Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Basic Accounting 295 Questions

Basic Accounting 295 Questions

Ratings: (0)|Views: 63|Likes:
Published by Atul Kumar

More info:

Published by: Atul Kumar on Apr 21, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOCX, PDF, TXT or read online from Scribd
See more
See less

12/03/2013

pdf

text

original

 
BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers)
2012
1
ACCOUNTING CONCEPTS & CONVENTIONS
Q1} XYZ Ltd. Purchased goods for
`
. 25,00,000 andsold 80% of such goods during the accounting yearended 31
st
March, 2005. The market value of theremaining goods was
`
.4,00,000. The companyvalued the closing stock at cost. They violated theconcept of (a)
 
Conservatism(b)
 
Money measurement(c)
 
Periodicity(d)
 
CostQ2} Profit and Loss Account is prepared for a periodof one year by following(a)
 
Periodicity period concept(b)
 
Business entity concept(c)
 
Accrual concept(d)
 
None of the aboveQ3} Basic concepts related to balance sheet are(a)
 
Conservatism concept(b)
 
Business entity concept(c)
 
Going concern concept(d)
 
Both (b) or (c)Q4} What is the important object of accounting?(a)
 
To maintain records(b)
 
Depiction of financial position(c)
 
Make information available to variousgroups & users(d)
 
All of the aboveQ5} Income is measured on the basis of (a)
 
Matching concept(b)
 
Consistency concept(c)
 
Cost concept(d)
 
None of the aboveQ6} The enterprise is liable to the owner for capitalinvestment made by the owner as per(a)
 
Entity concept(b)
 
Money measurement concept(c)
 
Accrual concept(d)
 
Going concern conceptQ7} Inventories are valued at lower of cost or netrealizable value by applying the principle of (a)
 
Conservatism(b)
 
Consistency(c)
 
Materiality(d)
 
DisclosureQ8} In which area different accounting policies areadopted(a)
 
Valuation of inventories(b)
 
Valuation of investment(c)
 
Depreciation(d)
 
All of the aboveQ9} Advance received from Debtors is not taken asSales is based on(a)
 
Conservatism concept(b)
 
Accrual concept(c)
 
Money measurement concept(d)
 
None of the aboveQ10} Mohan purchased a Motor Car costing
`
.60,000on 1
st
January, 2006 transportation and repairingcharge were incurred amounting
`
.5,000 and 200respectively. Dismantling charge of old motor car inplace of which new motor car was purchasedamounted to
`
.20,000. Marked value of motor carwas estimated at
`
.70,000 and 31
st
December, 2006while finalizing the annual accounts. Mohan valuesthe motor car at
`
.70,000 in this book. Which of thefollowing concepts was violated by the Mohan?(a)
 
Matching concept(b)
 
Realization concept(c)
 
Cost concept(d)
 
Periodicity conceptQ11} Fundamental accounting assumptions are(a)
 
Consistency concept(b)
 
Going concern concept(c)
 
Accrual concept(d)
 
All of the aboveQ12} Arjun purchased goods for
`
.10,00,000 and sold70% of such goods during the year ended 31
st
Dec.2006. The market value of the remaining goods was2,00,000. He valued the closing stock at cost. Heviolated the concept of (a)
 
Periodicity(b)
 
Money measurement(c)
 
Conservatism(d)
 
CostQ13} All the following items are classified asfundamental accounting assumptions except(a)
 
Consistency(b)
 
Business entity(c)
 
Going concern(d)
 
AccrualQ14} Two primary qualitative characteristics of financial statements are(a)
 
Understandability and materiality(b)
 
Relevance and reliability(c)
 
Relevance and understandability(d)
 
Materiality and reliabilityQ15} Kanika Enterprises follows the written downvalue method of depreciating machinery year afteryear due to(a)
 
Comparability(b)
 
Convenience(c)
 
consistency(d)
 
All of the aboveQ16} Assets are held in the business for the purposeof (a)
 
Resale(b)
 
Conversion into cash(c)
 
Earning revenue(d)
 
None of the aboveQ17} Revenue from sale of products, is generally,realized in the period in which(a)
 
Cash is collected(b)
 
Sale is made
 
BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers)
2012
2(c)
 
Products are manufactured(d)
 
None of the aboveQ18} The concept of conservatism when applied tothe balance sheet results in(a)
 
Understatement of assets(b)
 
Overstatement of assets(c)
 
Overstatement of capital(d)
 
Understatement of capitalQ19} The determination of expenses for anaccounting period is based on the principle of (a)
 
Objectivity(b)
 
Materiality(c)
 
Matching(d)
 
PeriodicityQ20} Economic life of an enterprise is split into theperiodic interval as per(a)
 
Periodicity(b)
 
Matching(c)
 
Going concern(d)
 
AccrualQ21} If an individual asset is increased, there will bea corresponding(a)
 
Increase of another asset or increase of capital(b)
 
Decrease of another asset or increase of liability(c)
 
Decrease of specific liability or decrease of capital(d)
 
None of the theseQ22} Financial position of the business is ascertainedon the basis of (a)
 
Records prepared under book
 –
keepingprocess(b)
 
Trial balance(c)
 
Accounting reports(d)
 
None of the aboveQ23} User of accounting information include(a)
 
Creditors(b)
 
Lenders(c)
 
Customers(d)
 
All of the aboveQ24} It is on the basis of the entity co9ncept thatmoney brought by the proprietor into the business iscredit to ____________ account.(a)
 
Proprietor’s personal
 (b)
 
Proprietor’s capital
 (c)
 
Cash A/c(d)
 
Bank A/cQ25} As per the going concern concept until andunless the business has entered into a state of liquidation, it is viewed as having ________ life.(a)
 
Definite(b)
 
Indefinite(c)
 
Standstill(d)
 
NoneQ26} A businessman needs to know the state of affairs of his business at frequent intervals which isnormally a twelve-month period this period is called _______ year.(a)
 
Accounting(b)
 
Calendar(c)
 
Financial year(d)
 
Leap year.Q27} ______ basis of revenue recognition considersthe revenue as realized when sale is completed.(a)
 
Cash(b)
 
Sales(c)
 
Mercantile(d)
 
None of theseQ28} In determining net income from businessoperation, the losses not related to ordinarybusiness operation are ______ from the revenue fordetermining net income.(a)
 
deducted(b)
 
not deducted(c)
 
added(d)
 
none of theseQ29} According to the convention of conservatism,the stock in trade is valued at market price, or costprice, whichever is _____(a)
 
Less(b)
 
More(c)
 
Same(d)
 
NoneQ30} The principle of accountancy, which recognizesthe double aspect of a business transaction is knowsare _______ concept.(a)
 
Dual(b)
 
Accrual(c)
 
Matching(d)
 
EntityQ31} The system of recording transactions based ondual concept is called-(a)
 
Double account system(b)
 
Double entry system(c)
 
Single entry system(d)
 
Cash systemQ32} According to money measurement concept thefollowing on dual concept is called
 –
 (a)
 
Health of the chairman of the company(b)
 
Quality control in the business(c)
 
Value of the building(d)
 
Staff moraleQ33} Cost concept envisages the recording of thefollowing in the books of accounts -(a)
 
An asset at its cost(b)
 
Knowledge and will acquired by businessexecutive(c)
 
Changes effected because of some politicalevents(d)
 
Qualification C/F/O. (Chief Financial officer)Q34} The practice of appending note regardingcontingent liabilities in the accounting statements isin pursuant to
 –
 
 
BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers)
2012
3(a)
 
Conventio0n of Consistency(b)
 
Money measurement concept(c)
 
Convention of disclosure(d)
 
Entity conceptQ35} The Proprietor is treated as a creditor to theextent of his capital according to
 –
 (a)
 
Cost concept(b)
 
Business entity concept(c)
 
Going concern concept(d)
 
Dual conceptQ36} The accounting equation is based on
 –
 (a)
 
Going concern concept(b)
 
Dual aspect concept(c)
 
Money measurement concept(d)
 
Entity conceptQ37} Market value of investments is shown as afootnote according to
 –
 (a)
 
Convention of disclosure(b)
 
Convention of consistency(c)
 
Convention of conservatism(d)
 
Entity conceptQ38} Making the provision for doubtful debts inanticipation of actual bad debts is on the basis of 
 –
 (a)
 
Convention of disclosure(b)
 
Convention of consistency(c)
 
Convention of conservatism(d)
 
Dual ConceptQ39} According to going concern concept, a Businessis viewed as having(a)
 
A limited life(b)
 
An indefinite life(c)
 
A very long life(d)
 
No lifeQ40} Contingent liability is shown due to(a)
 
Convention of full disclosure(b)
 
Convention of conservatism(c)
 
Convention of materiality(d)
 
Dual aspect conceptQ41} Depreciation was not recorded because to doso would result in a net loss for the period Indicatethe accounting principle that is violated(a)
 
Cost Principle(b)
 
Consistency(c)
 
Materiality(d)
 
No principle of accounting is violatedQ42} LIFO inventory method was used in year 1, FIFOin year 2 and weighed average in year 3. Whichaccounting principle is violated?(a)
 
Cost Principle(b)
 
Consistency(c)
 
Materiality(d)
 
No principle of accounting is violatedQ43.} The owner of a company included his personal
medical expenses in the company’s income
statements. Indicate the accounting principle that isviolated.(a)
 
Cost principle
 
(b)
 
Going concern concept
 
(c)
 
Entity concept
 
(d)
 
ConservatismQ.44.} Land was reported as its selling prince whichis substantially higher than its cost. The increase invalue was included in the income statement. Whichaccounting principle is violated?(a)
 
Cost principle(b)
 
Going concern concept(c)
 
Entity concept(d)
 
ConservatismQ.45} No mention was made of a major law suit filed
against the company even though the company’s
attorney believes that there is high probability of losing the case. Indicate the accounting principlethat is violated.(a)
 
Cost principle(b)
 
Conservatism(c)
 
Full disclosure(d)
 
MaterialityQ.46} The cost of three small files (of 
`
.4 each) wascharged to expenses when purchased even thoughthey had a useful life of several years. This was doneaccording to thea)
 
Cost principleb)
 
Conservatism principlec)
 
Full disclosured)
 
MaterialityQ.47) An accounting convention which provides thatwhen doubt, choose the solution least likely tooverstate assets and income is(a)
 
Consistency(b)
 
Materiality(c)
 
Conservatism(d)
 
ContinuityQ.48) Money measurement concept of accountingtheory is based on the assumption that the value of money will(a)
 
Remain constant(b)
 
Fluctuate(c)
 
Decrease(d)
 
Go upQ.49) The fundamental accounting equation Assets
 –
 Liabilities is the formal expression of (a)
 
Dual aspect concept(b)
 
Matching concept(c)
 
Going concern concept(d)
 
Money measurement conceptQ.50) Any change in the accounting policy relating toinventories which has a material effect in the currentor late, periods should be disclosed. This is inaccordance with the accounting principle of :(a)
 
Going concern(b)
 
Conservatism(c)
 
Consistency(d)
 
Disclosure

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->