8/4/22, 7:01 PM Introduction To Accounting Questions | Class 11 Accountancy Important Questions

Class 11 >> Accountancy >> Introduction to Accounting >> Easy Questions

Introduction To Accounting
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Q1 What is a transaction?

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A transaction is a business event having a monetary value on the financial

statements of a business. It is recorded in the accounting records of the
business. It is an event which involves some value between two or more
entities.

For example, sale of goods, purchase of goods, etc.

Q2 Define loss in accounting terms.

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The excess of expenses over related revenues is known as loss. It also refers
to money or money worth lost without it being beneficial in return, e.g., cash
or goods lost by theft or a fire accident, loss on sale of assets, etc.

Q3 ________ is the language of business and used to communicate financial and

other information to different interested parties like creditors, investors,
researchers, governments etc.
Correct Answer
A Accounting

B Cost Accounting

C Costing

D Management Accounting

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Accounting is known as the language of the business as it

communicates that how the business is operating, whether it is making
profit or loss etc.

Accounting is  used to communicate financial and other information to

different interested parties like creditors, investors, researchers,
governments etc.

Q4 What is the measurement process of accounting?

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Measurement means enumeration of business transactions into financial

terms by using the monetary unit as a measuring unit. If an event cannot be
quantified in monetary terms, it will not be considered for recording in
financial accounts.

Q5 What do you mean by external economic events?

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An external economic event is an event where a business organization is

engaged in a transaction with an outsider. It basically involves the
transactions between a business and its external environment. 

For example, Sale of goods to customers, purchase of goods from suppliers,

payment of rent for warehouse.

Q6 Define business entity.

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Q7 What do you mean by internal economic events?

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An internal economic event is an event that occurs between the

organization's departments. It comprises internal transactions. 

For example, charging of depreciation, payment of salary to employees,

supply of raw materials from one department to another.

Q8 Which of the following would be considered as external users of accounting

information's?

A Board of Directors
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Correct Answer
B Shareholders

C Finance manager

D Sales manager

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External Users of Financial statements are those people which are

outside the affairs of the business but use accounting information.
Example: banks, shareholders, creditors, etc.

Q9 The sale of merchandise to the customers is an

A External event

B Internal event

C Social event

D None of the above

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There are mainly Two Types of Economic events i.e., External Events
and Internal Events.

External Events are those events that involve transactions between an

outsider and an organization.

In this example, the Customer is an outsider and goods belongs to the

business, therefore, this is an example of External Events.

Q10 Define management accounting.

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Management accounting is the branch of accounting that addresses the

needs of a single user group i.e., the management, as it enables the

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8/4/22, 7:01 PM Introduction To Accounting Questions | Class 11 Accountancy Important Questions

management to gather information relating to funds, costs, profits, etc.

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Q11 Discuss about vouchers in accounting terms.

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The written document through which financial transactions are recorded in

the books is called a voucher. It is the document that holds evidence of the
occurrence of the transaction.
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Q12 What are drawings in accounting terms?

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The amount of cash or goods which is withdrawn by the proprietor from

the business for its private uses is called drawings. It reduces the
investment of the owners, i.e., the capital of the business.

Q13 Discuss about discount in accounting terms.

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Discount is the deduction in the price of the goods sold. 

There are two types of discounts:

1. Trade Discount: Offering deduction of an agreed percentage of list price

at the time selling goods is one way of giving a discount. Such a discount is
called a trade discount. It is generally offered by manufacturers to
wholesalers and by wholesalers to retailers.

2. Cash Discount: After selling the goods on a credit basis the debtors may
be given a certain deduction in the amount due in case if they pay the
amount within the stipulated period or earlier. This deduction is given at
the time of payment on the amount payable. Hence, it is called a cash
discount. It acts as an incentive that encourages rapid payment by the
debtors.

Q14 Define creditors.

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The person, firm, or organization from whom goods or services are

purchased on credit by the business are called creditors of the business.
The business owes money to them. The amount payable to creditors is a
liability of the business.

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