Class 11 Accountancy - Chapter Introduction to Accounting NCERT Solutions | You are a senior accountant of Ramona En

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.

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.

Define accounting and state its objectives.

Enumerate informational needs of management.

'Accounting information should be comparable'. Do you agree with this statement? Give two reasons.

Giving examples, explain each of the following accounting terms:
* Fixed assets              * Revenue              * Expenses
* Gain                           * Profit                    * Capital
* Short-term liabilities

Distinguish between debtors and creditors.

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.

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?

What do you understand by ledger folio?

What kinds of errors would cause differences in the trial balance. Also list examples that would not be revealed by a trial balance?

What are the effects of depreciation on profit and loss account and balance sheet?

Enumerate the steps to ascertain the correct cash book balance.

Distinguish between ‘revenue reserve’ and ‘capital reserve’.

What are special purpose books?

Fill in the blanks:
1. Issued a cheque for ₹8,000 to pay rent. The account to be debited is ............
2. Collected ₹35,000 from debtors. The account to be credited is ............
3. Purchased office stationary for ₹18,000. The account to be credited is ...........
4. Purchased new machine for ₹1,70,000 and issued cheque for the same.
The account to be debited is ............
5. Issued cheque for ₹70,000 to pay off on of the creditors. The account to be debited is ............
6. Returned damaged office stationary and received ₹50,000. The account to be credited is ............
7. Provided services for ₹65,000 on credit. The account to be debited is ...........

What are the steps taken by an accountant to locate the errors in the trial balance?

What is meant by renewal of a bill of exchange?

Complete the following work sheet:
(i) If a firm believes that some of its debtors may ′default′, it should act on this by making sure that all possible losses are recorded in the books. This is an example of the ___________ concept.
(ii) The fact that a business is separate and distinguishable from its owner is best exemplified by the ___________ concept.
(iii) Everything a firm owns, it also owns out to somebody. This co-incidence is explained by the ___________ concept.
(iv) The ___________ concept states that if straight line method of depreciation is used in one year, then it should also be used in the next year.
(v) A firm may hold stock which is heavily in demand. Consequently, the market value of this stock may be increased. Normal accounting procedure is to ignore this because of the ___________.
(vi) If a firm receives an order for goods, it would not be included in the sales figure owing to the ___________.
(vii) The management of a firm is remarkably incompetent, but the firms accountants can not take this into account while preparing book of accounts because of ________ concept.