CBSE Class 11 Accountancy Introduction to Accounting MCQs Set D

Question: Use of common unit of measurement and common format of reporting promotes
a) Comparability
b) Understandability
c) Relevance
d) Reliability
Answer: a

Question: Which is the last step of accounting as a process of information?
a) Recording of data in the books of accounts
b) Preparation of summaries in the form of financial statements
c) Communication of information
d) Analysis and interpretation of information
Answer: c

Question: Which of the following is not a business transaction?
a) Bought furniture of Rs. 10,000 for business
b) Paid for salaries of employees Rs. 5,000
c) Paid sons fees from her personal bank account Rs. 20,000
d) Paid sons fees from the business Rs. 2,000
Answer: c

Complete the following sentences with appropriate words

Question: Internal users are the _________ of the business entity.
Answer: management/employees

Question: The Internet has assisted in decreasing the ________ in issuing financial reports to users.
Answer: time-gap

Question: Information is said to be relevant if it is _______
Answer: free from bias

Question: Accounting measures the business transactions in terms of _______ units.
Answer: monetary

Question. Mention 2 qualitative characteristics of accounting information.
Answer: - Reliability
- Comparability

Question. Who are the users of Accounting?
Answer : The users may be categorised into 2 groups. Namely, - Internal users - External users

Question. What are the 5 roles of accounting?
Answer : Roles of accounting are,
- Role of language
- Role of the historical record
- Role of the service provider
- Role of information system
- Role of determining the net profit

Question. Mention 2 Differences between accounting and accountancy.
Answer :
Accounting
Accounting is an art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events, which are, in part at least, of a financial character, and interpreting the results there of 
It relies on Book-keeping. 
Accountancy
Accountancy is a body of knowledge prescribing definite rules to be observed while recording, classifying and summarising of transactions.
It relies on both Book-keeping and Accounting.

Question. Which of the following is not a sub-field of accounting?
- Financial Accounting
- Cost Accounting
- Management Accounting
- Book-keeping
Answer : Book-keeping

Question. Mention 3 functions of Accounting.
Answer : Functions of accounting are,
- Maintaining complete and systematic records
- Trusteeship
- Compliance of legal needs 

Question. Book-keeping begins where accounting ends. True or False?
Answer : False

Read the following case study and answer questions

Sen and Shetty are two friends who both have just attended their first class of accountancy .The friends were intrigued by the different branches of accounting and their widespread application. Sen personally liked the branch of accounting in which fund flow statement and budgetary control is used and that branch helps in planning and controlling of operations.As the concept of accounting was further explored, they began discussing the different users of accounting. Sen said that he finds it interesting that even the employees demand information relating to business . Shetty said he finds more interesting the fact that even competitors want information on the relative strengths and weaknesses of the enterprise and for making comparisons. Shetty further said that even accounting helps owners to compare one year’s costs, expenses, and sales with those of other years. However, they were quite shocked by the fact that the management-worker relations was not taken into consideration in the accounting.Meanwhile, Sen and Shetty had an argument at the end of the discussion. Sen was saying that accounting is an art whereas Shetty was saying that accounting is a science. Their teacher came in and said something to them which made them stop the argument .

Question. What might have their teacher said to solve their argument?
(a) Sen, please understand, Shetty is correct in this situation
(b) Shetty, please understand, Sen is correct in this situation
(c) Both are correct
(d) None is correct
Answer: c

Question. Shetty talked about which type of users of accounting?
(a) Internal users
(b) External users
(c) Both Internal usersand External users
(d) None of the options
Answer: c

Question. Which limitation of accounting is being talked by them?
(a) Influenced by personal judgement
(b) Omission of qualitative information
(c) Incomplete information
(d) Based on historical costs
Answer: b

Question. Which advantage of accounting is being talked by Shetty in last part of first para?
(a) Provides information regarding profit and loss
(b) Provides completes and systematic record
(c) Enables comparative study
(d) Evidence in legal matters
Answer: c

Question. Which branch of accounting is liked by Sen?
(a) Financial accounting
(b) Cost accounting
(c) Management accounting
(d) Tax accounting
Answer: c
 

Read the following case study and answer questions

Ben and Jones started with Cash ₹ 10,000 and Machinery ₹ 1,00,000. They decided to set up a production line for PPE kits for the protection from Covid 19 virus. As their demand expanded , they decided to purchase one more machinery. For the same, they took bank overdraft and purchased the machinery. The quality of the company’s product was very high and therefore, it could develop a reputation for itself in the market and business was flourishing. After 1.5 years, their old machinery turned obsolete so they decided to sell the same.They sold it and got some cash proceeds. To further increase the brand presence among the concerned stakeholders, they decided to run advertisements from the cash proceeds of machinery sold. As more and more customers demanded their product, they decided to launch a discount for bulk purchases. The discount was not to be recorded in the books of accounts. This campaign was successful and they earned lot of profits from the same.

Question. Which type of discount is being discussed in the last part of passage?
(a) Trade discount
(b) Cash discount
(c) Both Trade discount and Cash discount
(d) Can’t be determine
Answer: a

Question. Which asset is discussed in the line, “The quality of the company’s product was very high and therefore, it could develop a reputation for itself in the market and business was flourishing”?
(a) Tangible
(b) Intangible
(c) Current
(d) Both Tangible and Current
Answer: b

Question. Which type of liability is discussed in the passage?
(a) Non-current
(b) Current
(c) Both Non-current and Current
(d) Can’t be determined
Answer: b

Question. What was the capital initially invested?
(a) ₹ 10,000
(b) ₹ 1,00,000
(c) ₹ 1,10,000
(d) Can’t be determined
Answer: c

Question. The passage involves capital receipts (apart from initial capital invested).
(a) True
(b) False
(c) Partially true
(d) Can’t say
Answer: a