Accounting concepts MCQs

11)

Showing purchased office equipments in financial statements is the application of which accounting concept?

A)  Historical cost conventionWRONG ANSWER

B)  MaterialityRIGHT ANSWER

C)  PrudenceWRONG ANSWER

D)  Matching conceptWRONG ANSWER


12)

Assets can't be offset against liabilities. This the dictation of which of the following accounting concepts?

A)  Matching conceptWRONG ANSWER

B)  Accrual conceptWRONG ANSWER

C)  Prudence conceptWRONG ANSWER

D)  Offsetting conceptWRONG ANSWER


13)

Information about an item is ________ if its omission or misstatement might influence the financial decision of the users taken on the basis of that information

A)  ConcreteWRONG ANSWER

B)  CompleteWRONG ANSWER

C)  ImmaterialWRONG ANSWER

D)  MaterialRIGHT ANSWER!!!


14)

Exercising a degree of caution in the case of judgments needed under the condition of uncertainty is assumption of which of the following accounting concepts?

A)  Matching conceptWRONG ANSWER

B)  Timeliness conceptWRONG ANSWER

C)  Accrual conceptWRONG ANSWER

D)  Prudence conceptRIGHT ANSWER!!!


15)

Which one of the following concepts states that the publication or presentation financial statements should not be delayed?

A)  Objectivity ConceptWRONG ANSWER

B)  Timing conceptRIGHT ANSWER

C)  Timeliness ConceptRIGHT ANSWER

D)  Reliability ConceptWRONG ANSWER


16)

land on lease should be shown in balance sheet contrary to fact that company doesn't own this piece of land. This is the statement of what accounting concepts?

A)  Matching conceptWRONG ANSWER

B)  Accrual conceptWRONG ANSWER

C)  Prudence conceptWRONG ANSWER

D)  Substance over form ConceptRIGHT ANSWER


17)

"Financial information should be neutral and bias free" is the dictation of which one of the following?

A)  Completeness conceptWRONG ANSWER

B)  Faithful representation ConceptWRONG ANSWER

C)  Objectivity ConceptRIGHT ANSWER!!!

D)  Duality ConceptWRONG ANSWER


18)

A business was commenced on 1st January and it purchased 5 vehicles, each costing $5000. During the year the business managed to sell 2 vehicles at the price of $12000. How should the remaining 3 vehicles be valued if the business is going to continue its operations in the next year?

A)  At the breakup valueWRONG ANSWER

B)  On the basis of going concernRIGHT ANSWER!!!

C)  Liquidation valueWRONG ANSWER

D)  More than market valueWRONG ANSWER


19)

A company received cash $1000 in advance for auditing service. However, the company neither earned this revenue nor made any adjusting entry in its books. Identify the effect of this omission?

A)  Total liabilities to be understatedRIGHT ANSWER!!!

B)  Total expenses to be overstatedWRONG ANSWER

C)  Total income to be overstatedWRONG ANSWER

D)  Total assets to be understatedWRONG ANSWER


20)

Depreciation is charged on fixed asse to comply with which of the following accounting principles or concepts?

A)  Matching conceptRIGHT ANSWER!!!

B)  Prudence conceptWRONG ANSWER

C)  Timeliness conceptWRONG ANSWER

D)  Reliability conceptWRONG ANSWER