CBSE Questions for Class 11 Commerce Accountancy Theory Base Of Accounting Quiz 8 - MCQExams.com

Non financial quantitative information is not recorded in accounts due to _______________.
  • Dual aspect concept
  • Accrual concept
  • Money measurement concept
  • Period concept
The convention of conservation is applied to Balance sheet from result of ________________.
  • Over statement of capital
  • Under statement of capital
  • Under statement of liabilities and provision
  • None of the above
Cost concept envisages the recording of the following in the books of accounts.
  • An asset its market prize
  • An asset at its cost
  • An asset at average cost
  • All of the above
According to the convention of conservatism, the stock in trade is valued at ______________.
  • Market price
  • Cost price
  • Market price or cost price whichever is higher
  • Market price or cost price whichever is lower
Playing safe policy is according to _________________.
  • Convention of conservatism
  • Convention of full disclosure
  • Convention of materiality
  • Convention of consistency
According to money measurement concept, which of the following will be recorded in the books of accounts?
  • Excellent Morale of workers
  • Quality control in the business
  • Managing liability of the Manager
  • Cost of the Machinery
Which is the accounting concept that requires the practice of crediting closing stock to the trading account?
  • Going concern concept
  • Maturing concept
  • Cost concept
  • Realization concept
Revenue is said to have been earned when ______________.
  • Sale is made
  • Cash is received
  • Goods are manufactured
  • When accounted for
Contingent liability appears as a foot note in the balance sheet. This is in accordance with the accounting principle _____________.
  • Consistency
  • Disclosure
  • Conservation
  • Materiality
The policy of "anticipate no profits, but provide for all possible losses" are due to convention of ______________.
  • Consistency
  • disclosure
  • Materiality
  • Conservatism
The principle of treating business distinct from its owner is known as _________________.
  • Business Entity concept
  • The concept of consistency
  • The concept of conservatism
  • Dual aspect concept
In trading account, closing stock is shown at cost price or net realization price whichever is lower. This is due application of ______________.
  • Convention of disclosure
  • Convention of materiality
  • Convention of consistency
  • Convention of conservatism
State the reasons whether the following statement is true or false:
Accrual concept implies accounting on cash basis.
  • True
  • False
The various assets acquired by a concern or firm should be recorded on the basis of the actual amounts involved or spent. This is the assertion of ______________.
  • Money Measurment
  • Cost concept
  • Going Concern Concept
  • Dual Aspect Concept
The transaction recorded through accounting equation are based on _______________.
  • Money measurment
  • Cost concept
  • Going concern concept
  • Dual aspect concept
As per ________ business transactions are recorded on the assumption that the business will continue for a long-time.
  • Money Measurment
  • Cost concept
  • Dual aspect concept
  • Going concern concept
______ concept is based on double entry book-keeping which means that accounting system is set up in such a way that a record is made of the two aspects of each transaction that affects the records.
  • Money measurment
  • Cost concept
  • Going concern concept
  • Dual aspect concept
Accounting is a measurement and communication process of the activities of the firm that are measurable in monetary terms.
  • Money Measurement
  • Cost concept
  • Going Concern Concept
  • Dual Aspect Concept
Transaction and events are guides by generally accepted accounting principles.
  • True
  • False
State with reasons whether the following statement is true or false.
The financial statement must also disclose the relevant and reliable information in accordance with the full Disclosure Principle.
  • True
  • False
State with reasons whether the following statement is true or false:
As per the concept of conservatism, the accountant should provide for all possible losses, but should not anticipate income. 
  • True
  • False
State with reasons whether the following statement is true or false:
The economic life of an enterprise is artificially split into periodic intervals in accordance with the going concerns assumption. 
  • True
  • False
Business is treated as an entity separate from its owners, creditors, managers and others. This is as per _________________.
  • Money measurement
  • Business Entity Concept
  • Going Concern Concept
  • Dual Aspect Concept
As per convention of conservatism, if the accountant is faced with the choice between two methods of valuing _____, the accountant should choose a method which leads to the lesser value.
  • An asset
  • A liability
  • Expenses
  • Revenue
Revenue is recognized only when a sale is made. This is as per ___________________.
  • Accrual concept
  • Realization concept
  • Accounting periods concept
  • Revenue match concept
Mr. N purchased a furniture costing Rs. 13,000 on 1st October,Transportation and installation charges were incurred amounting Rs. 1,300 and Rs. 520 respectively. Dismantling charges of the old furniture in place of which new furniture was purchased amounted Rs. 1,Market value of the furniture was estimated at Rs. 15,600 on 31st MarchWhile finalizing the annual accounts, Mr. N values the furniture at Rs. 15,600 in his books. Which of the following concepts was violated by Mr. N?
  • Realization concept
  • Cost concept
  • Matching concept
  • Periodicity concept
State the case where the going concern concept is applied?
  • When an enterprise was set up for a particular purpose, which has been achieved , or to be achieved shortly
  • When a receiver or liquidator has been appointed in case of as a company which is to be liquidated
  • Fixed assets are acquired for use in the business for earning revenues and are not meant for resale
  • When an enterprise is declared sick
Which of the following is not an accounting convention?
  • Consistency
  • Disclosure
  • Going concern
  • Conservatism
Accounting standards are ____________________.
  • Written policy documents issued by expert accounting body
  • Set of broad accounting policies to be followed by an entity.
  • Set in the form of general principles
  • All of the above
R Ltd. purchased equipment from P Ltd. for Rs. 50,000 on 1st AprilThe freight and cartage of Rs. 2,000 is spent to bring the asset to the factory and Rs. 3,000 is incurred on installing the equipment to make it possible for the intended use. The market price of machinery on 31st April, 2020 is Rs. 60,000 in financial statements.However, the auditor emphasizes that the machinery should be valued at Rs. 55,000 (50,000+2,000+3,000) according to _____________________.
  • Money measurement principle
  • Historical cost concept
  • Full disclosure principle
  • Revenue recognition
_______ principle required that the same accounting method should be used from one accounting period to the next.
  • Consevatism
  • Consistency
  • Business entity
  • Money measurement
Assets should be valued at the price paid to acquire them is based on ________________.
  • Realization concept
  • Cost concept
  • Matching concept
  • Periodicity concept
The cost of a small calculator is accounted as an expense and not shown as an asset in a financial statement of a business entity due to __________________.
  • Convention of materiality
  • Matching concept
  • Periodicity concept
  • Convention of Conservatism
Which accounting system best reflect the time picture of organization?
  • Accrual system of accounting
  • Cash system of accounting
  • Receipts & expenditure accounts
  • All of the above
The adjusting process is based on two accounting principles; The two accounting principles are _______________.
  • Realization and recognition
  • Revenue recognition and matching
  • Cost and business entity
  • Continuing-concern and realization
Mr Nachiket, the owner of Furniture Shop, owns a personal residence that cost Rs. 6,00,000 but has a market value of Rs. 9,00,000. During preparation of the financial statement for the business, the entire value of the property was ignored and was not shown in the financial statements. The principle that was followed was __________________.
  • The concept of the business entity
  • The concept of the cost principle
  • The concept of going concern principle
  • The concept of duality principe
The standard given by ICAI for calculation of depreciation is ________.
  • Accounting standard 5 depreciation accounting
  • Accounting standard 6 depreciation accounting
  • Accounting standard 7 depreciation accounting
  • Accounting standard 4 depreciation accounting
Purpose of an accounting system include all the following except _______________________.
  • Interpret and record the effects of business transaction
  • Classify the effects of transactions to facilitate the preparation of reports
  • Summarize and communicate information to decision makers
  • Dictate the specific types of business enterprise transactions that the enterprises may engage in.
The correct concept of double entry book keeping states that ___________.
  • for every goods received on credit, the seller becomes your creditor
  • for every debit entry, there must be a corresponding credit entry
  • for every seller, there must be a buyer
  • one party receives and another party gives value
Ashok a cloth merchant buys cloth for Rs. $$50,000$$ paying cash Rs. $$20,000$$. What is the amount of expense as per accrual concept?
  • $$50,000$$
  • $$20,000$$
  • $$30,000$$
  • Nil
Which accounting concept is applicable to record a transaction entered between owner and business?
  • Productivity
  • Going concern
  • Prudence
  • Business entity
Which accounting system best reflect the time picture of organization?
  • Accrual system of accounting
  • Cash system of accounting
  • Receipts & expenditure accounts
  • All of the above
Amit is recording sales transactions in the accounting system so that they can be summarized in a logical manner for the purpose of providing the financial statements for decision-making. Amit is doing________.
  • Management Consulting
  • Review
  • Accounting
  • Auditing
State whether the following statement is True or False.
Closing stock is always valued at market price.
  • True
  • False
In accrual system of accounting ______________________.
  • Revenues are taken care of irrespective whether cash is received or not
  • Cost incurred during the period is taken care of
  • Both a & b
  • Cost of last financial period is only taken care of
If the original and current price of machinery is given, it will be recorded at which value?
  • Historical value
  • Realisable value
  • Market value
  • Original cost
An auditor should consider which of the following when evaluating the ability of a company to continue as a going concern?
  • Audit fees
  • Future assurance services.
  • Management's plans for disposal of assets.
  • A lawsuit for which judgment is not anticipated for $$18$$months.
Which one of the following is one of the major professional accountancy bodies in the India?
  • Institute of Chartered Accountants of India
  • Chartered Association of Accountants
  • Indian Institute of Chartered Accountants
  • Institute of Company Accountants
Monthly and quarterly time periods are called ______________.
  • Fiscal period
  • Calendar period
  • Quarterly period
  • Interim period
Double Entry principle means __________________.
  • Writing all entries twice in the book
  • Having debit for every credit and similarly, credit for every debit
  • Maintaining the double account for each business transactions
  • Writing two times the same entry
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