Test 1 Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Basic Concept of Accounting Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email Area Pin Code 1. Which of the following concepts, if violated, would make comparison of financial statements over a period of time difficult? Cost concept Consistency concept Accounting period concept Accrual concept None 2. Conservatism concept does not require Making provision for doubtful debts Valuing stock at lower of cost or net realisable value Creating provision for discount on creditors Making provision for an unfavourable legal suit None 3. As per duality concept or accounting equivalence concept, which of the following is correct? All increase in liabilities and increase in assets represent sources of funds All decrease in liabilities and decrease in assets represent sources of funds All increase in liabilities and decrease in assets represent sources of funds All increase in liabilities and increase in assets represent uses of funds None 4. This is more of a convention than a concept, it proposes that while accounting for various transactions, only those which may have material effect on profitability or financial status of the business should have special consideration for reporting, this concept is known as Concept of Consistency Concept of Conservation Concept of Materiality Concept of Disclosure None 5. Recording of Fixed Assets at cost ensures adherence of Conservatism Concept Going Concern Concept Cost Concept Both (a) and (b) above None 6. Human resources will not appear in the balance sheet according to Accrual Going concern Money measurement concept None None 7. The ______ concept means that similar items in a set of accounts should be given similar accounting treatment and it should be applied from one period to another. Going Concern Prudence Consistency Materiality None 8. ‘A Limited’ purchased goods of ₹ 10,00,000, and sold 90% of goods and remaining goods market value is ₹ 90,000, and closing stock is 10%, but he recorded ₹ 90,000 and not ₹ 1,00,000. Which concept does he follows: Materiality concept Cost concept Entity concept Conservatism concept None 9. Omission of Paise and showing the round figures in financial statements is based on: Conservatism Concept Consistency Concept Materiality Concept Realization Concept None 10. Assets are held in the business for the purpose of: Re-sale Conversion into cash Earning reverse None of the above None 11. It is essential to standardize the accounting principles and policies in order to insure: Transparency Consistency Comparability All of the above None 12. In the financial, statement, contingent liability is: Recognized Not Recognized Adjusted None of the above None 13. Rohan purchased goods for ₹ 25,00,000 and sold 4/5lh of the goods amounting ₹ 18,00,000 and met expenses amounting ₹ 2,50,000 during the year, 2013. He counted net profit as ₹ 3,50,000 which accounting concept was followed by him? Entity Periodicity Matching Conservation None 14. The determination of expenses for an accounting period is based on the principle of: Objectivity Materiality Matching Periodicity None 15. The concepts of Conservation in balance sheet results in: Increase in Cash Decrease in Cash Decrease in assets No change in assets None 16. If the going concern concept is no longer valid, which of the following is true? All prepaid assets would be completely written-off immediately Potal contributed capital and retained earnings would remain unchanged. Intangible assets would continue to be carried at net amortized historical cost. Land held as an investment would be valued at its realizable value. None 17. Under which of the following concepts are shareholders created as creditors for the amount they paid on the shares they subscribed to ? Cost concept Duality concept Business entity concept Since the shareholders own the business, they are not treated as creditors None 18. Which of the following is not a contingent liability ? Claims against the company not acknowledged as debts Debts included on debtors which are doubtful in nature Uncalled liability on partly paid shares Arrears of cumulative fixed dividends None 19. The concept of conservatism will have the effect off Overstatement of Assets Understatement of Assets Overstatement of Liabilities Understatement of Liabilities None 20. Recording of Fixed Assets at cost ensure adherence of: Conservatism concept Going concern concept Cost concept Both (a) and (b) above None 21. Accounting is a / an ______ . Science Art Subject matter of sociology Subject matter philosophy None 22. Choose the correct answer from the given four alternatives: (iv) Accounting does not record non-financial transactions because of ______ . entity concept accrual concept measurement concept going concept None 23. The determination of expenses for an accounting period is based on the concept of Objectivity Materiality Matching Periodicity None 24. Decrease in the amount of creditors results in increase in cash decrease in cash increase in assets no change in assets None 25. Accounting does not record non-financial transactions because of Entity Concept Accrual Concept Cost Concept Money Measurement Concept None 26. Income tax of the sole trader paid is shown Debited to P & L Account Debited to Trading Account Debited to his Capital Account None of the above None 27. Which one of the following character is not related to Financial Accounting? Evaluates the financial strength of the whole business Based on monetary transactions of the enterprise. Reports are always subject to statutory audit. Reports are as per requirement of management None 28. Which one of the following equation is correct? Owner’s Equity = Liability + Asset Owner’s Equity = Asset - Liability Liability = Owner’s Equity + Asset Asset = Owner’s Equity – Liability None 29. Fixed Assets and Current Assets are categorized as per concept of Separate Entity Going Concern Consistency Time period None 30. Accounting does not record non-financial transactions because of Entity concept Accrual concept Cost concept Money measurement concept None 31. The valuation procedure for stock is cost or net re. lisable value, whichever is lower. The procedure follows as per Historical Cost Concept Going Concern Concept Money Measurement Concept Conservatism Concept None 32. When incomes recognised on cash basis and expenditure recognised on accrual basis, the system termed as Accrual basis of accounting Cash basis of accounting Mercantile basis of accounting Hybrid basis of accounting None 33. Profit and loss account is prepared for a period of one year by following the concept of Consistency Concept Cost Concept Going Concern Concept Periodicity Concept None 34. ______ is not objective of accounting. Gives accurate information Keeps records in systematic manner (c) Analyses recorded data Ascertain financial position of business None 35. Accounting cycle ends with preparation of ______ . The journal/ledger The trial balance The financial statement The closing entries record None 36. Provision for bad debt is made as per the Entity Concept Conservatism Concept Cost Concept Going Concern Concept None 37. Which financial statement represents the accounting equation as- Assets = Liabilities + Owner’s equity? Income Statement Statement of Cash Flows Balance Sheet Either (a) or (b) None 38. Trade discount is allowed at the time of sale of goods Is recorded in sales book. Is recorded in cash book. Is not recorded in books of accounts Is recorded in journal. None 39. A debit note issued to a creditor for goods returned is to be recorded in the Purchase return book Journal proper Purchase book Bill receivable book None 40. The determination of expenses for an accounting period is based on the concept of Objectivity Materiality Matching Periodicity None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! Your quiz time is about to finish. Few seconds left. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
