Assertion Reason MCQ of Accounting Principles Class 11 with answers
Assertion Reason MCQ of Accounting Principles Class 11 with answers of CBSE, ISC and State Boards
Assertion (A): Based on the Going Concern Concept, assets are valued at the market value.
Reason (R): According to the Consistency Concept, accounting policies may be changed every year.
(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 but 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): Assets are always recorded in the books of accounts at the price paid to acquire them.
Reason (R): As per Money measurement concept Assets have to be recorded at cost price only.
(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): The Concept of Full Disclosure implies that all material information should be disclosed in the financial statements.
Reason (R): Materiality Concept holds that information that may influence the decision of the user should be disclosed in the financial statements.
(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 but 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): Prudence or Conservatism Concept prescribes that anticipated incomes and gains should be recognised but anticipated expenses and losses should not be recognised.
Reason (R): A fixed asset (say, building) with book value of ₹ 5,00,000 has market value of ₹ 25,00,000. the difference amount, i.e., ₹ 20,00,000 should be recognised as gain.
(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 but 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): Both, debit and credit aspects of a transaction are recorded in the books of account.
Reason (R): According to teh Dual Aspect Concept, a transaction is recorded in the books having debits and credits of equal amount.
(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 but 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 money measuremnt concept states that only those transactions can be recorded in the books of accounts which can be measured in terms of money.
Reason (R): The creativity of the employees that contributes to the profits can be recorded under money mesurement 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 – (c)
Assertion (A): Stock, at the end of the year, is valued at cost or net realisable value (Market value) whichever is less because of Prudence or Conservatism Concept
Reason (R): Prudence or Converatism Concept prescribes that anticipated expenses or losses should be recognised.
(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 but 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): Convention of conservatism takes into account all probable losses but ignores prospective profits.
Reason (R): All significant information relating to the economic affairs of the enterprise should be completely disclosed.
(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): Under the Going Concern Concept of Accounting, life of the business is considered to be infinite.
Reason (R): Depreciation is provided each year because of the accrual concept of 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 but 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): As per matching conept all costs incurred during a particular period should be charged to revenue of that period.
Reason (R): It is because of matching concept that full cost of the asset is not treated as an expense in the year of its purchase itself rather it is spread over its useful life.
(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): Transactions are recorded in the books of accounts from the viewpoint of the firm due to Business Entity Concept.
Reason (R): Capital Introduced by the proprietor of the firm is not a liability for the firm since he is an owner of business and not a lender.
(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 but 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): According to Business Entity Concept, business as a unit separate and distinct from its owners.
Reason (R): Business Entity Concept does not apply to a sole proprietorship firm.
(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): Revenue is matched with expenses incurred to earn the revenue under Matching Concept of Accounting.
Reason (R): If revenue is recognised as earned its related costs, whether paid or not should also be recognised.
(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 but 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): Human Resources in a business firm are important but is not reflected in the financial statements of the firm.
Reason (R): Transactions should be recorded from view point of business and not from the view point of businessman/owner.
(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): Life of the business is assumed to be infinite but broken into parts (usually a period of 12 months) to assess the performance and financial position of the firm at regular intervals.
Reason (R): Accounting Period Concept prescribes that the financial statements of a firm should be prepared every year.
(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 but 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 essence of convention of prudence is to anticipate no profit and provide for all possible losses.
Reason (R): Convention of prudence results in understatement of profits and assets and overstatement of liabilities.
(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): Annual Membership Fee of ₹ 50,000 was received in advance. It will be shown as income in the year to which it relates.
Reason (R): According to Accrual Concept of Accounting, incomes and expenses are recognised in the year they are received.
(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 but 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): As per Going Concern Concept it is assumed that the business will continue to exist for a long period in future.
Reason (R): Entire life of the firm is divided into time intervals for the measurement of profits in accordance with ‘Going Concern 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 – (c)
Assertion (A): The quality of the staff is not shown in the Balance Sheet of a firm because it cannot be measured in money terms
Reason (R): According to Money Measurement Concept, those transactions are recorded in the books which can be measured in money terms
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 but 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): Concept of prudence requires that the same accounting methods should be used from one accounting period to the next.
Reason (R): The consistency concept states that if straight line method of depreciation is used in one year, then it should also be used in next year.
Optoins:
(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): Assets are recorded in the books of account at their cost to the firm.
Reason (R): According to Historical Cost Concept, assets are recorded at cost.
(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 but 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 those facts and events are recorded in accounting which are capable of being expressed in terms of money.
Reason (R): The calibre or quality of the mangement is not recorded in the books 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 – (a)
Assertion (A): According to the Going Concern Assumption, it is assumed that the entity will remain in business for a foreseeable period and there is no intention to close down or scale down its operations significantly.
Reason (R): According to Consistency Concept, accounting policies once adopted and applied should be followed year after year.
(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 but 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): Advance salary paid, relating to next year, is treated as an asset in the Balance Sheet.
Reason (R): Matching principle, matches the expenses incurred to revenue generated of same period to find profit or loss.
(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): Business Entity Concept is not applied to sold properietorship firms
Reason (R): Finanical statements of a firm can be prepared at the end of its life.
(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 but 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): the principle of consitency is especially important where equally acceptable accounting policies exist.
Reason (R): According to the Consistency Concept, accounting policies may be changed every year.
(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 but 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)
