ICMA Foundation- FFCA- Categorised PYQ- Class 11-Accountancy Part 1-Chapter-1-Introduction
Fundamentals of Financial and Cost Accounting
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QUESTION 1 OF 9
Which of the following is/are the basic objective(s) of accounting? [PYQ DEC 2024]
QUESTION 2 OF 9
What is the primary purpose of financial accounting? [PYQ JUNE 2025]
QUESTION 3 OF 9
________ is an activity which is concerned with recording and classifying financial data related to business operations in order of its occurrence. [PYQ DEC 2025]
QUESTION 4 OF 9
_________ is a science and art of correctly recording in the books of accounts all those transactions that result in transfer of money or money's worth. [PYQ JUNE 2025]
QUESTION 5 OF 9
Trade Mark is a [PYQ JUNE 2024, JUNE 2026]
QUESTION 6 OF 9
The framework of accounting has _____ pillars. [PYQ DEC 2024]
QUESTION 7 OF 9
Which of the following is not a framework of accounting? [PYQ JUNE 2024, DEC 2025]
QUESTION 8 OF 9
Awareness about various authorities like RBI, SEBI, TRAI etc. and their pronouncement come by an organisation while undertaking its accounting activities come under _________ framework. [PYQ JUNE 2026]
QUESTION 9 OF 9
Which one of the following statements is true? [PYQ JUNE 2024]
Test Complete!
Answer Review
1 Which of the following is/are the basic objective(s) of accounting? [PYQ DEC 2024]
� Accounting involves maintaining systematic records to avoid reliance on memory. • It calculates profit or loss to determine the operational results. • It prepares the balance sheet to ascertain the financial position of the entity.
�� According to NCERT, the primary objectives of accounting as an information system include maintaining systematic records of business transactions, calculating profit and loss (operating results), depicting the financial position, and providing useful accounting information to interested users. Thus, all the given options correctly identify the fundamental objectives of accounting.
� Option A → Incomplete, as systematic recording is only one of the objectives. • Option B → Incomplete, as determining operating results is just one aspect. • Option C → Incomplete, as ascertaining the financial position is part of a broader set of objectives.
Used • Option Grouping Application: → When multiple individual options accurately describe the functions of accounting as per NCERT guidelines without contradicting each other, the "All the above" option logically encompasses them. Final Logic: → Since A, B, and C are all explicitly stated basic objectives in the textbook, D is the correct choice.
�� R-P-P: Record, Profit, Position (The three main pillars of accounting objectives).
2 What is the primary purpose of financial accounting? [PYQ JUNE 2025]
� Financial accounting functions as an information system. • Its end goal is to communicate economic information. • This information is used by internal and external stakeholders for economic decision-making.
�� NCERT explicitly states that financial accounting is "primarily concerned with the provision of financial information to all stakeholders." While maintaining records of assets/liabilities is a step in the process, the primary and overarching purpose of financial accounting as an information system is to communicate this summarized financial information to interested users (investors, management, creditors, etc.) to aid in decision-making.
� Option B → Minimizing taxes is related to tax planning and management, not the primary objective of financial accounting itself. • Option C → Maintaining details of assets and liabilities is a sub-function (record-keeping) required to achieve the ultimate goal of providing information, not the overarching primary purpose. • Option D → Since B is incorrect and C is a secondary function, "All of the above" is invalid.
Used • Elimination Application: → Recognize that tax minimization is a financial management/tax strategy, instantly eliminating options B and D. Between A and C, A represents the ultimate goal, making it the "primary" purpose. Final Logic: → The fundamental definition of accounting highlights it as the "language of business" designed specifically to communicate financial information to users.
�� "Accounting is the Language of Business" – and the sole purpose of a language is to communicate (provide information to stakeholders).
3 ________ is an activity which is concerned with recording and classifying financial data related to business operations in order of its occurrence. [PYQ DEC 2025]
� Book-keeping is the mechanical and foundational task of recording and classifying. • It ensures the chronological recording of financial data. • It does not include the summarization or interpretation of data.
�� Book-keeping is the specific phase of the overall accounting process that strictly deals with identifying, measuring, recording, and classifying financial transactions in a chronological order. Accounting is a much broader concept that encompasses book-keeping but extends to summarizing, analyzing, interpreting, and communicating this data.
� Option B → Accounting is a broader term that includes summarizing and interpreting. • Option C → Posting is just one specific step within book-keeping. • Option D → Journalizing is only the recording aspect, ignoring the classifying aspect.
Used • Contextual / Tonal Matching Application: → The definition specifically limits the scope to "recording and classifying" in "order of occurrence", isolating the traditional, mechanical scope of book-keeping. Final Logic: → Book-keeping encompasses recording (journalizing) and classifying (posting) routine data chronologically.
�� Book-keeping = Keeping the Books (Recording + Classifying). Accounting = Analyzing the Books.
4 _________ is a science and art of correctly recording in the books of accounts all those transactions that result in transfer of money or money's worth. [PYQ JUNE 2025]
� Focuses entirely on the "recording" aspect of financial events. • Involves capturing transactions involving money or money's worth. • Acts as the very first mechanical step of the overall accounting process.
�� The phrase "science and art of correctly recording" strictly defines Book-keeping. While Accounting is the "art of recording, classifying, and summarising," Book-keeping is strictly limited to the systematic recording of transactions that result in the transfer of money's worth.
� Option A → Accounting goes beyond just recording to include summarizing, interpreting, and communicating results. • Option B → Accountancy refers to the entire body of knowledge, theory, and practice of the subject. • Option C → Journalizing is just one subset of the overall book-keeping process.
Used • Substitution Application: → Substitute the operational word mentally. If a definition focuses solely on "recording," it generally refers to Book-keeping. Final Logic: → The classic definition restricting the scope exclusively to "correctly recording" aligns perfectly with Book-keeping.
�� "Recording = Book-keeping". "Recording + Summarizing + Interpreting = Accounting".
5 Trade Mark is a [PYQ JUNE 2024, JUNE 2026]
� Trade marks do not have a physical form or shape. • They provide long-term economic benefits to the business. • They fall under the category of non-current (fixed) intangible assets. (Note: In June 2026, the question appeared as "Trademarks are categorized as" with slightly different options, but the correct answer remained "Intangible Asset".)
�� According to NCERT Chapter 1's basic accounting terms, assets are broadly classified into Current and Non-Current (Fixed). Non-current assets are further divided into Tangible and Intangible. "Intangible assets are those assets which do not have physical existence... e.g. patents, trade marks, copyrights, goodwill." Thus, a trademark is a fixed intangible asset.
� Option A → Tangible assets have physical existence (e.g., machinery, buildings). • Option C → Current assets are held for a short period (e.g., cash, stock). • Option D → Fictitious assets are actually accumulated losses or deferred revenue expenditures (e.g., heavy advertising), not real assets with resale value.
Used • Contextual / Tonal Matching Application: → A trademark is an intellectual property. You cannot touch it. Therefore, it is "intangible". Final Logic: → Trademarks provide long-term value without physical substance, classifying them as fixed intangible assets.
�� Things You Can't Touch = Intangible (Trademarks, Goodwill, Patents).
6 The framework of accounting has _____ pillars. [PYQ DEC 2024]
� The accounting framework is supported by distinct pillars that give it structure. • These pillars encompass concepts, laws, institutions, and regulations. • There are exactly four recognized pillars in the CMA foundational syllabus.
�� The foundational framework of accounting is generally understood to be supported by 4 pillars: Conceptual, Legal, Institutional, and Regulatory frameworks. These four frameworks ensure that accounting information is standardized, legally compliant, institutionally supported, and properly regulated.
� Option A, B, D → Incorrect numerical values for the recognized frameworks of accounting.
Used • Fact-based Recall Application: → Recalling the standard CMA introductory framework classification directly points to the number 4. Final Logic: → The framework is strictly divided into Conceptual, Legal, Institutional, and Regulatory (4 pillars).
�� C-L-I-R: Conceptual, Legal, Institutional, Regulatory (4 Pillars).
7 Which of the following is not a framework of accounting? [PYQ JUNE 2024, DEC 2025]
� Accounting operates within recognized frameworks. • The standard frameworks are Conceptual, Legal, Institutional, and Regulatory. • Social (or Business) framework is not an official pillar of the accounting framework. (Note: In DEC 2025, the options featured "Business Framework" instead of "Social Framework" as the incorrect option. Both serve as the odd one out.)
�� The four widely accepted frameworks that govern accounting practices are the Conceptual framework (GAAP/Concepts), Legal framework (Companies Act), Institutional framework (ICAI/ICMAI), and Regulatory framework (SEBI/RBI). "Social framework" (or "Business framework") is a distractor and does not constitute a formal pillar of accounting methodology.
� Option A, B, D → These are actual, recognized frameworks of accounting, so they are incorrect choices for a "which is NOT" question.
Used • Odd One Out Application: → Using the C-L-I-R acronym (Conceptual, Legal, Institutional, Regulatory), "Social" or "Business" clearly does not fit. Final Logic: → Social is not one of the four foundational frameworks of accounting.
�� C-L-I-R (Clear) Framework: Conceptual, Legal, Institutional, Regulatory. Anything else is false.
8 Awareness about various authorities like RBI, SEBI, TRAI etc. and their pronouncement come by an organisation while undertaking its accounting activities come under _________ framework. [PYQ JUNE 2026]
� RBI, SEBI, and TRAI are independent regulatory bodies. • They issue guidelines and rules to regulate their respective sectors. • Compliance with their pronouncements falls under regulation.
�� Authorities like the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) are statutory regulatory bodies established by the government to regulate financial markets and institutions. Awareness of and compliance with their accounting pronouncements and guidelines falls strictly under the Regulatory Framework of accounting.
� Option A → Legal framework refers to the laws passed by the legislature (like the Companies Act), not the specific guidelines of market regulators. • Option B → Institutional framework refers to professional accounting bodies that set accounting standards (like ICAI, ICMAI). • Option D → Conceptual framework deals with basic accounting principles, concepts, and conventions (like GAAP).
Used • Contextual / Tonal Matching Application: → RBI and SEBI are universally known as "Regulators". Therefore, the framework they represent must be the "Regulatory" framework. Final Logic: → Regulators = Regulatory Framework.
�� RBI & SEBI are Regulators -> Regulatory Framework.
9 Which one of the following statements is true? [PYQ JUNE 2024]
� Joint ventures are temporary, so they don't follow going concern. • Accounting only deals with monetary transactions. • Comparability is a qualitative characteristic, not an accounting concept. • Accounting is a broad process that includes summarizing data into financial statements.
�� According to NCERT Chapter 1, "Accounting" is a broad process that includes identifying, measuring, recording, and communicating financial information. The preparation of Financial Statements (Trading, P&L, Balance Sheet) falls under the summarizing and communicating phases of accounting. Therefore, financial statements are inherently a part of Accounting.
� Option A → Joint Ventures are formed for a specific, temporary purpose and are dissolved once the purpose is achieved, fundamentally violating the "going concern" assumption. • Option B → Accounting strictly follows the "Money Measurement Concept," meaning non-monetary transactions (like employee morale or a manager's resignation) are NOT recorded. • Option C → In accounting literature (including NCERT Ch 1), Comparability is defined as a "Qualitative Characteristic" of accounting information, whereas "Accounting Concepts" refer to underlying assumptions like Entity, Matching, or Dual Aspect (covered in Ch 2).
Used • Elimination Application: → Eliminate A (JV is temporary). Eliminate B (Money measurement rule). Eliminate C (Comparability is a characteristic, not a structural concept). This leaves D as the only definitively true statement. Final Logic: → Financial statements are the end product of the accounting process.
�� Book-keeping = Recording. Financial Statements = Summarizing. Both are subsets of the master term: Accounting.