CBSE Class 11 Chapter 11 Accountancy Extra Questions

Accounts from Incomplete Records Class 11 Accountancy Practice Questions

Ch-11 Accounts Incomplete Records

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1. Can a limited company maintain its accounts under single entry system?
2. Calculate Purchases-
   

   	Rs.
   Cost of Goods Sold	65,000
   Stock in the beginning	4,000
   Closing Stock	5,000

3. In the single entry system, state any method which is used to ascertain profit or loss.
4. Explain how opening capital and closing capital be ascertained from incomplete records?
5. Following information is given of an accounting year-
   Opening Creditors Rs.15,000; Cash paid to creditors Rs.15,000; Returns Outward Rs.1,000 and Closing creditors Rs.12,000.
   Calculate Credit Purchases during the year.
6. Rishant keeps incomplete records of his business. He gives you the following information. Capital at the beginning of the year Rs 8,00,000; capital at the end of the year Rs 6,20,000, Rs 2,50,000 was withdrawn by him for his personal use; as Rishant needed money for expansion of his business, he asked his wife for help, his wife allowed him to sell her ornaments and invest that amount into the business which come to Rs 30,000. Calculate his profit or loss for the year ended.
7. What is meant by single entry system of accounts and give any three salient features.
8. Manveer started his business on 1st January 2013 with a capital of Rs 4,50,000. On 31st December, 2013 his position was under
   

   Items	Amt(Rs)
   Cash	99,000
   Bills Receivable	75,000
   Plant	48,000
   Land and Building	1,80,000
   Furniture	50,000

   He owed Rs 45,000 from his friend Susheel on that date. He withdrew Rs 8,000 per month for his household purposes. Ascertain his profit or loss for this year ended 31 st December, 2013.

9. Following information is supplied to you by a shopkeeper:
   

   	1st April 2017	31st March 2018
   Cash	Rs.6,000	Rs.7,000
   Sundry Debtors	68,000	64,000
   Stock	59,000	87,000
   Furniture	15,000	13,500
   Sundry Creditors	20,000	18,000
   Bills Payable	15,000	11,000

   During the year he withdrew Rs.2,500 per month for domestic purpose. He also borrowed from a friend at 9% a sum of Rs.20,000 on 1st October 2017. He has not yet paid the interest. A provision of 5% on debtors for doubtful debts is to be made. Ascertain the profit or loss made by him during the period.

10. Vijay commenced business as foodgrains merchant on 1st April, 2017 with a capital of Rs.4,00,000. On the same day, he purchases furniture for Rs.80,000. From the following particulars obtained from his books which do not conform to Double Entry principles, you are required to prepare the Trading and Profit and Loss Account for the year ended 31st March, 2018 and the Balance Sheet as on that date :
    

    	Rs.
    Sales (including Cash Sales Rs.2,00,000)	5,00,000
    Purchases (including Cash Purchases Rs.1,20,000)	4,00,000
    Vijay’s Drawings (in Cash)	40,000
    Salaries to Staff	48,000
    Bad Debts written off	4,000
    Trade Expenses paid	16,000

    Vijay used goods of Rs.12,000 for private purpose during the year. On 31st March, 2018, his Debtors amounted to Rs.1,40,000 and Creditors Rs.80,000. Stock-in-Trade on that date was Rs.1,60,000.

Ch-11 Accounts Incomplete Records

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Answer

1. No, a limited company cannot maintain its books of accounts under single entry system due to legal restrictions.
2. Cost of goods Sold = Purchase + Opening Stock – Closing Stock
   65,000 = Purchase + 4,000 – 5,000 n Purchase = Rs.66,000
3. Statement of Affairs Method or Net Worth Method is generally used to ascertain Profit /Loss in case of Single Entry System.
4. Opening capital can be obtained by preparing the statement of affairs at the beginning of the financial year and the closing capital can be ascertained with the help of the statement of affairs at the end of the financial year of the firm.
5. The term “Sundry” usually refers Small or infrequent customers/companies that are not assigned individual ledger accounts but are classified as a group. Sundry creditors are such small entities that the company owes money to. In this question the account is to be maintained as follows:-

   Sundry Creditors A/c

   Particulars	Rs.	Particulars	Rs.
   To Cash A/c (Paid)	15,000	By Balance b/d	15,000
   To Returns Outward	1,000	By Credit Purchase (Bal. Fig.)	13,000
   To Balance c/d	12,000
   Total	28,000	Total	28,000

6. Statement of Profit And Loss
   for the year ended….

   Particulars	Amt.(Rs)
   Capital at the End(ie.closing capital)	6,20,000
   Add: Drawings	2,50,000
   	8,70,000
   Less: Additional Capital Introduced	30,000
   Adjusted capital at the end	8,40,000
   Less: Capital in the Beginning(ie.opening capital)	8,00,000
   Profit Made During the year	40,000

   Profit=Closing capital+Drawings-Additional capital-Opening capital

7. Meaning of Single Entry System: A single entry system records a transaction with a single entry and only maintains one side of every transaction. It is the oldest method of recording financial transactions and is less popular than the double-entry system and is mainly used for entries recorded in the income statement. This term is used to describe the problems associated with the accounts from an incomplete transaction and is popularly called as ‘Preparation of accounts from incomplete records’Three Salient features of Single Entry System :
   • Under this method, only one Cash Book is maintained which mixes up both the private and business transaction.
   • Under this system, Profit or Loss can be ascertained but not the financial position as a whole.
   • Arithmetical accuracy of the account is not possible since Trial Balance can’t be prepared.

8. Books of Manveer

   Statement of Affairs
   as 31st December, 2013

   Liabilities	Amt(Rs)	Assets	Amt(Rs)
   Loan from Sushil	45,000	Cash	99,000
   Capital(Balancing figures)	4,07,000	Bills Receivable	75,000
   		Plant	48,000
   		Land and Building	1,80,000
   		Furniture	50,000
   	4,52,000		4,52,000

   Statement of Profit or Loss
   for the year ended 31st December, 2013

   Particulars	Amt(Rs)
   Capital at the End i.e, 31st December, 2013	4,07,000
   (+) Drawings Made During in the year(8000 {tex}\times{/tex}12)	96,000
   Adjusted capital at the end	5,03,000
   (-) Capital in the Beginning i.e, 1st January, 2013	4,50,000
   Profit Made During the year 2013	53,000

   Note: 1. Statement of Profit and loss is made to ascertain the Profit or Loss during the period in place of Profit/Loss Account.

   2.   Statement of Affairs is made to ascertain the Closing Capital.

9. Incomplete records refer to a situation in which an organization is not using double-entry bookkeeping. Instead, it is using a more informal accounting system, such as a single-entry system, to maintain a reduced amount of information about its financial results. So, as per this, the question is to be solved as follows:-

   STATEMENT OF AFFAIRS

   Liabilities	1.4,17	31.3.18	Assets	1.4.17	31.3.18
   Creditors	20,000	18,000	Cash	6,000	7,000
   B/P	15,000	11,000	Debtors	68,000	64,000
   Capital (Balancing figure)	1,13,000	1,22,500	Furniture	15,000	13,500
   Friend’s loan	–	20,000	Stock	59,000	87,000
   	1,48,000	1,71,500		1,48,000	1,71,500

   STATEMENT OF PROFIT

   Particulars		Amount (Rs.)
   Closing Capital		1,22,500
   Add : Drawings (12{tex}\times{/tex}2,500)		30,000
   Total		1,52,500
   Less : Opening Capital	1,13,000	1,13,000
   Gross Profit		39,500
   Less : Interest on Borrowings = 20,000{tex}\times{/tex}9%1/2=	900
   Less : Provision for B/D = 64,000{tex}\times{/tex}5%=	3,200	4,100
   Net Profit		35,400

10. Cash A/c

    Particulars	Amount Rs.	Particulars	Amount Rs.
    To Capital A/c	4,00,000	By Furniture A/c	80,000
    To Cash Sales A/c	2,00,000	By Cash Purchase A/c	1,20,000
    To Sundry Debtors A/c	1,56,000	By Sundry Creditors A/c	2,00,000
    		By Drawings A/c	40,000
    		By Salaries A/c	48,000
    		By Trade Expenses A/c	16,000
    		By Balance c/d (Bal. Fig)	2,52,000
    	7,56,000 ======		7,56,000 ======

    Sundry Debtors A/c 

    Particulars	Amount Rs.	Particulars	Amount Rs.
    To Credit Sales A/c	3,00,000	By Bad Debts A/c	4,000
    		By Cash A/c (Bal. Fig.)	1,56,000
    		By Balance c/d	1,40,000
    	3,00,000 =======		3,00,000 ========

    Sundry Creditors A/c

    Particulars	Amount Rs.	Particulars	Amount Rs.
    To Cash A/c (Bal. Fig.)	2,00,000	By Credit Purchase A/c	2,80,000
    To Balance c/d	80,000
    	2,80,000 ========		2,80,000 =======

    Trading and Profit & Loss A/c
    as at March 31, 2018

    Particulars	Amount Rs.	Particulars	Amount Rs.
    To Purchases A/c                    4,00,000		By Sales A/c	5,00,000
    Less: Drawings A/c                                                            12,000	3,88,000	By Closing Stock A/c	1,60,000
    To Gross Profit c/d	2,72,000
    	6,60,000 ========		6,60,000 =======
    To Salaries A/c	48,000	By Gross Profit b/d	2,72,000
    To Bad Debts A/c	4,000
    To Trade Expenses A/c	16,000
    To Net Profit c/d	2,04,000
    	2,72,000 =======		2,72,000 ========

    Balance Sheet
    as at March 31, 2018

    Liabilities	Amount Rs.	Assets	Amount Rs.
    Sundry Creditors	80,000	Cash	2,52,000
    Capital 4,00,000		Sundry Debtors	1,40,000
    Add: Net Profit 2,04,000		Closing Stock	1,60,000
    6,04,000		Furniture	80,000
    Less : Drawings [40,000+12,000]       52,000	5,52,000
    	6,32,000 ========		6,32,000 ========

    Final Accounts of sole trader consists of:

    • Trading Account
    • Profit and Loss Account
    • Balance Sheet

    So far in this unit you have looked at different adjustment needed before the final accounts can be prepared. The final accounts for a sole trader business are the Income Statement (Trading and Profit & loss Account) and the Balance Sheet. The final accounts give a picture of the financial position of your business. It shows where or not your business has made a profit or loss during the accounting period and whether you are able to pay your debts as they become due.