Q & A (New Pattern) - Concepts and conventions For Departmental Exam Account & Finance

1)Recognition of expenses in the same period as associated revenues is known as the


A)Book-Keeping principle


B)matching principle.


C)Cost Principle


D)None.


2)If a concern proposes to discontinue its business from March 2018 and decides to dispose of all its assets within a period of 4 months, The Balance Sheet as on


(A)Historical Cost


(B)Net realisable value


(C)Cost less Depreciation


(D)Cost price or Market value, whichever is lower.


3)A concept that a business enterprise will not be sold or liquidated in the near future is known as:


(A)Going Concern


(B)Economic Entity


(C)Monetary Unit


(D)None of the above


4)During the life-time of an entity accounting produce financial statements in accordance with which basic accounting concept:


(A)Conservation


(B)Matching


(C)Accounting Period


(D)None of the Above


5)The concept which requires that the same accounting method should be used from one accounting period to the next is called


(A)Conservatism


(B)Consistency


(C)Objectivity


(D)Matching


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


A)Consistency


B)Business Entity


C)Going concern


D)Accrual


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


A)Objectivity


B)Materiality


C)Matching


D)Periodicity.


8)A change in accounting policy is justified


(A) To comply with accounting


(B) To ensure more appropriate presentation of the financial statement of the enterprise.


(C) To comply with the law


(D) All of the above


9)Selection of an inappropriate accounting policy decision may


(A)Overstate the performance and financial position of a business entity


(B)Understate/ overstate the performance and financial position of a business entity


(C)Overstate the performance of a business entity


(D)Understate financial position of a business entity.


10)Accounting polices refer to specific accounting


(A) principles


(B) Methods of applying those principles.


(C) Both (a) and (b) .


(D) None of the above.


11)All of the following are valuation principles except


(A) Historical cost.


(B) Present Value


(C) Future value


(D) Realisable value


12)Nandini enterprises follows the Written Down Value method of depreciating machinery year after year due to


A)Comparability


B)Convenience


C)Consistency


D)All of them.


13)Mr. Raj purchased goods costing 1,50,000 and sold 4/5th of the goods amounting to Rs.1,80,000. He met expenses amounting to Rs.25,000 during the year, 2018. He made a net profit as Rs.35,000. Which of the accounting concept was followed by him?


A)Entity


B)Periodicity


C)Matching


D)Conservatism.


14) Economic life of an enterprise is split into period interval as per


A)Entity


B)Matching


C)Accounting Period


D)Accrual


15)It is essential to standardize a company’s accounting principles and policies in order to ensure


A)Transparency


B)Consistency


C)Comparability


D)All of the above.


16) What is the Accounting Standard for Depreciation?


A)AS4


B)AS6


C)AS8


D)AS10


Answer key


Concepts and conventions


1B


2B


3A


4C


5B


6B


7D


8D


9B


10C


11C


12C


13C


14C


15D


16D