MCQ Questions for Accountancy Class 11 Chapter 3 Theory Based of Accounting, Accounting Standards and Indian Accounting Standards (Ind-AS)
Table of Contents
Q.1. According to the Business Entity Concept
(a) transactions between the business and its owners are not recorded.
(b) transactions between the business and its owners are recorded considering them to be one single entity
(c) transactions between the business and its owners are recorded from the business point of view.
(d) None of the above.
Q.2. According to the Money Measurement Concept
(a) all transactions and events are recorded.
(b) all transactions and events which can be estimated in money terms are recorded in the books of account.
(c) all transactions and events which can be measured in money terms are recorded in the books of account.
(d) None of the above.
Q.3. According to the Cost Concept
(a) assets are recorded at the value paid for acquiring them.
(b) assets are recorded by estimating the market value at the time of purchase.
(c) assets are recorded at lower of cost or market value.
(d) None of the above.
Q.4. According to the Going Concern Concept
(a) assets are recorded at cost and are depreciated over their useful life.
(b) assets are valued at their market value at the year-end and are recorded in the books of account.
(c) assets are valued at their market value, recorded in the books and depreciation is charged on the market value.
(d) None of the above.
Q.5. According to the Accrual Concept
(a) transactions and events are recorded in the books at the time of their settlement in cash.
(b) transactions and events are recorded in the books at the time when they are entered into.
(c) transactions and events may be recorded either at the time of the settlement or when they are entered into.
(d) None of the above.
Q.6. According to the Convention of Consistency
(a) accounting policies and practices once adopted should be consistently
(b) accounting policies and practices adopted may be changed as per the management’s decision
(c) accounting policies and practices once adopted cannot be changed under any circumstances
(d) None of the above.
Q.7. According to Going Concern Concept, a business is viewed as having
(a) a limited life.
(b) a very long life.
(c) an indefinite life.
(d) None of these.
Q.8. According to which of the following accounting concepts, even the proprietor of a business is treated as creditor to the extent of his capital?
(a) Money Measurement Concept
(b) Dual Aspect Concept
(c) Cost Concept
(d) Business Entity Concept
Q.9. According to which of the following concepts, in determining the net income from business, all costs which are applicable to the revenue of the period should be charged against that revenue?
(a) Matching Concept
(b) Money Measurement Concept
(c) Cost Concept
(d) Dual Aspect Concept
Q.10. Valuation of stock at lower of cost or net realisable value is an example of
(a) Consistency Convention.
(b) Conservatism Convention.
(c) Realisation Concept.
(d) Matching Concept
Q.11. During the life-time of an entity, accounting produces financial statements in accordance with which of the following accounting concept?
(a) Matching
(b) Conservatism
(c) Accounting period
(d) Cost
Q.12. X Ltd. follows the Written Down Value Method of depreciating machinery year after year due to
(a) comparability.
(b) convenience.
(c) consistency.
(d) All of these.
Q.13. The Convention of Conservatism takes into account
(a) all prospective profits and prospective losses.
(b) all prospective profits and leaves out prospective losses.
(c) all prospective losses but leaves out prospective profits.
(d) None of the above.
Q.14. IASB upon coming into existence has adopted
(a) all IAS and SIC.
(b) some IAS and SIC.
(c) none of the IAS and SIC.
(d) None of these.
Q.15. IFRS are
(a) rule based accounting standards.
(b) principle based accounting standards.
(c) partially rule based and partially principle based accounting standards.
(d) None of the above.
Q.16. IFRS are based on
(a) historical cost.
(b) fair value.
(c) both historical cost and fair value.
(d) None of these.
Q.17. Ind-AS are
(a) rule based accounting standards.
(b) principle based accounting standards.
(c) partially rule based and partially principle based accounting standards.
(d) None of the above.
Q.18. Assets (except Securities) may be valued under Ind-AS on.
(a) historical cost.
(b) fair value.
(c) both historical cost and fair value.
(d) None of these.
Q.19. The Concept of Conservatism takes into account
(a) all prospective profits and all prospective losses.
(b) all prospective profits and leaves all prospective losses.
(c) all prospective losses but not the prospective profits.
(d) None of the above.
Q.20. According to which of the following concepts, in determining the net income, all costs which are applicable to earn the revenue of the period should be charged against that revenue?
(a) Matching Concept
(b) Money Measurement Concept
(c) Cost Concept
(d) Dual Aspect Concept
Q.21. Lower of cost or net realisable value is an example of
(a) Consistency Concept.
(b) Prudence (Conservatism) Concept.
(c) Realisation Concept.
(d) Matching Concept.
Q.22. X Ltd. follows the Written Down Value Method of depreciating machinery year after year due to
(a) comparability.
(b) convenience.
(c) consistency.
(d) All of these.
Q.23. An employee of the enterprise suffers an injury at work and the enterprise decides to pay him 50,000 as compensation. Should the enterprise pass an entry even though it has not paid it?
(a) Yes, because of Accrual Concept.
(b) No, because it is not paid.
(c) No, because the employee has not accepted.
(d) None of these.
Q.24. Ind-AS are based on
(a) Rules.
(b) Principles.
(c) Both (a) and (b).
(d) None of these
Q.25. Ind-AS apply to
(a) Companies listed on Stock Exchange.
(b) Companies having net worth of 250 crores or more.
(C) Subsidiaries, Holding, Joint Ventures and Associates of above two categories of Companies
(d) All of the above.
1. MCQ Questions for Accountancy Class 11 Chapter 1 Introduction to Accounting
2. MCQ Questions for Accountancy Class 11 Chapter 2 Basic Accounting Terms
MCQ Questions for Accountancy Class 11 Chapter 3 Theory Based of Accounting, Accounting Standards and Indian Accounting Standards (Ind-AS)
True or False
(i) Business Entity Concept is not applicable to sole trading concerns and partnership concerns.
(ii) Money Measurement Concept takes into account changes in the value of monetary unit.
(iii) The principle of consistency is particularly valuable when alternative accounting method is equally acceptable.
(iv) The essence of Conservatism Concept is to anticipate no profit and provide for all possible losses.
(v) According to the Realisation Concept, revenue should be accounted only when it is received.
(vi) Accounting principles are rules of action or conduct which are adopted by the accountants universally while recording accounting transactions.
(vii) Accounting Standards are not mandatory in nature.
(viii) According to the Cost Concept, assets are recorded at the value paid for acquiring them.
(ix) According to the Going Concern Concept, assets are recorded at realisable value andare depreciated over their estimated useful life.
(x) According to the Convention of Consistency, accounting policies and practices once adopted should be consistently followed.
(xi) According to Principle of Conservatism, closing stock is valued at Historical cost or net realisable value (market value) whichever is higher.
(xii) Transaction between the firm and proprietor is accounted in the books of account because of Business Entity Principle.
(xiii) Quality of Manpower is not shown in the Financial Statements because of Revenue Principle.
(xiv) The financial statements under Ind-AS include a statement of financial position.
[Ans.: (i) False; (ii) False; (iii) True; (iv) True; (v) False; (vi) True; (vii) False; (viii) True; (ix) False; (x) True; (xi) False; (xii) True; (xiii) False; (xiv) True.)
Fill in the blanks
(i) Business Entity Concept implies that a business unit is _________________ from the persons who supply capital to it.
(ii) According to the ___________________ Concept, revenue is considered as being earned on the date on which it is earned.
(iii) The ____________________ Concept requires that the same accounting method should be used from one accounting period to next.
(iv) Transactions between owner and business are recorded due to _____________ Concept.
(v) Going Concern Concept assumes that business will be carried on for _______________ period.
(vi) Withdrawal of money by the owner is not an expense but a reduction of __________________ and _________________.
(vii) The ______________________ Concept requires that accounting transactions should be free from the bias of accountants and others.
(viii) Going concern is a ______________ accounting assumption.
(ix) Total of debit side and credit side of trial balance matches because of ________________ principle.
(x) Ind-AS are _____________ based accounting standards.
(Ans.: (i) separate; (ii) Realisation; (iii) Consistency; (iv) Business Entity; (v) indefinite; (vi) cash; capital; (vii) Verifiable Objective (Evidence); (viii) Fundamental; (ix) Dual Aspect; (x) Principle.]
