CA Foundation Accounting MCQs

Which of the following is the primary objective of accounting?

• To maintain records of assets

• To ascertain profit or loss

• To comply with legal requirements

• To establish controls over business activities

Which accounting principle requires recognizing revenue when it is earned and not when cash is received?

• Cost Concept

• Entity Concept

• Realization Concept

• Matching Concept

Which of the following is a characteristic of the Accrual Basis of Accounting?

• Transactions are recorded only when cash is received or paid

• Revenues and expenses are recognized when they are earned or incurred

• Only cash transactions are recorded

• None of the above

The dual aspect concept is based on which of the following accounting equations?

• Assets + Liabilities = Capital

• Assets = Liabilities + Capital

• Assets = Capital - Liabilities

• Liabilities = Assets + Capital

Which of the following is considered a branch of accounting?

• Auditing

• Cost Accounting

• Business Law

• Business Ethics

The principle of conservatism is also known as:

• Realization Concept

• Prudence Concept

• Matching Concept

• Materiality Concept

The entity concept in accounting implies that:

• The business is separate from its owners

• The business and its owners are one and the same

• Only large businesses should prepare financial statements

• The business is always a legal entity

Which of the following best describes the Matching Concept?

• Expenses should be matched with the period they are paid

• Expenses should be matched with the revenues they generate

• Expenses should be recorded only when cash is paid

• None of the above

What is the primary purpose of financial statements?

• To provide tax authorities with necessary information

• To provide information about financial performance and position

• To provide details about company operations

• To maintain compliance with accounting standards

Which of the following is NOT an accounting concept?

• Matching Concept

• Conservatism

• Consistency

• cost benefit