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Paper 1 accounting chapter 1 accounting standards

ca foundation notes of AS

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ca foundation

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University

Institute of Chartered Accountants of India

Academic year: 2023/2024

Listed booksAccounting for Non-Accounting Students Business Economics Business Law Reading Materials for Legal Environment and Commercial Laws Eckart's Notes Economics

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Poorvaa Kumpawat

Institute of Chartered Accountants of India

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Paper 1 accounting chapter 1 accounting standards

Accounting standards for non corporate entities in india are issued by

Central government

State government

Institute of chartered accountants

Ans : institute of chartered accountants

2 accounting standards

A: harmonise accounting policies and eliminate the non comparability of financial statements

Improve the reliability of financial statements

Both A and B

Ans : both A and B

3 it is essential to standadise the accounting principles and policies in order to ensure

Transparency

Consistency

Both A and B

Ans : both A and B

4 which company is responsible for approval of accounting standards and their modification for the purpose of applicability to companies

A) NFRA B) MCA C) Central government advisory committee

ANS : ministery of corporate affairs

Global standards facilitate cross border flow of money comparability of financial statements

Additional guidance given in ind AS over and above what is given in IFRS are called

Carve outs

Carve ins

Carve clarifications

Ans : b) carve ins

IASB stands for

a) International accounting standards beaurau

b) International advisory standards board c) International accounting standard board Ans: international accounting standard board IFRS stands for International financial reporting system International finance reporting board international financial reporting standard ans : international financial reporting standards 9 phase 1 of AS was applicable to a) All listed companies in india or outside india b) Companies with turnover INR 500 crores or more c) Companies with net worth INR 500 crores or more Ans :Companies with net worth INR 500 crores or more Long answer questions 1 explain the objective of accounting standards in brief state the advantages of setting accounting standards Ans accounting standards are written policy documents issued by government relating to various aspects of measurement treatement presentation and disclosure of accounting transactions and events accounting standards facilitate the preparation of financial statements of different and make them comparable accounting standards give a sense of faith and reliability to the users The advantages of setting accounting standards Accounting standards makes the financial statements of different companies comparable which helps investors in decision making Accounting standards prevent any misleading accounting standards Accounting standards prevent manipulation of data by the management 2 breifly explain the process of issuance of Indian accounting standards Due to recent stream of overseas acquisitions by Indian companies there is a need for adoption of high quality standards to convince foreign enterprises about financial standing as also the disclosure and governance standards of Indian aquirers The government of india in consultation with ICAI decided to converge and not to adopt IFRS issued by the IASBthe decision of convergence rather than adoption was tqaken after the detailed analysis of IFRS requirements and extensive discussion with various stakeholders the ICAI has worked towards convergence of global accounting standards by considering the application of IFRS in Indian corporate environment recognizing the growing need for full convergence of ind AS IFRS ICAI and in consultation with NFRA. NFRA recommends this standards to the ministery of corporate affairs and ministery of corporate affairs has to spell out the accounting standards applicable for companies in india 3 explain the significance of emergence of IFRS as global standards Global standards facilitate cross border flow of money global listing in different bourses and comparability of financial statements global standards improve the ability of investors to compare investments on a global basis and thus lowers the risk of errors of judgement it facilitates accounting and reporting for companies with global operations and eliminates some costly requirements say reinstatement of financial statements

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