Finance Test on Basic Theory of Accounting Concepts

“The enterprise will continue for a long time to cover the matching or accrued cost of fixed assets and other costs, to pay for liabilities and contractual commitments.” This theory holds true for which Accounting Concept?
Separate Entity Concept
Dual Aspect Concept
Going Concern Concept
Periodic Matching of Costs and Revenue Concept
“The Accounting Period Concept” implies:
At the end of fixed time interval or period, mostly a year, the financial position of the business is ascertained by preparing an Income Statement and Balance Sheet.
Every business transaction has a dual or double effect in the same year.
Revenue arises only when goods are sold i.e. the property in goods passes to the buyer and he becomes legally bound to pay for them in the same time span.
All liabilities, charges and expenses must be discharged during the period in which they arise and payments should not be released against them in the subsequent years.
The convention by which the same accounting practices should be followed by the business over the years, is called:
Materiality Concept
Full Disclosure Concept
Consistency Concept
Conservative Concept
/
1. a, 2. b, 3. c, 4. d
1. d, 2. c, 3. b, 4. a
1. b, 2. c, 3. a, 4. d
1. c, 2. b, 3. d, 4. a
The Mercantile System of Accounting is a system by which:
Merchants can quickly prepare accounts
The Accountant Debit what comes in and Credit what goes out
Amounts due for receipt and payment are taken into consideration while preparing accounts
Only cash entries are recorded in the books of accounts
/
a) 1, 2, 3; b) 4, 5; c) 6, 7
a) 2, 5, 7; b) 1, 4; c) 3, 6
a) 2, 5; b) 1, 3, 7; c) 4, 6
a) 1, 5; b) 6, 2, 4; c) 3, 7
Classify the Accounts involved in the given transactions into Real, Nominal or Personal Accounts: a)Salaries paid in cash INR 15000 b)Outstanding Salaries INR 5000
a) Salaries: Nominal Account, Cash: Nominal Account b) Salaries: Nominal Account, Outstanding Salaries: Real Account
a) Salaries: Real Account, Cash: Real Account b) Salaries: Real Account, Outstanding Salaries: Personal Account
a) Salaries: Nominal Account, Cash: Personal Account b) Salaries: Nominal Account, Outstanding Salaries: Real Account
a) Salaries: Nominal Account, Cash: Real Account b) Salaries: Nominal Account, Outstanding Salaries: Personal Account
Which of the following CAN NOT be classified as Goods Account:
Sale Account
Purchase Return Account
Selling Expenses Account
Purchase Account
The journal entry for Interest on Capital is:
Interest A/c Dr. To Interest on Capital A/c
Capital A/c Dr. To Interest A/c
Interest on Capital A/c Dr. To Capital A/c
Capital A/c Dr. To Interest on Capital A/c
Trading Account is:
An account prepared to ascertain the overall result of purchase and sale of goods as Gross profit or Gross loss.
An Account prepared to determine the cost of production of finished goods manufactured during a fixed period of time.
An account prepared to ascertain the effect of purchase and sale of goods in addition to the operating expenses and income earned as Net Profit or Net Loss
A statement of Assets and Liabilities showing the financial position on a particular date.
“Wages paid on the erection/instalment of new Machinery” should be debited to:
Installation Account
Machinery Account
Purchase Account
Wages Account
In case of an investment by the business, while making the Adjustment entry for Accrued Interest, the account debited is:
Income Account
Investment Account
Interest on Investment Account
Accrued Interest Account
/
a) 1, b) 2, c) 3
a) 1, b) 3, c) 2
a) 2, b) 3, c) 1
a) 3, b) 2, c) 1
Which of the following errors in preparing accounts will affect the Trial Balance:
Sales Return Journal is under cast by INR 2000
Wages INR 4000 paid for installation of Machinery debited to Wages Account
Amount INR 6000 paid to Amit wrongly debited to Aman’s Account
A Sale of INR 30000 to Mohit not mentioned in the books
The Purchase Return Journal is made to record:
Return of goods purchased for cash
Goods returned exchanged for other goods of the same value
Goods purchased from the party to whom goods were returned earlier
Return of goods purchased on credit
Which of the following is a Revenue Expenditure?
Purchase of premises for running the office
Purchase of Patent rights
Money spent on repair of existing working Machinery
Money spent on repairing Machinery damaged in transit from the place of purchase.
Which of the following is NOT a Deferred Revenue Expenditure:
Money spent on Advertisement for introducing a new line of product
Rent of new office paid in advance
Heavy amount of Premium on redemption of Preference Shares
Money realized from the sale of securities
Which of the following statements is False:
The two column Cash Book has one column for Cash and the other for discount
The three column Cash Book has columns for Discount, Cash and Bank on the left side and columns for Cash and Bank on the right side
In the Petty Cash Book, petty cash expenses like stationery and postage are charged against an advance balance of cash called Imprest
The discount column in the cash book are only totaled and not balanced.
The debit note is:
Sent by the Seller of goods to the Purchaser to confirm the sale of goods from the Seller to the Purchaser
Sent by the Seller of goods to the Purchaser of goods on return of goods by the Purchaser to the Seller
Sent by the Purchaser of goods to the Seller of goods on return of goods by the Purchaser to the Seller
Sent by the Purchaser of goods to the Seller to confirm the purchase of goods by the Purchaser from the Seller
There is a mistake in making entries. A sale of INR 10000 posted to Ashish’s Account is actually for INR 1000. The account affected is:
Sales A/c
Ashish A/c
Sales A/c and Ashish A/c
Cash A/c
Description:

Finance Test on Basic Theory of Accounting Concepts begins your test preparation from the basics of accounts. These basic concepts come handy not just after the 10th Grade, but at all stages from Graduation to Post Graduation and other entrance and finance related Exams like ICWA, Company Secretary, Chartered Financial Analyst and Chartered Accountancy. So, if it has been more than a year since you studied concepts like Journals, Ledgers, Trial Balance or the Final Accounts take this test to see how much you remember and can recall. Here is an objective type Finance Test on the Basic Theory of Accounting Concepts which you must take before you open up your big Accounting and finance books for learning or revising the basics. After you make an attempt, you get an assessment of the topics you really need to work upon.

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696 days 12 hours 33 minutes ago

Sujitha S

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2416 days 2 hours 35 minutes ago

Chandra Sain

THANKS FOR THIS TEST

3474 days 11 hours 14 minutes ago

Englishteacher Namrata Arora

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3487 days 7 hours 14 minutes ago

Englishteacher Namrata Arora

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3789 days 6 hours 54 minutes ago

Englishteacher Namrata Arora

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3793 days 6 hours 48 minutes ago

Englishteacher Namrata Arora

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3818 days 51 minutes ago

Vinia

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3997 days 1 hours 34 minutes ago

salma

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4008 days 8 hours 19 minutes ago

Englishteacher Namrata Arora
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