Please refer to Chapter 1 Introduction to Accounting MCQ Class 11 Accountancy with answers below. These multiple-choice questions have been prepared based on the latest NCERT book for Class 11 Accountancy. Students should refer to MCQ Questions for Class 11 Accountancy with Answers to score more marks in Grade 11 Accountancy exams. Students should read the chapter Introduction to Accounting and then attempt the following objective questions.

MCQ Questions Class 11 Accountancy Chapter 1 Introduction to Accounting

Introduction to Accounting MCQ Class 11 Accountancy provided below covers all important topics given in this chapter. These MCQs will help you to properly prepare for exams.

Question. Accounting provides information on
(a) Cost and income for managers
(b) Company’s tax liability for a particular year
(c) Financial conditions of an institutions
(d) All of the above

Question. The debts which are to be repaid within a short period (year or less) are known as
(a) Current liabilities
(b) Fixed liabilities
(c) Contingent liabilities
(d) All of the above

Question. Which of the following accounting equation is correct?
(a) Cash + Other assets = Capital – Liabilities
(b) Capital + Liabilities = Assets + Income
(c) Assets – Liabilities = Capital
(d) Assets + Capital = Liabilities

Question. General Journal is a book of _____ entries
(a) First
(b) Original
(c) Secondary
(d) Generic

Question. The following is (are) the type(s) of Journal
(a) Purchase Journal
(b) Sales Journal
(c) Cash Journal
(d) All of the above

Question. All the transactions measurable in the terms of money are recorded in accounts is according to
(a) business entity concept
(b) going concern concept
(c) money measurement concept
(d) accounting period concept

Question. Co-operative societies is an example of
(a) personal account
(b) real account
(c) nominal account
(d) representative personal account

Question. Which is the most important characteristic that all assets of a business have?
(a) Long life of assets
(b) Value of assets
(c) Intangible nature of assets
(d) Future economic benefits

Question. What is equity?
(a) Cash from the business
(b) Liability of a business
(c) Owner’s claim on total assets
(d) Owner’s claim on total liabilities

Question. A Master Budget consists of
(a) Sales budget
(b) Production budget
(c) Material budget
(d) All of the above

Question. A low Return on Investment Ratio (ROI) indicates
(a) Improper utilization of resources
(b) Over investment in assets
(c) Both A and B
(d) None of the above

Question. Commission paid is a
(a) personal account
(b) real account
(c) nominal account
(d) representative personal account

Question. Trading account is a
(a) personal account
(b) real account
(c) nominal account
(d) representative personal account

Question. In profit and loss account, if credit is more than the debit, the difference is
(a) net profit
(b) net loss
(c) gross profit
(d) gross loss

Question. Deepti wants to buy a building for her business today. Which of the following is the relevant data for his decision?
(a) Similar business acquired the required building in 2000 for Rs. 10,00,000
(b) Building cost details of 2003
(c) Building cost details of 1998
(d) Similar building cost in August, 2005 Rs. 25,00,000

Question. Use of common unit of measurement and common format of reporting promotes
(a) Comparability
(b) Understandability
(c) Relevance
(d) Reliability

Question. Book – keeping is-
(a) An art
(b) A science
(c) An art and science both
(d) None of these.

Question. There are _____________ parties to bill of exchange.
(a) five
(b) four
(c) three
(d) two

Question. If any asset is taken over by partner from firm his capital account will be __________.
(a) Credited
(b) Debited
(c) Added
(d) Divided

Question. Dissolution expenses are credited to __________ Account.
(a) Realisaton Account
(b) Cash / Bank Account
(c) Partner’s Capital Account
(d) Partner’s Loan Account

Question. Before acceptance the bill is called a _____________.
(a) Order
(b) Request
(c) Draft
(d) Instrument

Question. The closing balance of Receipts and Payments account usually represent _____________.
(a) Closing stock
(b) Cash and Bank balance
(c) Surplus
(d) Deficit

Question. Net-Profit Ratio is equal to ____________.
(a) Operating ratio
(b) Operating net-profit ratio
(c) Gross Profit Ratio
(d) Current Ratio

Question. The document inviting to subscribe the shares of a company is ____________ .
(a) Prospectus
(b) Memorandum of Association
(c) Articles of Association
(d) Share certificate

Question. The ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources
(a) Liquidity ratio
(b) Leverage ratio
(c) Activity ratio
(d) Profitability ratio

Question. The following is a statement showing the financial status of the comapany at any given time
(a) Trading account
(b) Profit & Loss statement
(c) Balance Sheet
(d) Cash Book

Question. Liquid or Quick assets =
(a) Current assets – (Stock + Work in progress)
(b)Current assets + Stock + Work in progress
(c) (Current assets + Stock) + Work in progress
(d) (Current assets + Work in progress) – Stock

Question. Identify the correct sequence of accounting process
(a) Communicating -> Recording -> Identifying
(b) Recording -> Communicating -> Identifying
(c) Identifying -> Communicating -> Recording
(d) Identifying -> Recording -> Communicating

Question. Lower the Debt Equity ratio
(a) Lower the protection to creditors
(b) Higher the protection to creditors
(c) It does not affect the creditors
(d) None of the above

Question. When there is no partnership agreement between partners, the division of profits take place in___________ratio.
(a) Equal
(b) Capital ratio
(c) initial contribution
(d) experience and tenure of Partners.

Question. The unpaid amount on allotment and calls may be transferred to ____________ account.
(a) calls in advance
(b) calls
(c) calls in arrears
(d) allotment

Question. Bookkeeping mainly consists of which part of accounting process?
(a) Analysing
(b) Preparing financial statements
(c) Recording financial information
(d) Auditing the books of accounts

Question. ________ is the first phase of accounting cycle
(a) Identifying an economic event or transaction
(b) Preparing Journal
(c) Posting entries to Ledger accounts
(d) Making decisions about business

Question. An asset must be ________ by the business to be shown as an asset in its balance sheet.
(a) Possessed
(b) Owned
(c) Controlled
(d) Used

Question. Identify the nominal account
(a) Machinery account
(b) Building account
(c) Creditors account
(d) Rent expenses account

Question. Capital of a business decreases if there is an increase in
(a) Drawings
(b) Income
(c) Gains
(d) Fresh capital

Question. Dividing the expenditure into capital and revenue is according to
(a) business entity concept
(b) going concern concept
(c) money measurement concept
(d) accounting period concept

Question. While putting the value or price of an entity in financial records the lowest price is recorded not the current price or current market value. This is known as
(a) Business Entity Concept
(b) Conservatism
(c) Cost Concept
(c) Money Measurement Concept

Fill In The Blanks 

Question. The Internet has assisted in decreasing the ———– in issuing financial reports to users.

Question. Information is said to be relevant if it is ———–

Question. Information in financial reports’is based on ———– transactions.

Question. ———– represents the excess of assets over liabilities.

Question. Machine of Rs. 6 00,000 was purchased at a commission of 10%. Total cost of machine will be Rs. ——–. 

Question. Amount not recovered from trade receivables on account there insolvency is known as ———– . 

Question. Assets which do not have physical existence and can’t be touched, seen but can be felt only are known as—————–. 

Question. Bank overdraft is an example of current liability and trade receivable is an example of—————–.

Question. Amount paid for the purchase of goods is an example of————-. 

Question. Anushka started business with cash Rs. 5,00,000, loan from friend. Rs. 2,00,000 and assets Rs. 7,00,000. Amount of Internal liability of Anushka is ——————-. 

Question. Assets used in the business for the purpose of re-sale are called ———–. 

Question. Double entry system of accounting involves two aspects———-and———-. 

Question. Qualitative characteristics of accounting include reliability, comparability, understand ability and———. 

Question. Paying salary to employee is a business transaction whereas paying salary to personal maid of owner is termed as—————. 

Question. Ansari sold goods costing Rs. 2 00,000 for Rs. 2 60,000 and received cash Rs. 2 43, 500 Amount of cash discount allowed will be————–. 

Question. Debtors + B/R + short term investments + marketable securities are examples of ————– Assets.

Question. Fixed assets are also known as ———————-. 

Question. Excess of current assets over current liabilities in known as————–. 

Question. Amount of cash invested in business is called capital whereas amount withdrawn from the business for personal use is known as————-. 

Question. Recording, classify and summarizing are also termed as————. 

Question. Liquid assets = Current assets–Prepaid expenses and———–. 

True / False

Question. Trade Discount is allowed to persuade the buyer to buy more goods. 

Question. Drawing increases the Capital of the Owner. 

Question. Goods remains at the end of accounting year is known as Closing Stock. 

Question. Resources minus Capital Equities is equal to Liabilities. 

Question. Trade Payable includes Creditors & Bills Receivable. 

Question. Account Receivables are considered as Income. 

Question. Complete process of Accounting is called Accounting Circle. 

Question. Amount received from sale of goods is example of Revenue. 

Question. Goodwill is Tangible Assets. 

Question. Inventory is valued at cost price or realisable value, whichever is more. 

Question. Purchase of Machinery is a capital transaction. 

Question. Bad Debts arise from Credit Sales. 

Question. Written Document for Credit Sale given by seller to buyer is known as Invoice. 

Question. Costs incurred by a business for earning revenue are known as Expenses. 

Question. GST stands for Goods & Sales Tax. 

Question. The excess of current liabilities over current assets is known as working capital. 

Question. Capital Expenditure is non – recurring and irregular. 

Question. Assets accounts normally have a credit balance. 

Match The Following

Question.

1. Irrecoverable amount from a debtor	A. Provisions
2. Total sale of a particular period	B. Bad debts
	C. Turnover
	D. Investment

Question.

1. Manipulation of accounts book	A. Book keeping
2. Primary stage	B. Fraud
	C. Window dressing

Question.

1. Common unit of measurement	A. Last step of accounting
2. Analysis and interpretation of information	B. Reliability
	C. Understandability
	D. Comparability

Question.

1. Expenses	A. Voucher
2. Invoice	B. Fictitious assets
	C. Rent
	D. Goods

Question.

1. Deferred revenue expenditure	A. Fixed assets
2. Winning a court case	B. Fictitious assets
	C. Profit
	D. Gain

Question.

1. Trade discount	A. Which is received at the time of making payment.
2. Cash discount	B. Deferred revenue expenditure
	C. Which is allowed at the time of sale

Question.

1. Purchase	A. Total revenue from goods and services
2. Sales	B. Goods for resale

Question.

1. Capital expenditure	A. Sale of assets
2. Revenue expenditure	B. Receiving Commission
	C. Payment of salary
	D. Purchasing of assets

Question.

1. Recording	A. Tangible asset
2. Goodwill	B. Journal
	C. Intangible asset
	D. Ledger

Question.

1. Reliability	A. Primary stage
2. Book keeping	B. Faithfulness

Question.

1. Deferred revenue expenditure	A. Manipulation of the accounts book
2.Window dressing	B. Salary
	C. Heavy advertisement expenditure
	D. Faithful presentation

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