28 + Interview Questions in CONVENTIONS IN GENERAL AWARENESS Page 1 InterviewSolution

1.	Adjustments are made for incomes received in advance based on ……………… principle.(a) Matching cost with revenue(b) Cost(c) Prudence(d) Full disclosure
Answer» Correct option is (a) Matching cost with revenue

Discussion

2.	According to ………………………. concept, in addition to book value of investment in listed shares, the market value thereof is also shown as additional information in financial statements.(a) Dual aspect(b) Full disclosure(c) Cost(d) Going concern
Answer» Correct option is (b) Full disclosure

Discussion

3.	Due to the concept of ……………………. provision for doubtful debts on debtors is made in the accounts.(a) Prudence(b) Periodicity(c) Verifiability(d) Revenue recognition
Answer» Correct option is (a) Prudence

Discussion

4.	Pre-paid expenses should be carried forward on the basis of concept of ………………… .(a) Conservatism(b) Consistency(c) Dual aspect(d) Matching cost with revenue
Answer» Correct option is (d) Matching cost with revenue

Discussion

5.	What is assumed in going concern concept?
Answer» According to going concern concept, it is assumed that the business concern will continue for a long period and the same will not be closed or liquidated in the near future.

Discussion

6.	For accounting, what is accepted as common measurement unit?
Answer» For accounting, money is accepted as common measurement unit.

Discussion

7.	According to which principle, every business transaction has a two-fold effect?
Answer» According to duality principle, every business transaction has a two-fold effect.

Discussion

8.	How is the prudence concept also referred to as?
Answer» Prudence concept is also referred to as conservatism concept.

Discussion

9.	What does the principle of consistency suggest?
Answer» The principle of consistency suggests that while writing accounts or for preparing financial statements, the same policies, procedures and methods should be followed every year.

Discussion

10.	What does the money measurement concept suggest?
Answer» Money measurement concept suggests that in business, all transactions are represented in monetary unit.

Discussion

11.	How is the accounting entity concept also referred to as?
Answer» Accounting entity concept is also referred to as Business entity concept or Entity concept or Separate entity concept.

Discussion

12.	What does the principle of objectivity suggest?
Answer» The principle of objectivity suggests that there should be objective evidence, for transactions recorded in accounts, which are capable of verification.

Discussion

13.	Which principle or concept is a fundamental accounting convention?
Answer» Dual aspect concept or Duality principle is a fundamental accounting convention.

Discussion

14.	Which concept is similar to the concept of accrual of revenue?
Answer» The concept of accrual of revenue is similar to the concept of realisation of revenue or revenue recognition.

Discussion

15.	Which concept is associated with the principle of full disclosure?
Answer» Materiality concept is associated with the principle of full disclosure.

Discussion

16.	Which attitude can be said to be the conservative attitude ?
Answer» The attitude that future probable loss must be taken into consideration in accounts but future possible profits should not be taken into consideration is known as conservative attitude.

Discussion

17.	What does the matching cost with revenue concept suggest ?
Answer» The matching cost with revenue concept suggests that cost incurred during a particular period should be matched against the revenue of that period to ascertain profit or loss.

Discussion

18.	Fixed assets are depreciated based on the principle of ………………(a) Accounting period(b) Prudence(c) Going concern concept(d) Accrual concept
Answer» Correct option is (c) Going concern concept

Discussion

19.	When is revenue said to be realised in the sale of goods ?
Answer» Sales revenue is said to be realised at the time of delivery of goods or legal transfer of ownership of goods.

Discussion

20.	How is the accounting period known?
Answer» Accounting period is also known as accounting year.

Discussion

21.	Fundamental accounting equation i.e., A = C + L is based on ………………………….. concept.(a) Going concern(b) Dual aspect(c) Cost(d) Prudence
Answer» Correct option is (b) Dual aspect

Discussion

22.	……………………….. suggests that assets like goodwill, patents, trademark and copyright are not written off in one year.(a) Periodicity concept(b) Prudence concept(c) Going concern concept(d) Consistency concept
Answer» Correct option is (c) Going concern concept

Discussion

23.	Generally, why is the accounting period maintained of one year ?
Answer» The accounting period is maintained of one year because in the period most of the transactions relating to business are covered. A period of one year comprises all seasons and all types of seasonal transactions.

Discussion

24.	Based on …………………………. concept, no accounting entry is made in the books of accounts for advantage of having a team of sincere, honest, hard-working and efficient employees with the firm.(a) Accrual(b) Materiality(c) Money measurement(d) Consistency
Answer» Correct option is (c) Money measurement

Discussion

25.	State the name of the accounting principle, concept or convention in the following statements:1. Frequent changes in the methods of depreciation should be avoided.2. No accounting entry is made for free samples received.3. Information about the change in method of stock or inventory valuation and its impact should be disclosed in financial statements.4. Instead of keeping separate accounts for pencil, erasers, pen, etc., only one account styled as “Stationery Expense Account” shall be maintained.
Answer» 1. Consistency concept 2. Cost concept. 3. Full disclosure concept. 4. Materiality concept.

25.

State the name of the accounting principle, concept or convention in the following statements:1. Frequent changes in the methods of depreciation should be avoided.2. No accounting entry is made for free samples received.3. Information about the change in method of stock or inventory valuation and its impact should be disclosed in financial statements.4. Instead of keeping separate accounts for pencil, erasers, pen, etc., only one account styled as “Stationery Expense Account” shall be maintained.

Answer»

1. Consistency concept

2. Cost concept.

3. Full disclosure concept.

4. Materiality concept.

Discussion

26.	State the name of the accounting principle, concept or convention in the following statements:1. Generally, a discount reserve on creditors is not maintained.2. Professionals like advocates, doctors, C.A., etc. record their revenue on cash basis.3. Prepaid expenses are subtracted from the concerned expenses in the profit and loss account.4. In the Balance Sheet the receivable amount are shown at realisable value only.
Answer» 1. Prudence concept or Principal of conservatism. 2. Realisation concept. 3. Matching cost with revenue concept. 4. Going concern concept.

26.

State the name of the accounting principle, concept or convention in the following statements:1. Generally, a discount reserve on creditors is not maintained.2. Professionals like advocates, doctors, C.A., etc. record their revenue on cash basis.3. Prepaid expenses are subtracted from the concerned expenses in the profit and loss account.4. In the Balance Sheet the receivable amount are shown at realisable value only.

Answer»

1. Prudence concept or Principal of conservatism.

2. Realisation concept.

3. Matching cost with revenue concept.

4. Going concern concept.

Discussion

27.	Purchase of dustbin for ₹ 150 should be considered as an expense instead of considering the same to be a fixed asset.(a) Principal of conservatism(b) Cost concept(c) Money measurement concept(d) Materiality concept
Answer» Correct option is (d) Materiality concept

Discussion

28.	Change in method of depreciation should be disclosed in financial statements along with the impact of such change.(a) Materiality concept(b) Full disclosure concept(c) Prudence concept(d) Periodicity concept
Answer» Correct option is (b) Full disclosure concept

Discussion

Explore topic-wise InterviewSolutions in .

Adjustments are made for incomes received in advance based on ……………… principle.(a) Matching cost with revenue(b) Cost(c) Prudence(d) Full disclosure

According to ………………………. concept, in addition to book value of investment in listed shares, the market value thereof is also shown as additional information in financial statements.(a) Dual aspect(b) Full disclosure(c) Cost(d) Going concern

Due to the concept of ……………………. provision for doubtful debts on debtors is made in the accounts.(a) Prudence(b) Periodicity(c) Verifiability(d) Revenue recognition

Pre-paid expenses should be carried forward on the basis of concept of ………………… .(a) Conservatism(b) Consistency(c) Dual aspect(d) Matching cost with revenue

What is assumed in going concern concept?

For accounting, what is accepted as common measurement unit?

According to which principle, every business transaction has a two-fold effect?

How is the prudence concept also referred to as?

What does the principle of consistency suggest?

What does the money measurement concept suggest?

How is the accounting entity concept also referred to as?

What does the principle of objectivity suggest?

Which principle or concept is a fundamental accounting convention?

Which concept is similar to the concept of accrual of revenue?

Which concept is associated with the principle of full disclosure?

Which attitude can be said to be the conservative attitude ?

What does the matching cost with revenue concept suggest ?

Fixed assets are depreciated based on the principle of ………………(a) Accounting period(b) Prudence(c) Going concern concept(d) Accrual concept

When is revenue said to be realised in the sale of goods ?

How is the accounting period known?

Fundamental accounting equation i.e., A = C + L is based on ………………………….. concept.(a) Going concern(b) Dual aspect(c) Cost(d) Prudence

……………………….. suggests that assets like goodwill, patents, trademark and copyright are not written off in one year.(a) Periodicity concept(b) Prudence concept(c) Going concern concept(d) Consistency concept

Generally, why is the accounting period maintained of one year ?

Based on …………………………. concept, no accounting entry is made in the books of accounts for advantage of having a team of sincere, honest, hard-working and efficient employees with the firm.(a) Accrual(b) Materiality(c) Money measurement(d) Consistency

Purchase of dustbin for ₹ 150 should be considered as an expense instead of considering the same to be a fixed asset.(a) Principal of conservatism(b) Cost concept(c) Money measurement concept(d) Materiality concept

Change in method of depreciation should be disclosed in financial statements along with the impact of such change.(a) Materiality concept(b) Full disclosure concept(c) Prudence concept(d) Periodicity concept