DK Goel Solutions Chapter 5 Accounting Standards and IFRS

Read below DK Goel Solutions Class 11 Chapter 5 Accounting Standards and International Financial Reporting Standards (IFRS). These solutions have been prepared based on the best book and the latest DK Goel Accountancy book for Class 11 issued for this academic year.

DK Goel Solutions Class 11 Chapter 5 gives a brief about Accounting Standards its meaning, advantages, disadvantages, and objectives, International Financial Reporting Standards (IFRS) – all rules and regulations required for a company to draft the financial statements.

The chapter also includes good amount of questions which are very well developed and are very helpful to understand the concepts for Class 11 Students of Accountancy. These solutions are free and will help you to prepare for Class 11 Accountancy.

Accounting Standards and IFRS DK Goel Class 11 Accountancy Solutions

Students can refer below for solutions for all questions given in your DK Goel Accountancy Textbook for Class 11 in Chapter 5

Question 1: Define accounting standard.

Solution 1: Accounting standards are written policy documents covering the aspects of recognition, measurement, treatment, presentation and disclosure of accounting transactions in financial statements.

Question 2: Give two points regarding the nature of accounting standards.

Solution 2: Below are the two nature of accounting standards:-

(i) Accounting rules, accounting principles, accounting concepts and guidelines of the process of recording transaction all are tell by accounting standards.

(ii) From accounting standards we can easily understand financial statements.

Question 3: Give two advantages of accounting standards.

Solution 3: The two advantages of accounting standards are:-

(i) Accounting standard help in eliminating variations in accounting treatment to prepare financial statements.

(ii) Accounting standard facilitate comparability between financial statements of inter and intra companies.

Question 4: State the objectives of an accounting standard.

Solution 4: Below are the main objectives of Accounting Standards:-

1.) Reduce different accounting procedures and activities to the extent practicable, with the goal of removing them.

2.) Promote a greater awareness of financial statements.

3.) Understand the adoption and execution of important accounting policies.

4.) Allowing meaningful comparison of two or more companies’ financial statements.

5.) Improving financial reporting reliability.

Question 5: Define International Financial Reporting Standards (IFRS).

Solution 5: In the basis of financial statements, significant economic decisions are made. There is a need for a clear way of determining which items require identification and calculation, and how information is portrayed in the financial statements, in order to prevent changing statistics in the financial reports.

IFRS also tends to eliminate material abuse of financial reporting mistakes.

Question 6: What are the two basic objectives of having an accounting standard?

Solution 6: Below are the two basic objectives of accounting standard:-

1.) Reduce different accounting procedures and activities to the extent practicable, with the goal of removing them.

2.) Promote a greater awareness of financial statements.

Question 7: Why are accounting standard required?

Solution 7: To promote consistency and uniformity in the accounting process, accounting standards are required.

Question 8: What is the full form of IFRS?

Solution 8: IFRS stands for International Financial Reporting Standards.

Question 9: Which values are followed by adopting the accounting standards?

Solution 9: The values are followed by adopting accounting standards are:-

(i) Reliability

(ii) Comparability

(iii) Clarity

(iv) Consistency

Question 10: Why International Financial Reporting Standards (IFRS) is important.

Solution 10: Below are the reasons of International Financial Reporting Standards (IFRS):-

1) It is important to make a globalized analysis of the financial statements of corporations.

2) Accountants and auditors in countries implementing IFRS are in a position to offer their services.

3) Time and resources will be saved with the use of IFRS accountants and auditors.

4) There could be improved preparation and implementation for companies using IFRS.

DK Goel Solutions Class 11 Chapter 5
What is IFRS?

International Financial Reporting Standards (IFRS) depicts a set of accounting standards framed by the International Accounting Standards Board (IASB). With perfectly designed norms and regulations, these have turned to be the global standard for preparing the financial statements of public firms. International Financial Reporting Standards cover a bunch of accounting activities such as the statement of comprehensive income, statement of financial position of a firm, and many more.

What are the primary objectives of the International Financial Reporting Standards?

Here are the main objectives of the International Financial Reporting Standards –
● It aims to promote transparency in the process of preparing financial statements by analyzing the financial information, collecting the most accurate information, and much more.
● IFRS creates a bond with the fund providers and the companies they invested their hard-earned money in.
● It elevates the security and safety of the financial statements.

What are the advantages of accounting standards ?

Here are the key advantages of accounting standards –
● Accounting standard polishes the transparency and reliability of financial statements.
● Accounting standards ensure comparability and consistency of the financial statements, which enable the firms to function at their best.

Explain the importance of International Financial Reporting Standards.

Here are the key points highlighting the importance of IFRS –
Improves accessibility to the global capital market – IFRS opens the portal for investors to put their funds in companies all over the globe. However, international investors have to entirely rely on the financial statements designed under the IFRS before investing in a company.
Improves Comparability – IFRS highlights a clear picture of the financial statements of various firms, making it transparent and easy to compare for investors.
Design uniform financial reports – Financial statements designed under the IFRS regulations are even, transparent, comparable, and straightforward.

Why is accounting standard-essential?

Accounting standards are solely important to validate the firms’ financial reports’ reliability, transparency, consistency, and comparability.
What are the main disadvantages of IFRS?
Although IFRS has got global acceptance as the most reliable accounting standard, GAAP is also favored in the U.S countries. This is because a certain level of quality is retained on complete acceptance of the IFRS.