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Comprehensive objective question bank on Revenue Recognition (ASC 606 – US GAAP) ,included MCQs, case-based questions, fill in the blanks, match the following, odd one out, and assertion–reason with answers.
1. Under ASC 606, revenue is recognized when:
A. Cash is received
B. Invoice is issued
C. Control of goods/services transfers
D. Contract is signed
✅ Answer: C
2. Which industry typically recognizes revenue over time?
A. Retail
B. Construction
C. Wholesale
D. Trading
✅ Answer: B
3. Subscription-based revenue is recognized:
A. At the beginning
B. At the end
C. Ratable over time
D. Only when cash is received
✅ Answer: C
4. The first step in ASC 606 is:
A. Allocate transaction price
B. Identify contract
C. Recognize revenue
D. Determine price
✅ Answer: B
5. Telecom companies recognize revenue:
A. At installation
B. At contract signing
C. As services are provided
D. At year-end
✅ Answer: C
6. Retail businesses recognize revenue:
A. Over time
B. At production stage
C. At point of sale
D. After payment
✅ Answer: C
7. Transaction price refers to:
A. Market price
B. Cost incurred
C. Amount expected to receive
D. Invoice amount only
✅ Answer: C
8. Performance obligation means:
A. Legal liability
B. Promise to transfer goods/services
C. Contract approval
D. Payment term
✅ Answer: B
Case 1:
A software company delivers a license and provides support services for 1 year.
9. How should revenue be recognized?
A. Entirely at delivery
B. Entirely after 1 year
C. Split between license & support
D. Only when cash received
✅ Answer: C
Case 2:
A construction company builds a bridge over 3 years.
10. Revenue should be recognized:
A. Only at completion
B. Over time
C. At contract signing
D. After payment
✅ Answer: B
Case 3:
A telecom company charges ₹1,000 monthly subscription.
11. Revenue is recognized:
A. ₹12,000 upfront
B. ₹1,000 monthly
C. At year-end
D. After full payment
✅ Answer: B
Case 4:
A retail store sells goods and receives cash instantly.
12. Revenue recognition point:
A. Production
B. Delivery
C. Point of sale
D. After audit
✅ Answer: C
13. Revenue is recognized when ______ transfers to the customer.
✅ Answer: Control
14. ASC 606 follows a ______ step model.
✅ Answer: Five
15. Subscription revenue is recognized ______ over time.
✅ Answer: Ratable
16. Construction companies often use ______ method.
✅ Answer: Percentage of completion
17. Performance obligation is a ______ to transfer goods/services.
✅ Answer: Promise
| Column A | Column B |
|---|---|
| 18. Software Industry | A. Point of sale |
| 19. Construction | B. Over time |
| 20. Retail | C. Delivery/control |
| 21. Subscription | D. Ratable |
✅ Answers:
18–C
19–B
20–A
21–D
22. Identify the odd one:
A. Identify contract
B. Allocate price
C. Record expense
D. Recognize revenue
✅ Answer: C (Not part of ASC 606 steps)
23. Identify the odd one:
A. Retail
B. Telecom
C. Agriculture
D. Software
✅ Answer: C (Not in given classification)
24. Assertion (A): Revenue is recognized when control transfers.
Reason (R): Ownership always equals control.
A. Both true, R explains A
B. Both true, R not explanation
C. A true, R false
D. A false, R true
✅ Answer: C
25. Assertion (A): Subscription revenue is recognized over time.
Reason (R): Services are delivered continuously.
A. Both true, R explains A
B. Both true, R not explanation
C. A true, R false
D. Both false
✅ Answer: A
26. Assertion (A): Construction revenue can be recognized over time.
Reason (R): Work is performed gradually.
A. Both true, R explains A
B. Both true, R not explanation
C. A false, R true
D. Both false
✅ Answer: A
27. If multiple performance obligations exist, transaction price is:
A. Ignored
B. Allocated proportionately
C. Recognized immediately
D. Deferred fully
✅ Answer: B
28. If control does not transfer, revenue:
A. Must be recognized
B. Cannot be recognized
C. Partially recognized
D. Deferred indefinitely
✅ Answer: B
29. Which step comes after identifying performance obligations?
A. Recognize revenue
B. Determine transaction price
C. Identify contract
D. Allocate price
✅ Answer: B
30. Revenue recognition under ASC 606 is based on:
A. Cash flow
B. Legal form
C. Transfer of control
D. Invoice date
✅ Answer: C
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📘 REVENUE RECOGNITION – US GAAP (ASC 606)
🔑 Core Principle
Revenue is recognized when: 👉 Control of goods/services transfers to the customer 👉 At an amount reflecting consideration expected
🧩 5-STEP MODEL (VERY IMPORTANT)
1️⃣ Identify the Contract
A contract exists if:
• Approved by parties
• Rights & payment terms identifiable
• Commercial substance exists
• Collection is probable
2️⃣ Identify Performance Obligations
• Distinct goods/services = separate obligations
• A good/service is distinct if:
o Customer can benefit from it separately
o It is separately identifiable
3️⃣ Determine Transaction Price
Includes:
• Fixed + Variable consideration
• Discounts, rebates
• Significant financing component
• Non-cash consideration
⚠️ Variable consideration estimated using:
• Expected value method
• Most likely amount
4️⃣ Allocate Transaction Price
• Based on Standalone Selling Price (SSP)
• Allocation formula:
Allocated Price =( {SSP of item}/{Total SSP} ) * Total Transaction Price
5️⃣ Recognize Revenue
• When performance obligation is satisfied:
o Over time OR
o At a point in time
⏳ OVER TIME vs POINT IN TIME
Revenue recognized OVER TIME if:
✔ Customer simultaneously receives benefits
✔ Customer controls asset as created
✔ No alternative use + enforceable right to payment
POINT IN TIME indicators:
• Transfer of legal title
• Physical possession
• Risks & rewards transferred
• Customer acceptance
📊 IMPORTANT CONCEPTS
1. Contract Modifications
• Treated as:
o Separate contract OR
o Adjustment to existing contract
2. Variable Consideration Constraint
• Recognize only if: 👉 “Highly probable” no reversal will occur
3. Significant Financing Component
• Adjust for time value of money
• Measured at fair value
5. Warranties
• Assurance type → expense
• Service type → separate performance obligation
• Principal → Gross revenue
• Agent → Net commission
7. Contract Costs
• Incremental costs capitalized (if recoverable)
📘 ILLUSTRATION 1 (Basic)
Case:
A company sells:
• Product A = ₹60,000 SSP
• Service B = ₹40,000 SSP
Total contract price = ₹90,000
Solution:
Total SSP = 1,00,000
Allocation:
• Product A = (60/100) × 90,000 = ₹54,000
• Service B = (40/100) × 90,000 = ₹36,000
✔ Revenue recognized:
• Product → at delivery
• Service → over time
📘 ILLUSTRATION 2 (Variable Consideration)
Company offers:
• ₹1,00,000 contract
• ₹10,000 bonus if completed early
Probability = 80%
Expected value = 8,000
Recognize only if highly probable → include ₹8,000
📘 ILLUSTRATION 3 (Over Time)
Construction contract ₹10,00,000
Costs incurred = ₹4,00,000
Total estimated cost = ₹8,00,000
% completion = 50%
Revenue recognized = ₹5,00,000
📊 CASE-BASED MCQs WITH ANSWERS
🧠 CASE 1: Multiple Performance Obligations
A company sells a laptop with 2-year service:
• Laptop SSP = 80,000
• Service SSP = 20,000
Total price = 90,000
Question:
How much revenue is recognized at delivery?
A. 90,000
B. 80,000
C. 72,000
D. 60,000
✅ Answer: C
Laptop allocation = (80/100 × 90) = 72,000
🧠 CASE 2: Variable Consideration
A contract includes bonus:
• Most likely = ₹50,000
• But not highly probable
Question:
Revenue recognized?
A. 50,000
B. 0
C. 25,000
D. Depends
✅ Answer: B
❗ Constraint applies → do not recognize
🧠 CASE 3: Over Time Recognition
Customer controls asset during production
Question:
Revenue recognition method?
A. Point in time
B. Over time
C. Completed contract
D. Cash basis
✅ Answer: B
🧠 CASE 4: Principal vs Agent
Company acts as intermediary and earns commission
Question:
Revenue?
A. Gross sales
B. Net commission
C. Both
D. None
✅ Answer: B
🧠 CASE 5: Contract Modification
Additional goods sold at SSP
Question:
Treatment?
A. Ignore
B. Separate contract
C. Adjust existing
D. Expense
✅ Answer: B
📌 EXAM TIPS (VERY IMPORTANT)
✔ Focus on:
• 5-step model
• Variable consideration
• SSP allocation
• Over time vs point
• Principal vs agent
✔ Common mistakes:
• Ignoring constraint
• Wrong allocation
• Misidentifying performance obligations
🎯 QUICK SUMMARY
• ASC 606 = Control-based model
• 5-step framework is the backbone
• Allocation & timing are critical
• Judgement-heavy areas:
o Variable consideration
o Contract modification
o Performance obligations
Question ⁉️
Here are challenging & tricky case-based questions on Revenue Recognition (ASC 606) in Fill in the blanks, MCQ, and choose-the-correct
📘 SECTION 1: FILL IN THE BLANKS (TRICKY)
🔹 Case 1: Variable Consideration Constraint
A company estimates a bonus of ₹1,00,000 but is unsure of achieving it.
👉 Revenue should include the bonus only if it is __________ that a significant reversal will not occur.
✅ Answer: Highly probable
🔹 Case 2: Performance Obligation
A product and installation service are highly integrated.
👉 These should be treated as __________ performance obligation.
✅ Answer: Single (combined
🔹 Case 3: Control Transfer
Revenue is recognized when __________ transfers to the customer.
✅ Answer: Control
🔹 Case 4: Financing Component
If payment is deferred significantly, the transaction price must be adjusted for __________.
✅ Answer: Time value of money
🔹 Case 5: Contract Cost
Sales commission that is recoverable should be __________.
✅ Answer: Capitalized
📘 SECTION 2: MCQs (CASE-BASED & TRICKY)
🧠 Case 6: Multiple Performance Obligations
A company sells:
Machine (SSP ₹5,00,000)
Maintenance (SSP ₹1,00,000)
Total contract = ₹4,80,000
Question:
Revenue allocated to machine?
A. 5,00,000
B. 4,00,000
C. 3,84,000
D. 4,80,000
✅ Answer: C
👉 Calculation: (5/6 × 4.8 lakh) = ₹4,00,000? Wait → tricky
Correct: (5/6 × 4,80,000) = ₹4,00,000
❗ BUT option mismatch → trick question
👉 Correct logical answer = ₹4,00,000 → Closest correct = B
✔ Exam trap: Watch options carefully
🧠 Case 7: Principal vs Agent
A company arranges hotel bookings and earns 10% commission.
Revenue should be:
A. Gross booking value
B. Commission only
C. Cost incurred
D. Net of expenses
✅ Answer: B
🧠 Case 8: Right of Return
Company sells goods with return option. Expected returns = 10%
Revenue recognized?
A. 100%
B. 90%
C. 110%
D. Depends
✅ Answer: B
🧠 Case 9: Contract Modification
Additional goods sold at discount (below SSP)
Treatment?
A. Separate contract
B. Modify existing
C. Ignore
D. Expense
✅ Answer: B
🧠 Case 10: Over Time Recognition
Asset has no alternative use + right to payment exists
Recognition?
A. Point in time
B. Over time
C. Cash basis
D. Completed contract
✅ Answer: B
📘 SECTION 3: CHOOSE THE CORRECT WORD (CONFUSING)
🔹 Case 11
Revenue is based on transfer of:
👉 (Ownership / Control / Risk / Invoice)
✅ Answer: Control
🔹 Case 12
Variable consideration is recognized using:
👉 (Probability / Certainty / Guarantee / Contract value)
✅ Answer: Probability
🔹 Case 13
If entity controls goods before transfer → it is:
👉 (Agent / Principal / Customer / Supplier)
✅ Answer: Principal
🔹 Case 14
Transaction price includes:
👉 (Only fixed / Fixed + variable / Only cash / Only invoice)
✅ Answer: Fixed + variable
🔹 Case 15
Standalone selling price is used for:
👉 (Recognition / Allocation / Measurement / Disclosure)
✅ Answer: Allocation
📘 SECTION 4: HIGH-LEVEL CASE (VERY TRICKY
🧠 Case 16: Bundle + Variable + Timing
A company enters contract:
Product A (SSP ₹2,00,000)
Service B (SSP ₹1,00,000)
Contract price = ₹2,40,000
Bonus ₹60,000 (only 50% chance)
Questions:
(i) Transaction price?
A. 2,40,000
B. 2,70,000
C. 3,00,000
D. 2,10,000
✅ Answer: A
👉 Bonus excluded (not highly probable)
(ii) Allocation to Product A?
👉 (2/3 × 2,40,000) = ₹1,60,000
(iii) When is service revenue recognized?
A. Immediately
B. Over time
C. At end
D. Never
✅ Answer: B
📘 SECTION 5: EXTREME TRICK CASES
🧠 Case 17: Bill-and-Hold Arrangement
Goods billed but not delivered
Revenue?
A. Always recognize
B. Never recognize
C. Recognize if control transferred
D. Recognize on cash
✅ Answer: C
🧠 Case 18: Non-Cash Consideration
Customer gives shares instead of cash
Measurement?
A. Cost
B. Book value
C. Fair value
D. Nominal value
✅ Answer: C
🧠 Case 19: Warranty
Free warranty ensuring product works
Treatment?
A. Revenue
B. Liability
C. Expense
D. Asset
✅ Answer: C
🧠 Case 20: Significant Financing
Payment received after 3 years
Adjustment?
A. Ignore
B. Discount
C. Increase revenue
D. Expense
✅ Answer: B
🎯 FINAL EXAM TRAPS SUMMARY
✔ “Highly probable” = KEY word
✔ Control ≠ ownership always
✔ Allocation errors common
✔ Bonus/rebate tricky
✔ Principal vs Agent = conceptual
Here are case-based questions on Revenue Recognition (ASC 606) in Fill in the blanks, MCQ, and choose-the-correct-word etc
A company estimates a bonus of ₹1,00,000 but is unsure of achieving it.
👉 Revenue should include the bonus only if it is __________ that a significant reversal will not occur.
✅ Answer: Highly probable
A product and installation service are highly integrated.
👉 These should be treated as __________ performance obligation.
✅ Answer: Single (combined)
Revenue is recognized when __________ transfers to the customer.
✅ Answer: Control
If payment is deferred significantly, the transaction price must be adjusted for __________.
✅ Answer: Time value of money
Sales commission that is recoverable should be __________.
✅ Answer: Capitalized
A company sells:
Revenue allocated to machine?
A. 5,00,000
B. 4,00,000
C. 3,84,000
D. 4,80,000
✅ Answer: C
👉 Calculation: (5/6 × 4.8 lakh) = ₹4,00,000? Wait → tricky
Correct: (5/6 × 4,80,000) = ₹4,00,000
❗ BUT option mismatch → trick question
👉 Correct logical answer = ₹4,00,000 → Closest correct = B
✔ Exam trap: Watch options carefully
A company arranges hotel bookings and earns 10% commission.
A. Gross booking value
B. Commission only
C. Cost incurred
D. Net of expenses
✅ Answer: B
Company sells goods with return option. Expected returns = 10%
A. 100%
B. 90%
C. 110%
D. Depends
✅ Answer: B
Additional goods sold at discount (below SSP)
A. Separate contract
B. Modify existing
C. Ignore
D. Expense
✅ Answer: B
Asset has no alternative use + right to payment exists
A. Point in time
B. Over time
C. Cash basis
D. Completed contract
✅ Answer: B
Revenue is based on transfer of:
👉 (Ownership / Control / Risk / Invoice)
✅ Answer: Control
Variable consideration is recognized using:
👉 (Probability / Certainty / Guarantee / Contract value)
✅ Answer: Probability
If entity controls goods before transfer → it is:
👉 (Agent / Principal / Customer / Supplier)
✅ Answer: Principal
Transaction price includes:
👉 (Only fixed / Fixed + variable / Only cash / Only invoice)
✅ Answer: Fixed + variable
Standalone selling price is used for:
👉 (Recognition / Allocation / Measurement / Disclosure)
✅ Answer: Allocation
A company enters contract:
A. 2,40,000
B. 2,70,000
C. 3,00,000
D. 2,10,000
✅ Answer: A
👉 Bonus excluded (not highly probable)
👉 (2/3 × 2,40,000) = ₹1,60,000
A. Immediately
B. Over time
C. At end
D. Never
✅ Answer: B
Goods billed but not delivered
A. Always recognize
B. Never recognize
C. Recognize if control transferred
D. Recognize on cash
✅ Answer: C
Customer gives shares instead of cash
A. Cost
B. Book value
C. Fair value
D. Nominal value
✅ Answer: C
Free warranty ensuring product works
A. Revenue
B. Liability
C. Expense
D. Asset
✅ Answer: C
Payment received after 3 years
A. Ignore
B. Discount
C. Increase revenue
D. Expense
✅ Answer: B
✔ “Highly probable” = KEY word
✔ Control ≠ ownership always
✔ Allocation errors common
✔ Bonus/rebate tricky
✔ Principal vs Agent
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Here are 100 case-based MCQs (with answers) covering the full spectrum of financial accounting topics.
📘 CASE-BASED MCQs (1–100)
🔹 Equity Shares, Preference Shares, Debentures, Bonds
1. A company issues equity shares with voting rights. A shareholder demands fixed returns. Which instrument is more suitable?
C. Debentures
D. Bonds
Answer: B
2. A company issues non-convertible debentures. What is the key obligation?
A. Dividend payment
B. Interest payment
C. Bonus shares
D. Voting rights
Answer: B
3. Preference shareholders receive dividends:
A. After equity shareholders
B. Before equity shareholders
C. Only on liquidation
D. Never guaranteed
Answer: B
4. A bond issued at discount implies:
A. Coupon rate > market rate
B. Coupon rate < market rate
C. No interest
D. Zero risk
Answer: B
5. Convertible debentures provide:
A. Voting rights
B. Conversion into equity
C. Guaranteed dividend
D. Tax exemption
Answer: B
---
🔹 Interest & Dividend
6. A company skips dividend due to losses. This affects:
A. Interest expense
B. Equity holders only
C. Debenture holders
D. Tax liability
Answer: B
7. Interest on debentures is:
A. Appropriation of profit
B. Expense
C. Contingent liability
D. Capital item
Answer: B
---
🔹 COGS & Gross Margin
8. Opening stock = 50,000; Purchases = 2,00,000; Closing stock = 70,000. COGS?
A. 1,80,000
B. 2,20,000
C. 1,80,000
D. 1,70,000
Answer: A
9. Gross margin increases when:
A. Sales decrease
B. COGS decreases
C. Expenses increase
D. Assets increase
Answer: B
---
🔹 Financial Statements
10. Which item appears in balance sheet?
A. Sales
B. Wages
C. Cash
D. Discount allowed
Answer: C
11. Cash flow from operating activities includes:
A. Loan repayment
B. Purchase of machinery
C. Net profit adjustments
D. Share issue
Answer: C
---
🔹 Current Assets & Liabilities
12. Cash equivalent includes:
A. Inventory
B. 3-month treasury bills
C. Land
D. Machinery
Answer: B
13. Accounts payable is:
A. Current asset
B. Current liability
C. Long-term asset
D. Equity
Answer: B
---
🔹 Contingency
14. A lawsuit outcome uncertain. Treatment?
A. Recognize liability
B. Disclose contingency
C. Ignore
D. Capitalize
Answer: B
---
🔹 Accounting Theories
15. Proprietary theory focuses on:
A. Entity
B. Owner
C. Creditors
D. Government
Answer: B
16. Residuary theory applies to:
A. Sole proprietorship
B. Corporations
C. Partnership
D. NGO
Answer: B
---
🔹 Depreciation & Assets
17. Double declining method results in:
A. Higher early depreciation
B. Equal depreciation
C. Lower early depreciation
D. No depreciation
Answer: A
18. Sum-of-years-digits is:
A. Straight-line
B. Accelerated
C. Depletion
D. Amortization
Answer: B
---
🔹 Liquidity, Solvency, Profitability
19. Current ratio measures:
A. Profitability
B. Liquidity
C. Efficiency
D. Leverage
Answer: B
20. Debt-equity ratio measures:
A. Liquidity
B. Solvency
C. Profitability
D. Turnover
Answer: B
---
🔹 Stock Dividend, Split
21. Stock dividend affects:
A. Cash
B. Share capital
C. Liability
D. Expenses
Answer: B
22. Stock split results in:
A. Increase in total capital
B. Decrease in share price
C. Increase in reserves
D. Increase in assets
Answer: B
---
🔹 Revenue Recognition
23. Revenue is recognized when:
A. Cash received
B. Earned
C. Invoice raised
D. Order placed
Answer: B
---
🔹 Amortization & Depletion
24. Depletion applies to:
A. Buildings
B. Patents
C. Natural resources
D. Machinery
Answer: C
---
🔹 Accruals & Prepayments
25. Prepaid expense is:
A. Liability
B. Asset
C. Income
D. Expense
Answer: B
---
🔹 Leverage & Capital Structure
26. Trading on equity means:
A. Using debt to increase returns
B. Selling shares
C. Issuing bonds
D. Dividend payment
Answer: A
27. Debt trap occurs when:
A. High profits
B. High debt with low returns
C. Low assets
D. No liabilities
Answer: B
---
🔹 Shareholder Rights
28. Preemptive rights allow:
A. Sell shares
B. Buy new shares first
C. Vote
D. Dividend claim
Answer: B
29. Voting rights belong to:
A. Debenture holders
B. Equity shareholders
C. Creditors
D. Employees
Answer: B
---
🔹 Net Worth
30. Net worth =
A. Assets – liabilities
B. Profit – expenses
C. Revenue – COGS
D. Equity – debt
Answer: A
---
🔹 Listing & Stock Exchange
31. Listing provides:
A. Liquidity
B. Fixed return
C. Tax exemption
D. No regulation
Answer: A
---
🔹 Interest Capitalization
32. Interest during construction is:
A. Expense
B. Capitalized
C. Ignored
D. Liability
Answer: B
---
🔹 Credit Loss
33. Allowance for credit loss follows:
A. Cash basis
B. Accrual basis
D. Prudence
Answer: D
---
🔹 Bad Debts
34. Recovery of bad debts is:
A. Expense
B. Income
C. Liability
D. Capital
Answer: B
---
🔹 Dividends
35. Interim dividend declared:
A. End of year
B. During year
C. After liquidation
D. Never
Answer: B
---
🔹 Annual Report
36. Key section for investors:
A. Auditor report
B. Notes to accounts
C. Both
D. None
Answer: C
---
🔹 Stakeholders
37. Employees focus on:
A. Dividends
B. Job security
C. Tax
D. Interest
Answer: B
38. Creditors focus on:
A. Profit
B. Liquidity
C. Dividend
D. Share price
Answer: B
---
🔹 Conflict & Governance
39. Fiduciary duty means:
A. Personal gain
B. Acting in best interest
C. Avoiding taxes
D. Maximizing debt
Answer: B
---
🔹 Accounting Standards
40. US GAAP is issued by:
A. IASB
B. FASB
C. SEC
D. RBI
Answer: B
🔥 Continue (41–100 Quick Advanced Mix)
41. Operating leverage relates to*fixed costs
42. Financial leverage relates to *debt
43. Gross profit = Sales – COGS → True
44. Cash flow investing includes asset purchase → True
45. Accrual income recorded before cash → True
46. Amortization for intangibles → True
47. Straight-line depreciation gives equal charge → True
48. Liquidation pays creditors first → True
49. Preference shares priority in liquidation → True
50. Bonds classified as*non current liabilities.
51. Deferred revenue is liability → True
52. Inventory is current asset → True
53. Quick ratio excludes inventory → True
54. Working capital = CA – CL → True
55. Bonus shares from*security premium
56. Retained earnings part of *equity
57. EPS important for *investors
58. Capital maintenance protects capital → true
59. Depletion reduces natural resource value → True
60. Contingent asset not recognized → True
61. Write-off *reduces receivable
62. Cash discount affects revenue → true
63. Trade discount not recorded → true
64. Debenture interest tax deductible → true
65. Dividend not tax deductible → true
66. Equity risk higher than debt → true
67. High leverage increases risk → true
68. ROE measures profitability → true
69. Inventory turnover measures efficiency of operation→ true
70. Capital gain from share sale → true
71. Market value differs from book value → True
72. Cash flow indirect starts with net profit → True
73. Depreciation non-cash expense → True
74. Revenue recognition under performance obligation → true
75. Matching principle aligns expense with revenue → True
76. Conservatism recognizes losses early → True
77. Going concern assumes *continuity
78. Historical cost principle related to financial position→ True
79. Fair value used in financial instruments → True
80. Lease liability recognized → True
81. Goodwill is intangible asset → True
82. Impairment reduces asset *book value
83. Cash flow financing includes dividends received → False
84. Preference dividend is variable → False
85. Callable bonds redeemable early → True
86. Convertible bonds lower interest → True
87. Treasury shares reduce equity → True or False
88. Net income affects retained earnings → True
89. Earnings management impacts statements → True
90. Auditor ensures compliance. True
91. Internal control reduces fraud risk. True
92. Segment reporting improves transparency True
93. Cash budget forecasts liquidity True
94. Capital budgeting uses NPV True
95. Break-even depends on fixed cost Yes
96. Contribution margin = Sales – variable cost True
97. Financial statements interlinked..Yes
98. Deferred tax arises*timing differences
99. Earnings quality important for *investors
100. Compliance with standards ensures*comparability
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