The term 'Secret Reserves' are created by: MCQ with Answer and Explanation

Question
The term 'Secret Reserves' are created by:
A. Undervaluing assets or overvaluing liabilities
B. Undervaluing liabilities
C. Showing higher profits
D. Overvaluing assets
Answer: Option A
Solution (By JKSSB Mock Tests)
Secret reserves are created by undervaluing assets or overvaluing liabilities, which reduces reported profits and hides the true financial position.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
The 'Business Combinations' (Ind AS 103) require acquisition method. It involves:
A. No goodwill
B. Identifying acquirer, determining acquisition date, recognising and measuring identifiable assets, liabilities, and non-controlling interest, and recognising goodwill or bargain purchase
C. Only merger accounting
D. Pooling of interests
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Correct Answer: Option B

Explanation:
Ind AS 103 mandates the acquisition method for business combinations.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The 'Outcome Budget' in India is a part of:
A. Economic Survey
B. Finance Bill
C. The annual budget documents, showing measurable outcomes
D. Separate document from budget
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Correct Answer: Option C

Explanation:
Outcome budget is included in the budget papers to link expenditure with targeted results.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Related Party' as per AS 18 includes:
A. Government
B. All customers
C. Key management personnel and their relatives
D. All suppliers
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Correct Answer: Option C

Explanation:
Related parties include key management, enterprises with control or significant influence, etc.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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