Chapter Exam

Chapter 2 ACCOUNTANCY : Accounting Principles — Online MCQ Test

Q: Which accounting principle states that a business will continue to operate for an indefinite period?

Answer: B. Going Concern — The Going Concern concept assumes that the business will continue its operations for a long time in the future.

Q: Which of the following is NOT a fundamental accounting assumption?

Answer: D. Full Disclosure — Going Concern, Consistency, and Accrual are considered the three fundamental accounting assumptions under GAAP.

Q: If a business owner takes cash from the business for personal use, which principle separates this from business expenses?

Answer: C. Business Entity Concept — The Business Entity concept treats the owner and the business as distinct and separate entities.

Q: If an accountant omits a minor stationery purchase of Rs. 10, it is justified by which concept?

Answer: B. Materiality — The Materiality principle allows for minor items to be ignored if they do not significantly affect financial decision-making.

Q: When a company chooses to change its method of depreciation, it must be disclosed as per which convention?

Answer: B. Full Disclosure — While consistency requires uniformity, if a change is made, full disclosure is mandatory to explain the impact on financial statements.

ACCOUNTANCY · CLASS 11 INTER I YEAR · Andhra State Board

Practice Chapter 2 ACCOUNTANCY : Accounting Principles with a free chapter-wise online MCQ test for Andhra State Board CLASS 11 INTER I YEAR ACCOUNTANCY. This chapter covers: This chapter details GAAP accounting concepts including going concern consistency accrual entity money measurement alongside basic accounting conventions.. AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 2 ACCOUNTANCY : Accounting Principles — Important Questions & Answers (FAQ)

Frequently asked questions from Andhra State Board CLASS 11 INTER I YEAR ACCOUNTANCY — Chapter 2 ACCOUNTANCY : Accounting Principles, with answers and explanations. These are sample questions; the exam has its own separate question set.

Which accounting principle states that a business will continue to operate for an indefinite period?

A. Consistency
B. Going Concern ✓
C. Accrual
D. Prudence

Answer: B. Going Concern
The Going Concern concept assumes that the business will continue its operations for a long time in the future.

Which of the following is NOT a fundamental accounting assumption?

A. Going Concern
B. Consistency
C. Accrual
D. Full Disclosure ✓

Answer: D. Full Disclosure
Going Concern, Consistency, and Accrual are considered the three fundamental accounting assumptions under GAAP.

If a business owner takes cash from the business for personal use, which principle separates this from business expenses?

A. Matching Concept
B. Dual Aspect Concept
C. Business Entity Concept ✓
D. Periodicity Concept

Answer: C. Business Entity Concept
The Business Entity concept treats the owner and the business as distinct and separate entities.

If an accountant omits a minor stationery purchase of Rs. 10, it is justified by which concept?

A. Consistency
B. Materiality ✓
C. Going Concern
D. Objectivity

Answer: B. Materiality
The Materiality principle allows for minor items to be ignored if they do not significantly affect financial decision-making.

When a company chooses to change its method of depreciation, it must be disclosed as per which convention?

A. Consistency
B. Full Disclosure ✓
C. Prudence
D. Objectivity

Answer: B. Full Disclosure
While consistency requires uniformity, if a change is made, full disclosure is mandatory to explain the impact on financial statements.