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3. Theory Base Of Accounting


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25 Questions MCQ Test Financial Accounting | 3. Theory Base Of Accounting

3. Theory Base Of Accounting for Finanace & Accounting 2022 is part of Financial Accounting preparation. The 3. Theory Base Of Accounting questions and answers have been prepared according to the Finanace & Accounting exam syllabus.The 3. Theory Base Of Accounting MCQs are made for Finanace & Accounting 2022 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for 3. Theory Base Of Accounting below.
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3. Theory Base Of Accounting - Question 1

To see how a firm has performed as compared to the other firms is known as 

Detailed Solution for 3. Theory Base Of Accounting - Question 1

Inter firm comparison means a comparison of two or more similar business units with the objective of finding the competitive position to improve the profitability and productivity of those business units.

3. Theory Base Of Accounting - Question 2

Which is the regulatory body for standardization of accounting policies in the country which has issued Accounting Standards which are expected to be uniformly adhered to, in order to bring consistency in the accounting practices?

Detailed Solution for 3. Theory Base Of Accounting - Question 2

The Institute of Chartered Accountants of India (ICAI), which is the regulatory body for standardisation of accounting policies in the country has issued Accounting Standards which are expected to be uniformly adhered to, in order to bring consistency in the accounting practices.

3. Theory Base Of Accounting - Question 3

What is the full form of GAAP

Detailed Solution for 3. Theory Base Of Accounting - Question 3

Generally Accepted Accounting Principles (GAAP) refers to the rules or guidelines adopted for recording and reporting of business transactions, in order to bring uniformity in the preparation and the presentation of financial statements.

3. Theory Base Of Accounting - Question 4

A general law or rule adopted or professed as a guide to action, a settled ground or basis of conduct or practice is known as 

Detailed Solution for 3. Theory Base Of Accounting - Question 4

An accounting principle is defined by the American Institute of Certified Public Accountants (AICPA), as “a general law or rule adopted or proposed as a guide to action; a settled ground or basis of conduct or practice.

3. Theory Base Of Accounting - Question 5

What is the full form of AICPA

Detailed Solution for 3. Theory Base Of Accounting - Question 5

The American Institute of Certified Public Accountants (AICPA) is the world's largest member association representing the accounting profession, with a history of serving the public interest since 1887

3. Theory Base Of Accounting - Question 6

A method of bookkeeping relying on a one-sided accounting entry to maintain financial information is known as 

Detailed Solution for 3. Theory Base Of Accounting - Question 6

Single-entry bookkeeping or single-entry accounting or single entry system is a method of bookkeeping relying on a one sided accounting entry to maintain financial information. It is known as an incomplete or unscientific method for recording transaction. Most businesses maintain a record of all transactions using double-entry bookkeeping.

3. Theory Base Of Accounting - Question 7

Under which basis of accounting, entries in the book of accounts are made when cash is received or paid and not when the receipt or payment becomes due.

Detailed Solution for 3. Theory Base Of Accounting - Question 7

Under the cash basis, entries in the book of accounts are made when cash is received or paid and not when the receipt or payment becomes due. E.g.  if office rent for the month of December 2019, is paid in January 2020, it would be recorded in the book of account only in January 2020.

3. Theory Base Of Accounting - Question 8

Total number of Accounting Standards issued by Institute of Chartered Accountants of India (ICAI) as on 01.04.2019 is

Detailed Solution for 3. Theory Base Of Accounting - Question 8

Total number of Accounting Standards issued by Institute of Chartered Accountants of India (ICAI) as on 01.04.2019 are 27.

3. Theory Base Of Accounting - Question 9

Which English alphabet is similar to the shape of an account?

Detailed Solution for 3. Theory Base Of Accounting - Question 9

A T-account is an informal term for a set of financial records that uses double-entry bookkeeping.

3. Theory Base Of Accounting - Question 10

_____________________ are written policy documents covering the aspects of recognition, measurement, treatment, presentation, and disclosure of accounting transactions in financial statements.

Detailed Solution for 3. Theory Base Of Accounting - Question 10

Accounting standards are written policy documents covering the aspects of recognition, measurement, treatment, presentation, and disclosure of accounting transactions in financial statements.

3. Theory Base Of Accounting - Question 11

Which of the System of Accounting is used for recording transactions in the book of account?

Detailed Solution for 3. Theory Base Of Accounting - Question 11

The systems of recording transactions in the book of accounts are generally classified into two types, viz. Double entry system and Single entry system.

3. Theory Base Of Accounting - Question 12

Which of the following is/are the objective of accounting standards 

Detailed Solution for 3. Theory Base Of Accounting - Question 12

The objective of accounting standards is to bring uniformity in different accounting policies in order to eliminate the non-comparability of financial statements for enhancing the reliability of financial statements. Secondly, the accounting standard provides a set of standard accounting policies, valuation norms, and disclosure requirements. In addition to improving credibility of accounting data, the accounting standard enhances the comparability of financial statements, both intra and inter enterprises. Such comparisons are very effective and widely used for assessment of firms’ performance by the users of accounting.

3. Theory Base Of Accounting - Question 13

________________ is based on the principle of “Dual Aspect” which states that every transaction has two effects, viz. receiving of a benefit and giving of a benefit.

Detailed Solution for 3. Theory Base Of Accounting - Question 13

Double entry system is based on the principle of “Dual Aspect” which states that every transaction has two effects, viz. receiving of a benefit and giving of a benefit.

3. Theory Base Of Accounting - Question 14

Which of the following is the Limitation of Accounting Standards

Detailed Solution for 3. Theory Base Of Accounting - Question 14

Limitations of Accounting Standards
1. Accounting standard makes choice between different alternate accounting treatments difficult to apply.
2. It is rigidly followed and fails to extend flexibility in applying accounting standards.
3. Accounting standard cannot override the statue. The standards are required to be farmed within the ambit of prevailing status.

3. Theory Base Of Accounting - Question 15

Under which basis of accounting,  revenues, and costs are recognized in the period in which they occur rather when they are paid. 

Detailed Solution for 3. Theory Base Of Accounting - Question 15

Under the accrual basis, revenues and costs are recognised in the period in which they occur rather when they are paid. A distinction is made between the receipt of cash and the right to receive cash and payment of cash and legal obligation to pay cash. Thus, under this system, the monitory effect of a transaction is taken into account in the period in which they are earned rather than in the period in which cash is actually received or paid by the enterprise. This is a more appropriate basis for the calculation of profits as expenses are matched against revenue earned in relation thereto. E.g.  raw material consumed are matched against the cost of goods sold.

3. Theory Base Of Accounting - Question 16

___________________ connotes customs or traditions as a guide to the preparation of accounting statements.

Detailed Solution for 3. Theory Base Of Accounting - Question 16

Accounting convention connotes customs or traditions as a guide to the preparation of accounting statements.

3. Theory Base Of Accounting - Question 17

IFRS stands for

Detailed Solution for 3. Theory Base Of Accounting - Question 17

International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board

3. Theory Base Of Accounting - Question 18

From the point of view of the timing of recognition of revenue and costs, accounting approaches can be

Detailed Solution for 3. Theory Base Of Accounting - Question 18

From the point of view the timing of recognition of revenue and costs, there can be two broad approaches to accounting. These are:
(i) Cash basis; and
(ii) Accrual basis.

3. Theory Base Of Accounting - Question 19

______________ refers to the necessary assumptions and ideas which are fundamental to accounting practice

Detailed Solution for 3. Theory Base Of Accounting - Question 19

Accounting concept refers to the necessary assumptions and ideas which are fundamental to accounting practice

3. Theory Base Of Accounting - Question 20

GST stands for

Detailed Solution for 3. Theory Base Of Accounting - Question 20

GST stands for Goods and Services Tax

3. Theory Base Of Accounting - Question 21

GST was implemented in India from

Detailed Solution for 3. Theory Base Of Accounting - Question 21

GST was implemented in India from 1st July 2017

3. Theory Base Of Accounting - Question 22

GST is a consumption of goods and service tax based on

Detailed Solution for 3. Theory Base Of Accounting - Question 22

GST is a consumption of goods and service tax based on destination

3. Theory Base Of Accounting - Question 23

Which of the following is not the component of GST

Detailed Solution for 3. Theory Base Of Accounting - Question 23

There are three main components of GST which are CGST, SGST, IGST.
CGST - Central Goods and Services Tax
SGST - State Goods and Services Tax
IGST - Integrated Goods and Services Tax

3. Theory Base Of Accounting - Question 24

Which of the following Tax has not been subsumed under GST

Detailed Solution for 3. Theory Base Of Accounting - Question 24

Following Taxes has been subsumed under GST
1. Service Tax
2. Excise Duty
3. Customs Duty
4. Central Sales Tax
5. VAT
6. Entry Tax
7. Octroi
8. Luxury Tax

3. Theory Base Of Accounting - Question 25

Comparison of two or more departments or divisions of the same business unit with the objective of meaningful analysis in order to improve the operational efficiency of all the departments or divisions is known as 

Detailed Solution for 3. Theory Base Of Accounting - Question 25

Intra-firm comparison means comparison of two or more departments or divisions of the same business unit with the objective of meaningful analysis in order to improve the operational efficiency of all the departments or divisions. 

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