Correct Answer:
C. The carrying amount of an asset exceeds its recoverable amount
Impairment is the write-down of an asset to its recoverable amount.
November 13, 2026 · Accounting and Finance MCQs, Financial Accounting MCQs
An impairment loss arises when:
Related MCQs
A machine costing Rs. 200,000 is depreciated at 20% on the reducing balance method. Depreciation for the first year is:
A.
Rs. 20,000
B.
Rs. 40,000
C.
Rs. 160,000
D.
Rs. 4,000
Correct answer is:
B. Rs. 40,000
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A mixed (semi-variable) cost is a cost that:
A.
Contains both fixed and variable components
B.
Is completely fixed
C.
Is completely variable
D.
Is never related to activity
Correct answer is:
A. Contains both fixed and variable components
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Accounts receivable are Rs. 100,000 and annual credit sales are Rs. 730,000. Average collection period (365-day year) is:
A.
73 days
B.
50 days
C.
30 days
D.
7.3 days
Correct answer is:
B. 50 days
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In public sector internal control, the main purpose of segregation of duties is to:
A.
Increase the number of staff only
B.
Reduce the risk of error, fraud and misappropriation by dividing incompatible functions
C.
Avoid the need for budgets
D.
Speed up audits
Correct answer is:
B. Reduce the risk of error, fraud and misappropriation by dividing incompatible functions
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A qualified audit certificate on government accounts may be given when:
A.
The accounts are perfect
B.
The auditor finds material errors or is unable to obtain sufficient evidence on specific items
C.
The department refuses to pay audit fees
D.
The budget is surplus
Correct answer is:
B. The auditor finds material errors or is unable to obtain sufficient evidence on specific items
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Actual hours are 90, standard hours allowed are 100 and the standard rate is Rs. 20. The labor efficiency variance is:
A.
Rs. 200 favorable
B.
Rs. 200 adverse
C.
Rs. 1,800 favorable
D.
Rs. 2,000 adverse
Correct answer is:
A. Rs. 200 favorable
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