Accounting Concepts Quiz! Trivia Knowledge

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| By Vivek Bhola
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Vivek Bhola
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Quizzes Created: 1 | Total Attempts: 745
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  • 1/10 Questions

    Assets will be equal to capital if there are no liability.

    • True
    • False
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About This Quiz


Welcome to the Accounting Concepts Knowledge Quiz. There are different guidelines to follow when it comes to bookkeeping, and they include accounting concepts, principles, and laws. Revenue is only recognized when there is a certainty that it will be realized, whereas expenses are recognized when a reasonable possibility is incurred. In this quiz, you will test how well you know the different concepts and what they mean.

Accounting Concepts Quiz! Trivia Knowledge - Quiz

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  • 2. 

    According to money measurement concept:

    • All events and transactions are recorded

    • All transaction and events which can be estimated in money are recorded in the books of account

    • All transaction and events which can be measured in money terms are recorded in the books of accounts

    • None of these

    Correct Answer
    A. All transaction and events which can be measured in money terms are recorded in the books of accounts
    Explanation
    According to the money measurement concept, only those transactions and events that can be measured in monetary terms are recorded in the books of accounts. This means that any event or transaction that cannot be expressed in monetary value will not be recorded. The concept ensures that only quantifiable and measurable information is included in the financial statements, providing a more objective and reliable representation of the organization's financial position and performance.

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  • 3. 

    According to which concept the same accounting methods should be used each year

    • Prudence

    • Full disclosure

    • Cost concept

    • Consistency

    Correct Answer
    A. Consistency
    Explanation
    Consistency is the concept that states that the same accounting methods and principles should be applied consistently from one accounting period to another. This ensures that financial statements are comparable and allows users to make meaningful comparisons and decisions based on the information provided. By using consistent accounting methods, companies can avoid misleading or confusing financial statements and provide a clear and accurate representation of their financial performance and position over time.

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  • 4. 

    During the lifetime of an entity, accounting produces financial statements in accordance with which of the following accounting concept.

    • Matching

    • Conservatism

    • Accounting period

    • Cost

    Correct Answer
    A. Accounting period
    Explanation
    Accounting period is the correct answer because this concept states that the economic activities of an entity should be divided into specific time periods, usually one year, in order to provide meaningful and comparable financial information. This allows for the measurement and reporting of financial performance and the assessment of the entity's financial position at regular intervals. By following the accounting period concept, financial statements can be prepared and presented in a systematic and consistent manner, enabling users to make informed decisions based on the entity's financial information.

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  • 5. 

    Accrual concept is based on

    • Matching concept

    • Cost concept

    • Dual aspect concept

    • Going concern concept

    Correct Answer
    A. Matching concept
    Explanation
    The accrual concept is based on the matching concept. This means that revenues and expenses are recognized in the accounting period in which they are earned or incurred, regardless of when the cash is received or paid. The matching concept ensures that the expenses incurred to generate revenue are matched with the corresponding revenue in the same period, providing a more accurate representation of the financial performance of a business. This concept helps in determining the true profitability of a business by considering both the revenues and expenses associated with a particular accounting period.

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  • 6. 

    According to going concern concept,a business is viewed as having

    • A limited life

    • A very long life

    • An indefinite life

    • None of these

    Correct Answer
    A. An indefinite life
    Explanation
    According to the going concern concept, a business is viewed as having an indefinite life. This means that the business is expected to continue operating in the foreseeable future, without any intention of liquidation or cessation of operations. The concept assumes that the business will continue to generate revenue, incur expenses, and fulfill its obligations. It is based on the belief that the business will be able to meet its financial commitments and achieve its objectives in the long term. Therefore, the correct answer is an indefinite life.

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  • 7. 

    According to convention conservatism

    • Provision is made for bad and doubtful debts

    • Depreciation is charged on assets

    • Recording is made of outstanding expenses

    • All of above

    Correct Answer
    A. Provision is made for bad and doubtful debts
    Explanation
    The correct answer is "Provision is made for bad and doubtful debts." In convention conservatism, it is customary to make provisions for bad and doubtful debts to account for potential losses in the future. This ensures that the financial statements reflect a more realistic and conservative view of the company's financial position. Making provisions for bad debts helps to anticipate potential non-payment by customers and allows for a more accurate estimation of the company's assets and liabilities.

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  • 8. 

    Recognition of cost in the same period associated revenues is called

    Correct Answer
    matching concept
    Explanation
    The matching concept is the principle in accounting that states that expenses should be recognized in the same period as the revenues they help generate. This concept ensures that the financial statements accurately reflect the expenses incurred to generate the revenues reported. By matching expenses with the related revenues, it provides a more accurate representation of the profitability and financial performance of a company. This principle helps in making informed decisions and assessing the overall financial health of the business.

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  • 9. 

    Income is measured on the basis of:

    Correct Answer
    matching concept
    Explanation
    The matching concept is a fundamental accounting principle that states that expenses should be matched with the revenues they generate in the same accounting period. This means that income is measured based on the matching of expenses incurred to generate that income. By matching expenses and revenues, the matching concept ensures that the financial statements accurately reflect the financial performance of a business for a given period. Therefore, income is measured on the basis of the matching concept.

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  • 10. 

    Which of these is not a fundamental accounting assumption?

    • Going concern

    • Consistency

    • Accrual

    • Materiality

    Correct Answer
    A. Going concern
    Explanation
    The going concern assumption is a fundamental accounting assumption that assumes a company will continue to operate in the foreseeable future. This assumption allows accountants to prepare financial statements under the assumption that the company will not liquidate or cease operations. Consistency, accrual, and materiality are also fundamental accounting assumptions.

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  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Jun 10, 2020
    Quiz Created by
    Vivek Bhola
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