Questions - DT team Articles

What is the journal entry to record the depreciation of a company's equipment for the year, using the straight-line method, if the equipment's cost is $10,000, its estimated useful life is 5 years, and no salvage value?

• Debit Depreciation Expense $2,000, Credit Accumulated Depreciation $2,000
• Debit Accumulated Depreciation $2,000, Credit Depreciation Expense $2,000
• Debit Depreciation Expense $10,000, Credit Accumulated Depreciation $10,000
• Debit Accumulated Depreciation $10,000, Credit Depreciation Expense $10,000

A company books salary expense of $5,000. TDS of $500 has to be deducted on this amount. What is the payable entry for the above

• Debit Salary $5,000; Credit TDS payable $500; Credit Salary payable $4500
• Debit Salary $5,000; Debit TDS payable $500; Credit Bank $4,500
• Debit Salary $5,000; Debit TDS payable $500; Credit Bank $5,500
• Debit Salary payable $5,000; Credit Bank $5,500; Credit TDS payable $500

If a company purchases inventory on credit terms, what is the correct journal entry for this transaction?

• Debit Inventory, Credit Accounts Payable
• Debit Accounts Payable, Credit Inventory
• Debit Inventory, Credit Cash
• Debit Cash, Credit Accounts Payable

If the auditor identifies a material misstatement in the financial statements that management refuses to correct, the auditor should issue:

• An unmodified (clean) opinion.
• An adverse opinion.
• A disclaimer of opinion.
• A qualified opinion.

In the context of auditing, what is the primary purpose of substantive procedures when using statistical sampling methods?

• To eliminate judgmental errors
• To guarantee the detection of all errors
• To provide greater audit efficiency
• To test the fairness of financial statement assertions

When conducting analytical procedures during the audit, which of the following statements is correct?

• Analytical procedures are used to obtain conclusive evidence about specific financial statement assertions.
• Analytical procedures involve the testing of accounting records and other source documents.
• Analytical procedures involve the evaluation of financial information through the study of plausible relationships and trends.
• Analytical procedures are performed only during the final review stage of the audit.

What are the effects of changing an accounting policy under Ind AS (Indian Accounting Standards)?

• No change in financial statements is required, and the change is only disclosed in the notes.
• The change is reflected prospectively in the current and future financial statements.
• The change is reflected retrospectively by adjusting the opening balances of both equity and other comprehensive income.
• The change is applied differently based on the preferences of the auditor.

Which of the following costs shall not be capitalized as per Accounting Standard 10 (AS 10 - Property, Plant, and Equipment)?

• Costs incurred to bring the asset to its intended use, including initial testing and trial runs.
• Borrowing costs directly attributable to the acquisition, construction, or production of a qualifying asset.
• Direct labor and directly attributable variable overheads for self-constructed assets.
• Research costs that are directly incurred for the asset.

According to AS 2, which inventory valuation method is not allowed for measuring the cost of inventories?

• FIFO (First-In, First-Out)
• LIFO (Last-In, First-Out)
• Weighted Average Cost
• Specific Identification of Cost

Loan of INR $15,00,000 is received by A Private Ltd, repayable in 15 equal monthly installments starting 30th April 2023. Loan is received on 31st March 2023. Which of the following statements is correct

• Present $15,00,000 as long term borrowings in the Balance Sheet
• Present $12,00,000 as long term borrowings and $3,00,000 as short term borrowings in the Balance sheet
• Present $3,00,000 as long term borrowings and $12,00,000 as short term borrowings in the Balance sheet
• Present $4,00,000 as long term borrowings and $11,00,000 as short term borrowings in the Balance sheet