The 'Modification of a Lease' is accounted for as: MCQ with Answer and Explanation

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The 'Modification of a Lease' is accounted for as:

A. Termination of original lease

B. No accounting

C. A separate lease if it adds the right to use one or more underlying assets at a price commensurate with standalone price; otherwise remeasure

D. Original lease continues

Answer: Option C

Solution (By JKSSB Mock Tests)

Ind AS 116 provides specific guidance for modifications.

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

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Question #1

The 'GST Audit' by tax authorities (Section 65) has been replaced by:

A. No audit

B. Reconciliation of returns and information

C. Only CAG audit

D. Internal audit

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Correct Answer: Option B

Explanation:
Finance Act 2021 removed the mandatory GST audit by CA/CWA and replaced with self-certification and department's scrutiny.

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

Question #2

'Bills Payable' is shown under:

A. Current assets

B. Non-current liabilities

C. Capital

D. Current liabilities

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Correct Answer: Option D

Explanation:
Bills payable are obligations payable on demand or within a year, thus current liabilities.

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

Question #3

Hidden goodwill at the time of admission of a partner is calculated by comparing:

A. Assets and outside liabilities

B. Average profits of last 5 years

C. Total capital based on new partner's share and actual total capital of all partners

D. Super profit and normal rate of return

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Correct Answer: Option C

Explanation:
Hidden goodwill is the excess of the firm's inferred total capital (based on the new partner's contribution and share) over the actual combined capital balances.

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

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