ACCOUNTANCY ASSIGNMENT CLASS 11

CHAPTER 1 – INTRODUCTION TO ACCOUNTING

A. Objective Type Questions
1. Complete the following sentences with appropriate words:
(a) Information in financial reports is based on_________transactions.
(b) Internal users are the...... of the business entity.
(c) A ___________would most likely use an entities financial report to
determine whether or not the business entity is eligible for a loan.
(d) The Internet has assisted in decreasing the....... in issuing financial reports
to users.
(e) __________ users are groups outside the business entity, who use the
information to make decisions about the business entity.
(f) Information is said to be relevant if it is....
(g) The process of accounting starts with ...... and ends with........
(h) Accounting measures the business transactions in terms of ...... units.
(i) Identified and measured economic events should be recording in _________
order.
B. Very Short Answer Type Questions
1. Mention two types of liabilities.
2. Name two intangible assets.
3. Define accounting in your own words.
4. Define the term 'Capital:
5. Name any two contingent liabilities.
6. State the meaning of Financial Accounting.

C. Short Answer Type Questions

1. Define Book-keeping.

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2. Explain the following terms briefly:
(a) Business Transactions
(b) Assets
(c) Capital
(d) Working capital
(e) Debtors
(f) Creditors
(g) Current assets and fixed assets
(h) Current and non-current assets.
3. What do you mean by creditors? Classify it and mention two examples of
each category.
4. What do you mean by purchases, purchases returns net purchases?
5. What is relationship between sales, net sales and sales return?
D. Long Answer Type Questions
1. What is accounting? Explain its objectives.
2. Define accounting and explain its limitations
3. Explain briefly the advantages of accounting.
4. What do you mean by Financial Accounting? Explain the main four
limitations of Financial Accounting
5. Explain any four advantages of Accounting

CHAPTER-2 THEORY BASE OF ACCOUNTING

IMPORTANT POINTS
Generally Accepted Accounting Principles (GAAP)

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Accounting rules derived from experience and practice having proved and
accepted as useful and correct become Generally Accepted Accounting
Principles (GAAP).
Basic Accounting Concepts
Basic concepts are the foundation stone of systematic and proper accounting.
Every business enterprise must adopt these concepts,
1. Business Entity
Business is assumed to have distinct entity other than its owners. Business
transactions are to be recorded in the books of the enterprise. Identification of
items, whether Assets, liabilities, revenue or expense are made from business
point of view.
2. Money Measurement
Accounting transactions must be capable of being measured in terms of
money. These transactions must be financial in nature.
3. Going Concern
Accounting assumes business enterprise to last long and carried on
indefinitely. The business enterprise is viewed as going concern that is
continuing operation for the foreseable future.
4. Accounting Period
The performance of the business enterprise must be assessed and measured
after an accounting period. ie., 12 months.
5. Cost
Expenditure incurred on acquiring, manufacturing and processing goods is
termed as cost. All business transactions must be recorded in the books of
Accounts at their monetary cost of acquisition.
6. Dual Aspect (or Duality)
Every accounting transaction must have dual aspect i.e., every debit must have
its corresponding credit. If there is receiver, there must be giver. If someone is
purchaser, someone must be seller. If something is received, something must
be given and loss for somebody must be gain for someone.

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In the same way, according to modern accounting equation approach every
asset has got its corresponding liability i.e., Assets= Liabilities + Capital.
7. Revenue Recognition (Realisation)
(1) Sales basis. Revenue should be recognised when title of goods is passed to
the buyer and the payment or the promise to make the payment is received.
(ii) Cash basis. Revenue is recognised when actual payment is received. In case
of hire purchase and accounts of professionals, this basis is followed.
(iii) Production basis. Revenue is supposed to have been realised for the part of
work completed. This approach is followed in construction works.
8. Matching Primary Objective
According to this principle income can be ascertained by matching revenue of
the business with its cost. According to this principle:
Gross income = Revenue - Expenses or Net sales – Cost of Goods Sold
9. Full Disclosure
Accounting must disclose all material information.
10. Consistency

According to this principle the methods and practices of accounting and its
reporting must be consistent so that accurate comparisons can be made and
correct decisions can be taken.
11. Conservatism (Prudence) According to this principle the business must
always play safe. The principle stresses that business transactions should be
recorded in such way that profit should not be overstated.
12. Materiality
Accounting should disclose all the material information. Material, here means
the information, which would have changed the result of the business, if it
would have been disclosed.
13. Objectivity

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Every business record must be based and supported by documentary evidence.
According to this principle accounting should be definite, verifiable and free
from manipulation and personal bias.

Accounting Policies

Specific principles and methods applied in the preparation and presentation of

Accounting information are known as Accounting Policies. These policies
should be based upon Materiality, Prudence and substance over form.

Accounting Standard

The uniform, definite and universally accepted accounting rules developed by

International Accounting Standard and Institute of Chartered Accountants of
India are known as Accounting Standard. These Accounting Standards have
been developed to prevent financial scandals and business failures.

Advantages/Need of Accounting Standard

(1) Uniform and standard presentation of accounts (2) Removal of
ambiguity (3) Prevention of accounting scandals (4) Globalisation of
business (5) Internationalisation of financial institutions.

IFRS

IFRS is a single set of high quality, understandable and enforceable global

accounting standards. It is a "principles based" set of standards which are
drafted lucidly and are easy to understand and apply.

IFRS adoption as a universal financial reporting language is gaining momentum

across the globe. Most of the Countries have implemented IFRS and Converged
their natural GAAP to IFRS.

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Systems of Accounting
1. Double entry system 2. Single entry system.
Basis of Accounting
1. Cash basis 2. Accrual basis.

A. Objective Type Questions

1. Choose the Correct Answer:

1. During the life-time of an entity accounting produce financial statements in
accordance with which basic accounting concept:
(a) Conservation
(b) Matching
(c) Accounting period
(d) None of the above.
2. When information about two different enterprises have been prepared and
presented in a similar manner the information exhibits the characteristic of
(a) Verifiability
(b) Relevance
(c) Reliability
(d) None of the above.
3. A concept that a business enterprise will not be sold or liquidated in the
near future is known as:
(a) Going concern
(b) Economic entity
(c) Monetary unit
(d) None of the above.

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4. The primary quantities that make accounting information useful for
decision-making are:
(a) Relevance and freedom from bias
(b) Reliability and comparability
(c) Comparability and consistency
(d) None of the above.

II. Fill in the correct word:

1. Recognition of expenses in the same period as associated revenues is
called ...... concept.
2. The accounting concept that refers to the tendency of accountants to
resolve uncertainty and doubt in favour of understating assets and
revenues and overstating liabilities and expenses is known as.........
3. Revenue is generally recognised the point of sale denotes the concept
of........ .
4. The …………….. concept requires that the same accounting method
should be used from one accounting period to the next.
5. The …………… concept requires that accounting transaction should be
free from the bias of accountants and others.

III. Point out whether following statements are true or false:

1. Assets will be equal to capital, if there are no liabilities.
2. It is binding upon every business to adopt basic concepts in
accounting, while maintaining their books of accounts.
3. 'Conservatism' is the basic concept of accounting.
4. 'Objectivity' is the basic concept of accounting.
5. Income= Revenue - Expense.
6. Amount received in cash is an income.
7. Every accounting record must be based on documentary evidence.
8. Basic concepts bring uniformity in accounting.
9. According to business entity concept the existence of business and
proprietors is one and the same.

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10. Valuation of stock at cost price or market price whichever is lower
does not observe the concept of consistency.
11. Transactions and events are guided by generally accepted accounting
principles subject to laws of land.
12. Accrual concept implies on cash basis.
13. Revenues are matched with expenses in accordance
with the matching principle.
14. The financial statements must disclose all the relevant and reliable
information in accordance with full disclosure principle.

CHAPTER 3- SOURCE DOCUMENTS & VOUCHERS

A. Objective Type Questions

1. Voucher is prepared for:

(a) Cash received and paid
(b) Cash/Credit sales
(c) Cash/Credit purchase
(d) All of the above.

2. Voucher is prepared from:

(a) Documentary evidence
(b) Journal entry
(c) Ledger account
(d) All of the above.
3. Transfer voucher is prepared for…………..
(a) Cash payment (b) Cash receipt
(c) Non-cash transactions (d) None of the above.

4. Debit voucher is prepared for...........

(a) Cash payment (b) Cash receipt
(c) Credit transactions (d) All of the above.

5. Credit voucher is prepared for………….

(a) Cash payment (b) Cash receipt
(c) Credit transaction (d) All of the above.

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B. Very Short Answer Type Questions

1. Define source documents.

2. Define vouchers.

3. What is supporting vouchers?

4. What is debit voucher?

5. What do you mean by credit voucher?

6. What is transfer voucher?

C. Short Answer Type Questions

1. Describe two basic purpose of source documents.

2. State the purpose of accounting vouchers.

3. What is meant by a voucher? Prepare an imaginary specimen of a

voucher.

D. Long Answer Type Questions

1. What are supporting vouchers? What are the types of supporting

vouchers? Give their specimen.
2. What are accounting vouchers? What are the types of accounting
vouchers? Give their format.

CHAPTER 4- ACCOUNTING EQUATION

A. Objective Type Questions

1. Point out the correct equation

(a) Assets = Liabilities – Capital

(b) Assets = Liabilities + Capital
(c) Liabilities = Assets + Capital

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(d) Capital = Assets + Liabilities.

2. Point out the incorrect Accounting Equation:

(a) Assets= Liabilities + Capital
(b) Assets = Capital + Liabilities
(c) Liabilities = Assets + Capital
(d) Capital = Assets - Liabilities.

3. Payment of salary to Anil, the manager will …………

(a) Decrease assets and capital
(b) Increase assets and decrease capital
(c) Decrease assets and increase capital
(d) Decrease assets and liability.

4. Purchasing pocket transistor for proprietor will......

(a) Increase assets and decrease capital
(b) Increase assets and decrease liability
(c) Decrease assets and decrease capital
(d) Decrease assets and decrease liability.

5. Mohan spent ₹2,000 as repair on purchases of machinery from scrap

dealer. The transaction will ………..
(a) Increase and decrease assets
(b) Decrease assets and capital
(c) Increase and decrease capital
(d) Increase and decrease liability.

6. How many sides does an account have?

(a) Two
(b) Three
(c) One
(d) none of the above

Practical Questions

1. Use Accounting Equation to show the effect of following transactions

on assets, liabilities and capital and also show the final Balance Sheet:

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(a) Started business with cash ₹70,000

(b) Purchased goods on credit ₹18,000

(c) Purchased machinery of ₹20,000

(d) Payment made to creditors in full settlement ₹17,500
(e) Depreciation on machinery ₹2,000

2. Prepare Accounting Equations on the basis of the following:

(a) Rahim started business with cash ₹20,000.
(b) Rahim purchased furniture for cash ₹2,000.
(c) Rahim paid rent ₹200.
(d) Rahim purchased goods on credit ₹3,000.
(e) Rahim sold goods (Cost price ₹2,000) for ₹5,000 in cash.

3. Arvind had the following transactions. Use Accounting Equation to

show their effect on his assets, liabilities and capital:

(a) Invested ₹15,000 in cash as capital.

(b) Purchased furniture for cash ₹7,500.
(c) Purchased a building for ₹15,000, giving ₹5,000 in cash and the
balance through a loan.
(d) Sold furniture costing ₹1,000 for ₹1,500.
(e) Purchased an old car for ₹2,800 cash.
(f) Received cash as rent ₹3,600.
(g) Paid cash ₹500 for loan and ₹300 for interest.
(h) Paid cash for household expenses ₹300.
(i) Received cash for dividend on securities ₹200.

4. Show the Accounting Equation on the basis of the following

transactions : ₹
(a) Mohan commenced business with cash 70,000
(b) Purchased goods on credit 14,000
(c) Withdrew for private use 1,700
(d) Goods purchased for cash 10,000

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(e) Paid wages 300
(f) Paid to creditors 10,000
(g) Sold goods on credit for 15,000
(h) Sold goods for cash (Cost price was ₹3,000) 4,000
(i) Purchased furniture for 500

5. Show the Accounting Equation on the basis of the following

transactions :
Ram and Mohan entered into a partnership agreement to deal in
furniture. They contributed 70,000 and 50,000 as capital respectively.
Other transactions were as under: ₹
(a) Timber purchased by them 40,000
(b) Wages paid to carpenters 30,000
(c) Furniture sold (Costing 40,000) 50,000
(d) Furniture sold on credit (Costing 9,000) 10,000
(e) Amount received from debtors 9,900
Discount allowed 100
(f) Timber purchased on credit 6,000
(g) Furniture purchased 5,000
(h) Payment to creditors 5,950 in full settlement
(i) Amount withdrawn:
Ram 2,000
Mohan 1,000

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 CHAPTER 5-JOURNAL

A. Objective Type Questions

I. Choose the correct answer:

1. The ledger folio column of journal is used to:

(a) Record the date on which amount posted to a ledger account.
(b) Record the number of ledger account to which information is posted.
(c) Record the number of amounts posted to the ledger account.
(d) Record the page number of the ledger account.
2. The journal entry to record the sale of services on credit should
include:
(a) Debit to debtors and credit to capital.
(b) Debit to Cash and Credit to debtors.
(c) Debit to fees Income and Credit to debtors.
(d) Debit to Debtors and Credit to fees income.
3. The journal entry to record purchase of equipment for ₹2,00,000 cash
and a balance of ₹8,00,000 due in 30 days include:
(a) Debit equipment for ₹2,00,000 and Credit cash ₹2,00,000.
(b) Debit equipment for ₹10,00,000 and Credit cash ₹2,00,000 and
Creditors ₹8,00,000,
(c) Debit equipment ₹2,00,000 and Credit debtors ₹8,00,000.
(d) Debit equipment ₹10,00,000 and Credit cash ₹10,00,000.
4. When an entry is made in journal:
(a) Assets are listed first.
(b) Accounts to be debited listed first
(c) Accounts to be credited listed first
(d) Accounts may be listed in any order.

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5. If a transaction is properly analysed and recorded:
(a) Only two accounts will be used to record the transaction
(b) One account will be used to record transaction.
(c) One account balance will increase and another will decrease.
(d) Total amount debited will equals total amount credited.

6. The journal entry to record payment of monthly bill will include:

(a) Debit monthly bill and Credit capital
(b) Debit capital and Credit cash
(c) Debit monthly bill and Credit cash
(d) Debit monthly bill and Credit creditors.

7. Journal entry to record salaries will include:

(a) Debit salaries credit cash
(b) Debit capital credit cash
(c) Debit cash credit salary
(d) Debit salary credit creditors.
8. Interest on drawing.......
(a) Increases assets and decreases capital.
(b) Increases expense and decreases liability.
(c) Increases and decreases capital.
(d) Increases liability and decreases capital.
9. Goods drawn by the proprietor from the business for personal use......
(a) Increases capital and decreases assets.
(b) Increases assets and decreases expense.
(c) Decreases capital and decreases assets.

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(d) Increases and decreases assets.
10. Recovery of bad debts previously written off …………….
(a) Increases assets and revenue.
(b) Decreases assets and expenses.
(c) Increases assets and capital.
(d) Increases expenses and assets.
11. The rule of debit and credit as regards………. Should be 'debit the
debtor and credit and creditor.
(a) Personal Account.
(b) Impersonal Account.
(c) Real Account.
(d) Nominal Account.
12. Wages owing is........
(a) Personal Account.
(b) Impersonal Account.
(c) Real Account.
(d) Nominal Account.
13. Recording of transaction in the journal is called:
(a) Posting.
(b) Journalising.
(c) Tallying.
(d) Casting.
14. The journal is a book of:
(a) Only cash transactions.
(b) Original entry.
(c) Credit sales and purchases.
(d) Secondary entry.
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 Practical questions:
1. Gyan Prakash started his business with the following assets
and liabilities:
2008
Jan. 1 Cash in hand 20,000
Stock in hand 25,000
Debtors: Khanna Bros. 20,000
Nirmal & Co. 15,000
Creditors: Kripal Bros. 10,000
Mitra Sen & Co. 5,000
His transactions for the month were:
Jan. 2 Sold goods to Karmarkar subject to a trade discount of 10% 10,000
Jan. 4 Received from Nirmal & Co. 14,500
Discount allowed 500
Jan. 8 Settled Mitra Sen and Co's account deducting 5% for cash discount
Jan. 10 Purchased stationery articles 100
Jan. 12 Paid rent for the month 250
Jan. 13 Bought goods from S.K. & Co. 30,000
Jan. 16 Paid Kripal Bros. in full settlement of account 9,500
Jan. 20 Withdrew cash for personal expenses 500
Jan. 24 Issued a Credit Note to Mr. Karmarkar for goods damaged in transit
Jan. 26 Returned goods to S.K. & Co and received their Credit Note 5,000
Jan. 29 Paid S.K. & Co. on account 10,000
Discount allowed 250
Record the above transactions in journal.

2. Give journal entries for the following

(a) Goods worth ₹500 given as free samples.
(b) Received ₹9,975 from Sarika in full settlement

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 (c) Received a first and final of her account for ₹10,000 dividend of
70 paise in a rupee from the Official Receiver of Mr. Karim who
owed us ₹10,000.
(d) Commenced business with cash ₹30,000.
(e) Paid rent in advance ₹500.
(f) Purchased goods for cash ₹15,000 and for Credit ₹10,000.
(g) Bought Motor cycle for personal use for ₹6,000 and the payment
made out of business money.
(h) Received Cash for a bad debt written off last year ₹100. X, a
debtor of the firm became insolvent. A first and final payment @
80 paise in a rupee was received from his official receiver towards
his total dues of ₹200.
(i) Goods worth ₹700 distributed as sample.
(j) Goods costing ₹11,000 was stolen in transit.
(k) Cash embezzled by Himanshu ₹33,000.
(l) Goods worth ₹400 were given as charity out of business.
(m) Received cash ₹500 of a bad debts written off last year.
(n) Interest charged on drawings @ 5%, when total drawings were
₹10,000.

CHAPTER-6 LEDGER

OBJECTIVE TYPE QUESTIONS:

1. Posting is made at the ....... side of the account appearing at the debit
side of the Cash Book.
(a) Debit
(b) Credit
(c) Either debit or credit
(d) Neither debit nor credit.

2. Posting is made at the ...... side of accounts appearing at the credit

side of Cash book.
(a) Debit
(b) Credit

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(c) Either debit or credit
(d) Neither debit nor credit.

3. While preparing parties A/c on the basis of Purchases book posting is

made at the ...... side of Parties A/c.
(a) Debit
(b) Credit
(c) Either debit or credit
(d) Neither debit nor credit.

4. While preparing accounts appearing in the Sales Return book posting

is made at their ..... side.
(a) Debit
(b) Credit
(c) Debit or credit
(d) Neither debit nor credit.

5. The balance of Purchase Return book is always........

(a) Debit
(b) Debit or Credit
(c) Credit
(d) Neither debit nor credit.

6. The ledger is a book of:

(a) Original entry
(b) Secondary entry
(c) All cash transactions
(d) Petty cash transactions.

7. Writing of transaction in the ledger is called:

(a) Costing
(b) Balancing
(c) Journalising
(d) Posting.

8. When a firm maintains a cash book, it need not maintain?

(a) Sales journal

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 (b) Purchases journal
(c) General journal
(d) Cash account in the ledger.

9. Balancing of account means:

(a) Total of debit side
(b) Total of credit side
(c) Difference in Total of debit and credit
(d) None of these.

Practical questions
1. On 1st January, 2012, the following were the ledger balances of Rajan &
Co:
Cash in hand, 900; Cash at Bank, 21,000; Soni (Cr.), 3,000, Zahir (Dr.).
2,400, Stock, 12,000, Prasad (Cr.) 6,000 Sharma (Dr.), 4,500, Lall (Cr).
2,700.
Ascertain Capital.
Transactions during the month were:
2012
Jan. 2 Bought goods from Prasad Sold to Sharma 2,700
Jan. 3 Sold to Sharma 3,000
Jan. 5 Sold to Lall goods for cash 3,600
Jan. 7 Took goods for personal use 200
Jan. 13 Received from Zahir in full settlement 2,350
Jan. 17 Paid to Soni in full settlement 2,920
Jan. 22 Paid cash for stationery 50
Jan. 29 Paid to Prasad by cheque 2,650
Discount allowed 50
Jan. 30 Provide interest on capital 100
Rent due to landlord 200

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 CHAPTER – 7 CASH BOOK
A. Objective Type Questions
I. Select the correct answer:
1. When a firm maintains a cash book, it need not maintain:
(a) Journal proper
(b) Purchases (journal) book
(c) Sales (journal) book
(d) Bank and cash account in the ledger.

2. Double column cash book records:

(a) All transactions
(b) Cash and bank transactions
(c) Only cash transactions
(d) Only credit transactions

3. Cash book does not record transaction of:

(a) Cash nature
(b) Credit nature
(c) Cash and credit nature
(d) None of these.

B. State whether the following statements are true or false.

1. Cash book records all cash receipts.

2. The debit side of cash book is always greater.
3. Bank columns are not balanced in cash book.
4. 4. All receipts are entered in the credit side of cash book.

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5. Only cash receipts and cash payments are recorded in the cash book.
6. Payments are recorded at the credit side of cash book.
7. Assets and liabilities are the two sides of the cash book.
8. Credit transactions are not recorded in the cash book.
9. It is preferable to use before every entry "To" on the debit side and "By"
on the credit side of cash book.
10. Trade discount is shown in the cash book.
11. The word (c) against an entry in the cash book signifies that this entry is
not to be recorded to the ledger.
12.The petty cashier generally works on imprest system.
13.Discount account should be balanced in the Cash Book.
14. The balance in cash book shows net income.
15.The balance in the petty cash book represents expenses.
16. When we buy a furniture in cash, we debit cash account.

CHAPTER -8 OTHER SUBSIDIARY BOOKS

Objective Type Questions

I. Select correct answer: 1. Total of these transactions is posted in

purchase account:

(a) Purchase of furniture

(b) Cash and credit purchase
(c) Purchases return
(d) Purchase of stationery.

2. The periodic total of sales return journal is posted to:

(a) Sales account
(b) Goods account
(c) Purchases return account
(d) Sales return account.

3. Goods purchased on cash are recorded in the:

(a) Purchases (journal) book
(b) Sales (journal) book

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(c) Cash book
(d) Purchases return (journal) book.

4. The periodic total of purchases return journal is posted to:

(a) Purchase account

(b) Profit and loss account
(c) Purchases return account
(d) Furniture account.

5. Purchases book records........

(a) all purchases
(b) all cash purchases
(c) all credit purchases
(d) all credit purchases of goods

6. Sales book records.......

(a) sale of assets on credit
(b) sale of goods on credit
(c) cash sales
(d) all credit sales.

7. Purchases return book records........

(a) return of goods purchased on credit
(b) return of assets purchased on credit
(c) return of all things
(d) return of capital.

8. Sales return book records..........

(a) return of assets sold on credit

(b) return of goods sold on credit
(c) return of all things
(d) return of capital.

9. Journal proper records...........

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(a) all transactions
(b) all cash transactions
(c) all credit transactions
(d) all transactions not recorded in any of subsidiary books.

10. The purchases journal contains:

(a) All purchases

(b) All purchases of merchandise
(c) Credit purchase of merchandise
(d) Cash purchase of merchandise.

11. The source document for recording entries in the purchases returns
journal is generally:

(a) A credit note

(b) An invoice
(c) A bill
(d) A debit note.

12. Credit balance of bank column in cash book shows:

(a) Overdraft
(b) Cash deposited in our bank
(c) Cash withdrawn from bank
(d) None of these.

13. Balancing of account means:

(a) Total of debit side

(b) Total of credit side
(c) Difference in total of debit & credit
(d) None of these.

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CHAPTER -9 TRIAL BALANCE

A. Objective Type Questions

I. Point out the suitable alternative answers to the following questions:

1. Assets account show...... balance.

(a) debit
(b) credit
(c) either debit or credit
(d) plus.
2. Trial balance is prepared according to .... method.
(a) balance
(b) total
(c) total and balance
(d) all the above.

3. The balance of ..... account will be shown at the debit column of trial
balance.
(a) cash
(b) creditors account
(c) bank overdraft account
(d) capital account.
4. Trial balance fails to detect………
(a) errors of omission in original books
(b) errors of principle
(c) compensating errors
(d) all the above.

5. Trial balance is
(a) a statement
(b) an account

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(c) a summary
(d) an information.

6. Preparation of trial balance is ……………

(a) optional
(b) compulsory.

7. The preparation of a Trial Balance helps in:

(a) Locating errors of complete omission
(b) Locating errors of principle
(c) Locating errors of commission
(d) None of the above
8. The form listing the balances and the title of the accounts in the
ledger on a given date is the :
(a) Income statement
(b) Balance sheet
(c) Retained earnings statement
(d) Trial balance
B. Very Short Answer Type Question
Name the type of error:
(a) Goods returned by Mohan was not passed through books of
accounts.
(b) Cash sales to Mohan was debited to Mohan's account.
(c) Committing two errors which neutralise the effect of each other.
(d) Committing mistake in additions.
(e) Posting an account to the wrong side.
(f) Debiting purchases account for the purchase of building.

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 CHAPTER – 10 BANK RECONCILIATION STATEMENT

Objective Type Questions

Point out the suitable alternative answers to the following questions:

1. Bank reconciliation statement may be prepared with the balance

of.......

(a) cash book

(b) pass book

(c) either cash book or pass book

(d) neither cash book nor pass book.

2. The debit balance of pass book is......

(a) plus balance

(b) minus balance

(c) either plus or minus

(d) neither plus nor minus.

3. Pass book is ......

(a) the copy of banking transactions entered in the cash book

(b) the copy of the customers' ledger account main- tained by the bank

(c) the record of all cash transactions.

(d) the copy of firms receipts and payments.

26
4. If the statement is prepared from the balance of cash book, we shall
finally find out the balance of .......

(a) cheque book

(b) pay-in-slip book

(c) cash book

(d) pass book.

5. Overdraft facilities are available only in………….
(a) current account
(b) saving bank account

(c) recurring deposit account

(d) fixed deposit account.

6. Bank reconciliation statement is prepared by…………..

(a) the customers of the bank

(b) bank

(c) proprietor of the business

(d) tax authorities.

7. The bank balance is treated as plus balance if it balance of ......

(a) cash book

(b) credit balance of pass book

(c) debit balance of cash book

(d) in the all above cases.

27
CHAPTER 11 – DEPRECIATION
Objective Type Questions

1. Depreciation according to straight line method is calculated on ......

(a) opening balance

(b) closing balance

(c) original cost

(d) market value.

2. Depreciation is calculated on …………

(a) fixed assets

(b) current assets

(c) fictitious assets

(d) wasting assets.

3. Depreciation is calculated on..... of assets.

(a) cost price

(b) market value

(c) book value

(d) invoice price.

4. Depreciation means......

(a) physical wear and tear

(b) amortisation
(c) fluctuation
(d) obsolescence.

28
5. According to diminishing balance method depreciation

is charged on......
(a) original cost of assets.

(b) written down value

(c) market value

(d) average cost.

6. In the straight line method, the amount of depreciation ..... every

year.

(a) increases
(b) decreases

(c) remains constant

(d) either increases or decreases.

7…………is maintained for known liabilities.

(a) Reserve

(b) Provision

(c) Capital reserve

(d) Reserve fund.

8. Maintenance of ...... is a must.

(a) general reserve

(b) sinking fund

(c) provision

29
(d) secret reserve.

9. Creation of provision is.

(a) discretionery

(b) must.

10. ………….is created for unknown liability.

(a) Provision

(b) Reserve for bad debts

(c) Reserve

(d) Provision for taxation.

11. Provision were previously known as......

(a) specific reserve

(b) reserve fund

(c) contingency fund

(d) capital reserve.

12. Which are of the following is not depreciated

(a) Plant & Machinery

(b) Land & Building

(c) Vehicles

(d) Furniture

30
 13. Depreciation is a

(a) Cash expenditure

(b) Abnormal expenditure

(c) Non-cash expenditure

(d) Normal expenditure.

14. Which of the following Accounting? Standards is applicable for

Depreciation
(a) Accounting Standard 10

(b) Accounting Standard 29

(c) Accounting Standard 3

(d) Accounting Standard 6.

Accountancy Sample Paper

Maximum Marks: 80
Time Allowed: : 3 hours

General Instructions:

1. This question paper contains 34 questions. All questions are

compulsory.

31
 2. This question paper is divided into two parts, Part A and B.
3. Question 1 to 17 and 27 to 29 carries 1 mark each.
4. Questions 18 to 20 and 30 to 32 carries 3 marks each.
5. Questions from 21 to 23 carries 4 marks each.
6. Questions from 24 to 26, 33 and 34 carries 6 marks each.

Class 11 Accountancy Sample Paper Part A

1. The vouchers which are prepared for transactions not involving cash, i.e. non-
cash transactions, are known as ________ vouchers.
a) Token
b) Credit
c) Transfer
d) Unilateral
2. Goodwill account is a:
a) Nominal Account
b) Real Account
c) None of these
d) Personal Account

3. Source of documents are

a) Cash Memo
b) Both Cash Memo and Invoice
c) Neither Cash Memo Nor Invoice
d) Invoice
4. Income statement include
a) Profit and loss account only
b) Trial Balance only
c) Balance sheet only
d) Statement of profit and loss
OR

Which of the following is not a limitation of accounting?

a) Evidence in Legal Matters

b) Based on accounting conventions
c) Incomplete Information

32
 d) Omission of Qualitative Informations
.
5. Which of the following correctly differentiates between provision
and reserves?
i. A provision is a charge against profit whereas reserve is an
appropriation of profit.
ii. Provision is made for a known liability or expense the
amount of which is not certain whereas reserve is created for
strengthening the financial position of the business.
iii. Provision is deducted before calculating taxable profits
whereas a reserve is created from profit after tax and
therefore it has no effect on taxable profit.
iv. All of these
a) Option (ii)
b) Option (i)
c) Option (iii)
d) Option (iv)
6. Rule of Debit and Credit for Impersonal account is
a) Dr. the receiver and Cr the giver
b) Dr. what goes out and Cr what comes in
c) Dr. all expenses and Cr all gains & Dr. what goes out and Cr what comes in
d) Dr. all expenses and Cr all gains
OR

When a total of the debit side of an account exceeds the total of its credit
side, the account is said to have ________.

a) Debit Balance
b) None of these
c) Debit as well as credit balance
d) Credit Balance
 7. What shall be the amount of Capital if Cash is ₹ 5,000; Furniture ₹ 12,000;
Stock ₹ 30,000 and Creditors ₹ 6,000?
a) ₹ 41,000
b) 43,000
c) ₹ 53,000
d) ₹ 47,000
OR

Purchase of machine by cash means:

a) increase in asset and decrease in the asset

33
 b) none of these

c) the decrease in asset and increase in capital

d) increase in asset and decrease in liability

Question No. 8 to 10 are based on the given text. Read the text carefully and
answer the questions:A business purchased goods for ₹ 2,00,000 and sold 75% of
such goods during accounting year ended 31st March 2020. The market value of
remaining goods was ₹ 43,000. Accountant valued closing stod at cost. According to
him, 
i. Owner of the business is treated as creditor to the extent of his capital;
ii. All expenses incurred to earn revenue or a particular period should be
charged against that revenue to determine the net income:
Financial statements are prepared on 31st March every year.
7. A business purchased goods for ₹ 200,000 and sold 75% of such
goods during the accounting year ended 31st March, 2020. The
market value of the remaining goody was ₹ 43,000 Accountant
valued closing stock it cost: Identify the concept violated in the
above situation.
a) Matching
b) Conservatism
c) Business entity
d) Accounting period
8. Under which concept owner of the business is treated as creditor to
the extent of his capital.
a) Conservatism
b) Business entity
c) Matching
d) Accounting period
9. Match the following. Options are
a. General reserve i. reserve are created for specific purpose

b. Specific reserve ii. reserve may or may not involve any receipts of cash

c. Capital reserve iii. created in business for rainy day

10. a) a – (ii), b – (iii), c – (ii)
11. b) a – (iii), b – (i), c – (ii)
12. c) a – (iii), b – (ii), c – (i)
13. d) a – (ii), b – (i), c – (iii)
10. Which of the following is not a fixed asset?
a) Computers
b) Furniture
c) Building

34
 d) Cash in hand
11. Return of goods purchased on credit to the suppliers will be
entered in ____ Book.
a) Purchase
b) Sales
c) Sales Return
d) Purchase Return
12. When goods are returned to supplier assets and ________ are
________ by same amount.
a) liabilities, increased
b) assets, decreased
c) liabilities, decreased
d) assets, increased
13. Which of the following is not a fixed asset?
iii. Balance with bank
iv. Plant and Machinery
v. Building
vi. Goodwill
a) B only
b) C only
c) A only
d) D only
OR

Out of the following assets, which one is not an intangible asset?

a) Patents
b) Trade Mark
c) Machinery
d) Goodwill
14. Goods sold for Cash Rs 25,000 plus 12% IGST. Sales A/c will be credited
by:
a) Rs 28,000
b) Rs 22,000
c) Rs 25,000
d) None of these
15. How secret reserve can be created
a) All of these
b) By charging capital expenditure to revenue
c) Under valuating stock
d) By making excessive provisions
16. When an account is said to have a debit balance and credit balance?
OR

35
 Pass Journal entry for purchase of goods by Amrit, Delhi from Add Gel
Pens, Delhi for ₹ 15,000 less Trade Discount 10% and Cash Discount
3%. CGST and SGST is levied @ 6% each. Assume payment is made at
the time of purchase.

17. Why is the consistency principle important?

OR

What is meant by Accounting Standard? State any two benefits of it.

18. Distinguish between debtors and creditors.

19. Following balances were extracted from the books of Ravinder
Associates as at 31st March, 2017:
(₹)   (₹)

Sundry Debtors 4,10,000 Stock (April 1, 2016) 2,30,000

Sundry Creditors 80,000 Premises 12,00,000

Rent and Taxes 48,000 Fixtures & Fittings 3,10,000

Purchases 34,00,000 Bad Debts written off 8,000

Rent received from sub-let of part of

Sales 56,00,000 30,000
premises

Trade Expenses 12,000 Loan from Mukul 1,50,000

Returns Outwards 80,000 Interest on Mukul’s Loan 15,000

Returns Inwards 1,20,000 Drawings 40,000

Expenses 4,000 Cash in hand 75,000

Motor Vehicles 6,50,000 Stock on 31st March, 2017

Electricity 25,000 (not adjusted) 3,80,000

20. You are required to prepare the trial balance treating the difference
as his capital.
21. Record the following transactions in a cash book with cash and bank
columns:
2017 ₹

Jan. 1 Bank overdraft 12,000

Cash in hand 2,300

36
Jan. 7 Cheque received from Ram ₹ 4,000 and discount allowed ₹ 200

Jan. 8 Deposited the above cheque into Bank 4,000

Jan. 12 Banked 200

Jan. 15 Received a money order from Gopal 500

Jan. 16 Money is withdrawn from Bank for office use 300

Jan. 18 Bank Charges 20

Jan. 20 Interest on bank overdraft 1,000

22. From the following particulars ascertain the balance that would
appear in the Bank Pass Book of A at 31st December 2013:
i. The bank overdraft as per Cash Book on 31st December 2013
₹ 63,400.
ii. Interest on overdraft for 6 months ending 31st December
2013, ₹ 1,600 is entered in the Pass Book.
iii. Bank charges of ₹ 300 for the above period are debited in
the Pass Book.
iv. Cheques issued but not cashed prior to 31st December 2013
amounted to ₹ 11,680.
v. Cheques paid into bank but not cleared before 31st
December 2013 were for ₹ 21,700.
vi. Interest on investments collected by the bank is credited in
the Pass Book ₹ 12,000.
OR

On 31st March 2018, the Bank Pass Book of Naresh & Co. showed an
overdraft of Rs.10,700. From the following particulars prepare Bank
Reconciliation Statement

i. Cheques issued before 31-03-2018 but presented for payment after

that date amounted to Rs.900.
ii. Cheques paid into the Bank but not collected and credited
until 31-03- 2018 amounted to Rs.2,200.
iii. Interest on overdraft amounting to Rs.1,200 did not appear
in the Cash Book.
iv. Rs.5,000 being interest on investments collected by the Bank
and credited in the Pass Book were not shown in the Cash
Book.
v. Bank charges of Rs.50 were not entered in the Cash Book.

37
 vi. Rs.800 in respect of dishonoured cheque were entered in the
Pass Book but not in the Cash Book.
23. On the basis of the narrations, fill in the missing values:
Journal Entries
Date Particulars L.F. Amount (Rs) Amount Cr. (Rs)

________ Dr. ________

________ ________
(i)
To ________ ________

(Being the bank draft of Rs 10,000 issued to

Suman, bank charges Rs 100)

________ Dr. 10,000

(ii) To ________ 10,000

(Being the cheque of Ranjan dishonoured)

________ Dr. ________

To ________ ________
(iii)
To ________ ________

(Being the purchase of goods of Rs 30,000;

received cash discount @ 2%)

________ Dr. ________

________ ________
(iv)
To ________ ________

(Being the sale of goods of Rs 30,000

allowed cash discount @ 3% )

________ Dr. ________

To ________ ________
(v)
(Being the goods costing Rs 15,000 lost in
the fire)

(vi) ________ Dr. ________

________ ________

38
 To ________ 10,000

(Being the rent paid, 1414th of the premises

used for residence)

________ Dr. ________

To ________ ________

To ________ ________
(vii) To ________ ________

(Being the machinery (cost Rs 2,00,000)

recorded, adjusting advance (Rs 20,000),
old machine (Rs 10,000 cost) and balance
by payment by cheque)

________ Dr. 20,000

To ________ 20,000
(viii)
(Being a computer out of stock used for
office purposes)

________ Dr. ________

To ________ ________
(ix)
(Being the computer (stock) costing Rs
15,000 taken for domestic use)

________ Dr. ________

________ ________

To ________ ________
(x)
To ________ ________

(Being the salaries (Rs 40,000) and rent (Rs

15,000) outstanding)
OR

Journalise the following transactions:

2017 Amount (₹)

Dec.01 Hema started business with cash 1,00,000

39
Dec.02 Open a bank account with SBI 30,000

Dec.04 Purchased goods from Ashu 20,000

Dec.06 Sold goods to Rahul for cash 15,000

Dec.10 Bought goods from Tara for cash 40,000

Dec.13 Sold goods to Suman 20,000

Dec.16 Received cheque from Suman 19,500

Discount allowed 500

Dec.20 Cheque given to Ashu on account 10,000

Dec.22 Rent paid by cheque 2,000

Dec.23 Deposited into bank 16,000

Dec.25 Machine purchased from Parigya 10,000

Dec.26 Trade expenses 2,000

Dec.28 Cheque issued to Parigya 10,000

Dec.29 Paid telephone expenses by cheque 1,200

Dec.31 Paid salary 4,500

24. Trial Balance of Rahul did not agree. Rahul put the difference to
Suspense Account. Subsequently, he located the following errors:
i. Wages paid for the installation of Machinery Rs 600 was
posted to Wages A/c.
ii. Repairs to Machinery Rs 400 debited to Machinery A/c.
iii. Repairs paid for the overhauling of second-hand machinery
purchased Rs 1,000 was debited to Repairs A/c.
iv. Own business material 8,000 and wages Rs 2,000 were used
for the construction of the building. No adjustment was
made in the books.
v. Furniture purchased for Rs 5,000 was posted to Purchases
A/c as Rs 500.
vi. Old machinery sold to Karim at its Book value of Rs 2,000 was
recorded through sales book.
vii. Total of Sales Returns Book Rs 3,000 was not posted to the
ledger.
Rectify the above errors and prepare Suspense Account to
ascertain the original difference in Trial Balance.

40
 OR

There was a difference of Rs. 8,595 in a trial balance. It has been

transferred to debit side of suspense account. Later on following errors
were discovered. Pass the rectifying entries and prepare the suspense
account.

i. Rs 283 discount received from a creditor had been duly

entered in his account but not posted to discount
account.
ii. Goods bought from a merchant for Rs 770 had been
posted to the credit of his account as Rs. 7,700.
iii. Rs 6,000 owing by a customer had been omitted from
the schedule of sundry debtors.
iv. An item of Rs 2,026 entered in the sales return book
had been posted to the debit of the customer who
returned the goods.
25. On 1st April, 2016 a firm purchased machinery for ₹ 3,00,000. On 1st
October, 2016, additional machinery costing ₹ 1,50,000 was
purchased On 1st October, 2017, the machinery purchased on 1st
April, 2016 having become obsolete, was sold for ₹ 1,35,000. On 1st
October, 2018, new machinery was purchased for ₹ 3,75,000 while
the machinery purchased on 1st October, 2016 was sold for
₹ 1,27,500 on the same day. The firm provides depreciation on its
machinery @ 10% per annum on original cost on 31st March every
year.
Show Machinery Account, Provision for Depreciation Account and
Depreciation Account for the period of three accounting years
ending 31st March, 2019.
OR

You are given following balances as on 1st April 2014:

Plant & Machinery A/c Rs 25,00,000
Provision for Depreciation A/c Rs 5,80,000
Depreciation is charged on the plant at 20% p.a. by the diminishing
balance method. A piece of machinery purchased on 1st April 2012 for
Rs 5,00,000 was sold on 1st October 2014 for Rs 3,00,000.
Prepare the Plant & Machinery Account and Provision for Depreciation
Account for the Year ended 31st March 2015.
Also, prepare Machinery Disposal Account.

 Part B

41
 26. The time between the acquisition of an asset for processing and its
conversion into cash and cash equivalent is called
a) Production cycle
b) Operating cycle
c) None of these
d) Time gap
OR

_____ is the arrangement of various assets and liabilities in a particular order

a) Marshalling
b) Grouping
c) All of these
d) Balancing
27. Loss on sale of an old car is debited to:
a) Profit and Loss A/c
b) Depreciation A/c
c) None of these
d) Car A/c
28. Closing Stock, if given outside the Trial Balance is shown in:
a) Profit and Loss Account
b) Trading Account and Balance Sheet
c) Profit and Loss Account and Balance Sheet
d) Balance Sheet
OR

Calculate provision for doubtful debt. If debtor closing balance is

Rs.3,400 and provision for the reserve of doubtful debts at 10% on
sundry debtors

a) Rs.2,060
b) Rs.3,400
c) Rs.340
d) Rs.3,060
29. Distinguish between Capital Receipts and Revenue Receipts.
30. From the following information, prepare the Trading Account for the
year ended 31st March, 2017:
Adjusted Purchases ₹ 15,00,000; Sales ₹ 21,40,000; Returns Inwards ₹
40,000; Freight and Packing ₹ 15,000; Packing Expenses on Sales ₹
20,000; Depreciation ₹ 36,000; Factory Expenses ₹ 60,000; Closing
Stock ₹ 1,20,000.
31. Why is it necessary to create a provision for doubtful debts at the time
of preparation of final accounts?

42
 32. Following is the Trial Balance of Shamit on 31st March, 2019. Pass
closing entries and prepare Trading and Profit and Loss Account for the
year ended 31st March, 2019.
TRIAL BALANCE as on 31st March, 2019
Particulars Dr.(₹) Cr.(₹)

Capital A/c – 1,00,000

Stock A/c (1st April, 2018) 20,000 –

Cash at Bank 10,000 –

Cash In Hand 4,400 –

Machinery A/c 60,000 –

Furniture and Fittings A/c 13,600 –

Purchases A/c 1,50,000 –

Wages A/c 1,00,000 –

Power and Fuel A/c 30,000 –

Factory Lighting A/c 2,000 –

Salaries A/c 70,000 –

Discount Allowed A/c 5,000 –

Discount Received A/c – 3,000

Advertising A/c 50,000 –

Sundry Office Expenses A/c 40,000 –

Sales A/c – 5,00,000

Sundry Debtors 85,000 –

Sundry Creditors – 37,000

Total 6,40,000 6,40,000

Value of Closing Stock as on 31st March, 2019 was ₹ 27,000

OR

43
 From the following trial balance, prepare the trading and profit and loss
account for the year ended 31st March 2013 and the balance sheet as
at that date

Debit Credit
Name of Account Amount Name of Account Amount
(Rs.) (Rs.)

Debit Balances Rent, Rates, and Taxes 800

Sundry Debtors 1,500 Salaries 2,000

Stock on 1 st April 2012 5,000 Drawings 2,000

Land and building 10,000 Purchases 10,000

Cash in hand 1,600 Office expenses 2,500

Cash at bank 400 Plant and machinery 5,700

Wages 3,000 Credit Balances

Bills Receivable 2,000 Capital 25,000

Interest 200 Interest 600

Bad debts 500 Sundry creditors 7,000

Repairs 300 Sales 17,000

Furniture and fixtures 1,500 Bills payable 400

Depreciation 1,000
On 31st March 2013, the stock was valued at Rs. 10,000.

33. From the following trial balance extracted from the books of MMN,
prepare the trading and profit and loss account for the year ended
31st December, 2013 and the balance sheet as at that date.

Name of Accounts Debit Balance(Rs) Credit Balance(Rs)

Capital 90,000

Drawings 6,480

Land and buiding 25,000

44
 Plant and machinery 14,270

Furniture and fixtures 1,250

Carriage inwards 4,370

Wages 21,470

Salaries 4,670

Provision for bad debts 2,470

Sales 91,230

Sales return 1,760

Bank charges 140

Coal, gas and water 720

Rates and taxes 840

Discount 120

Purchases 42,160

Purchases return 8,460

Bills receivable 1,270

Trade expenses 1,990

Sundry debtors 37,800

Sundry creditors 12,170

Stock (1st January, 2013) 26,420

Apprentice premium 500

Fire insurance 490

Cash at bank 13,000

Cash in hand 850

Total 2,04,950 2,04,950

Additional Adjustments
Charge depreciation on land and building at 21212%, on plant and
machinery account at 10% and on furniture and fixtures at 10%. Make a

45
 provision of 5% on debtors for doubtful debts. Carry forward the
following unexpired amounts.
a. Fire insurance Rs 125
b. Rates and taxes Rs 240
c. Apprentice premium Rs 400
d. Closing stock Rs 29,390

ASSIGNMENT SOLUTION
Chapter 1 Answers A

(a) Economic (b) Management/Employees (c) Creditor (d) Time gap

(e) External (f) Free from bias
(g) Identifying the transactions and communicating information
(h) Monetary (i) Chronological.

Chapter 2
I. objective type questions

1. (c) 2. (d) 3. (a) 4. (b)

II. (1) matching (2) conservatism (3) revenue realisation (4) consistency
(5) objectivity
III. 1. True 2. True 3. False 4. False 5. True 6. False

7. True 8. True 9. False 10. False 11. True 12. False

13. True 14. True.

CHAPTER 3- SOURCE DOCUMENTS & VOUCHERS

A. Objective Type Questions

1. (d) 2. (a) 3. (c) 4. (a) 5. (b)

CHAPTER 4- ACCOUNTING EQUATION

A. Objective Type Questions

46
 1. (b) 2. (c) 3. (a) 4. (c) 5. (a) 6. (a)
B. Practical questions:
1. Assets= 68,500 and Capital=68,500
2. Assets=25,800; Liabilities =3,000; Capital = 22,800
3. Assets = 28,200; Liabilities = 9,500; Capital = 18,700
4. Assets = 73,000; Liabilities = 4,000; Capital = 69,000
5. Assets= 1,27,950 and Capital=1,27,950
CHAPTER 5-JOURNAL
Objective type questions
1. (d) 2. (d) 3. (b) 4. (b) 5. (d) 6. (c)
7. (a). 8. (c) 9. (c) 10. (a) 11. (a) 12. (a)
13. (b) 14. (b).

CHAPTER 6 - LEDGER
Objective type questions
1. (b) 2. (a) 3. (b) 4. (b) 5. (c) 6. (b) 7. (d) 8. (d) 9. (c)
Practical questions
Opening balance of capital 29.100; Closing balance of cash 3,880
CHAPTER 7-CASH BOOK

Objective type questions

1. (d) 2. (b) 3. (b).
True/False
1. True
2. True in case of cash column but may not be true in case of bank column
3. False
4. False
5. True
6. True
7. False
8. True
9. True
10.False
11.True
12.True
13.False

47
 14.False
15.False
16.False

CHAPTER -8 OTHER SUBSIDIARY BOOKS

Objective Type Questions

Answers 1. (b) 2. (d) 3. (c) 4. (c). 5. (d)
6. (b) 7. (a) 8. (b) 9. (d) 10. (c)
11. (d) 12. (a) 13. (c).

CHAPTER -9 TRIAL BALANCE

Objective Type Questions

1. (a) 2. (d) 3. (a) 4. (d) 5. (a) 6. (a)
7.(c) 8. (d)

CHAPTER – 10 BANK RECONCILIATION STATEMENT

1. (c) 2. (b) 3. (b) 4. (d) 5. (a) 6. (a) 7. (d).

CHAPTER 11 – DEPRECIATION
Objective Type Questions

1. (c) 2. (a) 3. (c) 4. (a) 5. (b) 6. (c) 7. (b) 8. (c) 9. (b) 10. (c)11. (a)
12. (b) 13. (c) 14. (d)

48
49