Standards, Mechanism and Bases of Accounting

Accounting standards are:

• Customized accounting rules for individual companies.

• Guidelines for maintaining financial records.

• Uniform accounting rules issued by the accounting body of the country.

• Legal provisions that override international accounting standards.

Accounting standards issued by the Institute of Chartered Accountants of India (ICAI) are applicable to:

• Only public sector undertakings.

• All companies registered in India.

• Multinational corporations operating in India.

• All entities preparing financial statements.

The main function of the Accounting Standards Board (ASB) is to:

• Develop draft standards without external input.

• Override the provisions of applicable laws.

• Identify areas where uniformity in accounting standards is needed.

• Implement international accounting standards in India.

The ASB considers which of the following while developing accounting standards?

• International accounting standards only.

• Government regulations and laws.

• Input from industry representatives and other organizations.

• Customary accounting practices in India.

The accounting standards developed by the ASB are finalized and notified for use by:

• The Indian government.

• The International Accounting Standards Board.

• The council of the ICAI.

• The Accounting Standards Board.

Which accounting system records both debit and credit aspects of transactions?

• Single Entry System.

• Cash Basis of Accounting.

• Accrual Basis of Accounting.

• Double Entry System.

The Double Entry System of accounting was developed by:

• Institute of Chartered Accountants of India.

• Indian Accounting Standards Board.

• Luca Pacioli.

• International Accounting Standards Board.

The Single Entry System of accounting is commonly used by:

• Large organizations with complex transactions.

• Multinational corporations.

• Small business firms.

• Government entities.

Under the cash basis of accounting, revenue is recognized:

• When cash is received.

• When sales take place.

• When expenses are paid.

• When receipts or payments become due.

The accrual basis of accounting is based on the principles of:

• Cash flow management.

• Realization and matching.

• Debt and credit.

• Single-entry system.