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AP Intermediate 1st Year Introduction to Accounting & Recording Transactions — practice questions

Explore 45 free Introduction to Accounting & Recording Transactions questions in AP Intermediate 1st Year Accountancy. Open each question or exercise to read its content, reference answers and available explanation.

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Introduction to Accounting & Recording Transactions questions and exercises with answers

Showing questions 1–30 of 45.

Accounting Standards in India are issued by theRead the answer and worked solution →Revenue is recognised when it is earned, not when cash is received. This is theRead the answer and worked solution →The accounting equation isRead the answer and worked solution →A business introduces ₹50,000 cash as capital. The effect on the accounting equation isRead the answer and worked solution →The book of original entry in which transactions are first recorded is theRead the answer and worked solution →Under the modern rules, an increase in a liability is recorded as aRead the answer and worked solution →The process of transferring journal entries to individual accounts is calledRead the answer and worked solution →A source document that serves as evidence of a transaction and basis for recording is aRead the answer and worked solution →A computer costing Rs 50,000 has a life of 5 years. Under going concern, what is charged to profit each year?Read the answer and worked solution →Without the continuity assumption, the cost of an asset would be charged in which year?Read the answer and worked solution →What is the span of time after which financial statements are prepared called?Read the answer and worked solution →How long is the normal accounting period?Read the answer and worked solution →Annual income statements are required by the Income Tax Act and which other Act?Read the answer and worked solution →How often must companies listed on a stock exchange publish results?Read the answer and worked solution →Which situation may need interim statements for a period other than twelve months?Read the answer and worked solution →The cost concept requires assets to be recorded at which value?Read the answer and worked solution →A building bought for Rs 2.5 crore now has a higher market value. How is it shown in later years?Read the answer and worked solution →Why does historical cost bring objectivity to recording?Read the answer and worked solution →Which concept is the foundation of accounting and basis for recording transactions?Read the answer and worked solution →Ram starts a business by investing Rs 50,00,000. Which two items are affected?Read the answer and worked solution →Goods worth Rs 10,00,000 are bought for cash. What is the effect?Read the answer and worked solution →A machine worth Rs 30 lakh is bought on credit. What is the effect?Read the answer and worked solution →Which is the fundamental accounting equation?Read the answer and worked solution →A firm has assets of Rs 8,00,000 and liabilities of Rs 3,00,000. What is the capital?Read the answer and worked solution →The dual aspect concept forms the core of which system?Read the answer and worked solution →When is revenue regarded as realised?Read the answer and worked solution →When are credit sales treated as revenue?Read the answer and worked solution →Which of these is revenue from the use of a firm's resources by others?Read the answer and worked solution →For a construction contract lasting 2 to 3 years, how is revenue treated as realised?Read the answer and worked solution →Which concept says expenses must be set against revenues of the same period?Read the answer and worked solution →

Worked practice questions

Accounting Standards in India are issued by the

  1. RBI
  2. ICAI
  3. Ministry of Finance
  4. SEBI
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Correct answer: B. ICAI

The Institute of Chartered Accountants of India (ICAI) issues Accounting Standards to bring uniformity to accounting practice.

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Revenue is recognised when it is earned, not when cash is received. This is the

  1. conservatism
  2. realisation of cash
  3. accrual concept
  4. cash basis
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Correct answer: C. accrual concept

The accrual concept recognises revenue when earned and expenses when incurred, regardless of cash flow timing.

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The accounting equation is

  1. Assets = Liabilities + Capital
  2. Assets + Capital = Liabilities
  3. Capital = Assets + Liabilities
  4. Assets = Capital − Liabilities
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Correct answer: A. Assets = Liabilities + Capital

Assets = Liabilities + Capital — the foundation of the dual-aspect (double-entry) system.

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