Theory Base of Accounting Class 11 MCQ Pdf:
1. A concept that a business enterprise will not be sold or liquidated in the near future is known as:
(1) Going concern
(2) Economic entity
(3) Monetary unit
(4) None of the above
Answer: (1) Going concern
Explanation: The "going concern" concept in accounting assumes that a business will continue its operations indefinitely and will not be liquidated or sold in the near future. This concept underlies the preparation of financial statements, assuming the continuity of the business.
2. Which of the following is a characteristics of accounting_____
(1) Understandability:
(2) Relevance.
(3) Reliability.
(4) Comparability.
(5) All of these
Answer: (5) All of these
Explanation: The characteristics of accounting include understandability (users can comprehend the information), relevance (information influences decisions), reliability (information is free from bias), and comparability (information can be compared over time or with other entities).
3. What are the basic of accouting?
(1) Basic accounting refers to the process of recording a company's financial transactions.
(2) It involves analyzing, summarizing and reporting these transactions to regulators, oversight agencies and tax collection entities
(3) Both of these
(4) None of these
Answer: (3) Both of these
Explanation: Basic accounting involves both the process of recording financial transactions (bookkeeping) and the subsequent analysis, summarization, and reporting of these transactions to stakeholders.
4. Meaning of credibility of going concern is:
(1) Closing of business
(2) Opening of business
(3) Continuing of business
(4) None of these.
Answer: (3) Continuing of business
Explanation: Credibility of the "going concern" concept refers to the assumption that the business will continue its operations into the foreseeable future without the intention of liquidation or cessation
5. The amount drawn by a businessman for his personal use is _______.
(1) Capital
(2) Drawing
(3) Expenditure
(4) Loss
Answer: (2) Drawing
Explanation: In accounting, when a businessman withdraws funds from the business for personal use, it is recorded as a "drawing" or "withdrawal" from the business by the owner.
6. Generally the duration of an Accounting period is of-
(1) 6 months
(2) 3 months
(3) 12 months
(4) 1 month.
Answer: (3) 12 months
Explanation: The accounting period is typically a period of 12 months, corresponding to the fiscal year for most businesses, although shorter or customized accounting periods are possible.
7. The primary qualities that make accounting information useful for decision making are _______.
(1) Relevance and freedom from bias
(2) Reliability and comparability
(3) Comparability and consistency
(4) None of the above
Answer: (2) Reliability and comparability
Explanation: Reliable (trustworthy and accurate) and comparable (can be compared with other periods or entities) accounting information is essential for decision-making purposes.
8. The sum of Liabilities and Capital is_________
(1) Expense
(2) Income
(3) Drawings
(4) Assets.
Answer: (4) Assets
Explanation: According to the accounting equation (Assets = Liabilities + Capital), the sum of liabilities (debts owed by the business) and capital (owner's equity or investment) equals the total assets (resources owned by the business).
9. The basic accounting postulates are denoted by______.
(1) Concepts
(2) Bookkeeping
(3) Accounting standards
(4) None of the above
Answer: (1) Concepts
Explanation: Basic accounting postulates are fundamental concepts or principles that form the foundation of accounting theory and practice.
10. Which of the following is not a characteristic of accounting________
(1) Timeliness.
(2) Understandability.
(3) Comparability
(4) Future Transaction
Answer: (4) Future Transaction
Explanation: Accounting characteristics typically include timeliness (information is provided promptly), understandability (information is clear and comprehensible), and comparability (information can be compared over time or with other entities). Future transactions are not a characteristic of accounting but rather a potential event or occurrence.