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Test: Accounting Concepts, Principles And Conventions - 2


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30 Questions MCQ Test Crash Course of Accountancy - Class 11 | Test: Accounting Concepts, Principles And Conventions - 2

Test: Accounting Concepts, Principles And Conventions - 2 for Commerce 2022 is part of Crash Course of Accountancy - Class 11 preparation. The Test: Accounting Concepts, Principles And Conventions - 2 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Accounting Concepts, Principles And Conventions - 2 MCQs are made for Commerce 2022 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Accounting Concepts, Principles And Conventions - 2 below.
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Test: Accounting Concepts, Principles And Conventions - 2 - Question 1

 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:-

Test: Accounting Concepts, Principles And Conventions - 2 - Question 2

A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:

(i). The cost of an assets Rs. 25,000 has been taken as en expense.
(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.
(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.
(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.

What is the correct amount of profit to be reported in the books?

Test: Accounting Concepts, Principles And Conventions - 2 - Question 3

 Capital brought in by the proprietor is an example of 

Test: Accounting Concepts, Principles And Conventions - 2 - Question 4

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

Test: Accounting Concepts, Principles And Conventions - 2 - Question 5

XYZ Ltd. follows the written down value method for depreciating machinery year after year due to ____.

Test: Accounting Concepts, Principles And Conventions - 2 - Question 6

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, 2011. He counted net profit as Rs. 3,50,000. Which of the accounting concept was followed by him?

Test: Accounting Concepts, Principles And Conventions - 2 - Question 7

 “For every debit there is an equivalent credit” this statement demonstrates:

Test: Accounting Concepts, Principles And Conventions - 2 - Question 8

Match the following items from column A with column B 

Test: Accounting Concepts, Principles And Conventions - 2 - Question 9

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

Test: Accounting Concepts, Principles And Conventions - 2 - Question 10

Human resources can’t be shown in Balance Sheet because of __________ concept.

Test: Accounting Concepts, Principles And Conventions - 2 - Question 11

Decrease in the amount of trade payables results in

Test: Accounting Concepts, Principles And Conventions - 2 - Question 12

 A proprietor, Mr. A has reported a profit of Rs. 1,25,000 at the end of the financial year after taking into consideration the following amount:

(i). The cost of an assets Rs. 25,000 has been taken as en expense.
(ii). Mr. A is anticipating a profit of Rs. 10,000 on the future sale of a car shown as an asset in his books.
(iii). Salary of Rs. 7,000 payable in the financial year has not been taken into account.
(iv). Mr. A purchased an asset for Rs. 75,000 but its fair value on the date of purchase was Rs. 85,000. Mr. A recorded the value of asset in his books by Rs. 85,000.

Which concept should be followed in the statement (ii)?

Test: Accounting Concepts, Principles And Conventions - 2 - Question 13

 Consider the following data pertaining to Alpha Ltd.:

While finalizing the annual accounts, if the company values the machinery at Rs. 12,00,000. Which of the following concepts is violated by the Alpha Ltd.?

Test: Accounting Concepts, Principles And Conventions - 2 - Question 14

Matching concept is based on: 

Revenue ______ = Profit. 

Test: Accounting Concepts, Principles And Conventions - 2 - Question 15

 The ‘going concern concept’ is the underlying basis for 

Test: Accounting Concepts, Principles And Conventions - 2 - Question 16

The underlying accounting principle necessitating amortization of Intangible Assets is/are :

Test: Accounting Concepts, Principles And Conventions - 2 - Question 17

If nothing is written in the financial statements about the fundamental accounting assumptions, then it could be presumed that:-

Test: Accounting Concepts, Principles And Conventions - 2 - Question 18

Two primary qualitative characteristics of financial statements are:

Test: Accounting Concepts, Principles And Conventions - 2 - Question 19

 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. 

Test: Accounting Concepts, Principles And Conventions - 2 - Question 20

__________Concept is the basic idea that the business is separate from owner. 

Test: Accounting Concepts, Principles And Conventions - 2 - Question 21

Gyan received Rs. 5,000 advance from a customer. He showed this amount as his income, which Accounting Concept is not followed?

Detailed Solution for Test: Accounting Concepts, Principles And Conventions - 2 - Question 21

The correct option is D.

Accrual concept is the most fundamental principle of accounting which requires recording revenues when they are earned and not when they are received in cash, and recording expenses when they are incurred and not when they are paid.

Test: Accounting Concepts, Principles And Conventions - 2 - Question 22

ACE Traders purchased goods for Rs. 30,00,000 and sold 70% of such goods during the accounting year ended 31stMarch, 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 not at Rs. 9, 00,000 due to concept of ______

Detailed Solution for Test: Accounting Concepts, Principles And Conventions - 2 - Question 22

 

The correct option is D.

Conservatism Principle is a concept in accounting under GAAP which recognises and records expenses and liabilities-certain or uncertain in nature, as soon as possible but recognises revenues and assets when they are assured of being received. It gives clear guidance in recording cases of uncertainty and estimates. Since the value of the goods is decreased the company writes down this decrease.

Test: Accounting Concepts, Principles And Conventions - 2 - Question 23

 GAAP’s are: 

Test: Accounting Concepts, Principles And Conventions - 2 - Question 24

Double Entry Principle means :

Test: Accounting Concepts, Principles And Conventions - 2 - Question 25

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:

Test: Accounting Concepts, Principles And Conventions - 2 - Question 26

Recording of Fixed Asset at Cost ensures adherence of :

Test: Accounting Concepts, Principles And Conventions - 2 - Question 27

When Fixed assets are sold:

Test: Accounting Concepts, Principles And Conventions - 2 - Question 28

 Which is the accounting concept that requires the practice of crediting closing stock in the trading account?

Test: Accounting Concepts, Principles And Conventions - 2 - Question 29

Cost of Machinery: Rs. 10,00,000
Installation charges: Rs. 1,00,000
Market Value on 31.3.06: Rs. 12,00,000
While finalizing the accounts, if the company values the machinery at Rs. 12,00,000. Which concept is violated by the Company?  

Detailed Solution for Test: Accounting Concepts, Principles And Conventions - 2 - Question 29

The correct option is Option A.

Machinery should be valued at Rs. 11,00,000 on 31.3.06 and not for Rs. 12,00,000. This entails adherence of Cost Concept. If the machinery is valued at Rs. 12,00,000 on 31.03.06 it will mean violation of cost concept. Cost concept means that assets should be recorded at their buying cost or historical cost and not on their market value existing at the date of balance sheet.

Test: Accounting Concepts, Principles And Conventions - 2 - Question 30

Proprietor’s personal travelling expenses are not to be charged in business accounts. It is due to ______ concept. 

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