DEEP STUDY POINT

Theory Base of Accounting

Question 1.
Generally the duration of an Accounting period is of-
(a) 6 months
(b) 3 months
(c) 12 months
(d) 1 month.

Answer (c) 12 months

Question 2.
The sum of Liabilities and Capital is-
(a) Expense
(b) Income
(c) Drawings
(d) Assets.

Answer (d) Assets.

Question 3.
In India, the accounting standard board was set up in the year-
(a) 1972
(b) 1977
(c) 1956
(d) 1932.

Answer (b) 1977

Question 4.
The basic accounting postulates are denoted by –
(a) Concepts
(b) Book – keeping
(c) Accounting standards
(d) None of these.

Answer (a) Concepts

Question 5.
The amount drawn by businessmen for his personal use is-
(a) Capital
(b) Drawing
(c) Expenditure
(d) Loss.

Answer (b) Drawing

Question 6.
Meaning of credibility of going concern is:
(a) Closing of business
(b) Opening of business
(c) Continuing of business
(d) None of these.
Fill in the blanks:
Answer (c) Continuing of business

1. …………… is a document that verifies the business transaction.

Answer Voucher
2. The existence of business is different from its ………………

Answer Owner
3. ……………. has been applied on accountants by accounting standard board, law or
professional institutions.

Answer Code of conduct

4. ……………. aspects are affected in every transaction.

Answer Two
Answer in one word/sentence:
1. When was Indian Accounting standard board formed?

Answer
Answer: 21 st April, 1977

2. “The rules and conventions of accounting are commonly referred to as principles.”

Who said it?

Answer
Answer: R.N. Anthon

3. On what basis accounting principles are developed?

Answer
Answer: Accounting Conventions & Concepts

4. Which concept denotes that the existence of business is separate from its owner?

Answer
Answer: Business entity concept.