Class 11 Accountancy - Chapter Financial Statements - 1 NCERT Solutions | Choose the correct chronological order o

Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure :
(a) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.
(b) Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order.
(c) Registration fees paid at the time of purchase of a building.
(d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four years.
(e) Depreciation charged on a plant.
(f) The expenditure incurred in erecting a platform on which a machine will be fixed.
(g) Advertising expenditure, the benefits of which will last for four years.

What is meant by Grouping and Marshalling of assets and liabilities. Explain the ways in which a balance sheet may be marshalled.

Match the items given under ‘A’ with the correct items under ‘B’
(i) Closing stock is credited to                                                  (a) Trial balance
(ii) Accuracy of book of account is tested by                            (b) Trading account
(iii) On returning the goods to seller, the buyer sends              (c) Credit note
(iv) The financial position is determined by                              (d) Balance sheet
(v) On receiving the returned goods from the                          (e) Debit note
buyer, the seller sends

While calculating operating profit, the following are not taken into account.
(i) Normal transactions
(ii) Abnormal items
(iii) Expenses of a purely financial nature
(iv) (ii) & (iii)
(v) (i) & (iii)

Choose the correct option in the following questions :

The financial statements consist of:
(i) Trial balance
(ii) Profit and loss account
(iii) Balance sheet
(iv) (i) & (iii)
(v) (ii) & (iii)

State True or False :
(i) Gross profit is total revenue.
(ii) In trading and profit and loss account, opening stock appears on the debit side because it forms the part of the cost of sales for the current accounting year.
(iii) Rent, rates and taxes is an example of direct expenses.
(iv) If the total of the credit side of the profit and loss account is more than the total of the debit side, the difference is the net profit.

What are closing entries? Give four examples of closing entries.

Which of the following is correct :
(i) Operating Profit = Operating profit – Non-operating expenses – Non-operating incomes
(ii) Operating profit = Net profit + Non-operating Expenses + Non-operating incomes
(iii) Operating profit = Net profit + Non-operating Expenses – Non-operating incomes
(iv) Operating profit = Net profit – Non-operating Expenses + Non-operating incomes

Explain the concept of cost of goods sold?

What is a balance sheet. What are its characteristics?

Name any two types of commonly used negotiable instruments.

Why is it necessary to record the adjusting entries in the preparation of final accounts?

State the meaning of incomplete records?

What is ‘Depreciation’?

Briefly state how the cash book is both journal and a ledger.

State the meaning of a trial balance?

State the four basic requirements of a database applications.

Define accounting.

State the different elements of a computer system.

Why is it necessary for accountants to assume that business entity will remain a going concern?

Which stakeholder group...                    would be most interested in
_____________________________       (a) the VAT and other tax liabilities of the firm
_____________________________       (b) the potential for pay awards and bouns deals
_____________________________       (c) the ethical or environmental activities of the firm
_____________________________       (d) whether the firm has a long-term future
_____________________________       (e) profitability and share performance
_____________________________       (f) the ability of the firm to carry on providing a
                                                                 service or producing a product.

State what is end product of financial accounting?

Name any two types of commonly used negotiable instruments.

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.

Fill in the Correct Words :

(a) Cash book is a ......... journal.
(b) In Journal proper, only......... discount is recorded.
(c) Return of goods purchased on credit to the suppliers will be entered in ...... Journal.
(d) Assets sold on credit are entered in .........
(e) Double column cash book records transaction relating to ......... and .........
(f) Total of the debit side of cash book is ......... than the credit side.
(g) Cash book does not record the ......... transactions.
(h) In double column cash book ......... transactions are also recorded.
(i) Credit balance shown by a bank column in cash book is .........
(j) The amount paid to the petty cashier at the beginning of a period is known as ......... amount.
(k) In purchase book goods purchased on ......... are recorded.

Choose the Correct Answer :

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.

The periodic total of purchases return journal is posted to :
(i) Purchase account
(ii) Profit and loss account
(iii) Purchase returns account
(iv) Furniture account

State the limitations of trial balance?

As an accountant of a company, you are disappointed to learn that the totals in your new trial balance are not equal. After going through a careful analysis, you have discovered only one error. Specifically, the balance of the Office Equipment account has a debit balance of 15,600 on the trial balance. However, you have figured out that a correctly recorded credit purchase of pendrive for 3,500 was posted from the journal to the ledger with a 3,500 debit to Office Equipment and another 3,500 debit to creditors accounts. Answer each of the following questions and present the amount of any misstatement :

(a) Is the balance of the office equipment account overstated, understated, or correctly stated in the trial balance?
(b) Is the balance of the creditors account overstated, understated, or correctly stated in the trial balance?
(c) Is the debit column total of the trial balance overstated, understated, or correclty stated?
(d) Is the credit column total of the trial balance overstated, understated, or correctly stated?
(e) If the debit column total of the trial balance is 2,40,000 before correcting the error, what is the total of credit column.