Assertion Reason MCQ of Process and Basis of Accounting Class 11 with answers
Assertion Reason MCQ of Process and Basis of Accounting Class 11 with answers for CBSE, ISC and State Boards
Assertion (A): First step in the accounting process is the identification of business transactions.
Reason (R): Business transactions must be evidenced by an appropriate document such as cash memo, purchase invoice etc.
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 – (a)
Assertion (A): Under Cash Basis of Accounting, entries in the books of account are passed when cash is received or paid
Reason (R): Under Accrual Basis of Accounting, entries are passed in the books of accounts when a transaction is entered into whether cash is received or not or paid or not.
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): Second step in the accounting process in the preparation of Trial Balance.
Reason (R): A trial balance is a statement, prepared with the debit and credit balances of ledger accounts to check the arithmetical accuracy of accounts.
(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): Cash basis of accounting is not compatible with Matching Principle.
Reason (R): Matching Principle requires that costs incurred to earn the revenue should be matched whether costs have been paid or not.
(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): Only cash transactions are recorded under cash basis of accounting.
Reason (R): Cash basis of accounting does not give a true and fair view of profit or loss of the business because it ignores outstanding expenses, prepaid expenses, accrued incomes 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 – (a)
Assertion (A): Accrual basis of accounting gives a true and fair view of financial performance and financial position of the business.
Reason (R): Accrual Basis of Accounting requires that incomes earned, whether received or not, and expenses incurred, whether paid or not should be accounted.
(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): Accrual basis of accounting makes a complete record of all cash as well as credit transactions. It, however does not follow matching principle of accounting.
Reason (R): Accrual basis of accounting is superior to cash basis kof accounting because it depicts true profit or loss of the business and is recognised by Companies Act, 2013.
(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): Cash basis considers the revenue as realised when the goods are sold.
Reason (R): Accrual Basis of Accounting recognises revenue on receipt of amount against sale of goods.
(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): Cash basis considers the revenue as realised when amount is received against sale of goods.
Reason (R): Accrual Basis of Accounting recognises revenue on receipt of amount against sale of goods.
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 – (d)
