Chapter 2: Conceptual Framework of Accounting — Online MCQ Test
ACCOUNTANCY · CLASS 11th · Tamil Nadu State Board
Practice Chapter 2: Conceptual Framework of Accounting with a free chapter-wise online MCQ test.
This chapter covers: Focusing on accounting principles this chapter details fundamental accounting concepts conventions and accounting standards. Students study double entry system mechanics principles....
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Chapter 2: Conceptual Framework of Accounting — Important Questions & Answers
Which accounting concept assumes that a business will continue to exist for a long period?
- A. Going concern concept
- B. Business entity concept
- C. Accounting period concept
- D. Matching concept
Answer: A. Going concern concept
The going concern concept assumes that the enterprise has neither the intention nor the necessity of liquidation in the foreseeable future.
The going concern concept assumes that the enterprise has neither the intention nor the necessity of liquidation in the foreseeable future.
Which of the following is an example of the 'Business Entity' concept?
- A. Personal expenses of the owner paid from business cash
- B. Recording depreciation on machinery
- C. Calculating closing stock at cost or market price
- D. Recording transactions only in terms of money
Answer: A. Personal expenses of the owner paid from business cash
The business entity concept treats the owner and the business as distinct entities, so personal expenses must be separated from business expenses.
The business entity concept treats the owner and the business as distinct entities, so personal expenses must be separated from business expenses.
According to the Dual Aspect concept, every transaction must affect at least:
- A. One account
- B. Two accounts
- C. Three accounts
- D. Four accounts
Answer: B. Two accounts
The Dual Aspect concept states that every transaction has a two-fold effect, affecting at least two accounts (debit and credit).
The Dual Aspect concept states that every transaction has a two-fold effect, affecting at least two accounts (debit and credit).
If a businessman buys a pen for office use and treats it as an expense, this is an application of:
- A. Materiality
- B. Cost concept
- C. Going concern
- D. Dual aspect
Answer: A. Materiality
Because a pen has a small value, it is not treated as a fixed asset but as a revenue expense due to the materiality concept.
Because a pen has a small value, it is not treated as a fixed asset but as a revenue expense due to the materiality concept.
If a company decides to show a contingent liability as a footnote rather than in the balance sheet, it is following:
- A. Prudence and Full Disclosure
- B. Consistency and Materiality
- C. Dual Aspect and Cost
- D. Going Concern and Accrual
Answer: A. Prudence and Full Disclosure
Prudence requires acknowledging the potential loss, and Full Disclosure requires showing this information in the notes to the financial statements.
Prudence requires acknowledging the potential loss, and Full Disclosure requires showing this information in the notes to the financial statements.