Preparation and Presentation of Financial Statements MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Preparation and Presentation of Financial Statements, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Preparation and Presentation of Financial Statements MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Preparation and Presentation of Financial Statements mcq questions that explore various aspects of Preparation and Presentation of Financial Statements problems. Each MCQ is crafted to challenge your understanding of Preparation and Presentation of Financial Statements principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Preparation and Presentation of Financial Statements MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

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Preparation and Presentation of Financial Statements MCQs | Page 1 of 11

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Q1.
What is the requirement under Section 128 of the Companies Act, 2013, regarding the preparation of financial statements?

a.

Financial statements must be prepared on a cash basis.

b.

Financial statements should give a true and fair view of the company's affairs and transactions.

c.

Financial statements are optional for companies.

d.

Financial statements must be prepared only for branch offices.

Discuss
Answer: (b).Financial statements should give a true and fair view of the company's affairs and transactions. Explanation:Section 128 of the Companies Act, 2013, mandates that financial statements must give a true and fair view of the company's affairs and transactions.
Q2.
According to Section 128 of the Companies Act, 2013, where can a company keep its books of account and relevant papers?

a.

Only at the registered office

b.

Anywhere in the world

c.

Only at branch offices

d.

Anywhere in India as decided by the Board of Directors

Discuss
Answer: (d).Anywhere in India as decided by the Board of Directors Explanation:Section 128 allows a company to keep its books of account and relevant papers at any place in India as decided by the Board of Directors.
Q3.
What does Section 129 of the Companies Act, 2013, state regarding financial statements?

a.

Financial statements should comply only with the company's internal standards.

b.

Financial statements must comply with accounting standards notified under Section 133.

c.

Financial statements are not mandatory for certain classes of companies.

d.

Financial statements are required only for insurance companies.

Discuss
Answer: (b).Financial statements must comply with accounting standards notified under Section 133. Explanation:Section 129 of the Companies Act, 2013, mandates that financial statements must comply with accounting standards notified under Section 133.
Q4.
According to Section 129, which companies are exempt from the requirements of disclosing certain matters in their financial statements?

a.

All companies are exempt.

b.

Insurance companies.

c.

Banking companies.

d.

Companies engaged in the generation or supply of electricity.

Discuss
Answer: (c).Banking companies. Explanation:Section 129 specifies exemptions for banking companies from disclosing certain matters in their financial statements.
Q5.
What is the requirement under Sub-section (2) of the Companies Act, 2013, regarding financial statements at an annual general meeting?

a.

Financial statements must be prepared only for subsidiaries.

b.

Financial statements should be laid before the annual general meeting.

c.

Financial statements are not required for companies with subsidiaries.

d.

Financial statements should be prepared only for joint ventures.

Discuss
Answer: (b).Financial statements should be laid before the annual general meeting. Explanation:Sub-section (2) mandates that the Board of Directors shall lay financial statements before every annual general meeting of the company.
Q6.
In addition to financial statements under Sub-section (2), what does a company with subsidiaries need to prepare according to Sub-section (3)?

a.

A separate statement for each subsidiary.

b.

A consolidated financial statement of the company and its subsidiaries.

c.

Financial statements for each subsidiary in a different form.

d.

Financial statements only for the main company.

Discuss
Answer: (b).A consolidated financial statement of the company and its subsidiaries. Explanation:Sub-section (3) requires a company with subsidiaries to prepare a consolidated financial statement of the company and all subsidiaries, laid before the annual general meeting.
Q7.
What is the basis for the presentation of general-purpose financial statements, ensuring compatibility with previous periods and other entities in the same industry, according to lAS 1?

a.

lAS 34 on Interim Financial Reporting

b.

lAS 1 on "Preparation of Financial Statements"

c.

Comparative income statements

d.

Interim financial statements

Discuss
Answer: (b).lAS 1 on "Preparation of Financial Statements" Explanation:lAS 1 on "Preparation of Financial Statements" provides the basis for the presentation of general-purpose financial statements.
Q8.
Which of the following is NOT a basic requirement of lAS 1 for financial statements?

a.

Statement of financial position (balance sheet)

b.

Statement of comparative income for the period

c.

Statement of changes in equity for the period

d.

Statement of cash flows for the period

Discuss
Answer: (d).Statement of cash flows for the period Explanation:lAS 1 requires a statement of financial position, statement of comparative income, and statement of changes in equity, but not a statement of cash flows.
Q9.
According to lAS 1, what is the requirement for entities whose financial statements comply with IFRS?

a.

An explicit statement of non-compliance

b.

An explicit statement of compliance in the notes

c.

Use of financial statements only for internal reporting

d.

Exclusion of environmental reports in financial statements

Discuss
Answer: (b).An explicit statement of compliance in the notes Explanation:lAS 1 requires entities whose financial statements comply with IFRS to make an explicit statement of such compliance in the notes.
Q10.
In terms of lAS 1.112, what must the notes to the financial statements include?

a.

Only information about the basis of preparation

b.

Only information required by IFRS

c.

Only additional information relevant to understanding the financial statements

d.

Information about the basis of preparation, specific accounting policies, information required by IFRS, and additional information relevant to understanding the financial statements.

Discuss
Answer: (d).Information about the basis of preparation, specific accounting policies, information required by IFRS, and additional information relevant to understanding the financial statements. Explanation:According to lAS 1.112, the notes must include information about the basis of preparation, specific accounting policies, information required by IFRS, and additional information relevant to understanding the financial statements.
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