THE HOLY ANGELS' ENGLISH ACADEMY
PRACTICE SET-2
Class 11 - Accountancy
Time Allowed: 1 hour and 30 minutes Maximum Marks: 40
General Instructions:
All questions are compulsory.
1. The objectives of accounting are varied. Which of the following are the objectives of accounting? [1]
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 iii b) only i
c) i and ii d) All of these
2. Assertion (A): Qualitative aspects of the business unit are completely ignored from the books while preparing [1]
financial statements.
Reason (R): Window dressing refers to the practice of manipulating accounts so as to conceal vital facts, so that
the financial statements may disclose a more favourable position than the actual position.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
3. Cost of Goods Manufactured is determined by: [1]
a) Human Resource Accounting b) Financial Accounting
c) Cost Accounting d) Management Accounting
4. Accounting Starts: [1]
a) After preparing final accounts b) Where books are not maintained at all
c) Where book-keeping ends d) Where book-keeping begins
5. Goods means [1]
i. Items purchased for own consumption.
ii. Items purchased for donation.
iii. Items purchased for resale.
iv. Items purchased for use in business.
a) Statement (iv) is Correct. b) Statement (ii) is Correct.
c) Statement (iii) is Correct. d) Statement (i) is Correct.
6. Sale is recognised as revenue: [1]
A. when the contract for sale is entered into.
B. at the point of sale or performance of service.
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C. after the expiry of credit period allowed to debtors.
D. after the money collected from the customers.
a) Only D b) Only C
c) Only A d) Only B
7. Goodwill is a/an: [1]
a) fictitious asset b) tangible asset
c) intangible asset d) current asset
8. Match the following: [1]
(a) Money withdrawn by owner from business for personal use. (i) Intangible Assets.
(b) Documentary evidence in support of a transaction. (ii) Drawings.
(c) Goodwill,patent and trademarks are. (iii) External users.
(d) Tax authorities, employees and customers are. (iv) voucher.
9. According to companies act 1956 all companies are required to maintain their accounts according to [1]
a) Accrual basis b) Profit basis
c) Cash Basis d) Money basis
10. Assertion (A): Accrual basis of accounting makes a complete record of all cash as well as credit transactions. It, [1]
however does not follow matching principle of accounting.
Reason (R): Accrual basis of accounting is superior to cash basis of accounting because it depicts true profit or
loss of the business and is recognised by Companies Act, 2013.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
11. As per Income Tax Act, the accounting period is: [1]
a) From 1st January to 31st December b) From Diwali to Diwali
c) From 1st April to 31st March d) From 1st July to 30th June
12. It is necessary to assume the Going Concern Concept as it [1]
a) Helps to bifurcate revenue expenditure b) Helps to bifurcate expenses
c) Helps to bifurcate capital expenditure d) Both bifurcate revenue expenditure
and capital expenditure
13. Match the following options are [1]
a. Historical Cost i. revenue is considered as the income earned on the date
b. Revenue Realization ii. assets are recorded at the price paid to acquire them
c. Full Disclosure iii. disclose fully and completely all the significant information
a) a - (iii), b - (ii), c - (i) b) a - (ii), b - (i), c (iii)
c) a - (ii), b - (iii), c - (i) d) a - (i), b - (ii), c - (iii)
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14. According to Convention of Full Disclosure [1]
a) All accounts should be maintained honestly b) All accounts should be prepared quickly
c) All secrets of the business must be disclosed d) All significant information should be
completely disclosed
15. Assertion (A): Principle of conservatism takes into account all probable losses but ignores prospective profits. [1]
Reason (R): All significant information relating to the economic affairs of the enterprise should be completely
disclosed.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
16. Assertion (A): Capital = Liabilities - Assets. [1]
Reason (R): According to the dual aspect principle, every business transaction is recorded as having a dual
aspect, one aspect is debit and the other aspect is credit.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
17. IFRS are [1]
a) Partially rule based and partially based b) Rule based accounting standards
accounting standards
c) Principle based accounting standards d) Partially rule based accounting standards
18. Assertion (A): Accounting Standards are based on historical cost concept. [1]
Reason (R): Accounting Standards ensure the consistency and comparability of financial statements and remove
the effect of diverse accounting policies and practices.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
19. Assertion (A): The ICAI gives consideration to the international accounting standards. [1]
Reason (R): India is a member of international account setting body.
a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.
c) A is true but R is false. d) A is false but R is true.
20. Which of the following is a liability [1]
a) Cash in hand b) Factory owned by the firm
c) An overdrawn balance on the firm’s bank d) Money owned by the firm
account
21. Protecting the assets of business is one of the functions of accounting. Explain. [3]
22. What is Window Dressing? Explain with the help of an example. [3]
23. Girish gives following information about his income and expenses for the year ended 31st March, 2023: [4]
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₹
Expenses paid 1,60,000
Expenses paid in advance (included in ₹ 1,60,000) 40,000
Expenses not yet paid 20,000
Income received 2,40,000
Income received in advance (included in ₹ 2,40,000) 30,000
Income not yet received 24,000
Determine his income if he adopts (i) Cash Basis of Accounting, and (ii) Accrual Basis of Accounting.
24. What do you mean by an asset and what are different type of assets? [4]
25. Prepare accounting equation on the basis of the following transactions: [6]
i. Ram started business with cash Rs 50,000
ii. Purchased goods on credit Rs 4,000
iii. Purchased goods for cash Rs 1,000
iv. Purchase furniture for cash Rs 500
v. Withdrawal for private use Rs 700
vi. Paid rent Rs 200
vii. Received interest Rs 100
viii. Sold goods on credit (cost Rs 500) Rs 700
ix. Paid to creditors Rs 400
x. Paid salaries Rs 200
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