Practice Test

Q1) 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 payment due in 60 days. As a results of this transaction Show Answer

Q2) All the following items are classified as fundamental accounting assumptions except Show Answer

Q3) Two primary qualitative characteristics of financial statements are Show Answer

Q4) Kanika Enterprises follows the written down value method of depreciating machinery year after year due to Show Answer

Q5) 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 amounting concept was followed by him ? Show Answer

Q6) 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 remaining goods was Rs.4,00,000, He valued the closing stock at cost . He violated the concept of Show Answer

Q7) Capital brought in by the proprietor is an example of Show Answer

Q8) Fixed Assets are held in the business for the purpose of Show Answer

Q9) Revenue from Sale of products, is generally , realized in the period in which Show Answer

Q10) The concept of conservatism when applied to the balance sheet results in Show Answer

Q11) Decrease in the amount of creditors results in Show Answer

Q12) The 'going concern concept' is the underlying basis for Show Answer

Q13) Economic life of an enterprise is split into the periodic interval to measure its performance as per Show Answer

Q14) If an individual asset is increased , there will be a corresponding Show Answer

Q15) Purchase of machinery for cash Show Answer

Q16) MATCH THE PAIRS :- Entity concept assumptions Show Answer

Q17) Accrual concept Show Answer

Q18) Going concern , consistency and accrual Show Answer

Q19) Going concern , cost and realization concept Show Answer

Q20) Consistency Show Answer

Q21) Money measurement Show Answer

Q22) Entity Show Answer

Q23) Conservatism Show Answer

Q24) Accrual Show Answer

Q25) Going concern Show Answer

Q26) Cost Show Answer

Q27) fundamental accounting assumptions as per AS-1 are Show Answer

Q28) Economic life of an enterprise is artificially split into the periodic interval in accordance Show Answer

Q29) the assets are classified as current assets & fixed assets in accordance with Show Answer

Q30) the accounting data should be defined ,verifiable & free from the personal bass in accordance with Show Answer

Q31) materiality principle is an exception to the Show Answer

Q32) when stock is valued at a cost in one accounting period & at a lower of cost & net realizable value in another accounting period Show Answer

Q33) accrual means Show Answer

Q34) prudence principle is as exception to the Show Answer

Q35) the assets & incomes are not overstated & the liabilities & losses are not understated in accordance with Show Answer

Q36) prudence is a concept to recognize Show Answer

Q37) accounting of a small calculator as an expenses & not as an asset is in accordance with Show Answer

Q38) appending notes to the financial statements is in accordance with Show Answer

Q39) valuation of the crops at the market value is in accordance with Show Answer

Q40) X ltd . Purchased a machine for Rs.1,00,000 on 1st Jan .The market price of there machine was Rs.1,20,000 on 31st dec. The accountant of X ltd .values machine for Rs.1,20,000 while finalizing the accounts .He has violated the Show Answer

Q41) X purchased merchandise worth Rs.1,00,000 & sold 60% for Rs.90,000 & 40% of the remaining sold for Rs.60,000. The market value of the remaining merchandise was Rs.20,000 .He valued the closing stock at Rs.24,000.He has violated the Show Answer

Q42) X purchased merchandise worth Rs.1,00,000 & sold 60% for Rs.90,000 & 40% of the remaining sold for Rs.60,000. and met operating expenses Rs.10,000 .He counted operating profit as Rs.40,000.He has violated the Show Answer

Q43) personal transaction are distinguished from business transaction of an accounting period in accordance with Show Answer

Q44) x purchased a motorcycle for his son on credit & recorded as purchase of asset in business books.He has violated Show Answer

Q45) x started a business on 1st April 2001 & reported about the financial performance & financial position of the business on 31st march 2007 being the date of liquidation of enterprise. He has violated Show Answer

Q46) the principle which treats all rupees alike whether it is a rupee of 1957 or 2007 Show Answer

Q47) As per AS-I , the fact need not be disclosed in the financial statements if the following concept is followed Show Answer

Q48) As per AS-I , the fact need not be disclosed in the financial statements if the following concept is followed Show Answer

Q49) As per AS-I , the fact must be disclosed with reason in the financial statements if the following concept is not followed Show Answer

Q50) X value the inventory on FIFO basis & LIFO basis during 2006 & 2007 respectively .He has violated Show Answer

Q51) Y followed WDV method & SLM method of depreciation during 2006 & 2007 respectively .He has violated Show Answer

Q52) X has a closing stock costing Rs.10,000 but its market value is Rs.9,000.He shows this stock at Rs.10,000 in the financial statements .He has violated Show Answer

Q53) X has a closing stock costing Rs.10,000 but its market value is Rs.12,000.He shows this stock at Rs.12,000 in the financial statements .He has violated Show Answer

Q54) X has a sundry debtors of Rs.1,00,000 .creating a provision for doubtful debts @ 5% on sundry debtor is in accordance with Show Answer

Q55) X has a sundry debtors of Rs.1,00,000 .creating a provision for discount @ 2% on sundry debtor is in accordance with Show Answer

Q56) X has a sundry creditor of Rs.1,00,000 .creating a reserve for discount @ 2% on sundry creditor is in accordance with Show Answer

Q57) The production manager reports to the top management that the production for the year 2007 is 200 tons but actual production is 1,99,000.90 kg.He has followed Show Answer

Q58) X purchased a building for Rs.1,00,000 but at the end of the accounting period ,the market value of building is Rs.1,50,000.& he disclosed the building at Rs.1,50,000 in the financial statement.He has violated the Show Answer

Q59) X purchased goods for Rs.40,000 of which 25% for cash ,incurred expenses Rs.10,000 of which Rs.2,000 still outstanding & sold all goods for Rs.80,000 of which 75% on credit. he calculated his profit at Rs.2,000.He has violated Show Answer

Q60) X purchased goods for Rs.40,000 of which 25% for cash ,incurred expenses Rs.10,000 of which Rs.2,000 still outstanding & sold 80% of the goods for Rs.80,000 of which 75% on credit. he calculated his profit at Rs.30,000.He has violated Show Answer

Q61) X purchased goods for Rs.40,000 of which 25% for cash ,incurred expenses Rs.10,000 of which Rs.2,000 still outstanding & sold 80% of the goods for Rs.80,000 of which 75% on credit. he calculated his profit for the period Show Answer

Q62) The concept which calls for adjustment to be made in respect of prepaid & outstanding expenses & accrued & unaccrued revenues Show Answer

Q63) subjectivity is involved in Show Answer

Q64) objectivity is involved in Show Answer

Q65) X purchased a car for Rs.4,00,000 making a down payment of Rs.50,000 & signing a Rs.3,50,000 bill payable due in 60 days. As a result of this transaction Show Answer

Q66) during the year ,2006 X purchased goods for Rs.5,00,000 & sold 3/5th of the goods for Rs.5,00,000 & met expenses amounting Rs.1,50,000 . He counted net profit as Rs.50,000 .which of the accounting concept was followed by him ? Show Answer

Q67) a businessman purchased goods for Rs.15,00,000 and sold 80% of such goods during the accounting year ended 31st March, 2007. The market value of remaining goods was Rs.2,50,000, He valued the closing stock at Rs.3,00,000 . He violated the concept of Show Answer

Q68) consider the following data pertaining to X ltd . Particulars :- cost of machinery purchased on 1st April 2006 Rs.1,00,000 ; Installation charges Rs.10,000 ; market value as on 31st March 2006 1,20,000. while finalizing the final accounts, if the company values the machinery at Rs.1,20,000 Which of the following concept is violated by the X ltd Show Answer

Q69) A proprietor X has a reported a profit of Rs.1,00,000 at the end of the financial year after taking into consideration the following amount (I) the cost of an asset of Rs.10,000 has been taken as an expenses (ii) X is anticipating a profit of Rs.5,000 on the future sale of a car shown as an asset in his books (iii) salary of Rs.200 payable in the financial year has not been taken into account (iv) X purchased an asset for Rs.50,000 but its fair value on the date of purchase was Rs.60,000.X recorded the value of asset in his book at Rs.60,000.On the basis of the above facts answers the following question from the given choice ? 1. what is the correct amount of profit to be reported in the books Show Answer

Q70) A proprietor X has a reported a profit of Rs.1,00,000 at the end of the financial year after taking into consideration the following amount (I) the cost of an asset of Rs.10,000 has been taken as an expenses (ii) X is anticipating a profit of Rs.5,000 on the future sale of a car shown as an asset in his books (iii) salary of Rs.200 payable in the financial year has not been taken into account (iv) X purchased an asset for Rs.50,000 but its fair value on the date of purchase was Rs.60,000.X recorded the value of asset in his book at Rs.60,000.On the basis of the above facts answers the following question from the given choice ? 1. which measurement base should be followed in the statement Show Answer

Q71) A proprietor X has a reported a profit of Rs.1,00,000 at the end of the financial year after taking into consideration the following amount (I) the cost of an asset of Rs.10,000 has been taken as an expenses (ii) X is anticipating a profit of Rs.5,000 on the future sale of a car shown as an asset in his books (iii) salary of Rs.200 payable in the financial year has not been taken into account (iv) X purchased an asset for Rs.50,000 but its fair value on the date of purchase was Rs.60,000.X recorded the value of asset in his book at Rs.60,000.On the basis of the above facts answers the following question from the given choice ? 1. which concept should be followed in the statement Show Answer

Q72) A proprietor X has a reported a profit of Rs.1,00,000 at the end of the financial year after taking into consideration the following amount (I) the cost of an asset of Rs.10,000 has been taken as an expenses (ii) X is anticipating a profit of Rs.5,000 on the future sale of a car shown as an asset in his books (iii) salary of Rs.200 payable in the financial year has not been taken into account (iv) X purchased an asset for Rs.50,000 but its fair value on the date of purchase was Rs.60,000.X recorded the value of asset in his book at Rs.60,000.On the basis of the above facts answers the following question from the given choice ? 1. which concept should be followed in the statement Show Answer

Q73) x ltd .follows the WDV method of depreciating machinery year after due to Show Answer

Q74) The determination of expenses for an accounting period is based on the principle of Show Answer

Q75) The value of human resources is generally not shown in the balance sheet as per Show Answer

Q76) ______are defined as basic assumption on the basis of which financial statements of a business entity are prepared. Show Answer

Q77) Which of the following is/are the common accounting concepts ? Show Answer

Q78) Which of the following is/are the common accounting concepts ? Show Answer

Q79) Which of the following is/are the common accounting concepts ? Show Answer

Q80) According to_______business is treated as an entity separate from its owners,creditors,managers and others. Show Answer

Q81) According to_________the various assets acquired by a concern or firm should be recorded on the basis of the actual amounts involved or spent. Show Answer

Q82) _________holds that accounting is a measurement and communication process of the activities of the firm that are measurable in monetary terms. Show Answer

Q83) As per______business transaction are recorded on the assumption that the business will continue for a long-time Show Answer

Q84) If the assumption of the going concern is not valid,the financial statements should_________ Show Answer

Q85) on the basis of___concept, a clear distinction is made between assets and expenses. Show Answer

Q86) Non-monetary events like,death,dispute,sentiments,efficiency etc. are______in the books,even though these may have a great effect. Show Answer

Q87) _______form of business organization is the exception to the going concern concept. Show Answer

Q88) According to "business entity concept" business is treated as separate from its____________ Show Answer

Q89) ______concept is based on double entry book keeping which means that accounting system is set up in such way that a record made of the two aspects of each transaction that affects the records. Show Answer

Q90) The transaction recorded through accounting equation are based on_______ Show Answer

Q91) According to_______revenue is recognized only when a sale is made. Show Answer

Q92) Which financial statement represents the accounting equation,Assets=Liabilities+Owner's equity. Show Answer

Q93) __________period is normally adopted for accounting purpose. Show Answer

Q94) As per______concepts in order to determine the profit earned or loss suffered by the business in a particular defined accounting period,it is necessary that expenses of the period should be matched with the revenues of that period Show Answer

Q95) Going concern concept is not followed by_____ Show Answer

Q96) Which of the following is/are accounting convention ? Show Answer

Q97) According to the_____accountants should report only what is material and ignore insignificant details while preparing the final accounts. Show Answer

Q98) As per________apart from statutory requirements goods accounting practice also demands all significant information should be fully and fairly disclosed in the financial statements. Show Answer

Q99) As per_________the accountant should not anticipate income and should provide for all possible losses. Show Answer

Q100) As per________ if the accountant is faced with the choice between two methods of valuing an asset the accountant should choose a method which leads to the lesser value. Show Answer

Q101) Provisions for bad debts in respects of doubtful debts are made due to______ Show Answer

Q102) Closing stock in hand valued at lower of cost or market value due to________ Show Answer

Q103) Which of the following is an accounting convention ? Show Answer

Q104) As per convention of conservatism,if the accountant is faced with the choice between two methods of valuing______the accountant should choose a method which leads to the lesser value. Show Answer

Q105) ________Principle requires that the same accounting method should be used from one accounting period to the next. Show Answer

Q106) Which of the following is not an accounting convention ? Show Answer

Q107) It is essential to standardize the accounting principles and policies in order to ensure________ Show Answer

Q108) Mr.N purchased a furniture costing Rs.13,000 on 1st Oct,2011.Transportation and installation charges were incurred amounting Rs.1,300 and Rs.520 respectively.Dismantling charges of the old furniture in place of which new furniture was purchased amounted Rs. 1,300.Market value of the furniture was estimated at Rs.15,600 on 31st March,2012.While finalizing the annual accounts,Mr.N values the furniture at Rs.15,600 in his books.Which of the following concepts was violated by Mr.N ? Show Answer

Q109) State the case where the going concern concept is applied ? Show Answer

Q110) R Ltd. Purchased Equipment from P Ltd. For Rs. 50,000 on 1st April 2009. The freight and cartage of Rs. 2,000 is spent to bring the Asset to the factory and Rs. 3,000 is incurred on installing the equipment to make it possible for the intended use. The market price of machinery on 31st April 2010 is Rs. 60,000 and the accountant of the company want to disclose the machinery at Rs. 60,000 in financial statements.However,the auditor emphasizes that the machinery should be valued at Rs.55,000 (50,000+2,000+3,000) according to________ Show Answer

Q111) The cost of a small calculator is accounted as an expense and not shown as an asset in a financial statement of a business entity due to_____ Show Answer

Q112) A businessmen purchased goods for Rs. 25,00,000 and sold 80 % of such goods during the accounting year ended 31st March 2010. The Market value of the remaining goods was Rs. 4,00,000. He Valued the closing stock at cost.He violated the concept of___________ Show Answer

Q113) Assets should be valued at the price paid to acquire them is based on_______ Show Answer

Q114) If a machinery is Purchased for Rs. 1,00,000 the asset would be recorded in the books at Rs. 1,00,000 even if its market value at that time happens to be Rs. 1,40,000. in case a year after, the market value of this asset comes down to Rs.90,000,it will ordinarily continue to be shown at Rs.1,00,000 and not at Rs.90,000 due to_______ Show Answer

Q115) According to which concept,the owner of an enter price pays the interest on drawings ? Show Answer

Q116) Decrease in the amount of trade payables results in Show Answer

Q117) During the life-time of an entity, accounting provides financial statements in accordance with which basic accounting concept: Show Answer

Q118) A concept that a business enterprise will not be liquidated in the near future is known as: Show Answer