Basic Accounting Concepts

JKSSB Finance Accounts Assistant · Accountancy & Book-Keeping · 25 practice questions with answers and explanations: 15 Easy, 6 Medium, 4 Hard.

Sample questions

Sample Easy question 1

The accounting concept that assumes a business will continue to operate indefinitely is called:

  1. Going Concern Concept
  2. Matching Concept
  3. Accrual Concept
  4. Consistency Concept
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Answer: A. The Going Concern Concept assumes the business will continue operating for the foreseeable future.

Sample Medium question 2

The 'Dual Aspect Concept' is the foundation of which system of accounting?

  1. Single-entry bookkeeping
  2. Double-entry bookkeeping
  3. Cash-basis accounting only
  4. Government accounting only
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Answer: B. The Dual Aspect Concept — that every transaction has two aspects, a debit and a credit of equal amount — is the foundation of the double-entry system of bookkeeping.

Sample Hard question 3

The 'Materiality Concept' in accounting allows that:

  1. All transactions, however small, must be disclosed in exhaustive detail
  2. Insignificant items may be recorded/disclosed in a simplified manner if their omission would not mislead users
  3. Only material (physical) assets need be recorded, not intangible ones
  4. Materiality applies only to government accounts
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Answer: B. The Materiality Concept permits accountants to disregard or simplify treatment of insignificant items, as long as this does not distort the true and fair view given to users of the financial statements.

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