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CA Inter AS 4 Contingencies and Events Occurring After the Balance Sheet Date — practice questions

Explore 37 free AS 4 Contingencies and Events Occurring After the Balance Sheet Date questions in CA Inter Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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AS 4 Contingencies and Events Occurring After the Balance Sheet Date questions and exercises with answers

Showing questions 1–30 of 37.

A plant worth Rs 5,00,000 burns down after the year end. Year-end balance sheet value?Read the answer and worked solution →How many conditions must be met before IAS 37 allows a provision to be recognised?Read the answer and worked solution →IAS 37 defines a provision as a liability of what nature?Read the answer and worked solution →IAS 10 was retitled in 2007. Its current title isRead the answer and worked solution →IAS 10: dividends declared after the period areRead the answer and worked solution →Under IAS 10, a post-period decline in the market value of investments is typically which event?Read the answer and worked solution →Which is a typical example of a contingent liability?Read the answer and worked solution →Which is listed as a contingent liability example?Read the answer and worked solution →Which term describes a situation whose gain or loss depends on uncertain future events?Read the answer and worked solution →For a company, the post balance sheet event window ends on which date?Read the answer and worked solution →A customer is declared insolvent after year-end, confirming a loss on his dues. What is the treatment?Read the answer and worked solution →A dividend declared after year-end is shown as a year-end liability only if what holds?Read the answer and worked solution →How should a dividend declared after the balance sheet date normally be treated?Read the answer and worked solution →Why are contingent gains kept out of the accounts?Read the answer and worked solution →A gain ceases to be a contingency when its realisation is what?Read the answer and worked solution →A contingent loss is charged to profit and loss when it is probable and what else?Read the answer and worked solution →A loss is probable but its amount cannot be reasonably estimated. What is done?Read the answer and worked solution →Which kind of contingent loss normally needs no disclosure?Read the answer and worked solution →Guarantees given by an enterprise are generally disclosed even if loss is what?Read the answer and worked solution →Which obligation is generally disclosed even when loss is remote?Read the answer and worked solution →No provision for contingencies is made for which kind of risk?Read the answer and worked solution →Despite using estimated useful life, depreciation is not a contingency because what?Read the answer and worked solution →An estimated amount owed for services already received is classed as what?Read the answer and worked solution →The uncollectable portion of receivables is estimated on which basis?Read the answer and worked solution →Provision for product warranty costs is recognised in which period?Read the answer and worked solution →Where can a major later event with no amount change be reported?Read the answer and worked solution →Fire destroys a major plant after year-end. Which assumption must be reconsidered?Read the answer and worked solution →Disclosure rules in AS 4 apply only if a contingency affects financial position to what extent?Read the answer and worked solution →Which item must be given when disclosing a contingency?Read the answer and worked solution →Liabilities on policies issued by which enterprises are excluded from AS 4?Read the answer and worked solution →

Worked practice questions

A plant worth Rs 5,00,000 burns down after the year end. Year-end balance sheet value?

  1. Rs 10,00,000
  2. Rs 5,00,000
  3. Rs 1,00,000
  4. Rs 2,50,000
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Correct answer: B. Rs 5,00,000

The fire arose after the year end, so it is a non-adjusting event and the year-end carrying amount stays Rs 5,00,000 with disclosure.

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How many conditions must be met before IAS 37 allows a provision to be recognised?

  1. Five
  2. Three
  3. Two
  4. Four
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Correct answer: B. Three

IAS 37 needs a present liability from a past event, a likely outflow, and a reliable estimate, which makes three conditions.

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IAS 37 defines a provision as a liability of what nature?

  1. Uncertain timing or amount
  2. Fixed timing, unknown payee
  3. Certain timing and amount
  4. Unknown legal existence
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Correct answer: A. Uncertain timing or amount

A provision is a liability of uncertain timing or amount, unlike a trade payable which is certain.

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More Accounting topics

AS 3 Cash Flow StatementSchedule III Division I Financial StatementsAS 19 LeasesValuation of Inventories (AS 2)AS 22 Taxes on IncomeAS 28 Impairment of AssetsProperty, Plant and EquipmentAS 17 Segment Reporting