Theory Base of Accounting Test

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Theory Base of Accounting Test - 53

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Weekly Quiz Competition

Question 1
1 / -0

When a change in accounting policy is justified?

A
To comply with accounting standard

B
To ensure more appropriate presentation of the financial statement of the enterprise

C
to comply with law

D
All of the above

Solution

A change in accounting policy is justified in the following situation:-
1. To comply with accounting standard
2. To ensure more appropriate presentation of the financial statement of the enterprise
3. To comply with law
Question 2
1 / -0

Accounting policies followed by organizations ______________.

A
Can be changed every year

B
Should be consistently followed from year to year

C
Can be changed after 5 year

D
None of the above

Solution

Accounting policies followed by organizations should be consistently followed from year to year.
However, there can be change in accounting policy if
1. The laws require
2. for the better presentation of the financial statements.
Question 3
1 / -0

As per _____ concepts in order to determine the profit earned or loss suffered by the business in a particular defined accounting period, it is necessary that expenses of the period should be matched with the revenues of that period.

A
Accrual concept

B
Realization concept

C
Accounting period concept

D
matching concept
Question 4
1 / -0

AS - 3 deals with __________________.

A
Accounting for government grants

B
Accounting for amalgamations

C
Cash Flow statement

D
Fund Flow statement

Solution

Accounting standards are rules and guidelines set up by the governing bodies, to keep accounting practices consistent and understandable across all companies and industries.
Accounting standards in India are issued by the Institute of Chartered Accountants of India. At present, there are 30 Accounting Standards.
Out of these, AS- 3 deals with Cash Flow Statement.
Question 5
1 / -0

The value of human resources is generally not shown in the Balance Sheet as per _______________.

A
Going concern concept

B
Accrual concept

C
Prudence concept

D
Money Measurement concept

Solution

The value of human resources is generally not shown in the balance sheet as per money measurement concept. Money measurement concept means only those transactions will be recorded in the books of accounts which can be measured in monetary terms. Accounting ignore the qualitative aspects it records only quantitative aspects.
Question 6
1 / -0

Land on lease should be shown in balance sheet contrary to fact that company doesn't own this piece of land. This is the statement of what accounting concepts?

A
Matching concept

B
Accrual concept

C
Prudence concept

D
Substance over form

Solution

Land on lease should be shown in the Balance sheet contrary to the fact that the company does not own that piece of land is the implementation of Substance over form concept.
Substance over form in accounting refers to a concept that transactions recorded in the financial statements must reflect their economic substance rather than their legal form.
Question 7
1 / -0

Mohan purchased a machinery amounting Rs.10,000 on 1.4.2010.
On 31.3.2019, similar machinery could be purchased for Rs.20,000 but the realizable value of the machinery (purchased on 1.4.2010) was estimated at Rs.15,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as Rs 12,000.
The historical cost of machinery is ____________.

A
Rs.10,000

B
Rs.20,000

C
Rs. 15,000

D
Rs. 12,000

Solution

The historical cost of machinery is 10,000 as historical cost means that cost at which the asset was purchased.
Question 8
1 / -0

A specific accounting policy refers to _______________.

A
Principles

B
Methods of applying those principals

C
Both (A) & (B)

D
None of the above

Solution

Accounting policies means principles and methods of applying those principles.
It helps in preparing the financial statements of the business in a systematic manner.
Accounting policies include various accounting methods, procedures and principles used for preparing and presenting financial statements.
Question 9
1 / -0

Which accounting principle is followed in adopting accounting policy of treating the cost of calculator as an expense ?

A
Prudence

B
Substance over from

C
Materiality

D
All of these

Solution

Materiality accounting principle is followed in adopting accounting policy of treating the cost of calculator as an expense
Question 10
1 / -0

It is essential to standardize the accounting principles and policies in order to ensure _______________.

A
Transparency

B
Profitability

C
Reputation

D
All of the above

Solution

The accounting principles and policies are standardised in order to ensure transparency, uniformity and comparability.
However, the objective is never to increase profit.
Accounting principles helps in maintaining books of accounts in a standardized manner.

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Re-Attempt Weekly Quiz Competition

Theory Base of Accounting Test - 53

Result

Theory Base of Accounting Test - 53

Score

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Rank

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SHARING IS CARING

Question 1

To comply with accounting standard

To ensure more appropriate presentation of the financial statement of the enterprise

to comply with law

All of the above

Solution

Question 2

Can be changed every year

Should be consistently followed from year to year

Can be changed after 5 year

None of the above

Solution

Question 3

Accrual concept

Realization concept

Accounting period concept

matching concept

Question 4

Accounting for government grants

Accounting for amalgamations

Cash Flow statement

Fund Flow statement

Solution

Question 5

Going concern concept

Accrual concept

Prudence concept

Money Measurement concept

Solution

Question 6

Matching concept

Accrual concept

Prudence concept

Substance over form

Solution

Question 7

Rs.10,000

Rs.20,000

Rs. 15,000

Rs. 12,000

Solution

Question 8

Principles

Methods of applying those principals

Both (A) & (B)

None of the above

Solution

Question 9

Prudence

Substance over from

Materiality

All of these

Solution

Question 10

Transparency

Profitability

Reputation

All of the above

Solution

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