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Recording of transactions and events as & when they occur and classifying them into suitable account heading is the subject matter of | Book-keeping | Management Accounting | Cost Accounting | Financial Accounting | Bookkeeping is the process of systematically recording financial transactions and events as they happen, and classifying them into appropriate accounts. It's the foundational part of accounting, focusing on the basic recording and organization of financial data | a | English | Easy |
Book-keeping is mainly concerned with the recording of financial data relating to the in significant and orderly manner. | Company | Business | Monetary | Personal | Bookkeeping is primarily concerned with the systematic and orderly recording of financial data relating to business operations. | b | English | Easy |
Basic function of accounting is to | Summarise the data | Assist the management in performing functions effectively | Interpret the financial data | Record all business transactions of monetary nature | The process of accounting begins with meticulously recording every business transaction that has a financial character, such as sales, purchases, and payments. Without this foundational step, the subsequent functions of accounting cannot be performed accurately. | d | English | Easy |
There are two systems of accounting i.e. cash basis system of accounting and basis system of accounting | Dual Aspect | Accrual | Single Entry | Double entry | The cash basis and the accrual basis are the two main comprehensive methods of keeping accounting records | b | English | Easy |
The alternative to cash basis of accounting is called ……… basis of accounting | Accrual | Due | Receipt | Credit | Cash basis records transactions when cash changes hands, while accrual basis records them when they are earned or incurred. | a | English | Easy |
The system of recording transactions based on dual aspect concept is called | Double Entry System | Single Entry System | Accrual Basis of Accounting | Double Account System | The dual aspect concept is a foundational principle in accounting, stating that every business transaction has two effects (a debit and a credit) on the accounting equation (Assets = Liabilities + Owner's Equity), which is the basis of the double-entry system. | a | English | Easy |
As per dual aspect concept | Assets + Capital Liabilities | Assets + Liabilities = Capital | Assets = Liabilities + Capital | Assets = Liabilities-Capital | As per the dual aspect concept, the fundamental accounting equation is (c) Assets = Liabilities + Capital (also known as Owner's Equity or Shareholders' Equity). This equation reflects the core idea that every transaction affects at least two accounts, ensuring that the accounting records always balance. | c | English | Easy |
Liabilities of a firm are 8,00,000 and capital of the proprietor is 7,00,000. Then total | ₹15,00,000 | ₹11,00,000 | ₹10,00,000 | ₹8,00,000 | Assets=Capital+Liabilities
Given:
Liabilities = ₹8,00,000
Capital = ₹7,00,000
Assets=7,00,000+8,00,000=₹15,00,000
Total Assets = ₹15,00,000 | a | English | Easy |
Assets are 14,00,000 and liabilities are 6,00,000. His capital would be | 12,00,000 | 10,00,000 | 2,00,000. | 8,00,000 | Capital = Assets - Liabilities
Capital = 14,00,000 - 6,00,000 = 8,00,000 | d | English | Easy |
Capital + Liabilities = | Fixed Assets | Current Assets | Losses | Total Assets | The fundamental accounting equation states that Capital + Liabilities = Total Assets. This means that a company's total assets are comprised of the funds invested by its owners (capital) and the debts it owes to creditors (liabilities). | d | English | Easy |
Which of the following will be goods for a business run by a footwear merchant? | Tables and Chairs | Pens and Pencils | Shoes | Electrical Appliances | A footwear merchant deals in products like shoes, sandals, slippers, etc. The other items (tables and chairs, pens and pencils, electrical appliances) are not part of their business inventory. | c | English | Easy |
Which of the following is not a business transaction? | Goods purchased from 1000 | Placed an order for purchasing the goods for 2000 | Received interest from Bank 5000 | Rent paid to Landlord 3000 | It does not create any financial impact until goods are received or payment is made. | b | English | Easy |
Which of the following item is not financial in nature : | Purchase of machine for cash | Withdrawal of cash by proprietor for his domestic use | Dismissing an employee from job | Purchase of a bike on credit | it does not involve any monetary exchange at the time of dismissal. | c | English | Easy |
Total assets of a trader are 7,25,000 and outside liabilities are 4,25,000; owner’s equity will be: | 2,50,000 | 3,00,000 | None of the above | 6,00,000 | Owner’s Equity = Total Assets – Outside Liabilities
= 7,25,000 – 4,25,000
= 3,00,000 | b | English | Easy |
Maintaining of systematic records of all the business transactions is termed as | Recording | Accounting | Classification of Records | None of the above | Maintaining systematic records of all business transactions is called Accounting.
Recording = writing transactions in books (first step)
Accounting = complete process → recording + classifying + summarizing + interpreting | c | English | Easy |
Accounting in the modern time is treated as | The source of business information | The language of business | An art of recording, classifying and summarizing transactions in monetary units | All of the above | All the given statements correctly describe accounting:
(a) It is a source of business information.
(b) It is known as the language of business.
(c) It is an art of recording, classifying, and summarizing transactions in monetary terms. | d | English | Easy |
Which is not dependent on accounting? | Book keeping | Cost accounting | Financial accounting | Management decision making | It is the first step of accounting. It involves recording transactions.
It does not depend on accounting; rather accounting depends on bookkeeping. | a | English | Easy |
Accounting is treated as both science and an | Economics | Commerce | Science | Art | Accounting is considered a science because it is based on principles, and an art because it involves skill in recording and interpreting financial data. | d | English | Easy |
Book Keeping is made to maintain a detail record of | None of the above | College transaction | Business transaction | Selling transaction | Book keeping involves recording all business transactions in a systematic manner. | c | English | Easy |
The primary objective of accounting is to. | Abnormal records | Normal records | Unsystematic record | Systematic record | The primary objective of accounting is to maintain systematic records of all business transactions. | d | English | Easy |
Users of accounting informations are classified in to two parts i.e. External Users and | Share holder | Customer | Internal users | External users | Users of accounting information are divided into External users and Internal users. | c | English | Easy |
Book Keeping is regarded as the step of accounting. | Fourth | Secondary | Third | Primary | Book keeping is considered the first or primary step of accounting because it involves the basic recording of financial transactions. | d | English | Easy |
Accounting is both | None of the above | History and geography | Commerce and management | Arts and science | Accounting is considered both an art and a science:
Science → because it is based on principles and rules
Art → because it requires skill and judgment in recording and interpreting financial data | d | English | Easy |
There are three approaches to accounting which are widely accepted: (a) Cash basis (b) | Book keeping | Accrual basis and Accounting basic | Mixed or hybrid | None of the above | The three widely accepted approaches to accounting are:
Cash basis
Accrual basis
Mixed or hybrid basis | c | English | Easy |
Under which basis of accounting actual cash receipts and actual cash payments are | Cash Basis of Accounting | Accrual Basis | Hybrid Basis | Current Assets | Revenue is recorded only when cash is received
Expenses are recorded only when cash is paid | a | English | Easy |
The alternative to cash basis of accounting is called basis of accounting | Hybrid | Accrual | Cash | None of the above | The alternative to the cash basis of accounting is the accrual basis of accounting. | b | English | Easy |
The system of accounting in which only personal accounts with or without subsidiary books are maintained is known as | Double | Triple | Single entry | None | The system in which only personal accounts (sometimes with subsidiary books) are maintained is called Single Entry System. | c | English | Easy |
This method of writing every transaction in two accounts is known as | Double entry | Triple | Single entry | None | Writing every transaction in two accounts (debit and credit) is called the Double Entry System. | a | English | Easy |
Under which basis of accounting both cash basis and accrual basis are followed | Accrual basis | Cash basis | Mixed or hybrid | None of the above | When both cash basis and accrual basis are used together, it is called the mixed or hybrid basis of accounting. | c | English | Easy |
Any exchange of money or money’s worth between two parties is called | Business transaction | Non business transaction | Register transaction | None of the above | Any exchange of money or money’s worth between two parties is called a business transaction. | a | English | Easy |
In accounting, transactions of similar nature are added or subtracted at a particular place. | Ledger | Trial Balance | Journal | Commission | All transactions relating to one item (e.g., Cash, Purchases, Rent, Debtors) are posted to the respective ledger account, where they are added or subtracted to find the final balance.
So, the correct concept is: Ledger (or Ledger Posting) | a | English | Easy |
A person to whom money is owing or payable is called a | Creditor | Debtor | Owner | None of the above | A person to whom money is owed or payable is called a creditor. | a | English | Easy |
owner’s financial interest or holding in the business and is represented by the value of net assets (L.e., total assets less liabilities.) is termed as | None of the above | Liability | Assets | Capital | The owner’s financial interest in the business, represented by Net Assets = Total Assets – Liabilities, is called Capital. | d | English | Easy |
Any physical thing or right owned that has a money value is an | Assets | Liabilities | Money | All of the above | Any physical thing or right owned that has money value is called an Asset. | a | English | Easy |
A claim which can be enforced against the assets of the firm is called | Debenture | Money | Equity | None of the above | A claim that can be enforced against the assets of the firm is known as Equity. | c | English | Easy |
An inflow of assets which results in an increase in the owner’s equity is termed as | Liability | Expenses | Income | None of the above | An inflow of assets that increases owner’s equity is called Income. | c | English | Easy |
Any amount or goods withdrawn by the owner of a business for personal use is called | Drawing | Liability | Expenses | Income | Any amount or goods withdrawn by the owner for personal use is called Drawings. | a | English | Easy |
Any written document in support of a business transaction is called a | Voucher | Bill | Account | Register | Any written document that serves as proof of a business transaction is called a voucher. | a | English | Easy |
According to the going concern concept, a business entity should assumed to have | a very short life | an indefinite life | a long life | None of the above | Going Concern Concept assumes that the business will continue its operations for an indefinite period and not liquidate in the near future. | null | English | Easy |
In the balance sheet, Contingent liability is shown because of | Convention of disclosure | Convention of materiality | Convention of consistency | None of the above | Contingent liabilities are shown in the Balance Sheet to inform users about possible future obligations. | a | English | Easy |
Revenue is considered as earning, when | Sale is effected | Production is done | Cash is received | None of the above | Revenue is considered earned when the sale is effected, not when cash is received or production is completed. | a | English | Easy |
Accounting does not record non-financial transactions because of which accounting principle | Accrual concept | Entity concept | Measurement concept | None of the above | Accounting does not record non-financial transactions because of the Measurement Concept — only transactions that can be measured in monetary terms are recorded. | c | English | Easy |
Which concepts states that even the owner of the capital may be treated as a creditor of the business? | Money measurement concept | Cost concept | Business Entity concept | None of the above | The concept that states the owner is treated as separate from the business and therefore is considered a creditor to the business is the: Business Entity Concept | c | English | Easy |
Appending notes to the financial statements as per …… convention | Convertism | Disclosure | Consistency | Materiality | Appending notes to financial statements is done according to the Disclosure Convention | b | English | Easy |
Accounting of a pen as an expense and not as an asset is due to | Materiality Concept | Matching Concept | Dual Aspect Concept | Increase | Pens are inexpensive and have a very short useful life, so recording them as assets is not practical. According to the materiality concept, such small items are treated as expenses to simplify accounting. | a | English | Easy |
Following the written down value method of depreciation on particular is because of ……… convention | Conservatism | Consistency | Materiality | Disclosure | Using the same method of depreciation every year, such as the Written Down Value (WDV) method, is done to maintain uniformity in accounting practices. This follows the Consistency Convention. | b | English | Easy |
Valuation of stock is done at lower of cost or market value because | Consistency | Conservatism | Disclosure | Materiality | Stock is valued at the lower of cost or market value to recognize anticipated losses but not anticipated gains. This follows the Conservatism (Prudence) Convention. | b | English | Easy |
Making provision for doubtful debts is as per …… convention | Consistency | Disclosure | Conservatism | Materiality | Making a provision for doubtful debts follows the Conservatism (Prudence) Convention, which states that anticipated losses should be recorded | c | English | Easy |
Contingent liability shown in the balance sheet, arises | Consistency | Materiality | Conservatism | Disclosure | A contingent liability is shown in the balance sheet to inform users about possible future obligations, even though they are not yet actual liabilities.
This follows the Convention of Disclosure. | d | English | Easy |
Accounting principles are generally based on | Subjectivity | Practicability | Objectivity | Convenience in Recording | Accounting principles are generally developed on the basis of practicability — meaning they should be practical and applicable in real business situations. | b | English | Easy |
According to money measurement concept the following will be recorded in the books | Reputation of the business | Value of machinery purchased | Working conditions of employees | double entry system | Because reputation and working conditions cannot be expressed in monetary terms reliably. | b | English | Easy |
The convention of Prudence when applied to the balance sheet results | Overstatement of Assets | Understatement of Liability | Understatement of Assets | Overstatement of Liabilities | The Convention of Prudence (Conservatism) says:
Anticipate no profits
Provide for all possible losses
As a result:
Assets are shown at a lower (understated) value
Liabilities may be shown at a higher (overstated) value
From the given options, the one that directly matches is: | c | English | Easy |
Accounting concepts include those assumptions upon which the science of ………… is based. | Book-keeping | Accounting | Double Entry System | Recording | Accounting concepts are the assumptions on which the science of accounting is based. | b | English | Easy |
A firm follows the straight line method of depreciating fixed assets year after year due to: | Objectivity | Convenience | Consistency | Prudence | When a firm continues to use the same method of depreciation (like the Straight Line Method) year after year, it is following the Consistency Convention. | c | English | Easy |
A change in accounting policy is justified: | To comply with accounting standard | To ensure better presentation of the financial statements of the firm | To comply with law | All of the above | A change in accounting policy is justified in the following cases:
To comply with accounting standards
To ensure better presentation of financial statements
To comply with the law | d | English | Easy |
Which of the following is fundamental accounting assumption? | Accounting period | Materiality | Going Concern | Full disclosure | Among the options, the fundamental accounting assumption is the Going Concern Assumption, which assumes that a business will continue its operations indefinitely unless there is evidence to the contrary. | c | English | Easy |
Revenue Should be recognised at the point of sale. Which principle is applied here ? | Consistency | Cost Realization | Marketing | Realization | Revenue is recognized when the sale is effected, i.e., at the point of sale. This follows the Realization Principle. | d | English | Easy |
Which assumption says a business entity will not be sold or liquidated in the near future | Conservatism | Going Concern | Periodic | Separate Entity | The assumption that a business will continue to operate and not be sold or liquidated in the near future is called the Going Concern Assumption. | b | English | Easy |
Corporate must prepare financial statements by time to time due to | Accrual concept | Going Concern concept | Period Concept | Business Entity concept | The requirement for a corporate to prepare financial statements periodically is based on the Period Concept (Accounting Period Assumption). | c | English | Easy |
Which principle states that same accounting methods should be used from one | Consistency Principle | Prudence Principle | Matching Principle | Assets | he principle that states the same accounting methods should be used from one accounting period to another is: Consistency Principle | null | English | Easy |
Expenses not yet paid still recorded in accounting according which concept ? | Realisation | Conservatism | Money Measurement | Accrual | Expenses incurred but not yet paid are recorded according to the Accrual Concept, which recognizes expenses and revenues when they are incurred or earned, regardless of cash payment. | d | English | Easy |
Classification of assets as current assets and fixed assets is as per… | Going Concern concept | Dual aspect | Cost | Money Measurement | Classification of assets into current assets and fixed assets is based on the Going Concern Concept, which assumes the business will continue to operate and use assets over time. | a | English | Easy |
The convention that sates that the accounting practice should be followed consistently over | Consistency | Full disclosure | Conservatism | Materiality | The convention stating that accounting practices should be followed consistently over time is the Consistency Convention. | a | English | Easy |
Which Accounting Principles says personal expenses should be debited to Drawings Account. | Money measurement concept | Going Concern Concept | Business entity concept | Accounting Period Concept | The principle that treats the business and its owner as separate entities, so personal expenses of the owner are recorded in Drawings Account, is the Business Entity Concept. | c | English | Easy |
which principle says quality should not recorded in the book of accounts? | Business entity concept | Money measurement concept | Going Concern Concept | Dual aspect concept | The principle that only transactions measurable in monetary terms are recorded, and qualitative aspects are not recorded, is the Money Measurement Concept. | b | English | Easy |
Which concept assumes that a business entity will not be liquidated in the near future? | Money measurement concept | Business entity concept | Dual aspect concept | Going Concern Concept | The concept that assumes a business will continue operating and not be liquidated in the near future is the Going Concern Concept. | d | English | Easy |
Which accounting concept requires that the life of a business be divided into smaller parts? | Business entity concept | Dual aspect concept | Accounting Period Concept | Matching Concept | The concept that requires the life of a business to be divided into smaller periods for reporting purposes is the Accounting Period Concept. | c | English | Easy |
Under which concept assets is recorded at cost, even if the market price is more or less? | Accounting Period Concept | Matching Concept | Matching Concept | Cost Concept | The concept that states assets should be recorded at their original cost, regardless of changes in market value, is the Cost Concept. | d | English | Easy |
Under which concept advance received against sale of goods is recorded as ‘Advance' | Revenue Recognition (Realisation) Concept | Matching Concept | Materiality Concept | Matching Principle | Because revenue should be recognized only when goods are delivered or services are provided, not when cash is received in advance. | a | English | Easy |
Which Accounting Principle is Applied for “Closing stock is valued at lower of cost or market price” | Matching Concept | Prudence Concept | Matching Concept | Money measurement concept | Valuing closing stock at the lower of cost or market price follows the Prudence (Conservatism) Concept, which ensures anticipated losses are recognized but not anticipated gains. | b | English | Easy |
General Reserve is created on the basis of convention of | Materiality | Uniformity | Prudence | Account Period | General Reserve is created to meet future contingencies or possible losses, following the Prudence (Conservatism) Convention. | c | English | Easy |
IASC Stands for | International accounting standard committee | Indian accounting standard committee | International accounting standard company | Indian accounting standard company | IASC stands for International Accounting Standards Committee. | a | English | Easy |
IASC established in the year | 1963 | 1973 | 1983 | 1993 | The International Accounting Standards Committee (IASC) was established in the year 1973. | b | English | Easy |
IASB Stands for | International accounting standard Board | International accounting standard Board | Indian accounting standard Board | None of the above | IASB stands for International Accounting Standards Board. | a | English | Easy |
IASB established in the year | 2000 | 2001 | 2003 | 2004 | The International Accounting Standards Board (IASB) was established in the year 2001. | b | English | Easy |
ICAI established under | Chartered accountant act 1949 | Company act 1956 | Partnership act 1930 | Company act 2013 | ICAI (Institute of Chartered Accountants of India) was established under the Chartered Accountants Act, 1949. | a | English | Easy |
When accounting standard board has been constitute | 21 Feb 1977 | 21 March 1977 | 21 April 1977 | 21 May 1977 | The Accounting Standards Board (ASB) in India was constituted on 21 April 1977. | c | English | Easy |
National advisory committee on accounting standard (NACAS) established in the year | August 2001 | August 2002 | August 2003 | August 2004 | The National Advisory Committee on Accounting Standards (NACAS) was established in August 2001. | a | English | Easy |
IAS in accounting stands for | Indian administrative services | International accounting standard | Indian accounting standard | None of the above | IAS in accounting stands for International Accounting Standard. | b | English | Easy |
How many Ind AS are there in India | 39 | 38 | 42 | 41 | There are 41 Ind AS in India. | d | English | Easy |
Income taxes Comes under | Ind AS 11 | Ind AS 12 | Ind AS 13 | Ind AS 14 | Income Taxes are covered under Ind AS 12 – Income Taxes. | b | English | Easy |
Intangible assets come under | AS 22 | AS 23 | AS 24 | AS 26 | Intangible Assets are covered under AS 26 – Intangible Assets. | d | English | Easy |
Intangible assets come under | Ind AS 37 | Ind AS 23 | Ind AS 26 | Ind AS 38 | Intangible Assets are covered under Ind AS 38 – Intangible Assets. | d | English | Easy |
XBRL stands for | Extensible Business Reporting league | Extensible Boards Reporting language | Extensible Business Reporting language | Estimated Business Reporting language | XBRL stands for Extensible Business Reporting Language. | c | English | Easy |
The main aim of accounting standard is | Standardize diverse accounting policies | Lower the accounting dissimilarities | Ensuring the comparability of financial statement | All of the above | The main aim of accounting standards is to:
Standardize diverse accounting policies
Reduce accounting dissimilarities
Ensure comparability of financial statements | d | English | Easy |
GAAP of India has been established by | MCA | ICAI | Ministry of Finance | ICSI | The Generally Accepted Accounting Principles (GAAP) of India have been established by the ICAI (Institute of Chartered Accountants of India). | b | English | Easy |
How many number of accounting standard have been issued by ICAI | 38 | 41 | 32 | 12 | The Institute of Chartered Accountants of India (ICAI) has issued 32 Accounting Standards (AS). | c | English | Easy |
The global recognized set of standard for the preparation of financial statement by business entity used in multiple countries is termed as | IFRS | ICAI | ASB | IAS | The globally recognized set of standards for preparing financial statements used in multiple countries is called IFRS (International Financial Reporting Standards). | a | English | Easy |
The board which was constitute by ICAI to formulate accounting standard is known as | IFRS | ICAI | ASB | IAS | The board constituted by ICAI to formulate Accounting Standards is called the Accounting Standards Board (ASB). | c | English | Easy |
A language used for the electronic communication of business and financial data which revolutionizing business reporting around the world is known as | XBRL | ASB | IAS | IFRS | The language used for electronic communication of business and financial data, revolutionizing business reporting worldwide, is XBRL (Extensible Business Reporting Language). | a | English | Easy |
Interim financial reporting comes under | Ind AS 31 | Ind AS 32 | Ind AS 33 | Ind AS 34 | Interim Financial Reporting is covered under Ind AS 34 – Interim Financial Reporting. | d | English | Easy |
Erosion, rust, rot, and decay cause of depreciation is an example of | Physical deterioration | Economic factor | Time factors | None of the above | Erosion, rust, rot, and decay are examples of Physical Deterioration of an asset. | a | English | Easy |
Lease, patents and copy right related to which cause of depreciation | Physical deterioration | Economic factor | Time factors | None of the above | Lease, patents, and copyrights lose value over time due to their limited useful life. This is depreciation due to Time Factors. | c | English | Easy |
Obsolescence means is | Update | Out of date | Up to date | None of the above | Obsolescence means out of date or no longer useful | b | English | Easy |
Decrease in the value of natural assets is | Depreciation | Depletion | Amortization | None of the above | A decrease in the value of natural assets (like mines, forests, oil reserves) is called Depletion. | b | English | Easy |
Decrease in the value of fixed assets is | Depletion | Amortization | Depreciation | None of the above | A decrease in the value of fixed assets over time due to wear and tear, usage, or obsolescence is called Depreciation. | c | English | Easy |
Decrease in the value of intangible assets is | Amortization | Depreciation | Depletion | None of the above | A decrease in the value of intangible assets (like patents, copyrights, goodwill) over time is called Amortization. | a | English | Easy |
Depreciation is a process of | Allocation | Valuation | Both | None of the above | Depreciation is a process of allocation of the cost of a fixed asset over its useful life, not its valuation. | a | English | Easy |
Depreciation arise because due to | Physical wear and tear | Fall in money value | Fall in market price | None of the above | Depreciation arises due to physical wear and tear of assets over time. | a | English | Easy |
Under straight line methods of charging depreciation, value of depreciation | Increase every year | Decrease every year | Constant every year | None of the above | Under the Straight Line Method, the depreciation charged is constant every year. | c | English | Easy |
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