CBSE Class 11 Chapter 1 Introduction to Accounting
CBSE Class 11 Chapter 1 Introduction to Accounting
Introduction:
Learn the important MCQ Questions for Class 11 Accountancy Chapter 1 of Introduction to Accounting with the latest CBSE syllabus.
Below is also a Google Forms mock test which can be used for quick revision and self-assessment prior to exams.
For better understanding of MCQs and short questions in an easy way you can watch the video explanation.
Very Short Answer Type Questions:
1.Give the meaning of 'Accounting'.
Answer:
Accounting is a process of identifying financial transactions, measuring them in money terms, recording them in primary books, classifying, summarising, analyzing, interpreting them and communicating the results to the users.
2.List any two
functions of Accounting.
Answer:
Two functions of accounting are:(i) Identifying financial transactions
(ii)Recording them in the books of account.
3.Name the
branch of commerce, which keeps a record of monetary transactions in a set of
books.
Answer: Book keeping4.Define Book
keeping
Answer:
Book keeping is an art of recording in the books of account the monetary aspect
of commercial and financial transactions.5.What is the
function of Book keeping?
Answer:
The function of Book Keeping is to identify financial transactions and events,
measuring them in money terms, recording them in the books of account and
classifying the recorded transactions.6.Name any two
objectives of Accounting.
Answer: The two objectives of Accounting are:(i)Ascertaining profit or loss and
(ii) Ascertaining
financial position
7.What are the
advantages of Accounting? (Any Two)
Answer: Two advantages
of Accounting are:(i)Financial performance and position is known
(ii)Assist management in making business plans, take decisions and exercise control.
8.What are the limitations of Accounting? (Any Two)
Answer: The
limitations of Accounting are:
(i) Non-financial information are not recorded; and
(ii) It ignores price level changes.
(i) Non-financial information are not recorded; and
(ii) It ignores price level changes.
9.Name any one external user of
Accounting information.
Answer:
Creditors.10.What are the two accounting systems to record financial transactions in the books of account?
Answer: The two accounting systems are:(i)Double Entry System; and
(ii)Accounts from Incomplete Records (or) Single-Entry System.
11.Name the external user of accounting information from whom the firm purchases goods on credit.
Answer: Supplier of goods.12.Is the basic objective of Book Keeping to maintain systematic records (or) to ascertain net results of operations of financial transactions?
Answer: The basic objective of Book Keeping is to maintain systematic records of financial transactions.13.Name the external users directly concerned with accounting information. (or) Name any two external users of accounting information.
Answer: The external users directly concerned with accounting information:
(i) Creditors,
(ii) Bankers or Financial Institutions, and
(iii)Government and its Authorities.
(i) Creditors,
(ii) Bankers or Financial Institutions, and
(iii)Government and its Authorities.
Short Answer Type Questions:
1. Explain the Meaning of Accounting?
Answer: Accounting is a process of identifying financial transactions, measuring them in money terms, recording them in primary books, classifying, summarizing, analyzing, interpreting them and communicating the result to the users.
2. What is the Process of Accounting?
Answer: Accounting is the process of identifying financial transactions, measuring them in money terms, recording them in primary books, classifying, summarizing, analyzing and interpreting them.
3. Define Book Keeping. What is the Function of Book-Keeping?
Answer: Define Book Keeping:
According to R.N. Carter, “Book-keeping is the science and art of recording correctly in the books of account all those business transactions that result in the transfer of money or money’s worth.
Functions of book-keeping:
The following are the functions of book-keeping:
(i)Identify financial transactions and events.
(ii)Measuring them in terms of money.
(iii)Recording them in the book of accounts.
(iv)Classifying the recorded transactions.
4. Give on Point of Distinction Between Book-Keeping and Accounting.
Answer: Distinction Between Book-Keeping and Accounting:
Book- keeping:
(i) Book keeping involves identifying financial transactions and events;
(i) Book keeping involves identifying financial transactions and events;
(ii) Measuring them in money terms;
(iii) Recording them in the books of account and classifying them.
Accounting:
(i) Accounting involves with summarizing the recorded transactions and events,
(ii) Interpreting them and communicating the results thereof.
5. Discuss briefly the type of Accounting Information.
Answer: The type of accounting information are
(a)Income Statement (or) Profit and Loss Account and (b)Position Statement (or) Balance Sheet.
6. Why the following parties are interested in Accounting Information: (a) Investors (b) Government
Answer:
Investors: Investors rely on accounting information to know about the profitability of the business and the safety of their investments.
Government: Government uses accounting information for tax assessment and calculation of national income accounts.
7. State what is the end-product of Financial Accounting.
Answer: The end products of financial accounting are financial statements, i.e., Income Statement and Balance Sheet.
8. What are the attributes (features) of Accounting?
Answer: The attributes (or) features of Accounting are:
Identification, measurement, recording, classification, summarization, interpretation, and communication of financial data.
9. What do you mean by Accounting? What are its main objectives?
Answer: Meaning of Accounting:
Accounting is a process of identifying financial transactions, measuring them in money terms, recording them in primary books, classifying, summarizing, analyzing, interpreting them, and communicating the results to the users.
Objectives of Accounting:
The following are main objectives of maintaining systematic records, ascertaining profit or loss, ascertaining financial position, assisting management, and communicating accounting information to users.
10. What are the advantages of accounting?
Answer: The advantages of accounting are:
(a) Financial information about business.
(b) Assistance to management.
(c) Replacement of memory.
(d) Facilitation of comparative study.
(e) Facilitation of settlement of tax liabilities.
(f) Facilitation of loans.
(g) Evidence in court.
(h) Facilitation of sale of business.
(i) Assistance in insolvency.
(j) Helpful in partnership accounts.
(b) Assistance to management.
(c) Replacement of memory.
(d) Facilitation of comparative study.
(e) Facilitation of settlement of tax liabilities.
(f) Facilitation of loans.
(g) Evidence in court.
(h) Facilitation of sale of business.
(i) Assistance in insolvency.
(j) Helpful in partnership accounts.
11. Explain the primary objectives of accounting.
Answer: The primary objectives are:
(a) Maintaining systematic records.
(b) Ascertaining profit or loss.
(c) Ascertaining financial position.
(d) Assisting management.
(e) Communicating accounting information to users.
12. Explain any four objectives of accounting.
Answer: The primary objectives are:
(a)Maintaining systematic records.
(b)ascertaining profit or loss.
(c)ascertaining financial position.
(d)communicating accounting information to users.
13. Define Accounting. Explain any two limitations of accounting.
Answer:
Define Accounting: According to the American Accounting Association, “Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by the users of the information.”
Limitations of Accounting (any two):
(a) Accounting ignores the effect of price level changes.
(b) It may lead to window dressing.
14. What is accounting? Explain four of its functions.
Answer: Meaning of Accounting:
Accounting is a process of identifying financial transactions, measuring them in money terms, recording them in primary books, classifying, summarizing, analyzing, interpreting them, and communicating the results to the users.
Functions of Accounting (any four):
The following are the four functions of Accounting:
(a) Maintaining systematic records.
(b) Communicating financial results.
(c) Meeting legal requirements.
(d) Protecting business assets.
15. What do you mean by accounting? Explain in brief any four advantages of accounting.
Answer: Meaning of Accounting:
Accounting is a process of identifying financial transactions, measuring them in money terms, recording them in primary books, classifying, summarizing, analyzing, interpreting them, and communicating the results to the users.
Advantages of Accounting (any four):
The following are the four fadvantages of Accounting:
(a) Financial information about business.
(b) Assistance to management.
(c) Replacement of memory.
(d) Facilitation of comparative study.
16. What do you mean by Financial Accounting? Explain the four main limitations of Financial Accounting.
Answer:
Meaning of Financial Accounting:
Financial Accounting records financial transactions and events, summarizes and interprets them, and communicates the results to the users.
Limitations of Financial Accounting:
These are the four main limitations of financial accounting:
(a) Accounting ignores the effect of price level changes.
(b) It may lead to window dressing.
(c) It ignores qualitative elements.
(d) It doesn’t indicate the realizable value.
17. What do you mean by Financial Accounting? Explain its one main function.
Answer:
(a) Financial Accounting records financial transactions and events, summarizes and interprets them, and communicates the results to the users.
(b) One main function is maintaining systematic records for recording them in the Journal, posting them into the ledger, and preparing final accounts.
18. Write a short note on Double Entry System of Accounting.
Answer:
(a) The double entry system records every transaction in two aspects: debit and credit.
(b) If more than two accounts are affected, the sum of debit transactions must equal the sum of credit transactions.
(c) It is a scientific and complete system of accounting followed by enterprises and organizations.
19. Accounting provides information about the profitability and financial soundness of a concern. In addition, it provides various other valuable information also. However, accounting has certain limitations. Explain any three of such limitations.
Answer:
(i) Financial Accounting records financial transactions and events, summarizes and interprets them, and communicates the results to the users.
(ii) Three limitations are:
(a) Accounting ignores the effect of price level changes.
(b) It may lead to window dressing.
(c) It ignores qualitative elements.
Conclusion:
Carefully rewrite all the important MCQs and short questions to clear your concepts of Introduction to Accounting.
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