accounting basics in india as taught to grade 11 students following hsc board

Question 1

What is accounting?

Answer 1

Accounting is the process of recording, summarizing, and reporting financial transactions.

Question 2

True or False: The main objective of accounting is to provide financial information to stakeholders.

Answer 2

True

Question 3

Fill in the blank: The accounting equation is _____ = Assets - Liabilities.

Answer 3

Equity

Question 4

What are the two main types of accounting?

Answer 4

Financial accounting and management accounting.

Question 5

Multiple Choice: Which of the following is not a financial statement? A) Balance Sheet B) Income Statement C) Cash Flow Statement D) Audit Report

Answer 5

D) Audit Report

Question 6

What is a ledger?

Answer 6

A ledger is a book or digital record where all the financial transactions of a business are recorded.

Question 7

True or False: The double-entry system of accounting means that every transaction affects two accounts.

Answer 7

True

Question 8

What is the role of a trial balance?

Answer 8

A trial balance is used to verify that the total debits equal the total credits in the ledger.

Question 9

Fill in the blank: The _____ is the financial statement that shows a company’s revenues and expenses over a specific period.

Answer 9

Income Statement

Question 10

What is depreciation?

Answer 10

Depreciation is the allocation of the cost of a tangible asset over its useful life.

Question 11

Multiple Choice: Which accounting principle requires revenue to be recognized when it is earned? A) Matching Principle B) Revenue Recognition Principle C) Cost Principle D) Conservatism Principle

Answer 11

B) Revenue Recognition Principle

Question 12

What is the purpose of an audit?

Answer 12

The purpose of an audit is to examine financial statements to ensure accuracy and compliance with accounting standards.

Question 13

True or False: Assets are resources owned by a business.

Answer 13

True

Question 14

What is a cash flow statement?

Answer 14

A cash flow statement shows the inflows and outflows of cash in a business over a specific period.

Question 15

Fill in the blank: _____ are obligations that a company owes to external parties.

Answer 15

Liabilities

Question 16

What is the difference between current and non-current assets?

Answer 16

Current assets are expected to be converted to cash within one year, while non-current assets are held for longer than one year.

Question 17

Multiple Choice: Which of the following is an example of a current liability? A) Long-term loan B) Accounts payable C) Equipment D) Land

Answer 17

B) Accounts payable

Question 18

What does GAAP stand for?

Answer 18

GAAP stands for Generally Accepted Accounting Principles.

Question 19

True or False: Revenue is recognized when cash is received.

Answer 19

False

Question 20

What is the purpose of the balance sheet?

Answer 20

The balance sheet provides a snapshot of a company’s financial position at a specific point in time.

Question 21

Fill in the blank: The _____ principle states that expenses should be matched with revenues in the period they are incurred.

Answer 21

Matching

Question 22

What is working capital?

Answer 22

Working capital is the difference between current assets and current liabilities.

Question 23

Multiple Choice: Which of the following is not an accounting cycle step? A) Journalizing B) Posting C) Tax Filing D) Preparing financial statements

Answer 23

C) Tax Filing

Question 24

What is a trial balance used for?

Answer 24

To ensure that total debits equal total credits before preparing financial statements.

Question 25

True or False: An expense decreases equity.

Answer 25

True