📘 ACCOUNTING PRINCIPLES – 100 MCQs
Q1. Business entity concept means:
A. Owner and business are same
B. Owner and business are separate
C. Only owner matters
D. None
Q2. (T/F) Business and owner are treated separately in accounting.
Q3. Money measurement concept records:
A. All events
B. Only monetary transactions
C. Only cash
D. None
Q4. (Fill) Only ______ transactions are recorded in accounting.
Q5. Going concern concept assumes:
A. Business will close
B. Business continues indefinitely
C. Business is bankrupt
D. None
Q6. (T/F) Accounting ignores future closure of business.
Q7. Cost concept means recording at:
A. Market price
B. Cost price
C. Estimated value
D. None
Q8. Matching concept relates to:
A. Assets
B. Liabilities
C. Expenses & revenue
D. Capital
Q9. (Fill) Revenue should be matched with ______.
Q10. Revenue recognition concept states:
A. Revenue recorded when cash received
B. When earned
C. When estimated
D. None
Q11. (T/F) Revenue is always recorded when cash is received.
Q12. Accrual concept records:
A. Only cash transactions
B. When earned/incurred
C. Only expenses
D. None
Q13. Consistency concept means:
A. Change methods frequently
B. Same method every year
C. Ignore methods
D. None
Q14. (Fill) Consistency improves ______.
Q15. Prudence concept means:
A. Record all profits
B. Anticipate losses only
C. Ignore losses
D. None
Q16. (T/F) Losses are recorded even if not realized.
Q17. Dual aspect concept means:
A. Single effect
B. Two effects
C. Three effects
D. None
Q18. Accounting period concept divides:
A. Lifetime
B. Business into periods
C. Profit
D. None
Q19. (Fill) Accounting period is usually ______.
Q20. Materiality concept refers to:
A. Important items
B. All items equally
C. Only cash
D. None
Q21. (T/F) Insignificant items can be ignored.
Q22. Full disclosure means:
A. Hide facts
B. Show all relevant info
C. Show only profit
D. None
Q23. Objectivity concept requires:
A. Bias
B. Evidence
C. Guess
D. None
Q24. (Fill) Accounting must be based on ______ evidence.
Q25. Which is not a principle?
A. Matching
B. Prudence
C. Marketing
D. Consistency
Q26. If owner invests cash:
A. Asset increases
B. Capital increases
C. Both
D. None
Q27. (T/F) Accrual concept ignores unpaid expenses.
Q28. Outstanding expense is recorded due to:
A. Cash concept
B. Accrual concept
C. Cost concept
D. None
Q29. (Fill) Expenses are recorded when ______.
Q30. Prepaid expense is:
A. Liability
B. Asset
C. Income
D. Expense
Q31. Which concept supports depreciation?
A. Cost
B. Matching
C. Prudence
D. All
Q32. (T/F) Depreciation spreads cost over useful life.
Q33. Revenue received in advance is:
A. Asset
B. Liability
C. Expense
D. Income
Q34. Which concept ensures comparability?
A. Prudence
B. Consistency
C. Matching
D. None
Q35. (Fill) Full disclosure ensures ______.
Q36. Contingent liability follows:
A. Prudence
B. Materiality
C. Consistency
D. None
Q37. (T/F) All contingent gains are recorded.
Q38. Historical cost ignores:
A. Original cost
B. Market fluctuations
C. Assets
D. None
Q39. Which concept divides profit annually?
A. Periodicity
B. Matching
C. Cost
D. None
Q40. (Fill) Business is assumed ______ under going concern.
Q41–50 (Mixed Moderate)
Q41. Closing stock valuation follows:
A. Prudence
B. Cost
C. Matching
D. None
Q42. (T/F) Inventory valued at cost or market value whichever lower.
Q43. Which concept avoids overstatement?
A. Prudence
B. Consistency
C. Matching
D. None
Q44. Non-monetary transaction:
A. Recorded
B. Ignored
C. Estimated
D. None
Q45. (Fill) Accounting ignores ______ factors.
Q46. Which ensures reliability?
A. Objectivity
B. Matching
C. Consistency
D. None
Q47. Which concept supports accrual basis?
A. Matching
B. Accrual
C. Cost
D. None
Q48. (T/F) Consistency allows change without disclosure.
Q49. Goodwill follows:
A. Cost concept
B. Prudence
C. Matching
D. None
Q50. Which concept relates to evidence?
A. Objectivity
B. Matching
C. Cost
D. None
Q51. Change in accounting method requires:
A. No disclosure
B. Full disclosure
C. Ignoring
D. None
Q52. (T/F) Consistency prohibits any change.
Q53. Provision for doubtful debts follows:
A. Prudence
B. Matching
C. Cost
D. None
Q54. Capital vs revenue distinction follows:
A. Matching
B. Periodicity
C. Prudence
D. None
Q55. (Fill) Revenue must be ______ not received.
Q56. Accrued income is:
A. Asset
B. Liability
C. Expense
D. None
Q57. Deferred revenue expenditure relates to:
A. Matching
B. Cost
C. Periodicity
D. None
Q58. (T/F) Going concern affects asset valuation.
Q59. If business likely to close:
A. Cost concept
B. Realizable value
C. Matching
D. None
Q60. Materiality depends on:
A. Size & nature
B. Cash
C. Owner
D. None
Q61–100 (Advanced Conceptual + Case Based)
Q61. Change in depreciation method violates:
A. Consistency
B. Prudence
C. Matching
D. None
Q62. (T/F) Matching concept applies only to expenses.
Q63. Recording future loss:
A. Prudence
B. Matching
C. Cost
D. None
Q64. (Fill) Assets are recorded at ______ cost.
Q65. Unrealized gain:
A. Recorded
B. Ignored
C. Adjusted
D. None
Q66. Which concept is violated if revenue is recorded before it is earned?
A. Matching
B. Revenue recognition
C. Prudence
D. Consistency
Q67. (T/F) Matching concept applies to both revenues and expenses.
Q68. Deferred revenue expenditure is based on:
A. Prudence
B. Matching
C. Consistency
D. Objectivity
Q69. If stock is overvalued, it violates:
A. Prudence
B. Cost
C. Matching
D. None
Q70. (Fill) Accounting records only ______ information.
Q71. Capital expenditure wrongly treated as revenue violates:
A. Matching
B. Cost
C. Consistency
D. Prudence
Q72. Recognition of income without certainty violates:
A. Prudence
B. Matching
C. Consistency
D. None
Q73. (T/F) Objectivity eliminates personal bias.
Q74. Historical cost concept ignores:
A. Original value
B. Market value changes
C. Expenses
D. Liabilities
Q75. Which concept requires documentation?
A. Objectivity
B. Prudence
C. Matching
D. Consistency
Q76. (Fill) Accounting period concept divides life of business into ______.
Q77. Not disclosing contingent liability violates:
A. Prudence
B. Disclosure
C. Consistency
D. Matching
Q78. (T/F) Materiality depends on judgment.
Q79. Under accrual system, income is recorded when:
A. Received
B. Earned
C. Estimated
D. None
Q80. Which concept is affected if depreciation is not charged?
A. Matching
B. Prudence
C. Cost
D. All
Q81. Provision for expenses ensures:
A. Matching
B. Prudence
C. Accrual
D. All
Q82. (Fill) Prudence concept avoids ______ of profit.
Q83. Change in stock valuation method requires:
A. No action
B. Disclosure
C. Ignore
D. Adjustment only
Q84. (T/F) Consistency enhances comparability.
Q85. Which concept justifies charging expenses to correct period?
A. Matching
B. Cost
C. Prudence
D. None
Q86. Capital vs revenue distinction mainly relates to:
A. Periodicity
B. Matching
C. Prudence
D. Consistency
Q87. (Fill) Revenue is recognized when ______.
Q88. Ignoring small items is allowed due to:
A. Prudence
B. Materiality
C. Matching
D. Consistency
Q89. Which concept is violated if personal expenses are recorded in business?
A. Business entity
B. Matching
C. Prudence
D. None
Q90. (T/F) Going concern assumes indefinite continuation.
Q91. Valuation of assets at liquidation value violates:
A. Going concern
B. Cost
C. Matching
D. None
Q92. Income received in advance is:
A. Income
B. Liability
C. Asset
D. Expense
Q93. (Fill) Expenses must be ______ with revenue.
Q94. If accounts are prepared without consistency:
A. Reliable
B. Comparable
C. Not comparable
D. Accurate
Q95. (T/F) Objectivity requires evidence-based accounting.
Q96. Recording fictitious assets violates:
A. Prudence
B. Objectivity
C. Matching
D. None
Q97. Which concept supports uniform accounting policies?
A. Consistency
B. Prudence
C. Matching
D. None
Q98. (Fill) Gains are ______ unless realized.
Q99. Which principle ensures fair reporting?
A. Disclosure
B. Matching
C. Cost
D. None
Q100. Which concept is most conservative?
A. Prudence
B. Consistency
C. Matching
D. Cost
📘 FINAL ANSWER KEY (1–100)
1–25:
1-B, 2-T, 3-B, 4-Monetary, 5-B, 6-T, 7-B, 8-C, 9-Expenses, 10-B,
11-F, 12-B, 13-B, 14-Comparability, 15-B, 16-T, 17-B, 18-B,
19-One year, 20-A, 21-T, 22-B, 23-B, 24-Documentary, 25-C
26–50:
26-C, 27-F, 28-B, 29-Incurred, 30-B,
31-D, 32-T, 33-B, 34-B, 35-Transparency,
36-A, 37-F, 38-B, 39-A, 40-Continuing,
41-A, 42-T, 43-A, 44-B, 45-Qualitative,
46-A, 47-B, 48-F, 49-A, 50-A
51–65:
51-B, 52-F, 53-A, 54-A, 55-Earned,
56-A, 57-A, 58-T, 59-B, 60-A,
61-A, 62-F, 63-A, 64-Historical, 65-B
📘 ANSWER KEY (66–100)
66-B
67-T
68-B
69-A
70-Monetary
71-A
72-A
73-T
74-B
75-A
76-Periods
77-B
78-T
79-B
80-D
81-D
82-Overstatement
83-B
84-T
85-A
86-A
87-Earned
88-B
89-A
90-T
91-A
92-B
93-Matched
94-C
95-T
96-B
97-A
98-Ignored
99-A
100-A
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