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CS Foundation Theorybase — practice questions

Explore 9 free Theorybase questions in CS Foundation Accountancy. Open each question or exercise to read its content, reference answers and available explanation.

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Theorybase questions and exercises with answers

Showing questions 1–9 of 9.

The concept that treats the business as separate from its owner is theRead the answer and worked solution →According to the going-concern concept, a business is assumed toRead the answer and worked solution →Recording only transactions that can be expressed in money terms reflects theRead the answer and worked solution →'Anticipate no profit but provide for all possible losses' expresses the convention ofRead the answer and worked solution →Closing stock is valued at cost or net realisable value, whichever is lower. This follows the principle ofRead the answer and worked solution →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 book of original entry in which transactions are first recorded is theRead 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 →

Worked practice questions

The concept that treats the business as separate from its owner is the

  1. going concern concept
  2. money measurement concept
  3. business entity concept
  4. dual aspect concept
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Correct answer: C. business entity concept

The business entity concept treats the business and its owner as distinct the owner's personal transactions are kept out of the business books.

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According to the going-concern concept, a business is assumed to

  1. sell all assets immediately
  2. continue operating for the foreseeable future
  3. close at the end of the year
  4. have unlimited capital
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Correct answer: B. continue operating for the foreseeable future

Going concern assumes the enterprise will continue indefinitely, which justifies recording assets at cost and charging depreciation over their life.

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Recording only transactions that can be expressed in money terms reflects the

  1. money measurement concept
  2. matching concept
  3. prudence concept
  4. accrual concept
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Correct answer: A. money measurement concept

The money measurement concept records only monetary transactions non-monetary facts (e.g. staff morale) are excluded.

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More Accountancy topics

PartnershipRecordingtransactionsNational Income Accounting