Practice Accounts Questions and Answers

• Depreciation of ₹5 lakh is added back while calculating cash flows from operations under the indirect method. Why?
• According to the Companies Act, 2013, every listed company must constitute an Audit Committee. Which of the following is not a role of this committee?
• A company’s debt-to-equity ratio is 3:1, and it faces a high interest burden. What does this suggest about the financial structure?
• In a manufacturing company, which of the following best represents a preventive control?
• A company takes office space on a 5-year lease. As per Ind AS 116, what should be recognized in books at commencement?
• In a job order company, factory overheads are allocated using machine hours. Actual overhead = ₹5 lakh, standard overhead based on actual hours = ₹6 la...
• If an entity revalues its land upward and this is the first time revaluation is being done, how is the increase treated under Ind AS 16?
• A company has an actual sales of ₹25 crore vs. a budget of ₹30 crore. Costs were below budget by ₹2 crore. What does this imply?
• While auditing cash payments, an auditor examines supporting documents like invoices, payment vouchers, and authorizations. This process is called:
• Parent Co. holds 80% in Subsidiary Co. The subsidiary reports profit of ₹10 lakh. What is the amount of minority interest in the consolidated P&L?
• In variance analysis, which variance helps management identify whether quantity of materials used is efficient?
• A company chooses not to record a small calculator worth ₹500 as a fixed asset. Which concept is being applied?
• According to the Net Income Approach, what happens to the firm’s value as debt increases?
• As per Companies Act, 2013, how long can an individual auditor be appointed in a listed company?
• A trader opts for GST Composition Scheme and has total turnover of ₹1.2 crore. What is the GST rate applicable?
• Which of the following leads to de-recognition of PPE under Ind AS 16?
• A firm has a current ratio of 2:1 and quick ratio of 1.2:1. Its inventory is valued at ₹4 lakh. What is the amount of current liabilities?
• As per Schedule III of Companies Act, which of the following is not shown under ‘Other Current Liabilities’?
• A company purchases machinery worth ₹10 lakh and puts it to use on 1st December. What will be the depreciation rate and amount for the year under the Inc...
• When profits as per cost accounts differ from financial accounts, the difference may be due to:
• A company’s warehouse was damaged by fire after the balance sheet date but before the approval of accounts. Under Ind AS 10, this is:
• As per the Companies Act, 2013, CSR provisions are applicable if the company meets which of the following thresholds in any financial year?
• Under Walter’s model, if a firm’s return on investment (r) > cost of equity (ke), what should the firm do?
• If a firm’s interest coverage ratio falls from 6x to 2x over a year, it indicates:
• A company transfers semi-finished goods from Process 1 to Process 2. Normal loss in Process 1 is 10%. If 10,000 units are input and 8,800 units are transfe...
• IRR is the rate at which:
• If the auditor is unable to obtain sufficient audit evidence and the possible effect is material but not pervasive, what type of opinion is issued?
• A company announces a 1:4 rights issue at ₹50 per share when market price is ₹70. What is the value of right?
• Auditor notes that the company has accumulated losses exceeding net worth, but management claims recovery. What should auditor consider?
• A firm’s current ratio is 1.5:1 and quick ratio is 1.5:1. What does it suggest about inventory?
• A business availed ITC of ₹2 lakh on inputs used partly for personal purposes. What should it do?
• An auditor resigns from a listed company. Within how many days must they file Form ADT-3?
• A company buys a machine from the US at $50,000 when $1 = ₹70. On balance sheet date, $1 = ₹75. How is this change treated?
• An investment of ₹10 lakh yields ₹4L, ₹3L, ₹2L, ₹1L over four years. What is the payback period?
• In a manufacturing entity, the cost of abnormal waste is:
• Salaries of ₹1 lakh paid in April 2024 relate to March 2024. As per matching concept, when should this expense be recorded?
• X Ltd. forfeits shares for non-payment of final call. These are reissued at a discount. Where is the discount adjusted?
• Cost of equity is 15%, cost of debt is 10%, debt-equity ratio is 1:1, tax rate 30%. What is WACC?
• As per Companies Act, 2013, what is the minimum number of board meetings a company must hold in a year?
• A company incurred ₹1 lakh as preliminary expenses. How should it treat the amount under current Ind AS?