Accounting Principles & Accounting Concepts – 40 Easy MCQs

Accounting Principles & Accounting Concepts

Here are the 40 Solved MCQs of Accounting Principles & Accounting Concepts of Commerce. These MCQs develop your concept and help to improvise your exams preparation.

1-10 Solved MCQs – Accounting Principles & Accounting Principles

  1. According to going concept, a business is viewed as having a / an
    • Indefinite Life
    • Definite Life
    • Very Long Life
    • Limited Life
  2. The comparison of net profit with the sales of the same year is
    • Horizontal Comparison
    • Two-Dimensional Comparison
    • Vertical Comparison
    • Three-Dimensional Comparison
  3. Bank account is a / an
    • Actual Account
    • Personal Account
    • Nominal Account
    • Discount Account
  4. Following is not included in Current Assets:
    • Stock in Trade
    • Debtors
    • Cash
    • Building
  5. Following is not included in Fixed Assets:
    • Machinery
    • Debtors
    • Fixtures
    • Land
  6. Which of the following is not a current liability?
    • Prepaid Rent
    • Bank Overdraft
    • Creditors
    • Tax Payable
  7. A reserve is a charge against
    • Profit & Loss Account
    • Trading Account
    • Cash Flow Statement
    • Profit & Loss Appropriation Account
  8. The debit balance of a personal account shows the
    • Amount Payable
    • Amount of Credit Sales
    • Cash at Bank
    • Cash in Hand
  9. Which of the following is a real account?
    • Debtors Account
    • Bank Account
    • Investment in Shares
    • Salaries
  10. Provision of bad debt is made under the principle of
    • Full Disclosure
    • Conservatism
    • Industry Practice
    • Consistency
4

Accounting Principles & Accounting Concepts 1-10

Quiz with Answers

1 / 10

According to going concept, a business is viewed as having a / an

2 / 10

The comparison of net profit with the sales of the same year is

3 / 10

Bank account is a / an

4 / 10

Following is not included in Current Assets:

5 / 10

Following is not included in Fixed Assets:

6 / 10

Which of the following is not a current liability?

7 / 10

A reserve is a charge against

8 / 10

The debit balance of a personal account shows the

9 / 10

Which of the following is a real account?

10 / 10

Provision of bad debt is made under the principle of

11-20 Solved MCQs – Accounting Principles & Accounting Concepts

  1. Credit may signify
    • decrease in assets
    • increase in capital account
    • increase in liability
    • all of these
  2. Window dressing is prohibited due to
    • convention of disclosure
    • convention of materiality
    • convention of conservatism
    • accrual concept
  3. All of the following are current assets except
    • temporary investments
    • preliminary expenses
    • inventory
    • rent paid in advance
  4. Qualitative transactions are not recorded in accounts due to
    • accrual concept
    • money measurement concept
    • dual concept
    • none of these
  5. All of the followings are current liabilities except
    • redeemable debentures
    • accounts payable
    • bank overdraft
    • rent due
  6. Which of the following is classified as an operating expense?
    • Debenture Interest
    • Freight on Sales
    • Purchase of machinery
    • Dividend Payable
  7. Which of the following is an operating revenue?
    • Dividend received
    • Sale of merchandise
    • Sale of old machinery
    • None of these
  8. Rent received by a trading company is treated as
    • Operating Expense
    • Non-Operating Income
    • Operating Income
    • Non-Operating Expense
  9. Goodwill account is a
    • Real Account
    • Personal Account
    • Nominal Account
    • None of these
  10. A purchase account is a
    • Personal Account
    • Nominal Account
    • Real Account
    • Individual Account
2

Accounting Principles & Accounting Concepts 11-20

Quiz with Answers

1 / 10

Credit may signify

2 / 10

Window dressing is prohibited due to

3 / 10

All of the following are current assets except

4 / 10

Qualitative transactions are not recorded in accounts due to

5 / 10

All of the followings are current liabilities except

6 / 10

Which of the following is classified as an operating expense?

7 / 10

Which of the following is an operating revenue?

8 / 10

Rent received by a trading company is treated as

9 / 10

Goodwill account is a

10 / 10

A purchase account is a

21-30 Solved MCQs – Accounting Principles & Accounting Concepts

  1. Bills receivable account is a
    • Real Account
    • Personal Account
    • Nominal Account
    • None of these
  2. Patent Rights Account is a
    • Nominal Account
    • Personal Account
    • Real Account
    • None of these
  3. Trading Account is a
    • Nominal Account
    • Real Account
    • Personal Account
    • None of these
  4. Drawing Account of the Proprieter is a
    • Real Account
    • Personal Account
    • Nominal Account
    • Substandard Account
  5. Bank Overdraft is a
    • Nominal Account
    • Real Account
    • Personal Account
    • None of these
  6. The Accounting Equation is
    • Assets=Capital – Liabilities
    • Assets=Capital + Liabilities
    • Assets=Capital / Liabilities
    • Assets=Capital x Liabilities
  7. The system of recording transactions based on dual concept
    • Single Entry System
    • Double Account System
    • Double Entry System
    • Single Account System
  8. Bank Loan Account is a
    • Real Account
    • Nominal Account
    • Personal Account
    • None of these
  9. Contingent Liability is shown due to
    1. convention of materiality
    2. convention of full disclosure
    3. convention of conservatism
    4. dual aspect concept
  10. An accounting convention which provides that when doubt, choose the solution least likely to overstate assets and income is
    • Continuity
    • Conservatism
    • Materiality
    • Consistency
1

Accounting Principles & Accounting Concepts 21-30

Quiz with Answers

1 / 10

Bills receivable account is a

2 / 10

Patent Rights Account is a

3 / 10

Trading Account is a

4 / 10

Drawing Account of the Proprieter is a

5 / 10

Bank Overdraft is a

6 / 10

The Accounting Equation is

7 / 10

The system of recording transactions based on dual concept

8 / 10

Bank Loan Account is a

9 / 10

Contingent Liability is shown due to

10 / 10

An accounting convention which provides that when doubt, choose the solution least likely to overstate assets and income is

31-40 Solved MCQs – Accounting Principles & Accounting Concepts

  1. Outstanding and prepaid expenses and incomes are taken into account in determining profit or loss under
    1. Mercantile System of Accounting
    2. Cash System of Accounting
    3. Both of the above
    4. None of the above
  2. In stock valuation, application of the principle at cost price or market price whichever is lower will result in the valuation of stock sometimes at cost price and at other times at market price. This is an application of the principle of
    • Conservatism
    • Consistency
    • Materiality
    • Disclosure
  3. A business is considered to be having an indefinite life according to
    • Accounting Period Concept
    • Going Concern System
    • Cost Concept
    • Dual Concept
  4. Owner’s Equity stands for
    • Total Assets – Total Liabilities
    • Total Assets + Total Liabilities
    • Total Assets x Total Liabilities
    • Total Assets / Total Liabilities
  5. The money measurement concept of accounting theory is based on the assumption that the value of money will
    • fluctuates
    • remains constant
    • decreases
    • increases
  6. Which of the following branches of accounting primarily deals with processing and presenting accounting data for internal use?
    • Tax Accounting
    • Management Accounting
    • Financial Accounting
    • Inflation Accounting
  7. Accounting records transactions in terms of
    • commodity units
    • production units
    • monetary units
    • distribution units
  8. Long-term liabilities are
    • Current Assets + Current Liabilities
    • Total Liabilities – Current Liabilities
    • Current Liabilities + Owner’s Equity
    • None of these
  9. A business entity has assets of Rs. 20,000/- and liabilities of Rs. 5,000/-, Owner’s Equity is
    • Rs. 15,000/-
    • Rs. 25,000/-
    • Rs. 30,000/-
    • Rs. 20,000/-
  10. A business entity has an owner’s equity of Rs. 40,000/- and liabilities of Rs. 25,000/-, Its assets are
    • Rs. 65,000/-
    • Rs. 15,000/-
    • Rs. 25,000/-
    • Rs. 40,000/-
0

Accounting Principles & Accounting Concepts 31-40

Quiz with Answers

1 / 10

Outstanding and prepaid expenses and incomes are taken into account in determining profit or loss under

2 / 10

In stock valuation, application of the principle at cost price or market price whichever is lower will result in the valuation of stock sometimes at cost price and at other times at market price. This is an application of the principle of

3 / 10

A business is considered to be having an indefinite life according to

4 / 10

Owner’s Equity stands for

5 / 10

The money measurement concept of accounting theory is based on the assumption that the value of money will

6 / 10

Which of the following branches of accounting primarily deals with processing and presenting accounting data for internal use?

7 / 10

Accounting records transactions in terms of

8 / 10

Long-term liabilities are

9 / 10

A business entity has assets of Rs. 20,000/- and liabilities of Rs. 5,000/-, Owner’s Equity is

10 / 10

A business entity has an owner’s equity of Rs. 40,000/- and liabilities of Rs. 25,000/-, Its assets are

Accounting Principles & Accounting Concepts
Accounting Principles & Accounting Concepts

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