The 'Level 1 Inputs' in fair value hierarchy are: MCQ with Answer and Explanation

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The 'Level 1 Inputs' in fair value hierarchy are:

A. Inputs based on market-corroborated data

B. Cost of the asset

C. Quoted prices (unadjusted) in active markets for identical assets or liabilities

D. Unobservable inputs

Answer: Option C

Solution (By JKSSB Mock Tests)

Level 1 gives highest priority to quoted prices in active markets.

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

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Question #1

If a trial balance does not tally, the difference is put to:

A. Capital account

B. Profit and Loss account

C. Drawings account

D. Suspense account

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Correct Answer: Option D

Explanation:
A suspense account is opened temporarily to make the trial balance agree pending detection of errors.

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Question #2

Which of the following errors is an Error of Principle?

A. Posting a debit entry to the credit side

B. Treating wages paid for installation of machinery as normal wages

C. Posting Rs 500 as Rs 5,000

D. Forgetting to record a sales invoice entirely

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Correct Answer: Option B

Explanation:
Treating capital expenditure (installation of machinery) as revenue expenditure (normal wages) violates fundamental accounting principles.

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Question #3

In cost accounting, prime cost is:

A. Direct material + Direct labour + Factory overheads

B. All manufacturing costs

C. Administration overheads

D. Direct material + Direct labour + Direct expenses

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Correct Answer: Option D

Explanation:
Prime cost is the sum of all direct costs: direct material, direct labour, and direct expenses.

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

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