Important Questions on Accounting Principles | Class 11 Accountancy

Try these questions on Accounting Principles 

1. Give the full form of GAAP.
2. Mr Sivam has made cash sales Rs.65, 000 and credit sales Rs.30, 000. Expenses incurred Rs.25000 out of which Rs.4000 is yet to be paid. Calculate net income following the accrual concept of accounting.
3. During the year ended 2021, 100 pens were purchased at a price of Rs 10 per pen and all these pens were sold at a price of Rs 15 per pen. Find out the profit or loss of the business for the year ended 2021. 
4. During the year ended 2021, 100 pens were purchased at a price of Rs 10 per pen and out of these 50 pens were sold at a price of Rs 15 per pen. Find out the profit or loss of the business for the year ended 2021. 
5. Four years back, Mr Rahul acquired a building at a price of Rs 500,000 for his business. Now, the realisable value of the building is Rs 750,000. Rahul wants to record the building at this realisable value. Can he do so? Why or why not?
6. The Modern Enterprises reported all assets in the balance sheet at current market value. Which accounting principle was violated by him?

Identify the accounting principles from each of the following statements:

1. Accounting should be free from bias.
2. Expenses of an accounting period should be charged against revenues of that period.
3. Ignore expected or anticipated profits but record expected or anticipated losses.
4. Personal assets of owners are not recorded in the company's balance sheet.
5. Closing stock is recorded at cost price or market price whichever is lower. 
6. There is no intention to close down the business in the near future. 
7. The life of a business can be divided into small time intervals. 

Assertion and Reason Type Questions:

Instructions: Read the Assertion and Reasoning given and select the correct option.

Both assertion (A) and reasoning (R) are true and Reason (R) is the correct

explanation of Assertion (A)

b. Assertion (A) is true but Reason (R) is false.

c. Assertion (A) is false but Reason (R) is true.

d. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

1. Assertion (A): Capital is treated as liability.
Reasoning (R): Capital is treated as a liability due to money measurement concept.