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Principles Of Accounting (MCQs)
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Principles Of Accounting (MCQs)
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20 Questions

1. A Company lost vital machinery in an accident on 2nd March, 2011 which will have adverse impact on its production capacity. As a result, it is likely to lose business to its competitors. The company needs to disclose this fact in its annual report for the year ended March 31, 2011 because of which principle?
2. Valuation of stock at lower of cost or net realizable value is an example of:
3. Which of the following accounting concept says that asset is to be recorded at their original cost and depreciated in a systematic manner without reference to its market value?
4. Which of the following accounting concept says that asset is to be recorded at their original cost and depreciated in a systematic manner without reference to its market value?
5. According to which concept, the proprietor of the business is treated as the creditor to the extent of his capital?
6. Rahul, the proprietor of M/s. R. K. & Co. purchased an air conditioner and installed it at his residence. The payment was made by issuing a cheque from the account of M/s. R. K. & Co. The accountant debited the Drawings account. Which principle of accounting did he apply?
7. Capital is a liability for the business. This statement is true because of which principle?
8. Guneet purchased 1000 sq. yards land to build a factory and paid Rs. 15 lakhs towards its cost including registration charges. At the end of the financial year, the value of the land came down to RS. 13 lakhs. Guneet recorded the land at Rs. 13 lakhs and booked a loss of Rs. 2 lakhs. Which principle has been violated?
9. When goods are sold on credit to RameshRameshs account is debited and Sales account is credited. Which accounting concept is involved?
10. Which of the following is the International Accounting Standard for Intangible Assets?
11. Which of the following is the International Accounting Standard for Intangible Assets?
12. Which accounting principle requires that life of a business be broken into smaller parts?
13. An investment company has valued its inventory at its current market price, which is higher than its cost. Which accounting principle is violated?
14. Under which concept if advance is received against sale of goods, the advance received is recorded as Advance against Sale and not Sales?
15. Under which concept if advance is received against sale of goods, the advance received is recorded as Advance against Sale and not Sales?
16. Which accounting principle requires that life of a business be broken into smaller parts?
17. Capital is a liability for the business. This statement is true because of which principle?
18. International Accounting Standards adopted by International Accounting Standards Board and still in force are
19. An investment company has valued its inventory at its current market price, which is higher than its cost. Which accounting principle is violated?
20. Rent for the month of March 2011 is not paid. Under which accounting concept it should be recorded as expense for the year ended March 31, 2011?

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