Financial Accounting Quiz | Financial Accounting Objective Type Questions and Answers

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Questions
21 The comparison of financial statement of one year with that of another is possible only when concept is followed
A Consistency
B Going concern
C Accrual
D Materiality

Answer: Consistency
22 Which of the following is not the main objective of accounting?
A Solving tax disputes with tax authorities
B Systematic recording of transactions
C Ascertaining profit or loss
D Ascertainment of financial position

Answer: Solving tax disputes with tax authorities
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23 An asset was purchased for Rs.1000000 with the down payment of Rs.200000 and bills accepted for Rs.800000/-What would be the effect on the total asset and total liabilities in the balance sheet?
A Assets increased by Rs.800000 and liabilities increased by Rs.800000
B Assets increased by Rs.1000000 and liabilities increased by Rs.800000
C Assets decreased by Rs.800000 and liabilities increased by Rs.800000
D Assets increased by Rs.800000 and liabilities decreased by Rs.800000

Answer: Assets increased by Rs.800000 and liabilities increased by Rs.800000
24 Matching concept means
A Expenses should be matched with the revenue of the period
B Assets = capital + liabilities
C Transactions recorded at accrual concept
D Anticipate no profit but recognize all losses

Answer: Expenses should be matched with the revenue of the period
25 Financial accounting is concerned with –
A Recording of day to day business transactions
B Recording of business expenses and revenue
C Recording of costs of products and services
D None of the above

Answer: Recording of day to day business transactions
26 The rule debit all expenses and losses and credit all income and gains relates to
A Nominal accounts
B Personal account
C Real account
D None of the above

Answer: Nominal accounts
27 Double entry system is used in which type of accounting
A Financial
B Cost
C Management
D All

Answer: Financial
28 Rent paid to landlord should be credited to
A Cash account
B Rent account
C Expense account
D Landlords account

Answer: Cash account
29 Cash discount allowed to a debtor should be credited to
A Discount account
B Customer’s account
C Sales account
D Cash account

Answer: Customer’s account
30 Which accounting concept satisfy the valuation criteria
A Cost, Dual aspect, Conservatism
B Realisation, Conservatism, Going concern.
C Going concern, Cost, Dual aspect
D Going concern, Realisation, Cost

Answer: Going concern, Realisation, Cost
31 In which of the following cases, accounting estimates are needed?
A Inventory obsolescence
B Impairment of losses
C Employs benefit schemes
D All of the above

Answer: All of the above
32 In income measurement & recognisation of assets & liabilities which of the following concepts goes together ?
A Cost, Accural, matching
B Going concern, cost, Realization
C Going concern, Periodicity, Reliability
D Periodicity, Accural, Matching

Answer: Periodicity, Accural, Matching
33 Interpretation means
A Concerned with preparation and presentation of classified data
B Systematic analysis of recorded data
C Methodical classification of data given in Financial Statements
D Explanation of meaning and significance of the data in Financial Statements

Answer: Explanation of meaning and significance of the data in Financial Statements
34 A trader purchases goods for Rs. 2500000, of these 70% of goods were sold during the year. At the end of 31st December 2009, the market value of such goods were Rs. 500000. But the trader recorded in his books for Rs. 750000. Which of the following concept is violated.
A Conservatism
B Money measurement
C Consistency
D None of these

Answer: Conservatism
35 If nothing is given in the financial statements aboutthe three accounting assumptions then it is to be treated as it
A Is assumed to be followed
B Is assumed that it is not followed
C Is assumed to be followed to some extent
D None of the above

Answer: Is assumed to be followed
36 The proprietor of the business is treated as creditor for the capital introduced by him due to...... concept.
A Entity
B Money measurement
C Cost
D None of these

Answer: Entity
37 Consistency with reference to application of accounting procedures means
A Accounting methods & procedures shall be followed uniform basis year after year
B All companies in the same Industry should use identical accounting procedures
C Income & assets have not been overstated
D Any accounting method can be followed as per convenience

Answer: Accounting methods & procedures shall be followed uniform basis year after year
38 If one of the cars purchased by a car dealer is used for business purpose, instead of resale, then it should be recorded by
A Dr Motor Car A/c & Cr Purchases A/c
B Dr Drawing A/c & Cr Purchases A/c
C Dr Office Expenses A/c & Cr Motor Car A/c
D Dr Motor Car & Cr Sales A/c

Answer: Dr Motor Car A/c & Cr Purchases A/c
39 Human resources will not appear in the balance sheet according to _ concept.
A Money measurement concept
B Accrual
C Going concern
D None

Answer: Money measurement concept
40 Which of the following is not a Real Account?
A Out standing rent A/c
B Cash A/c
C Investments A/c
D Purchases A/c

Answer: Out standing rent A/c

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