Tuesday, June 28, 2011

Chapter-2 : Accounting Concepts & Conventions

Q1. Accounting Principle are generally based on:
(a) Subjectivity            (b) Convenience in Recording
(c) Practicability          (d) None of the above


Q2. All Probable losses are provided for estimating profit of an 
       accounting Firm due to :
(a) Convention of consistency       (b) Convention of conservatism
(c)  Convention of disclosure         (d) Convention of materiality


Q3.The system of recording transactions based on dual aspect
      concept is called:
(a) Double Accounting System     (b) Double Entry System
(c) Single Entry System                 (d) None of the above.


Q4.Revenue is usually recognized :-
(a) When goods are sold                  (b) When Cash is received
(c)  When production is completed  (d)  Goods sold or cash received whichever is earlier.


Q5. The following will be recorded in the books of accounts in terms of
       money measurement concept -
(a) Value of Order placed for supply     (b) Health of the Managing Director of the Company
(c)  Quality control in the factory          (d) Value of the building


Q6. Which of the following is not a revenue reserve -
(a) General Reserve              (b) Increment Allowance Reserve
(c)  Revaluation Reserve       (d) Both (b) and (c)


Q7. Owner of the business is treated as creditor for his capital  contribution 
       under the concept -
(a) Money measurement concept     (b) Dual aspect concept
(c)  Going concern concept              (d) Separate Entity Concept


Q8. According to Going Concern Concept -
(a) A firm has limited life.             (b) A firm is going to wound up
(c) A firm has infinite life.             (d) None of the above.


Q9.Gross profit means -
(a) Net Sales - cost of goods sold      (b) Net Sales - All expenses
(c)  Incomes - All Expenses               (d) Net sales - Net purchases


Q10.The basic Concepts governing balance sheet are:
(a) Dual aspect concept                 (b) Business Entity concept
(c) Accounting period concept       (d) All of the above.


Q11.The basic concepts governing the Profit and Loss Account are :
(a) Cost concept                 (b) Realisation Concept
(c) Matching concept          (d) Both (b) and (c)


Q12.As per convention of convservatism, stock is valued at:
(a) Cost price                       (b) Market Price
(c) Cost Price or Market price whichever is less
(d) Cost price or market price whichever is More


Q13. Trading and Profit & Loss Account is prepared for the period of one year as per-
(a) Accrual concept               (b) Money measurement concept
(c)  Periodicity concept          (d) Cost concept


Q14.The stage of double entry system which shows the financial postion of a firm is-
(a) Primary records                (b) Classification
(c) Trial Balance                     (d) Final Accounts   


Q15.If the going concern concept does not remains valid. Which of the following is true-
(a) Provision for bad debts should be eliminated.
(b) Assets should be valued at their realizable values.
(c) Creditors should be over-valued
(d) Total of capital, reserves and funds shall remain unchanged.


Answers :-
1.(c)      2.(b)   3.(b)   4.(a)   5.(d)  6.(c)  7.(d)   8.(c)  9.(a)
10.(d)   11.(d)   12.(c)  13.(c)   14.(d)   15.(b)



















































  


     

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