Which of the following is not a business transaction?

1

(a)

Bought furniture of Rs 10,000 for business

(b)

Paid for salaries of employees Rs 5,000

(c)

Paid sons fees from her personal bank account Rs 20,000

(d)

Paid sons fees from the business Rs 2,000

Deepti wants to buy a building form her business today. Which of the following is the relevant data for his decision?

1

(a)

Similar business acquired the required building in 2000 for Rs 10,00,000

(b)

Building cost details of 2003

(c)

Building cost details of 1998

(d)

Similar building cost in August, 2005 Rs 25,00,000

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

1

(a)

Recording of data in the books of accounts

(b)

Preparation of summaries in the form of financial statements

(c)

Communication of information

(d)

Analysis and interpretation of information

Information in financial reports is based on __________ transactions.

1

(a)

Economic

Internal users are the _____________ of the business entity.

1

(a)

Management/Employees

A _____________ would most likely use an entities financial report to determine whether or not the business entity is eligible for a loan.

1

(a)

Creditor

The Internet has assisted in decreasing the ______________ in issuing financial reports to users.

1

(a)

Time-gap

Accounting measures the business transactions in terms of ____________ units.

1

(a)

Monetary

Identified and measured events should be recording in ____________ order.

1

(a)

Chronological

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

1

(a)

Recording of transactions in the books of accounts is the first step of accounting process.

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

1

(a)

Communication of information to the users of accounting is the last step of accounting process.

What types of transactions are recorded in accounting books?

1

(a)

Monetary transactions.

Write any one objective of accounting.

1

(a)

(i) To keep systematic and complete record of business transactions in books of accounts.
(ii) To ascertain the profit earned or loss incurred during a particular accounting period.
(ill) To ascertain the financial position of the business by means of financial statement.
(iv) To provide useful information to users like owners, investors etc.

Name any two objectives of Accounting.

1

(a)

Two objectives of accounting are :
(i) To maintain systematic record of business transactions.
(ii) To ascertain profit or loss of the firm.

What is discount?

1

(a)

Discount is the amount which is deducted from the amount due.

What is meant by trade discount?

1

(a)

Trade discount means a deduction allowed from the list price, by a trader, to customers, when they make purchases in large quantities.

What is the purpose of trade discount?

1

(a)

Trade discount is allowed to increase the sales volume.

What is meant by cash discount?

1

(a)

Cash discount means a deduction in payment allowed by a trader to customers when they make payments within a fixed period of times.

What is the purpose of cash discount?

1

(a)

Cash discount is allowed to receive timely payments.

If the accounting information is not clearly presented, which of the qualitative characteristic of the accounting information is violated ?

1

(a)

Reliability.