Theory Base of Accounting MCQ Questions for Class 11 Accountancy Chapter 2 with Answers

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MCQ Questions for Class 11 Accountancy with Answers: Financial Accounting

Q1. The primary qualities that make accounting information useful for decision-making are

(i) Relevance and freedom from bias
(ii) Reliability and comparability
(iii) Comparability and consistency
(iv) None of the above

(ii) Reliability and comparability

Q2. According to the Cost Concept

(i) Assets are recorded at lower of cost and market value.
(ii) Assets are recorded by estimating the market value at the time of purchase.
(iii) Assets are recorded at the value paid for acquiring it.
(iv) Assets are not recorded

(iii) Assets are recorded at the value paid for acquiring it.

Q3. The Trading and Profit and Loss Account is prepared under which attribute of accounting:

(i) Summarising
(ii) Recording
(iii) Classifying
(iv) Analysis and Interpretation

(i) Summarising

Q4. Meaning of credibility of going concern is:

(i) Closing of business
(ii) Opening of business
(iii) Continuing of business
(iv) None of these.

(iii) Continuing of business

Q5. A concept that a business enterprise will not be sold or liquidated in the near future is known as :

(i) Going concern
(ii) Economic entity
(iii) Monetary unit
(iv) None of the above

(i) Going concern

Q6. Convention of conservatism takes into account:

(i) All future profits and losses
(ii) All future profits and not losses
(iii) All future losses and not profits
(iv) Neither profits nor losses of the future

(iii) All future losses and not profits

Q7. Which of the following statements is correct:

(i) Book Keeping is a part of Accounting.
(ii) Accounting is a part of book-keeping.
(iii) The term book-keeping and accounting can be used interchangeably.
(iv) Book keeping is not a part of accounting.

(i) Book Keeping is a part of Accounting.

Q8. The amount drawn by businessmen for his personal use is-

(i) Capital
(ii) Drawing
(iii) Expenditure
(iv) Loss.

(ii) Drawing

Q9. When information about two difference enterprises have been prepared presented in a similar manner the information exhibits the characteristic of:

(i) Verifiability
(ii) Relevance
(iii) Reliability
(iv) None of the above

(iv) None of the above

Q10. As per Income Tax Act, accounting period is :

(i) From 1st January to 31st December
(ii) From 1st April to 31st March
(iii) From 1st July to 30th June
(iv) From Diwali to Diwali

(ii) From 1st April to 31st Mar

Q11. IFRS are:

(i) Principles based accounting standards
(ii) Rule based accounting standards
(iii) Partially rule and partially principles
(iv) None of the options

(i) Principles based accounting standards

Q12. The basic accounting postulates are denoted by

(i) Concepts
(ii) Book – keeping
(iii) Accounting standards
(iv) None of these.

(i) Concepts

Q13. During the lifetime of an entity accounting produce financial statements in accordance with which basic accounting concept:

(i) Conservation
(ii) Matching
(iii) Accounting period
(iv) None of the above

(iii) Accounting period

Q14. As per Dual Aspect Concept:

(i) Assets = Liabilities – Capital
(ii) Assets = Capital – Liabilities
(iii) Assets = Liabilities + Capital
(iv) Capital = Assets + Liabilities

(iii) Assets = Liabilities + Capital

Q15. A liability arises because of:

(i) Credit transaction
(ii) Cash transaction
(iii) None of the options
(iv) Cash and credit transaction

(i) Credit transaction

Q16. In India, the accounting standard board was set up in the year-

(i) 1972
(ii) 1977
(iii) 1956
(iv) 1932.

(ii) 1977

Q17. Which of these is not a fundamental accounting assumption?

(i) Going concern
(ii) Consistency
(iii) Accrual
(iv) Materiality

(iv) Materiality

Q18. Which of the following limitations of accounting states that accounts may be manipulated to conceal vital information?

(i) Accounting leads to window dressing
(ii) Accounting is not fully exact
(iii) Accounting ignores price level changes.
(iv) Accounting ignores qualitative concepts.

(i) Accounting leads to window dressing

Q19. As per Income Tax Act, accounting period is :

(i) From 1st January to 31st December
(ii) From 1st April to 31st March
(iii) From 1st July to 30th June
(iv) From Diwali to Diwali

(ii) From 1st April to 31st March

Q20. Return Inward is the term used for:

(i) Sales Return
(ii) Purchase Return
(iii) Credit purchase
(iv) Credit Sales

(i) Sales Return

Q21. IASB upon coming into existence has adopted

(i) all IAS and SIC.
(ii) some IAS and SIC.
(e) none of the IAS and SIC.
(iv) None of these.

(i) all IAS and SIC

Q22. Among the following assets, which one is fictitious asset?

(i) Debit balance of Profit &loss A/c
(ii) Goodwill
(iii) Patents
(iv) Oil wells

(i) Debit balance of Profit &loss A/c

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MCQ Questions for Class 11 Accountancy: Financial Accounting

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