7/4/2021 OMR - ACCOUNTING PRINCIPLES, CONCEPTS & CONVENTIONS (SET 1)

OMR - ACCOUNTING PRINCIPLES,

CONCEPTS & CONVENTIONS (SET 1)

1. When the concept of conservation is applied to the Balance Sheet, it 1 point

results in

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Overstatement of Capital

Understatement of Capital

Overstatement of Assets

Understatement of Assets

2. The recognition that every transaction has two sides to it, is the leading 1 point
principle of

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Accrual Concept

Realisation Concept

Dual Aspect Concept

Matching Concept

3. The convention that states the accounting practice should be followed 1 point
consistently over the years

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Consistency

Conservation

Materiality

Disclosure

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4. Claims against the company not acknowledged as debts are 1 point

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Contingent Liability

Current Liability

Secured Loan

Unsecured Loans

5. Which method of costing is used for determination of costs for printing 1 point

industries

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Process Costing

Operating Costing

Batch Costing

Job Costing

6. Which of the following concepts, if violated, would make comparison of 1 point

financial statements over a period of time difficult?

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Cost Concept

Consistency Concept

Accounting Period Concept

Accrual Concept

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7. Conservatism concept does not require 1 point

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Making provision for doubtful debts

Valuing stock at lower of cost or net realisable value

Creating provision for discount on creditors

Making provision for an unfavourable legal suit

8. As per duality concept or accounting equivalence concept, which of the 1 point

following is correct?

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All increase in liabilities and increase in assets represent sources of funds

All decrease in liabilities and decrease in assets represent sources of funds

All increase in liabilities and decrease in assets represent sources of funds

All increase in liabilities and increase in assets represent uses of funds

9. This is more of a convention than a concept, it proposes that while 1 point

accounting for various transactions, only those which may have material
effect on profitability or financial status of the business should have special
consideration for reporting, this concept is known as

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Concept of Consistency

Concept of Concervation

Concept of Materiality

Concept of Disclosure

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10. Recording of Fixed Assets at cost ensures adherence of 1 point

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Conservatism Concept

Going Concern Concept

Cost Concept

Both (a) & (b) above

11. Human resources will not appear in the balance sheet according to 1 point

__________ concept.

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Accrual Concept

Going Concern Concept

Money Measurement Concept

None

12. The ___________ concept means that similar items in a set of accounts 1 point

should be given similar accounting treatment and it should be applied

from one period to another.

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Going Concern Concept

Prudence

Consistency Concept

Materiality Concept

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13. 'A Limited' purchased goods of Rs. 10,00,000 and sold 90 % of goods and 1 point

remaining goods market value is Rs. 90,000 and not Rs. 1,00,000. Which
concept does he follows:

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Materiality Concept

Cost Concept

Entity Concept

Conservatism Concept

14. Omission of paise and showing the round figures in financial statements is 1 point

based on:

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Conservatism Concept

Consistency Concept

Materiality Concept

Realisation Concept

15. Assets are held in the business for the purpose of: 1 point

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Re-sale

Conversion into cash

Earning Reserves

None of the above

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16. It is essential to standardize the accounting principles and policies in order 1 point

to ensure

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Transparency

Consistency

Comparability

All of the above

17. In the financial statement, contingent liability is 1 point

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Recognized

Not Recognized

Adjusted

None of the above

18. Rohan purchased goods for Rs. 25,00,000 and sold 4/5 th of the goods 1 point

amounting Rs. 18,00,000 and met expenses amounting Rs. 2,50,000

during the year 2013. He counted net profit as Rs. 3,50,000. Which
accounting concept was followed by him?

Mark only one oval.

Entity Concept

Periodicity Concept

Matching Concept

Conservation

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19. The determination of expenses for an accounting period is based on the 1 point

principle of

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Objectivity

Materiality

Matching

Periodicity

20. The concepts of conservation in balance sheet results in 1 point

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Increase in Cash

Decrease in Cash

Decrease in Assets

No change in Assets

21. If the going concern concept is no longer valid, which of the following is 1 point

true?

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All prepaid expenses would be completely written - off immediately.

Total contributed capital and retained earnings would remain unchanged.

Intangible assets would continue to be carried at net amortized historical cost.

Land held as an investment would be valued at its realisable value.

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7/4/2021 OMR - ACCOUNTING PRINCIPLES, CONCEPTS & CONVENTIONS (SET 1)

22. Under which of the following concept shareholders are treated as 1 point

creditors for the amount they paid on the shares they subscribed to?

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Cost Concept

Duality Concept

Business Entity Concept

Since the shareholders own the business, they are not treated as creditors.

23. Which of the following is not a contingent liability? 1 point

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Claims against the company not acknowledged as debts

Debts included on debtors which are doubtful in nature

Uncalled liability on partly paid shares

Arrears of cumulative fixed dividends

24. The concept of conservatism will have the effect of 1 point

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Overstatement of Assets

Understatement of Assets

Overstatement of Liabilities

Understatement of Liabilities

25. Recording of fixed assets at cost ensure adherence of 1 point

Mark only one oval.

Conservatism Concept

Going Concern Concept

Cost Concept

Both (a) and (b) above

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26. Accounting is an __________ . 1 point

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Science

Art

Subject matter of Sociology

Subject matter of Philosophy

27. Accounting does not record non - financial transactions because of 1 point

___________ .

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Business Entity Concept

Accrual Concept

Money Measurement Concept

Going Concern Concept

28. Decrease in the amount of creditors results in 1 point

Mark only one oval.

Increase in cash

Decrease in Cash

Increase in Assets

No change in Assets

29. Accounting does not record non - financial transactions because of 1 point

Mark only one oval.

Entity Concept

Accrual Concept

Cost Concept

Money Measurement Concept

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30. Income Tax of the sole trader paid is shown 1 point

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Debited to P & L Account

Debited to Trading Account

Debited to his Capital Account

None of the Above

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