Q1.

Book keeping is mainly concerned with:

(a) Recording of financial data

(b) Designing the system of summarizing the recorded data

(c) Interpreting the data for internal and external users

(d) Preparation of financial statements

Q2.Which of the following is not a sub field (branch) of accounting?

(a) Financial accounting

(b) Book Keeping

(c) Management accounting

(d)Cost accounting

Q3. Goods means:

(a) Commodity to be bought and sold

(b) Commodity to be bought but not to be sold

(c) Commodity to be used as an asset

(d)All of the above

Q4. Current asset do not include:

(a) Debtors

(b) Motor car

(c)Bank balance

(d)Prepaid expenses

Q5. Which of the following is not an intangible asset?

(a) Patents

(b) Investments

(c) Goodwill

(d)Trademark

Q6. A person who owes money to the firm is called:

(a)Debtors
 (b) Creditors

(c) Supplier

(d)None of the above

Q7. Which of the following is not a limitation of accounting?

(a)Information is not fully exact

(b) Replaces memory

(c) Evidence in legal matters

(d)Omission of Qualitative information

Q8. Accounting information is based on documentary evidences so it has the quality of :

(a)Relevance

(b) Reliability

(c) Understandability

(d)Comparability

Q9. Which of the following is not an advantage of accounting?

(a)Evidence in legal matter

(b) Enables comparative study

(c) Is not fully exact

(d)Helpful in raising loans

Q10. Which of the following is the capital expenditure?

(a)Wages paid for repair of building

(b) Wages paid for white washing of business

(c) Wages paid for extension of building

(d)wages paid for decoration of building

Q11. Current liabilities includes:

(a)Trade payables

(b) expenses due but not paid

(c) Income received in advance

 (d)all of the above

Q12. Trade discount is allowed:

(a) at the time of receiving the payment

(b) at the time of sale of goods

(c) both at the time of sale of goods and at time of receiving payment

(d) all of the above

Q13. External users of accounting information are:

(a)Bankers

(b) Potential investors

(c) Public

(d)All of the above

Q14. Furniture, Building Machinery etc. are:

(a)Tangible asset

(b) Intangible asset

(c) Current asset

(d) Fictitious asset

Q15. Which of the following transaction is not of financial character?

(a)Purchase of asset on credit

(b) Purchase of asset for cash

(c) Meeting with potential customers

(d)Drawings by proprietor

Q16.Use of common unit of measurement and common format of reporting promotes:

(a)Relevance

(b) Understandability

(c) Reliability

(d)Comparability

Q 17. Which of the following is the first step in accounting?

 (a)Analyzing and interpretation of financial transaction

(b) Identification of financial transactions and events

(c) Summarizing

(d) Communication of information to the users

Q18. Accounting involves recording of:

(a)Only non financial transactions

(b) Only financial transactions

(c) both (a) and (b)

(d) Personal transactions of the owner

Q19. Purchase refers to:

(a)Stationary for office use

(b) assets for the factory

(c) Goods for resale

(d) Investments

Q20. Which of the following accounting information is most relevant for government?

(a) Bank balance of the firm

(b) Book value of fixed assets

(c) Credit sales of the year

(d) Profits generated during the year

Q 21 Due to which concept qualitative transactions are not recorded in the books;

a)Business Entity Concept b)Money Measurement Concept

c)Historical Cost Concept d)Dual Aspect Concept

Q22 The following Concepts is followed in Accounting Standards;

a)Consistency b)Materiality

c)Full Disclosure d) All of the above

Q23 During the lifetime of an entity accounting produces financial statements in
accordance

with which basic concept:

a) Conservatism b)Matching

c)Accounting Period d)None of the above

Q24 A concept that a business enterprise will not be sold or liquidated in the near future is

known as :

a)Going Concern b)Economic Entity

c)Monetary unit d)None of the above

Q25 Closing Stock is valued at cost price or realisable value whichever is less. Which

accounting principle is applied here;

a)Principle of Prudence b)Matching Principle

c)Cost Principle d)Money Measurement Concept

Q26 Omission of Paise and showing the round figures in financial statements is based on:

a)Conservatism Convention b)Consistency Concept

c)Materiality Convention d)Money Measurement Concept

Q27 Which of these is not a fundamental accounting assumption:

a)Going Concern b)Consistency

c)Accrual d)Materiality

Q28 The owner of the firm records his medical expenses in the firm’s income statement.

Indicate the principle that is violated:

a)Cost Concept b)Prudence

c)Full Disclosure d)Entity Concept

Q29 According to which concept the same accounting methods should be used year;

a)Prudence b)Full Disclosure

c)Materiality d)Consistency

Q30 Revenue is generally realised at the time of sale,which principle is involved in this
 Situation:

a)Matching b)Full Disclosure

c)Revenue Recognition d)Consistency

Q31 What is meant by GAAP;

a)Generally Accepted Accounting Practices b)Generally Accepted Accounting Principles

c)Generally Acknowledged Accounting Practices d)Generally Accepted Accounting Points

Q32 Providing depreciation on Fixed Assets is in accordance with which of the following

principles/ Concepts:

i)Going Concern ii)Matching Concept iii)Materiality

a)i) and ii) b)ii) and iii)

c)i) and iii) d)All of three

Q33 M/s Future Ltd. has invested Rs 10,000 in the shares of Relicam Industries Ltd..
Current market value of these shares is Rs 10,500. Accountant of the company wants to
show Rs

10,500 as value of investment in the books of accounts ,which accounting convention

restricts him from doing so;

a)Full Disclosure b)Consistency

c)Conservatism d)Materiality

Q34. There is an accrued income of Rs.50,000 for the year ended 31st March, 2019.
Which basis of accountingwill show lesser profit due to this?
(a) Accrual Basis
(b) Cash Basis
(c) Both will show same profit
(d) Inadequate Information
Q35. What will be the amount of profit in case of following, under cash basis of
accounting?
Income received in advance Rs.50,000;
Accrued Income Rs.3,000;
Salaries paid Rs. 70,000 (including Rs. 5,000 of previous year) and
Total sales (30% credit) Rs.1,00,000
(a) Rs.70,000
(b) Rs.53,000
 (c) Rs.1,20,000
(d) Rs.50,000
Q36. What will be the amount of profit in case of following, under Accrual basis of
accounting?
Income received in advance Rs.1,50,000;
Accrued Income Rs.30,000;
Salaries paid Rs.1,05,000 (including Rs. 5,000 of previous year) and
Total sales (30% credit) Rs.2,00,000
(a) Rs.1,70,000
(b) Rs.2,80,000
(c) Rs. 1,30,000
(d) Rs.1,50,000
Q37. During the financial year 2018-19, Manish had a cash sales of Rs.3,90,000 and credit
sales of rs.1,60,000. His expenses for the year were Rs.2,70,000, out of which Rs.80,000 is
still outstanding. Find out Manish’s income for 2018-19 following the cash Basis of
Acconting.
Q38. Under cash basis of accounting incomes are recorded when
a) Incomes are received
b) Incomes are accrued
c) Expenses are paid
d) All of the above