Assertion Reason MCQs of Chapter 1- Introduction to Accounting with answers
Assertion Reason MCQs of Chapter 1- Introduction to Accounting with answers for CBSE, ISC and State Boards
Assertion (A): The main objective of book-keeping is to ascertain the profit or loss and financial position of the business.
Reason (R): Book-keeping includes identifying, measuring and recording or financial transactions of the business.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (d)
Assertion (A): Accounting is called the language of business.
Reason (R): The users of accounting information need financial information to make decisions.
Options:-
(a) Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of the Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion (A)
(c) Both Assertion (A) and Reason (R) are not correct.
(d) Assertion (A) is correct but Reason (R) is not correct.
Ans – (a)
Assertion (A): Accounting has a wider scope than book-keeping.
Reason (R): Book-keeping involves recording, classifying, summarizing and analysing the financial transactions.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (c)
Assertion (A): Accounting is used for maintaing systematic record of financial transactions in books of accounts.
Reason (R): Proper and complete records of business transactions are kept regularly in a systematic manner.
(a) Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of the Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion (A)
(c) Both Assertion (A) and Reason (R) are not correct.
(d) Assertion (A) is correct but Reason (R) is not correct.
Ans – (b)
Assertion (A): Owners or investors who contribute capital in the business require information regarding risk and return on their investment in the business enterprise.
Reason (R): Long term lenders require information about the ability of the enterprise to pay interest and repayment of their loans.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (b)
Assertion (A): Financial statements, i.e., Balance Sheet and Profit & Loss Account (Statement of Profit & Loss) may be prepared in the manner mangement decides.
Reason (R): Accounting standards notified under the Companies Act, 201 are not applicable on companies.
(a) Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of the Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion (A)
(c) Both Assertion (A) and Reason (R) are not correct.
(d) Assertion (A) is correct but Reason (R) is not correct.
Ans – (c)
Assertion (A): Accounting records only the transactions of financial nature.
Reason (R): Goods taken from the business by the proprietor for his personal use is not of financial nature and hence will not be recorded.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (c)
Assertion (A): Accounting identifies, records, classifies and summarises the financial transactions and events, besides interpreting the results thereof and communicating them to the users.
Reason (R): Book-keeping also performs the same function as accounting.
(a) Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of the Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion (A)
(c) Both Assertion (A) and Reason (R) are not correct.
(d) Assertion (A) is correct but Reason (R) is not correct.
Ans – (d)
Assertion (A): Accounting information must be reliable. Reliability implied that the information should be presented in such a simple and logical manner that they are understood easily by their users.
Reason (R): Accounting is influenced by personal judgements.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (d)
Assertion (A): Double Entry System of Accounting is an Accounting System by which both aspects, i.e., Debit and Credit of a financial transaction are recorded.
Reason (R): Single Entry System of Accounting is a system of accounting by which both the aspects, i.e., Debit and Credit may or may not be recorded.
(a) Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of the Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion (A)
(c) Both Assertion (A) and Reason (R) are not correct.
(d) Assertion (A) is correct but Reason (R) is not correct.
Ans – (a)
Assertion (A): Fixed Assets are shown in the Balance Sheet at their cost and not at their realisable value.
Reason (R): Fixed Assets are shown in the Balance Sheet according to ‘Historical Cost Concept’.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (a)
Assertion (A): All financial transactions relating to the business are first of all recorded in Ledger.
Reason (R): Separate accounts are opened in the Ledger for purchases, sales, expenses, incomes, assets etc.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (d)
Assertion (A): Accounting has wider meaning than book-keeping.
Reason (R): The function of Book-keeping is restricted to identifying, recording and classifying the financial transactions.
Options:
(a) Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of the Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion (A)
(c) Both Assertion (A) and Reason (R) are not correct.
(d) Assertion (A) is correct but Reason (R) is not correct.
Ans – (b)
Assertion (A): The main purpose of cost accounting is to ascertain total cost and per unit cost of goods produced.
Reason (R): The main purpose of financial accounting is to record the business transactions and to ascertain profit or loss and the financial position of the business.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (b)
Assertion (A): Accounting may be influenced by personal bias.
Reason (R): In some situations, choice has to be made from alternative accounting policies.
(a) Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of the Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion (A)
(c) Both Assertion (A) and Reason (R) are not correct.
(d) Assertion (A) is correct but Reason (R) is not correct.
Ans – (b)
Assertion (A): Internal users of accounting information include owners and management.
Reason (R): Internal users get accounting information by published reports of the business such a Profit & Loss Account and Balance Sheet. They also get information from unpublished reports or internal reports of the enterprise.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (a)
Assertion (A): Qualitative aspects of the business unit are completely ignored from the books while preparing financial statements.
Reason (R): Window dressing refers to the practice of manipulating accounts so as to conceal vital facts, so that the financial sttements may disclose a more favourable position that the actual position.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (b)
