MCQs Accountancy Class 11 Chapter 1: Introduction to Accounting

MCQS of Chapter 1 Introduction to Accounting Class 11 with answers for CBSE, ISC and State Boards.

MCQs of chatper 1 includes, Meaning, Objectives, Scope and Nature of Accounting with answers

Basic function of financial accounting is to:

(a) Record all business transactions
(b) Interpret cost data
(c) Assist the employees
(d) Interpret management data

Ans – (a)

Identify the correct statement expressing relationship between book-keeping and accounting.

(a) Both mean same
(b) Both are different and not related
(c) Accounting is part of Book-Keeping
(d) Book-keeping is a part of accounting

Ans – (d)

Financial Position of the business is determined by:

(a) Financial Accounting
(b) Cost Accounting
(c) Management Accounting
(d) All of these

Ans – (a)

Which of the following is not a sub-field of accounting?

(a) Book Keeping
(b) Management Accounting
(c) Financial Accounting
(d) Cost Accounting

Ans – (a)

Book-keeping means:

(a) Keeping books
(b) Recording in books
(c) Recording of business transactions in the books
(d) All of the above

Ans – (c)

Which of the following is not recorded in the books of account?

(a) Sales of goods
(b) Payment of salary
(c) Quality of staff
(d) Purchase of Goods

Ans – (c)

Book-keeping means:

(a) Recording financial transactions in the books of accounts
(b) Taking all steps from recording of transactions in the books of original entries to preparation of final accounts
(c) Preparing Final Accounts
(d) Taking all steps after preparing final accounts

Ans – (a)

Book keeping is concerned with

(a) recording financial transactions and events
(b) classifying and summarising recorded datea
(c) interpreting data for internal and external users
(d) recording and analysing financial statements

Ans – (a)

Book keeping is a wider concept than accounting.

(a) True
(b) False
(c) Partially true
(d) Partially false

Ans – (b)

Which is the last step of accounting as a process of information?

(a) Recording the transaction
(b) Preparation of financial statements
(c) Communication of information
(d) Analysis and interpretation of information

Ans – (c)

Accounting starts:

(a) Where Book-keeping begins
(b) Where book-keeping ends
(c) Where books are not maintained at all
(d) After preparing final accounts

Ans – (b)

Last step of accounting is

(a) recording economic events in the books of account
(b) preparation of financial statements
(c) Communication of information
(d) analysis and interpretation of information

Ans – (c)

Basic function of financial accounting is to

(a) record all business transactions
(b) interpret financial data
(c) assist the management
(d) All of these

Ans – (a)

In accounts recording is made of:

(a) Only Financial Transactions
(b) Only Non-financial transactions
(c) Financial and non-financial transactions
(d) Personal transactions of the Proprietor

Ans – (a)

Accounting involves recording of

(a) only non-financial transactions
(b) only financial transactions
(c) both (a) and (b)
(d) personal transactions of the owner

Ans – (b)

The characteristics of Accounting are:

(a) Recording
(b) Classifying
(c) Summarising
(d) All of the above

Ans – (d)

Transactions are posted into Ledger Account from

(a) Vouchers
(b) Journal book
(c) Bank Statement
(d) None of these

Ans – (b)

Which of the following is not a business transaction?

(a) Withdrew ₹ 10,000 from business for personal use by the proprietor.
(b) Proprietor Withdrew ₹ 20,000 from the Bank Account of the firm to pay the school fees of his son
(c) Proprietor withdrew ₹ 12,000 from his personal account to pay the school fees of his son.
(d) Goods taken worth ₹ 3,000 for personal use.

Ans – (c)

Which of the following is not a business transaction?

(a) Purchase of goods for resale amounted to ₹ 50,000
(b) Paid salaries and wages amounted to ₹ 10,000
(c) Paid rent for office premises ₹ 5,000
(d) Purchased a LED Television for personal use ₹ 25,000

Ans – (d)

Ghanshyam is a furniture dealer. Which one of the following will not be recorded in his books?

(a) Purchase of Timber for ₹ 5,00,000
(b) Sofa set worth ₹ 40,000 taken to his home
(c) Sale of household furniture for ₹ 20,000
(d) Dining table of ₹ 80,000 given to his friend as gift.

Ans – (c)

Which one is the advantage of accounting ?

(a) Replacement of Memory
(b) Shows the present value of business
(c) Accounting does not record price level changes
(d) Accounting is not fully exact

Ans – (a)

The functions of Accounting are:

(a) To ascertain Profit or Loss
(b) To ascertain the financial position of the Business
(c) To provide information’s to various parties
(d) All of the above

Ans – (d)

The function of Accounting is not to:

(a) Record the transactions of business
(b) Record the personal transactions of the Proprietor
(c) Ascertain the Profit or Loss of business
(d) Ascertain the Financial Position of the business

Ans – (b)

Which is the objective of accounting?

(a) To keep systematic records of financial transactions
(b) To ascertain the net profit of loss of business
(c) To ascertain the financial position of a business
(d) All of the above

Ans – (d)

Which of the following transactions is not of financial character?

(a) Purchase of asset on credit
(b) Purchase of asset for cash
(c) Withdrawing of money by proprietor from business
(d) Strike by Employees

Ans – (d)

Last step of accounting process is:

(a) Provide information to various parties who are interest in business enterprise
(b) Record transactions in the books
(c) To make summary in the form of financial statements
(d) To classify the transactions under separate heads in the ledger

Ans – (a)

Which of the following statements is incorrect?

(a) Accounting is concerned with non-monetary transactions
(b) Accounting is science as well as an art
(c) Accounting is concerned with past as well as future events
(d) Transactions that can be measured in money terms are recorded in the books of accounts.

Ans – (a)

Internal users of accounting information are:

(a) Potential Investors
(b) Creditors
(c) Management
(d) Employees

Ans – (c)

External users of accounting information are not

(a) Lenders
(b) Officers
(c) Employees
(d) Public

Ans – (b)

Accounting Cycle starts with:

(a) Recording of Transactions in Ledger
(b) Recording of Transactions in Journal
(c) Preparing Trial Balance
(d) Preparing Trading Account

Ans – (b)

Creditors of the business want to know:

(a) Profitability of the Business
(b) Capability of the business to pay higher salaries
(c) Creditworthiness of the business
(d) Employment Opportunities

Ans – (c)

External users of accounting information are:

(a) Researchers
(b) Government
(c) Potential Investors
(d) All of the above

Ans – (d)

Identify which of the following statements is associated with accounting:

(a) It is concerned with recording of transactions.
(b) It educates how accounting records are maintained
(c) It is an art of recording financial transactions and analysing the financial data
(d) It is an art of recording financial transactions, summarising the recorded transactions, preparing the financial statements, analysing them and communicating them to the users.

Ans – (d)

The advantages of accounting are:

(a) Information regarding Profit or Loss
(b) Information regarding Financial Position
(c) Helpful in Prevention of Erros
(d) All of these

(d)

Which of the following is not an internal user of financial statements?

(a) Board of Directors
(b) Managers
(c) Employees
(d) None of these

Ans – (c)

Limitations of accounting include

(a) Ignores Qualitative Elements
(b) Ignores Price Level Change
(c) Involves Subjectivity
(d) All of these

Ans – (d)

Cost of Goods Manufactured is determined by

(a) Financial Accounting
(b) Cost Accounting
(c) Management Accounting
(d) Human Resource Accounting

Ans – (b)

Which of the following is not the advantage of accounting?

(a) Systematic records
(b) Comparative Study
(c) Based on accounting concepts
(d) Helpful in decision making

Ans – (c)

Which of the following is an advantage of accounting?

(a) Based on Historical Costs
(b) Omission of Qualitative information
(c) Incomplete information
(d) Detection of Errors

Ans – (d)

Qualitative characteristic of Accounting includes

(a) Reliability and Relevance
(b) Understandability and Comparability
(c) True and Fair, Reliability, Understandability and Comparability
(d) None of the above

Ans – (c)

The limitations of accounting are:

(a) Influenced by Personal Judgements
(b) Based on Historical Costs
(c) Affected by window-dressing
(d) All of these

Ans – (d)

Purpose of financial accounting is to ascertain:

(a) Profit or Loss
(b) Value of assets and liabilities
(c) Financial Position
(d) Profit or Loss and financial position

Ans – (d)

The information provided in the financial statements of an enterprise pertains to __ .

(a) The nation as a whole
(b) The industry as a whole
(c) Business enterprise
(d) Proprietor

Ans – (c)

The branches of accounting are:

(a) Financial Accounting
(b) Cost Accounting
(c) Social Responsibility Accounting
(d) All of the above

Ans – (d)

Book-keeping is mainly concerned with:

(a) Recording of financial data
(b) Designing the systems of summarising the recorded data
(c) Interpreting the data for internal and external users
(d) Preparation of financial statements of the business enterprise

Ans – (a)

Which of the following is not a limitation of Accounting?

(a) Influenced by personal judgements
(b) Based on historical costs
(c) Affected by window dressing
(d) Enables the comparative study

Ans – (d)

which of the followings is NOT an internal user of accounting information?

(a) Management
(b) Owner
(c) Employee
(d) Directors

Ans – (c)

Choose the odd one out:

(a) Recording
(b) Classifying
(c) Controlling
(d) Summarising

Ans – (c)

Which of the following is not a sub-field of accounting?

(a) Financial Accounting
(b) Book Keeping
(c) Management accounting
(d) Cost Accounting

Ans – (b)

Which of the following is not a qualitative characteristic of accounting information?

(a) Reliability
(b) Understandability
(c) Comparability
(d) Materiality

Ans – (d)

Which one is the advantage of accounting?

(a) Shows the present value of the business
(b) Window Dressing
(c) Shows the effect of price level changes
(d) Replacement of Memory

Ans – (d)

Which of the following is not recorded in the books of accounts?

(a) Purchase of goods for sale amounted to ₹ 15,000
(b) Paid salary and wages amounting to ₹ 20,000
(c) Paid Rent for office premises ₹ 12,000
(d) Sale of household furniture for ₹ 10,000

Ans – (d)

If accounting information is based on facts and it is verifiable by documents it has the quality of _ .

(a) Relevance
(b) Reliability
(c) Understandability
(d) Comparability

Ans – (b)

Which of the following transactions is of a financial character and will be recorded in the business?

(a) Goods taken from the business by the proprietor for her personal use
(b) Interviewing the candidates for employment
(c) Sale of Household furniture ₹ 5,000
(d) Received on order for sale of goods

Ans – (a)

Use of common unit of measurement and common format of reporting promotes.

(a) Comparability
(b) Understandability
(c) Relevance
(d) Reliability

Ans – (a)

Which of the following is not a limitation of accounting?

(a) Window Dressing
(b) It ignores the effect of price level changes
(c) It ignores qualitative elements
(d) Can be used as evidence in court

Ans – (d)

Which qualitative characteristic of accounting information is reflected when accounting information is clearly presented?

(a) Reliability
(b) Relevance
(c) Comparability
(d) Understandability

Ans – (d)

Users of Accounting Information’s are

(a) Owners of Business
(b) Management of Business
(c) Creditors
(d) All of the above

Ans – (d)

Which one of the following is not an objective of accounting?

(a) To provide information about the assets, liabilities and capital of the enterprise
(b) To provide information about the private assets and liabilities of the proprietor
(c) To maintain records of the business.
(d) To provide information regarding the profit and loss of the enterprise

Ans – (b)

Accounting is

(a) Only an Art
(b) Only a Science
(c) Art and Science both
(d) Neither Art nor Science

Ans – (c)

Which of the following is the most relevant accounting information for taxation authorities?

(a) Cash Balance of the firm
(b) Book value of the Fixed Assets
(c) Credit Sales of the year
(d) Profit generated during the year

Ans – (d)

Which of the following limitations of accounting states that accounts may be manipulated to conceal vital facts:

(a) Accounting is not fully exact
(b) Accounting may lead to window dressing
(c) Accounting ignores price level changes
(d) Accounting ignores qualitative elements

Ans – (b)

Which qualitative characteristics of accounting information is reflected when accounting information is clearly presented?

(a) Relevance
(b) Comparability
(c) Reliability
(d) Understandability

Ans – (d)

Use of common unit of measurement and common format of reporting promotes:

(a) Comparability
(b) Reliability
(c) Relevance
(d) Understandability

Ans – (a)

Which of the following is included in Qualitative Characteristics of accounting information:

(a) Reliability
(b) Relevance
(c) Comparability
(d) All of these

Ans – (d)

Which of the following is not the user of accounting information:

(a) Long-term Creditors
(b) Public
(c) Debtors
(d) Government

Ans – (c)