# Unseen Passage

For Class 4 to Class 12

# Theory Base of Accounting MCQ Class 11 Accountancy

Please refer to Chapter 2 Theory Base of 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 Theory Base of Accounting and then attempt the following objective questions.

## MCQ Questions Class 11 Accountancy Chapter 2 Theory Base of Accounting

Theory Base of 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. Salary paid to partner should be:
(a) Debited to his current account
(b) Credited to his current account
(c) Credited to profit & loss appropriation A/c
(d) None of these

C

Question. Capital Expense from %
(a) Decrease Asset
(b) Decrease Liabilities
(c) Increase Asset
(d) None of these

C

Question. Expense on installation of new machinery %
(a) Capital Expense
(b) Capital Loss
(c) Revenue Expense
(d) Revenue Loss

A

Question. Under ___ method, the balance of the capital account fluctuates from year to year.
(a) Fixed capital account
(b) Current account
(c) Fluctuating capital account
(d) Floating capital account

C

Question. Which of the following account will be credited when interest on capital is charged against the distribution of profit?
(a) Interest account
(b) Partner`s capital account
(c) Profit & loss account
(d) Profit & loss appropriation account

B

Question. Debit word is %
(a) French Language
(b) Latin Language
(c) Hindi Language
(d) English Language

B

Question. What is the amount of Interest on drawings for Ram at 10% p.a. for the Year ended 31st March 2018, if he withdrew Rs 6000 in the middle of each quarter.
(a) Rs 1500
(b) Rs 1200
(c) Rs 900
(d) None of these

B

Question. Is given to businessman when clear his payment before certain period ?
(a) Cash Discount
(b) Special Discount
(d) None of these

A

Question. Appropriations are the transactions that happen between firm and partners in the capacity of ___________
(a) Partner
(b) Outsider
(c) Either A or B
(d) None of these

A

Question. The primary qualities that make accounting information useful for decision-making are
(a) Relevance and freedom from bias
(b) Reliability and comparability
(c) Comparability and consistency
(d) None of the above

B

Question. The primary qualities that make accounting information useful for decision-making are
(a) Relevance and freedom from bias
(b) Reliability and comparability
(c) Comparability and consistency
(d) None of the above

B

Question. A concept that a business enterprise will not be sold or liquidated in the near future is known as :
(a) Going concern
(b) Economic entity
(c) Monetary unit
(d) None of the above

A

Question. As per Income Tax Act, accounting period is :
(a) From 1st January to 31st December
(b) From 1st April to 31st March
(c) From 1st July to 30th June
(d) From Diwali to Diwali

B

Question. A liability arises because of:
(a) Credit transaction
(b) Cash transaction
(c) None of the options
(d) Cash and credit transaction

A

Question. As per Income Tax Act, accounting period is :
(a) From 1st January to 31st December
(b) From 1st April to 31st March
(c) From 1st July to 30th June
(d) From Diwali to Diwali

B

Question. Among the following assets, which one is fictitious asset?
(a) Debit balance of Profit &loss A/c
(b) Goodwill
(c) Patents
(b) Oil wells

A

Question. Goods means :
(a) Commodity to be bought and sold
(b) Commodity to be used as an asset
(c) Commodity to be bought but not to be sold
(d) None of these

A

Question. Current Assets is %
(a) Land
(b) Building
(c) Machinery
(d) Stock

D

Question. Current Liabilities is %
(a) Creditors
(b) Debentures
(c) Long-term Loan
(d) None of these

A

Question. Which of the following is not a current asset ?
(a) Prepaid Expenses
(b) Debtors
(c) Furniture
(d) Bills Receivable

C

Question. Repair charge of office old furniture is %
(a) Revenue Expense
(b) Capital Expense
(c) Both Revenue & Capital Expense
(d) None of these

A

Question. Capital profit is profit %
(a) Profit & Loss A/c of Business
(b) Sale of fixed asset
(c) Sale of goods
(d) None of these

B

Question. Which of the following is not a tangible asset ?
(a) Motor Car
(b) Goodwill
(c) Stock
(d) Building

B

Question. Working Capital is %
(a) Current Assets – Current Liabilities
(b) Current Assets + Current Liabilities
(c) Current Assets + Fixed Assets
(d) None of these

A

Question. Building A/c is related to %
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) None of these

B

Question. Interest A/c is %
(a) Nominal A/c
(b) Real A/c
(c) Personal A/c
(d) None of these

A

(a) Allowed at the time of receiving payment
(b) Allowed at the time of sale of goods
(c) Both ‘A’ and ‘B’
(d) Allowed in all the cases)

B

Question. Cash discount is :
(a) Allowed at the time of sale of goods
(b) Received at the time of making payment
(c) Received at the time of purchase of goods
(d) All the above

B

Question. Non-current Assets is %
(a) Building
(b) Stock
(c) Debtors
(d) Prepaid Expense

A

Question. Arun is a Book-seller, which item will be goods for his business ?
(a) Purchase of Computer
(b) Purchase of Fan
(c) Purchase of Furniture
(d) Purchase of Stationery

D

Question. What change does profit makes to capital?
(a) All of these
(b) Profit gets added to the capital
(c) Profit has no change to capital
(d) Profit gets reduced from capital

B

Question. During the lifetime of an entity accounting produce financial statements in accordance with which basic accounting concept:
(a) Conservation
(b) Matching
(c) Accounting period
(d) None of the above

C

Question. Salary A/c is related to %
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) Capital A/c

C

Question. Investment A/c is related to %
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) None of these

B

Question. Formula of Liquid Assets %
(a) Current Assets – Stock + Prepaid Expense
(b) Current Assets – Current Liabilities
(c) Current Assets + Stock + Prepaid Expense
(d) None of these

A

Question. Under this method, only 1 account i.e. partner`s capital account is maintained. This method is :
(a) .Normal
(b) Floating
(c) Fixed
(d) Fluctuating

d

Question. Long-term Liabilities %
(A) Debentures
(B) Bills Payable
(C) Creditors
(D) Outstanding Expenses

A

Fill In The Blanks

Question. Outstanding and prepaid expenses are adjusted according to _______ basis of accounting.

Accrual

Question. A Ltd. had shown a contingent liability of Rs 2,00,000 as footnote after it’s Balance Sheet. After analysing Balance Sheet of A Ltd., B Ltd. purchased this running business without any further enquiry. A Ltd. had prepared it’s books by strictly following ________________ convention.

Full Disclosure

Question. IASB stands for ________.

International Accounting Standard Board

Question. GAAP stands for _______.

Generally Accepted Accounting Principles

Question. A business purchased goods for Rs 2,00,000 and sold 75% of the goods during accounting year ended 31st March, 2019. The market value of remaining goods was Rs 48,000. He valued closing stock at cost. While recording he violated ____________ concept.

Prudence

Question. The closing stock is valued at cost price or market price whichever is _________.

lower

Question. Aman and Raman are creating 5% provision for doubtful debts keeping in mind ___________ principle of accounting.

Conservatism

Question. Devdhar keeps record of his assets according to market value, probably he does not know about _________ concept.

historical cost

single

Question. A charitable institution follows _________ basis of accounting.

Cash

Question. Posting into Ledger comes under _____________ step of accounting process.

Classifying

Question. X Ltd. produces its financial statements on 31st March every year in accordance to ____________ concept.

Accounting Period

Question. Depreciation is charged under __________ basis of accounting.

accrual

Question. Salary paid Rs 55,000 and outstanding Rs 5,000. At the time of passing journal entry Rs __________ amount will be debited in Salary A/c due to accrual concept.

Rs 60,000

Question. Anant charged depreciation on his Fixed Assets of Rs 8,50,000 @ 10% p.a. in year 2018. He then charged depreciation in year 2019 at the rate of 12% p.a. Management is facing problem in comparing the data in consecutive years. To solve this problem, Anant should learn about _____ Assumption of accounting.

Consistency

Question. “Do not anticipate any profit but provide for all losses” the statement justify the ______________ concept.

Prudence

True /False

Question. Accounting Principles are static in nature.

False

Question. A firm recorded the market value of asset in the financial statement has violated one of the principle of Accounting.

True

Question. Single entry system is a complete, accurate and most reliable system of maintaining records of financial transactions.

False

Question. Due to Dual Aspect Principle, the contingent Liabilities are shown as a foot note in the Balance Sheet.

False

Question. Can a Business firm record 10 chairs, 10 tables, a building have 10 rooms?

False

Question. To uniform Accounting policies and procedures almost all countries have agreed to apply IFRS. But the name of IFRS has been converged as Ind AS.

True

Question. A firm sold goods on credit of Rs 50,000 in the month of January and collected the amount in the month of April. Accountant record this sale in the month of April following Accrual basis of Accounting. Is he correct in doing so.

False

Question. According to Matching Concept, Expense of Rs 20,000 incurred in financial year 2017-2018 but paid in the year 2018-19 considered expense for the year 2017-2018.

True

Question. During the Financial year 2018-2019 ABC firm had Cash sales Rs 1,00,000 and Credit sales Rs 20,000. His expenses for the year were Rs 50,000 out of which Rs 30,000 is still to be paid. So according to Cash Basis of Accounting income of ABC firm is 70,000.

False

Question. Machinery was purchased for Rs 50 lakh. An amount of Rs 1, 00,000 was spent on transporting the machinery to factory site, Rs50, 000 spent on its installation. The total amount at which the Machinery will be recorded is 51, 50,000.

True

Question. Due to consistency Concept, accounting practices once selected and adopted, should be applied year after year.

True

Question. Under Dual Aspect, every transaction has two aspects one Debit and another Credit.

True

Question. A firm was charging depreciation on its asset according to SLM now changed to WDV but firm did not disclose this information in its financial statements. This has violated the Materiality principle of accounting.

True

Question. Due to consistency Concept, accounting practices once selected and adopted, should be applied year after year.

True

Question. Since the life of business is assumed to be indefinite the financial statement of the business should be prepared only when it goes into liquidation.

False

Question. As per Dual Aspect Principle Capital = Assets + Liabilities.

False

Question. The market value may vary from person to person and from place to place, thus objectivity cannot be maintained if such value is adopted for accounting purpose.

True

Question. The full form of Indian AS is Indian Accounting Services,

False

Match The Following

Question .

1-a, 2-b

Question .

1-a, 2-b

Question.

1-b, 2-a

Question.

1-a, 2-b

Question.

1-b; 2-a

Question.

1-a; 2-a

Question.