Theory Base of Accounting Test

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Theory Base of Accounting Test - 52

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Weekly Quiz Competition

Question 1
1 / -0

Accounting records only those transactions and events which are of -
X. Social character
Y. Financial character
Select the correct answer from the options given below:

A
X only

B
Y only

C
Both X and Y

D
None of above

Solution

Money Measurement Concept states that Accounting shall records only those transactions and events which are of financial character i.e,. can be measured in money.
Social character transactions and events cannot be recorded.
Question 2
1 / -0

Which convention implies that the accounting practices should remain same from one year to another year?

A
Going Concern

B
Materiality

C
Accrual

D
Consistency

Solution

The accounting information provided by the financial statements would be useful in drawing conclusions regarding the working of an enterprise only when it allows comparisons over a period of time as well as with the working of other enterprises.
Thus, both inter-firm and inter-period comparisons are required to be made. This can be possible only when accounting policies and practices followed by enterprises are uniform and are consistent over the period of time.
Question 3
1 / -0

______ is used by business entities for keeping records of their monetary or financial transaction.

A
Accounting

B
Cost accounting

C
Costing

D
Budgetary Control
Question 4
1 / -0

Accounting transactions are recorded in terms of ________.

A
money

B
purpose

C
characteristics

D
none of the above

Solution

In accounting we can communicate only those business transactions and other events which can be expressed in monetary units. This is called monetary unit assumption. Therefore, only money or money's worth transactions are recorded in the books of account.

Non monetary events like death, dispute etc. may have a great influence on the organization but these factors will not form the part of accounts as they can be calculated on monetary basis.

We may simply say " wherever there is money, there is an accounting, no money, no accounting".
Question 5
1 / -0

Which of the following practices is not in consonance with the convention of conservatism?

A
Creating provision for bad debts

B
Creating provision for discount on creditors

C
Creating provision for discount on debtors

D
Creating provision for tax

Solution

According to Conservatism, provision for discount on creditors is not created.
Question 6
1 / -0

Which of the following accounting concepts or principles require the calculation of depreciation of the fixed assets?

A
Prudence Concept

B
Accrual Concept

C
Consistency Concept

D
Matching Concept

Solution

Depreciation of Assets is charged to profit and loss account due to matching Concept.
Question 7
1 / -0

Accounting standards are issued for the purpose of :
(a) Improving dependability of financial statements
(b) Auditing work becomes easy task for the auditor
(c) Elimination of non-comparability between financial statements
The correct answer is :-

A
(a) only

B
(b) only

C
(c) only

D
All of the above

Solution

Accounting standards are issued for the purpose of eliminating non-comparability between financial statements.
Accounting standards are issued by the Institute of Chartered Accountants of India. Accounting Standards are sets of rules, principles, policies which are followed in accounting.
Question 8
1 / -0

Non-monetary events like, death, dispute, sentiments, efficiency etc. are _______ in the books, even though these may have a great effect.

A
Not recorded

B
Recorded

C
Recorded if suggested by external auditors

D
Recorded if suggested by internal auditors

Solution

As per Money Measurement Concept only those transactions shall be recorded in the books of accounts which can be measured in terms of money. Therefore, non monetary events and transactions are not recorded in the books of books.
Question 9
1 / -0

____ period is normally adopted for accounting purpose.

A
6 months

B
12 months

C
9 months

D
24 months

Solution

12 months period is normally adopted for accounting purpose.
Normally, Businesses follows financial year for preparation of their financial records.
Financial year starts from 1st April to 31 March of the next year.
Question 10
1 / -0

Accounting standards cover the aspects of ________ of accounting transactions in the financial statements.

A
Recognition

B
Measurements

C
Presentation and disclosure

D
Any of the above

Solution

Accounting standards are issued by the institute of chartered accountant of India. Accounting Standards are sets of rules, principles, policies which are followed in accounting.
Accounting standards cover the aspects of recognition, measurement, presentation and disclosure of accounting transactions in the financial statements.

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Theory Base of Accounting Test - 52

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Theory Base of Accounting Test - 52

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Question 1

X only

Y only

Both X and Y

None of above

Solution

Question 2

Going Concern

Materiality

Accrual

Consistency

Solution

Question 3

Accounting

Cost accounting

Costing

Budgetary Control

Question 4

money

purpose

characteristics

none of the above

Solution

Question 5

Creating provision for bad debts

Creating provision for discount on creditors

Creating provision for discount on debtors

Creating provision for tax

Solution

Question 6

Prudence Concept

Accrual Concept

Consistency Concept

Matching Concept

Solution

Question 7

(a) only

(b) only

(c) only

All of the above

Solution

Question 8

Not recorded

Recorded

Recorded if suggested by external auditors

Recorded if suggested by internal auditors

Solution

Question 9

6 months

12 months

9 months

24 months

Solution

Question 10

Recognition

Measurements

Presentation and disclosure

Any of the above

Solution

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