The 'Lessee' under Ind AS 116 does not apply to: MCQ with Answer and Explanation

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The 'Lessee' under Ind AS 116 does not apply to:

A. Finance leases

B. Property leases

C. Equipment leases

D. Short-term leases (≤12 months) and leases of low-value assets (like IT equipment) – subject to recognition exemption

Answer: Option D

Solution (By JKSSB Mock Tests)

Ind AS 116 provides recognition exemptions for short-term and low-value leases.

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

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Question #1

The closing entry for transferring purchases account is:

A. Trading A/c Dr. To Purchases A/c

B. Capital A/c Dr. To Purchases A/c

C. Profit & Loss A/c Dr. To Purchases A/c

D. Purchases A/c Dr. To Trading A/c

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Correct Answer: Option A

Explanation:
At year-end, purchases account balance is transferred to Trading Account by debiting Trading A/c and crediting Purchases A/c.

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

Question #2

Deferred revenue expenditure is written off over:

A. Immediately in the year of incurrence

B. Never

C. A number of years over which benefit is expected

D. One year

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Correct Answer: Option C

Explanation:
Deferred revenue expenditure like heavy advertisement is written off over a period of benefit, typically 3-5 years.

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

Question #3

The 'Companies Act, 2013' mandates CSR spending for companies with:

A. All companies

B. Net worth ≥ ₹500 crore, or turnover ≥ ₹1,000 crore, or net profit ≥ ₹5 crore

C. No mandate

D. Only listed companies

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Correct Answer: Option B

Explanation:
Section 135 specifies the criteria for mandatory CSR.

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

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