ACCOUNTING CONCEPTS & CONVENTIONS Q1} XYZ Ltd. Purchased goods for `. 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 `.4,00,000. The company valued the closing stock at cost. They violated the concept of (a) Conservatism (b) Money measurement (c) Periodicity (d) Cost Q2} Profit and Loss Account is prepared for a period of one year by following (a) Periodicity period concept (b) Business entity concept (c) Accrual concept (d) None of the above Q3} Basic concepts related to balance sheet are (a) Conservatism concept (b) Business entity concept (c) Going concern concept (d) Both (b) or (c) Q4} What is the important object of accounting? (a) To maintain records (b) Depiction of financial position (c) Make information available to various groups & users (d) All of the above Q5} Income is measured on the basis of (a) Matching concept (b) Consistency concept (c) Cost concept (d) None of the above Q6} The enterprise is liable to the owner for capital investment made by the owner as per (a) Entity concept (b) Money measurement concept (c) Accrual concept (d) Going concern concept Q7} Inventories are valued at lower of cost or net realizable value by applying the principle of (a) Conservatism (b) Consistency (c) Materiality (d) Disclosure Q8} In which area different accounting policies are adopted (a) Valuation of inventories (b) Valuation of investment (c) Depreciation (d) All of the above Q9} Advance received from Debtors is not taken as Sales is based on (a) Conservatism concept (b) Accrual concept (c) Money measurement concept (d) None of the above Q10} Mohan purchased a Motor Car costing `.60,000 on 1st January, 2006 transportation and repairing charge were incurred amounting `.5,000 and 200 respectively. Dismantling charge of old motor car in place of which new motor car was purchased amounted to `.20,000. Marked value of motor car was estimated at `.70,000 and 31st December, 2006 while finalizing the annual accounts. Mohan values the motor car at `.70,000 in this book. Which of the following concepts was violated by the Mohan? (a) Matching concept (b) Realization concept (c) Cost concept (d) Periodicity concept Q11} Fundamental accounting assumptions are (a) Consistency concept (b) Going concern concept (c) Accrual concept (d) All of the above 1 Q12} Arjun purchased goods for `.10,00,000 and sold 70% of such goods during the year ended 31st Dec. 2006. The market value of the remaining goods was 2,00,000. He valued the closing stock at cost. He violated the concept of (a) Periodicity (b) Money measurement (c) Conservatism (d) Cost Q13} All the following items are classified as fundamental accounting assumptions except (a) Consistency (b) Business entity (c) Going concern (d) Accrual Q14} Two primary qualitative characteristics of financial statements are (a) Understandability and materiality (b) Relevance and reliability (c) Relevance and understandability (d) Materiality and reliability Q15} Kanika Enterprises follows the written down value method of depreciating machinery year after year due to (a) Comparability (b) Convenience (c) consistency (d) All of the above Q16} Assets are held in the business for the purpose of (a) Resale (b) Conversion into cash (c) Earning revenue (d) None of the above Q17} Revenue from sale of products, is generally, realized in the period in which (a) Cash is collected (b) Sale is made
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Q.N. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Ans. A A D D A A A D B C D C B B C C B A C A B C D B B A C
Q.N. 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61
Ans. B B A C B A B B C A C D C D A D A D D A D D D A D B A
Q.N. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Q.N. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
Ans. C B A A C A C D B A A A C B C B A D D B A B A A C D A B
Q.N. 43 44 45 46 47 48 49 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Ans. A B B A C B A A D A C B B D D C A B B B D D A C B C D
TRIAL BALANCE
Q.N. 27 28 29 30 31 32 33 34 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Ans. C B B B C C C C C A B B C B C B B C A B B D A A B B B
SUBSIDIARY BOOK
Q.N. 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53
Ans. C A B D C D A C B D C A B D D C D D B B A B A C A A B D
Q.N. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Ans. C D B A B A A C D D A C D B C D C B D B B C B A A B C D
Q.N. 38 39 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Ans. C A B B C D A B B B B C D C B A B B A B B A B C A C A
Q.N. 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58
Ans. D B A A B A B B A A A A A A A A C A D B C D C A B C A
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C B
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