Skip to content

CMA Foundation · Fundamentals of Financial and Cost Accounting · Four Frameworks of Accounting and Forms of Organization

Which of the following is correct about the financial year for a company incorporated in India under the Companies Act, 2013?

A company's financial year ends on 31 March. A different year end is allowed only if the Tribunal grants permission for a valid reason, such as alignment with a foreign holding company. Companies cannot freely choose any 12-month period or end the year on 31 December or 30 June.

  1. AEach company may choose any 12-month period without restriction
  2. BThe financial year ends on 31 March, unless the Tribunal permits a different period for a valid reasonCorrect
  3. CThe financial year always ends on 31 December
  4. DThe financial year ends on 30 June for all companies

Explanation

The Act sets the financial year as ending on 31 March each year. A different period is allowed only with the Tribunal's permission, for example for a company that is a subsidiary or associate of a foreign entity needing a different year end. So a free choice of any period is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Four Frameworks of Accounting and Forms of Organization shows your real accuracy, how long you take and where you lose marks.

Practise Four Frameworks of Accounting and Forms of OrganizationFree diagnostic mock

More Four Frameworks of Accounting and Forms of Organization questions