Available Answers

1. 1.

   MULTIPLE CHOICE QUESTIONS.

   1. Book keeping is a part of accounting, therefore its scope is ______________ where as scope of accounting is ______________.
      1. Wider, narrow
      2. Narrow, wider
      3. More, less
      4. None of these
   2. ______________ is the art and science of recording transactions while ______________ is the art and science of recording, classifying and summarising transactions.
      1. Book keeping, accounting
      2. Accounting, book keeping
      3. Financial recording, accounting
      4. Accounting, journalising
   3. The purposes of financial recording is
      1. Keeping records
      2. Calculating profit or loss
      3. Ascertaining financial position
      4. All of these
   4. Which of these is not a purpose of financial recordings?
      1. Ascertaining financial position
      2. Making accounting information available to stakeholders
      3. Journal
      4. None of these
   5. The accounting cycle consists of
      1. Journal
      2. Ledger
      3. Trial balance
      4. All of these
   6. It is the first stage of maintaining accounts and provides no conclusions.
      1. Accounting
      2. Book keeping
      3. Book maintaining
      4. Book recording
   7. It is the second stage and provides conclusions.
      1. Accounting
      2. Book keeping
      3. Book maintaining
      4. Book recording
   8. It refers to a complete sequence of accounting activities.
      1. Accounting cycle
      2. Accounting sequence
      3. Accounting transactions
      4. Accounting
   9. The first step in accounting cycle is
      1. Recording of transactions in journal
      2. Preparing income statement
      3. Posting entries in ledger
      4. Preparing balance sheet
   10. Accounting cycle ends with the ______________.
       1. Recording of transactions in journal
       2. Preparing income statement
       3. Posting entries in ledger
       4. Preparation of balance sheet
   11. GAAP stands for
       1. Governor accepted accounting principles
       2. Generally avoided accounting principles
       3. Generally accepted accounting principles
       4. Governor avoided accounting principles
   12. Accounting principles are necessary due to which of the following reasons?
       1. To identify and classify economic transactions for meaningful presentation.
       2. To ensure uniformity in accounting records.
       3. These principles represent a scientific approach to financial statements.
       4. All of these
   13. ______________ is the language of business.
       1. Accounting
       2. Book keeping
       3. Book maintaining
       4. Book recording
   14. According to this concept, a business firm is treated as a unit separate and distinct from its owners.
       1. Money measurement concept
       2. Accounting period concept
       3. Business entity concept
       4. Realisation concept
   15. On the basis of this concept, only those transactions are recorded in accounts which can be expressed in terms of money.
       1. Money measurement concept
       2. Accounting period concept
       3. Business entity concept
       4. Realisation concept
   16. This concept assumes that the business will continue to exist for a long time in the future.
       1. Money measurement concept
       2. Going concern concept
       3. Business entity concept
       4. Realisation concept
   17. It is due to this concept that financial statements are prepared at regular intervals, generally one year.
       1. Money measurement concept
       2. Accounting period concept
       3. Business entity concept
       4. Realisation concept
   18. This principle suggests that every debit has a corresponding and equal credit.
       1. Matching principle
       2. Principle of full disclosure
       3. Dual aspect principle
       4. Realisation concept
   19. According to this principle, accounts should be prepared in such a way that all the material information required by users of financial statements is clearly disclosed.
       1. Matching principle
       2. Principle of full disclosure
       3. Dual aspect principle
       4. Realisation concept
   20. According to this principle, cast of a particular period should be charged from the revenue of same period only.
       1. Matching principle
       2. Principle of full disclosure
       3. Dual aspect principle
       4. Realisation concept
   21. According to this principle, revenue is deemed to be realised when the goods have been transferred or the services have been rendered to a customer.
       1. Matching principle
       2. Principle of full disclosure
       3. Dual aspect principle
       4. Realisation concept
   22. This principle states that accounting procedures and methods should remain consistent from one year to another.
       1. Materiality
       2. Consistency
       3. Conservatism
       4. Timeliness
   23. According to this principle, record all anticipated losses but ignore all anticipated gains. Industry practice.
       1. Materiality
       2. Consistency
       3. Conservatism
       4. Timeliness
   24. This principle states that the financial statements should be prepared quickly at the end of the accounting period.
       1. Materiality
       2. Consistency
       3. Conservatism
       4. Timeliness
   25. This principle is an exception to the principle of full disclosure.
       1. Materiality
       2. Consistency
       3. Conservatism
       4. Timeliness
   26. According to Business Entity Concept:
       1. Distinction should be made between fixed assets and current assets.
       2. Distinction should be made between business transactions and personal transactions.
       3. Distinction should be made between Capital expenditure and revenue expenditure.
       4. Accounting equation is always true.
2. 2.

   Give two differences between book-keeping and accounting.

3. 3.

   What is accounting cycle?

4. 4.

   What is business entity concept of accounting?

5. 5.

   Explain the principle of materiality.

6. 6.

   Name the basic principles of accounting.