Option D

Explanation:
Section 135 mandates CSR for companies with Net Worth ≥ 500 Cr, Turnover ≥ 1000 Cr, or Net Profit ≥ 5 Cr.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Under the single entry system, if Closing Capital is Rs 50,000, Opening Capital is Rs 30,000, and Drawings are Rs 10,000, what is the profit?
A. Rs 30,000
B. Rs 40,000
C. Rs 20,000
D. Rs 10,000
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Correct Answer: Option A

Explanation:
Profit = Closing Capital + Drawings - Opening Capital = 50,000 + 10,000 - 30,000 = Rs 30,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Cost of Debt' is computed as:
A. Interest rate * (1 - tax rate)
B. Interest rate
C. EBIT / Total capital
D. Dividend / Market price
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Correct Answer: Option A

Explanation:
Cost of debt is after tax because interest is tax deductible.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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