MCQs For NCERT Class 11 Chapter 1 Introduction to Accounting

Please refer to the MCQ Questions for Class 11 Accountancy Chapter 1 Introduction to Accounting with Answers. The following Introduction to Accounting Class 11 Accountancy MCQ Questions has been designed based on the latest syllabus and examination pattern for Class 11. Our experts have designed MCQ Questions for Class 11 Accountancy with Answers for all chapters in your NCERT Class 11 Accountancy book.

Introduction to Accounting Class 11 MCQ Questions with Answers

See below Introduction to Accounting Class 11 Accountancy MCQ Questions, solve the questions and compare your answers with the solutions provided below.

Question. Qualitative characteristics of accounting information are:
(a) Reliability
(b)Relevance
(c) Understandable
(d) All of these 

Question. A summarized record of relevant transactions of particulars head at one place are:
(a) Ledger
(b) Journal
(c) Account
(d) Purchases book

Question. Those assets which have physical existence and can be seen and touched are:
(a) Current assets
(b) Tangible assets
(c) Intangible assets
(d) None of these

Question. In measurement, what type of transactions are considered (during the process of accounting)?
(a) Quantitative
(b) Qualitative
(c) Both (a) and (b)
(d) Can’t say

Question. Which of the following is the process of entering business transactions of financial character in the books of original entry in terms of money?
(a) Classifying
(b) Summarising
(c) Interpretation
(d) None of these

Question. Accounting starts with …… financial transactions and ends with …… accounting information.
(a) recording, communicating
(b) classifying, analysing
(c) identifying, analysing
(d) identifying, communicating

Question. By the nature of multiple definitions given for accounting, which of these is a feature of accounting? 
(a) Communicating financial information
(b) Assisting in decision–making
(c) Helping interested users in judgement
(d) All of the above

Question. Which of these concepts is a process of give and take with ‘event’ as the end result of it?
(a) Measurement
(b) Financial information
(c) Transactions
(d) Communication

Question. Book keeping is a wider concept than accounting.
(a) True
(b) False
(c) Partially true
(d) Partially false

Question. …… refers to the entire body of the theoretical knowledge of accounting.
(a) Financial management
(b) Accounting
(c) Accountancy
(d) None of the above

Question. …… function is routine and clerical in nature and is increasingly done by computers now-a-days.
(a) Accounting
(b) Accountancy
(c) Book keeping
(d) Both (a) and (c)

Question. A portion of the accounts receivable which proves to be uncollectible is termed as:
(a) Bad debts
(b) Doubtful debts
(c) Provision for bad debts
(d) All of these

Question. The properties owned by a business enterprise are called:
(a) Capital
(b) Liabilities
(c) Assets
(d) Owner’s equity

Question. Accounts receivable are considered as:
(a) Current assets
(b) Income
(c) Deferred receipts
(d) Fixed assets

Question. Bad debts arise from:
(a) Credit sales
(b) Cash sales
(c) Personal sales
(d) All of these 

Question. Accounting function is……… in nature.
(a) clerical
(b) routine
(c) analytical
(d) Both (b) and (c)

Question. Summarising is the art of presenting the …… in an understandable manner. 
(a) business information
(b) transactions
(c) classified data
(d) All of these

Question. Accounting and Accountancy are one and the same thing.
(a) True
(b) False
(c) Partially false
(d) Can’t say 

Question. Although accounting provides lot of advantages to the business, it suffers from certain limitations. Which of these is not a limitation of accounting?
(a) It ignores quantitative elements
(b) It is historical in nature
(c) It is not free from personal bias
(d) It is affected by window dressing

Question. One of the limitations of accounting is that the figure given in financial statements ignore the effects of changes in price level.
(a) True
(b) False
(c) Partially false
(d) Can’t say

Question. Accounting indirectly helps the government agencies.
(a) True
(b) False
(c) Partially true
(d) Partially false

Question. Which of the following is not considered as a main branch of accounting?
(a) Cost accounting
(b) Management accounting
(c) Financial accounting
(d) Corporate accounting

Question. Recording, classifying and summarising are also termed as ……… .
(a) Accounting cycle
(b) Process of accounting
(c) Both (a) and (b)
(d) Book keeping

Question. ……… is the process of grouping the transactions of one nature at one place, in a separate account.
(a) Recording
(b) Classifying
(c) Summarising
(d) Interpretation

Question. What kind of business are required to perform the ‘recording’ of transaction in terms of ‘money’? 
(a) Small sized
(b) Medium sized
(c) Large sized
(d) All of these 

Question. The main purpose of which branch of accounting is to record the business transactions in a systematic manner and to ascertain the profit or loss of the accounting period?
(a) Cost accounting
(b) Corporate accounting
(c) Financial accounting
(d) Profit and loss accounting

Question. The objectives of accounting are varied. Which of the following are the objectives of accounting?
(i) Maintain systematic and complete record of business transactions.
(ii) Ascertain financial position of business.
(iii) Provide useful information to various interested parties.
(a) Only (i)
(b) Only (iii)
(c) (i) and (ii)
(d) All of these

Question. Accounting information is used to compare the result of current year with the previous year to analyse the changes.
(a) True
(b) False
(c) Partially true
(d) Can’t say

Question. Which of this is not an internal user of acounting?
(a) Owners
(b) Employees
(c) Management
(d) Potential investors

Question. Public is not a user of accounting.
(a) True
(b) False
(c) Partially True
(d) Partially false

Question. Accounting is a means to determine the current worth of a business enterprise on the basis of its profit earning capacity. The given statement highlights which of the role of accounting?
(a) As a language
(b) As current economic policy
(c) As a historical record
(d) As an information system

Question. Information provided by accounting should be factual and rerifiable. It should be free from error and bias. It should be such that users can depend upon the information provided. The given description describes an essential qualitative characteristic of accounting information. Name it.
(a) Relevance
(b) Reliability
(c) Comparability
(d) Understandability

Question. Which of the following describes ‘Qualitative characteristic understandability’ in the best manner?
(a) Decision makers must interpret the information in the same sense as it was described to them 
(b) Accounting reports must be of common period
(c) Information must be available in time
(d) None of the above

Question. A business transactions is an economic activity of the business that changes its financial position. A business transaction is the consequence of event.
(a) True
(b) False
(c) Partially true
(d) Partially false

Question. Accounts are generally divided into different segments. In how many segments, all accounts are divided based on the nature of transactions?
(a) 2
(b) 3
(c) 4
(d) Can’t say

Question. Each and every branch has its separate set of objectives.Which of these branches of accounting directly or indirectly helps in management decisions?
(i) Cost accounting
(ii) Management accounting
(iii) Financial accounting
(a) Only (ii)
(b) (i) and (ii)
(c) (i) and (iii)
(d) All of these

Question. The main purpose of cost accounting is to ascertain …. of …… rendered by business.
(a) total cost, goods
(b) per unit cost, goods
(c) per unit cost, services
(d) total cost and per unit cost, goods and services

Question. Pick the odd one out.
(a) Owner’s equity
(b) Drawings
(c) Net worth
(d) Net assets

Question. The following equations shows the relationship between assets, liabilities and capital. Which of the following is the correct equation?
(a) Capital = Liabilities − Assets
(b) Liabilities = Capital − Assets
(c) Assets = Liabilities + Capital
(d) Capital = Assets + Liabilities

Question. Which of these is not a part of current liabilities?
(a) Bank overdraft
(b) Bills payable
(c) Debentures
(d) Creditors

Question. Intangible assets are those assets which do not have a physical existence and cannot be seen and felt. Therefore, intangible assets are not valuable assets.
(a) True
(b) False
(c) Partially false
(d) Can’t say

Question. …… need information to form policies at the macro level and for providing subsidies.
(a) Tax authorities
(b) Competitors
(c) Management
(d) Government and its agencies

Question. Which of these are example(s) of short-term creditors?
(a) Financial institutions
(b) Suppliers of goods and services on credit
(c) Both (a) and (b)
(d) None of the above

Question. Which of the following assets is/are known as ‘active assets’?
(a) Tangible assets
(b) Intangible assets
(c) Current assets
(d) Both (a) and (b)

Question. …… are those assets which cannot be realised in cash or no further benefit can be derived from these assets.
(a) Realisable assets
(b) Nominal assets
(c) Current assets
(d) Real assets

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false

Question. Assertion (A) If Cash = ` 20,000, Machinery = ` 30,000, Stock = ` 10,000, Creditors = ` 40,000, then net worth of firm = ` 20,000.
Reason (R) Capital = Liabilities − Assets. 

Question. Assertion (A) Accounting is an art as it involves recording, classifying, summarising business transactions with a view to ascertain the net profit.
Reason (R) Accounting is a science since it is based on certain specified principles and accounting standards.   

Question. Assertion (A) Book keeping involves summarising the classified transactions in the form of profit and loss account and balance sheet.
Reason (R) Book keeping is an art of recording in books of accounts, the monetary aspect of commerical or financial transactions. It is concerned with record keeping maintenance of books of accounts. 

Question. Assertion (A) Prepaid expenses are a part of current assets. 
Reason (R) Current assets involves assets which can be converted into cash within one year as well as assets for which service or benefit will be 

Question. Assertion (A) Environmental protection groups are one of the multiple external users of accounting information.
Reason (R) Social responsibility groups want to know the impact of business on environment and steps taken by an enterprise for the protection of   environment.available against these assets without further repayment. 

Fill In The Blanks 

Question. Internal users are the persons who have direct interest in the business enterprise are known as ———– and ———–.

Question. Discount given to encourage prompt payment and which reduces bad debts is called——.

Question. Documentary evidence to support a business transaction is known as voucher, voucher prepared to deposit cash in bank is called————–.

Question. The goods unsold at the end of the accounting year is called————. 

Question. Current assets get converted in cash in a period of —————-. 

Question. Profit earned during year is called income and it is expressed as ———–. 

Question. Proprietor borrowed long term loan from bank on collateral of assets of Rs. 1,00,000. It is an example of —————–.

Question. Monetary benefit received from sale of noncurrent assets is called———.

Question. Amount spent on cost of goods sold during a year and no benefit received on the same leads to———-.

Question. Buying of machine of Rs. 10,000,00 for business is a capital expenditure whereas buying of a calculator for business is———–.

Question. Bad debts arises due to sale of goods on credit as well as————-.

Question. Amount due from Ajay was Rs. 10,000 being insolvent he paid Rs. 2500 only. Amount of bad debts of Ajay in terms of percentage will be————-.

Question. Sale of household furniture of Rs. 50,000 of proprietor for Rs. 45,000 and invested the same amount in business will be called as————.

Question. To ensure reliability the information disclosed must be ————-.

Question. The excess of revenue over expenses of an accounting year is known as ——–.

Question. The assets which are used in the business for a longer period of time are called———-. 

True / False

Question. Accountancy includes Book – Keeping as well as Accounting.

Question. The Purchase account is used for goods that are for the purpose of resale.

Question. Final Accounts are prepared at the end of the accounting year.

Question. Cash Account is a Nominal Account.

Question. Tax Accounting is not a branch of Accounting.

Question. Cost Accounting is a branch of Accounting.

Question. Accounting involves only the recording of Business Transactions.

Question. Business Organisation involves economic events.

Question. Cash Discount is allowed to the customers for making prompt payment.

Question. Accounting is a Service function.

Question. Net Profit or Net Loss of a particular period is ascertained by preparing a Trading Account.

Question. Profit decreases the investment of the Owner.

Question. Goods or Cash withdrew by owner for personal use treated as Expenditure.

Question. Book – Keeping starts where accounting ends.

Question. Accounting provides in formations which is useful to management for making economic decisions.

Question. The excess of revenues of a period over its related expenses during an accounting year is called Profit.

Question. Long – term transactions are also known as Revenue transactions.

Match The Following

Question.

1. Financial accounting	A. Analysis and interpretation of information
2. Last step of accounting	B. Help in assist the managers
	C. Keep a record of all financial transactions
	D. Recording the transactions

Question.

1. Cash discount	A. Which is allowed at the time of sale
2. Non financial character	B. Discount received
	C. Which is received at the time of making payment
	D. Strike by employees

Question.

1. Voucher	A. Cash book
2. Gain	B. Invoice
	C. Excess of revenue over expense
	D. Winning a court case

Question.

1. Trade discount	A. Which is allowed at the time of sale
2. Liabilities	B. Bank overdraft
	C. Which is received at the time of making payment
	D. Cash at Bank

Question.

1. Fictitious assets	A. Income
2. Revenue	B. Expense
	C. Deferred revenue expenditure
	D. Machinery

Question.

1. Goods	A. Assets
2. Rent	B. Commodities to be bought and sold
	C. Expenses

Question.

1. Capital expenditure	A. Converted into cash within one year
2. Current assets	B. Paying salary to worker
	C. Cost of installing machine

Question.

1. External users	A. Liability
2. Management	B. Researchers
	C. Management cost
	D. Internal users

Question.

1. 1 intangible	A. Assets have physical value
2. Purchase	B. Purchase of machinery
	C. Goods for resale
	D. Assets have no physical value

Question.

1. Debtors	A. Withdraw for official use
2. Drawing	B. To whom goods sold on credit
	C. From whom goods purchased on credit
	D. Withdraw for personal purpose

Question.

1. Bank overdraft	A. Fixed liability
2. Amount invested by owner	B. Current liability
	C. Capital