Class 11 Accountancy Chapter 1 (Introduction to Accounting) MCQ Solution: Check the correct option and detailed explanation for the qualitative characteristics of accounting information below.
Q. Use of common unit of measurement and common format of reporting promotes:
(1) Understandability
(2) Comparability
(3) Reliability
(4) Relevance
Correct Answer & Explanation
Correct Answer: (2) Comparability
Explanation: According to NCERT Class 11 Accountancy Part 1 (Chapter 1: Introduction to Accounting), using a common unit of measurement (money/currency) and a uniform reporting format across different accounting periods allows users to compare financial statements over time (intra-firm comparison) and across different enterprises (inter-firm comparison). Therefore, it directly promotes Comparability.
Quick Summary: 4 Qualitative Characteristics of Accounting Information
| Qualitative Characteristic | Meaning & Key Exam Keyword |
|---|---|
| 1. Reliability | Information must be verifiable, free from bias and material error, and faithfully represent transactions (supported by source documents/vouchers). |
| 2. Relevance | Information must be available in time and help users make predictions or confirm past evaluations. |
| 3. Understandability | Information must be presented clearly so decision-makers can interpret it without confusion. |
| 4. Comparability | Promoted by use of a common unit of measurement and common format of reporting, enabling intra-firm and inter-firm comparisons. |
Related MCQs on Introduction to Accounting (Class 11)
Q5. The process of recording, classifying and summarizing all business transactions in order to know the financial result is called –
(1) Accounting
(2) Book-keeping
(3) None of these
(4) Journalizing
Answer
(1) Accounting
Q6. The person, firm or institution who does not pay the price in cash for the goods purchased or the services received is called –
(1) Proprietor
(2) Creditor
(3) None of these
(4) Debtor
Answer
(4) Debtor (a person who owes money to the business for credit sales).
Q7. The long-term assets that have no physical existence but are rights that have value are known as –
(1) Fixed assets
(2) Current assets
(3) Investments
(4) Intangible assets
Answer
(4) Intangible assets (e.g., Goodwill, Patents, Trademarks, Copyrights).
Practice More: More MCQs on Introduction to Accounting · Class 11 Accountancy All Chapters MCQs · NCERT Class 11 Financial Accounting Part 1 PDF