Question 1

Which of the following statements regarding "Ind AS" (Indian Accounting Standards) is CORRECT?

They are converged with IFRS (International Financial Reporting Standards) but not identical.They apply only to manufacturing companies.They are rules-based standards unlike IFRS which is principle-based.They are identical to US GAAP.

View Explanation

Ind AS is "converged" with IFRS, meaning it is largely based on IFRS but contains certain "Carve-outs" (deviations) to suit Indian economic and legal conditions.

Question 2

IFRS stands for:

International Financial Reporting StandardsInternational Fund Regulatory StandardsIndian Financial Rating SystemIndian Fiscal Reporting System

View Explanation

IFRS are issued by the London-based International Accounting Standards Board (IASB) to provide a common global language for business affairs.

Question 3

AS 2 (Valuation of Inventories) states that inventory should be valued at:

Cost Price.Cost or Net Realizable Value (NRV), whichever is higher.Cost or Net Realizable Value (NRV), whichever is lower.Market Price.

View Explanation

This is based on the principle of conservatism (Prudence). You anticipate losses (if NRV < Cost) but do not anticipate gains.

Question 4

Ind AS is mandatory for unlisted companies if their Net Worth is equal to or greater than:

?50 Crore?500 Crore?250 Crore?100 Crore

View Explanation

Under Phase II of Ind AS implementation, unlisted companies with a net worth of ?250 crore or more are required to comply with Ind AS.

Question 5

In India, Accounting Standards are formulated by:

Ministry of FinanceInstitute of Chartered Accountants of India (ICAI)Reserve Bank of India (RBI)Securities and Exchange Board of India (SEBI)

View Explanation

The Accounting Standards Board (ASB) constituted by ICAI formulates Accounting Standards. Ind AS are notified by the Ministry of Corporate Affairs (MCA) based on ICAI recommendations.

Question 6

AS 1 deals with:

Depreciation AccountingValuation of InventoriesDisclosure of Accounting PoliciesCash Flow Statements

View Explanation

AS 1 requires enterprises to disclose the significant accounting policies followed in preparing and presenting financial statements.

Question 7

Ind AS 1 requires a complete set of financial statements to include a "Statement of Changes in Equity". This statement shows:

Changes in the owner's equity over the period (Share capital, Reserves).Changes in Market value of shares.Changes in Fixed Assets.Changes in Cash Flow.

View Explanation

Unlike traditional Indian GAAP, Ind AS requires a separate statement detailing the movement in Equity (Share Capital + Other Equity like Reserves) during the year.

Question 8

Ind AS 16 deals with:

Property, Plant and Equipment (PPE)Employee BenefitsIncome TaxesLeases

View Explanation

Ind AS 16 prescribes the accounting treatment for Property, Plant and Equipment (Fixed Assets), including recognition, measurement, and depreciation.

Question 9

GAAP stands for:

General Asset Assessment PrinciplesGovernment Audit and Accounts ProceduresGenerally Accepted Accounting PrinciplesGlobal Accounting and Audit Policies

View Explanation

GAAP refers to a common set of accounting principles, standards, and procedures that companies must follow when compiling their financial statements.

Question 10

Ind AS 109 deals with:

Financial InstrumentsLeasesConsolidated StatementsRevenue Recognition

View Explanation

Ind AS 109 covers Financial Instruments: Recognition, Measurement, Impairment (ECL model), and Hedge Accounting.

Question 11

Under Ind AS 7, Interest paid by a non-financial enterprise is classified as:

Financing ActivityInvesting ActivityExtraordinary ActivityOperating Activity

View Explanation

Interest paid is a cost of obtaining finance. Hence, for non-financial firms, it is a Financing Activity. (For banks, it is Operating).

Question 12

Are NBFCs required to follow Ind AS?

No, they follow RBI norms only.Yes, if their Net Worth is ?500 Cr or more (Phase I) or ?250 Cr or more (Phase II).No, they follow IFRS.Yes, all NBFCs.

View Explanation

MCA mandated Ind AS for NBFCs in phases based on net worth, similar to corporates.

Question 13

Under Ind AS 16, subsequent expenditure on an item of PPE is capitalized only if:

The amount is significant.It increases the future economic benefits from the asset beyond its previously assessed standard of performance.It is mandated by law.It restores the asset to its original condition.

View Explanation

Repairs that only maintain the asset are revenue expenses. Only those that enhance capacity, efficiency, or life are capitalized.

JAIIB Quiz

Quiz Finished!