CBSE Class 11 Accountancy Theory Base Of Accounting MCQs Set C

Question: All anticipated losses and gains should be recorded in the books of accounts.
a) True
b) False
c) Partially true
d) Can’t say
Answer: b

Question: The firm purchased the machine cost Rs. 10,000 and charged depreciation @ 10% according to the Straight line Method. After 2 years they switch to the Written down value method. At the time of sale of machine they calculated the depreciation as per the SLM. Which accounting principle is violated?
a) Historical cost
b) consistency
c) cost
d) money Measurement
Answer: b

Question: Which AS would have been followed by accountant to value inventories?
a) AS-1
b) AS-2
c) AS-3
d) AS-4
Answer: b

Question: Which principle/concept is highlighted in the line,” … and have been subjected to depreciation year on year based on written down value method.”?
a) Full disclosure principle
b) Business entity principle
c) Consistency concept
d) Accrual concept
Answer: c

Question: The junior accountant in a fortune 500 company decided to omit the ‘paisa’ in certain figures and showed the rounded off figures in financial statements. The act was found to be correct by senior accountant because of
a) principle of full disclosure
b) going concern concept
c) materiality principle
d) consistency concept
Answer: c

Question: Which AS deals with ‘Financial Instruments: Disclosures’?
a) AS-29
b) AS-30
c) AS-31
d) AS-32
Answer: d

Question: Recognition of cost in the same period as associated revenues is called ……… .
a) Cost principle
b) Dual aspect principle
c) Full disclosure principle
d) Matching principle
Answer: d

Question: According to ………, the entire life of business should be divided into timeintervals for the measurement of the profits of business.
a) going concern concept
b) accounting period principle
c) consistency concept
d) principle of prudence
Answer: b

Question: According to principle of prudence,
a) outstanding expenses are accounted for
b) provision for bad debts is created
c) depreciation is charged on assets
d) All of the options
Answer: b

Question: Everything a firm owns, it also owes to somebody. This co-existence is explained by ……… .
a) accrual concept
b) dual aspect principle
c) consistency concept
d) matching principle
Answer: b

Question: According to the cost principle, an asset bought is recorded in books at price ……… .
a) at which it was acquired
b) which is prevailing in market
c) higher of at which it was acquired and which is prevailing in market
d) lower of at which it was acquired and which is prevailing in market
Answer: a

Question: Principle of …… is an exception to the principle of full disclosure
a) money measurement
b) materiality
c) matching
d) None of the options
Answer: b

Question: Which concept is highlighted in the fact that company made long-term contracts with the farmers?
a) Going concern concept
b) Accrual concept
c) Consistency concept
d) Both Going concern concept and Accrual concept
Answer: a

Question: Cost/Historical cost principle means that assets will be continuously shown at their acquisition cost, even if the asset is depreciable.
a) True
b) False
c) Partially false
d) Can’t say
Answer: c

Question: Which of the following methods of accounting is/are recognised by Companies Act, 2013?
a) Cash basis of accounting
b) Accrual basis of accounting
c) Both Cash basis of accounting and Accrual basis of accounting
d) Can’t be determined
Answer: b

Question: Which basis of accounting makes a distinction between revenue and capital items?
a) Cash basis of accounting
b) Accrual basis of accounting
c) Both Cash basis of accounting and Accrual basis of accounting
d) Can’t be determined
Answer: b

Question: Which of these is/are the objectives of accounting standards?
a) Better understanding of financial statements
b) Minimise diverse accounting policies and practices with an aim to eliminate them to possible extent
c) Enhance reliability of financial statements
d) All of the options
Answer: d

Question: Accounting Standard-26 deals with
a) inventories valuation
b) plant, property and equipment
c) consolidated financial statements
d) intangible assets
Answer: d

Question: In ………, unpaid expenses are recorded in books of accounts.
a) cash basis of accounting
b) accrual basis of accounting
c) Both cash basis of accounting and accrual basis of accounting
d) Can’t be determined
Answer: b

Question: Ind-AS 1 deals with
a) statement of cash flows
b) disclosure of accounting policies
c) plant, property and equipment
d) None of the options
Answer: d

Question: ‘Double entry system’ is based on which accounting principle concept?
a) Going concern concept
b) Business entity principle
c) Matching principle
d) Dual aspect principle
Answer: d

Question: On which of these items, GST is not applicable?
a) Sanitary pads
b) Medicines
c) Alcoholic liquor
d) Books
Answer: c

Question: ……… is levied in the course of interstate supply of goods and services.
a) Central GST
b) State GST
c) Union Territory GST
d) Integrated GST
Answer: d

Question: Identify the GST applicable in case X Ltd. sells goods from Naisk to a vendor in Mumbai.
a) Central GST
b) State GST
c) Both Central GST and State GST
d) Integrated GST
Answer: c

Question: Serial number of AS and Ind-AS correspond with each other with respect to title.
a) True
b) False
c) Partially false
d) Can’t say
Answer: b

Question: The supplies of the company would be subjected to Integrated GST.
a) True
b) False
c) Partially true
d) Can’t say
Answer: b

Question: Consolidated financial statement is dealt under which IFRS?
a) IFRS – 1
b) IFRS -5
c) IFRS – 10
d) IFRS – 15
Answer: c

Question: According to Revenue Realisation concept
i) Credit sales are treated as revenue on the day sales are made and not when money is received
ii) Rent for the march 14 received in April 14 will be recorded in Profit and Loss A/c in the beginning of the Financial year April14
a) Option (i) is applicable
b) Option (ii) is applicable
c) Both Option (i) and (ii) are applicable
d) None of the options is applicable
Answer: a

Question: Which of the following will be recorded in the books of account?
(i) Competitor placing better product in market.
(ii) Strike by labour union.
(iii) Labours being pair.
a) (i) and (ii)
b) (ii) and (iii)
c) Only (iii)
d) All of the options
Answer: c

Question:
i) As per the conservatism principle the valuation of stock is at lower of cost or net realizable value.
ii) The convention of conservatism takes all the prospective losses but leaves out prospective profits.
iii) The Dual aspect concept states the proprietor of a business is treated as External liabilities
a) Option (i) and (ii) is correct
b) Option (iii) and (ii) is correct
c) Option (i), (ii) and (iii) is correct
d) Option (i) and (iii) is correct
Answer: a

Fill In The Blanks

Question: Cash as well as credit transactions are recorded in _________ basis of accounting.
Answer: accrual

Question: A Ltd. Purchased goods of Rs 5,20,000 during a financial year. His sales for the year were 6,00,000 and closing stock at the end was Rs 1,20,000. According to matching concept his profit during the year is Rs _______.
Answer: Rs 2,00,000

Question: Accounting process ends on _____________.
Answer: communicating

Question: Ram made cash sales of Rs 2,50,000 and credit sales of Rs 1,50,000. His expenses for the year were Rs 50,000, out of which Rs 10,000 is yet to be paid. Ram’s income on the base of cash basis of accounting will be Rs____________.
Answer: Rs 2,10,000

Question: Ghanshyam and co. purchased machinery worth Rs 12,00,000. It further incurred transportation cost of Rs 2,00,000 and installation cost of Rs 5,00,000. The market price of the machinery at the end of the accounting year was Rs 25,00,000. Ghanshyam and co. should record the machinery price as Rs ____________ in the books .
Answer: 19,00,000

Question: Accounting standards are not applicable on ________ organisations.
Answer: not for profit

Question: XYZ Ltd. Received an advance on sale in the month of January, 2019 for the sale made in May, 2019. The revenue should be recognised on __________.
Answer: May, 2019

Question: Somya and Komal are manager in a company. Somya is more organised and systematic, but employer cannot record her Quality of work as her efficiency cannot be measured in terms of ___________.
Answer: Money

True /False

Question: Recognition of expenses in the same period as associated revenues is called Objectivity concept.
Answer: False

Question: M/s Future Ltd. has invested Rs 10,000 in the shares of Relicam Industries limited. Current market value of the shares is Rs 10,500. Accountant of Future Ltd. wants to show Rs 10,500 as value of investment in the books of accounts. Can he do so?
Answer: False

Question: Due to the adherence of Cash Basis system Firm created provision for doubtful debts @ 10 % on its Debtors Rs 2,00,000 .
Answer: False

Question: Under Accrual Basis of Accounting, Only cash transactions are recorded.
Answer: False

Question: Accounting Standards are applicable for purely charitable organizations.
Answer: False

Question: Rent for the month of March 2018, even if received in April 2019 taken into the financial year ending March 31, 2018 due to the adherence of Revenue Recognition Concept.
Answer: True

Question: Due to Materiality Concept the cost of small calculator is accounted as an expense and not shown as on Assets in a financial statement.
Answer: True

Question: According to Accrual Concept, raw material consumed is matched against cost of goods sold.
Answer: True

Match The Following 

Question:
1. As per cost concept, calculate the amount to be recorded when 5                                 a) 50,00,500
    computers are purchased for Rs. 30,000 each and spend Rs. 2,000
    each on installation and Rs. 1,000 as carriage to deliver 5 computers.                          b) 50,00,000
2. As per Materiality concept, calculate the amount of assets, if firm
    purchased 20 acres of land for Rs.50,00,000 and 10 pencils for Rs. 50
                                                                                                                                            c) 1,61,000
                                                                                                                                            d) 1,53,000
Answer: 1-c; 2-b 

Question:
1. Mohan had cash sales of Rs. 90,000 and credit sales of Rs. 60,000:                             a) Rs. 78,000 .
    and his expenses were Rs. 70,000
    out of which 30,000 is yet to be paid. Find the Profit earned if books
    are mentioned on accrual basis 
2. Mohan had cash sales of Rs. 90,000 and credit sales of Rs. 60,000:                             b) Rs. 70,000 .
    and his expenses were Rs. 70,000 out of which 12,000 is only been paid.
    Find the profit earned if books are mentioned on cash basis. 
                                                                                                                                            c) Rs. 80,000 .
                                                                                                                                            d) Rs. 1,30,000
Answer: 1-c ;2-a 

Question:
1. Sale is recognized on the basis of cash memo which concept is applied.                                         a) Dual Aspect concept
2. Purchase of goods on credit from Raja will be debited to purchase and credited                              b) Verifiable evidence objective
    to Raja which concept is applied.
                                                                                                                                                                c) Materiality Concept
                                                                                                                                                                d) Cost Concept
Answer: 1-b; 2-a