Accountancy mcq of previous year question paper

 

 Unit 2: Accounting concepts, principles, and conventions

Objective Type Questions: The following multiple-choice questions are taken from the question papers of various Government recruitments that occurred in the past.

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[1] A change in Accounting Policy is justified to :

(a) Comply with Accounting Standard

(b) Comply with Law

(c) Ensure more appropriate presentation of finanacial statment

(d) All of the above

ANSWER-(d)

 

[2] Accounting Policies:

(a) Are prescribed by AS 1

(b) Are laid down by Law

(c) Are same for all concerns

(d) Change from concern to concern 

ANSWER-(d)

 

[3] Which of the following is one of the major considerations governing the selection and application of accounting policy:

(a) Prudence

(b) Materiality

(c) Substance over form

(d) All of the above

ANSWER-(d)

 

[4] Accounting principles and policies are to be standardised to achieve:

(a) Transparency

(b) Consistency

(c) Comparability

(d) All of these

ANSWER-(d)

 

[5] Which is not an example of an accounting policy:

(a) Going Concern

(b) Valuation of Fixed Assets

(c) Treatment of Retirement Benefits

(d) Valuation of Inventories

ANSWER-(a)

 

[6] As per AS 1 disclosure should form part of:

(a) The Final Accounts

(b) The Auditor's Report

(c) The Director's Report

(d) The Books of Accounts

ANSWER-(a)

 

[7] Selection of an inappropriate accounting policy may lead to :

(a) Understatement of Performance

(b) Overstatement of Performance

(c) Understatement or Overstatement of Financial Position

(d) None of the above

ANSWER-(c)

 

 [8] Selection of appropriate accounting policies is not based on:

(a) Prudence

(b) Substance over form

(c) Amount involved

(d) Materiality.

ANSWER-(c)

 

[9] Which of the following is not an example of change in accounting policy?

(a) Change in method of providing depreciation on fixed assets.

(b) Change in the method of providing inventory valuation.

(c) Adopting double Entry system of accounting in place of Single Entry.

(d) Change in method of valuation of Investments.

ANSWER-(c)

 

[10] The area wherein different accounting policies can be adopted are:

(a) Valuation of inventories

(b) Retirement benefits

(c) Treatment of goodwill

(d) All of the above

ANSWER-(d)

 

 

[11] An enterprise has adopted a wrong accounting treatment for valuation of spares and tools. However, proper disclosures are being made in financial statements?

(a) The disclosure has the effect of rectifying the - incorrect valuation.

(b) This wrong treatment will not effect true and fair view of financial statements.

(c) This disclosure cannot rectify a wrong or inappropriate treatment adopted by the enterprise.

(d) Wrong treatment has no relevance as spares and tools are not important to the enterprise.

ANSWER-(c)

 

[12] A change in accounting policy is justified:

(a) To comply with law.

(b) To ensure more appropriate presentation of the financial statement of the enterprise.

(c) To comply with accounting standard.

(d) All of the above.

ANSWER-(d)

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