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50522bos40251 L1accounting PDF
50522bos40251 L1accounting PDF
Yash Ltd. wants to prepare its cash flow statement. It sold equipment of book value of
Rs. 60,000 at a gain of Rs. 8,000. The amount to be reported in its cash flow statement under
operating activities is
(a) Nil
(b) (8,000)
(c) 8,000
(d) 60,000.
Answer ‐ (a) Nil
2. As per AS 13, when current investments are reclassified as long‐term investment, transfer
should be made at
(a) Cost
(b) Carrying amount on the date of transfer
(c) Lower of cost and carrying amount on the date of transfer
(d) Lower of cost and fair value at the date of transfer.
Answer ‐ (d) Lower of cost and fair value at the date of transfer
3. As per AS 16, income from temporary investment of borrowings that are eligible for
capitalisation is to be treated as
(a) Credited to profit and loss account
(b) Added to general reserve
(c) Deduction from the borrowing cost incurred
(d) Added to capital reserve.
Answer ‐(c) Deduction from the borrowing cost incurred
4. Which costs are not included in the carrying amount of an item of PPE?
(a) Costs of site preparation
(b) Costs of relocating the operations
(c) Installation and assembly costs
(d) Initial delivery and handling costs.
Answer‐ (b) Costs of relocating the operations
5. Out of the given Accounting Standards, which AS is not applicable to Level II and Level III non‐
corporate entities in their entirety?
(a) AS 17 “Segment Reporting”
(b) AS 28 “Impairment of Assets”
(c) AS 19 “Leases”
(d) AS 29, “Provisions, Contingent Liabilities and Contingent Assets”
Answer‐ (a) AS 17 “Segment Reporting”
6. If one large asset has a number of individual components with different useful lives, it should be
depreciated by
(a) Treating as one asset, without disclosing in the notes to the financial statements.
(b) Breaking down into different components.