1. As per AS 9, revenue can be recognised if there is no significant exists regarding the amount of

consideration and other conditions are also satisfied:

a. effective control

b. ultimate collection

c. uncertainty

d. risk

2. ABC Limited has taken a transit insurance policy. Suddenly in the year the percentage of accident

has gone up to 7% and wants to recognize insurance claim as revenue. Should revenue be

recognised for the same?

a. Not at all

b. If the amount can be measured reliably

c. If the ultimate collection is certain

d. Both b) & c)

3. ABC Limited has recognised Rs. 10,00,000 on accrual basis as dividend on securities on mutual

fund of the face value of Rs. 100,00,000 as standing on 31 Mar 2012. Dividends were declared at

15% on 15 Jun 2012(in AGM). Dividend was proposed on 12 Apr 2012. When should the

dividend be recognised in the books of account?

a. 12 Apr 2012

b. 15 June 2012

c. 31 Mar 2012

d. Never

4. When the uncertainty relating to collectability arises subsequent to the time of sale or the

rendering of the service what is the accounting treatment?

a. Make a separate provision to reflect the uncertainty

b. Adjust the amount of revenue originally recorded

c. Make part adjustment on the revenue amount and part provisioning

d. Revenue to be reversed

5. Match the following with their examples:

a) Completed service contract method 1) Installation service

b) Proportionate completion method 2) Sale of finished goods

c) Revenue 3) Profit on sale of a building

d) Other Income 4) Consultancy service over a long period

a. a_1, b_4, c_2, d_3

b. a_2, b_1, c_3, d_4

c. a_3, b_1, c_4, d_2

d. a_4, b_3, c_1, d_2

6. How is interest recognised as revenue?

a. Accrual basis in accordance with the terms of the relevant agreement

b. Owner's right to receive payment is established.

c. Time proportion basis taking into account the amount outstanding and the rate applicable.

d. On the date of payment being received

7. ABC Limited sells agriculture products to dealers on 10 Aug 2012. One of the condition of sale is

that interest is payable at the rate of 2% pm for delayed payments. Percentage of interest recovery

is only 10% on such overdue outstanding due to various reasons. ABC Limited received interest

on 12 Apr 2013 from the respective dealers, when should the company recognise the interest

receivable.

a. 10 Aug 2012

b. 31 Mar 2012

c. Not to recognise interest

d. 12 Apr 13

8. How is royalty recognised as revenue?

a. Accrual basis in accordance with the terms of the relevant agreement

b. Owner's right to receive payment is established.

c. Time proportion basis taking into account the amount outstanding and the rate applicable.

d. On the date of payment being receive

9. The board of directors decided on 31 Mar 2012 to increase the sales price of the product

retrospectively from 1 Jan 2012. Due to this the company stands to receive Rs. 50,00,000 from

the sales made from 1 Jan 2012 to 31 Mar 2012. What should be done by the accountant if there

is no uncertainty to receive the amount.

a. Recognise full Rs. 50,00,000

b. Part of the amount to be recognised

c. Nil amount to be recognised

d. Recognise Rs. 25,00,000

10. Which of the following is not the difference between revenue and income?

a. Revenue is the gross inflow of economic benefits, Income is the increase of economic

benefits during the accounting period in the form of inflows or enhancements of assets or

decreases of liabilities.

b. The top line on an income statement is revenue, whereas income is the bottom line

c. Revenue results in an increase in equity without the contributions from equity participants,

income does not result in increase in equity.

d. Revenue is the total amount of sales, income is the amount left after expenses

11. ABC Limited purchased the goods on credit from A Limited for Rs. 200,00,00,000. It was then

sold in the local market as the export order was cancelled and it was to be sold at 15% discount.

How should the accountant treat the discount?

a. To be shown separately

b. To be ignored

c. To be adjusted in the sales price

d. To be adjusted in the next sales

12. In case of consignment sales when does delivery meant to be completed?

a. When recipient undertakes to sell the goods on behalf of consignee

b. When goods are sold on behalf of consignor

c. When delivery is made whereby recipient undertakes to sell the goods on behalf of the

consignor

d. When recipient undertakes to purchase the goods from consignor.

13. ABC Limited, a contractor, presents following information relating to a contract entered into with

a client: Total Contract Price = Rs. 3,00,000 and architect certifies work of the value of Rs.

1,50,000 has been completed. If the client agrees to pay 90% of the work certified, what will be

the amount of Retention money?

a. Rs. 20,000

b. Rs. 15,000

c. Rs. 2,70,000

d. Rs. 1,35,000

14. Where a project has not reached a stipulated stage, architect does not certify any percentage of

work completed and hence no payment is received from the Client's side, such work is referred as

"Work in Progress Uncertified" and measured at:

a. Cost

b. Fair Value

c. NIL Value

d. None of the above

15. ABC Limited, a contractor, presents following information relating to a contract entered into with

a client: Contract price for a project is Rs. 6,00,000 and its estimated total cost of completing the

contract will be Rs. 5,20,000 thus giving profit of Rs. 80,000. Further assume, the value of work

already done is Rs. 2,50,000 and therefore, the credit to profit and loss account in respect of work

done so far would be

e. Rs. 33,333

a. Rs. 80,000

b. Rs. 2,50,000

c. None of the above

16. Strategic consulting services offered, not directly linked to the construction of an asset, will be

accounted for under:

a. AS - 7 (Construction Contracts)

b. AS - 9 (Revenues Recognition)

c. Irrevocable optional i.e. either a or b

d. None of the above

17. Which of the following statements are correct?

i. In case the contract account reveals a loss, the whole loss should not be charged to

the profit and loss account immediately

ii. Irrespective of the proportion of work completed, profit may be recognised using the

following formulae:

a) Only i

b) Only ii

c) Both i. and ii

d) None of the above

18. Which of the following are a permitted method of determining Stage of Completion under AS - 7

(Revised)?

a. Percentage of completion

b. Completed Contract Method

c. By survey of the work performed

d. a & c

19. ABC Limited has invested in shares of PQR Limited, an entity listed on the Bombay Stock

exchange. ABC Limited feels that market price of PQR's stock is way below its acquisition price

and feels that it is impaired as per AS 28 Impairment of assets. State which of the following

statement is correct:

a. AS 28 is not applicable to financial assets

b. Management is correct

c. Management may apply AS 28

d. None of the above

20. Reversal of impairment loss needs to be carried only when there are __________ of information.

State whether this statement is true or false.

a. indicators (external or internal)

b. only internal indicators

c. only external indicators

d. none of the above

21. Who is the issuing authority for IGAAP (i.e. AS)?

a. ICAI

b. IASB

c. FASB

d. IASC

22. Which of the following AS is applicable for recognition of revenue in case of "Interior decorator"

providing such services separately i.e. not along with construction services?

a. AS 7

b. AS 9

c. AS 18

d. AS 2

23. Which of the following accounting standard deals with accounting treatment for borrowing cost:

a. AS 17

b. AS19

c. AS16

d. AS 11

24. Limited has plant and machinery with carrying value of Rs. 25,00,000 as on 31 Mar 2012. The

balance useful is 3 years and residual value at the end of 3 years is Rs. 1,00,000. Estimated future

cash flows from plant and machinery from next 3 years are as follows:

For the year ended on Estimated cash flow

31 Mar 2013 5,00,000

31 Mar 2014 11,00,000

31 Mar 2015 4,00,000

The estimated discount rate to be applied is 10%. Net selling price of plant and machinery is Rs.

16,00,000. From the data provided above, what will be the value in use for plant and machinery

of ABC Limited?

a. Rs. 17,55,400

b. Rs. 17,38,600

c. Rs. 17.66,897

d. Rs. 17,87,000

25. ABC Limited has plant and machinery with carrying value of Rs. 25,00,000 as on 31 Mar 2012.

The balance useful is 3 years and residual value at the end of 3 years is Rs. 1,00,000. Estimated

future cash flows from plant and machinery from next 3 years are as follows:

For the year ended on Estimated cash flow

31 Mar 2013 5,00,000

31 Mar 2014 11,00,000

31 Mar 2015 4,00,000

The estimated discount rate to be applied is 10%. Net selling price of plant and machinery is Rs.

16,00,000. What will be impairment loss on plant and machinery of ABC Limited?

a. Rs. 7,44,600

b. Rs. 9,00,000

c. Rs. 7,33,103

d. Rs. 7,61,400