PracticeVideosBlogFlashcardsEspañol
All Practice Exams

Free Practice Questions for ICAN CAP-II

Exam-style questions and explanations by OpenExamPrep.

✓ No registration✓ No credit card
100+ Questions
100% Free

Loading practice questions...

Same family resources

Explore More Institute of Chartered Accountants of Nepal Examinations (ICAN)

Continue into nearby exams from the same family. Each card keeps practice questions, study guides, flashcards, videos, and articles in one place.

ICAN CA Foundation Level Examination (Nepal)

Practice Questions

ICAN CAP-III (Advisory Level) Examination (Nepal)

Practice Questions
Exam Review

Key Facts: ICAN CAP-II Exam

7 Papers

Group I: 3 papers; Group II: 4 papers

ICAN Students' Manual

40% / 50%

Minimum per paper and group aggregate to pass

ICAN Final Exam Criteria

NPR 1,200

Exam fee per paper (plus NPR 200 form fee)

ICAN Final Exam Criteria

9 Months

Minimum registration period before the exam

ICAN Final Exam Criteria

Dec 2026

First examination of the replacement Application level

ICAN Modality of New CA Syllabus

June & Dec

Examinations held in the first week of each

ICAN Final Exam Criteria

ICAN CAP-II has seven 100-mark written papers of 3 hours each, in two groups, held in the first week of June and December. A student passes a group with 40% in each paper and 50% in aggregate. The exam fee is NPR 1,200 per paper plus a NPR 200 form fee. The Application level replaces CAP-II for students registering from 1 November 2025.

Sample ICAN CAP-II Practice Questions

Try these sample questions to review concepts for the ICAN CAP-II exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Section 61 of the Companies Act, 2063 generally prohibits a company from buying back its own shares but allows it under conditions. Which of the following is one of those conditions?
A.The buyback is financed by a fresh term loan from a commercial bank
B.The board of directors approves it without reference to the shareholders
C.It is authorized by the articles and a special resolution, and paid out of free reserves available for dividend
D.After the buyback, the company's debt may be up to four times its capital and general reserve
Explanation: Section 61(2) permits a buyback out of free reserves available for dividend, with notice to the Company Registrar, where the shares are fully paid, a public company's shares are listed, the articles authorize it, the general meeting passes a special resolution, debt after the buyback is not more than twice the capital and general reserve, and the buyback does not exceed 20 percent of paid-up capital and general reserve.
2A company forfeits 1,000 equity shares of NPR 100 each, NPR 80 called up, for non-payment of a first call of NPR 20. It later reissues them as fully paid for NPR 75 each. How much is transferred to capital reserve?
A.NPR 60,000
B.NPR 25,000
C.NPR 15,000
D.NPR 35,000
Explanation: Amount received before forfeiture = NPR 60 per share, so the share forfeiture account is credited with NPR 60,000. Reissue as fully paid at NPR 75 means a discount of NPR 25 per share (NPR 25,000) is charged to the forfeiture account. The balance of 60,000 - 25,000 = NPR 35,000 is a capital profit transferred to capital reserve.
3In the basic communication process model, what is 'noise'?
A.Anything that distorts or interferes with the message between sender and receiver
B.The receiver's response that tells the sender how the message was actually understood
C.The sender's act of converting an idea into words, symbols or gestures
D.The medium, such as e-mail or a meeting, used to carry the message
Explanation: Noise is any interference, physical, semantic or psychological, that prevents the message from being received as intended. Choosing the right channel and seeking feedback help reduce its effect.
4What is the third step of the five-step revenue recognition model in NFRS 15 (Revenue from Contracts with Customers)?
A.Identify the contract with the customer
B.Determine the transaction price
C.Identify the performance obligations in the contract
D.Allocate the transaction price to the performance obligations
Explanation: The five steps are: identify the contract; identify the performance obligations; determine the transaction price; allocate the transaction price to the performance obligations; and recognize revenue when (or as) each obligation is satisfied.
5Under NFRS 16 (Leases), how does a lessee initially measure the lease liability at the commencement date?
A.At the total undiscounted lease payments due over the whole lease term, including options
B.At the fair value of the underlying asset on the commencement date
C.At the lessor's original purchase cost of the underlying asset
D.At the present value of unpaid lease payments, at the implicit rate or else the incremental borrowing rate
Explanation: The lease liability is the present value of the lease payments not yet paid at commencement. The discount rate is the interest rate implicit in the lease if it can be readily determined; otherwise the lessee's incremental borrowing rate is used.
6A Ltd. acquires 80% of B Ltd. for NPR 12,000,000 when the fair value of B's identifiable net assets is NPR 10,000,000. Non-controlling interest (NCI) is measured at its proportionate share of identifiable net assets. What goodwill is recognized under NFRS 3?
A.NPR 2,000,000
B.NPR 4,000,000
C.NPR 6,000,000
D.NPR 1,600,000
Explanation: Goodwill = consideration transferred + NCI - fair value of net assets = 12,000,000 + (20% x 10,000,000) - 10,000,000 = NPR 4,000,000.
7A parent sold goods costing NPR 800,000 to its wholly owned subsidiary for NPR 1,000,000. At year-end, 40% of these goods remain in the subsidiary's stock. What consolidation adjustment is needed for unrealized profit?
A.Debit consolidated sales NPR 200,000 and credit inventory NPR 200,000
B.Debit inventory NPR 80,000 and credit consolidated retained earnings NPR 80,000
C.Debit consolidated profit (retained earnings) NPR 80,000 and credit inventory NPR 80,000
D.Debit cost of sales NPR 1,000,000 and credit inventory NPR 1,000,000
Explanation: Intra-group profit = 1,000,000 - 800,000 = NPR 200,000. The unrealized part is 40% x 200,000 = NPR 80,000, which is removed from group profit and from the carrying amount of inventory. Intra-group sales and purchases of NPR 1,000,000 are also eliminated separately.
8Which of the following correctly describes the agenda and the minutes of a formal meeting?
A.The agenda is the official record of decisions taken, while the minutes list the items to be discussed
B.The agenda lists the items to be discussed and is circulated beforehand; the minutes record the proceedings and decisions afterwards
C.Both are prepared only after the meeting ends
D.The agenda is needed only for board meetings, and minutes only for general meetings
Explanation: The notice and agenda tell members what will be discussed so they can prepare. Minutes are the formal record of attendance, discussion and resolutions, and are approved and signed afterwards.
9Under NAS 16 (Property, Plant and Equipment), where is an increase in carrying amount arising from a first revaluation recognized?
A.In other comprehensive income, accumulated in equity as revaluation surplus
B.In profit or loss as operating income
C.Directly in general reserve as distributable profit
D.As a reduction in accumulated depreciation with no effect on equity
Explanation: A revaluation increase is recognized in OCI and accumulated in revaluation surplus, except to the extent it reverses a revaluation decrease of the same asset previously recognized in profit or loss.
10Under NAS 37, which three conditions must all be met before a provision is recognized?
A.A possible obligation, a possible outflow of resources and a roughly estimated amount
B.An approved budget, a board resolution and a future commitment to spend
C.A lawsuit already filed, certainty of loss and an agreed cash settlement
D.A present obligation from a past event, a probable outflow and a reliable estimate
Explanation: A provision is recognized only when there is a present (legal or constructive) obligation from a past event, an outflow is probable (more likely than not) and the amount can be estimated reliably. Otherwise a contingent liability may need to be disclosed.

About the ICAN CAP-II Exam

CAP-II is the second level of ICAN's Chartered Accountancy course under the Nepal Chartered Accountants Act, 2053. Its seven written papers cover advanced accounting under NFRS, audit under the Nepal Standards on Auditing, corporate and other laws, financial management, cost and management accounting, business communication and marketing, and income tax and VAT. ICAN is replacing CAP-II with the Application level, first examined in December 2026, while CAP-II continues for a limited number of carry-over sittings. This bank is independent practice by OpenExamPrep: English-language multiple-choice questions for study, not a simulation of ICAN's written papers.

Exam sponsor: Institute of Chartered Accountants of Nepal (ICAN). The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Seven 100-mark written papers of 3 hours each, with 10 minutes' reading time. Group I: Advanced Accounting; Audit and Assurance; Corporate and Other Laws. Group II: Financial Management; Cost and Management Accounting; Business Communication and Marketing; Income Tax and VAT. A student passes a group with at least 40% in each paper and 50% in the group aggregate, and may pass the groups at different sittings.

Time Limit

3 hours per paper (7 papers), plus 10 minutes' reading time

Passing Score

40% per paper and 50% aggregate per group

Exam / Certification Fees

NPR 1,200 per paper (NPR 8,400 for 7 papers) plus NPR 200 form fee

Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

15%

Advanced Accounting

Share buyback and forfeiture, debentures, NFRS 3, 15 and 16, NAS 8, 10, 16, 20, 23, 33, 37 and 38, consolidation adjustments.

14%

Audit and Assurance

NSA 200, 240, 500, 505, 530, 570, 580, 705 and 706, audit risk, and auditor appointment, disqualification, reporting and audit committees under the Companies Act 2063.

14%

Corporate and Other Laws

Companies Act 2063 (incorporation, meetings, quorum, special resolutions, board), Securities Act 2063, BAFIA 2073, NRB Act 2058, Labour Act 2074, Bonus Act 2030 and the Civil Code 2074.

14%

Financial Management

NPV, IRR and profitability index, capital rationing, cost of equity and debt, WACC, Modigliani-Miller, leverage, working capital, EOQ, factoring and dividend models.

14%

Cost and Management Accounting

Stores control, incentive schemes, labour turnover, overhead absorption, marginal and absorption costing, break-even and margin of safety, variances, ABC, joint products and budgeting.

14%

Business Communication and Marketing

Communication process and barriers, the 7 Cs, meetings, listening, cross-cultural and employment communication, reports, marketing concepts and environment, STP, product life cycle and the services mix.

15%

Income Tax and VAT

Residence, income headings, depreciation pools, repairs, loss carry-forward, withholding on rent and services, donations, VAT rates, registration limits, exemption and zero-rating, input credit and returns.

Preparing for the ICAN CAP-II Exam

What You Need to Know

  • Passing score: 40% per paper and 50% aggregate per group
  • Assessment: Seven 100-mark written papers of 3 hours each, with 10 minutes' reading time. Group I: Advanced Accounting; Audit and Assurance; Corporate and Other Laws. Group II: Financial Management; Cost and Management Accounting; Business Communication and Marketing; Income Tax and VAT. A student passes a group with at least 40% in each paper and 50% in the group aggregate, and may pass the groups at different sittings.
  • Time limit: 3 hours per paper (7 papers), plus 10 minutes' reading time
  • Exam / certification fees: NPR 1,200 per paper (NPR 8,400 for 7 papers) plus NPR 200 form fee Official sources

Using Our Practice Resources

  • Work through all 100 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

ICAN CAP-II: Suggested Study Strategy

1Learn the Companies Act 2063 sections that are tested often: section 61 buyback conditions, section 73 quorum, section 83 special resolutions and sections 111-115 on auditors.
2Use the current text of the Income Tax Act and VAT Act; recent Finance Acts have changed limits such as the VAT registration threshold for services.
3Practise NFRS consolidation adjustments and NAS measurement rules with full workings, not only definitions.
4Drill variance analysis and CVP calculations until each step is automatic.
5Do not neglect Business Communication and Marketing, which is a full paper in Group II.

Frequently Asked Questions

What is the CAP-II examination structure and passing rule?

CAP-II has seven 100-mark papers in two groups. A student passes both groups together with 40% in each paper and 50% aggregate in each group (or across both groups), or can pass one group at a time with 40% in each paper and 50% in that group's aggregate.

Is CAP-II being replaced by the Application level?

Yes. Under ICAN's new syllabus, the Application level applies to students registering in the second level on or after 1 November 2025, with its first examination in December 2026. Existing CAP-II students get a limited number of further CAP-II sittings and may opt to switch to the new syllabus, as set out in ICAN's modality.

What are the CAP-II exam fees?

ICAN's fee schedule lists NPR 1,200 per paper for CAP-II/Application level, a NPR 200 form fee and a NPR 500 late fee.

Who can register for CAP-II and when can they sit the exam?

Students who completed CAP-I or the Foundation level, or graduates with at least 50% or CGPA 2.5, can register. They may sit the exam after 9 months of registration and after completing ICAN's online eligibility test. Exams are held in the first week of June and December.

In what language is CAP-II set?

ICAN publishes its syllabus, study materials, question papers and suggested answers in English. This bank is an English-language practice resource and not an official ICAN product.

Is this bank a simulation of the CAP-II papers?

No. It is an independent multiple-choice study adaptation by OpenExamPrep. CAP-II papers are written examinations with computational and descriptive answers, so use ICAN's study materials and past papers to practise full written answers.