Top 80+ Solved Financial Reporting MCQ Questions Answer
Q. An intangible asset is identified when,
a. It is separable
b. It arises from contractual or other legal rights, regardless whether those rights are transferable or separable from the entity
c. Either (a) or (b)
d. None of these
Q. The cost of intangible asset at initial recognition is measured at its fair value when,
a. It is internally generated
b. It is acquired as a part of business combination
c. It is acquired by way of a Government grant
d. Both (b) and (c)
Q. The useful life of an intangible asset may be,
a. Finite
b. Infinite
c. Either (a) or (b)
d. None of these
Q. Impairment loss is recognised when,
a. Carrying amount of an asset is less than its recoverable amount
b. Carrying amount of an asset is less than its original acquisition cost
c. Carrying amount of an asset exceeds its recoverable amount
d. Fair value of an asset is less than the undiscounted expected future cash inflows
Q. An entity assesses inventories for impairment,
a. Only when there are external indicators that, an impairment has occurred
b. At each reporting date
c. Only when there are internal indicators that an impairment has occurred
d. None of these
Q. Inventories must be measured at
a. Cost
b. Lower of cost and estimated selling price less cost to complete and sell
c. Lower of cost and fair value less cost to complete and sell
d. None of these
Q. Cost of inventory is a sum of
a. Cost of purchase and cost of conversion
b. Direct cost, indirect cost and other cost
c. Cost of purchase, cost of conversion and other cost to bring the material to the present location
d. None of these
Q. Consumable stores are
a. Inventories
b. Property, Plant and Equipment
c. Investment Property
d. Intangible Asset
Q. Cost of inventory does not include
a. Salary of factory staff
b. Storage cost necessary in the production process
c. Cost of abnormal wastage
d. None refundable taxes
Q. A property developer must classify properties that it hold for sale in the ordinary courseof business as
a. Inventories
b. Property, Plant and Equipment
c. Financial Assets
d. Investment property
Q. Borrowing cost are,
a. Interest and other cost that an entity incurs in connection with borrowing of funds
b. Dividend payments
c. Fine on delayed payments
d. None of the above
Q. Borrowing cost do not include,
a. Interest on debentures
b. Incremental administrative fees for raising loans
c. Dividend declared to equity shareholders
d. All of the above
Q. Total borrowings used for construction of an office building are Rs.30, 00000. Entityissued 8% debentures worth 10,00000 for this purpose and balance amount was utilized from its common pool including 10% bank loan of Rs.1000000 and 9.5% bank loan of Rs.1000000. What is the amount of borrowing cost to be capitalized?
a. 275000
b. 300000
c. 250000
d. 265000
Q. An entity shall cease capitalizing borrowing cost when
a. Expenditure on the asset is being incurred
b. Borrowing cost are being incurred
c. The asset is materially ready for its intended use
d. All of the above
Q. Capitalization of borrowing cost should not cease when
a. There is a delay and that delay is inherent in the asset acquisition process
b. There is a delay in payment of interest on loan
c. There is a permanent interruption
d. None of the above