Class 11 Accountancy - Chapter Theory Base of Accounting NCERT Solutions | The realisation concept determines when
The realisation concept determines when goods sent on credit to customers are to be included in the sales figure for the purpose of computing the profit or loss for the accounting period. Which of the following tends to be used in practice to determine when to include a transaction in the sales figure for the period. When the goods have been:
a. dispatched
b. invoiced
c. delivered
d. paid for Give reasons for your answer.
According to the realisation concept, revenue is recognised when an obligation to receive the amount arises. When the goods are invoiced, it is treated as the transfer of ownership of goods from the seller to the buyer and hence the revenue is recognised.
More Questions From Class 11 Accountancy - Chapter Theory Base of Accounting
- Q:-
Complete the following work sheet:
(i) If a firm believes that some of its debtors may ′default′, it should act on this by making sure that all possible losses are recorded in the books. This is an example of the ___________ concept.
(ii) The fact that a business is separate and distinguishable from its owner is best exemplified by the ___________ concept.
(iii) Everything a firm owns, it also owns out to somebody. This co-incidence is explained by the ___________ concept.
(iv) The ___________ concept states that if straight line method of depreciation is used in one year, then it should also be used in the next year.
(v) A firm may hold stock which is heavily in demand. Consequently, the market value of this stock may be increased. Normal accounting procedure is to ignore this because of the ___________.
(vi) If a firm receives an order for goods, it would not be included in the sales figure owing to the ___________.
(vii) The management of a firm is remarkably incompetent, but the firms accountants can not take this into account while preparing book of accounts because of ________ concept. - Q:-
Discuss the concept-based on the premise do not anticipate profits but provide for all losses.
- Q:-
When should revenue be recognised? Are there exceptions to the general rule?
- Q:-
Fill in the correct word:
1. Recognition of expenses in the same period as associated revenues is called _______________concept.
2. The accounting concept that refers to the tendency of accountants to resolve uncertainty and doubt in favour of understating assets and revenues and overstating liabilities and expenses is known as _______________.
3. Revenue is generally recognised at the point of sale denotes the concept of _______________.
4. The _______________concept requires that the same accounting method should be used from one accounting period to the next.
5. The_______________concept requires that accounting transactions should be free from the bias of accountants and others. - Q:-
The accounting concepts and accounting standards are generally referred to as the essence of financial accounting. Comment.
- Q:-
Why is it necessary for accountants to assume that business entity will remain a going concern?
- Q:-
What is the money measurement concept? Which one factor can make it difficult to compare the monetary values of one year with the monetary values of another year?
- Q:-
What is matching concept? Why should a business concern follow this concept? Discuss?
- Q:-
Why is it important to adopt a consistent basis for the preparation of financial statements? Explain.
- Q:-
What is the basic accounting equation?
Popular Questions of Class 11 Accountancy
- Q:-
Name any two types of commonly used negotiable instruments.
- Q:-
Why is it necessary to record the adjusting entries in the preparation of final accounts?
- Q:-
State the meaning of incomplete records?
- Q:-
What is ‘Depreciation’?
- Q:-
Briefly state how the cash book is both journal and a ledger.
- Q:-
State the meaning of a trial balance?
- Q:-
State the four basic requirements of a database applications.
- Q:-
Define accounting.
- Q:-
State the different elements of a computer system.
- Q:-
State the need for the preparation of bank reconciliation statement?
Recently Viewed Questions of Class 11 Accountancy
- Q:-
Credit purchase, during the year is ascertained by preparing :
(a) Total creditors account (b) Total debtors account
(c) Cash account (d) Opening statement of affairs - Q:-
State True or False :
(i) Gross profit is total revenue.
(ii) In trading and profit and loss account, opening stock appears on the debit side because it forms the part of the cost of sales for the current accounting year.
(iii) Rent, rates and taxes is an example of direct expenses.
(iv) If the total of the credit side of the profit and loss account is more than the total of the debit side, the difference is the net profit. - Q:-
List the distinctive advantages of a computer system over a manual system.
- Q:-
Tick the correct answer :
Incomplete record mechanism of book keeping is :
(a) Scientific (b) Unscientific
(c) Unsystematic (d) both (b) and (c) - Q:-
Briefly explain the statement ‘wrongly debited by the bank’ with the help of an example.
- Q:-
Cash book does not record transaction of :
(i) Cash nature
(ii) Credit nature
(iii) Cash and credit nature
(iv) None of these - Q:-
What is difference between trade discount and cash discount?
- Q:-
Describe the various types of accounting software along with their advantages and limitations.
- Q:-
State different kinds of transactions that increase and decrease capital.
- Q:-
What is an operating profit?
- All Chapters Of Class 11 Accountancy
- All Subjects Of Class 11