Test / Exam Name: Ch 1 Standard: 11th Commerce Subject: Accountancy

Student Name: Section: Roll No.:

Questions: 320 Time: 03:00 hh:mm Marks: 543

Q1. Which of the following will not be recorded in the books of account? 1 Mark
A Sales of goods. B Payment of salary. C Quality of staff. D Purchase of Goods.
Q2. Which of the following is capital expenditure? 1 Mark
A Wages. B Wages paid for building construction.
C Repair expenses of building. D Advertisement Expenses.
Q3. Purposes of an accounting system include ________. 1 Mark
A Interpret and record the effects of transactions. B Classifying the effect of transaction to facilitate
report preparations.
C Summarize and communicate information to D All of the above.
decision makers.
Q4. Which of the following is not an internal user of financial statements? 1 Mark
A Board of Directors. B Managers. C Employees. D Lenders.

Q5. Sale of goods to Ram for cash Rs.1000 is a ___________. 1 Mark

A Cash Transaction B Credit Transaction C Barter System D Internal Event
Q6. Which of the following transactions is not of financial character? 1 Mark
A Purchase of asset on credit. B Purchase of asset for cash.
C Withdrawing of money by proprietor from D Strike by Employees.
business.
Q7. A person to whom amount is payable is known as ___________. 1 Mark
A Creditor B Debtor C Bad debt D None of the above
Q8. A_______ would most likely use an entity's financial report to determine whether or not the business entity is 1 Mark
eligible for a loan.
A Creditor B Emplyoee C Mangement D None of the Above
Q9. Use of common unit of measurement and common format of reporting promotes________. 1 Mark
A Comparability B Understandability C Relevance D Reliability
Q10. ________ can be considered as the last stage of accounting process. 1 Mark
A Summarizing B Analysis C Classifying D Interpreting
Q11. Which of the following show the basic sequence of the accounting process? 1 Mark
A Transaction, journal entry, source document, B Source document, transaction, ledger account,
ledger account, trial balance. journal entry, trial balance.
C Transaction, source document, journal entry, trial D Transaction, source document, journal entry,
balance, ledger account. ledger account, trial balance.
Q12. The branch of accounts that deals with the calculation of unit cost of services is called. 1 Mark
A Cost Accounting B Management C Financial Accounting D All of the above
accounting
Q13. Systematically writing down the transactions and events in account books soon after their occurrence is 1 Mark
known as _________.
A Classifying B Recording C Summarizing D Numbering
Q14. Which of the following is not a limitation of accounting? 1 Mark
A Based on accounting conventions. B Evidence in Legal Matters.
C Incomplete Information. D Omission of Qualitative Informations.
Q15. ________ is used to mean a happening as a consequence of transaction(s). 1 Mark
A Event B Transaction C Dealing D Operations
Q16. Which of the following transactions will not be recorded in the books of account? 1 Mark
 A Purchased a LCD for personal use, paying the B Purchased machinery for manufacture.
amount from personal bank account.
C Purchased machinery for resale. D Paid salaries and wages.
Q17. In order to enable retailer earn profit and still sell goods at the list price, the manufacturers frequently grant 1 Mark
them substantial reduction from the list price. Such a reduction in price is called ________.
A Trade Discount B Cash Discount C Price Reduction D Subsidies
Q18. The withdrawal of goods from the business by the proprietor should be recorded in the __________. 1 Mark
A Drawing Account B Purchase Account C Capital Account D Profit and Loss Account
Q19. In general the financial year from shall be from ___________. 1 Mark
A 1st April of any year B 31st March of any year C All of them are true D None of these
Q20. Which of the following are internal users of accounting information? 1 Mark
A Board of directors B Partners C Managers D All of the above
Q21. Two primary qualitative characteristics of financial statements are _________. 1 Mark
A Understandability and Materiality B Relevance and Reliability
C Relevance and Understandability D Materiality and Reliability
Q22. Management accounting involves _____________. 1 Mark
A Preparation of financial statements B Analysis and interpretation of data
C Recording of transactions D Preparation of cost statements
Q23. Which of the following will be treated as drawings: 1 Mark
A Withdrawing money for payment of salary to B Withdrawing money for payment to creditors.
employees.
C Withdrawing money from business for private D Withdrawing money for purchase of asset.
expenses.
Q24. Who is the father of Double entry- Book Keeping? 1 Mark
A F.W. Taylor B Henry Fayol C Lucas Pacioli D None of the above
Q25. ______ users are groups outside the business entity, who uses the information to make decisions about the 1 Mark
business entity.
A Mangement B Emplyoee C Owner D External
Q26. Which external user of accounting information is most interested in knowing the long-term solvency position 1 Mark
of the firm?
A Employees. B Management.
C Bank and Financial Institutions. D Researchers.
Q27. Which of the following would be considered as an internal user of the financial statements? 1 Mark
A Shareholder B Credotor C Debtor D Finance Manager
Q28. In accounts recording is made of: 1 Mark
A Only Financial Transactions. B Only Non-financial transactions.
C Financial as well as non-financial transactions. D Personal transactions of the Proprietor.
Q29. Qualitative characteristic of Accounting includes: 1 Mark
A Reliability and Relevance. B Understandability and Comparability.
C Both (a) and (b). D None of the above.
Q30. _____________ is a post mortem of past costs. 1 Mark
A Financial accounting B Cost accounting C Both A and B D None of these
Q31. _____________ is a deduction from the list or catalogue price allowed by the wholesalers to the retailers for 1 Mark
various reasons.
A Trade discount B Special discount C Cash discount D None of the above
Q32. Which of the following is the example of external users of accounting information ______________. 1 Mark
A Government B Owners C Managemen D Employee
Q33. Accounts that are prepared in order to comply with statutory requirement and to cater the information 1 Mark
requirement of external users are known as:
A Management Accounts B Financial Accounts
C Management information systems D Cost accounts
Q34. Ghanshyam is a furniture dealer. Which one of the following will not be recorded in his books? 1 Mark
A Purchase of Timber for ₹ 350,000. B Sofa set worth 40,000 taken to his home.
 C Sale of household furniture for ₹ 5,000. D Dining table of ₹ 30,000. given to his friend as gift.
Q35. Accounting is defined as "the __________ of recording, classifying and summarizing in terms of money 1 Mark
transactions and events of a financial character and interpreting the results thereof".
A Art B Science C Method D None of these
Q36. Identify the external users of financial information or financial statements __________. 1 Mark
A Management of the business. B CFO of the business.
C Employees of the business. D Investors of the business.
Q37. Which of these processes are the function of book keeping? 1 Mark
A Summarising B Interpreting C Classifying D Communicating
Q38. The Double Entry System of accounting originated in _________. 1 Mark
A America B Russia C Italy D England
Q39. When a proprietor withdraw cash from the firm for self use, this is treated as ______. 1 Mark
A Loss B Drawing C Depreciation D Expenses
Q40. __________ includes identifying, recording, classifying and summarizing the transactions. 1 Mark
A Accounting posting B Accounting cycle C Tally of accounts D All of the above
Q41. Commodities bought for resale are treated as _________. 1 Mark
A Expenses B Stock C Goods D Assets
Q42. A person who owes money to the firm is called: 1 Mark
A Debtor. B Creditor. C Supplier. D None of these.
Q43. A person or entity to whom money is owned is known as ________. 1 Mark
A Creditor B Claimant C Bailee D Debtor
Q44. ____________is a reduction from the list price of goods and services on account of immediate or payment within 1 Mark
a stipulated period.
A Trade discount B Cash discount C Festival discount D Inaugural discount
Q45. Sale or purchase of goods or services for immediate cash payment is known as ____________ . 1 Mark
A Cash transaction B Credit transaction
C Non-monetary transaction D All of the above
Q46. The users of financial statements include _______. 1 Mark
A Shareholders B Government C Lenders D All of the above
Q47. Cash Discount is: 1 Mark
A Which is received at the time of making the B Which is allowed at the time of sale of goods.
payment.
C Which is received at the time of purchase of D Which is received both at the time of making
goods. payment and purchase of goods.
Q48. Which of the following is not a business transaction? 1 Mark
A Purchase of goods for resale amounted to B Paid salaries and wages amounted to ₹ 10,000.
₹ 50,000.
C Paid rent for office premises ₹ 5,000. D Purchased a LCD for personal use.
Q49. Stock should include _________. 1 Mark
A Goods held as security. B Goods held by the business as consignee.
C Goods with customers for approval on sale or D Goods sold but not yet delivered.
return basis.
Q50. _________is a reducing from the list price of goods and services on business consideration other than prompt 1 Mark
payment.
A Trade discount B Cash discount C Festival discount D Inaugural discount
Q51. A business transaction in which money comes into the business immediately after the goods are delivered or 1 Mark
services are rendered is called ____________.
A Cash Transaction B Credit Transaction C Black Money D Hawala Transaction
Transaction
Q52. Accounting gives the true picture of the organization's financial position. 1 Mark
A True B False C Irrelevant D Partiality false
Q53. Which of the following statements about differences between financial and managerial accounting is 1 Mark
incorrect?
 A Managerial accounting information is prepared B Financial accounting is aggregated; managerial
primarily for martial parties such as stockholders accounting is focused on products and
and creditors; financial accounting is directed at departments.
internal users.
C Managerial accounting pertains to both past and D Financial accounting is based on generally
future items; financial accounting focuses accepted accounting practices; managerial
primarily on past transactions and events. accounting faces no similar constraining factors.
Q54. Book Keeping is concerned with: 1 Mark
A Recording financial data relating to business B Designing for systems recording, classifying and
operations. summarising recorded data.
C Interpreting data for internal and external users. D All of the above.
Q55. At the end of financial year, during which sale of goods was worth ₹ 35,00,000, the closing stock is valued at 1 Mark
₹ 40,000. This is ......
A An event. B A transaction.
C Both an event as well as transaction. D None of (A) and (B).
Q56. __________ is the interest of the owners in a business. 1 Mark
A Capital B Assets C Liability D Income
Q57. Which definition of accounting is most appropriate now-a-days? 1 Mark
A Accounting involves only the recording of those B Accounting is the recording, classifying,
business transactions which are of financial summarising, analysing and interpreting the
character. business transactions which are of general
character.
C Accounting is the process of identifying, D Accounting is basically a scientific approach.
measuring and communicating economic
information to permit informed judgments and
decisions by the users of accounts.
Q58. Which of the following statements is not an objective of financial reporting? 1 Mark
A Provide information that is useful in investment B Provide information regarding policy of
and credit decisions. organisation.
C Provide information that is useful in assessing D None of these.
cash flow prospective.
Q59. An economic event that involves transfer of money or money's worth is a/are __________. 1 Mark
A Financial Transactions B Barter System C Settlements D Receipts/Payments
Q60. Dealings between two persons is a __________. 1 Mark
A Narration B Entry C Transaction D None of the above
Q61. Tangible Assets do not include: 1 Mark
A Goodwill. B Furniture. C Stock. D Cash.
Q62. Financial accounting use ________. 1 Mark
A Projected data B External data only C Historical data D Manager data only
Q63. Which of the following transaction is of a financial character and will be recorded in the business? 1 Mark
A Goods taken from the business by the proprietor B Interviewing the candidates for employment.
for her personal use.
C Sale of Household furniture ₹ 5,000. D Received an order for sales of goods.
Q64. Commodity purchased or produced for sale is known as ____________. 1 Mark
A Goods B Machinery C Land D None of the above
Q65. Which of the following is/are not the branch of accounting? 1 Mark
A Cost Accounting B Financial Accounting
C Human Resources Accounting D All of the above
Q66. Purchases refers to the buying of: 1 Mark
A Stationery for office use. B Assets for the factory.
C Goods of resale. D Investment.
Q67. Which qualitative characteristic of accounting information is reflected when accounting information is clearly 1 Mark
presented?
A Reliability. B Relevance. C Comparability. D Understandability.
Q68. Which of the following is one of the major professional accountancy bodies in the is__________. 1 Mark
A Institute of Chartered Accountants of India. B Chartered Association of Accountants.
C Indian Institute of Chartered Accounts. D Institute of Company Accountants.
Q69. Which of the following is the Capital expenditure? 1 Mark
A Wages paid for repair of building. B Wages paid for white washing of building.
C Wages paid for construction of building. D Wages paid for cleaning of building.
Q70. Amit is recording sales transactions in the accounting system so that they can be summarized in a logical 1 Mark
manner for the purpose of providing financial information for decision-making. Amit is doing ___________.
A Management B Review C Accounting D Auditing
Consulting
Q71. Accounting: 1 Mark
A Includes Book Keeping. B Does not include Book Keeping.
C May or may not include Book Keeping. D None of these.
Q72. The Branch of Accounting which is concerned with the processing and presenting data for decision making is 1 Mark
known as-
A Common Dollar Accounting B Social Accounting
C Cost Accounting D Management Accounting
Q73. ________ is the language of business and used to communicate financial and other information to different 1 Mark
interested parties like creditors, investors, researchers, governments etc.
A Accounting B Cost Accounting C Costing D Management
Accounting
Q74. Which of the following groups/ parties are interested in the accounting information of the business? 1 Mark
A Proprietors or owners B Creditors C Tax authorities D All of these
Q75. The work of book-keeping is of __________ nature. 1 Mark
A Competitive B Primary/ basic C Secondary D None of these
Q76. Cost of Goods Manufactured is determined by: 1 Mark
A Financial Accounting. B Cost Accounting.
C Management Accounting. D Human Resource Accounting
Q77. Financial accounting information is characterized by all of the following except ___________. 1 Mark
A It is historical in nature. B It is factual, so it does not require judgement to
prepare.
C It results from appropriate measures. D It is enhanced by managements explanation.
Q78. ________ is the last phase of Accounting process. 1 Mark
A Classification B Summarizing C Recording D Communication
Q79. Which of the following involves the preparation of reports and statements from the classified data (ledger) 1 Mark
understandable and useful to management and other interested parties?
A Classifying B Recording C Summarizing D All of the above
Q80. Financial accounting is concerned with recording of _______________. 1 Mark
A Business expenses and revenue. B Costs of products and services.
C Day to day business transactions. D None of the above.
Q81. Which of the following is not a sub-field/Branch of Accounting? 1 Mark
A Cost Accounting. B Management Accounting.
C Social Responsibility Accounting. D Automated Accounting.
Q82. Purpose of accounting is to provide financial information to _________. 1 Mark
A Shareholders B Tax authorities C Investors D All of these
Q83. Which of the following limitations of accounting states that accounts may be manipulated to conceal vital 1 Mark
facts:
A Accounting is not fully exact. B Accounting may lead to window dressing.
C Accounting ignores price level changes. D Accounting ignores qualitative elements.
Q84. Internal user is ________of the business entity. 1 Mark
A Bank B Compititors C Customer D Management

Q85. The primary qualities that make accounting information useful for decision making are_________. 1 Mark
 A Relevance and freedom from bias. B Reliability and Relevance.
C Comparability and consistency. D None of these.
Q86. Current Liabilities do not include: 1 Mark
A Bills Payable. B Creditors. C Outstanding Exp. D Debentures.
Q87. Drawing are deducted from ___________. 1 Mark
A Sales B Purchases C Returns outward D Capital.
Q88. Which of these process is/are not the function of Book Keeping? 1 Mark
A Summarising B Interpreting C Communicating D All the three
Q89. Book Keeping and Accounting: 1 Mark
A Means same and are used interchangeably. B Does not mean same and are not used
interchangeably.
C Means both (a) and (b). D None of the above.
Q90. Which of the following is the most relevant accounting information for taxation authorities? 1 Mark
A Cash Balance of the firm. B Book Value of the Fixed Assets.
C Credit Sales of the year. D Profit generated during the year.
Q91. When information about two different enterprises have been prepared presented in a similar manner, the 1 Mark
information exhibits the characteristics of______________.
A Verifiability B Relevance C Reliability D None of these
Q92. Accounting involves _________. 1 Mark
A Decision making for the management easy as B The records being put is a systematic pattern so
financial results can be compared. that any point of time they can be used.
C The financial information being stored in a D All of the above.
meaningful way for taxation purpose.
Q93. The person to whom goods are sold on credit is known as _____________. 1 Mark
A Creditor B Debtor C Borrower D None of these
Q94. Amount received after selling of goods or services is known as _________. 1 Mark
A Revenue B Cost C Income D None of the Above
Q95. A commodity in which a trader deals is known as ______. 1 Mark
A Property B Goods C Expenditure D Income
Q96. Information is said to be relevant if it is _______. 1 Mark
A Free from bias B Shows profit C Not consistent D All of the above
Q97. Business transaction in which cash is not paid or received immediately is known as ______________. 1 Mark
A Cash transaction B Non monetary transaction
C Credit transaction D Transaction in kind
Q98. Which of the following is not a sub-field of accounting? 1 Mark
A Financial accounting. B Book Keeping. C Management D Cost Accounting.
accounting.
Q99. Regulatory Agencies, interested as users of accounting information's includes __________. 1 Mark
A Various Government departments. B Agencies such as Company Law Board (CLB).
C Registrar of Companies (ROC). D All of the above.
Q100.Out of the following assets which one is NOT an intangible asset? 1 Mark
A Patents. B Investments. C Goodwill. D Trademark.
Q101.Which of the following is a limitation of accounting? 1 Mark
A Assistance to Management. B Replaces Memory.
C Unrealistic Information. D Evidence in Court.
Q102._______ defined Accounting as the art of recording, classifying and summarizing in a significant manner and in 1 Mark
terms of money, transactions and events which are, in part at least of a financial character, and interpreting
the results thereafter.
A The American Institute of Certified Public B Financial Accounting Standard Board.
Accounts.
C Institute of Certified Accountants of Wales. D Institute of Chartered Accountants of India.
Q103._______ is used to an economic event in accounting. 1 Mark
A Event B Transaction C Dealing D Operations
Q104.The basic objective of accounting is _______________. 1 Mark
A To maintain systematic records of financial B To ascertain financial performance.
transactions.
C To ascertain financial position. D All of Above.
Q105.All are false except _________. 1 Mark
A Cash withdrawal by the proprietor for self-use B Cash withdrawal by the proprietor for self-use is a
need not be accounted for in books of account. revenue expenses.
C Cash withdrawal by the proprietor for self-use is a D Cash withdrawal by the proprietor for self-use is a
capital expenditure expenses. drawing.
Q106.Accounting is a language of _________. 1 Mark
A Business B Commerce C Economics D None of these
Q107.Which is the last step of accounting as a process of information? 1 Mark
A Recording the transaction. B Preparation of financial statements.
C Communication of information. D Analysis and interpretation of information.
Q108.A person who owes money to the firm is ____________. 1 Mark
A A creditor B A debtor C An investor D A lender
Q109.Goods that will be used in production are considered as___________. 1 Mark
A Raw Materials B Work in Progress C Finished Goods D Inventory
Q110.The sale of merchandise to the customers is an: 1 Mark
A External event B Internal event C Social event D None of the above
Q111.Accounting covers only the following octillion __________. 1 Mark
A Rewriting and Classifying. B Recording, Classifying and Analysing.
C Analysing, Recording and Interpreting. D Identifying, Classifying, Recording, Summarising
and Communicating.
Q112.Which of the following would be considered as external users of accounting information's? 1 Mark
A Board of Directors B Shareholders C Finance manager D Sales manager
Q113.Which of these would be considered as external user of the financial statements? 1 Mark
A Board of directors B Shareholders C Finance manager D Production manager
Q114.Which of the following is a credit transaction? 1 Mark
A Sold goods B Sold goods for cash
C Sold goods to a customer for cash D Sold goods to a customer
Q115.State the fundamental steps in the accounting process __________. 1 Mark
A Identifying financial transaction B Recording the business transaction
C Classifying the business transaction D All of the above
Q116.Main feature of business transaction is: 1 Mark
A It involves an economic activity. B It results in a change in the financial position of the
firm.
C Change must be capable of being expressed in D All of the above.
terms of money.
Q117.The gross decrease is economic benefits to the enterprise is referred to as __________. 1 Mark
A Inflow B Cash outflow C Expense D Income
Q118.The term sales is used only for the sales of _______ and is never used for the sale of _______: 1 Mark
A Assets, Investments. B Assets, Goods.
C Intangible Assets, Goods. D Goods, Assets
Q119.If accounting information is based on facts and it is verifiable by documents it has the quality of..... 1 Mark
A Relevance. B Reliability. C Understandability. D Comparability.
Q120.Trade Discount is: 1 Mark
A Which is allowed at the time of receiving the B Which is allowed at the time of sale of goods.
payment.
C Which is allowed both at the time of receiving D Allowed in all of the above.
payment and sale of goods.

Q121.Total amount of goods and services withdrawn by the proprietor for self use is known as ____________. 1 Mark
 A Capital B Drawings C Expense D Income
Q122._______ is the first phase of accounting process. 1 Mark
A Classification B Summarizing C Recording D Communicating
Q123.The prime objective of accounting is to _________________. 1 Mark
A To record economic data B Provide the information basis of action
C Classifying and recording business transaction D Attainment of economic goal
Q124._______ is concerned with the transmission of summarized, analysed and interpreted information to the end 1 Mark
users to enable them to make rational decision.
A Summarizing B Analysis C Classifying D Communicating
Q125.External users of accounting information are not: 1 Mark
A Lenders. B Officers. C Employees. D Public.a
Q126.Which of the following is not characteristic of accounting information? 1 Mark
A Understandability B Relevance C Future transactions D Completeness
Q127.The correct sequence of accounting process is _________ . 1 Mark
A Identifying, classifying and recording. B Identifying, recording and communicating.
C Analysis, recording and summarizing. D Communicating, recording and interpreting.
Q128.In every business transaction, at least _______ parties are involved. 1 Mark
A Two B Three C Four D Six
Q129._______ is a liability that results from a purchase of goods or service. 1 Mark
A Accounts payable B Bills payable C Accounts receivables D Accrued liability
Q130.If presentation of financial information/statement or accounting policy is designed with a pre-designed motive 1 Mark
to influence the decision-making or judgement or achieve a pre-determined result or object, the financial
statement are not said to have satisfied the criteria of ___________.
A Relevance B Materiality C Neutrality D Substance over form
Q131.Accounting is a substitute of ________ . 1 Mark
A Recording B Book-keeping C Memory D None of these
Q132.Explain the term 'Goods' _________________. 1 Mark
A Manufactured for the purpose of sales to earn B Purchased for the purpose of sales to earn profit.
profit.
C Commodities into which seller trade. D All of the above.
Q133.Determining the debit and credit parts of a transaction is called ____________. 1 Mark
A Analyzing business transaction B Classifying the transaction
C Summarizing D Interpreting
Q134.Ram purchased goods of Rs. 10,000. This can be classified as _________. 1 Mark
A An Event. B A Transaction.
C A transaction as well as an event. D Neither a transaction nor an event.
Q135.Which of the following characteristics of accounting information primarily allows user of financial statements 1 Mark
to generate predictions about an organization?
A Reliability B Timeliness C Neutrality D Relevance
Q136.Which branch of Accounting is concerned with ascertainment and control of cost of business activities? 1 Mark
A Cost Accounting B Management Accounting
C Human Resource Accounting D Financial Accounting
Q137.Book-keeping is mainly concerned with: 1 Mark
A Recording of financial data. B Designing the systems of summarising the
recorded data.
C Interpreting the data for internal and external D Preparation of financial statements of the
users. business enterprise.
Q138.Excess of revenue over its cost _______________. 1 Mark
A Cost B Profit C Income D Loss
Q139._________ refers the amount invested by the owner into business. 1 Mark
A Loan B Advance C Capital D Prepaid expenses
Q140.Select the odd on in relation to users of accounting information. 1 Mark
 A Officers B Managers C Debtors D Board of directors
Q141.The term 'sales' is used only for the sales of _______ and is never used for the sale of ______. 1 Mark
Q142.State whether the following statements are True or False with reason: 1 Mark
Accounting Information must be reliable.
Q143.State whether the following statements are True or False with reason: 1 Mark
Accounting Information must be presented in such a way that only accounting people understand it.
Q144.The persons to whom money is owing by the firm are termed as _______. 1 Mark
Q145.Amount which the firm owes to outsiders is known as ______. 1 Mark
Q146.Accounting involves only the recording of business transactions. 1 Mark
Q147.Assets held for continued use in the business and not meant for resale are termed as _______. 1 Mark
Q148.Accounting is a service function. 1 Mark
Q149.Only those transactions are recorded in accounting which can be expressed in terms of money. 1 Mark
Q150.Accounts are prepared on the basis of historical costs. 1 Mark
Q151.Accounting is helpful in raising loans. 1 Mark
Q152.___________ are those assets which have a physical existence and which can be seen or felt. 1 Mark
Q153.______ refer to those liabilities which are to be paid normally within one year. 1 Mark
Q154.Accounting makes a record of qualitative aspects of business. 1 Mark
Q155.Book-keeping starts where accounting ends. 1 Mark
Q156.Amount which the proprietor has invested in a business is known as _______. 1 Mark
Q157.Management of an enterprise is internal user of its accounting information. 1 Mark
Q158.Accounting is not accepted as evidence in legal matters. 1 Mark
Q159.The persons who still owe some amount to the business are termed as ______. 1 Mark
Q160.State whether the following statements are True or False with reason: 1 Mark
Accounting may be influenced by the personal judgment.
Q161.Creditors are external users of accounting information. 1 Mark
Q162.Revenue means the income of a ______. 1 Mark
Q163.State whether the following statements are True or False with reason: 1 Mark
Financial Statements are not comparable.
Q164.Accounting may be affected by window dressing. 1 Mark
Q165.______ is the cost incurred in producing goods and services. 1 Mark
Q166.Accounting is the language of business. 1 Mark
Q167.A creditor would use an entitie's financial report to determine whether or not credit may be granted to the firm. 1 Mark
Q168.Explain briefly any five advantages of accounting. 6 Marks
Q169.What are types of Accounting? 6 Marks
Q170.State any six users of accounting information Why do they need accounting information? 6 Marks
Q171.Describe the informational needs of external users. 6 Marks
Q172.What is accounting? Define its objectives. 5 Marks
Q173.Explain the qualitative characteristics of accounting information. 5 Marks
Q174.Read the following hypothetical Case Study and answer the given questions: 5 Marks
Business Transactions are only recorded in the Accounting Books of a firm and no other transaction that
happens in the day to day functioning of the business. Now the question arises what exactly is the Business
transactions? To answer this basic question we need to see that the transaction fulfils the basic criteria. First
one being the transaction should be an economic activity, that is it should create an income for the firm or an
expense for it. Like we can say that the payment of salary to the staff is a business transaction but persuading
a customer to buy a product or hiring a staff for that matter is not a business transaction. Secondly, the
transaction should change the financial position of the firm, that is it should either raise the income of the firm
or create debt for the firm. For example, even if the goods are bought on credit, increasing creditors of the
firm, it is a business transaction as it is creating a debt for the firm. But obviously, praising a staff for his work
 to sell the product at a better profit, is not termed as business transaction although it motivates the employee
but does not result in changing the financial position of the firm. Lastly, the transaction should be able to be
expressed in terms of money.
Every business transaction lead to an event, that is a consequence of the transaction. Say for example, when
the goods bought for ₹ 30,000 is sold for ₹ 32,000, the profit ₹ 2,000 is the event. In other words, we can say
that event is what a transaction does for the business entity. Every transaction is supported by a document
that provides the authorisation and allows the transaction to be recorded in the books of accounts. It varies
from entity to entity and every transaction needs to have a separate uniquely numbered voucher. When we
talk of business transactions, everything inclusive of acquiring of assets, whether current or non-current, and
incurring of liability, whether internal, external, current or non-current, is present. The change in stock due to
sale or purchase whether cash or credit, the expenses incurred, and other revenue generated are all business
transactions, that are called events and have separate unique vouchers.
1. Business Transaction of _____________ nature.
1. Economic
2. Monetary
3. Financial
4. All of the above
2. Business Transactions leads to an _________, that is nothing but its consequence.
1. Event
2. Analyze transactions.
3. Record transactions to a journal.
4. Unadjusted trial balance.
3. Which of the following is not a business transaction?
1. Buying of Furniture.
2. Paying salaries of the accountant.
3. Giving a motivation speech to the employee.
4. Buying a good for personal use from the office money.
4. Every business transaction is accompanied by _______________ voucher.
1. Receipt voucher
2. Separate uniquely numbered
3. Debtor account
4. Creditor account
5. Pick the odd one out:
1. Bank Loan
2. Cash at Bank
3. Creditors
4. Bills Payable
Q175.Explain the factors which necessiated systematic accounting. 5 Marks
Q176.What do you mean by Financial Accounting? Explain the four main limitations of Financial Accounting. 5 Marks
Q177.Enumerate main objectives of accounting. 5 Marks
Q178.Write a short note on Double Entry System of Accounting. 5 Marks
Q179.Describe the role of accounting in the modern world. 5 Marks
Q180.What do you mean by an asset and what are different types of assets? 5 Marks
Q181.Explain the factors which necessitated systematic accounting. 5 Marks
Q182.What do you mean by Accounting? Explain in brief any four advantages of Accounting. 5 Marks
Q183.Distinguish between debtors and creditors; profit and gain. 4 Marks
Q184.Give any three examples of revenues. 4 Marks
Q185.Enumerate information needs of management. 4 Marks
Q186.Explain the primary objectives of Accounting. 4 Marks
Q187.Explain the meaning of any three of the following terms: 4 Marks
1. Assets.
2. Capital.
3. Goods.
4. Drawings.
5. Trade Receivables.
Q188.Define accounting. 4 Marks
Q189.Explain the meaning of any three of the following terms: 4 Marks
1. Liability.
2. Stock.
3. Business Transaction.
4. Drawings.
Q190.Briefly appreciate the exact nature of accounting. 4 Marks
Q191.State three limitations of accounting. 4 Marks
Q192.Explain the meaning of gain and profit. Distinguish between these two terms. 4 Marks
Q193.Explain the following terms with examples: 4 Marks
1. Capital Expenditure
2. Non-Current Assets
Q194.Name the qualitative characteristics of accounting information. Explain any two of them. 4 Marks
Q195.Giving examples, explain each of the following accounting terms: 4 Marks
Fixed assets
Revenue
Expenses
Short-term liability
Capital
Q196.Explain the following terms: 4 Marks
1. Revenue.
2. Trade Payables.
3. Fictitious Assets.
4. Working Capital.
Working Capital = Current Assets - Current Liabilities.
Q197.What is the difference between Book Keeping and Accounting? 4 Marks
Q198.Why assets are classified into current and non-current? 4 Marks
Q199.“Only financial transactions are recorded in Accountancy.” Explain the statement. 4 Marks
Q200.Why receipts are classified into capital and revenue? 4 Marks
Q201.What is Accounting? Explain four of its functions. 4 Marks
Q202.State what is the end-product of Financial Accounting. 3 Marks
Q203.“The role of accounting has changed over the period of time”- Do you agree? Explain. 3 Marks
Q204.Give the meaning of 'Accounting'. 3 Marks
Q205.What are the steps involved in the process of accounting? 3 Marks
Q206.Accounting provides information about the profitability and financial soundness of a concern. In addition, it 3 Marks
provides various other valuable information also. However, accounting has certain limitations. Explain any
three of such limitations.
Q207.What do you mean by Financial Accounting? Explain its one main function. 3 Marks
Q208.A firm follows a practice of giving the figures of previous year alongwith the figures of current year. Now the 3 Marks
Accountant of the firm wants to discontinue this practice. Do you justify this decision?
Q209.Distinguish between expenses and expenditure. 3 Marks
Q210.What is the reason that the capital expenditure is shown in the Balance Sheet? 3 Marks
Q211.Define revenues and expenses? 3 Marks
Q212.Define Book Keeping. What is the function of Book Keeping? 3 Marks
Q213.Define Accounting. Explain any two limitations of Accounting. 3 Marks
Q214.“The role of accounting has changed over the period of time". Explain. 3 Marks
Q215."Accounting information should be comparable”. Do you agreewith this statement? Give two reasons. 3 Marks
Q216.Distinguish between debtors and creditors. 3 Marks
Q217.Distinguish between profit and gain. 3 Marks
Q218.What is the primiary reason for the business students and others to familiarise themselves with the accounting 3 Marks
discipline?
Q219.Classify the following into: 3 Marks
1. Assets.
2. Liabilities.
3. Expenses.
4. Revenues.
Sales, Bank balance, Debtors, Bank Overdraft, Creditors, Salary to manager, Discount to debtors, Cost of
goods sold.
Q220.Give difference between Book-keeping and Accounting on the basis of stage, special skills and nature of job. 3 Marks
Q221.Distinguish between revenue expenditure and capital expenditure. 3 Marks
Q222.What is the primary reason for business students and others to study accounting discipline? 3 Marks
Q223.What are Fictitious Assets? 3 Marks
Q224.“Non-monetary transactions are not recorded in the books of accounts". Explain. 3 Marks
Q225.What is the process of Accounting? 3 Marks
Q226.What do you mean by Accounting? What are its main objectives? 3 Marks
Q227.How is accounting influenced by personal judgements? 3 Marks
Q228.Distinguish between fixed assets and current assets. 3 Marks
Q229.Why expenditure is classified into capital and revenue. 3 Marks
Q230.What is the meaning of recording in terms of money? 3 Marks
Q231.Explain 'Comparability' as qualitative characteristics of accounting information. 3 Marks
Q232.Explain any three objectives of accounting. 3 Marks
Q233.What is the function of Book Keeping? 3 Marks
Q234.What is Accounting Cycle? 3 Marks
Q235.Identify the stakeholder group who would be most interested in the following: 3 Marks
1. The ethical or environmental activities of the firm.
2. Whether the firm has a long-term future.
3. The ability of the firm to carry on providing quality products.
Q236.What are the attributes (features) of Accounting? 2 Marks
Q237.Why the following parties are interested in Accounting Information: 2 Marks
1. Investors.
2. Government?
Q238.What are Assets? 2 Marks
Q239.What is Trade Discount? 2 Marks
Q240.Distinguish between expenses and losses. 2 Marks
Q241.What are Liabilities? 2 Marks
Q242.What is Cash Discount? 2 Marks
Q243.What type of information is required by long-term lenders? 2 Marks
Q244.Give one point of distinction between Book-keeping and Accountancy. 2 Marks
Q245.Define Book Keeping. 2 Marks
Q246.Who are the internal users of accounting information? 2 Marks
Q247.Differentiate between Assets and Goods on the basis of any two points. 2 Marks
Q248.Discuss briefly the types of Accounting Information. 2 Marks
Q249.Name any two objectives of Accounting. 2 Marks
Q250.Name the branch of commerce, which keeps a record of monetary transactions in a sec of books. 2 Marks
Q251.What is a Voucher? 2 Marks
Q252.What are the informational needs of management? 2 Marks
Q253.‘Accounting information should be comparable’. Do you agree with this statement. Give two reasons. 2 Marks
Q254.Write one limitation of accounting. 2 Marks
Q255.Give two characteristics of a business transaction. 2 Marks
Q256.What is meant by Accounting? 2 Marks
Q257.What are the limitations of Accounting? (Any Two) 2 Marks
Q258.Name the external users directly concerned with accounting information. 2 Marks
Q259.What are the two accounting systems to record financial transactions in the books of account? 2 Marks
Q260.What are the advantages of Accounting? (Any Two) 2 Marks
Q261.Name any two external users of accounting inforrnation? 2 Marks
Q262.What are Current Assets? 2 Marks
Q263.Explain the meaning of Accounting. 2 Marks
Q264.What is meant by Purchases? 2 Marks
Q265.List any two functions of Accounting. 2 Marks
Q266.What is income? 2 Marks
Q267.Mention two advantages of accounting. 2 Marks
Q268.Name the branch of commerce, which keeps a record of monetary transactions in a set of books. 2 Marks
Q269.What is end product of financial accounting? 2 Marks
Q270.What are Drawings? 1 Mark
Q271.Is the basic objective of Book Keeping to maintain systematic records or to ascertain net results of operations 1 Mark
of financial transactions?
Q272.Give two examples of transactions which are not recorded in accounting. 1 Mark
Q273.Name the external user of accounting information from whom the firm purchases goods on credit. 1 Mark
Q274.Mr. Ganpati, the proprietor of a business, sold his residential house for 50 Lac. Will it be recorded in the books 1 Mark
of accounts?
Q275.‘Accounting information should be verifiable and free from personal Bias’. Name the qualitative characteristic 1 Mark
of accounting information denoted by this statement.
Q276.What is meant by Sales? 1 Mark
Q277.What is the first step of Accounting Process? 1 Mark
Q278.Give two examples of Tangible Assets. 1 Mark
Q279.How is profit or loss of a particular period is ascertained? 1 Mark
Q280.Mr. Vishwanath established a Travel Agency. Over the years the Travel Agency earned high reputation. Mr. 1 Mark
Vishwanath considers the value of goodwill of his Travel Agency at ₹ 50 lac. He wants to record the value of
the goodwill in the books of accounts. Can he do so?
Q281.Miss Priti. an electronic goods dealer, gifted a washing machine valued ₹ 325,000 to her friend Suruchi. Will it 1 Mark
be recorded in the books of accounts?
Q282.What is expense? 1 Mark
Q283.On 1st Jan., 2015, Mr. Vadera was appointed as Marketing Manager of the firm with a salary of ₹ 50,000 per 1 Mark
month. State whether this event will be recorded in the books of accounts.
Q284.Profit is earned on sale of Fixed Asset. What should be the accounting treatment of this profit? 1 Mark
Q285.Confidence and rust that the reported information is a reasonable representation of the actual items and 1 Mark
events, that have occurred, depicts which qualitative characteristic of accounting information.
Q286.Recording the transactions and events correctly and preparing financial statements are the only objectives of 1 Mark
accounting. Do you agree?
Q287.Define Merchandise. 1 Mark
Q288.Mr. Dinanath who owed us 350,000 became insolvent and paid only 40% of this amount. What is term used 1 Mark
for the amount not received?
Q289.Give two examples of Current Assets. 1 Mark
Q290.Give two examples of Intangible Assets. 1 Mark
Q291.How do we ascertain the financial position of the business? 1 Mark
Q292.Give two examples of Current Liabilities. 1 Mark
Q293.State the nature of information required by Investors. 1 Mark
Q294.Which qualitative characteristic of accounting information requires the use of common unit and common 1 Mark
format of reporting?
Q295.Accounting records transactions and events that can be measured in money terms. Is this, in your opinion, a 1 Mark
limitation of accounting or an advantage? Give reasons.
Q296.The accountant of the firm found an error in the books of accounts but neither he rectified the error nor 1 Mark
disclosed it to the management fearing that it will risk his job. Which value has been violated by the
accountant?
Q297.Resignation by a Marketing Manager is not recorded in the books of account. Why? 1 Mark
Q298.Recording of financial transactions and preparing the financial statements are the only objectives of 1 Mark
accounting. Do You agree?
Q299.Who are the external users of information? 1 Mark
Q300.What is revenue? 1 Mark
Q301.State the nature of accounting information required by long-term lenders. 1 Mark
Q302.A firm has received a large order to supply the goods. Will it be recorded in the books? 1 Mark
Q303.What is Capital? 1 Mark
Q304.Which type of accounting information shows profit earned or loss incurred? 1 Mark
Q305.Name any one external user of Accounting information. 1 Mark
Q306.Which of the following transactions are of financial character and will be recorded in the books? 1 Mark
1. Credit purchase of goods.
2. Strike by employees.
3. Goods worth ₹ 20,000 taken from the business and given by the proprietor to his friend as gift.
4. Withdrawing of money by proprietor from business for personal use.
5. Interviewing the candidates for employment.
6. Sale of household furniture for ₹ 10,000.
7. Payment of school fees of proprietor's son from proprietor's personal bank Account.
8. Make promise to send the goods.
9. Receiving an order to send the goods.
10. Loss of goods by fire.
11. Value of human resources.
Q307.Name any two users of accounting information. 1 Mark
Q308.Meena is owner of a Restaurant. She paid son's fees from her personal bank account ₹`20,000. Whether this 1 Mark
constitute her Business Transaction? Give reason.
Q309.Accounting records business transactions and events which are of financial nature. Do you consider it a 1 Mark
limitation of accounting?
Q310.What is the traditional function of Accounting? 1 Mark
Q311.What is meant by qualitative information? 1 Mark
Q312.Which value is most important for a good accountant? 1 Mark
Q313.Give two examples of revenue expenditure. 1 Mark
Q314.What are Internal Liabilities? 1 Mark
Q315.If the accounting information is not clearly presented, which of the qualitative characteristic of the accounting 1 Mark
information is violated?
Q316.What are Current Liabilities? 1 Mark
Q317.Mr. Jaspal Singh dealing in electronic goods sold 20 TV sets costing ₹ 30,000 each at 40,000 each. Out of 1 Mark
this ₹ 5,00,000 were received in cash and the balance is not yet received. State the amount of revenue.
Q318.Huge loss occurred due to the strike by employees. Will it be recorded? 1 Mark
Q319.Book Keeping is not a part of accounting. Do you agree with the statement? 1 Mark
Q320. 1 Mark
Godrej Ltd. imported from Germany one machinery for sale in India and another machinery for production
purpose. Will you treat them goods or fixed assets?