Deck 1: Accounting Concepts and Principles

Question 1

Accounting furnishes data on

A)Income and cost for the managers
B)Financial conditions of the institutions
C)Company's tax liability for a particular year
D)All the above

Answer 1

All the above

Question 2

Long term assets having no physical existence but, possessing a value are called

A)Intangible assets
B)Fixed assets
C)Current assets
D)Investments

Answer 2

Intangible assets

Question 3

The assets that can be easily converted into cash within a short period, i.e., 1 year or less are known as

A)Current assets
B)Fixed assets
C)Intangible assets
D)Investments

Answer 3

Current assets

Question 4

The debts which are to be repaid within a short period (a year or less) are referred to as,

A)Current Liabilities
B)Fixed liabilities
C)Contingent liabilities
D)All the above

Question 5

The following is not a type of liability

A)Short term
B)Current
C)Fixed
D)Contingent

Question 6

Any written evidence in support of a business transaction is called

A)Journal
B)Ledger
C)Ledger posting
D)Voucher

Question 7

The accounts that records expenses, gains and losses are

A)Personal accounts
B)Real accounts
C)Nominal accounts
D)None of the above

Question 8

Real accounts records

A)Dealings with creditors or debtors
B)Dealings in commodities
C)Gains and losses
D)All of the above

Question 9

Which accounting concept satisfy the valuation criteria?

A)Going concern, Realisation, Cost
B)Going concern, Cost, Dual aspect
C)Cost, Dual aspect, Conservatism
D)Realisation, Conservatism, Going concern.

Question 10

A trader has made a sale of Rs.75,500 out of which cash sales amounted to Rs.25,500. He showed trade receivables on 31-3-2014 at Rs.25,500. Which concept is followed by him?

A)Going concern
B)Cost
C)Accrual
D)Money measurement

Question 11

A trader purchases goods for Rs. 2500000, of these 70% of goods were sold during the year. At the end of 31st December 2009, the market value of such goods were Rs. 500000. But the trader recorded in his books for Rs. 750000. Which of the following concept is violated.

A)Money measurement
B)Conservatism
C)Consistency
D)None of these

Question 12

The proprietor of the business is treated as creditor for the capital introduced by him due to_____ concept.

A)Money measurement
B)Cost
C)Entity
D)Dual aspect

Question 13

Fixed assets are held by business for _____.

A)Converting into cash
B)Generating revenue
C)Resale
D)None of the above

Question 14

Small items like, pencils, pens, files, etc. are written off within a year according to _____ concept.

A)Materiality
B)consistency
C)Conservatism
D)Realisation

Question 15

Business enterprise is separate from its owner according to _____ concept.

A)Money measurement concept
B)Matching concept
C)Entity concept
D)Dual aspect concept

Question 16

Debit the receiver & credit the giver is _____ account.

A)Personal
B)Real
C)Nominal
D)All the above

Question 17

Cash a/c is a ______.

A)Real a/c
B)Nominal
C)Personal
D)None

Question 18

As per the Matching concept, Revenue - ? = Profit

A)Expenses
B)Liabilities
C)Losses
D)Assets

Question 19

Which of the following is not a nominal Account?

A)Outstanding salaries Account
B)Salaries account
C)Interest paid
D)Commission received

Question 20

Historical cost concept requires the valuation of an asset at

A)Original cost
B)Replacement value
C)Net realizable value
D)Market value

Question 21

Profit and loss is calculated at the stage of

A)Recording
B)Posting
C)Classifying
D)Summarising

Question 22

The rule debit all expenses and losses and credit all income and gains relates to

A)Personal account
B)Real account
C)Nominal accounts
D)All

Question 23

The comparison of financial statement of one year with that of another is possible only when ------------- ---concept is followed

A)Going concern
B)Accrual
C)Consistency
D)Materiality

Question 24

For every debit there will be an equal credit according to

A)Matching concept
B)Cost concept
C)Money measurement concept
D)Dual aspect concept

Question 25

A trader calculated his profit as Rs.150000 on 31/03/2014. It is an

A)Transaction
B)Event
C)Transaction as well as event
D)Neither transaction nor event