Financial Statements Analysis & Reporting Assignment I

Q1. Double entry accounting system means

a) Every business transaction has two fold effects

b) Every business transaction is recorded in journal & ledger

c) Every business transaction is taken to trial balance

d) All of the above

Q2. Double entry accounting system was propounded by

a) Institute of Chartered Accountants of India

b) IASB

c) IASC

d) Fra Luco Pacioli

Q3. The first book written on double entry system was

a) De Computis et Scripturis

b) Balance sheet

c) Cash flow statement

d) None of the above

Q4. Under double entry accounting system all business transactions are divided under

a) One account

b) Two accounts

c) Three accounts

d) Four accounts

Q5. According to the money measurement concept, the following will be recorded in the books of
accounts

a) Quality control in business

b) Commission payable to a salesman

 c) Extra profits made due to introduction of a budgetary control system

d) All of these

Q6. The conversion of conservatism will have the effect of

a) Overstatement of assets

b) Understatement of assets

c) Understatement of liabilities

d) Understatement of provision for bad and doubtful debts

Q7. Any reserve which is not apparent on the face of the balance sheet is known as

a) Secret reserve

b) Hidden reserve

c) Inner reserve

d) Any of these

Q8. Amount spent on increasing the seating capacity in a cinema hall is a

a) Capital expenditure

b) Revenue expenditure

c) Deferred revenue expenditure

d) All of the above

Q9. Which of the following is capital expenditure?

a) Purchased a pencil sharpener at a cost of Rs.2

b) Installing an escalator at cost of Rs.5, 600 in a three storey building which had
previously been used without escalators

c) Painted delivery truck at a cost of Rs.450 after two years of use

d) All of the above

Q10. Qualitative transactions are not recorded in accounts due to

a) Dual concept

b) Accrual concept

c) Money measurement concept

 d) Cost concept

Q11. Concept of Realization implies

a) When cash is received from debtors

b) When goods are delivered to customer

c) When order is received

d) None of the above

Q12. Under Personal Account, accounts of

a) All natural human beings are included

b) All natural human beings and organizations/entities are included

c) All human beings and assets are included

d) All human beings and liabilities are included

Q13. Liabilities of a business are Rs. 21, 220 and owner’s equity is Rs. 25, 000. The assets of the
business will be

(a) Rs. 11,220

(b) Rs. 3,780

(c) Rs. 15, 000

(d) None of these