1.

As per Section 462 of the Companies Act 2013, the Financial statements of a Start-up Private
company may not include:-
(a) Balance sheet at the end of the financial year.
(b) Profit and Loss account for the financial year.
(c) Cash flow statement for the financial year.
(d) Statement of change in equity (if applicable).
2. When an impairment loss occurs, the carrying amount of the asset shall be reduced to its ____
a) Market value
b) Recoverable amount
c) Net present value
d) Value in use.
3. Segment revenue does not include
(a) Gains on sales of investments unless the operations of the segment are
primarily of a financial nature.
(b) Portion of enterprise revenue that is directly attributable to a segment.
(c) Revenue from transactions with other segments of the enterprise.
(d) Relevant portion of enterprise revenue that can be allocated on a reasonable basis to a
segment.
4. In an operating lease, the lessee should recognize the benefit of incentives as
a. a reduction of rental expense over the lease term, on a straight-line basis.
b. Recognized immediately as income.
c. Deducted from the value of the lease payments in the current year.
d. It is ignored.

5 An entity should present:

(a) the statement of cash flows more prominently than the other statements.

(b) the balance sheet and statement of profit and loss more prominently than the other
statements.

(c) notes to other accounts more prominently than the other statements.
(d) each financial statement with equal prominence.

6. The cost of an internally generated intangible asset does not include:

(a) expenditure on training the staff to operate the asset.
(b) salaries of personnel directly engaged in generating the asset
(c) materials consumed in generating the intangible asset
(d) fees to register a legal right
7. A non-cancellable lease cannot be cancelled
(a) upon the occurrence of any contingency

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 (b) with the permission of the lessor
(c) on the request of the lessee upon payment an additional amount
(d) if the lessee enters into a new lease for different asset with the same lessor.
8. As per AS 10 ‘Property, Plant and Equipment’, an enterprise holding investment properties
should value Investment property
(a) as per fair value
(b) as per revaluation model.
(c) under discounted cash flow model.
(d) under cost model.

9. As per AS 17, reportable segments are those whose total revenue from external sales and inter-segment
sales is
(a) 10% or more of the total revenue of all segments
(b) 15% or more of the total revenue of all segments
(c) 20% or more of the total revenue of all segments
(d) 25% or more of the total revenue of all segments.

10. As per AS 20, information regarding basic and diluted EPS is to be disclosed on the face of

(a) Statement of profit and loss

(b) Notes to the account
(c) Balance sheet
(d) Cash flow statement.

11. Which item of inventory is under the scope of AS 2 (Revised)?

(a) WIP arising under construction contracts
(b) Raw materials
(c) Shares, Debentures held as stock in trade.
(d) Inventory of livestock, agricultural and forest products.

12. Which account cannot be used for issue of bonus shares as per the Companies Act?
(a) Securities premium account
(b) Revaluation reserve
(c) Capital redemption reserve
(d) General reserve.

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13. An asset bought for Rs.12,00,000 have a carrying value of Rs. 10,00,000. It can be sold in
the market for Rs. 9,50,000. Similar asset with newer technology can be purchased from
the market at Rs. 15,00,000. The fair value of the asset will be
(a) Rs. 15,00,000
(b) Rs. 12,00,000
(c) Rs. 10,00,000
(d) Rs. 9,50,000

14. As per AS 3, cash flow should be reported on net basis in the case of
(a) Entities engaged in trading activities.
(b) Funds held for customers by an investment enterprise
(c) Entities engaged in stock broking business.
(d) Company which is a subsidiary of another company.
15. When the current ratio is 4 : 1 and the amount of current liabilities is Rs. 15,000 what
would be the amount of current assets?

(a) Rs. 75,000

(b) Rs. 3,750

(c) Rs. 12,000

(d) Rs. 60,000

16. A company is being sued but no court judgment or legal settlement has been reached. At
present, the company has no obligation to pay but in future 20% cash outflow of the sued
amount may occur. The company will account for it as a
(a) Provision
(b) Contingent liability
(c) Contingent asset
(d) Disclosure only.
17. The debit or credit balance of “Foreign Currency Monetary Item Translation Difference
Account”
(a) Is shown as “Miscellaneous Expenditure” in the Balance Sheet
(b) Is shown under “Reserves and Surplus” as a separate line item
(c) Is shown as “Other Non-current/Current Assets” in the Balance Sheet
(d) Is not shown in the books as it is a notional difference not realised in cash
18. As per Schedule III to the Companies Act, 2013, money received against share warrant should be
classified in Balance Sheet under
(a) Reserves and Surplus.

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 (b) Current Liabilities.
(c) Share Capital.
(d) Shareholders’ funds.

19. If the equipment account has a balance of Rs. 22,50,000 and the accumulated depreciation
account has a balance of Rs. 14,00,000, the book value of the equipment is

(a) Rs. 36,50,000

(b) Rs. 8,50,000
(c) Rs. 14,00,000
(d) Rs. 12,00,000

20. Goods purchased Rs. 1,00,000. Sales Rs. 90,000. Margin 20% on cost. Closing Inventory = ?

(a) Rs. 20,000

(b) Rs. 10,000
(c) Rs. 25,000
(d) Rs. 30,000

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