Chapter introduction-to-accounting: Introduction to Accounting Assertion-Reason Questions | accountancy Class 11 CBSE

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 1

Logic Check

Assertion (A): Accounting is described as the language of business. Reason (R): Accounting communicates financial information about enterprises to a wide variety of users through standardised financial reports and statements.

Reasoning Options

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Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 2

Logic Check

Assertion (A): The appointment of a new CEO is recorded in the books of accounts. Reason (R): Accounting records only those events that can be measured in monetary terms.

Reasoning Options

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Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 3

Logic Check

Assertion (A): Reliability is a qualitative characteristic of accounting information. Reason (R): Reliable information is free from error and bias and faithfully represents the transactions it purports to show.

Reasoning Options

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Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 4

Logic Check

Assertion (A): Comparability of accounting information requires the use of common accounting periods, common units of measurement, and common formats of reporting. Reason (R): Comparability helps users to compare financial statements of different entities or of the same entity across different periods.

Reasoning Options

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Assertion-Reason

Hard difficulty • Check the statement and reason

Hard

Question 5

Logic Check

Assertion (A): Drawings by the owner are treated as a business expense in the Profit and Loss Account. Reason (R): Drawings reduce the owner's capital and are a withdrawal for personal use, not a business expense.

Reasoning Options

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Assertion-Reason

Hard difficulty • Check the statement and reason

Hard

Question 6

Logic Check

Assertion (A): Management accounting draws information mainly from financial accounting and cost accounting. Reason (R): Management accounting is designed only for external stakeholders like investors and creditors.

Reasoning Options

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Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 7

Logic Check

Assertion (A): Luca Pacioli is regarded as the inventor of double entry book-keeping. Reason (R): Luca Pacioli's book published in 1494 spread the knowledge of double entry book-keeping, though Pacioli himself did not claim to be its inventor.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 8

Logic Check

Assertion (A): Cash discount is offered at the time of selling goods to wholesalers and retailers. Reason (R): Cash discount acts as an incentive for debtors to make prompt payment within a stipulated period.

Reasoning Options

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Assertion-Reason

Hard difficulty • Check the statement and reason

Hard

Question 9

Logic Check

Assertion (A): Financial accounting relates to past transactions and is monetary and historical in nature. Reason (R): Financial accounting primarily serves internal management for planning and controlling future operations.

Reasoning Options

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Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 10

Logic Check

Assertion (A): An economic event can consist of a number of financial transactions. Reason (R): For example, purchasing and installing machinery involves buying, transportation, site preparation, installation and trial run — all forming one economic event.

Reasoning Options

ByteNotes

Assertion-Reason

Hard difficulty • Check the statement and reason

Hard

Question 11

Logic Check

Assertion (A): Capital invested by the owner is shown on the assets side of the Balance Sheet. Reason (R): For the business entity, capital represents an obligation to the owner and is therefore shown as a liability (on the liabilities side) of the Balance Sheet.

Reasoning Options

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Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 12

Logic Check

Assertion (A): Closing stock is shown as a current asset in the Balance Sheet. Reason (R): Closing stock represents goods lying unsold at the end of the accounting period and is expected to be converted to cash within the next operating cycle.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 13

Logic Check

Assertion (A): Accounting information should be relevant to the user's decision-making needs. Reason (R): Relevant information must be available in time, help in prediction and feedback, and influence the decisions of users.

Reasoning Options

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Assertion-Reason

Hard difficulty • Check the statement and reason

Hard

Question 14

Logic Check

Assertion (A): Trade discount is recorded in the books of accounts of both buyer and seller. Reason (R): Trade discount is a reduction in the listed price at the time of sale and the net amount after discount is the actual transaction amount recorded.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 15

Logic Check

Assertion (A): The primary function of accounting is to provide useful information for decision-making. Reason (R): Since accounting provides information useful for decisions, it is a means to an end, with the end being the decision that is aided by accounting information.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 16

Logic Check

Assertion (A): Liabilities represent creditors' claims on the firm's assets. Reason (R): Liabilities are obligations or debts that an enterprise has to pay at some time in the future.

Reasoning Options

ByteNotes

Assertion-Reason

Hard difficulty • Check the statement and reason

Hard

Question 17

Logic Check

Assertion (A): Revenue expenditure is shown as an asset in the Balance Sheet. Reason (R): Revenue expenditure's benefit is exhausted within one year and is hence charged to the Profit and Loss Account as an expense.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 18

Logic Check

Assertion (A): Profit increases the investment (capital) of the owners. Reason (R): Profit is the excess of revenues over related expenses during an accounting period, which adds to the owner's equity.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 19

Logic Check

Assertion (A): An accounting entity can only be a profit-seeking enterprise such as a company or partnership. Reason (R): Accounting entity includes all organisations — profit or not-for-profit — such as sole proprietorships, cooperatives, companies, and even municipal corporations.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 20

Logic Check

Assertion (A): Accounting as a historical record provides a chronological account of financial transactions at actual amounts involved. Reason (R): Accounting relates to past transactions and cannot capture future plans or qualitative information.

Reasoning Options

ByteNotes

Chapter sections

Chapter introduction-to-accounting: Introduction to Accounting | Assertion-Reason

Assertion (A): Accounting is described as the language of business. Reason (R): Accounting communicates financial information about enterprises to a wide variety of users through standardised financial reports and statements.

Assertion (A): The appointment of a new CEO is recorded in the books of accounts. Reason (R): Accounting records only those events that can be measured in monetary terms.

Assertion (A): Reliability is a qualitative characteristic of accounting information. Reason (R): Reliable information is free from error and bias and faithfully represents the transactions it purports to show.

Assertion (A): Drawings by the owner are treated as a business expense in the Profit and Loss Account. Reason (R): Drawings reduce the owner's capital and are a withdrawal for personal use, not a business expense.

Assertion (A): Management accounting draws information mainly from financial accounting and cost accounting. Reason (R): Management accounting is designed only for external stakeholders like investors and creditors.

Assertion (A): Luca Pacioli is regarded as the inventor of double entry book-keeping. Reason (R): Luca Pacioli's book published in 1494 spread the knowledge of double entry book-keeping, though Pacioli himself did not claim to be its inventor.

Assertion (A): Cash discount is offered at the time of selling goods to wholesalers and retailers. Reason (R): Cash discount acts as an incentive for debtors to make prompt payment within a stipulated period.

Assertion (A): Financial accounting relates to past transactions and is monetary and historical in nature. Reason (R): Financial accounting primarily serves internal management for planning and controlling future operations.

Assertion (A): An economic event can consist of a number of financial transactions. Reason (R): For example, purchasing and installing machinery involves buying, transportation, site preparation, installation and trial run — all forming one economic event.

Assertion (A): Capital invested by the owner is shown on the assets side of the Balance Sheet. Reason (R): For the business entity, capital represents an obligation to the owner and is therefore shown as a liability (on the liabilities side) of the Balance Sheet.

Assertion (A): Closing stock is shown as a current asset in the Balance Sheet. Reason (R): Closing stock represents goods lying unsold at the end of the accounting period and is expected to be converted to cash within the next operating cycle.

Assertion (A): Accounting information should be relevant to the user's decision-making needs. Reason (R): Relevant information must be available in time, help in prediction and feedback, and influence the decisions of users.

Assertion (A): Trade discount is recorded in the books of accounts of both buyer and seller. Reason (R): Trade discount is a reduction in the listed price at the time of sale and the net amount after discount is the actual transaction amount recorded.

Assertion (A): The primary function of accounting is to provide useful information for decision-making. Reason (R): Since accounting provides information useful for decisions, it is a means to an end, with the end being the decision that is aided by accounting information.

Assertion (A): Liabilities represent creditors' claims on the firm's assets. Reason (R): Liabilities are obligations or debts that an enterprise has to pay at some time in the future.

Assertion (A): Revenue expenditure is shown as an asset in the Balance Sheet. Reason (R): Revenue expenditure's benefit is exhausted within one year and is hence charged to the Profit and Loss Account as an expense.

Assertion (A): Profit increases the investment (capital) of the owners. Reason (R): Profit is the excess of revenues over related expenses during an accounting period, which adds to the owner's equity.

Assertion (A): An accounting entity can only be a profit-seeking enterprise such as a company or partnership. Reason (R): Accounting entity includes all organisations — profit or not-for-profit — such as sole proprietorships, cooperatives, companies, and even municipal corporations.

Assertion (A): Accounting as a historical record provides a chronological account of financial transactions at actual amounts involved. Reason (R): Accounting relates to past transactions and cannot capture future plans or qualitative information.

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