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CBSE Questions for Class 9 Elements Of Book Keeping And Accountancy Introduction To Book Keeping And Accounting Quiz 2 - MCQExams.com
CBSE
Class 9 Elements Of Book Keeping And Accountancy
Introduction To Book Keeping And Accounting
Quiz 2
To be reliable, accounting information must _________________.
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Be available in time
0%
Help in prediction and feedback
0%
Influence the decisions of users
0%
All of the above
Explanation
Reliability means that the end users must be able to depend/rely on the information presented.
A piece of accounting information is reliable if it is
1.
A
vailable in time
2. H
elp in prediction and feedback
3. I
nfluence the decisions of users
Financial statements are used by _______ .
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owners
0%
creditors
0%
investors
0%
all the three
Explanation
The users of accounting are mainly
classified into two
categories
1. Internal Users:
Internal users are
inside
the business of the entity.
Example: managers, owners, directors, CEO, CFO etc.
2. External Users:
These are outside the affairs of the entity.
Example: Creditors. Government, Shareholders etc
.
So, accounting is useful for all these users and not just for owners.
_______ is/are sub-field(s) of Accounting.
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Management Accounting
0%
Cost Accounting
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Financial Accounting
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All of the above
Explanation
The economic development and technological improvements have resulted in an increase in the scale of operations and the advent of the company form of business organisation. This has made the management function more and more complex and increased the importance of accounting information. This gave rise to special branches of accounting: Financial accounting, cost accounting, management accounting.
Which branch of Accounting is concerned with ascertainment and control of cost of business activities?
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Cost Accounting
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Management Accounting
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Human Resource Accounting
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Financial Accounting
Explanation
Cost accounting is a branch of accounting. This tool is basically used by the business to find out the cost of any product or service. It also have various methods to find out the cost of any product. Cost accounting is a mechanism through which any business can control the cost. It has various tools and scientific method to have such control.
Which branch of Accounting caters to information requirement of external users of financial statements?
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Cost Accounting
0%
Management Accounting
0%
Human Resource Accounting
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Financial Accounting
Explanation
Financial accounting is the original form of accounting. It is mainly confined to the preparation of financial statements for the use of outsiders like shareholders, debenture holders, creditors, banks and financial institutions. The field of accounting that serves external users of financial statements in decision making process is known as financial accounting.
Irregularities, frauds and misappropriations can be detected only because of books accounts.
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True
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False
Explanation
Irregularities, frauds and misappropriation are not only detected by books of accounts but also by various strategies like making employees aware, set up reporting system, implement internal controls, hire experts etc.
When information about two different enterprises have been prepared presented in a similar manner, the information exhibits the characteristics of______________.
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Verifiability
0%
Relevance
0%
Reliability
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None of these
Explanation
When information about two different enterprises have been prepared presented in a similar manner, the information exhibits the characteristics of comparability.
It means that the books of accounts should be prepared in such a way that they facilitate easy comparison, intra firm or inter firm.
The primary qualities that make accounting information useful for decision making are_________.
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Relevance and freedom from bias
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Reliability and Relevance
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Comparability and consistency
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None of these
Explanation
The primary qualities that make accounting information useful for decision making are reliability and comparability. Reliability means that the statement of accounts/accounting information is reliable for the users of the financial statements.
Comparability means that the accounting information should be presented in such a way that it is comparable and it facilitates inter and intra-firm comparison.
State true of false :
Accounting is useful only to the owner.
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True
0%
False
Explanation
The users of accounting are mainly
classified into two
categories
1. Internal Users:
Internal users are
inside
the business of the entity.
Example: managers, owners, directors, CEO, CFO etc.
2. External Users:
These are outside the affairs of the entity.
Example: Creditors. Government, Shareholders etc
.
So, accounting is useful for all these users and not just for owners.
_______ is/are sub-field of Accounting.
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0%
Social Re-engineering
0%
Human Resource Accounting
0%
Social Responsibility Accounting
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Management Accounting
Explanation
There are mainly
three branches
of accounting
1. Financial
Accounting
2. Cost Accounting
3. Management Accounting,
If presentation of financial information/statement or accounting policy is designed with a pre-designed motive to influence the decision-making or judgement or achieve a pre-determined result or object, the financial statement are not said to have satisfied the criteria of ___________.
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Relevance
0%
Materiality
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Neutrality
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Substance over form
Explanation
Financial report should present true and fair view, which means that financial statements must be free from errors or from other missions. Financial statements cannot be prepared with the purpose to influence certain decisions, i.e. they might be neutral.
Which of these would be considered as external user of the financial statements?
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Board of directors
0%
Shareholders
0%
Finance manager
0%
Production manager
Explanation
Financial statement of the business are prepared on a periodic basis to check the health of the business. This is a statutory requirement also. There are internal and external users to view and refer the financial statement. Banks, financial institutions and investors are considered as external users. Investors are always look for a better returns from the business where they have invested the amount for which they have a tool i.e. financial statement.
Accounts that are prepared in order to comply with statutory requirement and to cater the information requirement of external users are known as
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Management Accounts
0%
Financial Accounts
0%
Management information systems
0%
Cost accounts
Explanation
Accounts that are prepared in order to comply with statutory requirement and to cater for the information requirement of external users are known as
Financial Accounts
.
Management accounts
are prepared for the internal purpose it is not distributed to people from the outer world.
The users of financial statements include _______ .
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0%
shareholders
0%
government
0%
lenders
0%
all of the above
Explanation
The users of financial statement may be classified into internal external users. Internal users refers to mangers who use accounting information in making decisions related to the company's operations. External users, on the other hand, are not involved in the operations of the company but hold some financial interest.
Two primary qualitative characteristics of financial statements are _________.
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Understandability and Materiality
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Relevance and Reliability
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Relevance and Understandability
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Materiality and Reliability
Explanation
The
two primary qualitative characteristics
of
financial statements
are relevance and reliability.
1. Relevance:
It means information should be
available in a timely manner, must help in prediction and feedback.
2. Reliability:
It means that the information should be free from error and verifiable by independent parties.
_____________ is/are not characteristics of Financial Statement.
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Compatibility
0%
Relevance
0%
Understandability
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Reliability
Explanation
There are mainly 4 characteristics of the accounting information
1.
Understandability
2. Reliability
3. Relevance
4. Comparability
____________ are important characteristics of Financial Statement.
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Understandability
0%
Comparability
0%
Reliability
0%
All of the above
Explanation
Financial accounting is the field of accounting concerned with the summary, analysis and reporting of financial transactions pertaining to a business. Financial accounting reports the results and position of business to government, creditors, investors, and external parties. Understanding, comparability, and reliability is important characteristics of financial accounting.
Which of the following are users of accounting information?
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Creditors
0%
Lenders
0%
Customers
0%
All of the above
Explanation
There are various stake holders who want to know about the business. There are internal and external stakeholders.
Internal stakeholders are investor and management who wants to know about the business performance.
External stakeholders are creditors, lenders and customers. Customers want to know about the growth of the organization and various new products whereas creditors and lenders are more interested to know about the financial position of the organization in reference to the security of their money.
Which of the following would be considered as an internal user of the financial statements?
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Shareholder
0%
Credotor
0%
Debtor
0%
Finance Manager
Explanation
Financial statements record and outline the financial activities of a business, an individual or any other entity. Financial statements are meant to present the financial information of the entity in equation as clearly and concise as possible for both the entity and for readers. Internal users refers to mangers who use accounting information in making decision related to the company's operation.
________ is/are not characteristic of financial statement.
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Prudence
0%
Full, fair and adequate disclosure
0%
Flexibility
0%
Faithful representation
Explanation
Financial accounting is the field of accounting concerned with the summary, analysis and reporting of financial transactions pertaining to a business. Financial accounting reports the results and position of business to government, creditors investors and external parties. Understandability, comparability, full, fair and adequate disclosure, faithful representation and reliability is important characteristics of financial statements.
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