Accounting Standard 1 to 10 Quiz

What does AS 1 (Disclosure of Accounting Policy) primarily aim to achieve?

• Standardization of accounting policies

• Promotion of diversity in accounting practices

• Better understanding of financial statements through policy disclosure

• Restriction of accounting policy choices

In which situation does AS 1 permit diversity in accounting policies?

• When there is uniformity among enterprises

• In areas covered by accounting standards

• Only when explicitly allowed by the regulatory authority

• When enterprises operate in diverse situations not covered by a standard

How is raw material valued under AS 2 (Valuation of Inventory)?

• Market value

• Lower of cost and net realizable value

• Historical cost

• Fair value

Which type of contract is characterized by a fixed sum or a fixed rate unit of output under AS 7 (Construction Contracts)?

• Cost plus contract

• Fixed price contract

• Hybrid contract

• Time and material contract

What does AS 5 (Net Profit or Loss for the Period) primarily deal with?

• Revenue recognition

• Classification and disclosure of specific items in the Statement of Profit and Loss

• Valuation of inventory

• Construction contracts

Under AS 8 (Accounting for Research & Development), when should research and development costs be charged as an expense?

• At the end of the project

• In the next financial year

• When they are incurred

• When the product is launched

AS 9 (Revenue Recognition) is concerned with the recognition of revenue arising from which of the following?

• Construction contracts

• Sale of goods, rendering of services, and others

• Insurance contracts

• All of the above

Which method of revenue recognition involves recognizing revenue as the project progresses?

• Proportionate completion method

• Completed service contract method

• Cash basis

• Accrual basis

AS 10 (PPE) replaces which previous accounting standard and deals with which type of assets?

• AS 2; Intangible assets

• AS 6; Tangible assets

• AS 5; Financial assets

• AS 3; Fixed assets

What is the purpose of AS 4 (Contingencies and events occurring after the Balance sheet date)?

• Classification of assets and liabilities

• Disclosure of accounting policies

• Dealing with contingencies and events post-balance sheet date

• Recognition of revenue