Test: Meaning And Scope Of Accounting - 3

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This mock test of Test: Meaning And Scope Of Accounting - 3 for CA Foundation helps you for every CA Foundation entrance exam. This contains 11 Multiple Choice Questions for CA Foundation Test: Meaning And Scope Of Accounting - 3 (mcq) to study with solutions a complete question bank. The solved questions answers in this Test: Meaning And Scope Of Accounting - 3 quiz give you a good mix of easy questions and tough questions. CA Foundation students definitely take this Test: Meaning And Scope Of Accounting - 3 exercise for a better result in the exam. You can find other Test: Meaning And Scope Of Accounting - 3 extra questions, long questions & short questions for CA Foundation on EduRev as well by searching above.

QUESTION: 1

Which of the following is not a subfield of accounting?

A.
Management accounting
B.
Cost accounting
C.
Financial accounting
D.
Book-keeping

Solution:

QUESTION: 2

Purposes of an accounting system include all the following except

A.
Interpret and record the effects of business transaction.
B.
Classify the effects of transactions to facilitate the preparation of reports.
C.
Summarize and communicate information to decision makers.
D.
Dictate the specify types of business enterprise transactions that the enterprises may engage in.

Solution:

The correct option is D.

The purpose of accounting is to accumulate and report on financial information about the performance, financial position, and cash flows of a business. This information is then used to reach decisions about how to manage the business, or invest in it, or lend money to it. This information is accumulated in accounting records with accounting transactions, which are recorded either through such standardized business transactions as customer invoicing or supplier invoices, or through more specialized transactions, known as journal entries.

accounting involves recording, classifying, summarizing, and interpreting financial information.So it does not define which type of business transactions that the enterprise must engage in.

QUESTION: 3

Financial accounting information is characterized by all of the following except

A.
It is historical in nature.
B.
It is factual, so it does not require judgement to prepare.
C.
It results from inexact and appropriate measures.
D.
It is enhanced by management’s explanation.

Solution:

The correct answer is B.

Judgement is required to prepare accounting information since it is based on various accounting assumptions, policies, principles and standards. Therefore, financial accounting information involves professional judgement which cannot be ignored .

QUESTION: 4

Book-keeping is mainly concerned with

A.
Recording of financial data.
B.
Designing the systems in recording, classifying and summarising the recorded data.
C.
Interpreting the data for internal and external users.
D.
None of the above.

Solution:

QUESTION: 5

All of the following are functions of Accounting except

A.
Decision making
B.
Measurement
C.
Forecasting
D.
Ledger posting

Solution:

Ledger posting is a 'book-keeping' exercise whereas the others are purely accounting in nature, which are done in accordance with various accounting standards, policies, etc.

QUESTION: 6

Financial statements are part of

A.
Accounting.
B.
Book-Keeping.
C.
All of the above.
D.
None of the above.

Solution:

QUESTION: 7

Financial position of the business is ascertained on the basis of

A.
Records prepared under book-keeping process.
B.
Trial balance.
C.
Accounting reports.
D.
None of the above.

Solution:

QUESTION: 8

Users of accounting information include

A.
Creditors.
B.
Lenders.
C.
Customers.
D.
All of the above.

Solution:

QUESTION: 9

Financial statements do not consider

A.
Assets expressed in monetary terms.
B.
Liabilities expressed in monetary terms.
C.
Assets expressed in non-monetary terms.
D.
Assets and liabilities expressed in non-monetary terms.

Solution:

QUESTION: 10

On January 1, Sohan paid rent of Rs. 5,000. This can be classified as

A.
An event.
B.
A transaction.
C.
A transaction as well as an event.
D.
Neither a transaction nor an event.

Solution:

QUESTION: 11

On March 31, 2006 after sale of goods worth Rs. 2,000, he is left with the closing stock of Rs. 10,000. This is

A.
An event.
B.
A transaction.
C.
A transaction as well as an event.
D.
Neither a transaction nor an event.

Solution:

Unsold items i.e Closing stock is captured in the financial statements as 'Current Assets'.

An event can be internal or external. This is an internal event.

There is no exchange of goods or services or money. Hence, it cannot be termed as a 'transaction'.

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Test: Meaning And Scope Of Accounting - 3

11 Questions MCQ Test Crash Course of Accountancy - Class 11 | Test: Meaning And Scope Of Accounting - 3

Which of the following is not a subfield of accounting?

Purposes of an accounting system include all the following except

Financial accounting information is characterized by all of the following except

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