Question 1

All the transactions measurable in the terms of money are recorded in accounts is according to&#10;A)business entity concept&#10;B)going concern concept&#10;C)money measurement concept&#10;D)accounting period concept

Accepted Answer

The money measurement concept in accounting means that only transactions that can be measured in monetary terms are recorded in the accounts, as it provides a consistent value measure.

Question 2

Dividing the expenditure into capital and revenue is according to&#10;A)business entity concept&#10;B)going concern concept&#10;C)money measurement concept&#10;D)accounting period concept

Accepted Answer

The accounting period concept requires that financial statements be prepared for specific periods, necessitating the division of expenditures into capital (long-term) and revenue (short-term) to accurately reflect financial performance and position for each period.

Question 3

While putting the value or price of an entity in financial records the lowest price is recorded not the current price or current market value. This is known as&#10;A)business entity concept&#10;B)conservatism&#10;C)cost concept&#10;D)money measurement concept

Accepted Answer

The conservatism principle in accounting guides that potential expenses and liabilities should be recognized immediately, but potential revenues should only be recognized when they are realized. This principle supports the idea of recording assets at the lowest value, to avoid overstating financial positions.

Question 4

Co-operative societies is an example of&#10;A)personal account&#10;B)real account&#10;C)nominal account&#10;D)representative personal account

Accepted Answer

Co-operative societies are considered personal accounts because they represent a group of individuals or an organization with whom financial transactions are conducted.

Question 5

Outstanding salary account is a&#10;A)natural personal account&#10;B)artificial personal account&#10;C)representative personal account&#10;D)real account

Accepted Answer

Outstanding salary account is considered a representative personal account because it represents a person or group of persons indirectly. It is an account that represents outstanding or unpaid salaries, which are personal obligations or expenses but do not directly represent a specific individual or entity like natural or artificial personal accounts do.

Question 6

Interest earned is a&#10;A)personal account&#10;B)real account&#10;C)nominal account&#10;D)representative personal account

Accepted Answer

Interest earned is classified as a nominal account because it relates to income earned by the business over a period, which affects the profit and loss statement. Nominal accounts are used for expenses, losses, incomes, and gains.

Question 7

Commission paid is a&#10;A)personal account&#10;B)real account&#10;C)nominal account&#10;D)representative personal account

Accepted Answer

Commission paid is considered a nominal account because it relates to expenses incurred by a business during an accounting period. Nominal accounts are used to track income, expenses, losses, and gains.

Question 8

Trading account is a&#10;A)personal account&#10;B)real account&#10;C)nominal account&#10;D)representative personal account

Accepted Answer

A trading account is a nominal account because it is used to record the results of buying and selling goods, which are part of the income statement accounts.

Question 9

Profit and loss account is a&#10;A)personal account&#10;B)real account&#10;C)nominal account&#10;D)representative personal account

Accepted Answer

Profit and loss account is a nominal account because it records expenses and revenues, which are income statement items reflecting the company's financial performance over a specific period.

Question 10

All revenue incomes are credited to&#10;A)manufacturing account&#10;B)trading account&#10;C)profit and loss account&#10;D)balance sheet

Accepted Answer

Revenue incomes are credited to the profit and loss account because they contribute to the net income or loss of a business during an accounting period.

Question 11

In profit and loss account, if credit is more than the debit, the difference is&#10;A)net profit&#10;B)net loss&#10;C)gross profit&#10;D)gross loss

Accepted Answer

The answer of In profit and loss account, if credit...

Question 12

The process of recording financial data upto trial balance is&#10;A)book keeping&#10;B)classifying&#10;C)summarising&#10;D)analyzing

Accepted Answer

The answer of The process of recording financial data upto...

Question 13

In income measurement & recognisation of assets & liabilities which of the following concepts goes together?&#10;A)periodicity, accural, matching&#10;B)cost, accural, matching&#10;C)going concern, cost, realization&#10;D)going concern, periodicity, reliability

Accepted Answer

The answer of In income measurement & recognisation of assets...

Question 14

Interpretation means&#10;A)explanation of meaning and significance of the data in financial statements.&#10;B)concerned with preparation and presentation of classified data&#10;C)systematic analysis of recorded data&#10;D)methodical classification of data given in financial statements.

Accepted Answer

The answer of Interpretation means&#10;A)explanation of meaning and significance of...

Question 15

Which of the following is wrong?&#10;A)all real and personal accounts are transferred to balance sheet&#10;B)nominal accounts are transferred to p & l account&#10;C)each account is opened separately in ledger&#10;D)rent is a personal account, outstanding rent is nominal account

Accepted Answer

The answer of Which of the following is wrong?&#10;A)all real...

Question 16

_______ is root cause for financial accounting&#10;A)stewardship accounting&#10;B)social accounting&#10;C)management accounting&#10;D)human resource accounting

Accepted Answer

The answer of _______ is root cause for financial accounting&#10;A)stewardship...

Question 17

Which accounting concept specifies the practice of crediting closing stock to the trading account?&#10;A)cost&#10;B)realisation&#10;C)going concern&#10;D)matching

Accepted Answer

The answer of Which accounting concept specifies the practice of...

Question 18

Amount spent to increasing the earning capacity is a ______ expenditure&#10;A)capital&#10;B)revenue&#10;C)deferred revenue&#10;D)capital loss

Accepted Answer

The answer of Amount spent to increasing the earning capacity...

Question 19

Human resources will not appear in the balance sheet according to ______ concept.&#10;A)accrual&#10;B)going concern&#10;C)money measurement concept&#10;D)none

Accepted Answer

The answer of Human resources will not appear in the...

Question 20

Provision for discount on debtors is calculated on the amount of debtors.&#10;A)before deducting provision for doubtful debts.&#10;B)after deducting provision for doubtful debts.&#10;C)before deducting actual debts and provision for doubtful debts.&#10;D)after adding actual bad and doubtful debts.

Accepted Answer

The answer of Provision for discount on debtors is calculated...

Question 21

Which of the following is not a Real Account?&#10;A)cash a/c&#10;B)investments a/c&#10;C)outstanding rent a/c&#10;D)purchases a/c

Accepted Answer

The answer of Which of the following is not a...

Question 22

Value of goods withdrawn by the proprietor for his personal use should be credited to ____&#10;A)capital a/c&#10;B)sales a/c&#10;C)drawings a/c&#10;D)purchases a/c

Accepted Answer

The answer of Value of goods withdrawn by the proprietor...

Question 23

Which of the following is incorrect?&#10;A)good will - intangible asset&#10;B)sundry debtors - current asset&#10;C)loose tools - tangible fixed asset&#10;D)outstanding expenses - current asset

Accepted Answer

The answer of Which of the following is incorrect?&#10;A)good will...

Deck 1: Accounting and Financial Concepts and Principles