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CA Inter AS 4 Contingencies and Events Occurring After the Balance Sheet Date — practice questions — page 2

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 31–37 of 37.

A contingent liability is matched by a claim on a third party. The provision considers what?Read the answer and worked solution →Which events are covered as events after the balance sheet date?Read the answer and worked solution →A post-year-end event gives further evidence of year-end conditions. What usually follows?Read the answer and worked solution →An event unrelated to conditions at the balance sheet date generally leads to what?Read the answer and worked solution →Besides its nature, what must be given about a post-year-end event reported by the approving authority?Read the answer and worked solution →Which accounting principle supports providing for a likely contingent loss?Read the answer and worked solution →Contingencies in AS 4 are restricted to conditions existing at which date?Read the answer and worked solution →

Worked practice questions

A contingent liability is matched by a claim on a third party. The provision considers what?

  1. Market interest rates
  2. Dividend payout policy
  3. Probable recovery
  4. Securities premium
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Correct answer: C. Probable recovery

The provision is set after taking into account the probable recovery if its collectability is not significantly uncertain.

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Which events are covered as events after the balance sheet date?

  1. Only unfavourable events
  2. Favourable and unfavourable
  3. Only favourable events
  4. Only statutory events
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Correct answer: B. Favourable and unfavourable

The definition covers significant events of both favourable and unfavourable kinds occurring in the window.

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A post-year-end event gives further evidence of year-end conditions. What usually follows?

  1. Adjustment of amounts
  2. Mere oral mention
  3. Deferral to next year
  4. Waiver of audit
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Correct answer: A. Adjustment of amounts

Events that add evidence on conditions existing at year-end call for adjusting assets and liabilities.

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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