Accounting Standards (IFRS, GAAP) MCQ Questions and Answers for Practice

1. What does IFRS stand for?

1. Indian Financial Reporting Systems
2. International Financial Reporting Standards
3. Indian Financial Reporting Standards
4. International Financial Reporting Systems

2. What is the role of the IASB in the convergence project?

1. To provide guidance on the implementation of IFRS
2. To work with the FASB to reduce differences between IFRS and GAAP
3. To develop its own set of accounting standards
4. To enforce accounting standards globally

3. What is the role of the FASB in the convergence project?

1. To provide guidance on the implementation of GAAP
2. To work with the IASB to reduce differences between IFRS and GAAP
3. To develop its own set of accounting standards
4. To enforce accounting standards in the US

4. What is the impact of IFRS adoption on companies?

1. Decreased investor confidence
2. Increased comparability of financial statements across borders
3. Increased complexity and costs of financial reporting
4. Improved financial performance

5. What is the impact of IFRS adoption on investors?

1. Increased risk of investment losses
2. Improved comparability of financial statements across companies
3. Increased complexity in understanding financial statements
4. Decreased investment opportunities

6. What is the role of the Securities and Exchange Board of India (SEBI) in relation to accounting standards in India?

1. All of the above
2. To enforce accounting standards in India
3. To issue accounting standards in India
4. To provide guidance on the implementation of accounting standards in India

7. What is the Ind AS?

1. Indian Accounting Standards based on US GAAP
2. Indian Accounting Standards
3. International Accounting Standards
4. Indian Accounting Standards based on IFRS

8. How do Ind AS relate to IFRS?

1. Ind AS are based on US GAAP
2. Ind AS are based on IFRS with some modifications to accommodate the Indian context
3. Ind AS are identical to IFRS
4. Ind AS are completely different from IFRS

9. What is the objective of Ind AS?

1. All of the above
2. To improve the quality and comparability of financial reporting in India
3. To harmonize Indian accounting standards with international standards
4. To facilitate cross-border capital flows

10. What is the impact of Ind AS adoption on Indian companies?

1. All of the above
2. Increased comparability with global companies
3. Increased complexity and costs of financial reporting
4. Improved access to international capital markets

11. What is the importance of accounting standards for investors?

1. All of the above
2. Accounting standards help investors make informed investment decisions
3. Accounting standards ensure that financial statements are reliable and comparable
4. Accounting standards reduce the risk of fraud

12. What does GAAP stand for?

1. Global Accounting and Auditing Principles
2. Generally Accepted Accounting Principles
3. Global Accounting and Auditing Practices
4. General Auditing and Assurance Principles

13. What is the importance of accounting standards for creditors?

1. All of the above
2. Accounting standards help creditors assess the creditworthiness of borrowers
3. Accounting standards ensure that financial statements are reliable and comparable
4. Accounting standards reduce the risk of default

14. What is the importance of accounting standards for regulators?

1. All of the above
2. Accounting standards help regulators monitor the financial health of companies
3. Accounting standards help regulators enforce laws and regulations
4. Accounting standards help regulators protect investors

15. What are the key principles of IFRS?

1. Historical cost, fair value, prudence, consistency
2. Accrual basis accounting, going concern, consistency, materiality
3. Historical cost, fair value, prudence, going concern
4. Accrual basis accounting, going concern, materiality, reliability