MCQ for CA Foundation Accounting Chapter 1 Theoretical Framework

Sample Multiple Choice Questions (MCQ's) for CA Foundation - Paper 1 - Principal and Practice of Accounting - Chapter 1 THEORETICAL FRAMEWORK - For Practice relevant for Dec 22 and May/June 23 Examinations

Q:1  Financial statements are a part of

  1. Accounting
  2. Book-keeping.
  3. Management Accounting.

Answer: 1

Q:2  A businessman purchased goods for Rs 25,00,000 and sold 80% of such goods during the accounting year ended 31st March, 2020. The market value of the remaining goods was Rs 4,00,000. He valued the closing Inventory at cost. He violated the concept of

  1. Money measurement.
  2. Conservatism.
  3. Cost.

Answer: 2

Q:3 Is the statement True or False

The drawer’s signed assent on bill of exchange, to the order of the drawee is called an acceptance:

  1. True
  2. False

Answer: 2

Q:4  If repair cost is Rs 25,000, whitewash expenses are Rs 5,000, (both these expenses relate to presently used building) cost of extension of building is Rs 2,50,000 and cost of improvement in electrical wiring system is Rs 19,000; the amount to be expensed is

  1. Rs 2,99,000.
  2. Rs 44,000.
  3. Rs 30,000.

Answer: 3

Q:5  Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as _.

  1. Provision.
  2. Liability
  3. Contingent liability.

Answer: 1.

Q:6  Accounting policy for inventories of Xeta Enterprises states that inventories are valued at the lower of cost determined on weighted average basis or net realizable value. Which accounting principle is followed in adopting the above policy?

  1. Materiality.
  2. Prudence.
  3. Substance over form.

Answer: 2

Q:7 Book value of machinery on 31st March, 2019 Rs 10,00,000 . Market value as on 31st March, 2019 if sold Rs 11,00,000. As on 31st March, 2019, if the company values the machinery at Rs 11,00,000, which of the following valuation principle is being followed?

  1. Historical Cost.
  2. Present Value.
  3. Realisable Value.

Answer: 3

Q:8 Accounting Standards

  1. Harmonise accounting policies.
  2. Eliminate the non-comparability of financial statements.
  3. Improve the reliability of financial statements.
  4. All the three.

Answer: 4

Q:9 The Government of India in consultation with the ICAI decided to

  1. Adapt with IFRS.
  2. Converge with IFRS.
  3. apply IFRS in India.
  4. notify IFRS in India.

Answer: 2


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