COMMERCE MCQs 01 _ Questions and answers with explanation _ Cost Accounting

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NTA UGC NET - Commerce: UNIT 02 - ACCOUNTING AND AUDITING (Part 01)

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UNIT 02 
ACCOUNTING AND AUDITING
Part 01
 
  • Basic accounting principles; concepts and postulates 
  • Partnership Accounts: Admission, Retirement, Death, Dissolution and Insolvency of partnership firms
  • Corporate Accounting: Issue, forfeiture and reissue of shares; Liquidation of companies; Acquisition, merger, amalgamation and reconstruction of companies
  • Holding company accounts
  • Cost and Management Accounting: Marginal costing and Break-even analysis; Standard costing; Budgetary control; Process costing; Activity Based Costing (ABC); Costing for decision-making; Life cycle costing, Target costing, Kaizen costing and JIT
  • Financial Statements Analysis: Ratio analysis; Funds flow Analysis; Cash flow analysis
  • Human Resources Accounting; Inflation Accounting; Environmental Accounting
  • Indian Accounting Standards and IFRS
  • Auditing: Independent financial audit; Vouching; Verification ad valuation of assets and liabilities; Audit of financial statements and audit report; Cost audit
  • Recent Trends in Auditing: Management audit; Energy audit; Environment audit; Systems audit; Safety audit 
 
MCQs on
Accounting and auditing
 
MCQ 01: The type of accounting that generates reports to understand the financial position of a company

a.Financial accounting
a.Managerial accounting
b.Cost accounting
c.Public accounting
 
Answer: Financial accounting
 
Managerial accounting: 
The purpose of managerial account is to assist the management in decision making and policy formulation
 
Cost accounting: 
The purpose of cost accounting is to ascertain the cost of each unit of product and to help in controlling cost.
 
Public accounting/ Government accounting: 
Type of accounting used in public sector.
 
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MCQ 02: The account that records expenses, gains and looses are
 
a. personal account
b. Real account
c. Nominal account
d. None of the above



 

 

 

 

 

 

 

 

 

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MCQ 03: Any written evidence in support of business transactions

 

a.Journal

b.Ledger

c.Ledger posting
d.Voucher

 

Answer : Voucher

 

 Journal : 

* Book of original entry  

* record of financial transaction in chronological order
* process is called journalising

 

Ledger : 

* Book of secondary entry
* Classify transactions of similar nature into accounts

 

Ledger posting : 

* process of posting debit and credit items from journal to their respective accounts 



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MCQ 04: The allocation of owners private expenses to their business, violates which of the following assumptions?


a.Business Entity
b.Money Measurement 

c.Going Concern
d.Accounting Period

 

Answer: Business entity

 

Business Entity:

Business is treated as a separate entity apart from its owner

 

Money measurement:

only the transactions which can be 

expressed in terms of money is recorded in the account book 

 

Going concern/continuity assumption: 

the business will have long life.

 

Accounting period: 

the life of a company is divided into equal time period 

 

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MCQ 05: Accounting convention do not include

 

a.Conservatism
b.Consistency 

c.Full disclosure
d.Depreciation

 

Conservatism: 

Anticipate no profit and provide for all possible losses

 

Consistency: 

use same accounting principles from one period of accounting cycle to next

 

Full disclosure: 

Reveal all information which are material

 

Materiality: 

Record all material facts.


 


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