Question 1

M/s Stationery Mart will debit the purchase of stationery to _______&#10;A)purchases a/c&#10;B)general expenses a/c&#10;C)stationery a/c&#10;D)none

Accepted Answer

Stationery is an expense for the business, and expenses are debited to the general expenses account.

Question 2

The policy of anticipate no profit and provide for all possible losses arise due to the concept of _____&#10;A)consistency&#10;B)disclosure&#10;C)conservatism&#10;D)matching

Accepted Answer

The policy of anticipating no profit and providing for all possible losses is a reflection of the conservatism principle in accounting. This principle advises that potential expenses and liabilities should be recognized as soon as possible, but revenue should only be recognized when it is earned, thus ensuring that the financial statements do not overstate the company's financial position.

Question 3

According to which concept, the proprietor pays interest on drawings&#10;A)accrual concept&#10;B)conservatism concept&#10;C)entity concept&#10;D)dual aspect concept

Accepted Answer

The entity concept is the accounting principle that treats the business and the proprietor as separate entities, leading to the proprietor paying interest on drawings as if they were transactions with an external party.

Question 4

If the Market value of closing Inventory is less than its cost price, inventory will he shown at ____&#10;A)marketable value&#10;B)fair market value&#10;C)both&#10;D)none

Accepted Answer

If the Market value of closing Inventory is less than its cost price, inventory will be shown at marketable value.

Question 5

The Market price of good declined than the cost price. Then the concept that plays a key role is ____&#10;A)materiality&#10;B)going concern concept&#10;C)realization&#10;D)consistency

Accepted Answer

The realization concept in accounting states that revenue is recognized when it is earned, regardless of when the payment is received. In the context of a good's market price declining below its cost price, the realization concept is relevant because it addresses when and how losses are recognized. If the market price of a good declines below its cost, this loss is realized and must be accounted for in the financial statements, reflecting the decrease in value of the asset.

Question 6

Fixed assets are double the current assets and half the capital. The current assets are Rs.3,00,000 and investments are Rs.4,00,000. Then the current liabilities recorded in balance sheet will be&#10;A)2,00,000&#10;B)1,00,000&#10;C)3,00,000&#10;D)4,00,000

Accepted Answer

The answer of Fixed assets are double the current assets...

Question 7

Which of the following provide frame work and accounting policies so that the financial statements of different enterprises become comparable.&#10;A)business standards&#10;B)accounting standards&#10;C)market standards&#10;D)none

Accepted Answer

Accounting standards provide a framework and accounting policies so that the financial statements of different enterprises become comparable.

Question 8

Which of the following factor is not considered while selecting accounting policies?&#10;A)prudence&#10;B)substance over form&#10;C)accountancy&#10;D)materiality

Accepted Answer

The term "accountancy" is not a factor considered while selecting accounting policies. Factors like prudence, substance over form, and materiality are considered to ensure that financial statements provide a true and fair view of the company's financial position. "Accountancy" is a broad field that encompasses the principles, practices, and procedures of accounting, rather than a specific factor for selecting policies.

Question 9

As per accrual concept, which of the followings is not true&#10;A)revenue - expenditure = profit&#10;B)revenue - profit = expenditure&#10;C)sales + gross profit = revenue&#10;D)revenue = profit + expenditure

Accepted Answer

The accrual concept focuses on recognizing revenue when it is earned and expenses when they are incurred, regardless of when cash is received or paid. Options A, B, and D are basic accounting equations that align with this concept. However, option C is incorrect because it misunderstands the relationship between sales, gross profit, and revenue. Gross profit is derived from revenue (sales) minus the cost of goods sold, not added to sales to calculate revenue.

Question 10

Mr. X sold goods to Mr. Y ask Mr. X to keep the goods with him for some time&#10;A)symbolic delivery&#10;B)actual delivery&#10;C)constructive delivery&#10;D)none of these

Accepted Answer

The answer of Mr. X sold goods to Mr. Y...

Question 11

If nothing is written about the accounting assumption to be followed it is presumed that&#10;A)they have been followed&#10;B)they have not been followed&#10;C)they are followed to some extent&#10;D)none of these

Accepted Answer

The answer of If nothing is written about the accounting...

Question 12

Capital A/c is a _______ A/c.&#10;A)personal&#10;B)real&#10;C)nominal&#10;D)none

Accepted Answer

The answer of Capital A/c is a _______ A/c.&#10;A)personal&#10;B)real&#10;C)nominal&#10;D)none...

Question 13

Valuation of stock in accounting follows the principle of cost price or ____ whichever is lower.&#10;A)market price&#10;B)average price&#10;C)net realizable value&#10;D)none of these.

Accepted Answer

The answer of Valuation of stock in accounting follows the...

Deck 2: Accounting Concepts and Principles