MCQs on Financial Accounting - 5

1. The prime function of accounting is to

(a) record economic data
(b) provide the informational basis for action
(c) classifying and recording business transactions
(d) attain non-economic goals.

2. The basic function of financial accounting is to

(a) record all business transactions
(b) interpret financial data
(c) assist the management in performing functions,
(d) none of the above.

3. A person who brings capital in the business is called

(a) debtor
(b) creditor
(c) proprietor
(d) none of the above.

4. A person who owes money to the firm is known as

(a) debtor
(b) creditor
(c) supplier
(d) none of the above

5. Accounting principles are generally based on

(a) objectivity
(b) subjectivity
(c) convenience and personal interpretation
(d) none of the above.

6.The policy ‘anticipate the profit and provide for all possible losses’ arises due to

(a) convention of consistency 
(b) convention of conservatism
(c) convention of full disclosure 
(d) convention of materiality.

7. Revenue is generally recognized as being earned at the point of time

(a) sale is made and ownership of goods transferred
(b) cash is received
(c) production is completed
(d) sales are effected or cash is received, whichever is earlier.

8. The system of recording transactions based on dual aspect is called

(a) dual account system 
(b) double entry system
(c) cash accounting 
(d) single entry system.

9. According to which of the following accounting concept even the proprietor of business treated as a creditor of the business to the extent of his capital

(a) money measurement concept 
(b) dual entry concept
(c) going concern concept 
(d) separate entity concept.

10. According to going concern concept, a business is viewed as having

(a) a limited life
(b) going to be liquidated after 100 years
(c) an indefinite life
(d) none of the above.

More MCQs on Financial Accounting

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Smart Vidya

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