Chapter 10 Accountancy Class 11 Important Questions

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Chapter 10 Accountancy Class 11 Important Questions. myCBSEguide has just released Chapter Wise Question Answers for class 11. Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers. Accountancy describes the duties of an accountant, the person whose job is to keep, inspect and interpret financial accounts. There chapter wise Practice Questions with complete solutions are available for download in myCBSEguide website and mobile app. These Question with solution are prepared by our team of expert teachers who are teaching grade in CBSE schools for years. There are around 4-5 set of solved Accountancy Extra questions from each and every chapter. The students will not miss any concept in these Chapter wise question that are specially designed to tackle Exam. We have taken care of every single concept given in CBSE Class 11 Accountancy syllabus and questions are framed as per the latest marking scheme and blue print issued by CBSE for class 11.

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Financial Statements -II Adjustments Class 11 Accountancy Extra Questions

Ch-10 Financial Statements-II Adjustments


  1. On which side of the balance sheet are prepaid expenses shown?
  2. Following information is given in trial balance
    Bad debtRs 3,000
    Provision for bad debtsRs 3,500
    DebtorsRs 40,000

    Additional information
    It is desired to make a provision for doubtful debts @ of 10% on debtors. The amount debited to profit and loss account is.

  3. Is provision for discount on debtors made before making provision for doubtful debts?
  4. While Preparing final accounts, what treatment is made of prepaid expenses?
  5. Extract of Trial Balance
    as on 31st March, 2013

    Name of AccountsDebit Balance(Rs)Credit Balance(Rs)
    Wages Paid66,000
    Salary Paid16,500

    Additional Information
    Wages Rs 6,000 and salary Rs 1,500 are outstanding.
    Pass an adjusting entry and show how will this appear in final accounts.

  6. Why is it necessary to record the adjusting entries in the preparation of final accounts?
  7. Extract of Trial Balance
    as on 31st March, 2013

    Name of AccountsDebit Balance(Rs)Credit Balance(Rs)
    Bad Debts1,600
    Provision for doubtful Debts(1st April, 2012)5,000
    Debtors1,60,000

    Additional Information
    Create a provision for doubtful debts @ 5% on debtors.

    Pass necessary adjustment entries and show how will it appear in the financial statements of company.

  8. From the following balances obtained from the accounts of Mr. Ranjeet, Prepare the Trading and Profit & Loss Account:
    ParticularsRs.ParticularsRs.
    Stock on April 01, 20128,000Bad debts1,200
    Purchases for the year22,000Rent1,200
    Sales for the year42,000Discount (Dr.)600
    Wages2,500Commission paid1,100
    Salaries & Wages3,500Sales Expenses600
    Advertisement1,000Repairs600

    Closing stock on March 31, 2013, is Rs. 4,500.

  9. From the following balances, prepare the final accounts of M/s Mangal & Sons for the year ended 31st March 2018 :
    Rs.
    Opening Stock12,500
    B/R2,000
    Sales70,000
    Purchases37,500
    Creditors20,000
    Salaries3,850
    Insurance200
    Debtors32,500
    Carriage1,450
    Commission750
    Interest900
    Printing250
    B/P3,150
    Returns in1,300
    Returns out500
    Bank5,250
    Rent and Taxes1,300
    Furniture1,000
    Capital7,100

    Closing Stock on 31-3-2018 Rs.15,000

  10. Suresh started buisness on 1st April, 2013 with a capital of Rs 30,000. The following trial balance was drawn up from his books at the end of the year.
    Name of AccountsAmt(Rs)Name of AccountsAmt(Rs)
    Drawings4,500Capital40,000
    Plant and fixtures8,000Sales1,60,000
    Purchases1,16,000Creditors12,000
    Carriage inward2,000Bills payable9,000
    Wages8,000
    Return inward4,000
    Salaries10,000
    Printing800
    Advertisement1,200
    Trade Charges600
    Rent1,400
    Debtors25,000
    Bills Receivable5,000
    Investments15,000
    Discount500
    Cash at bank16,000
    Cash in hand3,000
    2,21,0002,21,000

    The value of stock as at 31st March, 2014 was Rs 26,000. You are required to prepare his trading and profit and loss account for the year ended 31st March, 2014 and a balance sheet as on the date after taking the following facts into account.

    1. Interest on capital is to be provided at 6% per annum.
    2. An additional capital of Rs 10,000 was introduced by Suresh on 1st October, 2013.
    3. Plant and fixtures are to be depreciated by 10% per annum.
    4. Salaries outstanding on 31st March, 2014 amounted to Rs 500.
    5. Accrued interest on investment amounted to Rs 750.
    6. Rs 500 are bad debts and provision for doubtful debts is to be created at 5% on the balance of debtors.

Ch-10 Financial Statements-II Adjustments


Answer

  1. Prepaid expenses are shown on Assets side of balance sheet.
  2. Statement showing showing provision for doubtful debts 
    ParticularsAmount
    Bad Debts3,000
    (+) New Provision @ 10 %4,000
    7,000
    (-) Old Provision(3,500)
    3,500
  3. No, it is made after the provision for doubtful debts
  4. Prepaid Expenses are deducted in Profit and Loss account and shown as Assets in Balance Sheet. When prepaid expenses are given in trial balance, it is to be debited in P&L A/c only.
  5. Adjustment Entries

    DrCr
    DateParticulars DebitCredit 
    31/03/2013(i) Wages A/cDr6,000
    To Outstanding Wages A/c
    (Being wages due)
    6,000
    (ii) Salary A/cDr1,500
    To Oustanding Salary A/c
    (Being salary due)
    1,500

    Effects on Final Account
    Trading Account

    DrCr
    DateParticularsAmt(Rs)DateParticularsAmt(Rs)
    31/03/2013To Wages A/c66,00031/03/2013
    (+)Outstanding Wages6,00072,000

    Profit and Loss A/c

    DrCr
    DateParticularsAmt(Rs)DateParticularsAmt(Rs)
    31/03/2013To Salary A/c16,500
    (+)Outstanding Salary1,50018,000

    Balance Sheet

    LiabilitiesAmt(Rs)AssetsAmt(Rs)
    Outstanding Wages6,000
    Outstanding salary1,500
  6. Before financial statements are prepared, additional journal entries, called adjusting entries, are made to ensure that the company’s financial records adhere to the revenue recognition and matching principles. Adjusting entries are necessary because a single transaction may affect revenues or expenses in more than one accounting period and also because all transactions have not necessarily been documented during the period.The following are the objectives of making adjustments ;
    • To show the assets and liabilities at their actual value.
    • to overcome the limitations of trial balance
    • Providing for depreciation and reserves to arrive at net profit. the purpose is to make provision for wear and tear of fixed asset and reserves for unforeseen losses which might accrue.
    • to account for all incomes pertaining to current year. The purpose is to adjust the accrued and unaccrued incomes.
    • to account for all expenses pertaining to current year. the purpose is to adjust the outstanding and prepaid expenses so that p/l a/c show actual position.
  7. The following entries will be passed for recording the provision for doubtful debts :

    JOURNAL

    DateParticularsLFDr.(₹)Cr.(₹)
    Mar 31Provision for Doubtful Debts A/cDr.1,600
           To Bad Debts A/c
    (Being bad debts transferred to old provision)
    1,600
    Mar 31Profit and Loss A/cDr.4,600
          To Provision for Doubtful Debts A/c
    (Being creation of provision at 5% on debtors)
    4,600

    The Provision for doubtful debts will be recorded in financial statements in the following manner:

     Extract of Profit and Loss Account
    for the year ended 31st March, 2013

    DrCr
    ParticularsAmt(₹)ParticularsAmt(₹)
    To Provision for Doubtful Debts A/c :
    Bad Debts1,600
    Add : New Provision on Rs 1,60,000 @ 5%8,000
    9,600
    Less : Old Provision(5,000)4,600

    Balance Sheet
    as at 31st March, 2013

    LiabilitiesAmt(₹) AssetsAmt(₹) 
    Debtors1,60,000
    Less :New Provision
    (@5% on ₹1,60,000)
    8,0001,52,000
  8. Trading account

    ParticularsRs.ParticularsRs.
    To Opening stock8,000by Sales42,000
    To Purchases22,000by Closing stock4,500
    To Wages2,500
    To gross profit c/d14000
    46,50046,500

    Profit and loss A/c 

    ParticularsRs.ParticularsRs.
    To Salaries and Wages3,500By gross profit b/d14,000
    To Rent1,200
    To Advertisement1,000
    To Commission1,100
    To Discount600
    To Bad debts1,200
    To Sales Expenses600
    To Repairs600
    To Net Profit (transferred to capital)4,200
    14,00014,000
  9. TRADING AND PROFIT AND LOSS ACCOUNT
    (for the year ended 31st 
    March, 2018)

    ParticularsRs.ParticularsRs.
    To Opening Stock12,500By Sales70,000
    To Purchases37,500Less : Sale Return1,30068,700
    Less : Purchase Return50037,000By Closing Stock15,000
    To Carriage1,450
    To Gross Profit32,750
    83,70083,700
    To Insurance Premium200By Gross Profit32,750
    To Salaries3,850
    To Interest Paid900
    To Printing250
    To Rent1,300
    To Commission750
    To Net Profit25,500
    32,75032,750

     BALANCE SHEET

    (AS AT 31-03-2018)

    LiabilitiesRs.AssetsRs.
    Capital7,100Bank5,250
    Add : Net Profit25,50032,600Bills Receivables2,000
    Bills Payables3,150Debtors32,500
    Creditors20,000Stock15,000
    Furniture1,000
    55,75055,750
  10. Trading and Profit and loss Account
    for the year ended 31st March, 2014

    DrCr
    ParticularsAmt(Rs)ParticularsAmt(Rs)
    To Purchases1,16,000By Sales1,60,000
    To Wages8,000Less : Returns Inward(4,000)1,56,000
    To Carriage Inward2,000By Closing Stock26,000
    To Gross Profit transferred to Profit & Loss A/c56,000
    1,82,0001,82,000
    To Salaries10,000By Gross Profit transferred from trading A/c56,000
    Add : Outstanding Salaries50010,500By Accrued Interest on Investment750
    To Printing800
    To Advertisement1,200
    To Trade Charges600
    To Rent1,400
    To Interest on Capital(W.N)(1,200 + 900)2,100
    To Depreciation on plant & fixtures800
    To Bad Debts500
    Add : New Provision1,2251,725
    To Net Profit Transferred to Capital A/c37,125
    56,75056,750

    Balance Sheet
    as at 31st March,2014

    LiabilitiesAmt(Rs)AssetsAmt(Rs)
    Bills Payable9,000Cash in hand3,000
    Creditors12,000Cash at bank16,000
    Salaries Outstanding500Bills Receivable5,000
    Capital(30,000 + 10,000)40,000Debtors25,000
    Add :Interest on Capital2,100Less : Bad Debts( 500)
             Profit transferred from Profit & Loss A/c37,12524,500
    79,225Less :Provision for Bad Debts(5% on ₹ 24,500)( 1,225)23,375
    (-)Drawings( 4,500)74,725Closing Stock26,000
    Investments15,000
    (+)Accrued Interest75015,750
    Plants and fixtures8,000
    (-)Depreciation( 800)7,200
    96,22596,225

    Note :

    Calculation of Interest on Capital:

    On ₹ 30,000 @ 6% p.a. for 6 months ( from April to September) = ₹900

    On ₹40,000 @ 6% p.a. for 6 months ( from October to March ) = ₹1,200

    Total interest = 1200+900=₹2100




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