Practice Test

1) 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

2) All the following items are classified as fundamental accounting assumptions except

3) Two primary qualitative characteristics of financial statements are

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

5) 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 ?

6) 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

7) Capital brought in by the proprietor is an example of

8) Fixed Assets are held in the business for the purpose of

9) Revenue from Sale of products, is generally , realized in the period in which

10) The concept of conservatism when applied to the balance sheet results in

11) Decrease in the amount of creditors results in

12) The 'going concern concept' is the underlying basis for

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

14) If an individual asset is increased , there will be a corresponding

15) Purchase of machinery for cash

16) MATCH THE PAIRS :- Entity concept assumptions

17) Accrual concept

18) Going concern , consistency and accrual

19) Going concern , cost and realization concept

20) Consistency

21) Money measurement

22) Entity

23) Conservatism

24) Accrual

25) Going concern

26) Cost

27) fundamental accounting assumptions as per AS-1 are

28) Economic life of an enterprise is artificially split into the periodic interval in accordance

29) the assets are classified as current assets & fixed assets in accordance with

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

31) materiality principle is an exception to the

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

33) accrual means

34) prudence principle is as exception to the

35) the assets & incomes are not overstated & the liabilities & losses are not understated in accordance with

36) prudence is a concept to recognize

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

38) appending notes to the financial statements is in accordance with

39) valuation of the crops at the market value is in accordance with

40) 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

41) 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

42) 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

43) personal transaction are distinguished from business transaction of an accounting period in accordance with

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

45) 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

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

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

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

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

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

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

52) 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

53) 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

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

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

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

57) 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

58) 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

59) 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

60) 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

61) 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

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

63) subjectivity is involved in

64) objectivity is involved in

65) 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

66) 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 ?

67) 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

68) 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

69) 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

70) 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

71) 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

72) 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

73) x ltd .follows the WDV method of depreciating machinery year after due to

74) The determination of expenses for an accounting period is based on the principle of

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

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

77) Which of the following is/are the common accounting concepts ?

78) Which of the following is/are the common accounting concepts ?

79) Which of the following is/are the common accounting concepts ?

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

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

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

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

84) If the assumption of the going concern is not valid,the financial statements should_________

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

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

87) _______form of business organization is the exception to the going concern concept.

88) According to "business entity concept" business is treated as separate from its____________

89) ______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.

90) The transaction recorded through accounting equation are based on_______

91) According to_______revenue is recognized only when a sale is made.

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

93) __________period is normally adopted for accounting purpose.

94) 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

95) Going concern concept is not followed by_____

96) Which of the following is/are accounting convention ?

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

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

99) As per_________the accountant should not anticipate income and should provide for all possible losses.

100) 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.

101) Provisions for bad debts in respects of doubtful debts are made due to______

102) Closing stock in hand valued at lower of cost or market value due to________

103) Which of the following is an accounting convention ?

104) 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.

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

106) Which of the following is not an accounting convention ?

107) It is essential to standardize the accounting principles and policies in order to ensure________

108) 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 ?

109) State the case where the going concern concept is applied ?

110) 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________

111) 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_____

112) 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___________

113) Assets should be valued at the price paid to acquire them is based on_______

114) 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_______

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

116) Decrease in the amount of trade payables results in