Under AS 19 'Leases', a lease is classified as finance lease if: MCQ with Answer and Explanation

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Under AS 19 'Leases', a lease is classified as finance lease if:

A. It is an operating lease

B. Lessor retains ownership

C. It transfers substantially all risks and rewards incidental to ownership

D. Lease term is less than one year

Answer: Option C

Solution (By JKSSB Mock Tests)

Finance lease transfers substantially all risks and rewards of ownership to the lessee.

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Question #1

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A partnership firm is dissolved. Which of the following accounts is prepared at the time of dissolution?

A. Profit and Loss Adjustment Account

B. Revaluation Account

C. Realisation Account

D. Memorandum Revaluation Account

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Correct Answer: Option C

Explanation:
Realisation Account is prepared to close the books on dissolution.

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Question #2

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The 'Discount Rate' for measuring defined benefit obligation under Ind AS 19 is determined by reference to:

A. Fixed rate

B. Incremental borrowing rate

C. Market yields on government bonds at the reporting date

D. Expected return on plan assets

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Correct Answer: Option C

Explanation:
The discount rate reflects the time value of money; usually based on high-quality corporate bonds or government bonds.

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Question #3

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Which of the following is a non-integrated accounting system?

A. Cost and financial accounts maintained separately

B. Single entry system

C. Cost accounts integrated with financial accounts

D. Computerized accounting

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Correct Answer: Option A

Explanation:
Non-integrated system keeps cost and financial accounts independently, with reconciliation.

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

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