Accounting Standards, Historical Cost, LIFO & FIFO – 35 Easy MCQs

Here are the 35 Solved MCQs of Accounting Standards, Historical Cost, LIFO, and FIFO. These MCQs will develop your concept and help to improvise your exams preparation. A soft copy of these MCQs is also available.

Accounting Standards, Historical Cost, LIFO & FIFO

  1. Accounting standards on inventory valuation is not applicable to
    1. Agricultural commodities
    2. Livestock
    3. Share held as security
    4. All of the above
  2. Net reliable value means
    1. Sales less gross profit margin
    2. Sales less cost of purchase
    3. Sales less sales returns
    4. Sales less cost incurred necessarily to make the sale
  3. As per Accounting Standard-2, historical cost of inventory includes
    1. Cost of convention
    2. Cost of purchase
    3. Cost of inventories
    4. All of the above
  4. Inventory should be valued at below historical cost when
    1. Selling prices have increased significantly
    2. There are no buyers in the market
    3. Historical cost cannot be realized
    4. Selling prices are not known
  5. In computing the cost of purchase of raw material consumed and cost of conversion, the value of by-product is
    1. Deducted
    2. Added
    3. Both A&B
    4. Divided
  6. In determining the historical cost, which of the following methods is widely used in retail business
    1. Average cost method
    2. Adjusted selling price
    3. LIFE
    4. FIFO
  7. Which of the following methods of inventory valuation is based on historical cost?
    1. LIFO
    2. Specific identification
    3. Base stock
    4. All of the above
  8. Inventory of consumable stores and maintenance supplies should ordinarily be valued at
    1. Net realized value
    2. Gross sale value
    3. Historical cost
    4. None of the above
  9. Historical cost of inventories should not be determined normally by
    1. Base stock method
    2. LIFO method
    3. Average cost method
    4. FIFO method
  10. According to the accounting standard-6, depreciation is to be provided on the basis of
    1. Market price of the asset
    2. Replacement cost of the asset
    3. Historical cost of the asset
    4. None of the above
  11. Accounting standard-6 relating to depreciation is applicable to all of the following except
    1. Patents
    2. Livestock
    3. Building
    4. Plant & machinery
  12. Accounting standard-6 relating to depreciation is applicable to which of the following?
    1. Mines
    2. Goodwill
    3. Forest and plantation
    4. Land if it has limited useful life for the enterprise
  13. Accounting standard-10 deals with all of the following fixed assets except
    1. Livestock
    2. Trade marks
    3. Goodwill
    4. Patents
  14. Gross book value of a fixed asset refers to its
    1. Historical cost less accumulated depreciation
    2. Cost less depreciation
    3. Historical cost
    4. Fair market value
  15. Net book value of a fixed asset refers to its
    1. Historical cost less accumulated depreciation
    2. Gros book value plus historical cost
    3. Historical cost
    4. Fair market value
  16. Which of the following is not included in the gross book value of self-constructed fixed asset?
    1. Fee of engineers
    2. Internal profit
    3. Costs of construction
    4. None of the above
  17. In the financial statement, the fixed assets appear at
    1. Current value
    2. Historical cost
    3. Competent value’s appraisal value
    4. Either of the above
  18. Accounting standard-10 deals with which of the following fixed assets
    1. Forests
    2. Land
    3. Mines
    4. Plantations
  19. Which of the following items are capitalized along with the purchase price of the fixed asset?
    1. Trade discount
    2. Handling cost
    3. Import duties
    4. Both B&C
  20. Separate items of fixed assets in a financial statement may be shown at
    1. Different basis of valuation
    2. Same basis of valuation
    3. Both A&B
    4. None of the above
  21. In the books, Goodwill is recorded when
    1. Directors of the company decided to record it
    2. Super profit is earned by the enterprise
    3. Money or money’s worth is paid to acquire it
    4. Normal profit is earned by the enterprise
  22. According to Accounting standard-10, gross book value of the asset may be
    1. Historical cost
    2. Revaluation amount
    3. Fair market value
    4. A&B
  23. The method of recognition of revenue from service transaction is termed as
    1. Matching Principle
    2. Proportionate Completion Method
    3. Accrual Method
    4. Consistency Method
  24. Revenue arising from the use by others of enterprise resource yielding interest should be recognized by
    1. Receipt Basis
    2. Time Proportion Basis
    3. Accrual Basis
    4. None of the above
  25. Revenue arising from the use by others of enterprise resource yielding royalties should be recognized on
    1. Re-Accept Basis
    2. Time Proportion Basis
    3. Accrual Basis
    4. All of the above
  26. Revenue is the form of admission fees for artistic performance, banquets, etc. should be recognized when
    1. Event takes place
    2. Admission tickets are made
    3. Admission tickets are sold
    4. None of the above
  27. Depreciation is charged on
    1. Fixed assets
    2. Non-current assets
    3. Current assets
    4. A&B
  28. All of the following fixed assets must be depreciated except
    1. Building
    2. Plant
    3. Land
    4. Machinery
  29. The term depletion is used in relation to
    1. Current assets
    2. Intangible assets
    3. Fixed assets
    4. Wasting assets
  30. Obsolescence is defined as decline in the value due to
    1. Wear and tear
    2. Invasions and inventions
    3. Fall in market price
    4. None of the above
  31. The asset account appears at its original cost throughout its life under
    1. Depreciation fined method
    2. Machine hour rate method
    3. Annuity method
    4. Sum of years digits method
  32. Leasehold property is generally depreciated by
    1. Reducing balance method
    2. Annuity method
    3. Fixed installment method
    4. Insurance policy method
  33. Interest on the cost of the asset is considered while calculating depreciation in which of the following method?
    1. Insurance policy method
    2. Annuity method
    3. Reducing balance method
    4. Fixed installment method
  34. As compared to annuity method, the amount of depreciation provided in the sinking find method is
    1. Equal
    2. Higher
    3. Lower
    4. Zero
  35. Under diminishing balance method, the depreciation is calculated on
    1. The written down value of the asset
    2. The market value of the asset
    3. The original cost of the asset
    4. The fair market value of the asset

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Quiz with Answers

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Accounting Standards, Historical Cost, LIFE & FIFO

Quiz with Answers

1 / 35

Accounting standard on inventory valuation is not applicable to

2 / 35

Net reliable value means

3 / 35

As per AS-2, historical cost of inventory includes

4 / 35

Inventory should be valued at below historical cost when

5 / 35

In computing the cost of purchase of raw material consumed and cost of conversion, the value of by-product is

6 / 35

In determining the historical cost, which of the following methods is widely used in retail business

7 / 35

Which of the following methods of inventory valuation is based on historical cost?

8 / 35

Inventory of consumable stores and maintenance supplies should ordinarily be valued at

9 / 35

Historical cost of inventories should not be determined normally by

10 / 35

According to the accounting standard-6, depreciation is to be provided on the basis of

11 / 35

Accounting standard-6 relating to depreciation is applicable to all of the following except

12 / 35

Accounting standard-6 relating to depreciation is applicable to which of the following?

13 / 35

Accounting standard-10 deals with all of the following fixed assets except

14 / 35

Gross book value of a fixed asset refers to its

15 / 35

Net book value of a fixed asset refers to its

16 / 35

Which of the following is not included in the gross book value of the self-constructed fixed assets?

17 / 35

In the financial statement, the fixed assets appear at

18 / 35

Accounting standard-10 deals with which of the following fixed assets

19 / 35

Which of the following items are capitalized along with the purchase price of the fixed asset?

20 / 35

Separate items of fixed assets in a financial statement may be shown at

21 / 35

In the books, Goodwill is recorded when

22 / 35

According to Accounting standard-10, the gross book value of the asset maybe

23 / 35

The method of recognition of revenue from service transactions is termed as

24 / 35

Revenue arising from the use by others of enterprise resource yielding interest should be recognized by

25 / 35

Revenue arising from the use by others of enterprise resource yielding royalties should be recognized on

26 / 35

Revenue is the form of admission fees for artistic performance, banquets, etc. should be recognized when

27 / 35

Depreciation is charged on

28 / 35

All of the following fixed assets must be depreciated except

29 / 35

The term depletion is used in relation to

30 / 35

Obsolescence is defined as a decline in the value due to

31 / 35

The asset account appears at its original cost throughout its life under

32 / 35

A leasehold property is generally depreciated by

33 / 35

Interest on the cost of the asset is considered while calculating depreciation in which of the following method?

34 / 35

As compared to annuity method, the amount of depreciation provided in the sinking find method is

35 / 35

Under the diminishing balance method, the depreciation is calculated on

Accounting Standards, Historical Cost, LIFO & FIFO
Historical Cost, LIFO & FIFO

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