The 'Right-of-Use Asset' under Ind AS 116 is depreciated over: MCQ with Answer and Explanation

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The 'Right-of-Use Asset' under Ind AS 116 is depreciated over:

A. 5 years

B. Only lease term

C. The lease term or the useful life of the asset, whichever is shorter

D. Only useful life

Answer: Option C

Solution (By JKSSB Mock Tests)

If ownership transfers or there is a bargain purchase option, depreciate over useful life; otherwise over the shorter of lease term and useful life.

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

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Question #1

The journal entry for goods withdrawn by the proprietor for personal use is:

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

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

C. Drawings A/c Dr. To Sales A/c

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

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Correct Answer: Option B

Explanation:
Goods taken for personal use reduce drawings and reduce purchases (or stock). Correct entry: Drawings A/c Dr. To Purchases A/c.

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Question #2

Which of the following is a fundamental accounting assumption as per AS-1?

A. Conservatism

B. Accrual

C. Materiality

D. Matching

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Correct Answer: Option B

Explanation:
AS-1 lists Going Concern, Consistency, and Accrual as the three fundamental accounting assumptions.

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Question #3

The 'Equalisation Levy' on e-commerce supply of goods/services is applicable to non-resident e-commerce operators with:

A. Any revenue

B. Only if they have a PE

C. Annual revenue exceeding ₹2 crore from India

D. No threshold

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Correct Answer: Option C

Explanation:
2% equalisation levy applies if the non-resident e-commerce operator's revenue from India exceeds ₹2 crore.

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

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