CBSE Questions for Class 11 Commerce Accountancy Theory Base Of Accounting Quiz 7 - MCQExams.com

Insignificant events are not recorded in the books of accounts due to ______________.
  • Materiality concept
  • Cost concept
  • Business entity concept
  • Verifiable objective concept
All transactions of a business are recorded as having a _____________.
  • Single effect
  • Dual aspect
  • Three-dimensional effect
  • Any of these
It is on the basis of going concern concept that the assets are always valued at market value.
  • True
  • False
The Entity concept of Accounting is applicable to ________________.
  • Sole Proprietary Concern
  • Partnership Firm
  • Joint Stock Company
  • All of the aforesaid
The comparison of one accounting period with that in the past is possible only when the concept of _______________ .
  • Consistency is adhered to
  • Entity is adhered to
  • Matching is adhered to
  • Cost is adhered to
Income is measured on the basis of _______________.
  • Accounting Period Concept
  • Matching Concept
  • Consistency Concept
  • Entity Concept
The policy of 'anticipate no profit and provide for all possible losses' is followed due to ____________.
  • Conservatism Concept
  • Consistency Concept
  • Materiality Concept
  • Cost Concept
Accounting Standard Board was set up by __________________.
  • Government of India
  • Institute of chartered accountants of India
  • Institute of cost and works accountants of India
  • None of the above
Cost concept envisages the recording of the following/in the books of accounts ________________.
  • An asset at its cost
  • Knowledge acquired by business executive
  • Changes effected because of some political events.
  • None of the above
Assets are depreciated on the basis of expected life rather than on the basis of market value according to _____________.
  • going concern concept
  • cost concept
  • entity concept
  • matching concept
According to money measurement concept, working conditions in which the workers of the business have to work must be clearly recorded in the books of account. (True/False)
  • True
  • False
In accrual basis or mercantile basis of accounting, the financial effect of the transaction is recorded in the books ___________.
  • As and when they occur
  • On the basis of actual receipt and payment of cash
  • On confirmation of orders but before the delivery of goods take place
  • All of the above
Qualitative transactions are not recorded in accounts due to _______________.
  • Money measurement concept
  • Dual aspect concept
  • Business entity concept
  • Accounting period concept
The first account standard (AS-I) issued by the Institute of Chartered Accountants of India is _________________.
  • Valuation of Inventories
  • Revenue Recognition
  • Change in Financial Position
  • Disclosure of Accounting Policies
The convention of conservation takes into account all prospective profits but leaves all prospective losses. (True/False)
  • True
  • False
Which of the following statements describes GAAP properly?
  • Generally accepted accounting principles (GAAP) compries a set of rules, concepts and guidelines used in preparing financial accounting reports
  • Generally accepted accounting principles (GAAP) incorporate the consensus at any time as to which economic resources and obligations should be recorded as assets and liabilities
  • What information should be disclosed and how it should be disclosed, and which financial statements should be prepared
  • None of the above
The underlying accounting principle(s) necessitating amortisation of intangible asset(s) is / are ________________.
  • Cost concept
  • Realisation concept
  • Matching concept
  • Both (a) and (c)
  • Both (b) and (c)
Which of the following concepts is also know as 'Prudence'?
  • Conservatism
  • Consistency
  • Full disclosure
  • Materiality
It is one of the basis of the entity concept that money brought by the proprietor into the business is credited to _______ . 
  • proprietor's personal
  • capital
  • both (a) and (b)
  • none the above
In cash system of accounting, entries are recorded ____________.
  • when income is earned by a business or expenditure is incurred by it
  • on the basis of actual receipt of cash or actual payment of cash
  • when order for goods to be purchased in placed and order for goods to be sold is received
  • All of the above
The fundamental accounting equation "Total Assets = Total Liabilities" is the formal expression of ____________.
  • Dual aspect concept
  • Matching concept
  • Going concern concept
  • Money measurement concept
Concept of conservatism refers to taking into account ______________.
  • All profit
  • Only cash profit
  • Only profit realized
  • Profit realized and all possible losses
Accounting Standard Board was set up by __________.
  • Institute of Chartered Accountants of India
  • Institute of Cost and Works Accountants of India
  • Institute of Company Secretaries of India
  • Government of India
As per $$AS - 2$$, inventory is to be valued at _______________.
  • Actual cost
  • Sales value
  • Net realisable value
  • The lower of cost or net realisable value
Money measurement concept of accounting theory is used only when transactions can be expressed in terms of __________.
  • Money
  • Commodities
  • Events
  • None of the above
Concept of realisation implies accounting should be done when _________.`
  • cash is received from debtors
  • order is received
  • goods are delivered to customer
  • advance for order is recieved
Accounting records transactions in terms of __________.
  • Commodity units
  • Monetary units
  • Production units
  • None of these
Accounting is BEST described as__________.
  • The use of financial data
  • The collection of financial data
  • The collection and use of financial data
  • The collection and use of financial and non- financial data
In reference to the accounting standards, choose the correct statement _______________________.
  • Accounting standards codify the generally accepted accounting principles.
  • They lay down the norms of accounting policies and practices by way of codes or guideline.
  • The main purpose of accounting standards is to provide information to the used as to the basis on which the accounts have been prepared.
  • All of the above.
Valuation of inventory is dealt with in ______.
  • $$AS - 1$$
  • $$AS - 2$$
  • $$AS - 3$$
  • $$AS - 4$$
The application of principle 'for stock valuation at cost price or market price, whichever is lower' will result in the valuation of stock sometimes at cost price and at other times at market price which is an application of the principle of ____________.
  • Consistency
  • Materiality
  • Disclosure
  • Conservatism
In case where installation fees are other than incidental to the sale of a product, they should be recognized as revenue _____________________.
  • When the order for installation of equipment is received
  • When the advance for installation work to be done is received
  • When the equipment is installed and accepted by the customer
  • All of the above
Market value of investment is shown as a foot note to Balance Sheet according to ________________.
  • Consistency concept
  • Disclosure concept
  • Materiality concept
  • Going concern concept
Window dressing is prohibited due to____________________.
  • Convention of conservatism
  • Convention of disclosure
  • Convention of materially
  • Accrual concept
Which one of the following is an ingredient of the entity convention of accounting?
  • The owner of a unit and the unit itself is one and the same
  • The owner and the unit are treated separately
  • No separate accounts for the unit is required
  • The unit is a private affair of the owner, hence no accounting is required
According to Money measurement concept, the following will be recorded in the books of accounts.
  • Quality control in business
  • Commission payable to salesman
  • Extra profit due to introduction of a budgetary control system
  • All of these
Qualitative transaction are not recorded in accounts due to _____________.
  • Dual aspect concept
  • Accrual concept
  • Money Measurement concept
  • None of the above
According to which of the following accounting concepts, even then the proprietor of a business is treated as a creditor to the extend of his capital. 
  • Money Measurement Concept
  • Cost Concept
  • Dual aspect concept
  • Entity concept
The convention of conservatism will have the effect of _________________.
  • Over statement of assets
  • Under statement of assets
  • Under statement of provisions for bad and doubtful debts
  • None of the above
According to which of the following concepts in determining the net income from the business, all costs which are applicable to revenue of the period should be charged against that revenue. 
  • Matching Concept
  • Cost Concept
  • Money Measurement Concept
  • Dual aspect Concept
Making provision for an expected loss or expenses in an approved practice in a business house. This is justified on the principle of _____________.
  • Conservatism
  • Cost
  • Industry pratice
  • Verifiable objective
According to money measurement concept the following will be record in the books of account.
  • Value of the machine
  • Quality control in the business
  • Health of the Manager of the Company
  • Company value
Which of the following concept forms the basis for depreciation accounting?
  • Cost concept
  • Consistency concept
  • Accrual concept
  • Going concern concept
A Punching Machine having a life of three years acquired by the owner for personal use for Rs. 100 is debited to the office equipment account which of the accounting convention is being violated?
  • Matching concept
  • Going concern concept
  • Entity concept
  • None of the above
The convention of conservatism is applicable __________________.
  • Showing joint life policy of surrender value as against the amount paid
  • Provision for discount on creditors
  • Market value of the investment is shown as a foot note in the balance sheet
  • None of the above
Insurance prepaid is shown on the asset side of the balance sheet due to __________________.
  • Cost concept
  • Matching concept
  • Business entity concept
  • Going concern concept
The concept of treating the business as a separate entity is called __________________.
  • Money Measurement Concept
  • Dual Aspect Concept
  • Business Entity Concept
  • Period Concept
Concept of realization implies __________________.
  • When cash is received from Debtors
  • When goods are delivered to customer
  • When order is received
  • When money is deposited
The objective of accounting standard is to ___________.
  • bring uniformity in financial reporting
  • ensure consistency and comparability of data with earlier years on with similar organizations
  • both a & b
  • establishment of law
Business is treated as a separate entity accounts for __________.
  • Sole trader
  • Partnership
  • Company
  • All of the above
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