Class 11 Accountancy - Chapter Financial Statements - 2 NCERT Solutions | Show the treatment of prepaid expenses d
Show the treatment of prepaid expenses depreciation, closing stock at the time of preparation of final accounts when:
(a) When given inside the trial balance?
(b) When given outside the trial balance?
Treatment of prepaid expenses, depreciation and closing stock at the time of preparing the final account :
(a) When Given Inside the Trial Balance
Prepaid Expenses When prepaid expenses are given in the trial balance itself it will be treated as current assets only and will be posted in the Assets Side of the balance sheet. No further adjustment will be required in this case
Depreciation When depreciation is given in the trial balance it will be treated as an expenditure and will be shown in the debit side of the Profit and Loss Account. No further adjustment will be required in this case.
Closing Stock When closing stock is given in the trial balance it will purely be treated as assets and will be shown only in the Assets Side of the Balance sheet. No further adjustment will be required in this case.
(b) When Given Outside the Trial Balance
Prepaid Expenses When prepaid expenses are given outside the trial balance it will be treated as an Adjustment and will be posted at two places first of all it will be deducted from the concerned expenses in the debit side of Profit and Loss Account and after that it will be treated as current assets and will be posted in the Assets side of the Balance Sheet.
Depreciation When depreciation is given outside the trial balance it will be treated as an adjustment and will be posted at two places to comply with the rules of double entry book keeping system. First of all the amount of depreciation will be shown in the debit side of Profit and Loss account as an expenditure and the amount of depreciation will be deducted from the concerned assets in the assets side of Balance Sheet.
Closing Stock When closing stock is given outside the trial balance It will purely be treated as an adjustment and will be posted at two places first of all the amount of closing stock will be shown at the credit side of Trading Account and after that it will be shown as an assets in the Assets side of the Balance Sheet.
More Questions From Class 11 Accountancy - Chapter Financial Statements - 2
- Q:-
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. - Q:-
What adjusting entries would you record for the following :
(a) Depreciation
(b) Discount on debtors
(c) Interest on capital
(d) Manager’s commission - Q:-
State the meaning of:
(a) Outstanding expenses
(b) Prepaid expenses
(c) Income received in advance
(d) Accrued income - Q:-
Rahul’s trial balance provide you the following information :
Debtors Rs. 80,000
Bad debts Rs. 2,000
Provision for doubtful debts Rs. 4,000It 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. - Q:-
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 - Q:-
What is meant by closing stock? Show its treatment in final accounts?
- Q:-
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. - Q:-
What are adjusting entries? Why are they necessary for preparing final accounts?
- Q:-
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 - Q:-
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.
Popular Questions of Class 11 Accountancy
- Q:-
Name any two types of commonly used negotiable instruments.
- Q:-
State the meaning of incomplete records?
- Q:-
What is ‘Depreciation’?
- Q:-
Briefly state how the cash book is both journal and a ledger.
- Q:-
State the meaning of a trial balance?
- Q:-
State the four basic requirements of a database applications.
- Q:-
Define accounting.
- Q:-
State the different elements of a computer system.
- Q:-
Why is it necessary for accountants to assume that business entity will remain a going concern?
- Q:-
State the need for the preparation of bank reconciliation statement?
Recently Viewed Questions of Class 11 Accountancy
- Q:-
Briefly explain the statement ‘wrongly debited by the bank’ with the help of an example.
- Q:-
What is the primary reason for the business students and others to familiarise themselves with the accounting discipline?
- Q:-
Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.
From the above, answer the following :
1. What is the amount of capital with which Mr. Sunrise started business?
2. What are the fixed assets he bought?
3. What is the value of the goods purchased?
4. Who is the creditor and state the amount payable to him?
5. What are the expenses?
6. What is the gain he earned?
7. What is the loss he incurred?
8. Who is the debtor? What is the amount receivable from him?
9. What is the total amount of expenses and losses incurred?
10. Determine if the following are assets, liabilities, revenues, expenses or none of the these: sales, debtors, creditors, salary to manager, discount to debtors, drawings by the owner. - Q:-
Describe the informational needs of external users.
- Q:-
Write two points of distinction between bills of exchange and promissory note.
- Q:-
If the trial balance agrees, it implies that:
(a) There is no error in the books.
(b) There may be two sided errors in the book.
(c) There may be one sided error in the books.
(d) There may be both two sided and one sided errors in the books. - Q:-
Discuss the concept-based on the premise do not anticipate profits but provide for all losses.
- Q:-
Describe the advantages of sub-dividing the Journal.
- Q:-
State the various essential features of an accounting report.
- Q:-
State any four essential features of bill of exchange.
- All Chapters Of Class 11 Accountancy
- All Subjects Of Class 11