Test: Accounting Concepts, Principles And Conventions - 5

Question 1

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

Accepted Answer

Realisation

Answer

Accrual

Answer

Consistency

Answer

Going concern

Question 2

Two primary qualitative characteristics of financial statements are

Accepted Answer

Relevance and reliability.

Answer

Understandability and materiality.

Answer

Relevance and understandability.

Answer

Materiality and reliability

Question 3

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

Accepted Answer

Consistency.

Answer

Comparability

Answer

Convenience.

Answer

All of the above.

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

Accepted Answer

Total assets increased by Rs.4,00,000 with corresponding increase in liabilities by Rs.4,00,000.

Answer

Total assets increased by Rs.5,00,000.

Answer

Total liabilities increased by Rs.4,00,000.

Answer

Total assets increased by Rs.4,00,000.

Question 5

Mohan purchased goods for Rs.15,00,000 and sold 4/5^th 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?

Accepted Answer

Matching.

Answer

Entity.

Answer

Periodicity.

Answer

Conservatism.

Question 6

A businessman purchased goods for Rs.25,00,000 and sold 80% of such goods during the accounting year ended 31^st 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

Accepted Answer

Conservatism.

Answer

Money measurement.

Answer

Cost.

Answer

Periodicity.

Question 7

Capital brought in by the proprietor is an example of

Accepted Answer

Increase in asset and increase in liability.

Answer

Increase in liability and decrease in asset.

Answer

Increase in asset and decrease in liability.

Answer

Increase in one asset and decrease in another asset.

Question 8

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

Accepted Answer

Business Entity

Answer

Going Concern Entity

Answer

Money Measuring Entity

Answer

Accounting Period concept

Answer

None of the above

Question 9

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

Accepted Answer

Sale is made.

Answer

Cash is collected.

Answer

Products are manufactured.

Answer

None of the above.

Question 10

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

Accepted Answer

Understatement of assets.

Answer

Overstatement of assets.

Answer

Overstatement of capital.

Answer

Understatement of capital.

Question 11

Decrease in the amount of creditors results in

Accepted Answer

Decrease in cash.

Answer

Increase in cash.

Answer

Increase in assets.

Answer

No change in assets.

Question 12

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

Accepted Answer

Matching.

Answer

Objectivity.

Answer

Materiality.

Answer

Periodicity.

Question 13

The ‘going concern concept’ is the underlying basis for

Accepted Answer

Stating fixed assets at their realizable values.

Answer

Disclosing the market value of securities.

Answer

Disclosing the sales and other operating information in the income statement.

Answer

None of the above.

Question 14

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

Accepted Answer

Periodicity.

Answer

Matching.

Answer

Going concern.

Answer

Accrual.

Question 15

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

Accepted Answer

Decrease of another asset or increase of liability.

Answer

Increase of another asset or increase of capital.

Answer

Decrease of specific liability or decrease of capital.

Answer

Increase of drawings and liability.

Question 16

Purchase of machinery for cash

Accepted Answer

Retains total assets unchanged.

Answer

Decreases total assets.

Answer

Increases total assets.

Answer

Decreases total liabilities.

Question 17

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

Accepted Answer

cash disbursements

Answer

price disbursements

Answer

budget disbursements

Answer

goods disbursements

Accounting Concepts, Principles And Conventions - 5 - Free MCQ Practice

MCQ Practice Test & Solutions: Test: Accounting Concepts, Principles And Conventions - 5 (17 Questions)

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

Two primary qualitative characteristics of financial statements are

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

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

Mohan purchased goods for Rs.15,00,000 and sold 4/5^th 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?

A businessman purchased goods for Rs.25,00,000 and sold 80% of such goods during the accounting year ended 31^st 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

Capital brought in by the proprietor is an example of

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

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

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

Decrease in the amount of creditors results in

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

The ‘going concern concept’ is the underlying basis for

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

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

Purchase of machinery for cash

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

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Accounting for CA Foundation

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Accounting Concepts, Principles And Conventions - 5 - Free MCQ Practice

MCQ Practice Test & Solutions: Test: Accounting Concepts, Principles And Conventions - 5 (17 Questions)

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

Two primary qualitative characteristics of financial statements are

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

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

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?

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

Capital brought in by the proprietor is an example of

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

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

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

Decrease in the amount of creditors results in

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

The ‘going concern concept’ is the underlying basis for

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

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

Purchase of machinery for cash

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

Accounting for CA Foundation

Accounting for CA Foundation

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About this CA Foundation Practice Test

Explore more CA Foundation Study Resources

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

Mohan purchased goods for Rs.15,00,000 and sold 4/5^th 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?

A businessman purchased goods for Rs.25,00,000 and sold 80% of such goods during the accounting year ended 31^st 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