SSC CGL Finance – Accounting Concepts, Conventions & GAAP – Level 3 · Challenge

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SSC CGL Finance – Accounting Concepts, Conventions & GAAP – Level 3 · Challenge – 8 questions, subject: Finance & Economics (Tier II Paper III). Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
Statement-based
I. NFRA was constituted under section 132 of the Companies Act, 2013.
II. Accounting standards for companies are prescribed by the Central Government under section 133.
III. The Companies (Indian Accounting Standards) Rules were notified in 2021.

Correct Answer: A [I and II only]

Explanation:

Ind AS Rules were notified in 2015 (16.02.2015); the 2021 Rules are for AS.

2.  
Cash profit ₹ 2,40,000. Income receivable: ₹ 8,000 (opening), ₹ 14,000 (closing). Outstanding expenses: ₹ 10,000 → ₹ 6,000. Prepaid expenses: ₹ 3,000 → ₹ 2,000. Income received in advance: ₹ 5,000 → nil. Accrual profit is:

Correct Answer: D [₹ 2,54,000]

Explanation:

2,40,000 + 6,000 + 4,000 − 1,000 + 5,000 = 2,54,000.

3.  
Debtors ₹ 1,80,000; further bad debts ₹ 4,000; provision to be 5%; old provision ₹ 15,000. The effect on the Profit and Loss Account is:

Correct Answer: A [₹ 2,200 credited]

Explanation:

4,000 + 8,800 − 15,000 = −2,200 → excess provision written back (credit).

4.  
Profit under the old stock method is ₹ 2,50,000. A new method values closing stock at ₹ 3,62,000 instead of ₹ 3,80,000 (opening stock unchanged). Profit under the new method is:

Correct Answer: C [₹ 2,32,000]

Explanation:

Closing stock lower by 18,000 → profit lower by 18,000; disclose the change.

5.  
Which pair is correctly matched?

Correct Answer: B [Matching – outstanding rent charged this year]

Explanation:

Lower of cost and NRV is conservatism; same method is consistency; revenue on delivery is revenue recognition.

6.  
As per AS 2, which of the following is excluded from the cost of inventories?

Correct Answer: D [Selling and distribution costs]

Explanation:

AS 2 para 13 excludes selling costs, abnormal wastage, most storage and unrelated administrative overheads.

7.  
A van bought on hire purchase is shown as the buyer's asset before the last instalment is paid. This follows:

Correct Answer: B [Substance over form]

Explanation:

Economic reality (use and risks) over legal title.

8.  
Data tableStock (cost / NRV in ₹): P 22,000 / 19,000; Q 16,000 / 18,000; R 9,000 / 8,200; S 13,000 / 13,500. By how much must the stock be written down below cost?

Correct Answer: A [₹ 3,800]

Explanation:

Item-wise value 56,200 vs cost 60,000 → write-down 3,800.

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Finance & Economics (Tier II Paper III) book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-finance-economics

📘 SSC CGL 2026 – General Studies – Finance & Economics (Tier II Paper III)
Here you get the answer with a one-line explanation. 1,064 original questions with worked answers · Part A Finance & Accounts and Part B Economics & Governance notes · practice sets + 3 mock tests
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