1. Accrued income should be ___ to compute profit and prepaid expenses should be ___ according to the accrual concept of accounting.
Ans. Added, deducted
2. Income is considered as earned only when it is ___.
Ans. Realized
3.Income realized is different from the cash received. Is it true or false?
Ans. True
4.Capital payments resulting in the acquisition of assets appear in the balance sheet. True or False?
Ans. True
5. Expenditure paid or payable and revenue earned whether realized or not in cash are taken into account to find out profit or loss. True or False?
Ans. True
6.Matching concept of accounting considers only revenue incomes and expenses relating to a particular accounting period. True or False?
Ans. True
7.For the actual revenue received, outstanding incomes are ___ and income received in advance are___ to find out the revenue income for the given period.
Ans. Added, Deducted
8. Machinery is bought for Rs.200000 and its market value is Rs.80000. Which of these values do you consider mentioning in the balance sheet according to the cost principle?
Ans. Rs.200000
9. Machinery is bought for Rs.200000 and its market value is Rs.80000. Which of these values do you consider mentioning in the balance sheet according to the cost principle?
Ans. Rs.200000
10. The accountants are free to submit financial statements at arbitrary points in time during the life of the entity. This is in accordance with the periodicity concept.
Ans. False
11. Accounting ignores the price level changes when financial statements are prepared on ___.
Ans. Historical Cost
12. Assets may be depreciated on fixed installment method or reducing balance method. Is it a concept or a convention?
Ans. Convention
13. Book keeping ___ the transactions and events, ___ the identified transactions and events in a common measuring unit, records them in proper books of accounts and finally classifies them in the ledger.
Ans. Identifies, measures
14.Accounting in addition to book keeping involves ___ the classified transactions and ___ the summarized results.
Ans. Summarizing, analyzing
15. . ___ as the chief provider of risk capital is keen to understand both the return from their investments and the associated risk.
Ans. Investors
16. The regulatory agencies use ___ to take action against the firm when appropriate returns are not filed in time or when the returns fail to provide the true and fair position of the business or to take appropriate action against the firm when complaints/misappropriation are being lodged.
Ans. Financial Reports
17. The danger of ___ arises when the management decides to incorporate wrong figures to artificially inflate revenue or deflate losses or when there is a threat of hostile takeover.
Ans. Window dressing
Financial and Management Accounting MCQ pdf with Answers