CBSE Questions for Class 11 Commerce Accountancy Theory Base Of Accounting Quiz 9 - MCQExams.com

The rule 'every transaction affects two or more ledger accounts' is based or the concept of ___________.
  • Going concern
  • Double entry system of book-keeping
  • Money measurement
  • Periodicity
Accounting Transactions are recorded in terms of ___________.
  • Money
  • Purpose
  • Characteristics
  • None of these
Which of the following is an accepted method of accounting?
  • Cash Accounting
  • Accrual or Mercantile Accounting
  • Both Accrual Accounting and Cash Accounting
  • None of the above
General reserve is created on the basis of convention of ______________.
  • Conservatism
  • Uniformity
  • Materiality
  • Full disclosure
The notion that the life of a business is divisible into equal time periods of equal length is known as the _______________.
  • continuing concern principle
  • time-period principle/ Accounting Period Concept
  • business entity principle
  • recognition principle
Accounting records only those transactions and events which are of -
X. Social character
Y. Financial character
Select the correct answer from the options given below:
  • X only
  • Y only
  • Both X and Y
  • None of above
Which convention implies that the accounting practices should remain same from one year to another year?
  • Going Concern
  • Materiality
  • Accrual
  • Consistency
______ is used by business entities for keeping records of their monetary or financial transaction.
  • Accounting
  • Cost accounting
  • Costing
  • Budgetary Control
It is essential to standardize the accounting principles and policies in order to ensure _______________.
  • Transparency
  • Profitability
  • Reputation
  • All of the above
Accounting transactions are recorded in terms of ________.
  • money
  • purpose
  • characteristics
  • none of the above
Which of the following practices is not in consonance with the convention of conservatism?
  • Creating provision for bad debts
  • Creating provision for discount on creditors
  • Creating provision for discount on debtors
  • Creating provision for tax
Which of the following accounting concepts or principles require the calculation of depreciation of the fixed assets?
  • Prudence Concept
  • Accrual Concept
  • Consistency Concept
  • Matching Concept
Accounting standards are issued for the purpose of :
(a) Improving dependability of financial statements
(b) Auditing work becomes easy task for the auditor
(c) Elimination of non-comparability between financial statements 
The correct answer is :-
  • (a) only
  • (b) only
  • (c) only
  • All of the above
Non-monetary events like, death, dispute, sentiments, efficiency etc. are _______ in the books, even though these may have a great effect. 
  • Not recorded
  • Recorded
  • Recorded if suggested by external auditors
  • Recorded if suggested by internal auditors
____ period is normally adopted for accounting purpose. 
  • 6 months
  • 12 months
  • 9 months
  • 24 months
Accounting standards cover the aspects of ________ of accounting transactions in the financial statements.  
  • Recognition
  • Measurements
  • Presentation and disclosure
  • Any of the above
When a change in accounting policy is justified?
  • To comply with accounting standard
  • To ensure more appropriate presentation of the financial statement of the enterprise
  • to comply with law
  • All of the above
Accounting policies followed by organizations ______________.
  • Can be changed every year
  • Should be consistently followed from year to year
  • Can be changed after 5 year
  • None of the above
As per _____ concepts in order to determine the profit earned or loss suffered by the business in a particular defined accounting period, it is necessary that expenses of the period should be matched with the revenues of that period.
  • Accrual concept
  • Realization concept
  • Accounting period concept
  • matching concept
AS - 3 deals with __________________.
  • Accounting for government grants
  • Accounting for amalgamations
  • Cash Flow statement
  • Fund Flow statement
Land on lease should be shown in balance sheet contrary to fact that company doesn't own this piece of land. This is the statement of what accounting concepts?
  • Matching concept
  • Accrual concept
  • Prudence concept
  • Substance over form
A specific accounting policy refers to _______________.
  • Principles
  • Methods of applying those principals
  • Both (A) & (B)
  • None of the above
Mohan purchased a machinery amounting Rs.10,000 on 1.4.2010.
On 31.3.2019, similar machinery could be purchased for Rs.20,000 but the realizable value of the machinery (purchased on 1.4.2010) was estimated at Rs.15,The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs 12,000.
The historical cost of machinery is ____________.
  • Rs.10,000
  • Rs.20,000
  • Rs. 15,000
  • Rs. 12,000
The value of human resources is generally not shown in the Balance Sheet as per _______________.
  • Going concern concept
  • Accrual concept
  • Prudence concept
  • Money Measurement concept
Which accounting principle is followed in adopting accounting policy of treating the cost of calculator as an expense ?
  • Prudence
  • Substance over from
  • Materiality
  • All of these
Concept of Realisation implies _____________.
  • When cash is received from debtors
  • When goods are delivered to customer
  • When order is received
  • None of the Above
Which accounting principle is followed in adopting policy of making provision for doubtful debts @ 5% on debtors ?
  • Prudence
  • Substance over from
  • Materiality
  • All of these
Accounting Standards in India are issued by _________________.
  • The Board of Studies - ICAI
  • The Accounting Standards Board-ICAI
  • The Expert Advisory Committee - ICAI
  • The International Accounting Standards Committee (IASC)
Book value & Market value of machinery on 31.3.2019 was Rs.1,00,000 & Rs.1,10,000 respectively. As on 31.3.2019, if the company values the machinery at Rs. 1,10,000, which of the following principle is not being followed _________________.
  • Historical Cost
  • Present Value
  • Realisable value
  • Current Cost
GST is a destination based tax on consumption of ______________.
  • goods
  • resources
  • services
  • both (A) & (C)
Materiality in accounting is decided __________________.
  • By the size of an item
  • By the knowledge as to whether an individual item is having a significant influence on financial statement
  • Solely by the discretion of the accountant
  • By the physical volume of the transaction
GST will replace a major part of __________ taxes.
  • direct
  • indirect
  • foreign
  • all of the above
Tick mark the correct answer.
The accounting measurement that is not consistent with the going concern concept is?
  • Realisation
  • Historical cost
  • Liquidation value
  • Continuity
Under GST, credit availed of all the taxes paid is termed as __________.
  • Round off
  • Net off
  • Set off
  • Cut off
A cooperative store having a turnover of Rs 10 lakh and profit of Rs 50,000 purchased locks costing Rs 12,000 for use in the shop. The accountant charged it in the P & L A/c or current year but auditor raised an objection saying that it should be capitalised. On which one of the following conventions could the accountant be defended?
  • Disclosure
  • Materiality
  • Conservatism
  • Consistency
GST is proposed to be levied at all stages right from _____________ up to the final consumption.
  • business
  • trading
  • manufacturing
  • mining
Under GST, burden of tax is to be borne by the final consumer.
  • True
  • False
GST is implemented to accomplish the objective of one nation ________ tax.
  • integrated
  • one
  • many
  • diverse
Under the destination based Goods and Services Tax, tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply.
  • True
  • False
GST is a _____________ based tax and levied at a single point at the time of ___________ of goods and services.
  • Money, sale
  • Consumption, trading
  • Destination, consumption
  • Destination, sale
The prime objective of GST implementation is to ________ the multiple levy of tax on goods and services. 
  • Abolish
  • Promote
  • Motivate
  • Sustain
Accounting Standards issued by the Institute of Chartered Accountants of India are mandatory to which of the following _______________.
  • Sole proprietor
  • Partnership firm
  • Corporate body
  • All the three
When does the liability to pay GST arise in case of supply of goods?
  • On raising of invoice
  • At the time of supply of goods
  • On receipt of payment
  • Earliest of a, b or c
Accounting Standard 2 deals with valuation of ____________.
  • Fixed assets
  • Inventory
  • Cash Flow Statement
  • None of These
GST enhances the cascading effect on taxation.
  • True
  • False
Which of the following was the first country to implement GST to reduce tax-evasion?
  • France
  • Canada
  • Germany
  • Switzerland
GST is basically designed to:
Enhance manufacturing system
Reduce the tax base
Expand the distribution system
Increase the revenue from taxes
Of the above ___________.
  • 1 & 2 are correct
  • Only 4 is correct
  • 1, 3 & 4 are correct
  • None of these
GST widens the _______ base which accordingly increases the _______ for government.
  • revenue, cost
  • sale, tax
  • cost, tax
  • tax, revenue
The subsumption of which taxes will make the GST-a pucca Destination based Consumption Tax _________________.
  • CST and Central Excise
  • VAT and Luxury Tax
  • Service Tax and Purchase Tax
  • Taxes on Lotteries and Entertainment Tax
What is the maximum rate prescribed under CGST?
  • 14%
  • 28%
  • 20%
  • 18%
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