Chapter theory-base-of-accounting: Theory Base of Accounting Assertion-Reason Questions | accountancy Class 11 CBSE

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 1

Logic Check

Assertion (A): Personal assets of the owner are not recorded in the business books of accounts. Reason (R): According to the Business Entity Concept, the business and its owner are treated as two separate entities.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 2

Logic Check

Assertion (A): The appointment of a new manager is not recorded in the books of accounts. Reason (R): Events that cannot be expressed in monetary terms are excluded from accounting records under the Money Measurement Concept.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 3

Logic Check

Assertion (A): Depreciation on a machine is charged every year over its useful life. Reason (R): The Going Concern Concept assumes that the business will continue indefinitely, allowing asset costs to be spread over their useful lives.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 4

Logic Check

Assertion (A): A building purchased 20 years ago for ₹10 lakh continues to be shown at ₹10 lakh (less depreciation) even though its market value is ₹1 crore. Reason (R): The Conservatism Concept requires assets to be shown at the lower of cost or market value.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 5

Logic Check

Assertion (A): Revenue is recognised when cash is actually received from the buyer. Reason (R): The Revenue Recognition Concept states that revenue is realised when a legal right to receive it arises.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 6

Logic Check

Assertion (A): Every business transaction must be recorded in at least two accounts. Reason (R): The Dual Aspect Concept states that every transaction has a two-fold effect.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 7

Logic Check

Assertion (A): Salary due for March 2024 but paid in April 2024 is recorded as an expense in 2023–24 accounts. Reason (R): Under the Matching Concept and Accrual Basis, expenses are recognised in the period to which they relate, not when cash is paid.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 8

Logic Check

Assertion (A): Closing stock is valued at ₹50,000 (cost) even though its market value is ₹80,000. Reason (R): The Consistency Concept requires that the same valuation method be used every year.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 9

Logic Check

Assertion (A): The Full Disclosure Concept requires all material facts to be disclosed in financial statements. Reason (R): Financial statements are the primary means of communicating financial information to interested parties.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 10

Logic Check

Assertion (A): Stationery items such as pens and pencils are treated as expenses in the year of purchase and not shown as assets. Reason (R): Under the Materiality Concept, strict adherence to accounting principles is not required for items involving very small amounts.

Reasoning Options

ByteNotes

Assertion-Reason

Hard difficulty • Check the statement and reason

Hard

Question 11

Logic Check

Assertion (A): Accounting records cannot reflect the true and fair view during periods of rising prices. Reason (R): The Money Measurement Concept does not account for changes in the purchasing power of money over time.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 12

Logic Check

Assertion (A): Double Entry System minimises possibilities of frauds and misappropriations. Reason (R): In Double Entry System, every debit has a corresponding credit, and arithmetic accuracy can be verified through a trial balance.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 13

Logic Check

Assertion (A): A provision for doubtful debts is created even though the actual default has not occurred. Reason (R): The Conservatism Concept requires that all anticipated losses, even those with a remote possibility, be provided for in the books.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 14

Logic Check

Assertion (A): An order received for goods worth ₹1,00,000 is not recorded as revenue. Reason (R): Under the Revenue Recognition Concept, revenue is recognised only when goods are delivered or service is rendered, not when an order is received.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 15

Logic Check

Assertion (A): Accounting Standards can override the provisions of the Companies Act when they conflict. Reason (R): Accounting Standards are issued by ICAI, a statutory body under the Government of India.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 16

Logic Check

Assertion (A): If a firm changes its method of depreciation from SLM to WDV, such change must be disclosed in the financial statements. Reason (R): The Consistency Concept permits changes in accounting policies only when they are necessary and fully disclosed with probable effects.

Reasoning Options

ByteNotes

Assertion-Reason

Easy difficulty • Check the statement and reason

Easy

Question 17

Logic Check

Assertion (A): Capital contributed by the owner is shown as a liability in the business's books. Reason (R): Under the Business Entity Concept, the owner and the business are considered separate entities, so the business owes the capital to the owner.

Reasoning Options

ByteNotes

Assertion-Reason

Hard difficulty • Check the statement and reason

Hard

Question 18

Logic Check

Assertion (A): Under cash basis of accounting, credit sales made in January are recorded in April when payment is received. Reason (R): Cash basis of accounting is perfectly compatible with the Matching Concept.

Reasoning Options

ByteNotes

Assertion-Reason

Medium difficulty • Check the statement and reason

Medium

Question 19

Logic Check

Assertion (A): The rise in market value of land held by a firm is not recorded in the books until the land is sold. Reason (R): According to the Conservatism Concept, unrealised gains are not recognised in accounting records.

Reasoning Options

ByteNotes

Assertion-Reason

Hard difficulty • Check the statement and reason

Hard

Question 20

Logic Check

Assertion (A): Two firms using different methods of inventory valuation cannot be meaningfully compared for the same period. Reason (R): The Consistency Concept requires that accounting methods must be consistent to enable inter-firm comparisons.

Reasoning Options

ByteNotes

Chapter sections

Chapter theory-base-of-accounting: Theory Base of Accounting | Assertion-Reason

Assertion (A): Personal assets of the owner are not recorded in the business books of accounts. Reason (R): According to the Business Entity Concept, the business and its owner are treated as two separate entities.

Assertion (A): The appointment of a new manager is not recorded in the books of accounts. Reason (R): Events that cannot be expressed in monetary terms are excluded from accounting records under the Money Measurement Concept.

Assertion (A): Depreciation on a machine is charged every year over its useful life. Reason (R): The Going Concern Concept assumes that the business will continue indefinitely, allowing asset costs to be spread over their useful lives.

Assertion (A): A building purchased 20 years ago for ₹10 lakh continues to be shown at ₹10 lakh (less depreciation) even though its market value is ₹1 crore. Reason (R): The Conservatism Concept requires assets to be shown at the lower of cost or market value.

Assertion (A): Revenue is recognised when cash is actually received from the buyer. Reason (R): The Revenue Recognition Concept states that revenue is realised when a legal right to receive it arises.

Assertion (A): Every business transaction must be recorded in at least two accounts. Reason (R): The Dual Aspect Concept states that every transaction has a two-fold effect.

Assertion (A): Salary due for March 2024 but paid in April 2024 is recorded as an expense in 2023–24 accounts. Reason (R): Under the Matching Concept and Accrual Basis, expenses are recognised in the period to which they relate, not when cash is paid.

Assertion (A): Closing stock is valued at ₹50,000 (cost) even though its market value is ₹80,000. Reason (R): The Consistency Concept requires that the same valuation method be used every year.

Assertion (A): The Full Disclosure Concept requires all material facts to be disclosed in financial statements. Reason (R): Financial statements are the primary means of communicating financial information to interested parties.

Assertion (A): Stationery items such as pens and pencils are treated as expenses in the year of purchase and not shown as assets. Reason (R): Under the Materiality Concept, strict adherence to accounting principles is not required for items involving very small amounts.

Assertion (A): Accounting records cannot reflect the true and fair view during periods of rising prices. Reason (R): The Money Measurement Concept does not account for changes in the purchasing power of money over time.

Assertion (A): Double Entry System minimises possibilities of frauds and misappropriations. Reason (R): In Double Entry System, every debit has a corresponding credit, and arithmetic accuracy can be verified through a trial balance.

Assertion (A): A provision for doubtful debts is created even though the actual default has not occurred. Reason (R): The Conservatism Concept requires that all anticipated losses, even those with a remote possibility, be provided for in the books.

Assertion (A): An order received for goods worth ₹1,00,000 is not recorded as revenue. Reason (R): Under the Revenue Recognition Concept, revenue is recognised only when goods are delivered or service is rendered, not when an order is received.

Assertion (A): Accounting Standards can override the provisions of the Companies Act when they conflict. Reason (R): Accounting Standards are issued by ICAI, a statutory body under the Government of India.

Assertion (A): If a firm changes its method of depreciation from SLM to WDV, such change must be disclosed in the financial statements. Reason (R): The Consistency Concept permits changes in accounting policies only when they are necessary and fully disclosed with probable effects.

Assertion (A): Capital contributed by the owner is shown as a liability in the business's books. Reason (R): Under the Business Entity Concept, the owner and the business are considered separate entities, so the business owes the capital to the owner.

Assertion (A): Under cash basis of accounting, credit sales made in January are recorded in April when payment is received. Reason (R): Cash basis of accounting is perfectly compatible with the Matching Concept.

Assertion (A): The rise in market value of land held by a firm is not recorded in the books until the land is sold. Reason (R): According to the Conservatism Concept, unrealised gains are not recognised in accounting records.

Assertion (A): Two firms using different methods of inventory valuation cannot be meaningfully compared for the same period. Reason (R): The Consistency Concept requires that accounting methods must be consistent to enable inter-firm comparisons.

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