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Accountancy Practice Worksheet Ch-3

This document is a practice worksheet for accounting students in Class XI studying the chapter on the theory base of accounting. It contains multiple choice questions and case studies related to key accounting concepts and conventions such as accounting conventions, the revenue recognition principle, and the going concern concept. The questions assess students' understanding of how these concepts are applied in practical accounting situations involving the recording of transactions and preparation of financial statements.

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Pujan Sachapara
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570 views2 pages

Accountancy Practice Worksheet Ch-3

This document is a practice worksheet for accounting students in Class XI studying the chapter on the theory base of accounting. It contains multiple choice questions and case studies related to key accounting concepts and conventions such as accounting conventions, the revenue recognition principle, and the going concern concept. The questions assess students' understanding of how these concepts are applied in practical accounting situations involving the recording of transactions and preparation of financial statements.

Uploaded by

Pujan Sachapara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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DELHI PUBLIC SCHOOL HARNI

Academic Session 2022 – 2023


Practice Worksheet – 1
Class: XI (Commerce) Subject: Accountancy
Chapter 3- Theory Base of Accounting
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Q1. Choose the most appropriate alternative from the given options:
1. The term that connotes customs or traditions as a guide to the preparation of accounting statements is:
(a) Accounting Concept (c) Accounting Convention
(b) Accounting Procedures (d) Accounting Standards
2. Identify the assumption of accounting that provides the very basis for showing the value of assets in the
Balance Sheet.
(a) Going Concern Concept (c) Full Disclosure
(b) Objectivity (d) Materiality
3. Identify the Accounting Principle which includes the cost of acquisition that does not change year after year.
(a) Cost Concept (c) Accounting Period
(b) Revenue Recognition (d) Consistency
4. According to Revenue Recognition concept:
(i) Credit sales are treated as revenue on the day sales are made and not when money is received.
(ii) Rent for the March 2020 received in April 2020 will be recorded in Profit and Loss A/c in the
beginning of the financial year on April 2020.
(a) Option (i) is correct.
(b) Option (ii) is correct.
(c) Both (i) and (ii) are correct.
(d) None of them is correct.
5. According to the Matching concept, a company show all the expenses related to its revenues of a specified
period even if:
(a) Expenses were not paid in that period.
(b) Revenues were not paid in that period.
(c) Fixed assets were not sold in that period.
(d) Liabilities were not paid in that period.
Q2. Answer the following questions:
1. Highlight the difference between IFRS and Indian GAAP in your own words.
2. Describe the utility of accounting standards.
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3. India, instead of Adoption IFRS decided to prepare and adopt Ind-AS. Why?
4. As per Companies Act, 2013, Ind-AS is applicable to which companies?
Q3. Case Studies:
Q1. Mohan is the proprietor of M/s. M.K. & Co. He purchased a car for his son and made the payment by
issuing a cheque from the account of M/s. M.K. & Co. The accountant debited the Drawings Account with the
amount. But according to Mohan, it should be debited to Fixed Assets. Who is correct in your view and why?
Q2. Ashok purchased a factory building and paid ₹55 lakhs towards its cost including registration charges. At
the end of the financial year, the value of building came down to ₹53 lakhs. How should Ashok record the value
of building in the books of accounts? Why?
Q3. The Government acquired the assets of a company on 1st April 2020, and given a compensation of ₹15
crores. The company did not have any other business as on the date of acquisition and also not started any other
business even after acquisition of assets. The company placed the amount received as compensation in a fixed
deposit with a bank, which is still lying deposited with the bank. Do you think the company is a going concern?
Q4. Dinesh, a customer had advanced ₹10,000 against the order for purchase of LCD TV worth ₹55,000. The
owner wants to book it as a sale. Would he be correct in doing so?
Q5. An enterprise follows the accrual basis for preparing its books of accounts. Rent of factory premises
amounting to ₹20,000 for the month of March, 2020 was not paid. The owner did not want to account it in the
books of accounts for the year 2019-20 on the ground that the amount was not paid. The enterprise closes its
books of accounts on 31st March every year. Is he correct?
Q6. Due to an accident on 22nd February, 2020, a company’s vital machinery is damaged completely. This will
have an adverse impact on its production capacity. As a result, the competitors are likely to take its advantage
and capture the market. The company has not disclosed this fact in its annual report for the year ended 31st
March 2020. Which principle of accounting is not complied with? Explain the same.

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