Multiple Choice Questions
1. By the nature of multiple definitions
given for accounting, which of these is a
feature of accounting?
(a) Communicating financial information
(b) Assisting in decision–making
(c) Helping interested users in judgement
(d) All of the above
2. Which of these concepts is a process of
give and take with ‘event’ as the end
result of it?
(a) Measurement
(b) Financial information
(c) Transactions
(d) Communication
3. In measurement, what type of
transactions are considered (during the
process of accounting)?
(a) Quantitative (b) Qualitative
(c) Both (a) and (b) (d) Can’t say
4. Which of the following is the process of
entering business transactions of
financial character in the books of
original entry in terms of money?
(a) Classifying (b) Summarising
(c) Interpretation (d) None of these
5. Accounting starts with …… financial
transactions and ends with ……
accounting information.
(a) recording, communicating
(b) classifying, analysing
(c) identifying, analysing
(d) identifying, communicating
6. Book keeping is a wider concept than
accounting.
(a) True (b) False
(c) Partially true (d) Partially false
7. …… refers to the entire body of the
theoretical knowledge of accounting.
(a) Financial management
(b) Accounting
(c) Accountancy
(d) None of the above
8. Accounting and Accountancy are one
and the same thing.
(a) True (b) False
(c) Partially false (d) Can’t say
9. The objectives of accounting are varied.
Which of the following are the
objectives of accounting?
(i) Maintain systematic and complete
record of business transactions.
(ii) Ascertain financial position of
business.
(iii) Provide useful information to various
interested parties.
(a) Only (i) (b) Only (iii)
(c) (i) and (ii) (d) All of these
10. Accounting information is used to
compare the result of current year with
the previous year to analyse the changes.
(a) True
(b) False
(c) Partially true
(d) Can’t say
11. Although accounting provides lot of
advantages to the business, it suffers
from certain limitations.
Which of these is not a limitation of
accounting?
(a) It ignores quantitative elements
(b) It is historical in nature
(c) It is not free from personal bias
(d) It is affected by window dressing
12. One of the limitations of accounting is
that the figure given in financial
statements ignore the effects of changes
in price level.
(a) True (b) False
(c) Partially false (d) Can’t say
13. Which of the following statements is
not true?
(i) Accounting depends on book
keeping.
(ii) Accountancy depends on book
keeping and accounting.
(iii) Accounting includes summarising the
classified transactions.
(iv) Accountancy is narrow in scope.
(a) (i), (ii), (iv) (b) (ii), (iv)
(c) Only (iv) (d) None of these
14. …… function is routine and clerical in
nature and is increasingly done by
computers now-a-days.
(a) Accounting (b) Accountancy
(c) Book keeping (d) Both (a) and (c)
15. Accounting function is……… in nature.
(a) clerical (b) routine
(c) analytical (d) Both (b) and (c)
16. Recording, classifying and summarising
are also termed as ……… .
(a) Accounting cycle
(b) Process of accounting
(c) Both (a) and (b)
(d) Book keeping
17. ……… is the process of grouping the
transactions of one nature at one place,
in a separate account.
(a) Recording (b) Classifying
(c) Summarising (d) Interpretation
18. What kind of business are required to
perform the ‘recording’ of transaction
in terms of ‘money’?
(a) Small sized (b) Medium sized
(c) Large sized (d) All of these
19. Summarising is the art of presenting the
…… in an understandable manner.
(a) business information (b) transactions
(c) classified data (d) All of these
20. Accounting indirectly helps the
government agencies.
(a) True (b) False
(c) Partially true (d) Partially false
Multiple Choice Questions
1. (d) 2. (c) 3. (a) 4. (d) 5. (d) 6. (b) 7. (c) 8. (b) 9. (d) 10. (a)
11. (a) 12. (a) 13. (c) 14. (c) 15. (c) 16. (c) 17. (b) 18. (d) 19. (c) 20. (a)