During the life-time of an entity accounting produce financial statements in accordance with which basic accounting concept:

1

(a)

Conservation

(b)

Matching

(c)

Accounting period

(d)

None of the above

When information about two different enterprises have been prepared presented in a similar manner the information exhibits the characteristic of :

1

(a)

Verifiability

(b)

Relevance

(c)

Reliability

(d)

None of the above

A concept that a business enterprise will not be sold or liquidated in the near future is known as :

1

(a)

Going concern

(b)

Economic entity

(c)

Monetary unit

(d)

None of the above

The primary qualities that make accounting information useful for decision-making are:

1

(a)

Relevance and freedom from bias

(b)

Reliability and comparability

(c)

Comparability and consistency

(d)

None of the above

Recognition of expenses in the same period as associated revenues is called_______concept.

1

(a)

Matching

Revenue is generally recognised at the point of sale denotes the concept of___________.

1

(a)

Revenue Realisation

The_______concept requires that accounting transaction should be free from the bias of accountants and others.

1

(a)

Objectivity

Everything a firm owns it also owns out to somebody. This coincidence is explained by the_______concept.

1

(a)

Matching

A firm may sold stock which is heavily in demand consequently the market value of this stock may be increased. Normal accounting procedure to ignore this because of the_________.

1

(a)

Periodic Causes

The management of a firms remarkably incompetent but the firm accountants, cannot take this into amount while preparing book of accounts because of_________concept.

1

(a)

Money measurement Concept

What is meant by fundamental accounting assumptions?

1

(a)

Fundamental accounting assumptions are the basic accounting conditions which provide a foundation for the accounting process.

Which Accounting Standard lays down fundamental accounting assumptions?

1

(a)

Accounting Standard - 1 (AS- 1).

Mention three fundamental assumptions.

1

(a)

(i) Going concern
(ii) Consistency
(iii) Accrual

Accountancy to which Accounting concept, depreciation is to be charged as per one particular method year to year.

1

(a)

Consistency concept

An accountant always charges depreciation on fixed assets @ 15% p.a. which principle is followed by the accountant?

1

(a)

Accountant is following consistency principal of accounting.

Under which principle the calibre or quality of the management is not disclosed in the balance sheet?

1

(a)

Money Measurement Principle.

"Closing stock is valued at lower of cost price or market price." Which concept of accounting is applied here?

1

(a)

The Prudence Concept.

State the meaning of going concern assumption.

1

(a)

Going concern assumption means that a business firm would continue to carry out its operations indefinitely and would not be liquidated in the foreseeable future.

What is the effect of going concern assumption?

1

(a)

Assets are shown in the accounting records at cost less depreciation.

What is meant by consistency assumption?

1

(a)

Consistency assumption means that the same accounting method should be used from one accounting period to the next period.