NCERT Solutions for Class 11 Accountancy

NCERT Solutions for Class 11 accountancy covers all the questions given in the NCERT book. You can study and download these question and their solutions free from this page. These solutions are solved by our specialists at SaralStudy.com, that will assist all the students of respective boards, including CBSE, who follows NCERT; with tackling all the questions easily. We give chapter wise complete solutions for your straightforwardness.

• Chapter 1 Introduction to Accounting

  Accounting is the process of collecting, recording, summarising and communicating financial information to its users for correct decision making. Accounting is an art as well as science. Bookkeeping is a part of accounting and mainly concerned with recording of financial data. Users of accounting information may be internal users and external users. Internal users include owners, management etc, External users include Banks and financial institutions, creditors etc. Importance accounting terms are business transactions expenses all include and income all include, profit, loss, purchase, liabilities, assets, inventory etc.

• Chapter 2 Theory Base of Accounting

  Generally Accepted Accounting Principles (GAAP) are the basic rules which have been generally accepted by accounting all over to the world as general guidelines for preparing the accounting statements. Accounting concepts include money measurement concept dual concept, matching concept objectivity concept etc. Accounting conventions include conventions of full disclosure, convention of consistency, convention of conservatism and convention of materiality. Double entry system of accounting is based on the principle that every business transaction is recorded in at least two accounts.

• Chapter 3 Recording of Transactions - 1

  Bills that provide evidence of a transaction are called source documents on the basis of the source documents, entries are first recorded on the vouchers and then on the basin of the vouchers, entries are made in journal. Accounting equation means assets are equal to liabilities plus capital. Left hand side records sources of funds (liabilities), while right hand side records application of funds (Assets).

  There are three types of accounts viz. real account, nominal account and personal account. The rule of Accounting: 

  • Real Account : Real account is debit what comes in and credit what goes out.
  • Personal Account : Personal account is debit the gives and credit the received.
  • Nominal Account : Nominal account is debit all expenses and losses and credit all profits and gains.

• Chapter 4 Recording of Transactions - 2

  Special purpose books include cash book sales book, sales return book, purchase book purchase return book, bills receivable book, bills payable book and journal proper. Single column cash book itself is a cash account. Bank overdraft is a situation in which cash drawn from the bank exceeds the amount of deposits. Contra entry is an entry which is recorded on both sides of the cash book. Advantages of a petty cash book are that the burden of the main cash book is reduced, helps in preparation of ledger accounts, etc. Cash is maintained on the basis of ordinary system or imprest system.

• Chapter 5 Bank Reconciliation Statement

  A Bank reconciliation statement is a document that matches the cash balance on a company balance sheet to the corresponding amount on its bank statement. They also help detect fraud and any cash manipulations.

  Reasons : 

  • Interest income : Banks pay interest on some bank accounts.

  Procedure :

  • Deduct any outstanding checks.
  • This will provide the adjusted bank cash balance.
  • Deduct any bank service fees, penalties, and NSF checks.

• Chapter 6 Trail Balance and Rectification of Errors

  Trial Balance: A Trial Balance is a list of balances of all ledger accounts. It is only a statement and not an account. Trial Balance consists of a debit balance column with all debit balance of accounts and credit column with all credit balances of accounts.

  Rectification of Errors:

  • Error of Commission is an error, which is committed wrong totalling, wrong casting subsidiary books or wrong recording of amount books of original entry.
  • Error of Omission: When a transaction is completely or partially omitted from recorded in books of accounts.
  • Error of Principle: When a transaction is recorded in contravention of accounting principle.
  • Compensation Error: When two mistakes nullify the effect of each other and spite of error in both the accounts trial balance still agrees.

• Chapter 7 Depreciation, Provisions and Reserves

  Depreciation means a fall in the value of an asset because of its usage with the efflux of time, due to its obsolescence or accident. Factor affecting the amount of depreciation, scrap value, useful life legal provision etc.

  Methods :

  • Straight Line Method: In this method percentage of original cost of asset is written off every year. This method is also called the Equal installment method or original cost method.
  • Diminishing Balance Methods: Depreciation is charged at a fixed rate on the reducing balance every year.
  • Reserve : Reserve is the amount set aside out of the profit.
  • Provision: Provision is an amount provided for a known liability the amount cannot be determined with accuracy.

• Chapter 8 Bill of Exchange

  Bill of exchange is an instrument in writing containing an unconditional order signed by the maker or to bearer of the instrument.

  Parties: Three parties are given on given

  • Drawer: Drawer is the person who sells the goods on credit, draws the bill and signut.
  • Drawee: Drawee or acceptor is the person who purchases goods on credit, accepts the bill and makes the payment on the due date.
  • Payee: Payee is the person whom payment is made on the due date.

• Chapter 9 Financial Statements - 1

  The financial statements provide a summary of the accounts of a business enterprises the balance sheet reflecting the assets liabilities and capital as on a certain date and income statement showing the result of operations during a certain period. Capital expenditure is an expenditure benefit of which is discussed over a number of years, expenditure shown in the balance sheet. Deferred Revenue expenditure are those expenses whose benefits expand more than one accounting period not as long as capital is expenditure.

• Chapter 10 Financial Statements - 2

  Since final accounts are prepared on an actual basis, this is a need for adjustment. Closing stock is the goods lying unsold at the end of the current accounting period. It is shown in the trading account and assets side of the balance sheet. Such expenses are shown in a profit and loss account and liabilities side of the balance sheet. Prepaid expenses are the expenses which have been paid in advance during the current financial year. Such expenses are shown in the assets side of the balance sheet and deducted from the concerned expenses in trading and profit & loss accounts.

• Chapter 11 Accounts from Incomplete Records

  Accounts from incomplete records, is a system of bookkeeping in which accounting records are not kept according to the double entry principle of bookkeeping; it is called a single entry system. It is a simple method suitable for small businesses and there is no need for the knowledge of principles of book keeping etc. The difference between the opening capital and closing capital profit earned during the year. The difference between opening capital and closing capital is the profit earned during the year.

• Chapter 12 Applications of Computers in Accounting

  A computer is an electronic device, which is capable of performing a variety of operations as directed by a set of instructions. This set of instruments are capable of instrument is instructions is called a computer programme or software. Computer components that can be physically touched such as keyboard, C.P.U, monitor, mouse etc. are known as computer hardware limitations of computer systems include lack of common issue of sense,  lack of own intelligence etc. Components of the computer system are input, central processing unit and output.

• Chapter 13 Computerised Accounting System

  A computerised accounting system (CAS) refers to use of computers in performing accounting function with the help of application softwares i.e. accounting softwares. Need of computerised accounting varies with numerous transactions, instant reporting, flexible reporting reduction is paperwork, on-line facility, accuracy and security etc.