Vidaara.orgClass 11 · Mathematics
CodeVID-M11-WS
Theory Base of Accounting — Practice Worksheet
Name: ____________________
Roll No.: __________
Date: ____________
General Instructions
- All questions are compulsory.
- Choose the correct option (A, B, C or D) for each question.
- The answer key is at the end — try the paper first!
Section A — Multiple Choice (1 mark each)
15 × 1 = 15 marks
1.
GAAP stands for:
- A.General Accounts And Profit
- B.Generally Accepted Accounting Principles
- C.Government Approved Accounting Policy
- D.Global Accounting And Profit
2.
The business is treated as separate from its owner under the:
- A.Cost concept
- B.Business entity concept
- C.Matching concept
- D.Materiality convention
3.
Only transactions measurable in money are recorded under the:
- A.Money measurement concept
- B.Going concern concept
- C.Dual aspect concept
- D.Accrual concept
4.
Assets are shown at cost less depreciation because of the:
- A.Conservatism convention
- B.Going concern concept
- C.Materiality convention
- D.Realisation concept
5.
Every transaction has two aspects of equal amount under the:
- A.Dual aspect concept
- B.Cost concept
- C.Money measurement concept
- D.Disclosure convention
6.
The accounting equation is:
- A.Assets = Liabilities − Capital
- B.Assets = Liabilities + Capital
- C.Capital = Assets + Liabilities
- D.Assets + Capital = Liabilities
7.
Recording revenue when goods are sold rather than when cash is received is the:
- A.Matching concept
- B.Revenue recognition concept
- C.Cost concept
- D.Consistency convention
8.
Matching a period's expenses with its revenues is the:
- A.Matching concept
- B.Materiality convention
- C.Entity concept
- D.Objectivity concept
9.
'Anticipate no profit but provide for all possible losses' is the convention of:
- A.Consistency
- B.Conservatism
- C.Full disclosure
- D.Materiality
10.
Following the same methods year after year is the convention of:
- A.Consistency
- B.Conservatism
- C.Objectivity
- D.Disclosure
11.
Closing stock is valued at cost or net realisable value, whichever is:
- A.Higher
- B.Lower
- C.Average
- D.Doubled
12.
The three fundamental accounting assumptions (AS-1) are going concern, accrual and:
- A.Cost
- B.Consistency
- C.Materiality
- D.Dual aspect
13.
Indian accounting standards converged with IFRS are called:
- A.GAAP
- B.Ind AS
- C.GST
- D.ICAI
14.
Under the cash basis of accounting, an expense is recorded when:
- A.It is incurred
- B.Cash is actually paid
- C.Goods are sold
- D.The year ends
15.
The basis of accounting required by the Companies Act is the:
- A.Cash basis
- B.Accrual (mercantile) basis
- C.Hybrid basis only
- D.No basis
Section B — Challenge / Olympiad (2 marks each)
10 × 2 = 20 marks
16.
A proprietor uses business cash to pay his son's school fees and records it as a business expense. Which concept has he violated?
- A.Business entity concept
- B.Going concern concept
- C.Dual aspect concept
- D.Matching concept
17.
A firm values its building at the current market price of Rs 90 lakh instead of its Rs 60 lakh cost. This breaches the:
- A.Cost concept
- B.Realisation concept
- C.Consistency convention
- D.Materiality convention
18.
A trader treats a credit sale of 28 March as income of the next year because cash came in April. The concept ignored is:
- A.Revenue recognition (realisation)
- B.Going concern
- C.Materiality
- D.Entity
19.
Why does the matching concept require us to add outstanding salaries while preparing final accounts?
- A.So the full expense of the period is matched against the period's revenue
- B.To increase profit
- C.Because cash was paid
- D.To follow the cash basis
20.
A company creates a provision for doubtful debts even though no debtor has yet failed to pay. This reflects:
- A.Conservatism (prudence)
- B.Going concern
- C.Materiality
- D.Cost concept
21.
A firm changes its depreciation method every year to show whatever profit it likes. Which convention does this defeat?
- A.Consistency
- B.Conservatism
- C.Full disclosure
- D.Objectivity
22.
Recording a Rs 40 stapler as an expense at once instead of depreciating it over years is justified by:
- A.Materiality convention
- B.Cost concept
- C.Going concern
- D.Realisation
23.
Which statement about the going concern concept is correct?
- A.It assumes the firm will continue for the foreseeable future
- B.It assumes the firm will close next month
- C.It records only cash items
- D.It splits life into periods
24.
Under the cash basis, a business that sold heavily on credit but received little cash would report:
- A.Understated profit, because credit sales are ignored until received
- B.Exactly true profit
- C.Higher profit than accrual
- D.No sales at all ever
25.
If a firm does NOT follow one of the fundamental accounting assumptions, AS-1 requires that it:
- A.Disclose the fact
- B.Hide it
- C.Close the business
- D.Switch to the cash basis
Answer Key
Section A — Multiple Choice (1 mark each)
- (B) Generally Accepted Accounting Principles
- (B) Business entity concept
- (A) Money measurement concept
- (B) Going concern concept
- (A) Dual aspect concept
- (B) Assets = Liabilities + Capital
- (B) Revenue recognition concept
- (A) Matching concept
- (B) Conservatism
- (A) Consistency
- (B) Lower
- (B) Consistency
- (B) Ind AS
- (B) Cash is actually paid
- (B) Accrual (mercantile) basis
Section B — Challenge / Olympiad (2 marks each)
- (A) Business entity concept
- (A) Cost concept
- (A) Revenue recognition (realisation)
- (A) So the full expense of the period is matched against the period's revenue
- (A) Conservatism (prudence)
- (A) Consistency
- (A) Materiality convention
- (A) It assumes the firm will continue for the foreseeable future
- (A) Understated profit, because credit sales are ignored until received
- (A) Disclose the fact
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