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 4 of 11

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Q31.
What should be specified regarding redeemed bonds/debentures that the company has the power to reissue?

a.

The names of the bondholders.

b.

The date of redemption only.

c.

Particulars of redemption.

d.

The terms of repayment.

Discuss
Answer: (c).Particulars of redemption. Explanation:Regarding redeemed bonds/debentures that the company has the power to reissue, the particulars of redemption should be specified.
Q32.
How are short-term borrowings classified?

a.

Only as Loans repayable on demand.

b.

Loans repayable on demand and Loans and advances from subsidiaries.

c.

Loans repayable on demand, Deposits, and Other loans and advances.

d.

Loans repayable on demand, Loans and advances from subsidiaries, and Deposits.

Discuss
Answer: (c).Loans repayable on demand, Deposits, and Other loans and advances. Explanation:Short-term borrowings are classified as Loans repayable on demand, Deposits, and Other loans and advances, among other specified categories.
Q33.
How should borrowings be classified in financial statements?

a.

Only as secured borrowings.

b.

As secured and unsecured borrowings, with the nature of security specified separately in each case.

c.

Only as unsecured borrowings.

d.

As long-term and short-term borrowings.

Discuss
Answer: (b).As secured and unsecured borrowings, with the nature of security specified separately in each case. Explanation:Borrowings should be classified as secured and unsecured, with the nature of security specified separately in each case.
Q34.
When loans are guaranteed by directors or others, what information should be disclosed?

a.

Only the names of the guarantors.

b.

A mention thereof and the aggregate amount of loans under each head.

c.

The terms of repayment only.

d.

The reasons for the guarantee.

Discuss
Answer: (b).A mention thereof and the aggregate amount of loans under each head. Explanation:When loans are guaranteed by directors or others, the disclosure should include a mention thereof and the aggregate amount of loans under each head.
Q35.
What should be specified regarding the period and amount of default in repayment of dues?

a.

Only the amount of default.

b.

Only the period of default.

c.

Both the period and amount of default, providing a break-up of principal and interest separately in each case.

d.

Whether there is a default or not.

Discuss
Answer: (c).Both the period and amount of default, providing a break-up of principal and interest separately in each case. Explanation:The period and amount of default in repayment of dues should be specified, providing a break-up of principal and interest separately in each case.
Q36.
How are other current liabilities classified?

a.

Only as current maturities of long-term debt.

b.

Current maturities of long-term debt, finance lease obligations, and income received in advance.

c.

Current maturities of long-term debt, finance lease obligations, and unpaid dividends.

d.

Current maturities of long-term debt, finance lease obligations, and unpaid matured deposits.

Discuss
Answer: (b).Current maturities of long-term debt, finance lease obligations, and income received in advance. Explanation:Other current liabilities are classified as current maturities of long-term debt, finance lease obligations, income received in advance, and more.
Q37.
How should share application money be disclosed in financial statements?

a.

It should be shown under the head Equity.

b.

It should be separately shown under 'Other current liabilities'.

c.

It should be shown under the head Loans and Advances.

d.

It should be disclosed in the notes to accounts only.

Discuss
Answer: (b).It should be separately shown under 'Other current liabilities'. Explanation:Share application money not exceeding the issued capital and to the extent not refundable should be shown under the head Equity, and the amount in excess or refundable should be separately shown under 'Other current liabilities'.
Q38.
How are short-term provisions classified?

a.

Only as provisions for employee benefits.

b.

Provisions for employee benefits and other provisions with a specified nature.

c.

Only as other provisions with a specified nature.

d.

Provisions for employee benefits and goodwill.

Discuss
Answer: (b).Provisions for employee benefits and other provisions with a specified nature. Explanation:Short-term provisions are classified as provisions for employee benefits and other provisions with a specified nature.
Q39.
How are tangible assets classified?

a.

Land, Buildings, and Plant and Equipment only.

b.

Land, Buildings, and Furniture and Fixtures only.

c.

Land, Buildings, and Vehicles only.

d.

Land, Buildings, and all other specified categories.

Discuss
Answer: (d).Land, Buildings, and all other specified categories. Explanation:Tangible assets are classified as Land, Buildings, Plant and Equipment, Furniture and Fixtures, Vehicles, Office Equipment, and others with a specified nature.
Q40.
How should assets under lease be specified in the classification of tangible assets?

a.

They should not be separately specified.

b.

They should be classified under "Others."

c.

They should be separately specified under each class of asset.

d.

They should be classified as a separate category.

Discuss
Answer: (c).They should be separately specified under each class of asset. Explanation:Assets under lease should be separately specified under each class of tangible asset.
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