Test: Meaning And Scope Of Accounting - 1


30 Questions MCQ Test Principles and Practice of Accounting | Test: Meaning And Scope Of Accounting - 1


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QUESTION: 1

Net Profit or Loss will be derived at ________ stage of accounting.

Solution:

Summarising stage is concerned with the preparation and presentation of the classified data in a manner useful to the internal as well as external users of financial statements. This process leads to the preparation of the following financial statements. Therefore, Net Profit or Loss is derived at the summarising stage.

QUESTION: 2

 Interpreting Financial Statements means:

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QUESTION: 3

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

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QUESTION: 4

Accounting has universal application for recording _______ and events and presenting suitable information for decision making

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QUESTION: 5

 Double Accounting System owes its origin to : 

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QUESTION: 6

 Financial statements users include: 

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QUESTION: 7

 Management Accounting: 

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QUESTION: 8

Purposes of an accounting system include all the following except

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QUESTION: 9

 If owner’s capital is Rs. 50,000 liability is Rs. 30,000 and fixed assets is Rs. 70,000, then what is the value of current assets?

Solution:

According to the accounting equation:
Owner's capital= Assets- Liabilities
50,000= (70,000+ current assets)- 30,000
Current Assets= Rs. 10,000

QUESTION: 10

Users of accounting information include

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QUESTION: 11

Rs. 5,000 paid as rent of office premises in an/a _________

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QUESTION: 12

Match the following items from column A with column B.

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QUESTION: 13

Financial statements are part of 

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QUESTION: 14

 Book-keeping is mainly concerned with 

Solution:

Bookkeeping refers mainly to the record-keeping aspects of financial accounting, and involves preparing source documents for all transactions, operations, and other events of a business.

QUESTION: 15

 Which of the following is an event? 

Solution:

The correct option is B.

In accounting terms, an event is simply an economic activity which can be cash or noncash which happens in day to day operation of a business which does not involves changes in account balances.

Difference between transaction and event is when an event brings change to account balances, it is classified as a transaction.

Therefore since in case of closing stock accounting, we are only presenting it in the books of final accounts, it is an event and not a transaction.

QUESTION: 16

Which of the following is correct? Owner’s Equity is : 

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QUESTION: 17

The direct advantage of accounting do not include: 

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QUESTION: 18

 On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with the closing inventory of  Rs. 10,000. This is

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QUESTION: 19

Which of the following is not a subfield of accounting?

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QUESTION: 20

The main objectives of Book- Keeping are :

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QUESTION: 21

________ of American Institute of Certified Public Accountants enumerated the functions of Accounting:

Solution:

 

QUESTION: 22

 Match the following items from column A with column B.

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QUESTION: 23

Financial Statements are a part of : 

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QUESTION: 24

 Financial position of the business is ascertained on the basis of 

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QUESTION: 25

 Financial accounting information is characterized by all of the following except

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: 26

The objective of wealth maximization takes into account 

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QUESTION: 27

All of the following are functions of Accounting except

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QUESTION: 28

Which of these is not available in the Financial Statements of Company?

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QUESTION: 29

 Financial statements do not consider

Solution:

Nonmonetary items are those assets and liabilities appearing on the balance sheet that are not cash, or cannot be readily converted into cash. ... Nonmonetary liabilities include those obligations that are not payable in cash, or items that will adjust an expense.

QUESTION: 30

 On 31st December, 2005, Ashok Ltd. purchased a machine from Mohan Ltd. for Rs. 1,75,000. This is : (year end : 31st December)

Solution:

 Transaction means a business, performance of an act, an agreement while event signifies a happening, as a consequence of transaction, a result. Thus, purchase of Machinery on 31st Dec, 2005 i.e. last day of accounting year will be a transaction as well as event.

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