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This set of Financial Accounting 2 Multiple Choice Questions & Answers (MCQs) focuses on Financial Accounting 2 Set 1
Q1 | All the transactions measurable in the terms of money are recorded in accounts is accordingto
- business entity concept
- going concern concept
- money measurement concept
- accounting period concept
Q2 | Dividing the expenditure into capital and revenue is according to
- business entity concept
- going concern concept
- money measurement concept
- accounting period concept
Q3 | While putting the value or price of an entity in financial records the lowest price is recordednot the current price or current market value. This is known as
- business entity concept
- conservatism
- cost concept
- money measurement concept
Q4 | Co-operative societies is an example of
- personal account
- real account
- nominal account
- representative personal account
Q5 | Outstanding salary account is a
- natural personal account
- artificial personal account
- representative personal account
- real account
Q6 | Interest earned is a
- personal account
- real account
- nominal account
- representative personal account
Q7 | Commission paid is a
- personal account
- real account
- nominal account
- representative personal account
Q8 | Trading account is a
- personal account
- real account
- nominal account
- representative personal account
Q9 | Profit and loss account is a
- personal account
- real account
- nominal account
- representative personal account
Q10 | All revenue incomes are credited to
- manufacturing account
- trading account
- profit and loss account
- balance sheet
Q11 | In profit and loss account, if credit is more than the debit, the difference is
- net profit
- net loss
- gross profit
- gross loss
Q12 | The process of recording financial data upto trial balance is
- book keeping
- classifying
- summarising
- analyzing
Q13 | In income measurement & recognisation of assets & liabilities which of the followingconcepts goes together?
- periodicity, accural, matching
- cost, accural, matching
- going concern, cost, realization
- going concern, periodicity, reliability
Q14 | Interpretation means
- explanation of meaning and significance of the data in financial statements.
- concerned with preparation and presentation of classified data
- systematic analysis of recorded data
- methodical classification of data given in financial statements.
Q15 | Which of the following is wrong?
- all real and personal accounts are transferred to balance sheet
- nominal accounts are transferred to p & l account
- each account is opened separately in ledger
- rent is a personal account, outstanding rent is nominal account
Q16 | _______ is root cause for financial accounting
- stewardship accounting
- social accounting
- management accounting
- human resource accounting
Q17 | The proprietor of the business is treated as creditor for the capital introduced by him dueto_____ concept.
- money measurement
- cost
- entity
- dual aspect
Q18 | Fixed assets are held by business for _____
- converting into cash
- generating revenue
- resale
- none of the above
Q19 | Which accounting concept specifies the practice of crediting closing stock to the tradingaccount?
- cost
- realisation
- going concern
- matching
Q20 | Amount spent to increasing the earning capacity is a ______ expenditure
- capital
- revenue
- deferred revenue
- capital loss
Q21 | Human resources will not appear in the balance sheet according to ______ concept.
- accrual
- going concern
- money measurement concept
- none
Q22 | Provision for discount on debtors is calculated on the amount of debtors.
- before deducting provision for doubtful debts.
- after deducting provision for doubtful debts.
- before deducting actual debts and provision for doubtful debts.
- after adding actual bad and doubtful debts.
Q23 | Which of the following is not a Real Account?
- cash a/c
- investments a/c
- outstanding rent a/c
- purchases a/c
Q24 | Value of goods withdrawn by the proprietor for his personal use should be credited to ____
- capital a/c
- sales a/c
- drawings a/c
- purchases a/c
Q25 | Which of the following is incorrect?
- good will – intangible asset
- sundry debtors – current asset
- loose tools - tangible fixed asset
- outstanding expenses – current asset