Class 11 Accountancy Chapter 2 Theory Base of Accounting MCQ Question With Answers

Theory Base of Accounting Class 11 MCQ is one of the best strategies to prepare for the CBSE Class 11 Board exam. If you want to complete a grasp concept or work on one’s score, there is no method except constant practice. Students can improve their speed and accuracy by doing more MCQs on Theory Base of Accounting Class 11, which will help them all through their board tests.

Theory Base of Accounting Class 11 MCQ Questions with Answer

Class 11 Accountancy MCQ with answers are given here to Chapter 2 Theory Base of Accounting. These MCQs are based on the latest CBSE board syllabus and relate to the latest Class 11 Accountancy syllabus. By Solving these Class 11 MCQs, you will be able to analyze all of the concepts quickly in the chapter and get ready for the Class 11 Annual exam.

Learn Class 11 Theory Base of Accounting MCQs with answers pdf free download according to the latest CBSE and NCERT syllabus. Students should prepare for the examination by solving CBSE Class 11 Accountancy Theory Base of Accounting MCQ with answers given below

Question 1. The Prudence concept doesn’t implies when the
a) Closing stock is valued at lower cost or market price
b) provision for doubtful debts
c) Anticipation of the bad debts
d) disclosure of the material information.

Question 2. According to the Going Concern Concept calculate the value of the Computer which has been purchased for Rs 60,000 and estimated its life for five years,
a) Rs 3,00,000
b) 12,000
c) 6,000
d) 60,000 

Question 3. Accrual concept is based on ……… .
(a) matching principle
(b) dual aspect principle
(c) cost principle
(d) going concern concept

Question 4. The firm purchased the machine cost Rs. 10,000 and charged depreciation @ 10% according to the Straight line Method. After 2 years they switch to the Written down value method. At the time of sale of machine they calculated the depreciation as per the SLM. Which accounting principle is violated?
a) Historical cost
b) consistency
c) cost
d) money Measurement 

Question 5. According to Revenue Realisation concept
i) Credit sales are treated as revenue on the day sales are made and not when money is received
ii) Rent for the march 14 received in April 14 will be recorded in Profit and Loss A/c in the beginning of the Financial year April14
a) Option (i) is applicable
b) Option (ii) is applicable
c) Both Option (i) and (ii) are applicable
d) None of the options is applicable 

Question 6. According to the Revenue Realization Concept the interest for Apr’18 received in March’14 will be taken in Profit/Loss A/c of the Financial Year
a) Beginning of Apr’18
b) Ending March’18
c) Beginning of March’18
d) Ending of Apr’18 

Question 7. According to the Duality Principle, Calculate the Owner’s claim, if the firms Outsider’s claim is Rs 20,000 and the net worth of the assets that business owns is Rs 70,000.
a) 50,000
b) 90,000
c) 70,000
d) 20,000 

Question 8. Calculate the owner’s equity as per the Business Entity Concept, if the owner commenced the business with the 2 acres of land worth Rs.3crore, building worth Rs. 5crore and Bank balance of Rs. 10 lacks.
a) Rs.8Cr 10 lacks
b) Rs.11crore 10 lacks
c) Rs.10 lacks
d) Rs. 9crore 

Question 9. An item is considered to be material if there is a reason to believe that knowledge of it would influence the decision of an informed investor.
(a) True
(b) False
(c) Partially true
(d) Partially false

Question 10. Which AS deals with ‘Financial Instruments: Disclosures’?
(a) AS-29
(b) AS-30
(c) AS-31
(d) AS-32

Question 11. In accrual concept, revenue is recorded when ……… .
(a) cash is received
(b) sales are made
(c) goods are delivered
(d) None of the above

Question 12. Due to which principle, contingent liabilities are shown in the balance sheet?
(a) Dual aspect principle 
(b) Principle of full disclosure
(c) Principle of materiality
(d) Going concern concept

Question 13. Going concern concept is indespensable for the proper working of the business. Which of the following events are based on the concept of going concern?
(a) Outside parties purchase the debentures and shares of the enterprise
(b) Prepaid expenses, which have no realisable value are shown as assets in balance sheet
(c) Classification of current and fixed assets is made in accounting books
(d) All of the above

Question 14. i) As per the conservatism principle the valuation of stock is at lower of cost or net realizable value.
ii) The convention of conservatism takes all the prospective losses but leaves out prospective profits.
iii) The Dual aspect concept states the proprietor of a business is treated as External liabilities
a) Option (i) and (ii) is correct
b) Option (iii) and (ii) is correct
c) Option (i), (ii) and (iii) is correct
d) Option (i) and (iii) is correct

Question 15. AS does not apply to purely charitable organisations.
(a) True
(b) False
(c) Partially true
(d) Can’t say

Question 16. International Financial Reporting Standards (IFRS) are issued by ……… .
(a) IFRS Committee
(b) International Accounting Standards Board
(c) international Accounting Committee
(d) None of the above

Question 17. For a large manufacturing, the costs of small tools used in not relevant whereas it is very relevant for a small roadside workshop. This fallacy can be explained by which principle?
(a) Principle of conservation
(b) Principle of full disclosure
(c) Principle of materiality
(d) Matching principle

Question 18. According to ……… principle, an event, even though it may be very important for the business, will not be recorded in the books of business unless its effect can be measured in
terms of money with a fair degree of accuracy. 
(a) materiality
(b) money measurement
(c) full disclosure
(d) dual aspect 

Question 19. All anticipated losses and gains should be recorded in the books of accounts.
(a) True
(b) False
(c) Partially true
(d) Can’t say

Question 20. Calculate the value of the asset at the time of preparing final account that is purchased for Rs. 5,00,000 ,if the market value is Rs. 7,00,000 as per the cost concept.
a) Rs. 5,00,000
b) Rs. 7,00,000
c) Rs.1,20,000
d) Rs. 2,00,000

Question 21. Accounting concepts are basic assumptions which are taken for any business and business are considered to be following them. From the given options, identify which of the following cannot be considered a fundamental accounting assumption?
(a) Going concern
(b) Consistency
(c) Accrual
(d) Materiality

Question 22. As per the law, which of the following is the correct accounting period?
(a) 1st April to 31st December
(b) 1st April to 31st March
(c) 1st January to 31st December
(d) Both (b) and (c)

Question 23. Pick the odd one out.
(a) Accounting period principle
(b) Financial period principle
(c) Periodicity principle
(d) Time period principle

Question 24. As per principle of conservatism, which of the following is incorrect?
(a) Provision for doubtful debts is created in anticipation of actual bad debts
(b) Closing stock is always valued at the realisable value
(c) Joint life insurance policy is shown at the surrender value
(d) None of the above

Question 24. Which of the following will be recorded in the books of account?
(i) Competitor placing better product in market.
(ii) Strike by labour union.
(iii) Labours being pair.
(a) (i) and (ii)
(b) (ii) and (iii)
(c) Only (iii)
(d) All of these

Question 25. The junior accountant in a fortune 500 company decided to omit the ‘paisa’ in certain figures and showed the rounded off figures in financial statements. The act was found to be correct by senior accountant because of
(a) principle of full disclosure
(b) going concern concept
(c) materiality principle
(d) consistency concept

Question 26. Principle of …… is an exception to the principle of full disclosure
(a) money measurement
(b) materiality
(c) matching
(d) None of the above

Question 27. Which of the following is correct about value of investments of a firm?
(a) Market value of investments are not shown anywhere and only book value is shown in balance sheet
(b) Both market value and book value is shown in balance sheet and the higher of the two is accounted for
(c) Market value of investments is shown in balance sheet and book value is not shown anywhere
(d) Market value of investments is shown in footnote and book value of investment is reflected in balance sheet

Question 28. According to principle of prudence,
(a) outstanding expenses are accounted for
(b) provision for bad debts is created
(c) depreciation is charged on assets
(d) All of the above

Question 29. “They first expanded to Tamil Nadu and got great demand.” Which type of GST is applicable on this supply to Tamil Nadu?
(a) Centre GST
(b) State GST
(c) Integrated GST
(d) Both (a) and (b)

Question 30. Which principle is highlighted in the line, ‘‘The machines were recorded at the price prevailing in 2004”?
(a) Full disclosure principle
(b) Conservatism principle
(c) Duality principle
(d) Historical cost principle

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Question 31. When there are different alternatives for recording a transaction, the one having least favourable immediate effect on profits or capital should be adopted.
(a) True
(b) False
(c) Partially true
(d) Can’t say

Question 32. According to ………, the entire life of business should be divided into timeintervals for the measurement of the profits of business.
(a) going concern concept
(b) accounting period principle
(c) consistency concept
(d) principle of prudence

Question 33. According to the cost principle, an asset bought is recorded in books at price ……… .
(a) at which it was acquired
(b) which is prevailing in market
(c) higher of (a) and (b)
(d) lower of (a) and (b)

Question 34. Cost/Historical cost principle means that assets will be continuously shown at their acquisition cost, even if the asset is depreciable.
(a) True
(b) False
(c) Partially false
(d) Can’t say

Question 35. Which principle/concept is highlighted in the line,” … and have been subjected to depreciation year on year based on written down value method.”?
(a) Full disclosure principle
(b) Business entity principle
(c) Consistency concept
(d) Accrual concept

Question 36. The proforma and contents of balance sheet and profit and loss account are prescribed by Companies Act so that companies show all the relevant information while preparing the financial statements. This is done to ensure that ……… is followed.
(a) accrual concept
(b) dual aspect principle
(c) principle of full disclosure
(d) principle of materiality

Question 37. ‘Double entry system’ is based on which accounting principle concept?
(a) Going concern concept
(b) Business entity principle
(c) Matching principle
(d) Dual aspect principle

Question 38. Central GST and Union Territory GST is applicable in such a way that if the prescribed rate is 18%, …… GST will be levied by centre and …… GST will be levided by the union territory.
(a) 10%, 8%
(b) 8%, 10%
(c) 9%, 9%
(d) Can’t be determined

Question 39. Recognition of cost in the same period as associated revenues is called ……… .
(a) Cost principle
(b) Dual aspect principle
(c) Full disclosure principle
(d) Matching principle

Question 40. Incomes receivables must be …… in revenues and income received in advance must be …… from revenues as per matching principle.
(a) deducted, added
(b) ignored, added
(c) added, deducted
(d) None of these

Question 41. In ………, unpaid expenses are recorded in books of accounts.
(a) cash basis of accounting
(b) accrual basis of accounting
(c) Both (a) and (b)
(d) Can’t be determined

Question 42. Which of the following methods of accounting is/are recognised by Companies Act, 2013?
(a) Cash basis of accounting
(b) Accrual basis of accounting
(c) Both (a) and (b)
(d) Can’t be determined

Question 43. In how many categories is GST divided?
(a) 2
(b) 4
(c) 3
(d) 6

Question 44. Everything a firm owns, it also owes to somebody. This co-existence is explained by ……… .
(a) accrual concept
(b) dual aspect principle
(c) consistency concept
(d) matching principle

Question 45. Cash basis of accounting does not require the use of estimates and personal judgements.
(a) True
(b) False
(c) Partially true
(d) Can’t say

Question 46. Ind-AS 1 deals with
(a) statement of cash flows
(b) disclosure of accounting policies
(c) plant, property and equipment
(d) None of the above

Question 47. Consolidated financial statement is dealt under which IFRS?
(a) IFRS – 1
(b) IFRS -5
(c) IFRS – 10
(d) IFRS – 15

Question 48. Which basis of accounting makes a distinction between revenue and capital items?
(a) Cash basis of accounting
(b) Accrual basis of accounting
(c) Both (a) and (b)
(d) Can’t be determined

Question 49. Which of these is/are the objectives of accounting standards?
(a) Better understanding of financial statements 
(b) Minimise diverse accounting policies and practices with an aim to eliminate them to possible extent
(c) Enhance reliability of financial statements
(d) All of the above

Question 50. Accounting Standard-26 deals with
(a) inventories valuation
(b) plant, property and equipment
(c) consolidated financial statements
(d) intangible assets

Question 51. Serial number of AS and Ind-AS correspond with each other with respect to title.
(a) True
(b) False
(c) Partially false
(d) Can’t say

Question 52. Which of the following is/are objectives of GST?
(a) To maximise tax rate slabs
(b) To restrict the movement of goods across the country
(c) To eliminate classification dispute between goods and services
(d) All of the above

Question 53. Which concept is highlighted in the fact that company made long-term contracts with the farmers?
(a) Going concern concept
(b) Accrual concept
(c) Consistency concept
(d) Both (a) and (b)

Question 54. On which of these items, GST is not applicable?
(a) Sanitary pads
(b) Medicines
(c) Alcoholic liquor
(d) Books

Question 55. Which AS will be applicable to evaluate the reputation and brand value of firm?
(a) AS-20
(b) AS-26
(c) AS-30
(d) AS-2

Question 56. The supplies of the company would be subjected to Integrated GST.
(a) True
(b) False
(c) Partially true
(d) Can’t say

Question 57. Which AS would have been followed by accountant to value inventories?
(a) AS-1
(b) AS-2
(c) AS-3
(d) AS-4

Question 58. ……… is levied in the course of interstate supply of goods and services.
(a) Central GST
(b) State GST
(c) Union Territory GST
(d) Integrated GST

Question 59. Identify the GST applicable in case X Ltd. sells goods from Naisk to a vendor in Mumbai.
(a) Central GST
(b) State GST
(c) Both (a) and (b)
(d) Integrated GST

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