Select the best choice to complete each sentence or answer each question below:
1. Book keeping is mainly concerned with
a. Recording financial data relating to business operations.
b. Designing for systems recording, classifying and summarizing recorded data.
c. Interpreting data for internal and external users.
2. Which qualitative characteristic of accounting information is reflected when accounting information is clearly presented?
a. Understandability
b. Relevance
c. Comparability
d. Reliability
3. Which is the last step of accounting as a process of information? a. Recording economic events in the books of accounts.
b. Preparation of financial statement.
c. Communication of information.
d. Analysis and interpretation of information.
4. The basic function of financial accounting is to
a. Record all business transactions.
b. Interpret financial data.
c. Assist the management in performing functions effectively.
5. The convention of conservatism takes into account
a. All prospective profits and all prospective losses.
b. All prospective profits and leaves all prospective losses.
c. All prospective losses but leaves all prospective profits.
d. None of the above.
6. According to going concern concept, a business is viewed as having
a. A limited life
b. A very long life
c. An indefinite life
d. None of these.
7. Accoding to which of the following accounting concepts, even the proprietor of a business is treated as creditor to the extent of his capital
a. Money measurement concept
b. Dual aspect concept
c. Cost concept
d. Business entity concept
8. According to which of the following concepts, in determining the net income from business, all costs which are applicable to the revenue of the period should be charged against that revenue
a. Matching concept
b. Money measurement concept
c. Cost concept
d. Dual aspect concept
9. Lower of cost or market price is an example of
a. Consistency convention
b. Conservatism convention
c. Realisation concept
d. Matching concept
10. X ltd follows the written down value method of depreciating machinery year after year due to
a. Comparability
b. Convenience
c. Consistency
d. All of the above