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Test: Theory Base Of Accounting - 1


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10 Questions MCQ Test Accountancy Class 11 | Test: Theory Base Of Accounting - 1

Test: Theory Base Of Accounting - 1 for Commerce 2023 is part of Accountancy Class 11 preparation. The Test: Theory Base Of Accounting - 1 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Theory Base Of Accounting - 1 MCQs are made for Commerce 2023 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Theory Base Of Accounting - 1 below.
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Test: Theory Base Of Accounting - 1 - Question 1

According to which accounting principle personal expenses of proprietor are recorded in drawings account?

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 1

According to business entity concept business is different from owners and it is treated as a separate unit or entity apart from owners. Personal expenses of proprietor will be recorded in drawings because it may be an expenses which relate to business entity .So the correct answer is d

Test: Theory Base Of Accounting - 1 - Question 2

Under which accounting principle quality of manpower is not recorded in the books of accounts?

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 2

The accounting principle where the quality of manpower is not recorded in the accounts book is Money Measurement Principle.

This concept underlines the fact that in economics and accounting generally, every recorded transaction or event is measured with regards to money.

By utilizing this principle, the happening or a fact or event that cannot be indicated in terms of money are not recorded in accounting books.

Test: Theory Base Of Accounting - 1 - Question 3

Principle which assumes that a business enterprise will not be liquidated in the near future.

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 3

Going concern concept is also known as continuty assumption.
It is assumed that the enterprise is normally continuing in for the foreseeable future

Test: Theory Base Of Accounting - 1 - Question 4

Which accounting principle requires that life of a business be broken into smaller parts?

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 4

Accounting period principle: Accounting to this principle life of a business is broken into smaller parts generally in a period of one year known as accounting year so that its performance is measured at regular intervals.

Test: Theory Base Of Accounting - 1 - Question 5

Under which accounting concept fixed assets are recorded at cost without considering the market price (whether low or high)?

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 5

A historical cost is a measure of value used in accounting in which the price of an asset on the balance sheet is based on its nominal or original cost when acquired by the company. The historical-cost method is used for assets in the United States under generally accepted accounting principles (GAAP).

Test: Theory Base Of Accounting - 1 - Question 6

Single Entry system ignores ______ of accounting.

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 6

Single entry system ignores dual aspects (debit and credit) of transactions. It also ignores nominal account and real accounts. So, it is an incomplete system of recording transactions.

Test: Theory Base Of Accounting - 1 - Question 7

Closing stock is valued at lower of cost or market price. Which concept of accounting is applied here?

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 7

It is based on the Prudence or Conservatism Principle, according to which all the prospective losses are taken into consideration and not the prospective profits. The assumption of this concept ensures that the financial statement presents a realistic picture of state of affairs of the enterprise.

Test: Theory Base Of Accounting - 1 - Question 8

According to Business Entity concept

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 8

The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses. Doing so requires the use of separate accounting records for the organization that completely exclude the assets and liabilities of any other entity or the owner.

Test: Theory Base Of Accounting - 1 - Question 9

Full form of GAAP

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 9

GAAP means Generally Accepted Accounting Principles is a combination of authoritative standards (set by police boards) and the commonly accepted ways of recording and reporting accounting information. GAAP improves the clarity of the communication of financial information.

Test: Theory Base Of Accounting - 1 - Question 10

The debts, which are to be repaid within a short period (year or less) are known as

Detailed Solution for Test: Theory Base Of Accounting - 1 - Question 10

The debts which are to be repaid within a short period (year or less) are known as Current liabilities. Current liabilities are a company's debts or obligations that are due within one year or within a normal operating cycle.

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