CBSE Class 11 Chapter 1 Introduction to Accounting
CBSE Class 11 Chapter 1 Introduction to Accounting
Introduction:
👉 Click Here to Watch YouTube Video (MCQs & Short Answer Questions)
I. Multiple Choice Questions (MCQs):
(i)Bookkeeping and Accounting
(a) means same and are used interchangeably.
(b) does not mean same and are not used interchangeably.
(c) means both (a) and (b).
(d) None of the above.
Answer: (b) does not mean same and are not used interchangeably.
(ii) Which of the following is not a sub-field of accounting?
(a) Bookkeeping
(b) Management Accounting
(c) Financial Accounting
(d) Cost Accounting
Answer: (a) Bookkeeping
(iii) Which of the following is not recorded in the books of account?
(a) Sales of goods
(b) Payment of salary
(c) Quality of staff
(d) Purchase of Goods
Answer: (c) Quality of staff
(iv) Bookkeeping is concerned with____
(a) recording financial data relating to business transactions.
(b) classifying and summarising recorded data.
(c) interpreting data for internal users.
(d) All of the above.
Answer: (a) recording financial data relating to business transactions.
(v) Which is the last step of accounting as a process of information?
(a) Recording the transaction
(b) Preparation of financial statements
(c) Communication of information
(d) Analysis and interpretation of information
Answer: (c) Communication of information
(vi) Basic function of financial accounting is to
(a) record all business transactions
(b) interpret financial data.
(c) assist the management.
(d) None of these.
Answer: (a) record all business transactions
(vii) Transactions are posted into ledger account from
(a) Vouchers.
(b) Journal book.
(c) Bank Statement.
(d) None of these
Answer: (b) Journal book.
(viii) Which of the following is not a business transaction?
(a) Purchase of goods for resale amounted to Rs.50,000
(b) Paid salaries and wages amounted to Rs.10,000
(c) Paid rent for office premises to Rs.5,000
(d) Purchased a LCD for personal use
Answer: (d) Purchased a LCD for personal use
(ix) Which of the following transactions will not be recorded in the books of account?
(a) Purchased an LCD for personal use, paying the amount from a personal bank account.
(b) Purchased machinery for manufacture.
(c) Purchased machinery for resale.
(d) Paid salaries and wages.
Answer: (a) Purchased an LCD for personal use, paying the amount from a personal bank account.
(x)Which one is the advantage of accounting?
(a) Replacement of Memory
(b) Shows the present value of business
(c) Accounting does not record price level changes
(d) Accounting is not fully exact
Answer: (a) Replacement of Memory
(xi) Which is the important objective of accounting?
(a) To keep systematic records of financial transactions.
(b) To ascertain the net profit or loss of business.
(c) To ascertain the financial position of a business.
(d) All of the above.
Answer: (d) All of the above.
(xii) Which of the following is not an internal user of financial statements?
(a) Board of Directors
(b) Employees
(c) Managers
(d) None of these.
Answer: (d) None of these.
(xiii) Which of the following is not a characteristic of accounting?
(a) Recording non-monetary transactions
(b) Analysis
(c) Classifying
(d) Summarising
Answer: (a) Recording non-monetary transactions
(xiv) Which of the following is a limitation of accounting?
(a) Assistance to Management
(b) Replaces Memory
(c) Unrealistic Information
(d) Evidence in Court
Answer: (c) Unrealistic Information
(xv) Cost of Goods manufactured is determined by
(a) Financial Accounting.
(b) Cost Accounting.
(c) Management Accounting.
(d) Human Resource Accounting.
Answer: (b) Cost Accounting.
(xvi) Qualitative characteristic of accounting includes
(a) Reliability and Relevance.
(b) Understandability and Comparability.
(c) Both (a) and (b).
(d) None of the above.
Answer: (c) Both (a) and (b).
(xvii) Which of the following is not a qualitative characteristic of accounting information?
(a) Reliability
(b) Comparability
(c) Understandability
(d) Materiality
Answer: (d) Materiality
(xviii) Use of common unit of measurement and common format of reporting promotes
(a) Comparability.
(b) Relevance.
(c) Understandability.
(d) Reliability.
Answer: (a) Comparability.
(xix) Which qualitative characteristic of accounting information is reflected when accounting information is clearly presented?
(a) Reliability
(b) Comparability
(c) Relevance
(d) Understandability
Answer: (d) Understandability
(xx) Which external user of accounting information is most interested in knowing the long-term solvency position of the firm?
(a) Employees
(b) Management
(c) Bank and Financial Institutions
(d) Researchers
Answer: (c) Bank and Financial Institutions
II. Objective Type Questions:
1. State whether the following statements are true or false:
(i) Accounting may be influenced by personal judgment.
(ii) Financial statements are not comparable.
(iii) Accounting information must be presented in such a way that only accounting people understand it.
(iv) Accounting information should be reliable.
(v) Bookkeeping and accounting are synonymous terms.
(vi) Non-financial transactions are not recorded in the books of account.
(vii) Transactions are posted in a book called a journal.
(viii) Accounting does not include bookkeeping.
(ix) Accounting does not show the realizable value of business.
(x)Bookkeeping is concerned with recording and classifying financial data relating to business operations.
(xi) Analysis and interpretation is the last step of accounting as a process of information.
(xi) Accounting is the language of the business.
Answers:
(i) True; (ii) False; (iii) False; (iv) True; (v) False; (vi) True; (vii) False, (viii) False; (ix) True; (x) True; (xi) False; (xii) True.
2. Fill-in-the blanks with appropriate words:
(ii) ______ starts where bookkeeping ends.
(iii) Information in financial reports is based on ________.
(iv) Identified and measured economic events should be recorded in _______.
(v) The process of accounting starts with ________ and ends with ________ order.
(vi) Manipulation of accounts in a way so as to show a better position than what it actually is called _______.
(vii) Information is said to be relevant if it is __________.
(viii) Internal users of accounting information are _________ of the business entity.
(ix) The book of original entry where financial transactions are recorded is termed _____.
(x)To determine the financial position of a business, a _______ is prepared.
(x)Qualitative characteristics of accounting include reliability, relevance, comparability, and __________.
(xii) Cost of goods manufactured is determined by ______ accounting.
(xiii) Profit or loss is calculated by _______ accounting.
(xiv) ________ are the basis of recording financial transactions in the books of account.
(xv) A balance sheet is a statement of ________ and ________.
(xvi) The book where financial transactions are posted is termed as _______.
(xvii) The statement prepared to calculate the profit or loss of a business is termed as a __________.
(xviii)___________ is the qualitative characteristic that states that accounting information is verifiable and free from personal bias.
Answers:
(i) Monetary; (ii) Accounting; (iii) Economic Transactions; (iv) Chronological; (v) Identification of Financial Transactions, Communicating the information; (vi) Window Dressing; (vii) Free from Personal Bias; (viii) Owners/Management; (ix) Journal; (x) Balance Sheet or Position Statement; (xi) Understandability; (xii) Cost; (xiii) Financial; (xiv) Vouchers; (xv) Assets, Liabilities; (xvi) Ledger; (xvii) Income Statement or Statement of Profit and Loss; (xviii) Reliability
Conclusion:
Carefully rewrite all the important MCQs and short questions to clarify your concepts of Introduction to Accounting.
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