CBSE Questions for Class 9 Elements Of Book Keeping And Accountancy Accounting Equation Effects Quiz 16 - MCQExams.com

Reserve for Bad Debts is created in accordance with ____________.
  • going concern concept
  • conservative concept
  • dual aspect concept
  • materiality
If a radio seller-proprietor buys a radio for his personal use from out of business funds, the amount paid for the radio will be treated as "drawings" of the proprietor because of __________.
  • dual aspect concept
  • going concern concept
  • business entity concept
  • matching concept
According to the conservation concept, which of the following is recommended?
  • Making the provision for doubtful debts and discount on debtors in anticipation of actual bad debts and discount
  • Valuing the stock-in-trade at market price or cost whichever is less
  • Charging of small capital items, like crockery to revenue
  • All of the above
If the principle of conservatism is stretched without reservation, its likely effect may be ___________________.
  • Creation of secret reserves
  • Violation of the doctrine of full disclosure
  • Reported profit less than the actual profit
  • All of these
An increase in one liability may lead to _________________.
  • Increase in another asset
  • Decrease in liability
  • Both (A) and (B)
  • Either (A) or (B)
Apart from statutory requirements good accounting practice also demands all significant information should be fully and fairly disclosed in the financial statements. This is as per _________________.
  • Convention of disclosure
  • Convention of materiality
  • Convention of consistency
  • Convention of conservatism
A businessman purchases goods worth $$Rs.25,00,000$$ and sold $$80\%$$ of such goods during the accounting year ending on $$31$$st March, $$2011$$. The market value of the remaining goods was $$Rs.7,50,000$$. He valued the closing stock @ $$Rs.5,00,000$$ and not at $$Rs.7,50,000$$ due to ___________.
  • Money Measurement concept
  • Convention of conservatism
  • Cost concept
  • Accounting period concept
If a machinery is purchased for Rs. 1,00,000, the asset would be recorded in the books at Rs. 1,00,000 even if its market value at that time happens to be Rs. 1,40,In case a year after, the market value of this asset comes down to Rs. 90,000, it will ordinarily continue to be show at Rs. 1,00,000 and not at Rs. 90,000 due to _______________.
  • Realization concept
  • Present value concept
  • Cost concept
  • Money measurement concept
As per which concept, a clear distinction is made between assets and expenses?
  • Money measurment
  • Cost concept
  • Dual aspect concept
  • Going concern concept
Ram has assets of Rs. 10,000 and liabilities of Rs. 2,his capital would be ________. 
  • Rs. 10,000
  • Rs. 12,000
  • Rs. 8,000
  • None of these
Inclusion of personal expenses of using car in the business expenses would violate the concept of __________.
  • Separate business entity
  • Consistency
  • Going concern
  • Dual aspect
Revenue from sales of products is generally accounted in the period in which __________.
  • cash is collected
  • sales in made
  • products are manufactured
  • none of the above
X Ltd., purchased goods for Rs. 5,00,000 and sold 9/10th of the value of goods for Rs. 6,00,Net expenses during the year were Rs. 25,The company reported its net profit as Rs. 75,Which of the following concept is violated by the company?
  • Realization
  • Conservation
  • Matching
  • Accrual
The Working Capital (or Net Current Assets) of a business is ___________.
  • current assets less current liabilities
  • capital plus liabilities which are not expected to be paid within a year of the balance sheet date
  • the capital introduced by the proprietor at commencement of business
  • non current assets plus current assets less current liabilities
When a consistency is found between financial statements of one entity from period to period it is _____________.
  • conventions of conservatism
  • conventions of materiality
  • conventions of disclosure
  • conventions of horizontal consistency
State with reasons, whether the following statement is True or False.
A concern proposes to discontinue its business from December $$2020$$ and decides to dispose off all its plants within a period of $$3$$ month. The Balance Sheet as on $$31^{st}$$ December, $$2020$$ should continue to indicate the plants at its historical costs as the assets will be disposed off after the Balance Sheet date.
  • True
  • False
R Ltd. purchased equipment from P Ltd. for Rs.50,000 on$$1^{st}$$ 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 $$31^{st}$$ April, 2020 is Rs.60,000 and the accountant of the company wants to disclose the machinery at 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
Atul purchased a car for Rs. $$5,00,000$$, by making a down payment of Rs. $$1,00,000$$ and signing a Rs. $$4,00,000$$ bill payable due in $$60$$ days. As a result of this transaction ____________________.
  • total assets increased by Rs. $$5,00,000$$
  • total liabilities increased by Rs. 4,00,0004,00,000
  • total assets increased by Rs. 3,00,0004,00,000
  • total assets increased by Rs. 4,00,0004,00,000
Match List I with List II and select the correct answer using the codes given below the lists.
List IList II
A.Showing joint life policy at surrender value1.Consistency
B.Team spirit and dedication of employees are not recorded in the books of accounts2.Cost concept
C.Methods of depreciation and inventory valuation should not be changed frequently3.Conservatism
D.Fixed assets are recorded at cost less depreciation4.Money measurement
  • A - 3, B - 4, C - 1, D - 2
  • A - 3, B - 4, C - 2, D - 1
  • A - 4, B - 3, C - 1, D - 2
  • A - 4, B - 3, C - 2, D - 1
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