Class 11 Accountancy - Chapter Financial Statements - 2 NCERT Solutions | What adjusting entries would you record

If the rent of one month is still to be paid the adjustment entry will be :

(a) Debit outstanding rent account and Credit rent account.
(b) Debit profit and loss account and Credit rent account.
(c) Debit rent account and Credit profit and loss account.
(d) Debit rent account and Credit outstanding rent account.

State the meaning of:
(a) Outstanding expenses
(b) Prepaid expenses
(c) Income received in advance
(d) Accrued income

Rahul’s trial balance provide you the following information :
Debtors                                      Rs. 80,000
Bad debts                                  Rs. 2,000
Provision for doubtful debts       Rs. 4,000

It is desired to maintain a provision for bad debts of Rs. 1,000
State the amount to be debited/credited in profit and loss account :
(a) Rs. 5,000 (Debit)                 (b) Rs. 3,000 (Debit)
(c) Rs. 1,000 (Credit)                (d) none of these.

If the opening capital is Rs. 50,000 as on April 01, 2016 and additional capital introduced Rs. 10,000 on January 01, 2017. Interest charge on capital 10% p.a. The amount of interest on capital shown in profit and loss account as on March 31, 2017 will be :
  (a) Rs. 5,250                  (b) Rs. 6,000
  (c) Rs. 4,000                  (d) Rs. 3,000

What is meant by closing stock? Show its treatment in final accounts?

If the rent received in advance Rs. 2,000. The adjustment entry will be :

(a) Debit profit and loss account and Credit rent account.
(b) Debit rent account Credit rent received in advance account.
(c) Debit rent received in advance account and Credit rent account.
(d) None of these.

What are adjusting entries? Why are they necessary for preparing final accounts?

If the insurance premium paid Rs. 1,000 and prepaid insurance Rs. 300. The amount of insurance premium shown in profit and loss account will be :

  (a) Rs. 1,300             (b) Rs. 1,000
  (c) Rs. 300                (d) Rs. 700

Give the journal entries for the following adjustments :
(a) Outstanding salary ₹ 3,500.
(b) Rent unpaid for one month at ₹ 6,000 per annum.
(c) Insurance prepaid for a quarter at ₹ 16,000 per annum.
(d) Purchase of furniture costing ₹ 7,000 entered in the purchases book.

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

Name any two types of commonly used negotiable instruments.

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?

State the need for the preparation of bank reconciliation statement?

‘Accounting software is an integral part of the computerised accounting system’ Explain. Briefly list the generic considerations before sourcing an accounting software.

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

Why is it important to adopt a consistent basis for the preparation of financial statements? Explain.

Complete the following sentences with appropriate words:
(a) Information in financial reports is based on .....................
(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 uses the information to make decisions about the business entity.
(f) Information is said to be relevent 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.

Recording of transaction in the Journal is called:
(i) Casting
(ii) Posting
(iii) Journalising
(iv) Recording

A purchase of machine for cash should be debited to:
(i) Cash account
(ii) Machine account
(iii) Purchase account
(iv) None of these

What are ‘provisions’? How are they created? Give accounting treatment in case of provision for doubtful Debts.

What are the possible reasons for keeping incomplete records?

Use of common unit of measurement and common format of reporting promotes;
a. Comparability
b. Understandability
c. Relevance
d. Reliability

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.