SSC CGL Finance – Accounting Concepts, Conventions & GAAP – Level 1 · Warm-up

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SSC CGL Finance – Accounting Concepts, Conventions & GAAP – Level 1 · Warm-up – 12 questions, subject: Finance & Economics (Tier II Paper III). Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
The concept that treats the business as separate from its owner is the:

Correct Answer: A [Business entity concept]

Explanation:

Entity concept: owner and business are different persons in accounts.

2.  
The accounting equation Assets = Liabilities + Capital is based on the:

Correct Answer: C [Dual aspect concept]

Explanation:

Every transaction has two equal aspects – the basis of the equation.

3.  
AS 1 issued by the ICAI deals with:

Correct Answer: D [Disclosure of Accounting Policies]

Explanation:

AS 1 – Disclosure of Accounting Policies (AS 2 inventories, AS 3 cash flows, AS 9 revenue).

4.  
As per AS 2, inventories are valued at:

Correct Answer: B [Lower of cost and net realisable value]

Explanation:

AS 2 para 5: lower of cost and NRV.

5.  
The assumption that a business will continue to operate for the foreseeable future is the:

Correct Answer: A [Going concern concept]

Explanation:

Going concern – no intention or need to close down.

6.  
A stapler costing ₹ 150 is written off as an expense although it will last for years. This follows the:

Correct Answer: B [Materiality convention]

Explanation:

The amount is too small to influence decisions – materiality.

7.  
AS 10 deals with:

Correct Answer: C [Property, Plant and Equipment]

Explanation:

AS 10 – Property, Plant and Equipment (AS 26 intangibles, AS 19 leases).

8.  
In which year did the ICAI constitute its Accounting Standards Board?

Correct Answer: D [1977]

Explanation:

ASB constituted on 21 April 1977 (Preface to the Statements of Accounting Standards).

9.  
Indian Accounting Standards (Ind AS) are converged with:

Correct Answer: B [IFRS]

Explanation:

Ind AS are converged with IFRS issued by the IASB.

10.  
Fill in the blank“Anticipate no profit, but provide for all possible losses” describes the ______ convention.

Correct Answer: A [conservatism]

Explanation:

Answer: conservatism. Conservatism (prudence).

11.  
The honesty of a cashier is not recorded in the books because of the:

Correct Answer: C [Money measurement concept]

Explanation:

Only events measurable in money are recorded.

12.  
Odd one outOdd one out (AS 1 major considerations in selecting accounting policies):

Correct Answer: D [Going concern]

Explanation:

Prudence, substance over form and materiality are the AS 1 major considerations; going concern is a fundamental accounting assumption.

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Finance & Economics (Tier II Paper III) book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-finance-economics

📘 SSC CGL 2026 – General Studies – Finance & Economics (Tier II Paper III)
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