Test / Exam Name: Ch 1 Standard: 11th Commerce Subject: Accountancy

Student Name: Section: Roll No.:

Questions: 320 Time: 03:00 hh:mm Marks: 543

Q1. Which of the following will not be recorded in the books of account? 1 Mark
A Sales of goods. B Payment of salary. C Quality of staff. D Purchase of Goods.
Q2. Which of the following is capital expenditure? 1 Mark
A Wages. B Wages paid for building construction.
C Repair expenses of building. D Advertisement Expenses.
Q3. Purposes of an accounting system include ________. 1 Mark
A Interpret and record the effects of transactions. B Classifying the effect of transaction to facilitate
report preparations.
C Summarize and communicate information to D All of the above.
decision makers.
Q4. Which of the following is not an internal user of financial statements? 1 Mark
A Board of Directors. B Managers. C Employees. D Lenders.

Q5. Sale of goods to Ram for cash Rs.1000 is a ___________. 1 Mark

A Cash Transaction B Credit Transaction C Barter System D Internal Event
Q6. Which of the following transactions is not of financial character? 1 Mark
A Purchase of asset on credit. B Purchase of asset for cash.
C Withdrawing of money by proprietor from D Strike by Employees.
business.
Q7. A person to whom amount is payable is known as ___________. 1 Mark
A Creditor B Debtor C Bad debt D None of the above
Q8. A_______ would most likely use an entity's financial report to determine whether or not the business entity is 1 Mark
eligible for a loan.
A Creditor B Emplyoee C Mangement D None of the Above
Q9. Use of common unit of measurement and common format of reporting promotes________. 1 Mark
A Comparability B Understandability C Relevance D Reliability
Q10. ________ can be considered as the last stage of accounting process. 1 Mark
A Summarizing B Analysis C Classifying D Interpreting
Q11. Which of the following show the basic sequence of the accounting process? 1 Mark
A Transaction, journal entry, source document, B Source document, transaction, ledger account,
ledger account, trial balance. journal entry, trial balance.
C Transaction, source document, journal entry, trial D Transaction, source document, journal entry,
balance, ledger account. ledger account, trial balance.
Q12. The branch of accounts that deals with the calculation of unit cost of services is called. 1 Mark
A Cost Accounting B Management C Financial Accounting D All of the above
accounting
Q13. Systematically writing down the transactions and events in account books soon after their occurrence is 1 Mark
known as _________.
A Classifying B Recording C Summarizing D Numbering
Q14. Which of the following is not a limitation of accounting? 1 Mark
A Based on accounting conventions. B Evidence in Legal Matters.
C Incomplete Information. D Omission of Qualitative Informations.
Q15. ________ is used to mean a happening as a consequence of transaction(s). 1 Mark
A Event B Transaction C Dealing D Operations
Q16. Which of the following transactions will not be recorded in the books of account? 1 Mark
 A Purchased a LCD for personal use, paying the B Purchased machinery for manufacture.
amount from personal bank account.
C Purchased machinery for resale. D Paid salaries and wages.
Q17. In order to enable retailer earn profit and still sell goods at the list price, the manufacturers frequently grant 1 Mark
them substantial reduction from the list price. Such a reduction in price is called ________.
A Trade Discount B Cash Discount C Price Reduction D Subsidies
Q18. The withdrawal of goods from the business by the proprietor should be recorded in the __________. 1 Mark
A Drawing Account B Purchase Account C Capital Account D Profit and Loss Account
Q19. In general the financial year from shall be from ___________. 1 Mark
A 1st April of any year B 31st March of any year C All of them are true D None of these
Q20. Which of the following are internal users of accounting information? 1 Mark
A Board of directors B Partners C Managers D All of the above
Q21. Two primary qualitative characteristics of financial statements are _________. 1 Mark
A Understandability and Materiality B Relevance and Reliability
C Relevance and Understandability D Materiality and Reliability
Q22. Management accounting involves _____________. 1 Mark
A Preparation of financial statements B Analysis and interpretation of data
C Recording of transactions D Preparation of cost statements
Q23. Which of the following will be treated as drawings: 1 Mark
A Withdrawing money for payment of salary to B Withdrawing money for payment to creditors.
employees.
C Withdrawing money from business for private D Withdrawing money for purchase of asset.
expenses.
Q24. Who is the father of Double entry- Book Keeping? 1 Mark
A F.W. Taylor B Henry Fayol C Lucas Pacioli D None of the above
Q25. ______ users are groups outside the business entity, who uses the information to make decisions about the 1 Mark
business entity.
A Mangement B Emplyoee C Owner D External
Q26. Which external user of accounting information is most interested in knowing the long-term solvency position 1 Mark
of the firm?
A Employees. B Management.
C Bank and Financial Institutions. D Researchers.
Q27. Which of the following would be considered as an internal user of the financial statements? 1 Mark
A Shareholder B Credotor C Debtor D Finance Manager
Q28. In accounts recording is made of: 1 Mark
A Only Financial Transactions. B Only Non-financial transactions.
C Financial as well as non-financial transactions. D Personal transactions of the Proprietor.
Q29. Qualitative characteristic of Accounting includes: 1 Mark
A Reliability and Relevance. B Understandability and Comparability.
C Both (a) and (b). D None of the above.
Q30. _____________ is a post mortem of past costs. 1 Mark
A Financial accounting B Cost accounting C Both A and B D None of these
Q31. _____________ is a deduction from the list or catalogue price allowed by the wholesalers to the retailers for 1 Mark
various reasons.
A Trade discount B Special discount C Cash discount D None of the above
Q32. Which of the following is the example of external users of accounting information ______________. 1 Mark
A Government B Owners C Managemen D Employee
Q33. Accounts that are prepared in order to comply with statutory requirement and to cater the information 1 Mark
requirement of external users are known as:
A Management Accounts B Financial Accounts
C Management information systems D Cost accounts
Q34. Ghanshyam is a furniture dealer. Which one of the following will not be recorded in his books? 1 Mark
A Purchase of Timber for ₹ 350,000. B Sofa set worth 40,000 taken to his home.
 C Sale of household furniture for ₹ 5,000. D Dining table of ₹ 30,000. given to his friend as gift.
Q35. Accounting is defined as "the __________ of recording, classifying and summarizing in terms of money 1 Mark
transactions and events of a financial character and interpreting the results thereof".
A Art B Science C Method D None of these
Q36. Identify the external users of financial information or financial statements __________. 1 Mark
A Management of the business. B CFO of the business.
C Employees of the business. D Investors of the business.
Q37. Which of these processes are the function of book keeping? 1 Mark
A Summarising B Interpreting C Classifying D Communicating
Q38. The Double Entry System of accounting originated in _________. 1 Mark
A America B Russia C Italy D England
Q39. When a proprietor withdraw cash from the firm for self use, this is treated as ______. 1 Mark
A Loss B Drawing C Depreciation D Expenses
Q40. __________ includes identifying, recording, classifying and summarizing the transactions. 1 Mark
A Accounting posting B Accounting cycle C Tally of accounts D All of the above
Q41. Commodities bought for resale are treated as _________. 1 Mark
A Expenses B Stock C Goods D Assets
Q42. A person who owes money to the firm is called: 1 Mark
A Debtor. B Creditor. C Supplier. D None of these.
Q43. A person or entity to whom money is owned is known as ________. 1 Mark
A Creditor B Claimant C Bailee D Debtor
Q44. ____________is a reduction from the list price of goods and services on account of immediate or payment within 1 Mark
a stipulated period.
A Trade discount B Cash discount C Festival discount D Inaugural discount
Q45. Sale or purchase of goods or services for immediate cash payment is known as ____________ . 1 Mark
A Cash transaction B Credit transaction
C Non-monetary transaction D All of the above
Q46. The users of financial statements include _______. 1 Mark
A Shareholders B Government C Lenders D All of the above
Q47. Cash Discount is: 1 Mark
A Which is received at the time of making the B Which is allowed at the time of sale of goods.
payment.
C Which is received at the time of purchase of D Which is received both at the time of making
goods. payment and purchase of goods.
Q48. Which of the following is not a business transaction? 1 Mark
A Purchase of goods for resale amounted to B Paid salaries and wages amounted to ₹ 10,000.
₹ 50,000.
C Paid rent for office premises ₹ 5,000. D Purchased a LCD for personal use.
Q49. Stock should include _________. 1 Mark
A Goods held as security. B Goods held by the business as consignee.
C Goods with customers for approval on sale or D Goods sold but not yet delivered.
return basis.
Q50. _________is a reducing from the list price of goods and services on business consideration other than prompt 1 Mark
payment.
A Trade discount B Cash discount C Festival discount D Inaugural discount
Q51. A business transaction in which money comes into the business immediately after the goods are delivered or 1 Mark
services are rendered is called ____________.
A Cash Transaction B Credit Transaction C Black Money D Hawala Transaction
Transaction
Q52. Accounting gives the true picture of the organization's financial position. 1 Mark
A True B False C Irrelevant D Partiality false
Q53. Which of the following statements about differences between financial and managerial accounting is 1 Mark
incorrect?
 A Managerial accounting information is prepared B Financial accounting is aggregated; managerial
primarily for martial parties such as stockholders accounting is focused on products and
and creditors; financial accounting is directed at departments.
internal users.
C Managerial accounting pertains to both past and D Financial accounting is based on generally
future items; financial accounting focuses accepted accounting practices; managerial
primarily on past transactions and events. accounting faces no similar constraining factors.
Q54. Book Keeping is concerned with: 1 Mark
A Recording financial data relating to business B Designing for systems recording, classifying and
operations. summarising recorded data.
C Interpreting data for internal and external users. D All of the above.
Q55. At the end of financial year, during which sale of goods was worth ₹ 35,00,000, the closing stock is valued at 1 Mark
₹ 40,000. This is ......
A An event. B A transaction.
C Both an event as well as transaction. D None of (A) and (B).
Q56. __________ is the interest of the owners in a business. 1 Mark
A Capital B Assets C Liability D Income
Q57. Which definition of accounting is most appropriate now-a-days? 1 Mark
A Accounting involves only the recording of those B Accounting is the recording, classifying,
business transactions which are of financial summarising, analysing and interpreting the
character. business transactions which are of general
character.
C Accounting is the process of identifying, D Accounting is basically a scientific approach.
measuring and communicating economic
information to permit informed judgments and
decisions by the users of accounts.
Q58. Which of the following statements is not an objective of financial reporting? 1 Mark
A Provide information that is useful in investment B Provide information regarding policy of
and credit decisions. organisation.
C Provide information that is useful in assessing D None of these.
cash flow prospective.
Q59. An economic event that involves transfer of money or money's worth is a/are __________. 1 Mark
A Financial Transactions B Barter System C Settlements D Receipts/Payments
Q60. Dealings between two persons is a __________. 1 Mark
A Narration B Entry C Transaction D None of the above
Q61. Tangible Assets do not include: 1 Mark
A Goodwill. B Furniture. C Stock. D Cash.
Q62. Financial accounting use ________. 1 Mark
A Projected data B External data only C Historical data D Manager data only
Q63. Which of the following transaction is of a financial character and will be recorded in the business? 1 Mark
A Goods taken from the business by the proprietor B Interviewing the candidates for employment.
for her personal use.
C Sale of Household furniture ₹ 5,000. D Received an order for sales of goods.
Q64. Commodity purchased or produced for sale is known as ____________. 1 Mark
A Goods B Machinery C Land D None of the above
Q65. Which of the following is/are not the branch of accounting? 1 Mark
A Cost Accounting B Financial Accounting
C Human Resources Accounting D All of the above
Q66. Purchases refers to the buying of: 1 Mark
A Stationery for office use. B Assets for the factory.
C Goods of resale. D Investment.
Q67. Which qualitative characteristic of accounting information is reflected when accounting information is clearly 1 Mark
presented?
A Reliability. B Relevance. C Comparability. D Understandability.
Q68. Which of the following is one of the major professional accountancy bodies in the is__________. 1 Mark
A Institute of Chartered Accountants of India. B Chartered Association of Accountants.
C Indian Institute of Chartered Accounts. D Institute of Company Accountants.
Q69. Which of the following is the Capital expenditure? 1 Mark
A Wages paid for repair of building. B Wages paid for white washing of building.
C Wages paid for construction of building. D Wages paid for cleaning of building.
Q70. Amit is recording sales transactions in the accounting system so that they can be summarized in a logical 1 Mark
manner for the purpose of providing financial information for decision-making. Amit is doing ___________.
A Management B Review C Accounting D Auditing
Consulting
Q71. Accounting: 1 Mark
A Includes Book Keeping. B Does not include Book Keeping.
C May or may not include Book Keeping. D None of these.
Q72. The Branch of Accounting which is concerned with the processing and presenting data for decision making is 1 Mark
known as-
A Common Dollar Accounting B Social Accounting
C Cost Accounting D Management Accounting
Q73. ________ is the language of business and used to communicate financial and other information to different 1 Mark
interested parties like creditors, investors, researchers, governments etc.
A Accounting B Cost Accounting C Costing D Management
Accounting
Q74. Which of the following groups/ parties are interested in the accounting information of the business? 1 Mark
A Proprietors or owners B Creditors C Tax authorities D All of these
Q75. The work of book-keeping is of __________ nature. 1 Mark
A Competitive B Primary/ basic C Secondary D None of these
Q76. Cost of Goods Manufactured is determined by: 1 Mark
A Financial Accounting. B Cost Accounting.
C Management Accounting. D Human Resource Accounting
Q77. Financial accounting information is characterized by all of the following except ___________. 1 Mark
A It is historical in nature. B It is factual, so it does not require judgement to
prepare.
C It results from appropriate measures. D It is enhanced by managements explanation.
Q78. ________ is the last phase of Accounting process. 1 Mark
A Classification B Summarizing C Recording D Communication
Q79. Which of the following involves the preparation of reports and statements from the classified data (ledger) 1 Mark
understandable and useful to management and other interested parties?
A Classifying B Recording C Summarizing D All of the above
Q80. Financial accounting is concerned with recording of _______________. 1 Mark
A Business expenses and revenue. B Costs of products and services.
C Day to day business transactions. D None of the above.
Q81. Which of the following is not a sub-field/Branch of Accounting? 1 Mark
A Cost Accounting. B Management Accounting.
C Social Responsibility Accounting. D Automated Accounting.
Q82. Purpose of accounting is to provide financial information to _________. 1 Mark
A Shareholders B Tax authorities C Investors D All of these
Q83. Which of the following limitations of accounting states that accounts may be manipulated to conceal vital 1 Mark
facts:
A Accounting is not fully exact. B Accounting may lead to window dressing.
C Accounting ignores price level changes. D Accounting ignores qualitative elements.
Q84. Internal user is ________of the business entity. 1 Mark
A Bank B Compititors C Customer D Management

Q85. The primary qualities that make accounting information useful for decision making are_________. 1 Mark
 A Relevance and freedom from bias. B Reliability and Relevance.
C Comparability and consistency. D None of these.
Q86. Current Liabilities do not include: 1 Mark
A Bills Payable. B Creditors. C Outstanding Exp. D Debentures.
Q87. Drawing are deducted from ___________. 1 Mark
A Sales B Purchases C Returns outward D Capital.
Q88. Which of these process is/are not the function of Book Keeping? 1 Mark
A Summarising B Interpreting C Communicating D All the three
Q89. Book Keeping and Accounting: 1 Mark
A Means same and are used interchangeably. B Does not mean same and are not used
interchangeably.
C Means both (a) and (b). D None of the above.
Q90. Which of the following is the most relevant accounting information for taxation authorities? 1 Mark
A Cash Balance of the firm. B Book Value of the Fixed Assets.
C Credit Sales of the year. D Profit generated during the year.
Q91. When information about two different enterprises have been prepared presented in a similar manner, the 1 Mark
information exhibits the characteristics of______________.
A Verifiability B Relevance C Reliability D None of these
Q92. Accounting involves _________. 1 Mark
A Decision making for the management easy as B The records being put is a systematic pattern so
financial results can be compared. that any point of time they can be used.
C The financial information being stored in a D All of the above.
meaningful way for taxation purpose.
Q93. The person to whom goods are sold on credit is known as _____________. 1 Mark
A Creditor B Debtor C Borrower D None of these
Q94. Amount received after selling of goods or services is known as _________. 1 Mark
A Revenue B Cost C Income D None of the Above
Q95. A commodity in which a trader deals is known as ______. 1 Mark
A Property B Goods C Expenditure D Income
Q96. Information is said to be relevant if it is _______. 1 Mark
A Free from bias B Shows profit C Not consistent D All of the above
Q97. Business transaction in which cash is not paid or received immediately is known as ______________. 1 Mark
A Cash transaction B Non monetary transaction
C Credit transaction D Transaction in kind
Q98. Which of the following is not a sub-field of accounting? 1 Mark
A Financial accounting. B Book Keeping. C Management D Cost Accounting.
accounting.
Q99. Regulatory Agencies, interested as users of accounting information's includes __________. 1 Mark
A Various Government departments. B Agencies such as Company Law Board (CLB).
C Registrar of Companies (ROC). D All of the above.
[Link] of the following assets which one is NOT an intangible asset? 1 Mark
A Patents. B Investments. C Goodwill. D Trademark.
[Link] of the following is a limitation of accounting? 1 Mark
A Assistance to Management. B Replaces Memory.
C Unrealistic Information. D Evidence in Court.
Q102._______ defined Accounting as the art of recording, classifying and summarizing in a significant manner and in 1 Mark
terms of money, transactions and events which are, in part at least of a financial character, and interpreting
the results thereafter.
A The American Institute of Certified Public B Financial Accounting Standard Board.
Accounts.
C Institute of Certified Accountants of Wales. D Institute of Chartered Accountants of India.
Q103._______ is used to an economic event in accounting. 1 Mark
A Event B Transaction C Dealing D Operations
[Link] basic objective of accounting is _______________. 1 Mark
A To maintain systematic records of financial B To ascertain financial performance.
transactions.
C To ascertain financial position. D All of Above.
[Link] are false except _________. 1 Mark
A Cash withdrawal by the proprietor for self-use B Cash withdrawal by the proprietor for self-use is a
need not be accounted for in books of account. revenue expenses.
C Cash withdrawal by the proprietor for self-use is a D Cash withdrawal by the proprietor for self-use is a
capital expenditure expenses. drawing.
[Link] is a language of _________. 1 Mark
A Business B Commerce C Economics D None of these
[Link] is the last step of accounting as a process of information? 1 Mark
A Recording the transaction. B Preparation of financial statements.
C Communication of information. D Analysis and interpretation of information.
Q108.A person who owes money to the firm is ____________. 1 Mark
A A creditor B A debtor C An investor D A lender
[Link] that will be used in production are considered as___________. 1 Mark
A Raw Materials B Work in Progress C Finished Goods D Inventory
[Link] sale of merchandise to the customers is an: 1 Mark
A External event B Internal event C Social event D None of the above
[Link] covers only the following octillion __________. 1 Mark
A Rewriting and Classifying. B Recording, Classifying and Analysing.
C Analysing, Recording and Interpreting. D Identifying, Classifying, Recording, Summarising
and Communicating.
[Link] of the following would be considered as external users of accounting information's? 1 Mark
A Board of Directors B Shareholders C Finance manager D Sales manager
[Link] of these would be considered as external user of the financial statements? 1 Mark
A Board of directors B Shareholders C Finance manager D Production manager
[Link] of the following is a credit transaction? 1 Mark
A Sold goods B Sold goods for cash
C Sold goods to a customer for cash D Sold goods to a customer
[Link] the fundamental steps in the accounting process __________. 1 Mark
A Identifying financial transaction B Recording the business transaction
C Classifying the business transaction D All of the above
[Link] feature of business transaction is: 1 Mark
A It involves an economic activity. B It results in a change in the financial position of the
firm.
C Change must be capable of being expressed in D All of the above.
terms of money.
[Link] gross decrease is economic benefits to the enterprise is referred to as __________. 1 Mark
A Inflow B Cash outflow C Expense D Income
[Link] term sales is used only for the sales of _______ and is never used for the sale of _______: 1 Mark
A Assets, Investments. B Assets, Goods.
C Intangible Assets, Goods. D Goods, Assets
[Link] accounting information is based on facts and it is verifiable by documents it has the quality of..... 1 Mark
A Relevance. B Reliability. C Understandability. D Comparability.
[Link] Discount is: 1 Mark
A Which is allowed at the time of receiving the B Which is allowed at the time of sale of goods.
payment.
C Which is allowed both at the time of receiving D Allowed in all of the above.
payment and sale of goods.

[Link] amount of goods and services withdrawn by the proprietor for self use is known as ____________. 1 Mark
 A Capital B Drawings C Expense D Income
Q122._______ is the first phase of accounting process. 1 Mark
A Classification B Summarizing C Recording D Communicating
[Link] prime objective of accounting is to _________________. 1 Mark
A To record economic data B Provide the information basis of action
C Classifying and recording business transaction D Attainment of economic goal
Q124._______ is concerned with the transmission of summarized, analysed and interpreted information to the end 1 Mark
users to enable them to make rational decision.
A Summarizing B Analysis C Classifying D Communicating
[Link] users of accounting information are not: 1 Mark
A Lenders. B Officers. C Employees. D Public.a
[Link] of the following is not characteristic of accounting information? 1 Mark
A Understandability B Relevance C Future transactions D Completeness
[Link] correct sequence of accounting process is _________ . 1 Mark
A Identifying, classifying and recording. B Identifying, recording and communicating.
C Analysis, recording and summarizing. D Communicating, recording and interpreting.
[Link] every business transaction, at least _______ parties are involved. 1 Mark
A Two B Three C Four D Six
Q129._______ is a liability that results from a purchase of goods or service. 1 Mark
A Accounts payable B Bills payable C Accounts receivables D Accrued liability
[Link] presentation of financial information/statement or accounting policy is designed with a pre-designed motive 1 Mark
to influence the decision-making or judgement or achieve a pre-determined result or object, the financial
statement are not said to have satisfied the criteria of ___________.
A Relevance B Materiality C Neutrality D Substance over form
[Link] is a substitute of ________ . 1 Mark
A Recording B Book-keeping C Memory D None of these
[Link] the term 'Goods' _________________. 1 Mark
A Manufactured for the purpose of sales to earn B Purchased for the purpose of sales to earn profit.
profit.
C Commodities into which seller trade. D All of the above.
[Link] the debit and credit parts of a transaction is called ____________. 1 Mark
A Analyzing business transaction B Classifying the transaction
C Summarizing D Interpreting
[Link] purchased goods of Rs. 10,000. This can be classified as _________. 1 Mark
A An Event. B A Transaction.
C A transaction as well as an event. D Neither a transaction nor an event.
[Link] of the following characteristics of accounting information primarily allows user of financial statements 1 Mark
to generate predictions about an organization?
A Reliability B Timeliness C Neutrality D Relevance
[Link] branch of Accounting is concerned with ascertainment and control of cost of business activities? 1 Mark
A Cost Accounting B Management Accounting
C Human Resource Accounting D Financial Accounting
[Link]-keeping is mainly concerned with: 1 Mark
A Recording of financial data. B Designing the systems of summarising the
recorded data.
C Interpreting the data for internal and external D Preparation of financial statements of the
users. business enterprise.
[Link] of revenue over its cost _______________. 1 Mark
A Cost B Profit C Income D Loss
Q139._________ refers the amount invested by the owner into business. 1 Mark
A Loan B Advance C Capital D Prepaid expenses
[Link] the odd on in relation to users of accounting information. 1 Mark
 A Officers B Managers C Debtors D Board of directors
[Link] term 'sales' is used only for the sales of _______ and is never used for the sale of ______. 1 Mark
[Link] whether the following statements are True or False with reason: 1 Mark
Accounting Information must be reliable.
[Link] whether the following statements are True or False with reason: 1 Mark
Accounting Information must be presented in such a way that only accounting people understand it.
[Link] persons to whom money is owing by the firm are termed as _______. 1 Mark
[Link] which the firm owes to outsiders is known as ______. 1 Mark
[Link] involves only the recording of business transactions. 1 Mark
[Link] held for continued use in the business and not meant for resale are termed as _______. 1 Mark
[Link] is a service function. 1 Mark
[Link] those transactions are recorded in accounting which can be expressed in terms of money. 1 Mark
[Link] are prepared on the basis of historical costs. 1 Mark
[Link] is helpful in raising loans. 1 Mark
Q152.___________ are those assets which have a physical existence and which can be seen or felt. 1 Mark
Q153.______ refer to those liabilities which are to be paid normally within one year. 1 Mark
[Link] makes a record of qualitative aspects of business. 1 Mark
[Link]-keeping starts where accounting ends. 1 Mark
[Link] which the proprietor has invested in a business is known as _______. 1 Mark
[Link] of an enterprise is internal user of its accounting information. 1 Mark
[Link] is not accepted as evidence in legal matters. 1 Mark
[Link] persons who still owe some amount to the business are termed as ______. 1 Mark
[Link] whether the following statements are True or False with reason: 1 Mark
Accounting may be influenced by the personal judgment.
[Link] are external users of accounting information. 1 Mark
[Link] means the income of a ______. 1 Mark
[Link] whether the following statements are True or False with reason: 1 Mark
Financial Statements are not comparable.
[Link] may be affected by window dressing. 1 Mark
Q165.______ is the cost incurred in producing goods and services. 1 Mark
[Link] is the language of business. 1 Mark
Q167.A creditor would use an entitie's financial report to determine whether or not credit may be granted to the firm. 1 Mark
[Link] briefly any five advantages of accounting. 6 Marks
[Link] are types of Accounting? 6 Marks
[Link] any six users of accounting information Why do they need accounting information? 6 Marks
[Link] the informational needs of external users. 6 Marks
[Link] is accounting? Define its objectives. 5 Marks
[Link] the qualitative characteristics of accounting information. 5 Marks
[Link] the following hypothetical Case Study and answer the given questions: 5 Marks
Business Transactions are only recorded in the Accounting Books of a firm and no other transaction that
happens in the day to day functioning of the business. Now the question arises what exactly is the Business
transactions? To answer this basic question we need to see that the transaction fulfils the basic criteria. First
one being the transaction should be an economic activity, that is it should create an income for the firm or an
expense for it. Like we can say that the payment of salary to the staff is a business transaction but persuading
a customer to buy a product or hiring a staff for that matter is not a business transaction. Secondly, the
transaction should change the financial position of the firm, that is it should either raise the income of the firm
or create debt for the firm. For example, even if the goods are bought on credit, increasing creditors of the
firm, it is a business transaction as it is creating a debt for the firm. But obviously, praising a staff for his work
 to sell the product at a better profit, is not termed as business transaction although it motivates the employee
but does not result in changing the financial position of the firm. Lastly, the transaction should be able to be
expressed in terms of money.
Every business transaction lead to an event, that is a consequence of the transaction. Say for example, when
the goods bought for ₹ 30,000 is sold for ₹ 32,000, the profit ₹ 2,000 is the event. In other words, we can say
that event is what a transaction does for the business entity. Every transaction is supported by a document
that provides the authorisation and allows the transaction to be recorded in the books of accounts. It varies
from entity to entity and every transaction needs to have a separate uniquely numbered voucher. When we
talk of business transactions, everything inclusive of acquiring of assets, whether current or non-current, and
incurring of liability, whether internal, external, current or non-current, is present. The change in stock due to
sale or purchase whether cash or credit, the expenses incurred, and other revenue generated are all business
transactions, that are called events and have separate unique vouchers.
1. Business Transaction of _____________ nature.
1. Economic
2. Monetary
3. Financial
4. All of the above
2. Business Transactions leads to an _________, that is nothing but its consequence.
1. Event
2. Analyze transactions.
3. Record transactions to a journal.
4. Unadjusted trial balance.
3. Which of the following is not a business transaction?
1. Buying of Furniture.
2. Paying salaries of the accountant.
3. Giving a motivation speech to the employee.
4. Buying a good for personal use from the office money.
4. Every business transaction is accompanied by _______________ voucher.
1. Receipt voucher
2. Separate uniquely numbered
3. Debtor account
4. Creditor account
5. Pick the odd one out:
1. Bank Loan
2. Cash at Bank
3. Creditors
4. Bills Payable
[Link] the factors which necessiated systematic accounting. 5 Marks
[Link] do you mean by Financial Accounting? Explain the four main limitations of Financial Accounting. 5 Marks
[Link] main objectives of accounting. 5 Marks
[Link] a short note on Double Entry System of Accounting. 5 Marks
[Link] the role of accounting in the modern world. 5 Marks
[Link] do you mean by an asset and what are different types of assets? 5 Marks
[Link] the factors which necessitated systematic accounting. 5 Marks
[Link] do you mean by Accounting? Explain in brief any four advantages of Accounting. 5 Marks
[Link] between debtors and creditors; profit and gain. 4 Marks
[Link] any three examples of revenues. 4 Marks
[Link] information needs of management. 4 Marks
[Link] the primary objectives of Accounting. 4 Marks
[Link] the meaning of any three of the following terms: 4 Marks
1. Assets.
2. Capital.
3. Goods.
4. Drawings.
5. Trade Receivables.
[Link] accounting. 4 Marks
[Link] the meaning of any three of the following terms: 4 Marks
1. Liability.
2. Stock.
3. Business Transaction.
4. Drawings.
[Link] appreciate the exact nature of accounting. 4 Marks
[Link] three limitations of accounting. 4 Marks
[Link] the meaning of gain and profit. Distinguish between these two terms. 4 Marks
[Link] the following terms with examples: 4 Marks
1. Capital Expenditure
2. Non-Current Assets
[Link] the qualitative characteristics of accounting information. Explain any two of them. 4 Marks
[Link] examples, explain each of the following accounting terms: 4 Marks
Fixed assets
Revenue
Expenses
Short-term liability
Capital
[Link] the following terms: 4 Marks
1. Revenue.
2. Trade Payables.
3. Fictitious Assets.
4. Working Capital.
Working Capital = Current Assets - Current Liabilities.
[Link] is the difference between Book Keeping and Accounting? 4 Marks
[Link] assets are classified into current and non-current? 4 Marks
Q199.“Only financial transactions are recorded in Accountancy.” Explain the statement. 4 Marks
[Link] receipts are classified into capital and revenue? 4 Marks
[Link] is Accounting? Explain four of its functions. 4 Marks
[Link] what is the end-product of Financial Accounting. 3 Marks
Q203.“The role of accounting has changed over the period of time”- Do you agree? Explain. 3 Marks
[Link] the meaning of 'Accounting'. 3 Marks
[Link] are the steps involved in the process of accounting? 3 Marks
[Link] provides information about the profitability and financial soundness of a concern. In addition, it 3 Marks
provides various other valuable information also. However, accounting has certain limitations. Explain any
three of such limitations.
[Link] do you mean by Financial Accounting? Explain its one main function. 3 Marks
Q208.A firm follows a practice of giving the figures of previous year alongwith the figures of current year. Now the 3 Marks
Accountant of the firm wants to discontinue this practice. Do you justify this decision?
[Link] between expenses and expenditure. 3 Marks
[Link] is the reason that the capital expenditure is shown in the Balance Sheet? 3 Marks
[Link] revenues and expenses? 3 Marks
[Link] Book Keeping. What is the function of Book Keeping? 3 Marks
[Link] Accounting. Explain any two limitations of Accounting. 3 Marks
Q214.“The role of accounting has changed over the period of time". Explain. 3 Marks
Q215."Accounting information should be comparable”. Do you agreewith this statement? Give two reasons. 3 Marks
[Link] between debtors and creditors. 3 Marks
[Link] between profit and gain. 3 Marks
[Link] is the primiary reason for the business students and others to familiarise themselves with the accounting 3 Marks
discipline?
[Link] the following into: 3 Marks
1. Assets.
2. Liabilities.
3. Expenses.
4. Revenues.
Sales, Bank balance, Debtors, Bank Overdraft, Creditors, Salary to manager, Discount to debtors, Cost of
goods sold.
[Link] difference between Book-keeping and Accounting on the basis of stage, special skills and nature of job. 3 Marks
[Link] between revenue expenditure and capital expenditure. 3 Marks
[Link] is the primary reason for business students and others to study accounting discipline? 3 Marks
[Link] are Fictitious Assets? 3 Marks
Q224.“Non-monetary transactions are not recorded in the books of accounts". Explain. 3 Marks
[Link] is the process of Accounting? 3 Marks
[Link] do you mean by Accounting? What are its main objectives? 3 Marks
[Link] is accounting influenced by personal judgements? 3 Marks
[Link] between fixed assets and current assets. 3 Marks
[Link] expenditure is classified into capital and revenue. 3 Marks
[Link] is the meaning of recording in terms of money? 3 Marks
[Link] 'Comparability' as qualitative characteristics of accounting information. 3 Marks
[Link] any three objectives of accounting. 3 Marks
[Link] is the function of Book Keeping? 3 Marks
[Link] is Accounting Cycle? 3 Marks
[Link] the stakeholder group who would be most interested in the following: 3 Marks
1. The ethical or environmental activities of the firm.
2. Whether the firm has a long-term future.
3. The ability of the firm to carry on providing quality products.
[Link] are the attributes (features) of Accounting? 2 Marks
[Link] the following parties are interested in Accounting Information: 2 Marks
1. Investors.
2. Government?
[Link] are Assets? 2 Marks
[Link] is Trade Discount? 2 Marks
[Link] between expenses and losses. 2 Marks
[Link] are Liabilities? 2 Marks
[Link] is Cash Discount? 2 Marks
[Link] type of information is required by long-term lenders? 2 Marks
[Link] one point of distinction between Book-keeping and Accountancy. 2 Marks
[Link] Book Keeping. 2 Marks
[Link] are the internal users of accounting information? 2 Marks
[Link] between Assets and Goods on the basis of any two points. 2 Marks
[Link] briefly the types of Accounting Information. 2 Marks
[Link] any two objectives of Accounting. 2 Marks
[Link] the branch of commerce, which keeps a record of monetary transactions in a sec of books. 2 Marks
[Link] is a Voucher? 2 Marks
[Link] are the informational needs of management? 2 Marks
Q253.‘Accounting information should be comparable’. Do you agree with this statement. Give two reasons. 2 Marks
[Link] one limitation of accounting. 2 Marks
[Link] two characteristics of a business transaction. 2 Marks
[Link] is meant by Accounting? 2 Marks
[Link] are the limitations of Accounting? (Any Two) 2 Marks
[Link] the external users directly concerned with accounting information. 2 Marks
[Link] are the two accounting systems to record financial transactions in the books of account? 2 Marks
[Link] are the advantages of Accounting? (Any Two) 2 Marks
[Link] any two external users of accounting inforrnation? 2 Marks
[Link] are Current Assets? 2 Marks
[Link] the meaning of Accounting. 2 Marks
[Link] is meant by Purchases? 2 Marks
[Link] any two functions of Accounting. 2 Marks
[Link] is income? 2 Marks
[Link] two advantages of accounting. 2 Marks
[Link] the branch of commerce, which keeps a record of monetary transactions in a set of books. 2 Marks
[Link] is end product of financial accounting? 2 Marks
[Link] are Drawings? 1 Mark
[Link] the basic objective of Book Keeping to maintain systematic records or to ascertain net results of operations 1 Mark
of financial transactions?
[Link] two examples of transactions which are not recorded in accounting. 1 Mark
[Link] the external user of accounting information from whom the firm purchases goods on credit. 1 Mark
[Link]. Ganpati, the proprietor of a business, sold his residential house for 50 Lac. Will it be recorded in the books 1 Mark
of accounts?
Q275.‘Accounting information should be verifiable and free from personal Bias’. Name the qualitative characteristic 1 Mark
of accounting information denoted by this statement.
[Link] is meant by Sales? 1 Mark
[Link] is the first step of Accounting Process? 1 Mark
[Link] two examples of Tangible Assets. 1 Mark
[Link] is profit or loss of a particular period is ascertained? 1 Mark
[Link]. Vishwanath established a Travel Agency. Over the years the Travel Agency earned high reputation. Mr. 1 Mark
Vishwanath considers the value of goodwill of his Travel Agency at ₹ 50 lac. He wants to record the value of
the goodwill in the books of accounts. Can he do so?
[Link] Priti. an electronic goods dealer, gifted a washing machine valued ₹ 325,000 to her friend Suruchi. Will it 1 Mark
be recorded in the books of accounts?
[Link] is expense? 1 Mark
[Link] 1st Jan., 2015, Mr. Vadera was appointed as Marketing Manager of the firm with a salary of ₹ 50,000 per 1 Mark
month. State whether this event will be recorded in the books of accounts.
[Link] is earned on sale of Fixed Asset. What should be the accounting treatment of this profit? 1 Mark
[Link] and rust that the reported information is a reasonable representation of the actual items and 1 Mark
events, that have occurred, depicts which qualitative characteristic of accounting information.
[Link] the transactions and events correctly and preparing financial statements are the only objectives of 1 Mark
accounting. Do you agree?
[Link] Merchandise. 1 Mark
[Link]. Dinanath who owed us 350,000 became insolvent and paid only 40% of this amount. What is term used 1 Mark
for the amount not received?
[Link] two examples of Current Assets. 1 Mark
[Link] two examples of Intangible Assets. 1 Mark
[Link] do we ascertain the financial position of the business? 1 Mark
[Link] two examples of Current Liabilities. 1 Mark
[Link] the nature of information required by Investors. 1 Mark
[Link] qualitative characteristic of accounting information requires the use of common unit and common 1 Mark
format of reporting?
[Link] records transactions and events that can be measured in money terms. Is this, in your opinion, a 1 Mark
limitation of accounting or an advantage? Give reasons.
[Link] accountant of the firm found an error in the books of accounts but neither he rectified the error nor 1 Mark
disclosed it to the management fearing that it will risk his job. Which value has been violated by the
accountant?
[Link] by a Marketing Manager is not recorded in the books of account. Why? 1 Mark
[Link] of financial transactions and preparing the financial statements are the only objectives of 1 Mark
accounting. Do You agree?
[Link] are the external users of information? 1 Mark
[Link] is revenue? 1 Mark
[Link] the nature of accounting information required by long-term lenders. 1 Mark
Q302.A firm has received a large order to supply the goods. Will it be recorded in the books? 1 Mark
[Link] is Capital? 1 Mark
[Link] type of accounting information shows profit earned or loss incurred? 1 Mark
[Link] any one external user of Accounting information. 1 Mark
[Link] of the following transactions are of financial character and will be recorded in the books? 1 Mark
1. Credit purchase of goods.
2. Strike by employees.
3. Goods worth ₹ 20,000 taken from the business and given by the proprietor to his friend as gift.
4. Withdrawing of money by proprietor from business for personal use.
5. Interviewing the candidates for employment.
6. Sale of household furniture for ₹ 10,000.
7. Payment of school fees of proprietor's son from proprietor's personal bank Account.
8. Make promise to send the goods.
9. Receiving an order to send the goods.
10. Loss of goods by fire.
11. Value of human resources.
[Link] any two users of accounting information. 1 Mark
[Link] is owner of a Restaurant. She paid son's fees from her personal bank account ₹`20,000. Whether this 1 Mark
constitute her Business Transaction? Give reason.
[Link] records business transactions and events which are of financial nature. Do you consider it a 1 Mark
limitation of accounting?
[Link] is the traditional function of Accounting? 1 Mark
[Link] is meant by qualitative information? 1 Mark
[Link] value is most important for a good accountant? 1 Mark
[Link] two examples of revenue expenditure. 1 Mark
[Link] are Internal Liabilities? 1 Mark
[Link] the accounting information is not clearly presented, which of the qualitative characteristic of the accounting 1 Mark
information is violated?
[Link] are Current Liabilities? 1 Mark
[Link]. Jaspal Singh dealing in electronic goods sold 20 TV sets costing ₹ 30,000 each at 40,000 each. Out of 1 Mark
this ₹ 5,00,000 were received in cash and the balance is not yet received. State the amount of revenue.
[Link] loss occurred due to the strike by employees. Will it be recorded? 1 Mark
[Link] Keeping is not a part of accounting. Do you agree with the statement? 1 Mark
Q320. 1 Mark
Godrej Ltd. imported from Germany one machinery for sale in India and another machinery for production
purpose. Will you treat them goods or fixed assets?