Theoretical Framework

110 Practice MCQs available for CA Foundation

Paper

Paper 1: Accounting

Exam Weightage

5-10%

Key Topics

Policies, Standards (Ind AS), Vocabulary

This chapter covers Policies, Standards (Ind AS), Vocabulary and is part of Paper 1: Accounting in the CA Foundation exam.

Exam Strategy Tip

This topic carries 5-10% weightage. Focus on understanding core concepts rather than memorizing.

All 110 Questions

4601
What do you mean by accounting? Give its definition.
Subjective
4602
What are the branches of Accounting? Explain. OR What are the sub-fields of Accounting? [Dec 2023]
Subjective
4603
Limitations of accounting
Subjective
4604
Functions of accounting data. [Jan. 2025, 4 Marks]
Subjective
4605
Differentiate between Book keeping and Accounting. [Sept. 2024, 4 Marks]
Subjective
4606
Capital is all assets less fictitious assets.
Subjective
4607
Capital+ Long Term Liabilities = Fixed Assets+ Current Assets+ Cash - Current Liabilities.
Subjective
4608
Equity+ LTL-CL = FA+ CA
Subjective
4609
Customers of business should not be considered as users of accounts prepared by business. They are not interested in knowing the performance of the business. [Jan. 2025, 2 Marks]
Subjective
4610
Book keeping and accounting are not synonymous terms; they are different from each other. [Jan. 2025, 2 Marks]
Subjective
4611
What are Accounting Concepts, Principles & Conventions?
Subjective
4612
What are Fundamental Accounting Assumptions? Explain them in detail.
Subjective
4613
Money Measurement Concept [June 2022, Dec 2023, Jan 2025 MTP]
Subjective
4614
Convention of Materiality [June 2023, l Mark]
Subjective
4615
Convention of Prudence [June 2023, l Mark]
Subjective
4616
Cash Basis of Accounting [June 2024, 1 Mark]
Subjective
4617
Distinguish between Going Concern concept and Cost concept. [May 2019, 4 Marks; June 2024,1 Mark]
Subjective
4618
The financial statement must disclose all the relevant and reliable information in accordance with the foll disclosure principle. [Dec. 2023, 2 Marks]
Subjective
4619
As per Concept of Conservatism, the accountant should provide for all possible losses, but should not anticipate income. [June 2023, 2 Marks]
Subjective
4620
Valuation of inventory at cost or net realizable value is based on principle of Conservatism. [Nov. 2019, 2 Marks , Sep 2024, 2 Marks]
Subjective
4621
A concern proposes to discontinue its business from December, 2020 and decides to dispose of its plants within a period of 3 month§. The Balance Sheet as on 31st December, 2020 should continue to indicate the plants at its historical costs as the assets will be disposed of after the Balance Sheet date. [Nov. 2020, 2 Marks]
Subjective
4622
Matching concept is based on accrual concept. [Jan. 2025, 2 Marks]
Subjective
4623
"The cost of Property, Plant and Equipment comprises of any cost directly attributable to bring the asset to the location and condition necessary for it to be capable of operating in a manner intended hy the enterprise". Give any five examples of such ‘directly attributable costs'. [Dec. 2022, 5 Marks]
Subjective
4624
Capital Receipts and Revenue Receipts
Subjective
4625
Capital Expenditure. [July 2021, 2 Marks]
Subjective
4626
Revenue Expenditure. [July 2021, 2 Marks]
Subjective
4627
Expenses in connection with obtaining a license for running the Cinema Hall is Revenue Expenditure, [May 2018, June 2023, 2 Marks]
Subjective
4628
Overhauling expenses for the engine of motor car to get better fuel efficiency is revenue expenditure. [Nov. 2018, 2 Marks]
Subjective
4629
Amount spent for the construction of temporary huts, which were necessary for construction of the Cinema House and were demolished when the Cinema House was ready, is capital expenditure. [May 2019, 2 Marks]
Subjective
4630
M/ s. XYZ & Co, runs a cafe. They renovated some of the old cabins. Because of this renovation some space was made free and number of cabins was increased from 15 to 18. The total expenditure incurred was~ 30,000 and was treated as a revenue expenditure. [Nov. 2019, 2 Marks]
Subjective
4631
Expenses incurred on the repairs for the first time on purchase of an old building are capital expenditure. [Dec. 2021, 2 Marks]
Subjective
4632
Any amount spent for replacement of worn out part of a machine is capital expenditure, [June 2022, 2 Marks]; [MTP Jan. 2025]
Subjective
4633
Inauguration expenses of Rs. 10 lakhs incurred on the new unit in an existing business is a capital expenditure. [Dec. 2023, 2 Marks]
Subjective
4634
Overhaul Expenses of a second-hand machinery purchased are revenue Expenditure. [Sep. 2024, 2 Marks]
Subjective
4635
Classify the following expenditures as capital or revenue expenditure/ receipt: (i) An extension of railway tracks in the factory area. (ii) Amount spent on painting the factory. (iii) Payment of wages for building a new office extension. (iv) Premium received on issue of shares. (v) Rings and Pistons of an engine were changed to get full efficiency. (vi) Legal fees paid to acquire a property. [RTP Jan. 2025]
Subjective
4636
Contingent liability. [Dec. 2021, 1 Mark]
Subjective
4637
Contingent Assets. [Dec. 2021, 1 Mark]
Subjective
4638
Provision and Contingent liability. [May 2018; Nov, 2019, 4 Marks] [Dec. 2022, 4 Marks]
Subjective
4639
Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as contingent liability.
Subjective
4640
In the financial statement, contingent liability is recognized.
Subjective
4641
If an inflow of economic benefits is probable then a contingent asset is disclosed in the financial statements.
Subjective
4642
Contingent asset usually arises from unplanned or unexpected events that give rise to the possibility of an outflow of economic benefits to the business entity.
Subjective
4643
A claim that an enterprise is pursuing through legal process, where the outcome is uncertain, is a Contingent Liability. [June 2022, 2 Marks]; [MTP Jan. 2025]
Subjective
4644
What do you mean by Accounting policies? What are the basis of their selection? What are the different areas in which different accounting policies are possible? [June 2024, 1 Mark]
Subjective
4645
When changes in accounting policies are permitted? What disclosures are to be made whenever change takes place? [June 2024, 1 Mark]
Subjective
4646
Distinguish between fundamental accounting assumption and accounting policies. [RTP Jan. 2025]
Subjective
4647
"Change in accounting policy may have a material effect on the items of financial statements." Explain the statement with the help of an example. [RTP Jan. 2025]
Subjective
4648
Historical Cost.
Subjective
4649
Current Cost
Subjective
4650
Realisable Value
Subjective
4651
Present Value
Subjective
4652
Need of Accounting Standards
Subjective
4653
Objectives & Advantages of Accounting Standards [MTP Jan. 2025]; [RTP Jan~ 2025]
Subjective
4654
Accounting Standards for non-corporate entities in India are issued by the Central Government. [Jan. 2021, 2 Marks]
Subjective
4655
Promissory Note is different from Bill of Exchange because the amount is paid by the maker in case of former and by the acceptor in the later. [July 2024, 2 Marks]
Subjective
4934
What do you mean by accounting? Give its definition.
Subjective
4935
What are the branches of Accounting? Explain. OR What are the sub-fields of Accounting? [Dec 2023]
Subjective
4936
Limitations of accounting
Subjective
4937
Functions of accounting data. [Jan. 2025, 4 Marks]
Subjective
4938
Differentiate between Book keeping and Accounting. [Sept. 2024, 4 Marks]
Subjective
4939
Capital is all assets less fictitious assets.
Subjective
4940
Capital+Long Term Liabilities=Fixed Assets+Current Assets+Cash−Current Liabilities\displaystyle Capital + Long\ Term\ Liabilities = Fixed\ Assets + Current\ Assets + Cash - Current\ Liabilities
Subjective
4941
Equity+ LTL-CL = FA+ CA
Subjective
4942
Customers of business should not be considered as users of accounts prepared by business. They are not interested in knowing the performance of the business. [Jan. 2025, 2 Marks]
Subjective
4943
Book keeping and accounting are not synonymous terms; they are different from each other. [Jan. 2025, 2 Marks]
Subjective
4944
What are Accounting Concepts, Principles & Conventions?
Subjective
4945
What are Fundamental Accounting Assumptions? Explain them in detail.
Subjective
4946
Money Measurement Concept [June 2022, Dec 2023, Jan 2025 MTP]
Subjective
4947
Convention of Materiality [June 2023, l Mark]
Subjective
4948
Convention of Prudence [June 2023, l Mark]
Subjective
4949
Cash Basis of Accounting [June 2024, 1 Mark]
Subjective
4950
Distinguish between Going Concern concept and Cost concept. [May 2019, 4 Marks; June 2024,1 Mark]
Subjective
4951
The financial statement must disclose all the relevant and reliable information in accordance with the foll disclosure principle. [Dec. 2023, 2 Marks]
Subjective
4952
As per Concept of Conservatism, the accountant should provide for all possible losses, but should not anticipate income. [June 2023, 2 Marks]
Subjective
4953
Valuation of inventory at cost or net realizable value is based on principle of Conservatism. [Nov. 2019, 2 Marks , Sep 2024, 2 Marks]
Subjective
4954
A concern proposes to discontinue its business from December, 2020 and decides to dispose of its plants within a period of 3 month§. The Balance Sheet as on 31st December, 2020 should continue to indicate the plants at its historical costs as the assets will be disposed of after the Balance Sheet date. [Nov. 2020, 2 Marks]
Subjective
4955
Matching concept is based on accrual concept. [Jan. 2025, 2 Marks]
Subjective
4956
"The cost of Property, Plant and Equipment comprises of any cost directly attributable to bring the asset to the location and condition necessary for it to be capable of operating in a manner intended hy the enterprise". Give any five examples of such ‘directly attributable costs'. [Dec. 2022, 5 Marks]
Subjective
4957
Capital Receipts and Revenue Receipts
Subjective
4958
Capital Expenditure. [July 2021, 2 Marks]
Subjective
4959
Revenue Expenditure. [July 2021, 2 Marks]
Subjective
4960
Expenses in connection with obtaining a license for running the Cinema Hall is Revenue Expenditure, [May 2018, June 2023, 2 Marks]
Subjective
4961
Overhauling expenses for the engine of motor car to get better fuel efficiency is revenue expenditure. [Nov. 2018, 2 Marks]
Subjective
4962
Amount spent for the construction of temporary huts, which were necessary for construction of the Cinema House and were demolished when the Cinema House was ready, is capital expenditure. [May 2019, 2 Marks]
Subjective
4963
M/ s. XYZ & Co, runs a cafe. They renovated some of the old cabins. Because of this renovation some space was made free and number of cabins was increased from 15 to 18. The total expenditure incurred was~ 30,000 and was treated as a revenue expenditure. [Nov. 2019, 2 Marks]
Subjective
4964
Expenses incurred on the repairs for the first time on purchase of an old building are capital expenditure. [Dec. 2021, 2 Marks]
Subjective
4965
Any amount spent for replacement of worn out part of a machine is capital expenditure, [June 2022, 2 Marks]; [MTP Jan. 2025]
Subjective
4966
Inauguration expenses of Rs. 10 lakhs incurred on the new unit in an existing business is a capital expenditure. [Dec. 2023, 2 Marks]
Subjective
4967
Overhaul Expenses of a second-hand machinery purchased are revenue Expenditure. [Sep. 2024, 2 Marks]
Subjective
4968
Classify the following expenditures as capital or revenue expenditure/ receipt: (i) An extension of railway tracks in the factory area. (ii) Amount spent on painting the factory. (iii) Payment of wages for building a new office extension. (iv) Premium received on issue of shares. (v) Rings and Pistons of an engine were changed to get full efficiency. (vi) Legal fees paid to acquire a property. [RTP Jan. 2025]
Subjective
4969
Contingent liability. [Dec. 2021, 1 Mark]
Subjective
4970
Contingent Assets. [Dec. 2021, 1 Mark]
Subjective
4971
Provision and Contingent liability. [May 2018; Nov, 2019, 4 Marks] [Dec. 2022, 4 Marks]
Subjective
4972
Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as contingent liability.
Subjective
4973
In the financial statement, contingent liability is recognized.
Subjective
4974
If an inflow of economic benefits is probable then a contingent asset is disclosed in the financial statements.
Subjective
4975
Contingent asset usually arises from unplanned or unexpected events that give rise to the possibility of an outflow of economic benefits to the business entity.
Subjective
4976
A claim that an enterprise is pursuing through legal process, where the outcome is uncertain, is a Contingent Liability. [June 2022, 2 Marks]; [MTP Jan. 2025]
Subjective
4977
What do you mean by Accounting policies? What are the basis of their selection? What are the different areas in which different accounting policies are possible? [June 2024, 1 Mark]
Subjective
4978
When changes in accounting policies are permitted? What disclosures are to be made whenever change takes place? [June 2024, 1 Mark]
Subjective
4979
Distinguish between fundamental accounting assumption and accounting policies. [RTP Jan. 2025]
Subjective
4980
"Change in accounting policy may have a material effect on the items of financial statements." Explain the statement with the help of an example. [RTP Jan. 2025]
Subjective
4981
Historical Cost.
Subjective
4982
Current Cost
Subjective
4983
Realisable Value
Subjective
4984
Present Value
Subjective
4985
Need of Accounting Standards
Subjective
4986
Objectives & Advantages of Accounting Standards [MTP Jan. 2025]; [RTP Jan~ 2025]
Subjective
4987
Accounting Standards for non-corporate entities in India are issued by the Central Government. [Jan. 2021, 2 Marks]
Subjective
4988
Promissory Note is different from Bill of Exchange because the amount is paid by the maker in case of former and by the acceptor in the later. [July 2024, 2 Marks]
Subjective

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