Question 1

The customer who has acquired goods on credit basis and owes money to the business, is called a

debtor
Creditor
investor
shareholder

Answer

Correct Option: B

Question 2

According to money measurement concept, currency transactions and events are recorded in the books of accounts

in the ruling currency of the country in which transaction takes place
in the ruling currency of the country in which books of account are prepared
in the currency set by the ministry of finance
in the currency set by the government

Answer

Correct Option: B

Question 3

Consistency with reference to an application of accounting principles refers to the fact that

companies in the same industry use identical accounting procedures and methods and are consistent
income of the assets have not been overstated
accounting methods and procedures used have been consistently applied from year to year
all accounting methods and procedures have been utilised

Answer

Correct Option: C

Question 4

Which of the following is fundamental accounting assumptions?

Going concern
Materiality
Prudence
Business entity

Answer

Correct Option: A

Question 5

'Advance received from customers is not taken as sale', is based on

money measurement concept
accrual consent
consistency concept
conservation

Answer

Correct Option: B

Question 6

The determination of expenses for an accounting period is based on the principal of

objectivity
materiality
matching
periodicity

Answer

Correct Option: C

Question 7

“Business unit is separate and distinct from the person who supplies capital to it”, is based on

money measurement concept
going concern concept
separate entity concept
dual aspect concept

Answer

Correct Option: C

Question 8

Accounting Standards in India are issued by

central government
state Government
ICAI
RBI

Answer

Correct Option: C

Question 9

Which of the following is/are not applicable under AS - 2?

Stock of steel industry
Stock of coal and petroleum industry
Stock of construction contract
All of the above

Answer

Correct Option: C

Question 10

When should fundamental accounting assumptions followed be disclosed in the financial statement?

Should be disclosed always
Disclosed only when not followed
Disclosed only when followed
Disclosure depends on the nature of the enterprise

Answer

Correct Option: B

Question 11

All of the following are limitations of According Standards, except

the choice between different alternative accounting treatments is difficult
there may be trend towards rigidity
Accounting Standards cannot override the statute
all of the above

Answer

Correct Option: D

Question 12

Trade marks are

fixed assets
tangible fixed assets
intangible fixed assets
current assets

Answer

Correct Option: C

Question 13

A purchased a computer costing Rs. 10, 000. Repairing expenses Rs. 1, 000 and miscellaneous expenses Rs. 500 were incurred by him. He sold the computer at 20% margin on selling price. The sales value will be

Rs. 12, 500
Rs. 11, 000
Rs. 14, 375
Rs. 13, 800

Answer

Correct Option: C

Question 14

The concerned account debited in the main journal should be

debited in the ledger but reference should be of the respective credit account
Credited in the ledger but reference should be of the respective debit account
credited in the ledger and reference should be of the respective credit account
debited in the ledger but reference should also be of the respective debit account

Answer

Correct Option: A

Question 15

R started a business with cash Rs. 50, 000. Purchased goods worth Rs. 20, 000 from M on credit. Sold goods to S costing Rs. 3, 000 for Rs. 3, 600 (cash)
The accounting equation on the basis of these transactions will be

assets Rs. 70, 600 = liability Rs. 3, 600 + owner's equity Rs. 67, 000
assets Rs. 70, 600 = liability Rs. 50, 600 + owner's equity Rs. 20, 000
assets Rs. 70, 600 = liability Rs. 20, 000 + owner's equity Rs. 50, 600
none of these

Answer

Correct Option: C

Question 16

Consider the following data of Sky Ltd. Cost of machinery purchased on 1 - 4 - 08 : 10, 00, 000 Installation charges : 1, 00, 000 Market value as on 31 - 3 - 09 : 12, 00, 000 While finalising the annual accounts, the machinery should be valued at

Rs. 10, 00, 000
Rs. 11, 00, 000
Rs. 12, 00, 000
Rs. 15, 00, 000

Answer

Correct Option: B

Question 17

Income tax paid by the sole proprietor from business bank account is debited to

income tax account
bank account
capital account
not to be shown in the business books

Answer

Correct Option: C

Question 18

As contractor while executing a number of projects can adopt accounting system of

either completed contact or percentage of completion method
both the methods for different contracts
both the methods for single contract
as per the list given in AS - 6

Answer

Correct Option: B

Question 19

Assets are held in the business for the purpose of

resale
conversion into cash
earning revenue
none of these

Answer

Correct Option: C

Question 20

Rent of Rs. 5000 payable to the landlord is credited to

cash account
rent payable account
rent account
None of these

Answer

Correct Option: B

Question 21

'Penalties for unlawful environmental damage' is classified as

provision
contingent liabilities
contingent asset
reserve

Answer

Correct Option: B

Question 22

Which of the following will not form part of cost of inventory as per AS - 2?

Cost of purchase
Cost of conversion
Cost of bringing inventory to the present position
Selling and distribution overheads

Answer

Correct Option: D

Description: Theoretical Framework of Accounting
Number of Questions: 22
Created by: Aliensbrain Bot
Tags: Theoretical Framework of Accounting Theoretical Framework

Theoretical Framework of Accounting

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