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CA Inter AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies — practice questions

Explore 55 free AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies questions in CA Inter Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies questions and exercises with answers

Showing questions 1–30 of 55.

Prior period items under AS 5 arise from what?Read the answer and worked solution →Which description fits an extraordinary item in AS 5?Read the answer and worked solution →How often are extraordinary items expected to recur?Read the answer and worked solution →AS 5 judges whether an event is extraordinary mainly by itsRead the answer and worked solution →For which enterprise are earthquake claims NOT extraordinary?Read the answer and worked solution →Which is given as an extraordinary item for most enterprises?Read the answer and worked solution →Where are extraordinary items shown in the statement of profit and loss?Read the answer and worked solution →What must be separately disclosed for each extraordinary item?Read the answer and worked solution →Since most income and expense arises in ordinary activities, extraordinary items occurRead the answer and worked solution →Under AS 5, ordinary activities are those undertakenRead the answer and worked solution →Disclosures under AS 5 are made in addition to those required byRead the answer and worked solution →AS 5 prescribes classification and disclosure of items in which statement?Read the answer and worked solution →Unless a standard permits otherwise, income and expense recognised in a period go intoRead the answer and worked solution →Ordinary-activity items of unusual size or nature should beRead the answer and worked solution →Writing inventories down to net realisable value is treated by AS 5 asRead the answer and worked solution →Reversal of provisions for restructuring costs is an item forRead the answer and worked solution →Arrears paid to workers due to wages revised retrospectively this year areRead the answer and worked solution →Which is a cause of prior period errors listed in AS 5?Read the answer and worked solution →Mathematical mistakes in earlier year accounts, found now, give rise toRead the answer and worked solution →How are prior period items shown in the profit statement?Read the answer and worked solution →An alternative way to present prior period items is to show themRead the answer and worked solution →Income recognised on a contingency earlier not estimable isRead the answer and worked solution →Which is cited by AS 5 as needing estimation?Read the answer and worked solution →Compared with estimate changes, prior period items are generallyRead the answer and worked solution →If a change cannot be told apart as policy or estimate, it is treated asRead the answer and worked solution →A revised useful life of an asset affects depreciation inRead the answer and worked solution →The effect of an estimate change is classified in profit statementRead the answer and worked solution →A change in an estimate once treated as extraordinary is reported asRead the answer and worked solution →When must a change in accounting estimate be disclosed?Read the answer and worked solution →If a material estimate change cannot be quantified, the enterprise shouldRead the answer and worked solution →

Worked practice questions

Prior period items under AS 5 arise from what?

  1. Errors in earlier statements
  2. Changes in estimates made
  3. Changes in policy adopted
  4. Events outside normal trade
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Correct answer: A. Errors in earlier statements

They are income or expenses appearing now because earlier financial statements contained errors or omissions.

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Which description fits an extraordinary item in AS 5?

  1. Part of routine operations
  2. Distinct from usual business
  3. Caused by an accounting error
  4. Resulting from a policy change
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Correct answer: B. Distinct from usual business

Extraordinary items come from events clearly distinct from the enterprise's ordinary activities.

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How often are extraordinary items expected to recur?

  1. Every accounting year
  2. Frequent and regular basis
  3. Rarely, not regularly
  4. At every quarter end
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Correct answer: C. Rarely, not regularly

By definition they are not expected to recur frequently or regularly.

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