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CBSE Questions for Class 9 Elements Of Book Keeping And Accountancy Introduction To Book Keeping And Accounting Quiz 1 - MCQExams.com
CBSE
Class 9 Elements Of Book Keeping And Accountancy
Introduction To Book Keeping And Accounting
Quiz 1
Information is said to be relevant if it is _______.
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Free from bias
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Shows profit
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Not consistent
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All of the above
Explanation
The information must be relevant to the needs of the users, which is the case when the information influences the economic decisions of users. This may involve reporting particularly relevant information, or information whose omission or misstatement could influence the economic decisions of users.
Which of the following would be considered as external users of accounting information's?
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Board of Directors
0%
Shareholders
0%
Finance manager
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Sales manager
Explanation
External Users
of
Financial statements
are those people which are
outside
the affairs of the business but use accounting information.
Example:
banks, shareholders, creditors
, etc.
Financial account records only __________.
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Actual figures
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Budgeted figures
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Standard figures
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Management figures
Explanation
Financial accounting records only historical data. Accounting is done based on the actual amount of money incurred or spent.
For example, if business purchases a piece of land at a price of Rs.50000 of which market value is Rs.60000, accounting will be done only for Rs.50000 which is actually spent.
The prime objective of accounting is to _________________.
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To record economic data
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Provide the information basis of action
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Classifying and recording business transaction
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Attainment of economic goal
Explanation
Accounting is an art of recording, classifying, summarizing and interpreting the data in a significant manner of money's worth business transactions.
The prime function of accounting is to classify and record all such business transaction. It plays an important role in providing appropriate information to the business for decision making.
____________ provides information for income determination.
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Financial accounting
0%
Cost accounting
0%
Management accounting
0%
None of these
Explanation
Financial accounting
results in the
determination
of net
income
at the bottom of the
income
statement. Assets, liabilities and equity
accounts
are reported on the balance sheet. The balance sheet utilizes
financial accounting
to report ownership of the company's future economic benefits.
____________ is the oldest branch of accounting.
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Financial Accounting
0%
Cost Accounting
0%
Management Accounting
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None of these
Explanation
Accounting has various branches. Such as:
1. Cost Accounting
2. Management Accounting
3. Financial Accounting.
Financial accounting
is the
oldest branch
of accounting.
It has certain limitations too. To overcome these limitations, other branches i.e.cost accounting and management accounting are introduced.
Financial accounting use ________.
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Projected data
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External data only
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Historical data
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Manager data only
Explanation
Financial accounting consider only those transactions which are of historic nature, i.e. the transactions which have already taken place.
Financial accounting is concerned with recording of _______________.
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Business expenses and revenue
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Costs of products and services
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Day to day business transactions
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None of the above
Explanation
Accounting is the art of
recording, classifying and summarizing
all the transactions of monetary value in a significant manner to identify the end result.
In the recording step, day to day transactions is recorded in chronological order.
Firstly, the transactions are recorded in the journal. Journal is also known as the book of primary entry.
The appropriate objective of an enterprise is _________.
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To maintain sales at minimum level
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Maximisation of business wealth
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To maintain the profits at one level
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None of the above
Explanation
Looking at all the options, the most appropriate one is the
Maximisation of
business wealth
.
Well, whenever someone starts a business a lot of time, money and hard work is invested by the owner. So, definitely in return, the owner wants to maximize the profits.
Which of the following statements about differences between financial and managerial accounting is incorrect?
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Managerial accounting information is prepared primarily for martial parties such as stockholders and creditors; financial accounting is directed at internal users
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Financial accounting is aggregated; managerial accounting is focused on products and departments
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Managerial accounting pertains to both past and future items; financial accounting focuses primarily on past transactions and events
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Financial accounting is based on generally accepted accounting practices; managerial accounting faces no similar constraining factors
Explanation
Managerial accounting
is for
internal users
like the owner, directors
whereas
Financial accounting
is for
external users
like shareholders, creditors, bank etc.
Therefore, Only
Option A is incorrect
and the remaining are correct.
_____________ is a post mortem of past costs.
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Financial accounting
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Cost accounting
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Both A and B
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None of these
Explanation
Financial Accounting
also has its limitation. It records all the transaction on its historical cost and does not consider the changes happen in future.
Financial Accounting
does not consider the effect of
inflation
and change in the
price level.
Therefore, it is a
post mortem
of the cost recorded in books of
account.
Which of the following statements is not an objective of financial reporting?
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Provide information that is useful in investment and credit decisions.
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Provide information regarding policy of organisation
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Provide information that is useful in assessing cash flow prospective
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None of these
Explanation
They depict
not
only profits and losses, but even assets and liabilities. Let's take a look at the
objectives of financial statements
along with their features. They even help readers of these statements know the accounting
policies
used in them
. These statements also
provide information relating to
the company's cash flows .
The word accounting can be classified into __________________.
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Financial accounting and management accounting
0%
Financial accounting and cost accounting
0%
Financial accounting, management accounting and cost accounting
0%
Cannot be classified
Explanation
There are three main branches of accounting:
Financial Accounting : It is concerned with the recording and processing of all transactions.
Cost Accounting : It seeks to ascertain the cost of each product or job.
Management Accounting : It has the objective of collecting, systematically and regularly all such information as will help the management in decision making.
Internal user is ________of the business entity.
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Bank
0%
Compititors
0%
Customer
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Management
Explanation
Management and cost accountants are good examples of
internal users
. They are
managers inside
the organization who have knowledge about the inner workings of the
company
and can
use
this knowledge to improve the
business
' performance.
Use of common unit of measurement and common format of reporting promotes________.
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Comparability
0%
Understandability
0%
Relevance
0%
Reliability
Explanation
'
Comparability
' characteristic of accounting information requires the
use of common units
and
common format of reporting
. It is the most important quality of accounting information.
Comparability
means accounting information of a current year can be comparable with that of the previous years.
Which qualitative characteristic of accounting information is reflected when accounting information is clearly presented ?
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Understandability
0%
Relevance
0%
Comparability
0%
Reliability
Explanation
Understandability
is the concept that financial
information
should be presented so that a reader can easily comprehend it.
Adherence to a reasonable level of
understandability
would prevent an organization from deliberately confusing financial
information
in order to mislead users of its financial statements.
A_______ would most likely use an entity's financial report to determine whether or not the business entity is eligible for a loan.
Report Question
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Creditor
0%
Emplyoee
0%
Mangement
0%
None of the Above
Explanation
There are two types of creditors.
Short term creditors are those who are providing goods or services on credit by analyzing the short-term financial position of the company.
Long term creditors are basically lenders who are providing loans to the business for long term purposes. These creditors uses the financial statements and reports to determine the financial worth and see the repayment capabilities of the firm before lending any amount.
To be comparable, accounting reports must belong to ________.
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common period
0%
use common unit of measurement
0%
use common format of reporting.
0%
all of the above
Explanation
Comparability is one of the most important characteristic of financial information.
It states that accounting information must be capable of being compared between or among different entities.
Further accounting information is comparable only if the accounting policies and standards are consistently applied year after year or from one accounting period to another accounting period.
Also if there is any change in any accounting policy that change should also be reflected retrospectively and prospectively so as to deal with any changes in the amounts of transactions.
______ users are groups outside the business entity, who uses the information to make decisions about the business entity.
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Mangement
0%
Emplyoee
0%
Owner
0%
External
Explanation
There are various stakeholder in the business who want to know about the business performance of the organization. These are internal and external users.
Internal users are management, employees and accountants who wants to analyze the business performance based on various financial reports.
External users are lenders, creditors, investors which are more interested to know about the financial strength to take a decision about the business entity in terms of security of their money.
Which of the following are general objectives of accounting?
I. Maintenance of Accounting Records
II. Providing Information
III. Ascertainment of Profit or Loss
IV. Depiction of Financial Position
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I and II
0%
III and IV
0%
I and IV
0%
I, II, III and IV
Explanation
Accounting is the measurement,processing and communication of financial information about economic entities such as business and corporations. Accounting consists of various objectives. They are as follows:
Maintenance of Accounting records;
Providing information;
Ascertainment pf profit and loss;
Depiction of financial position.
With all these objectives one can carry out all the accounting process very effectively.
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Practice Class 9 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
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