Test: Accounting Policies

Question 1

Accounting principles and policies are to be standardised to achieve:

Accepted Answer

All of theses

Answer

Transparency

Answer

Consistency

Answer

Comparability

Question 2

Accounting policies refer to specific accounting

Accepted Answer

Both (a) and (b).

Answer

Principles.

Answer

Methods of applying those principles.

Answer

None of the above.

Question 3

Selection of an inappropriate accounting policy may lead to :

Accepted Answer

Understatement or Overstatement of Financial Position

Answer

Understatement of Performance

Answer

Overstatement of Performance

Answer

None of the above

Question 4

Which is not an example of an accounting policy:

Accepted Answer

Going Concern

Answer

Valuation of Fixed Assets

Answer

Treatment of Retirement Benefits

Answer

Valuation of Inventories

Question 5

The areas wherein different accounting policies can be adopted are

Accepted Answer

All of the above.

Answer

Providing depreciation.

Answer

Valuation of inventories.

Answer

Valuation of investments.

Question 6

A Change in accounting Policy is justified

Accepted Answer

All of the above.

Answer

To comply with accounting standard.

Answer

To ensure more appropriate presentation of the financial statement of the enterprise

Answer

To comply with law.

Question 7

Which of the following is not an example of change in accounting policy?

Accepted Answer

Adopting double Entry system of accounting in place of Single Entry.

Answer

Change in method of providing depreciation on fixed assets.

Answer

Change in the method of providing inventory valuation.

Answer

Change in method of valuation of Investments.

Question 8

Accounting policies:

Accepted Answer

Changing from concern to concern

Answer

Are prescribed by AS 1

Answer

Are laid down by Law

Answer

Are same for all concerns

Question 9

A change in Accounting Policy is justified to :

Accepted Answer

All of the above

Answer

Comply with accounting standard

Answer

Comply with Law

Answer

Ensure more appropriate presentation of Financial Statements

Question 10

Accounting policy for inventories of Xeta Enterprises states that inventories are valued at the lower of cost determined on weighted average basis or not realizable value. Which accounting principle in followed in adopting the above policy?

Accepted Answer

Prudence.

Answer

Materiality.

Answer

Substance over form.

Answer

All of above.

Question 11

The area wherein different accounting policies can be adopted are:

Accepted Answer

All of the above.

Answer

Valuation of inventories

Answer

Retirement benefits

Answer

Treatment of goodwill

Question 12

As per AS 1 disclosure should form part of :

Accepted Answer

The Final Accounts

Answer

The Auditor’s Report

Answer

The Director’s Report

Answer

The Books of Accounts

Question 13

Selection of an inappropriate accounting policy decision may

Accepted Answer

Understate/overstate the performance and financial position a business entity.

Answer

Overstate the performance and financial position a business entity.

Answer

Overstate the performance a business entity.

Answer

Understate financial position a business entity.

Question 14

Which of the following is one of the major considerations governing the selection and application of accounting policy:

Accepted Answer

All of the above

Answer

Prudence

Answer

Materiality

Answer

Substance over form

Question 15

Selection of appropriate accounting policies is not based on:

Accepted Answer

Amount involved

Answer

Prudence

Answer

Substance over form

Answer

Materiality.

Accounting Policies - Free MCQ Practice Test with solutions, CA Foundation

MCQ Practice Test & Solutions: Test: Accounting Policies (15 Questions)

Accounting principles and policies are to be standardised to achieve:

Accounting policies refer to specific accounting

Selection of an inappropriate accounting policy may lead to :

Which is not an example of an accounting policy:

The areas wherein different accounting policies can be adopted are

A Change in accounting Policy is justified

Which of the following is not an example of change in accounting policy?

Accounting policies:

A change in Accounting Policy is justified to :

Accounting policy for inventories of Xeta Enterprises states that inventories are valued at the lower of cost determined on weighted average basis or not realizable value. Which accounting principle in followed in adopting the above policy?

The area wherein different accounting policies can be adopted are:

As per AS 1 disclosure should form part of :

Selection of an inappropriate accounting policy decision may

Which of the following is one of the major considerations governing the selection and application of accounting policy:

Selection of appropriate accounting policies is not based on:

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