Test: Accounting Concepts, Principles And Conventions - 5


17 Questions MCQ Test Principles and Practice of Accounting | Test: Accounting Concepts, Principles And Conventions - 5


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QUESTION: 1

All the following items are classified as fundamental accounting assumption except:​ 

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QUESTION: 2

Two primary qualitative characteristics of financial statements are

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QUESTION: 3

Kanika Enterprises follows the written down value method of depreciating machinery year after year due to

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The correct option is C.

Depreciation means diminishing value over a period of time.When an asset is purchased,Neither side of this journal entry affects the income statement, where revenues and expenses are reported. In order to move the cost of the asset from the balance sheet to the income statement, depreciation is taken on a regular basis. So every year the value of the asset is depreciated due to the consistency.

QUESTION: 4

A purchased a car for Rs.5,00,000, making a down payment of Rs.1,00,000 and signing a Rs.4,00,000 bill payable due in 60 days. As a result of this transaction

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QUESTION: 5

Mohan purchased goods for Rs.15,00,000 and sold 4/5th of the goods amounting Rs.18,00,000 and met expenses amounting Rs.2,50,000 during the year, 2005. He counted net profit as Rs.3,50,000. Which of the accounting concept was followed by him?

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QUESTION: 6

A businessman purchased goods for Rs.25,00,000 and sold 80% of such goods during the accounting year ended 31st March, 2005. The market value of the remaining goods was Rs.4,00,000. He valued the closing stock at cost. He violated the concept of

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QUESTION: 7

Capital brought in by the proprietor is an example of

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QUESTION: 8

A business firm is separate and distinct from its owners is the assumption under which of the following accounting concepts:

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QUESTION: 9

Revenue from sale of products, is generally, realized in the period in which

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QUESTION: 10

The concept of conservatism when applied to the balance sheet results in

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QUESTION: 11

Decrease in the amount of creditors results in

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QUESTION: 12

The determination of expenses for an accounting period is based on the principle of

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QUESTION: 13

The ‘going concern concept’ is the underlying basis for

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QUESTION: 14

Economic life of an enterprise is split into the periodic interval as per

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QUESTION: 15

If an individual asset is increased, there will be a corresponding

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QUESTION: 16

Purchase of machinery for cash

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Purchase of Machinery. This transaction will give affect in two accounts i.e. Machinery Account and cash Account.
Hence there will be no affect in total assets as Machinery will increase and cash will decrease.
Yes, there will be a change in fixed assets and current assets. But total assets will remain unchanged.

QUESTION: 17

Direct labor and salary outlays direct material purchases, which are classified as

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