Test: Meaning And Scope Of Accounting - 1


30 Questions MCQ Test Accountancy Class 11 | 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:

Solution:
QUESTION: 3

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

Solution:
QUESTION: 4

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

Solution:
QUESTION: 5

 Double Accounting System owes its origin to : 

Solution:

Luca Pacioli, in venice (1494) is considered as the first book on double entry book-keeping. A portion of this book contains knowledge of business and book-keeping.

QUESTION: 6

 Financial statements users include: 

Solution:
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

Solution:
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.

Solution:

 

QUESTION: 13

Financial statements are part of 

Solution:
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 : 

Solution:
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 :

Solution:

The main objective of book-keeping is to keep a complete and accurate record of all the financial transactions in a systematic orderly, logical manner. This ensures that the financial effects of these transactions are reflected in the books of accounts.

Then the second main objective is to ascertain the overall effect of all recorded transactions on the final statement of the company. Book-keeping will eventually ascertain the final accounts of the company, namely the Profit and Loss Account and the Balance Sheet.

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.

Solution:
QUESTION: 23

Financial Statements are a part of : 

Solution:

Financial statement is a formal record of the financial activities and position of a business, person or other entity. Financial statement are major part of accounting as accounting is incomplete without financial statements. 

QUESTION: 24

 Financial position of the business is ascertained on the basis of 

Solution:
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 

Solution:

Wealth maximization is a modern approach to financial management. Maximization of profit used to be the main aim of a business and financial management till the concept of wealth maximization came into being. It is a superior goal compared to profit maximization as it takes broader arena into consideration.

QUESTION: 27

All of the following are functions of Accounting except

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: 28

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

Solution:
QUESTION: 29

 Financial statements do not consider

Solution:

Financial statements are written records of a business's financial situation. They include standard reports like the balance sheet, income or profit and loss statements, and cash flow statement. They stand as one of the more essential components of business information, and as the principal method of communicating financial information about an entity to outside parties. In a technical sense, financial statements are a summation of the financial position of an entity at a given point in time. 

The primary focus of financial reporting is information about earnings and its components. Hence financial statement do not consider assets and liabilities expressed in non-monetary terms.

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:

The transaction is simply a economic activity which can be cash or non cash which happens in day to day operation of a business. e.g Sale purchase of goods, Sale purchase of assets etc.

Therefore "​Ashok Ltd. purchased a machine from Mohan Ltd. for Rs.1,75,000" is a transaction.

It is an transaction as we purchased machinery but also an event becz it is purchased on closing date

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