Accounting concepts MCQs

1)
Which of the following is not regarded as the fundamental concept that
is identified by IAS-1
A) The going concern concept
B) The septate entity concept
C) The prudence concept
D) Correction concept

2)
Using "lower of cost and net realisable value" for the purpose
of inventory valuation is the implementation of which of the following
concepts?
A) The going concern concept
B) The septate entity concept
C) The prudence concept
D) Matching concept

3)
The concept of separate entity is applicable to which of following types
of businesses?
A) Sole proprietorship
B) Corporation
C) Partnership
D) All of them

4)
Is Prudence concept allows a business to build substantially higher
reserves or provisions than that are actually required?
A) Yes

B) No
C) To some extent
D) It depends on the type of business

5)
The revenue recognition principal dictates that all types
of incomes should be recorded or recognized when
A) Cash is received
B) At the end of accounting period
C) When they are earned
D) When interest is paid

6)
The matching concept matches which of the following?
A) Asset with liabilities
B) Capital with income
C) Revenues with expenses
D) Expenses with capital

7)
The allocation of owner's private expenses to his/her business violates
which of the following?
A) Accrual concept
B) Matching concept
C) Separate business entity concept
D) Consistency concept

8)

The going concern concept assumes that

A) The entity continue running for foreseeable future
B) The entity continue running until the end of accounting period
C) The entity will close its operating in 10 years
D) The entity can't be liquidated

9)
American companies prepare their financial statement in dollars
whereas Japanese companies produce financial statements in yens. This
is an example of:
A) Stable monetary unit Concept
B) Unit of measurement Concept
C) Money value concept
D) Current swap concept

10)
Which of the following is time span into which the total life of a
business is divided for the purpose of preparing financial statements?
A) Fiscal year
B) Calendar year
C) Accounting period
D) Accrual period
11)
Showing purchased office equipment in financial statements is the
application of which accounting concept?
A) Historical cost convention
B) Materiality
C) Prudence
D) Matching concept

12)
Assets can't be offset against liabilities. This the dictation of which of
the following accounting concepts?
A) Matching concept
B) Accrual concept
C) Prudence concept
D) Offsetting concept

13)
Information about an item is ________ if its omission or misstatement
might influence the financial decision of the users taken on the basis of
that information
A) Concrete
B) Complete
C) Immaterial
D) Material

14)
Exercising a degree of caution in the case of judgments needed under
the condition of uncertainty is assumption of which of the following
accounting concepts?
A) Matching concept
B) Timeliness concept
C) Accrual concept
D) Prudence concept

15)
Which one of the following concepts states that the publication or
presentation financial statements should not be delayed?

A) Objectivity Concept
B) Timing concept
C) Timeliness Concept
D) Reliability Concept

16)
land on lease should be shown in balance sheet contrary to fact that
company doesn't own this piece of land. This is the statement of what
accounting concepts?
A) Matching concept
B) Accrual concept
C) Prudence concept
D) Substance over form Concept

17)
"Financial information should be neutral and bias free" is the dictation
of which one of the following?
A) Completeness concept
B) Faithful representation Concept
C) Objectivity Concept
D) Duality Concept

18)
A business was commenced on 1st January and it purchased 5 vehicles,
each costing $5000. During the year the business managed to sell 2
vehicles at the price of $12000. How should the remaining 3 vehicles be
valued if the business is going to continue its operations in the next
year?
A) At the breakup value
B) On the basis of going concern
C) Liquidation value

D) More than market value

19)
A company received cash $1000 in advance for auditing service.
However, the company neither earned this revenue nor made any
adjusting entry in its books. Identify the effect of this omission?
A) Total liabilities to be understated
B) Total expenses to be overstated
C) Total income to be overstated
D) Total assets to be understated

20)
Depreciation is charged on fixed asse to comply with which of the
following accounting principles or concepts?
A) Matching concept
B) Prudence concept
C) Timeliness concept
D) Reliability concept