📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    âš¡ Month End Offer - Flat 52% Off On All Courses! Enroll Now âš¡
    00:00:00 AM Left

    Question

    Under Accounting Standard 5 on Net Profit or Loss for

    the period, prior period items and changes in accounting policies must be disclosed separately. Why is this considered essential for financial statements?
    A To adjust P&L automatically Correct Answer Incorrect Answer
    B To ensure that users can differentiate recurring operating performance from non-recurring adjustments Correct Answer Incorrect Answer
    C To inflate profits legally Correct Answer Incorrect Answer
    D To simplify audit procedures Correct Answer Incorrect Answer
    E To avoid taxation issues Correct Answer Incorrect Answer

    Solution

    • AS 5 mandates separate disclosure of material prior period items and policy changes so that users can assess true operational performance vs adjustments.

    Practice Next
    More Accounts Questions
    ask-question