Basic Questions:
1. What is the accounting equation?
A. Assets = Liabilities + Revenue
B. Assets = Liabilities + Capital
C. Assets = Capital - Liabilities
D. Assets = Income + Expenses
2. The process of allocating the cost of an intangible asset over its useful life is
called
A) Depreciation B) Amortization C) Capitalization D) Accrual
3. Which of the following is classified as a long-term liability?
A) Accounts payable B) Bank overdraft C) Mortgage D) Wages payable
4. Which of the following is a real account?
A. Rent Account
B. Wages Account
C. Cash Account
D. Commission Account
5. What is the main objective of accounting?
A. To count money
B. To analyze the market
C. To record and summarize financial transactions
D. To pay taxes
6. Which financial statement shows a company’s financial position on a specific
date?
A. Income Statement
B. Trial Balance
C. Cash Flow Statement
D. Balance Sheet
7. Debit what comes in, credit what goes out. This rule applies to:
A. Personal account
B. Nominal account
C. Real account
D. Capital account
8. The person or business to whom money is owed is called:
A. Creditor
B. Debtor
C. Investor
D. Banker
9. Which account does "Sales" fall under?
A. Real Account
B. Personal Account
C. Nominal Account
D. Liability Account
10. A company receives an advance payment. When should it recognize
revenue?
A. When cash is received
B. At the time of sale/service
C. End of the year
D. When budget is finalized
11. Which of the following is an example of indirect expense?
A. Wages
B. Carriage Inward
C. Salary
D. Carriage Outward
12. Prepaid expenses are shown under:
A. Income
B. Liability
C. Expense
D. Asset
13. The Matching Principle matches:
A. Assets with Liabilities
B. Revenues with Expenses
C. Capital with Drawings
D. Cash with Profit
14. A company changes its depreciation method without valid reason. Which
principle is violated?
A. Full Disclosure
B. Matching
C. Conservatism
D. Consistency
HARD Questions:
15. Under the conservatism principle, how should you account for inventory
when market value falls below cost?
A. Record at cost
B. Record at market value
C. Record at higher of cost or market
D. Record at lower of cost or market
16 . Which principle justifies the practice of not adjusting asset values despite
inflation?
A. Matching
B. Historical Cost
C. Money Measurement
D. Consistency
17. Which concept is violated if a personal expense of the owner is recorded as a
business expense?
A. Dual Aspect
B. Business Entity
C. Matching
D. Realization
18. SEBI's FY 2024–25 regulatory updates include stronger focus on:
A. Audit firm rotation
B. Climate disclosures and BRSR
C. Dividends payouts
D. IFRS adoption timelines
[Link] did the recent Ind AS amendment clarify about lease agreements?
A. Lease rent should not be disclosed
B. Short-term leases must be capitalized
C. Variable lease payments in sale and leaseback transactions
D. Lease payments should be ignored
[Link] do retained earnings appear on the financial statements?
A) Current liability on the balance sheet
B) Equity section of the balance sheet
C) Asset on the balance sheet
D) Cash flow statement
