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Accounting principles and procedures mcqs

Accounting MCQs Papers & Definitions Skip to content Question. As per Dual Aspect Concept: (a) Assets = Liabilities – Capital(b) Assets = Capital – Liabilities(c) Assets = Liabilities + Capital(d) Capital = Assets + Liabilities Question. 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 Future Ltd. 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 Question. 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 Question. According to the Cost Concept (a) Assets are recorded at lower of cost and market value.(b) Assets are recorded by estimating the market value at the time of purchase.(c) Assets are recorded at
the value paid for acquiring it.(d) Assets are not recorded Question X Ltd. follows the Written Down Value Method of depreciating machinery year after year due to (a) comparability.(b) convenience.(c) consistency.(d) All of these. Question. The Trading and Profit and Loss Account is prepared under which attribute of accounting:(a)
Summarising(b) Recording(c) Classifying(d) Analysis and Interpretation Question. According to Convention of Conservatism closing stock is valued at: (a) At cost Price(b) At Realisable value(c) Cost price or realisable(d) At Real value value whichever is less Question. Convention of conservatism takes into account: (a) All future profits
and losses(b) All future profits and not losses(c) All future losses and not profits(d) Neither profits nor losses of the future Question. The owner of the firm records his medical expenses in the firms’ income statement. Indicate the principle that is violated. (a) Cost Concept(b) Prudence(c) Full disclosure(d) Entity concept Question. As per
Income Tax Act, accounting period is : (a) From 1st January to 31st December(b) From 1st April to 31st March(c) From 1st July to 30th June(d) From Diwali to Diwali Question. Which of the following statements is correct:(a) Book Keeping is a part of Accounting.(b) Accounting is a part of book-keeping.(c) The term book-keeping and
accounting can be used interchangeably.(d) Book keeping is not a part of accounting. Question. As per Dual Aspect Concept: (a) Assets = Liabilities – Capital(b) Assets = Capital – Liabilities(c) Assets = Liabilities + Capital(d) Capital = Assets + Liabilities Question. Concept of Consistency means: (a) All the firms in the same industry
should use identical accounting principles and procedures (b) All principles and procedures of accounting are utilised(c) Accounting principles and methods should remain consistent from one year to another(d) All of the above Question. IFRS are:(a) Principles based accounting standards(b) Rule based accounting standards(c) Partially
rule and partially principles(d) None of the options Question. Which of these is not a fundamental accounting assumption? (a) Going concern(b) Consistency(c) Accrual(d) Materiality Question. The cost of a small calculator is accounted as an expense and not shown as an asset in a financial statements of a business entity due to …… .
(a) Materiality Convention(b) Matching concept(c) Periodicity concept(d) Convention of full disclosure Question IFRS are (а) rule based accounting standards.(б) principle based accounting standards.(c) partially rule based and partially principle based accounting standards.(d) None of the above. Question. 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 Future Ltd. 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 Question.
As per Income Tax Act, accounting period is : (a) From 1st January to 31st December(b) From 1st April to 31st March(c) From 1st July to 30th June(d) From Diwali to Diwali Question. IASB (International Accounting Standards Board) upon coming into existence has adopted:(a) All IAS and SIC (Standing Interpretation Board)(b) Some IAS
and SIC(c) None of the options(d) None of the IAS and SIC Question. Providing depreciation on fixed asset is in accordance with which of the following principles/concepts. (i) Going concern (ii) Matching Concept (iii) Materiality(a) (i) & (ii)(b) (ii) & (iii)(c) (i) & (iii)(d) All the three Question. Which one of the following statement is correct?(a)
Income = Revenue – Expenses.(b) Income = Expenses – Revenue.(c) Expenses = Income – Revenue.(d) Income= Profits – Expenses. Question IASB upon coming into existence has adopted (a) all IAS and SIC.(b) some IAS and SIC.(e) none of the IAS and SIC.(d) None of these. Question. Providing depreciation on fixed asset is in
accordance with which of the following principles/concepts. (i) Going concern (ii) Matching Concept (iii) Materiality(a) (i) & (ii)(b) (ii) & (iii)(c) (i) & (iii)(d) All the three Question Ind-AS are (a) rule based accounting standards.(b) principle-based accounting standards.(c) partially rule based and partially principle-based accounting standards.
(d) None of the above. Question Assets (except Securities) may be valued under Ind-AS on. (a) historical cost.(b) fair value.(c) both historical cost and fair value.(d) None of these. Question. Concept of Consistency means: (a) All the firms in the same industry should use identical accounting principles and procedures(b) All principles
and procedures of accounting are utilised(c) Accounting principles and methods should remain consistent from one year to another(d) All of the above Question. According to which Concept the same accounting methods should be used each year : (a) Prudence(b) Full Disclosure(c) Materiality(d) Consistency Question. Convention of
conservatism takes into account: (a) All future profits and losses(b) All future profits and not losses(c) All future losses and not profits(d) Neither profits nor losses of the future Question IFRS are based on (a) historical cost.(b) fair value.(c) both historical cost and fair value.(d) None of these. Question. Due to which of the following,
contingent liabilities are shown in the Balance Sheet: (a) Dual Aspect Concept(b) Convention of Full Disclosure(c) Convention of Materiality(d) Going Concern Concept Question. According to Convention of Conservatism closing stock is valued at: (a) At cost Price(b) At Realisable value(c) Cost price or realisable(d) At Real value value
whichever is less Question Under the Cash Basis of Accounting, expenses are recorded (a) on payment.(b) on being incurred.(c) either (a) or (b).(d) None of these. Question Accrual Basis of Accounting (a) does not give a true and fair view of profit and financial position.(b) gives a true and fair view of profit and financial position.(c)
may or may not give a true and fair view of profit and financial position.(d) None of the above. Question According to the Convention of Consistency (a) accounting policies and practices once adopted should be consistently followed.(b) accounting policies and practices adopted may be changed as per the management’s decision.(c)
accounting policies and practices once adopted cannot be changed under any circumstances.(d) None of the above. Question. Which of the following limitations of accounting states that accounts may be manipulated to conceal vital information?(a) Accounting leads to window dressing(b) Accounting is not fully exact(c) Accounting ignores
price level changes.(d) Accounting ignores qualitative concepts. Question According to the Going Concern Concept (a) assets are recorded at cost and are depreciated over their useful life.(b) assets are valued at their market value at the year-end and are recorded in the books of account.(c) assets are valued at their market value,
recorded in the books and depreciation is charged on the market value.(d) None of the above. Question. The cost of a small calculator is accounted as an expense and not shown as an asset in a financial statements of a business entity due to …… . (a) Materiality Convention(b) Matching concept(c) Periodicity concept(d) Convention of
full disclosure Question: Return Inward is the term used for:(a) Sales Return(b) Purchase Return(c) Credit purchase(d) Credit Sales Question Under the Accrual Basis of Accounting, expenses are recorded (a) on payment.(b) on being incurred.(c) either (a) or (b).(d) None of these. Question. Among the following assets, which one is
fictitious asset?(a) Debit balance of Profit &loss A/c(b) Goodwill(c) Patents(d) Oil wells Question (i) According to the Business Entity Concept (a) transactions between the business and its owners are not recorded.(b) transactions between the business and its owners are recorded considering them to be one single entity.(c) transactions
between the business and its owners are recorded from the business point of view.(d) None of the above. Question According to the Cost Concept (a) assets are recorded at the value paid for acquiring them.(b) assets are recorded by estimating the market value at the time of purchase.(c) assets are recorded at lower of cost or market
value.(d) None of the above. Question According to the Accrual Concept (a) transactions and events are recorded in the books at the time of their settlement in cash.(b) transactions and events are recorded in the books at the time when they are entered into.(c) transactions and events may be recorded either at the time of the settlement
or when they are entered into.(d) None of the above. Question. According to the Cost Concept (a) Assets are recorded at lower of cost and market value.(b) Assets are recorded by estimating the market value at the time of purchase.(c) Assets are recorded at the value paid for acquiring it.(d) Assets are not recorded Question Accrual
Basis of Accounting recognises (а) Outstanding and Prepaid Expenses.(b) Accrued Incomes and Incomes Received in Advance.(c) Both (a) and (b).(d) None of the above. Question. Which one of the following is NOT the qualitative characteristic of accounting?(a) Completeness(b) Reliability(c) Understandability(d) Relevance
Question. Reliability of accounting information depends upon:(a) Verifiability(b) Neutrality(c) Understandability(d) Comparability Question According to the Cost Concept (a) assets are recorded at the value paid for acquiring them.(b) assets are recorded by estimating the market value at the time of purchase.(c) assets are recorded at
lower of cost or market value.(d) None of the above. Question. The basic accounting postulates are denoted by –(a) Concepts(b) Book – keeping(c) Accounting standards(d) None of these. Question. Meaning of credibility of going concern is :(a) Closing of business(b) Opening of business(c) Continuing of business(d) None of these.
Question According to Going Concern Concept, a business is viewed as having (a) a limited life.(b) a very long life.(c) an indefinite life.(d) None of these. Question. Income is measured on the basis of: (a) Matching Concept(b) Consistency Concept(c) Cost Concept(d) None of the above Question. The sum of Liabilities and Capital is-(a)
Expense(b) Income(c) Drawings(d) Assets. Question IFRS are (а) rule based accounting standards.(б) principle based accounting standards.(c) partially rule based and partially principle based accounting standards.(d) None of the above. Question. Closing stock is valued at lower of cost or market price. Which concept of accounting is
applied here(a) Matching concept(b) Revenue concept(c) Prudence(d) Cost concept Question. Salary to Manager will be recorded in the books of accounts but appointment of manager is not recorded due to______(a) Full disclosure(b) Accounting period(c) Business entity(d) Money measurement Question IFRS are based on (a)
historical cost.(b) fair value.(c) both historical cost and fair value.(d) None of these. Question Ind-AS are (a) rule based accounting standards.(b) principle-based accounting standards.(c) partially rule based and partially principle-based accounting standards.(d) None of the above. Question Under Accrual Basis of Accounting (a) both
Cash and Credit transactions are recorded.(b) only cash transactions are recorded.(c) only credit transactions are recorded.(d) None of the above. Question. Under which accounting principle quality of manpower is not recorded in the books of accounts(a) Going concern(b) Accounting entity(c) Accounting period(d) Money measurement
Question According to which of the following accounting concepts, even the proprietor of a business is treated as creditor to the extent of his capital? (a) Money Measurement Concept(b) Dual Aspect Concept(c) Cost Concept(d) Business Entity Concept Question. Everything a firm owns, it also owns out to somebody. This co-incidence
is explained by the ___________ concept.(a) Cost concept(b) Prudence(c) Consistency(d) Dual aspect concept Question According to which of the following accounting concepts, even the proprietor of a business is treated as creditor to the extent of his capital? (a) Money Measurement Concept(b) Dual Aspect Concept(c) Cost
Concept(d) Business Entity Concept Question. Under which accounting concept fixed assets are recorded at cost without considering the market price (whether low or high).(a) Matching concept(b) Revenue concept(c) Prudence concept(d) Historical Cost Principle Question. Purchases refers to the buying of ——–(a) stationery for office
use (b) assets for the factory (c) goods of resale (d) investment Question IASB upon coming into existence has adopted (a) all IAS and SIC.(b) some IAS and SIC.(e) none of the IAS and SIC.(d) None of these. Question According to the Going Concern Concept (a) assets are recorded at cost and are depreciated over their useful life.(b)
assets are valued at their market value at the year-end and are recorded in the books of account.(c) assets are valued at their market value, recorded in the books and depreciation is charged on the market value.(d) None of the above. Question The Convention of Conservatism takes into account C(a) all prospective profits and
prospective losses.(b) all prospective profits and leaves out prospective losses.(c) all prospective losses but leaves out prospective profits.(d) None of the above. Question According to the Money Measurement Concept (a) all transactions and events are recorded.(b) all transactions and events which can be estimated in money terms are
recorded in the books of account.(c) all transactions and events which can be measured in money terms are recorded in the books of account.(d) None of the above. Question. Current asset do not include —(a) debtors(b) motor car(c) bank balance(d) prepaid expenses Question. Out of the following assets which one is not an intangible
asset?(a) Patents(b) investment(c) goodwill(d) trade mark Question. Select the best alternative: (i) According to the Business Entity Concept(a) transactions between the business and its owners are not recorded.(b) transactions between the business and its owners are recorded considering them to be one single entity.(c) transactions
between the business and its owners are recorded from the business point of view.(d) None of the above. Question. Which of the following is capital expenditure?(a) Wages (b) wages paid for building construction (c) repair expenses of building(d) advertisement expenses Question. Main feature of business transaction is ——(a) An
economic activity(b) change in the financial position of the firm(c) express in terms of money(d) all of the above Question. Accrual concept is based on(a) Matching principle(b) Dual aspect(c) Cost(d) Going concern Question. Due to which principle qualitative transactions are not recorded in the books(a) Business entity(b) Money
measurement(c) Historical cost(d) Dual aspect Question According to the Accrual Concept (a) transactions and events are recorded in the books at the time of their settlement in cash.(b) transactions and events are recorded in the books at the time when they are entered into.(c) transactions and events may be recorded either at the
time of the settlement or when they are entered into.(d) None of the above. Question. According to the cost concept(a) Assets are recorded at lower of cost and market value(b) Assets are recorded by estimating the market value at the time of purchase(c) Assets are not recorded(d) Assets are recorded at the value paid for acquiring it.
Question. Omission of paise and showing the round figures in financial statements is based on(a) Conservatism(b) Consistency(c) Materiality(d) Money measurement Question. Due to which of the following, contingent liabilities are shown in the Balance Sheet:(a) Dual aspect(b) Full disclosure(c) Materiality(d) Going concern
Question. When the information about two different enterprises have been prepared and presented in a similar manner the information exhibits the characteristic of:(a) Verifiability(b) Relevance(c) Reliability(d) None of the above Question. Accrual concept is based on : (a) Matching Concept(b) Dual Aspect Concept(c) Cost Concept(d)
Going concern Concept Question. Income is measured on the basis of: (a) Matching Concept(b) Consistency Concept(c) Cost Concept(d) None of the above Question According to Going Concern Concept, a business is viewed as having (a) a limited life.(b) a very long life.(c) an indefinite life.(d) None of these. Question According to
which of the following concepts, in determining the net income from business, all costs which are applicable to the revenue of the period should be charged against that revenue? (a) Matching Concept(b) Money Measurement Concept(c) Cost Concept(d) Dual Aspect Concept Question. The primary qualities that make accounting
information useful for decision-making are:(a) Relevance and freedom from bias|(b) Reliability and comparability (c) Comparability and consistency(d) None of the above Question. According to which Concept the same accounting methods should be used each year : (a) Prudence(b) Full Disclosure(c) Materiality(d) Consistency Question
According to the Money Measurement Concept (a) all transactions and events are recorded.(b) all transactions and events which can be estimated in money terms are recorded in the books of account.(c) all transactions and events which can be measured in money terms are recorded in the books of account.(d) None of the above.
Question. 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 Question Valuation of stock at lower of cost or net realisable value is an example of (a) Consistency Convention.(b) Conservatism
Convention.(c) Realisation Concept.(d) Matching Concept. Question. Revenue from sale of products is realized when(a) the sale is made(b) the cash is collected(c) the production is completed(d) the order placed to supply goods. Question. The owner of the firm records his medical expenses in the firms’ income statement. Indicate the
principle that is violated. (a) Cost Concept(b) Prudence(c) Full disclosure(d) Entity concept Question According to the Convention of Consistency (a) accounting policies and practices once adopted should be consistently followed.(b) accounting policies and practices adopted may be changed as per the management’s decision.(c)
accounting policies and practices once adopted cannot be changed under any circumstances.(d) None of the above. Question. According to which Concept even the proprietor of the business is treated as a creditor of the business; (a) Going concern Concept(b) Cost Concept(c) Business Entity Concept(d) Accounting Period Concept
Question. 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 Question Assets (except Securities) may be valued under Ind-AS on. (a) historical cost.(b) fair value.(c) both historical cost
and fair value.(d) None of these. Question. Accrual concept is based on : (a) Matching Concept(b) Dual Aspect Concept(c) Cost Concept(d) Going concern Concept Question. Normally assets are recorded at cost price. This because(a) Assets can be realized at the lime of winding up.(b) Historical cost concept.(c) Going concern
concept(d) All of these Question The Convention of Conservatism takes into account (a) all prospective profits and prospective losses.(b) all prospective profits and leaves out prospective losses.(c) all prospective losses but leaves out prospective profits.(d) None of the above. Question. According to Convention of Conservatism: (a)
Provision is made for bad and doubtful debts(b) Depreciation is charged on assets(c) Recording is made of outstanding expenses(d) All of the above Question. According to Convention of Conservatism: (a) Provision is made for bad and doubtful debts(b) Depreciation is charged on assets”(c) Recording is made of outstanding
expenses(d) All of the above Question. 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 Question. Accounting standard deals with depreciation accounting is(a) As-5(b) As-16(c) As-6(d) As-9
Question. During the lifetime of an entity, accounting produce financial statements in accordance with which basic accounting concept.(a) Conservation(b) Matching(c) Accounting period(d) None of these Question. According to which Concept even the proprietor of the business is treated as a creditor of the business; (a) Going concern
Concept(b) Cost Concept(c) Business Entity Concept(d) Accounting Period Concept Question X Ltd. follows the Written Down Value Method of depreciating machinery year after year due to (a) comparability.(b) convenience.(c) consistency.(d) All of these. Question. The Policy of ‘anticipate no profit and provide for all possible losses’
arises due to convention of(a) Matching(b) Conservatism(c) Consistency(d) None Question. Which of these is not a fundamental accounting assumption? (a) Going concern(b) Consistency(c) Accrual(d) Materiality Question According to which of the following concepts, in determining the net income from business, all costs which are
applicable to the revenue of the period should be charged against that revenue? (a) Matching Concept(b) Money Measurement Concept(c) Cost Concept(d) Dual Aspect Concept Question Valuation of stock at lower of cost or net realisable value is an example of (a) Consistency Convention.(b) Conservatism Convention.(c) Realisation
Concept.(d) Matching Concept. Question. Due to which of the following, contingent liabilities are shown in the Balance Sheet: (a) Dual Aspect Concept(b) Convention of Full Disclosure(c) Convention of Materiality(d) Going Concern Concept Question During the life-time of an entity, accounting produces financial statements in accordance
with which of the following accounting concept? (a) Matching(b) Conservatism(c) Accounting period(d) Cost error: Content is protected !!

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