Chapter 9-Financial Statements-1

Important MCQ questions for Class 11 Accountancy Chapter 9-Financial Statements-1

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MCQ Questions for Chapter 9-Financial Statements-1 class 11 Accountancy (Questions set-1) 

Accounting - MCQ on Financial Statements – I

Class XI

Q. 1. Financial accounting is a well-defined:-

a. Non sequential activity

b. Sequential activity

c. Fundamental activity

d. None

Answer:

(b)

Explanation :- Financial accounting is sequential activity which begins with journal, ledger and trial balance.

Q. 2. Aim of Financial Statements is to provide:-

a. information to market

b. Information to customers

c. Information to stakeholders

d. None

Answer:

(c)

Explanation:- Objectives of financial Statements is to provide meaningful information’s to stakeholders

Q. 3.The stake of various stakeholders can be:-

a. Monetary

b. Non-monetary

c. Monetary and non-monetary

d. None

Answer:

(c)

Explanation:- The stake of various stakeholders can be monetary and non-monetary.

Q. 4. The Stake can be:-

a. Direct or indirect

b. Active or passive

c. Both a and b

d. None

Answer:

(c)

Explanation :- Both a and b

Q. 5. The stakeholders are also called users who are normally classified as:-

a. internal

b. external

c. Internal and external

d. None

Answer:

(c)

Explanation:- Internal and external depending upon whether they are inside the business or outside the business.

Q. 6. The very important distinction in accounting is between:-

a. capital and revenue

b. debit and credit

c. assets and liabilities

d. none

Answer:

(a)

Explanation:- Capital and revenue

Q. 7. Capital items helps in:-

a. preparation of P&L

b. Preparation of Trial balance

c. Preparation of balance sheet.

d. None

Answer:

(c)

Explanation:- Preparation of Balance sheet

Q. 8. Whenever payment of an outlay are made for purpose other than the settlement of an existing liability it is called:-

a. expenditure

b. Purchase

c. Sale

d. None

Answer:

(a)

Explanation:- Expenditure

Q. 9. If the benefit of expenditure extends up to one accounting period it is termed as:

a. Capital expenditure

b. Revenue expenditure

c. Expenditure for assets

d. None

Answer:

(b)

Explanation:- Revenue expenditure

Q. 10.The benefit of expenditure extends to more than one accounting period, it is termed as:-

a. Capital expenditure

b. Revenue expenditure

c. Expenditure for assets

d. None

Answer:

(a)

Explanation:- Capital expenditure

Q. 11. Capital expenditure:-

a. increases the earning capacity

b. maintain the earning capacity

c. increase the loss chance

d. none

Answer:

(a)

Explanation:- increase the earning capacity

Q. 12. Revenue expenditure:-

a. Increase the earning capacity

b. incurred on day to day

c. incurred to acquire fixed assets

d. none

Answer:

(b)

Explanation:- is incurred on day-to-day conduct of business.

Q. 13. Capital expenditure is:-

a. recurring in nature

b. non-recurring in nature

c. depends on p&L

d. none

Answer:

(b)

Explanation:- Non-recurring in nature

Q. 14. Revenue expenditure is recorded in

a. Balance sheet

b. P&L Account

c. Trading and P&L account

d. None

Answer:

(c)

Explanation:- trading and Profit and loss account as it is related to day to day activities.

Q. 15. Revenue expenditures which are likely to give benefit for more than one accounting period is:-

a. capital expenditure

b. revenue expenditure

c. deferred revenue expenditure

d. none

Answer:

(c)

Explanation:- deferred revenue expenditure

Q. 16. It the receipts imply an obligation to return the money are:-

a. revenue receipts

b. capital receipts

c. either a or b

d. none

Answer:

(b)

Explanation:- capital receipts

Q. 17. Sale of fixed assets is

a. revenue receipts

b. capital receipts

c. either a or b

d. none

Answer:

(b)

Explanation:- It’s a kind of Capital receipts

Q. 18. The basic objectives of preparation of financial statements are;-

a. to present a true and fair view of the financial performance of business

b. To present a true and fair view of the financial position of the business

c. Both a and b

d. none

Answer:

(c)

Explanation:- both a and b

Q. 19. Trading and Profit and loss is also known as:-

a. Income statement

b. Capital revenue

c. Revenue receipts

d. None

Answer:

(a)

Explanation:- Income Statement as it shows total income over total expenditure

Q. 20. is summary of revenues and expenses of the business:-

a. balance sheet

b. Trading a/c

c. P&L A/c

d. None

Answer:

(c)

Explanation:- P&L account is the summary of revenues and expenses of the business and calculates the net figure termed as profit or loss.

Q. 21. net Profit =

a. Gross profit – purchases + direct expenses

b. Sales – purchase – direct expenses

c. Gross profit + other incomes – indirect Expenses

d. None

Answer:

(c)

Explanation:- Gross profit + other incomes – indirect expenses

Q. 22. Operating profit:-

a. the excess of operating revenue over operating expenses

b. The excess of operating expenses over operating revenue

c. Either a or b

d. None

Answer:

(a)

Explanation:- The excess of operating revenue over operating expenses.

Q. 23. While calculating operating profit, the incomes and expenses of a purely financial nature are:-

a. taken into account

b. not taken into account

c. no impact

d. none

Answer:

(b)

Explanation: not taken into account.

Q. 24. Operating profit =

a. Net profit + Non-Operating Expenses -Non Operating Incomes

b. Net profit * Non-Operating Expenses -Non Operating Incomes

c. Net profit - Non-Operating Expenses -Non Operating Incomes

d. none

Answer:

(a)

Explanation:- Net Profit+ Non-Operating Expenses -Non Operating Incomes

Q. 25.A balance sheet is called a balance sheet because:-

a. it is statement of balances of ledger accounts that have not been transferred to trading and profit and loss account.

b. As it shows balance of all various events of a firm

c. As it shows the balance of demand and supply of output

d. None

Answer:

(a)

Explanation:- it is statement of balances of ledger accounts that have not been transferred to trading and profit and loss account

Q. 26.Current assets:

a. cannot be sold

b. can be in form of cash or converted into cash

c. no liquidity

d. none

Answer:

(b)

Explanation:- either in the form of cash or a can be converted into cash with in a year.

Q. 27. Marshalling of assets and liabilities can be done in order of:-

a. Liquidity

b. Permanence

c. Both a and b

d. None

Answer:

(c)

Explanation:- In order of liquidity and permanence

Q. 28.in case of ______most permanent assets or liquidity is put on the top in the balance sheet.

a. Liquidity

b. Permanence

c. Both a and b

d. None

Answer:

(b)

Explanation:- In case of permanence, the most permanent asset or liability is put on the top in the balance sheet.