Practice Forming base to Accounts Questions and Answers

• A trader maintains accounts on cash basis and records revenue only when received. Which fundamental accounting assumption is not followed?
• An enterprise follows accrual basis of accounting and records revenue when it is earned and expenses when incurred. A client makes an advance payment of �...
• XYZ Ltd. incurred R&D expenses of ₹20 lakhs for developing a new product. The product has not yet reached the commercialisation stage. How should the amo...
• A firm’s EBIT is ₹5,00,000, interest expense is ₹1,00,000. What is the Degree of Financial Leverage (DFL)?
• A company purchases machinery for ₹10 lakhs and incurs ₹1 lakh on its installation. The accountant records the total ₹11 lakhs under the fixed asset ...
• The basic accounting equation is:
• Which accounting principle states that revenue should be recognized in the accounting period in which it is earned?
• The primary objective of financial accounting is to:
• Which accounting principle/concept states that revenue should be recognized when it is earned, regardless of when cash is received?
• Prepaid Rent appearing in the Trial Balance is treated as:
• If the opening stock is ₹50,000, purchases are ₹2,00,000, and closing stock is ₹70,000, the Cost of Goods Sold is:
• Goodwill is a/an:
• The error of principle occurs when:
• The difference between the total debits and total credits of an account is called:
• The law of demand states that, other things being equal:
• Inflation caused by an increase in the prices of inputs (e.g., wages, oil) is called:
• Gross Domestic Product (GDP) is defined as the total value of all:
• The concept that requires a business to be treated as a separate entity from its owners is:
• Which of the following is a "Real Account"?
• The "Matching Principle" requires that:
• Contingent Liabilities are shown in the:
• If an asset is purchased for ₹1,00,000 with a residual value of ₹10,000 and a life of 9 years, the annual depreciation under the Straight Line Method (...
• "Window Dressing" in accounting refers to:
• Which of the following is a "Capital Expenditure"?
• A "Trial Balance" is prepared to check:
• In the absence of a Partnership Deed, the interest on a partner's loan is allowed at:
• "Revenue Reserve" is created out of: