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B Com Exam  >  B Com Tests  >  Test: Accounting Standards - 2 - B Com MCQ

Test: Accounting Standards - 2 - B Com MCQ


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10 Questions MCQ Test - Test: Accounting Standards - 2

Test: Accounting Standards - 2 for B Com 2024 is part of B Com preparation. The Test: Accounting Standards - 2 questions and answers have been prepared according to the B Com exam syllabus.The Test: Accounting Standards - 2 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Accounting Standards - 2 below.
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Test: Accounting Standards - 2 - Question 1
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Under which section of the Companies Act, 2013 are companies required to present financial statements that provide a true and fair view of their income and financial position?

Detailed Solution for Test: Accounting Standards - 2 - Question 1
Section 129 of the Companies Act, 2013 mandates that companies present financial statements that provide a true and fair view of their income and financial position. This is a key requirement to ensure transparency and accuracy in financial reporting.
Test: Accounting Standards - 2 - Question 2
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Which of the following best describes the primary purpose of Generally Accepted Accounting Principles (GAAP)?

Detailed Solution for Test: Accounting Standards - 2 - Question 2
The primary purpose of GAAP is to ensure that financial statements are consistent and comparable across different organizations. This uniformity allows stakeholders to make informed decisions based on reliable financial information.
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Test: Accounting Standards - 2 - Question 3
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How do accounting standards act as a harmonizer in the accounting process?

Detailed Solution for Test: Accounting Standards - 2 - Question 3
Accounting standards act as harmonizers by removing inconsistencies in accounting practices and providing solutions to specific accounting issues. This ensures uniformity and fairness in financial reporting.
Test: Accounting Standards - 2 - Question 4
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What role do accounting standards play as a service provider in the field of accounting?
Detailed Solution for Test: Accounting Standards - 2 - Question 4
As service providers, accounting standards define accounting terms, present accounting issues, specify standards, and explain disclosures. This comprehensive role helps ensure clarity and consistency in the accounting process.
Test: Accounting Standards - 2 - Question 5
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Which organization established in 1973 plays a key role in setting international accounting standards?
Detailed Solution for Test: Accounting Standards - 2 - Question 5
The International Accounting Standards Committee (IASC) was established in 1973 to develop and promote international accounting standards. It was later succeeded by the International Accounting Standards Board (IASB).
Test: Accounting Standards - 2 - Question 6
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What is one way accounting standards serve as a guide to accountants?
Detailed Solution for Test: Accounting Standards - 2 - Question 6
Accounting standards guide accountants by providing methods for inventory valuation, among other practices. This guidance ensures that financial statements are prepared consistently and accurately.
Test: Accounting Standards - 2 - Question 7
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Which of the following is NOT a function of accounting standards?
Detailed Solution for Test: Accounting Standards - 2 - Question 7
Accounting standards do not develop tax laws. Their primary functions include guiding accountants, acting as a dictator in specific practices, and serving as a service provider by defining terms and standards, ensuring consistency and clarity in financial reporting.
Test: Accounting Standards - 2 - Question 8
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Which Indian organization is responsible for developing accounting standards that align with international practices but are tailored to Indian requirements?
Detailed Solution for Test: Accounting Standards - 2 - Question 8
The Institute of Chartered Accountants of India (ICAI) develops accounting standards that align with international practices but are tailored to meet Indian requirements, ensuring relevance and applicability in the Indian context.
Test: Accounting Standards - 2 - Question 9
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What is the key function of accounting standards in ensuring consistency in financial statements?
Detailed Solution for Test: Accounting Standards - 2 - Question 9
Accounting standards dictate the format and principles for financial reporting, ensuring that financial statements are consistent across different organizations, thereby aiding comparability and reliability.
Test: Accounting Standards - 2 - Question 10
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Why might accounting standards be described as acting like a dictator?
Detailed Solution for Test: Accounting Standards - 2 - Question 10
Accounting standards act like a dictator in certain areas by mandating specific practices without allowing alternatives. For example, the format for the Cash Flow Statement must be strictly followed as prescribed by the standards.
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