BCA - SYLLABUS (Bu Jhansi)
Yug Chetna Mahavidyalaya, Najarpur, Sumerpur, Hamirpur
Affiliated to Bundelkhand University, Jhans
"Related
to 100 MCQ with Answer" on UNIT-I of Financial Accounting, Paper
Code-1879. The topic is: Overview - Meaning and Nature of Financial Accounting,
Scope of Financial Accounting, Financial Accounting & Management Accounting,
Accounting concepts & convention, Accounting standards in India.
based on
UNIT-I of Financial Accounting (Paper Code-1879). The questions cover the key
topics: Meaning and Nature of Financial Accounting, Scope of Financial
Accounting, Financial Accounting & Management Accounting, Accounting
concepts & conventions, and Accounting standards in India. Each question
has four options (A, B, C, D), with one correct answer.
- Meaning
and Nature: Questions 1-10
- Scope:
Questions 11-20
- Financial
vs. Management Accounting: Questions 21-30
- Accounting
Concepts & Conventions: Questions 31-40
- Accounting
Standards in India: Questions 41-50
The correct
answers are provided at the end of each question for clarity, along with a
brief explanation where helpful.
Questions
1. What is
the primary objective of financial accounting?
A) To provide information for internal decision-making
B) To record, classify, and summarize
financial transactions for external users
C) To analyze cost behavior
D) To forecast future profits
Answer: B (Financial accounting focuses on
historical data for external stakeholders like investors and creditors.)
2. Which of
the following best describes the nature of financial accounting?
A) Subjective and forward-looking
B) Objective, historical, and based on
verifiable evidence
C) Focused only on cash flows
D) Limited to managerial use
Answer: B (It relies on objective data from
past transactions.)
3. Financial
accounting is primarily concerned with:
A) Planning and budgeting
B) Recording business transactions in
monetary terms
C) Evaluating employee performance
D) Marketing strategies
Answer: B (It involves systematic recording
of financial events.)
4. The
nature of financial accounting includes which of the following
characteristics?
A) It is confidential and internal
B) It follows a standardized format for
comparability
C) It ignores non-monetary transactions
D) It is unregulated
Answer: B (Standardization ensures
consistency across entities.)
5. Which
statement accurately reflects the meaning of financial accounting?
A) It is the process of interpreting
financial data for management
B) It is the art of recording, classifying,
and summarizing monetary transactions
C) It focuses on future-oriented
projections
D) It excludes balance sheet
preparation
Answer: B (This is the core definition.)
6. Financial
accounting provides information that is:
A) Only useful for tax authorities
B) Useful to external parties like
shareholders and lenders
C) Solely for internal control
D) Irrelevant to regulatory bodies
Answer: B (External users rely on it for
decision-making.)
7. The
nature of financial accounting emphasizes:
A) Flexibility in reporting
B) Adherence to generally accepted
principles
C) Exclusion of qualitative data
D) Focus on short-term goals only
Answer: B (It follows principles like GAAP
or IFRS.)
8. Which of
the following is NOT a characteristic of financial accounting?
A) It deals with historical data
B) It is mandatory for all businesses
C) It provides summarized financial
statements
D) It is primarily for internal use
Answer: D (It's mainly for external
stakeholders.)
9. Financial
accounting helps in:
A) Determining product pricing
B) Assessing the financial position and
performance of a business
C) Managing inventory levels
D) Recruiting employees
Answer: B (Through statements like P&L
and balance sheet.)
10. The
ultimate goal of financial accounting is to:
A) Maximize shareholder wealth
B) Provide a true and fair view of the
financial health
C) Eliminate all business risks
D) Focus on non-financial metrics
Answer: B (It aims for accurate
representation.)
11. What is
the scope of financial accounting?
A) Limited to recording sales
transactions
B) Encompasses identification, measurement,
recording, and communication of financial information
C) Excludes preparation of financial
statements
D) Only applies to manufacturing firms
Answer: B (It covers the entire process of
financial reporting.)
12. Which of
the following falls within the scope of financial accounting?
A) Budgeting for future expenses
B) Classifying transactions into assets,
liabilities, and equity
C) Analyzing competitor strategies
D) Forecasting market trends
Answer: B (It involves classification and
summarization.)
13. Financial
accounting scope includes:
A) Only cash-based transactions
B) Accrual basis for recording revenues and
expenses
C) Ignoring intangible assets
D) Focusing solely on government
entities
Answer: B (Accrual accounting is standard.)
14. The
scope of financial accounting extends to:
A) Preparing tax returns only
B) Communicating financial data through
statements to users
C) Managing human resources
D) Designing products
Answer: B (Communication is key.)
15. Which
activity is part of the scope of financial accounting?
A) Cost-volume-profit analysis
B) Summarizing transactions in ledgers and
journals
C) Employee motivation techniques
D) Supply chain optimization
Answer: B (Recording and summarizing is
core.)
16.
Financial accounting's scope does NOT include:
A) Measurement of economic events
B) Internal performance evaluation
C) Preparation of balance sheets
D) Recording of transactions
Answer: B (That's more for management
accounting.)
17. The
scope covers:
A) Only historical data
B) Both historical and projected data
C) Excluding equity transactions
D) Focusing on non-profit organizations
only
Answer: A (Primarily historical.)
18. Which of
the following is within the scope?
A) Strategic planning
B) Disclosure of financial position in
annual reports
C) Marketing campaigns
D) Quality control
Answer: B (Disclosure is a key aspect.)
19.
Financial accounting scope involves:
A) Ignoring regulatory requirements
B) Adhering to accounting standards
C) Only manual record-keeping
D) Excluding digital tools
Answer: B (Standards guide the process.)
20. The
broadest scope of financial accounting includes:
A) Providing information for
decision-making by external users
B) Limiting to one industry
C) Avoiding profit calculations
D) Focusing on personal finances
Answer: A (It's for a wide range of
external stakeholders.)
21. How does
financial accounting differ from management accounting?
A) Financial accounting is for external
users; management accounting is for internal users
B) Both are identical
C) Financial accounting ignores
profits
D) Management accounting is mandatory
Answer: A (Key difference in audience.)
22. Which
statement is true about financial vs. management accounting?
A)
Financial accounting is future-oriented; management accounting is
historical
B) Financial accounting follows strict
rules; management accounting is flexible
C) Both provide the same level of
detail
D) Management accounting is for shareholders
Answer: B (Management accounting adapts to
needs.)
23.
Financial accounting primarily deals with:
A) Detailed cost analysis
B) Summarized financial statements for
external parties
C) Budget variances
D) Employee training costs
Answer: B (External reporting.)
24.
Management accounting differs from financial accounting in that it:
A) Is regulated by law
B) Provides information for planning and
control within the organization
C) Excludes balance sheets
D) Is only for public companies
Answer: B (Internal focus.)
25. Which is
a feature of financial accounting but not management accounting?
A) Use of estimates
B) Mandatory disclosure to external users
C) Detailed breakdowns
D) Focus on future decisions
Answer: B (Mandatory for external
reporting.)
26.
Financial accounting is:
A) Optional for businesses
B) Based on GAAP; management accounting is
not
C) Only for non-profits
D) Focused on qualitative data
Answer: B (GAAP ensures comparability.)
27.
Management accounting is more concerned with:
A) Legal compliance
B) Internal efficiency and
decision-making
C) Public disclosures
D) Historical summaries only
Answer: B (It aids management.)
28. Unlike
financial accounting, management accounting:
A) Uses standardized formats
B) Can be tailored to specific needs
C) Is audited externally
D) Ignores costs
Answer: B (Flexibility is key.)
29.
Financial accounting reports are:
A) Timely and frequent
B) Periodic and summarized
C) Only for creditors
D) Unregulated
Answer: B (Annual/quarterly reports.)
30. The main
difference is:
A) Financial accounting is quantitative;
management accounting is qualitative
B) Financial accounting is for owners;
management accounting is for managers
C) Both are the same
D) Financial accounting excludes
revenues
Answer: B (Audience distinction.)
31. Which is
an accounting concept?
A) Conservatism
B) Materiality
C) Both A and B
D) Neither
Answer: C (Both are key concepts.)
32. The
going concern concept assumes:
A) The business will liquidate soon
B) The business will continue
indefinitely
C) Profits are guaranteed
D) Assets are overvalued
Answer: B (Basis for valuation.)
33.
Accounting conventions include:
A) Consistency
B) Prudence
C) Both
D) None
Answer: C (Conventions guide application.)
34. The
concept of accrual means:
A) Recording only cash transactions
B) Recognizing revenues and expenses when
earned/incurred
C) Ignoring future obligations
D) Focusing on past cash flows
Answer: B (Accrual basis.)
35. Which is
NOT an accounting concept?
A) Entity
B) Money measurement
C) Flexibility
D) Periodicity
Answer: C (Flexibility is a convention.)
36. The
prudence convention suggests:
A) Overstating profits
B) Anticipating losses but not profits
C) Ignoring uncertainties
D) Valuing assets at market price
always
Answer: B (Conservative approach.)
37. The
concept of materiality means:
A) All transactions must be recorded
B) Only significant items affect
decisions
C) Ignoring small amounts
D) Focusing on immaterial details
Answer: B (Judgment-based.)
38.
Accounting concepts ensure:
A) Subjectivity
B) Comparability and consistency
C) Random reporting
D) Exclusion of standards
Answer: B (Uniformity.)
39. The dual
aspect concept is:
A) Every transaction has two sides
B) Only one entry per transaction
C) Ignoring liabilities
D) Focusing on revenues only
Answer: A (Debit and credit.)
40.
Conventions like consistency help in:
A) Changing methods frequently
B) Comparing financial statements over
time
C) Avoiding standards
D) Ignoring user needs
Answer: B (Reliability.)
41.
Accounting standards in India are issued by:
A) RBI
B) ICAI
C) SEBI
D) Ministry of Finance
Answer: B (Institute of Chartered
Accountants of India.)
42. The
purpose of accounting standards in India is to:
A) Increase complexity
B) Ensure uniformity and reliability in
financial reporting
C) Limit disclosures
D) Focus on small businesses only
Answer: B (Harmonization.)
43. Which
body notifies accounting standards in India?
A) Government of India
B) ICAI with approval from the Central
Government
C) World Bank
D) Private firms
Answer: B (ICAI drafts, government
notifies.)
44.
Accounting standards in India are based on:
A) IFRS
B) US GAAP only
C) Local customs
D) No international influence
Answer: A (Converged with IFRS.)
45. How many
accounting standards are there in India?
A) 10
B) 32
C) 50
D) 100
Answer: B (As per ICAI, there are 32 AS.)
46.
Accounting standards apply to:
A) Only listed companies
B) All entities preparing financial
statements
C) Government only
D) Non-profits only
Answer: B (Mandatory for compliance.)
47. The
first accounting standard in India was on:
A) Inventories
B) Disclosure of Accounting Policies
C) Cash Flow
D) Revenue Recognition
Answer: B (AS 1.)
48.
Standards ensure:
A) Flexibility in reporting
B) Transparency and accountability
C) Ignoring user interests
D) Random practices
Answer: B (Key benefits.)
49. In
India, accounting standards are:
A) Voluntary
B) Mandatory for certain entities
C) Only for banks
D) Irrelevant
Answer: B (Required by law for companies.)
50. The
objective of Indian accounting standards is to:
A) Complicate reporting
B) Provide true and fair view
C) Limit information
D) Focus on costs only
Answer: B (Core principle.)
A. Meaning & Nature of Financial
Accounting
1. Financial
accounting is mainly concerned with:
a) Internal reporting
b) External reporting
c) Cost control
d) Budgeting
Answer: b
2. Financial
accounting information is primarily prepared for:
a) Managers
b) Employees
c) External users
d) Production department
Answer: c
3. Financial
accounting records transactions which are:
a) Estimated
b) Non-monetary
c) Monetary in nature
d) Hypothetical
Answer: c
4. The main
objective of financial accounting is to:
a) Maximize profit
b) Ascertain profit and financial position
c) Reduce costs
d) Fix selling prices
Answer: b
5. Financial
accounting is based on:
a) Cash system only
b) Accrual system
c) Single entry system
d) Statistical records
Answer: b
B. Scope of Financial Accounting
6. Financial
accounting includes preparation of:
a) Cost sheets
b) Budgets
c) Financial statements
d) Production reports
Answer: c
7. Which of
the following is NOT included in financial accounting?
a) Profit & Loss Account
b) Balance Sheet
c) Cash Flow Statement
d) Cost audit
Answer: d
8. Financial
accounting helps in:
a) Internal decision making
b) External reporting
c) Inventory control
d) Production planning
Answer: b
9. Financial
accounting data is usually presented:
a) Daily
b) Weekly
c) Periodically
d) Continuously
Answer: c
10. The
scope of financial accounting is:
a) Very narrow
b) Limited to costs
c) Very wide
d) Restricted to management
Answer: c
C. Financial Accounting vs Management
Accounting
11.
Financial accounting is mainly used by:
a) Management
b) Employees
c) External users
d) Cost accountants
Answer: c
12.
Management accounting is primarily concerned with:
a) Past data
b) Present and future data
c) External reporting
d) Legal compliance
Answer: b
13.
Financial accounting reports are prepared:
a) As required by management
b) According to accounting standards
c) Randomly
d) Only for tax purposes
Answer: b
14. Which
accounting is not mandatory by law?
a) Financial accounting
b) Cost accounting
c) Management accounting
d) Auditing
Answer: c
15.
Financial accounting emphasizes:
a) Planning
b) Control
c) Recording
d) Decision-making
Answer: c
D. Accounting Concepts
16. The
business entity concept assumes that:
a) Business and owner are same
b) Business is separate from owner
c) Business has infinite life
d) Business earns profit always
Answer: b
17. Going
concern concept assumes that:
a) Business will close soon
b) Business will continue indefinitely
c) Business will incur losses
d) Assets will be sold immediately
Answer: b
18.
According to money measurement concept, only those transactions are recorded
which are:
a) Important
b) Quantifiable in money
c) Non-monetary
d) Estimated
Answer: b
19. The
accounting period concept implies:
a) Life of business is divided into periods
b) Accounts are prepared once
c) Business life is unlimited
d) No need for final accounts
Answer: a
20. Accrual
concept recognizes income when it is:
a) Received
b) Earned
c) Collected
d) Deposited
Answer: b
E. Accounting Conventions
21. The
convention of conservatism means:
a) Showing higher profits
b) Anticipating profits
c) Anticipating losses
d) Ignoring losses
Answer: c
22.
Convention of consistency requires:
a) Changing methods frequently
b) Using same accounting methods
c) Ignoring standards
d) Recording estimates
Answer: b
23. Full
disclosure convention means:
a) Disclosing minimum information
b) Hiding information
c) Disclosing all material facts
d) Disclosing profits only
Answer: c
24.
Materiality convention relates to:
a) Legal rules
b) Significant information
c) All information
d) Future events
Answer: b
25.
Accounting conventions are:
a) Legally binding
b) Customs and traditions
c) Accounting standards
d) Accounting laws
Answer: b
F. Accounting Standards in India
26.
Accounting standards are issued in India by:
a) RBI
b) SEBI
c) ICAI
d) Ministry of Finance
Answer: c
27. The main
purpose of accounting standards is to:
a) Increase profit
b) Ensure uniformity
c) Reduce tax
d) Help auditors only
Answer: b
28.
Accounting Standards are applicable to:
a) Only government companies
b) Only listed companies
c) All enterprises
d) Only manufacturing firms
Answer: c
29. AS 1
relates to:
a) Valuation of inventories
b) Disclosure of accounting policies
c) Cash flow statement
d) Revenue recognition
Answer:
b
30. Indian
Accounting Standards are also known as:
a) GAAP
b) Ind AS
c) IFRS
d) IAS
Answer: b
G. Miscellaneous (Integrated MCQs)
31.
Financial statements are prepared at the end of:
a) Accounting year
b) Calendar year
c) Financial year
d) Business life
Answer: a
32. Which
concept supports depreciation?
a) Business entity
b) Matching concept
c) Going concern
d) Money measurement
Answer: c
33. Which
concept requires expenses to be matched with revenue?
a) Accrual
b) Matching
c) Consistency
d) Prudence
Answer: b
34.
Accounting standards improve:
a) Flexibility
b) Comparability
c) Complexity
d) Subjectivity
Answer: b
35.
Financial accounting mainly deals with:
a) Estimates
b) Facts
c) Future plans
d) Budgets
Answer: b
36. Which is
not an accounting concept?
a) Accrual
b) Consistency
c) Matching
d) Disclosure
Answer: d
37.
Accounting information should be:
a) Biased
b) Irrelevant
c) Reliable
d) Secret
Answer: c
38.
Accounting standards are mandatory under:
a) Income Tax Act
b) Companies Act
c) Contract Act
d) Sale of Goods Act
Answer: b
39. The
convention of conservatism is also called:
a) Prudence
b) Consistency
c) Materiality
d) Disclosure
Answer: a
40. Which
users rely most on financial accounting?
a) Production manager
b) Sales manager
c) Shareholders
d) Storekeeper
Answer: c
41.
Financial accounting information is:
a) Confidential
b) Secret
c) Public
d) Internal
Answer: c
42. Which
concept assumes stable currency?
a) Accrual
b) Money measurement
c) Going concern
d) Matching
Answer: b
43.
Management accounting reports are:
a) Mandatory
b) Statutory
c) Optional
d) Legal
Answer: c
44. Which
accounting ensures uniform practices?
a) Concepts
b) Conventions
c) Standards
d) Principles
Answer: c
45.
Accounting is primarily a:
a) Science
b) Art
c) Science and art
d) Law
Answer: c
46.
Financial accounting records are mainly historical in nature because they
relate to:
a) Future events
b) Past transactions
c) Estimated values
d) Planned activities
Answer: b
47.
Accounting policies are disclosed as per:
a) AS 1
b) AS 2
c) AS 3
d) AS 5
Answer: a
48. Which of
the following is an external user?
a) Accountant
b) Manager
c) Investor
d) Supervisor
Answer: c
49.
Accounting conventions help in:
a) Legal compliance
b)
Uniformity and comparability
c) Tax planning
d) Budget control
Answer: b
50. The
final output of financial accounting is:
a) Trial balance
b) Ledger
c) Financial statements
d) Journal
Answer: c