CBSE Class 11 Accountancy Theory Base of Accounting Assignment

CBSE Class 11 Accountancy Chapter 2 Theory Base of Accounting MCQs

Question. The accounting data does not reflect the True and fair view of the firm as the heterogeneous value of two different assets that has been purchased in two different year, can’t be clubbed together is the limitation of the concept of:
a) Money Measurement
b) cost
c) Accounting period
d) Matching
Answer. A

Question. The value of a building that has been purchased by the firm for 3 crores, keeps on changing with its market value violates the principle of
a) Historical cost
b) Matching
c) Money Measurement
d) Materiality
Answer. A

Question. The revenue will be recognized when
a) Received an order for the goods worth Rs.50,000 on 1st April’18
b) Goods worth Rs. 50,000 is supplied to the customer on 10th Apr’18
c) Received amount of Rs. 25,000 as from the customer on 15th Apr’18
d) Balance amount is received on 25th Apr’18
Answer. B

Question. Identify the Accounting principle which express the fundamental Accounting Equations
a) Dual Aspect
b) Matching
c) Cost
d) Consistency
Answer. A

Question. According to Dual Aspect State the accounts that affects when the goods are sold to Mr. Mohan.
a) Cash A/c and Stock A/c
b) Debtors A/c and Cash A/c
C) Stock and Debtors
d) Creditors and Stock
Answer. C

Question. According to Revenue Realisation concept
i) Credit sales are treated as revenue on the day sales are made and not when money is received
ii) Rent for the march 14 received in April 14 will be recorded in Profit and Loss A/c in the beginning of the Financial year April14
a) Option (i) is applicable
b) Option (ii) is applicable
c) Both Option (i) and (ii) are applicable
d) None of the options is applicable
Answer. A

Question. According to the Revenue Realization Concept the interest for Apr’18 received in March’14 will be taken in Profit/Loss A/c of the Financial Year
a) Beginning of Apr’18
b) Ending March’18
c) Beginning of March’18
d) Ending of Apr’18
Answer. B

Question. According to the Matching concept, a company show all the expenses related to its revenues of a specified period even if:
a) Expenses were not paid in that period
b) Revenues were not paid in that period
c) Fixed assets were not sold in that period
d) Liabilities were not paid in that period.
Answer. A

Question. i) According to cash basis the receipt or payment becomes due are ignored.
ii) As per the accrual basis the revenue and costs are recognized when it occurred
iii. Office Rent for the month of Dec’18 paid in Jan’19 is recorded in Jan’19.
a) Option (i) and (ii) is the correct statement
b) b) Option (i),(ii) and (iii) is the correct statement
c) Option (i) and (iii) is the correct statement
d) Option (ii) and (ii) is the correct statement
Answer. B

Question. The firm purchased the machine cost Rs. 10,000 and charged depreciation @ 10% according to the Straight line Method. After 2 years they switch to the Written down value method. At the time of sale of machine they calculated the depreciation as per the SLM. Which accounting principle is violated?
a) Historical cost
b) consistency
c) cost
d) money Measurement
Answer. B

Question. The Prudence concept doesn’t implies when the
a) Closing stock is valued at lower cost or market price
b) provision for doubtful debts
c) Anticipation of the bad debts
d) disclosure of the material information.
Answer. D

Question. According to the Going Concern Concept calculate the value of the Computer which has been purchased for Rs 60,000 and estimated its life for five years,
a) Rs 3,00,000
b)12,000
c)6,000
d)60,000
Answer. B

Question. According to the Duality Principle, Calculate the Owner’s claim, if the firms Outsider’s claim is Rs 20,000 and the net worth of the assets that business owns is Rs 70,000.
a)50,000
b)90,000
c)70,000
d)20,000
Answer. A

Question. As per the Duality principle calculate the total outsider’s equity if the raw materials cost Rs. 5000, machine cost Rs. 50,000, Furniture used in the firm cost Rs. 20,000, cash at bank is Rs. 30,000 and the owner’s equity is Rs. 70,000.
a) Rs.35,000
b) Rs. 1,75,000
c) Rs. 70,000
d) Rs. 1,40,000
Answer. B

Question. ABC Ltd. Received an advance on sale in the month of Dec’18 for the sales made in the month of May’19. The sale should recognized on
a) May’19
b) Dec’18
c) Both in May’19 and Dec’18
d) Jan’19
Answer. A

Question. Calculate the Liabilities, If Assets=Rs.1,00,000, capital= Rs. 40,000.
a) Rs.60,000
b) Rs.1,60,000
c) Rs.1,00,000
d) Rs.40,000
Answer. A

Question. Calculate the owner’s equity as per the Business Entity Concept, if the owner commenced the business with the 2 acres of land worth Rs.3crore, building worth Rs. 5crore and Bank balance of Rs. 10 lacks.
a) Rs.8Cr 10 lacks
b) Rs.11crore 10 lacks
c) Rs.10 lacks
d) Rs. 9crore
Answer. A

Question. i) As per the conservatism principle the valuation of stock is at lower of cost or net realizable value.
ii) The convention of conservatism takes all the prospective losses but leaves out prospective profits.
iii) The Dual aspect concept states the proprietor of a business is treated as External liabilities
a) Option (i) and (ii) is correct
b) Option (iii) and (ii) is correct
c) Option (i), (ii) and (iii) is correct
d) Option (i) and (iii) is correct
Answer. A

Question. Calculate the value of the asset at the time of preparing final account that is purchased for Rs. 5,00,000 ,if the market value is Rs. 7,00,000 as per the cost concept.
a) Rs. 5,00,000
b) Rs. 7,00,000
c) Rs.1,20,000
d) Rs. 2,00,000
Answer. A

CBSE Class 11 Accountancy Chapter 2 Theory Base of Accounting Fill in The Blanks  

Question. XYZ Ltd. Received an advance on sale in the month of January, 2019 for the sale made in May, 2019. The revenue should be recognised on __________.
Answer. May, 2019

Question. A Ltd. had shown a contingent liability of Rs 2,00,000 as footnote after it’s Balance Sheet. After analysing Balance Sheet of A Ltd., B Ltd. purchased this running business without any further enquiry. A Ltd. had prepared it’s books by strictly following ________________ convention.
Answer. Full Disclosure

Question. A business purchased goods for Rs 2,00,000 and sold 75% of the goods during accounting year ended 31st March, 2019. The market value of remaining goods was Rs 48,000. He valued closing stock at cost. While recording he violated ____________ concept.
Answer. Prudence

Question. Salary paid Rs 55,000 and outstanding Rs 5,000. At the time of passing journal entry Rs __________ amount will be debited in Salary A/c due to accrual concept.
Answer. Rs 60,000

Question. Ram made cash sales of Rs 2,50,000 and credit sales of Rs 1,50,000. His expenses for the year were Rs 50,000, out of which Rs 10,000 is yet to be paid. Ram’s income on the base of cash basis of accounting will be Rs____________.
Answer. Rs 2,10,000

Question. Shyam made cash sales of Rs 3,20,000 and credit sales of Rs 1,80,000. His expenses for the year were Rs 50,000, out of which Rs10,000 is yet to be paid. Ram’s income on the base of accrual basis of accounting will be Rs____________.
Answer. Rs 4,40,000

Question. Purchase goods of Rs 50,000 and purchase machinery of Rs 5,00,000 are classified under different expenditure category due to going concern concept. Carriage of Rs 1,000 is added to capital expenditure, in this Rs ____ amount is to be debited in purchase A/c.
Answer. Rs 50,000

Question. Anant charged depreciation on his Fixed Assets of Rs 8,50,000 @ 10% p.a. in year 2018. He then charged depreciation in year 2019 at the rate of 12% p.a. Management is facing problem in comparing the data in consecutive years. To solve this problem, Anant should learn about _____ Assumption of accounting.
Answer. Consistency

Question. A Ltd. Purchased goods of Rs 5,20,000 during a financial year. His sales for the year were 6,00,000 and closing stock at the end was Rs 1,20,000. According to matching concept his profit during the year is Rs _______.
Answer. Rs 2,00,000

Question. Rent paid Rs 85,000 out of which Rs 15,000 is related to next year. In the Cash Basis of accounting Rs __________ amount will be debited in Rent A/c.
Answer. Rs 85,000

Question. Accounting period may be either a calendar year from January 01 to December 31 or the _________ year from April 01 to March 31 of the government.
Answer.  financial / fiscal

CBSE Class 11 Accountancy Chapter 2 Theory Base of Accounting True and False  

1. During the Financial year 2018-2019 ABC firm had Cash sales Rs 1,00,000 and Credit sales Rs 20,000. His expenses for the year were Rs 50,000 out of which Rs 30,000 is still to be paid. So according to Cash Basis of Accounting income of ABC firm is 70,000. False
2. Machinery was purchased for Rs 50 lakh. An amount of Rs 1, 00,000 was spent on transporting the machinery to factory site, Rs50, 000 spent on its installation. The total amount at which the Machinery will be recorded is 51, 50,000. True
3. A firm was charging depreciation on its asset according to SLM now changed to WDV but firm did not disclose this information in its financial statements. This has violated the Materiality principle of accounting. True
4. A firm sold goods on credit of Rs 50,000 in the month of January and collected the amount in the month of April. Accountant record this sale in the month of April following Accrual basis of Accounting. Is he correct in doing so. False
5. According to Materiality concept, an ink pot has been purchased by the firm for Rs 5000 treated as revenue expenditure. True
6. Only personal accounts and Cash book are maintained under Double Entry System. False
7. According to Matching Concept, Expense of Rs 20,000 incurred in financial year 2017-2018 but paid in the year 2018-19 considered expense for the year 2017-2018. True
8. Since the life of business is assumed to be indefinite the financial statement of the business should be prepared only when it goes into liquidation. False
9. Purchase of goods amounted to Rs 50,000 on cash increased one asset and reduces the other Asset due to the adherence of Single entry system. False
10. Due to the adherence of Cash Basis system Firm created provision for doubtful debts @ 10 % on its Debtors Rs 2,00,000 . False
11. Rent for the month of March 2018, even if received in April 2019 taken into the financial year ending March 31, 2018 due to the adherence of Revenue Recognition Concept. True
12. Ram, a sole proprietor of M/s Ram & company purchase a car for his personal use. The payment was made by issuing a cheque from the account of M/s Ram & company. His accounted debited to his Drawings Account due to the adherence of Business Entity Concept. True