Cost Concept

Q.

Explain Going Concern Assumption and Matching Concept.

Q.

Explain Historical cost principle and consistency Assumption of accounting.

Q.

The assets are recorded in the books of account in the cost at which it was bought. This is based on which concept?

1. Matching

2. Accounting Period

3. Dual Aspect

4. Cost concept

Q.

The Modern Enterprises reported all assets in the balance sheet at current market value. This action is a violation of:

1. Realization Concept

2. Materiality Concept

3. Cost Principle or Historical Cost Concept

4. Accounting Period Concept

Q.

The Historical cost or cost principle is not applicable to which of the following assets:

1. Inventory i.e. stocks of business

2. Building in which machine is kept.

3. Land purchased for business

4. Machinery purchased for business

Q. Historical cost in relation to accounts means:

1. Current market price of the asset
2. Cost of acquisition of the asset
3. Purchase price, which includes cost of acquisition, transportation and installation
4. None of the above

Q. ________ take into account accounting costs but in addition, also takes into account the amount of money the entrepreneur could have earned if he had invested his money and sold his own services and other factors in the next best alternative uses.

1. Cash cost
2. Accounting costs
3. Economic costs
4. Direct cost

Q.

Write the following statement using numbers , literal numbers and sign of basic operations. Clearly state what each latter represent .

The selling price is equal to cost price plus profit .

Q. Which of the following is special business?
(1) Consideration of financial statements
(2) Consideration of reports of the board of directors and auditors
(3) Declaration of any dividend
(4) Appointment of directors in place of those retiring
(5) Appointment of, and the fixing of the remuneration of, the auditors
Select the correct answer from the options given below:

1. (1), (3) & (4)
2. (2) & (5)
3. (1), (3) & (5)
4. None of the above