# Accounting Concepts Principles And Conventions

## 77 Questions MCQ Test | Accounting Concepts Principles And Conventions

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Attempt Accounting Concepts Principles And Conventions | 77 questions in 154 minutes | Mock test for preparation | Free important questions MCQ to study for Exam | Download free PDF with solutions
QUESTION: 1

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QUESTION: 2

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QUESTION: 3

### Fundamental accounting assumptions are: [2006- November]

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QUESTION: 4

When fixed assets are sold:  [2006- November]

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QUESTION: 5

The accounting equation is based on : [2007- February]

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QUESTION: 6

_______ Concept is the basic idea that the business is separate from owner. [2007- February]

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QUESTION: 7

The owner of company included his personal medical expenses in the company’s income statement. Indicate the principle that is violated. [2007- February]

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QUESTION: 8

Two primary qualitative characteristic of financial statements are : [2007- February]

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QUESTION: 9

Money owed from an outsider is a [2007- May]

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QUESTION: 10

cost of machinery Rs..10,00,000 installation chargesRs.. 1,00,000 market value on 31.3.06 Rs..12,00,000 while finalizing the machinery at Rs..12,00,000. Which concept is violated by the company? [2007- May]

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QUESTION: 11

Capital as on 1-4-05 Rs..90,000 capital introduced Rs..25,000 drawings made Rs..35,000 what is the amount of profit added to the capital?  [2007- May]

Solution:

capital on 1-4-05 = Rs. 90,000

+ introduced capital= Rs 25,000

total capital ( 90,000 + 25,000) = 115,000

- Drawings. = 35,000

total capital ( 115,000 - 35,000) = 80,000

capital as on 31-3-2006 = 125,000

therefore, profit = (125,000 -80,000) = 45,000

so profit is Rs. 45,000

QUESTION: 12

GAAP’s are:  [2007- May]

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QUESTION: 13

______ refer to the general agreement on the usage and practices in social or economic life: [2007- August]

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QUESTION: 14

Double entry principle means:  [2007- August]

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QUESTION: 15

No inference of profit and the provision making policy for all possible losses is due to : [2007- August]

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QUESTION: 16

The underlying accounting principle necessitating amortization of intangible assets is/are: [2007- August]

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QUESTION: 17

“Holding gains in relation to stocks should not be used for payment of dividend”. Which one of the following accounting principle is involved in this? [2007- August]

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QUESTION: 18

If going concern concept is no longer valid, which of the following is true? [2009- June]

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QUESTION: 19

Ram starts business with Rs..90,000 and then buyes goods from Shyam on credit for Rs.. 23,000. The accounting equation based on assets = capital + liabilities will be:  [2009- June]

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QUESTION: 20

Window dressing of accounts means:  [2009- June]

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QUESTION: 21

Which financial statement represents the accounting equation ASSETS = LIABILITIES + OWNER’S EQUITY [2009- June]

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QUESTION: 22

Ram purchased a car for Rs..10,000 paid Rs..3,000 as cash and balance amount will be paid in three equal installments. Due to this:  [2009- June]

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QUESTION: 23

During life-time of an entity accountants prepare financial statements at arbitrary points of time as per: [2009- June]

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QUESTION: 24

The accounting convention or matching means:  [2009- June]

Solution:

The process of ascertaining the amount of profit earned or the loss incurred during a particular period involves deduction of related expenses from the revenue earned during that period.

The matching concept emphasises exactly on this aspect. It states that expenses incurred in an accounting period should be matched with revenues during that period.

It follows from this that the revenue and expenses incurred to earn these revenues must belong to the same accounting period.

QUESTION: 25

Recording of capital contributed by the owner as liability ensures adherence of principle of [2009- June]

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QUESTION: 26

Omission of paise and showing the round figures in financial statements is based on:  [2008- June]

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QUESTION: 27

Accounting does not record non-financial transactions because of:  [2008- June]

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QUESTION: 28

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QUESTION: 29

Which of these is not a fundamental accounting assumption?  [2008- June]

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QUESTION: 30

fixed assets and current assets are categorized as per concept of:  [2008- June]

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QUESTION: 31

The obligations of an enterprise other then owner’s fund are known as:   [2008- December]

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QUESTION: 32

Which concept requires that those transactions which can be expressed in terms of money should be recorded in books of account?  [2008- December]

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QUESTION: 33

An assets was purchased for Rs..6,60,000. Cash was paid Rs..1,20,000 and for the balance a bill was drawn for 60 days. What will be the effect on fixed assets? [2008- December]

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QUESTION: 34

Guru Ltd. Purchased a machinery for Rs..10 lakhs. Installation charges Rs..20,000. Market value Rs..12lakhs. company valued the machine at market price at the end of the year at Rs..12 lakhs which concept is violated? [2008- December]

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QUESTION: 35

Cash of Rs..2,000 is withdrawn for personal expenses. This will be debited to which account:  [2008- December]

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QUESTION: 36

Estimated selling price less estimated cost of sales is   [2008- December]

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QUESTION: 37

Unpaid expenses are:   [2008- December]

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QUESTION: 38

In the accounting period, accounting to which concept, cost incurred to acquire an asset is shown in the balance sheet  [2008- December]

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QUESTION: 39

What is the effect on the net assets if cash is received from debtors.’ of Rs..50,000?  [2008- December]

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QUESTION: 40

Proprietor (owner) is treated as creditor of business due to:  [2008- December]

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QUESTION: 41

Provision for discount is made due to concept of :  [2009- June]

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QUESTION: 42

the three fundamental accounting assumptions are-

(i) accrual

(ii) conservatism

(iii) Going concern

(iv) consistency

(v)  matching                               [2009- June]

Solution:
QUESTION: 43

debtors. – Rs..50,000. A provision for bad debt is created @ 5% according to which concept? [2009- June]

Solution:
QUESTION: 44

Outstanding expenses is included in profit & loss A/C at the yearend according to which concept_____ [2009- June]

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QUESTION: 45

What is the objective of conservatism?  [2009- December]

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QUESTION: 46

Contingent liabilities are shown in footnote of balance sheet as per which concept?  [2009- December]

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QUESTION: 47

Which of the following does not follow dual aspect?  [2009- December]

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QUESTION: 48

The rule of “lower of cost or market value” is based on which concept?  [2009- December]

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QUESTION: 49

According to which concept the owner of an enterprise pays the “interest on drawings”  [2010- June]

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QUESTION: 50

If market value of closing inventory is reduced below cost prices, which of the following concepts will play & role?  [2010- June]

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QUESTION: 51

Cost concept basically recognizes   [2010- June]

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QUESTION: 52

Provision for bad and doubtful debts is result of :  [2010- June]

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QUESTION: 53

A trader started retail business. During the year he sold goods worth Rs..60,000 and for Rs..1,20,000 out of which only Rs..1,00,000 was collected during the year. He had a closing stock of Rs..10,000. His other business expenses for the period were Rs.. 20,000 out of which Rs..5,000 was outstanding at year end his total profit for the year 2008-09 as per the terms of accrual concept was:   [2010- December]

Solution:
QUESTION: 54

As per accrual concept, which of the following is not true?  [2010- December]

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QUESTION: 55

If nothing is written in the financial statements about the three fundamental assumptions, then it could be pressured that:   [2010- December]

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QUESTION: 56

Rosa pays Rs..1200 on 01.06.2009 towards yearly subscription (July’01 2009 to June’30 2010) of a newspaper. It means she has to make adjustment of _____ for finalization of accounts for the year ended 31.3.10.  [2010- December]

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QUESTION: 57

Matching concept is based on revenue - _____ = profit    [2011- June]

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QUESTION: 58

According to the prudence concept closing stock be valued at cost or ______ whichever is less  [2011- June]

Solution:
QUESTION: 59

Small items like stapler, calculator, etc are not shown in books as fixed assets although they are used in business for long period due to:-   [2011- December]

Solution:
QUESTION: 60

Business enterprise is a separate identity apart from its owner accountant should treat a business as district from its owner. This concept is known as:   [2011- December]

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QUESTION: 61

XYZ Ltd. Follows the written down value method for depreciating machinery year after year due to _____   [2011- December]

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QUESTION: 62

X of Delhi purchased a machinery from Y of Chennai for Rs.. 10,00,000. He paid freight of Rs..2,00,000 and excise duty of Rs.. 1,00,000. He used the end of the year he changed depreciation. Rs..1,50,000. At what value the machinery should be shown in the balance sheet at the year end?  [2011- December]

Solution:
QUESTION: 63

Human resources can’t be shown in balance sheet because of ____ concept   [2011- December]

Solution:
QUESTION: 64

The policy of “anticipates no profit and provide for all possible losses” arises due to convention of   [2011-December]

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QUESTION: 65

“for every debit there is an equivalent credit” this statement demonstrates:    [2012- June]

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QUESTION: 66

The comparison of the financial statement of one accounting period with that of another accounting period is possible only when _____ concept is followed   [2012- June]

Solution:
QUESTION: 67

The _______ concept means that similar items in a set of accounts should be given similar accounting treatment and it should be applied for one period after another -    [2012- December]

Solution:
QUESTION: 68

Matching concept means:     [2012- December]

Solution:
QUESTION: 69

Proprietor’s personal travelling expenses are not to be charged in business accounts. It is due to ____ concept.  [2013- June]

Solution:
QUESTION: 70

As per basic accounting equation assets = capital + liabilities which of the following equation will be true if Ram starts a business with Rs.. 5,50,000 & then buy goods worth Rs..1,50,000 from Madan on credit?    [2013- June]

Solution:
QUESTION: 71

To achieve comparability of the financial statements of an enterprise, the same accounting policies should be followed from one period to another period due to _____ concept.      [2013- June]

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QUESTION: 72

Which accounting concept makes a distinction between the receipt of cash and the right to receive the cash?      [2013- June]

Solution:
QUESTION: 73

ACE traders. purchased goods for Rs.. 30,00,000 and sold 70% of such goods during the accounting year ended 31st March, 2012. The market value of the remaining goods was Rs..6,00,000. ACE Traders. valued the closing stock at Rs.. 6,00,000 and net at Rs..9,00,000 due to concept of _____      [2013- June]

Solution:
QUESTION: 74

If owner’s equity of a business are Rs.. 90,000 and profits are of Rs.. 60,000 for the year calculate total assets of the business   [2013- December]

Solution:
QUESTION: 75

If nothing is written in the financial about the fundamental accounting assumption .then it could be presumed that         [2013- December]

Solution:
QUESTION: 76

The proprietor of a business is treated as a creditor for capital introduced by him ,accounting to  [2013- December]

Solution:
QUESTION: 77

Which the accounting concept that requires the practice of crediting closing stock in the trading account ?   [2013- December]

Solution:
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