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Accounting Concepts, Conventions and Standards

This quiz covers the theoretical framework of accounting including basic accounting concepts (entity, going concern, dual aspect, money measurement, accounting period, cost, matching), conventions (conservatism, consistency, disclosure, materiality), and accounting standards issued by ICAI.

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Questions

Question 1 Multiple Choice (Single Answer)

The provision for bad debts should be made in the books of accounts on the basis of

  1. going concern concept
  2. convention of consistency
  3. Convention of coservatism
  4. Convention of materiality
Question 2 Multiple Choice (Single Answer)

According to which concept of accounting, the goods withdrawan by the proprietor should be recorded as drawings of the business?

  1. Accounting period concept
  2. Going concern concept
  3. Dual concept
  4. Business entity concept
Question 3 Multiple Choice (Single Answer)

According to which convention of accounting, the contingent liability should be shown as a footnote of balance sheet?

  1. Convention of conservatism
  2. Convention of consistency
  3. Convention of disclosure
  4. Convention of materiality
Question 4 Multiple Choice (Single Answer)

The concept of conservatism is also known as

  1. going concern concept
  2. prudence concept
  3. accounting period concept
  4. dual aspect
Question 5 Multiple Choice (Single Answer)

The accounting equation Assets = Liabilities + Capital is based on which of the following accounting principles?

  1. Dual aspect
  2. Going concern concept
  3. Entity concept
  4. Accounting period concept
Question 6 Multiple Choice (Single Answer)

The depreciation on fixed assets should be shown in the profit & loss account every year. It is according to

  1. going concern concept
  2. dual aspect
  3. entity concept
  4. accounting period concept
Question 7 Multiple Choice (Single Answer)

The cost price of a long term investment is Rs. 25,000 but its current market value is Rs. 15,000. The investment is likely to fetch Rs. 40,000 at its maturity. What should be the value which should be recorded in the books for this investment?

  1. Rs. 25,000
  2. Rs. 15,000
  3. Rs. 40,000
  4. Rs.20,000
Question 8 Multiple Choice (Single Answer)

The non-monetary transactions are ignored to be recorded in the books due to

  1. going concern concept
  2. dual aspect
  3. concept of cosvervatism
  4. money measurement concept
Question 9 Multiple Choice (Single Answer)

A business calculates stock at the end of every year according to FIFO or LIFO or weighted average method according to its suitability every year. Which accounting principle is violated?

  1. Going concern concept
  2. Accounting period concept
  3. Convention of consistency
  4. Concept of conservatism
Question 10 Multiple Choice (Single Answer)

According to which concept of accounting, the expenses of a particular period should be charged against the revenue earned during that period?

  1. Dual aspect
  2. matching concept
  3. Cost concept
  4. Realisation concept
Question 11 Multiple Choice (Single Answer)

The concept of conservatism takes into account

  1. all future profits and losses
  2. no future profits & losses
  3. all future profits only
  4. all future losses only
Question 12 Multiple Choice (Single Answer)

Which accounting standard is concerned with accounting for intangible assets?

  1. AS-14
  2. AS-18
  3. AS-19
  4. AS-26
Question 13 Multiple Choice (Single Answer)

Which of the following concepts is not applicable to the joint venture business?

  1. Going concern concept
  2. Dual aspect
  3. Accrual concept
  4. Matching concept
Question 14 Multiple Choice (Single Answer)

The value of residual postage stamps of the small amount lying in the business may not be shown in the books of accounts. It is as per

  1. consistency convention
  2. convention of materiality
  3. convention of conservatism
  4. dual aspect
Question 15 Multiple Choice (Single Answer)

The cash system of accounting records the transactions relating to

  1. current year only
  2. past years only
  3. future years only
  4. all current, past and future periods.
Question 16 Multiple Choice (Single Answer)

How many accounting standards have been issued by ICAI till date?

  1. 29
  2. 31
  3. 32
  4. 33
Question 17 Multiple Choice (Single Answer)

Which accounting standard is concerned with cash flow statement?

  1. AS-3
  2. AS-6
  3. AS-10
  4. AS_13
Question 18 Multiple Choice (Single Answer)

Which of the following accounting systems produces more accurate result of profits or losses?

  1. Cash system
  2. Mercantile system
  3. Both cash and mercantile system
  4. Accounting period concept
Question 19 Multiple Choice (Single Answer)

Which of the following systems of accounting is generally followed by professionals and not by the business enterprises?

  1. Cash system
  2. Mercantile system
  3. Both cash and mercantile system
  4. Accounting period
Question 20 Multiple Choice (Single Answer)

Anticipate no profits but provide for all possible losses is concerned with which concept?

  1. Cost concept
  2. Entity concept
  3. Convention of conservatism
  4. Accrual concept
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