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 5 of 11

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Q41.
What information should be disclosed regarding the reconciliation of the gross and net carrying amounts of tangible assets?

a.

Only additions and disposals.

b.

Additions, disposals, acquisitions, and other movements, and the related depreciation.

c.

Only acquisitions and other movements.

d.

Only depreciation and impairment losses/reversals.

Discuss
Answer: (b).Additions, disposals, acquisitions, and other movements, and the related depreciation. Explanation:The reconciliation of the gross and net carrying amounts of each class of tangible assets should include additions, disposals, acquisitions, and other movements, and the related depreciation and impairment losses/reversals.
Q42.
How are intangible assets classified?

a.

Goodwill, Brands/Trademarks, and Computer Software only.

b.

Goodwill, Brands/Trademarks, and Mastheads and Publishing Titles only.

c.

Goodwill, Brands/Trademarks, and all other specified categories.

d.

Goodwill, Brands/Trademarks, and Recipes only.

Discuss
Answer: (c).Goodwill, Brands/Trademarks, and all other specified categories. Explanation:Intangible assets are classified as Goodwill, Brands/Trademarks, Computer Software, Mastheads and Publishing Titles, Mining Rights, Copyrights and Patents, and other specified categories.
Q43.
How are non-current investments classified?

a.

Only as trade investments.

b.

Only as other investments.

c.

As trade investments and other investments, further classified into specified categories.

d.

As investment property and investments in government or trust securities.

Discuss
Answer: (c).As trade investments and other investments, further classified into specified categories. Explanation:Non-current investments are classified as trade investments and other investments, further classified into specified categories such as investment property, investments in equity instruments, investments in preference shares, and more.
Q44.
What information should be disclosed under the classification of non-current investments?

a.

Names of bodies corporate and their subsidiaries only.

b.

Names of bodies corporate and their subsidiaries, associates, joint ventures, or controlled special purpose entities, indicating the nature and extent of the investments.

c.

Only the names of partnership firms.

d.

Only the names of partnership firms and the total capital of each partner.

Discuss
Answer: (b).Names of bodies corporate and their subsidiaries, associates, joint ventures, or controlled special purpose entities, indicating the nature and extent of the investments. Explanation:Under the classification of non-current investments, details should include names of bodies corporate, their subsidiaries, associates, joint ventures, or controlled special purpose entities, indicating the nature and extent of the investments.
Q45.
How should investments carried at other than cost be disclosed?

a.

They should not be disclosed separately.

b.

They should be disclosed as aggregate amounts.

c.

They should be separately stated, specifying the basis for valuation.

d.

They should be disclosed in the notes to accounts only.

Discuss
Answer: (c).They should be separately stated, specifying the basis for valuation. Explanation:Investments carried at other than cost should be separately stated, specifying the basis for valuation.
Q46.
What information should be disclosed regarding long-term loans and advances?

a.

Only the classification as capital advances, security deposits, and loans and advances to related parties.

b.

Only the aggregate amount of loans and advances.

c.

Details of loans and advances to related parties and their classification as to the extent secured, considered good, and others.

d.

Only the allowance for bad and doubtful loans and advances.

Discuss
Answer: (c).Details of loans and advances to related parties and their classification as to the extent secured, considered good, and others. Explanation:Regarding long-term loans and advances, details should include classification as capital advances, security deposits, loans and advances to related parties, and their sub-classification as to the extent secured, considered good, and others.
Q47.
How are other non-current assets classified?

a.

Only as long-term trade receivables.

b.

Only as other assets with a specified nature.

c.

Both as long-term trade receivables and other assets with a specified nature.

d.

As long-term trade receivables, long-term trade payables, and other assets with a specified nature.

Discuss
Answer: (c).Both as long-term trade receivables and other assets with a specified nature. Explanation:Other non-current assets are classified as long-term trade receivables (including trade receivables on deferred credit terms) and other assets with a specified nature.
Q48.
How should long-term trade receivables be sub-classified?

a.

Only as secured, considered good.

b.

Only as unsecured, considered good.

c.

As secured, considered good; unsecured, considered good; and doubtful.

d.

Only as doubtful.

Discuss
Answer: (c).As secured, considered good; unsecured, considered good; and doubtful. Explanation:Long-term trade receivables should be sub-classified as secured, considered good; unsecured, considered good; and doubtful.
Q49.
What information should be disclosed regarding current investments?

a.

Only the classification of current investments.

b.

The basis of valuation of individual investments, aggregate amount of quoted and unquoted investments, and aggregate provision for diminution in value of investments.

c.

Only the names of bodies corporate in whom investments have been made.

d.

The aggregate amount of partly paid-up investments.

Discuss
Answer: (b).The basis of valuation of individual investments, aggregate amount of quoted and unquoted investments, and aggregate provision for diminution in value of investments. Explanation:Regarding current investments, information should include the basis of valuation of individual investments, aggregate amount of quoted and unquoted investments, and aggregate provision for diminution in value of investments.
Q50.
How are current investments classified?

a.

Only as investments in equity instruments.

b.

Investments in equity instruments, preference shares, government or trust securities, units, debentures or bonds, mutual funds, and partnership firms.

c.

Investments in equity instruments, preference shares, and others with a specified nature.

d.

Investments in government or trust securities, units, debentures or bonds, and mutual funds.

Discuss
Answer: (b).Investments in equity instruments, preference shares, government or trust securities, units, debentures or bonds, mutual funds, and partnership firms. Explanation:Current investments are classified as investments in equity instruments, preference shares, government or trust securities, units, debentures or bonds, mutual funds, and partnership firms.
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