Auditing and EthicsMCQQuestion 6196 of 213
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10. Is the bank's decision not to apply NPA and income recognition norms to account of SJ Ltd. valid under regulatory guidelines?

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option A — The bank is correct to the extent of not applying the NPA norms for provisioning purposes. However, this exemption is not available in respect of income recognition norms.

All Options:

  • AThe bank is correct to the extent of not applying the NPA norms for provisioning purposes. However, this exemption is not available in respect of income recognition norms. ✓
  • BThe bank is not correct for not applying the NPA norms for provisioning purposes. But this exemption is available in respect of income recognition norms. AUDITING AND ETHICS
  • CThe bank is correct in not applying the NPA norms and income recognition norms as both are not applicable.
  • DThe bank is not correct in not applying the NPA norms and income recognition norms as both are applicable. (2 Marks)

Detailed Solution & Explanation

Correct Answer: Option **A** Explanation: As per the official suggested answer, option **A** is correct. Hence, **Option A** is the correct answer.

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