Mock Examination Paper-2021 XI-POA

Which of the following best defines an asset?

• Something with a physical form that is valued at a cost in the accounting records.

• An economic resource owned by a business and expected to benefit future operations.

• An economic resource representing cash or the right to receive cash in the near future.

• Something owned by a business that has a ready market value.

• ..

Something owned by a business that has a ready market value.

• bank, cash, trade receivables (debtors), inventory (stock)

• bank, trade receivables (debtors), loan, prepaid expenses

• equipment, goodwill, machinery, vehicles

• equipment, machinery, premises, vehicles

• .

What is a cash discount?

• an allowance is given to a customer for paying in cash

• an allowance is given to a customer for prompt payment

• a deduction from the list price of goods bought by a customer

• a deduction from the list price of goods for bulk buying by a customer

• .

Mr. X is a dealer in electronic goods (refrigerator, washing machine, air conditioners, televisions, etc.) He purchased two air conditioners and installed them in his showroom. In the books of X, the cost two air conditioners will be debited to

• Drawing account

• Capital Account

• Fixed assets

• Purchases account

• .

Which accounting assumption assumes that an enterprise will continue in operation long enough to carry out its existing objectives and commitments?

• Monetary unit assumption

• Economic entity assumption

• Time period assumption

• Going concern assumption

• .

The owner of Westhampton Fish Eatery purchased a new car for his daughter who is away at college at a cost of Rs.43,000 and reported this amount as Delivery Vehicle in the restaurant's balance sheet. The reporting of this item in this manner violated the:

• Cost principle.

• Business entity concept.

• Objectivity principle.

• Going-concern assumption.

• .

Which of the following will not cause a change in the owners' equity of a business?

• Purchase of land with cash.

• Withdrawal of cash by the owner.

• Sale of land at a profit.

• Losses from unprofitable operations.

• .

A transaction caused an increase in both assets and owners' equity. This transaction could have resulted from the:

• Sale of services to a customer.

• Sale of land for a price less than its cost.

• Borrowing money from a bank.

• Sale of land for cash at a price equal to its cost.

• .

An expense is best defined as:

• Any payment of cash for the benefit of the company.

• Past, present, or future payments of cash required to generate revenues.

• Past payments of cash required to generate revenues.

• Future payments of cash required to generate revenues.

• .

The requirement that only transaction data capable of being expressed in terms of money be included in the accounting records relates to the

• cost principle.

• monetary unit assumption.

• economic entity assumption.

• both a and b above.

• .