NCERT Solutions Class 11 Accountancy Chapter 11

NCERT Solutions for Class 11 Accountancy Chapter 11 Accounts from Incomplete Records

The principles in Class 11 Accountancy Chapter 10, ‘Accounts from Incomplete Records,’ must be understood thoroughly to grasp the chapter. Also, students should practice the exercise questions given at the end of the chapter from a revision perspective. 

If you are looking for answers to the questions or want to check if the answer you have written is correct, NCERT Solutions for Class 11 Accountancy Chapter 11 is the right reference material. The subject matter experts at Extramarks have prepared the solutions while ensuring they are correct and written in simple language.

Class 11 Accountancy NCERT Solutions Chapter 11 Accounts from Incomplete Records

Access NCERT Solutions for Class 11 Accountancy Chapter 11- Accounts from Incomplete Records

NCERT Accountancy Class 11 Solutions

The NCERT Solutions Class 11 Accountancy Chapter 11 are great for understanding and solving the problematic sums of accountancy. The solutions have all the answers to the Accountancy Class 11 textbook questions. The solutions are prepared by subject matter experts at Extramarks who ensure that every answer is as per the CBSE guidelines and written in a comprehensive language.

What does accountancy mean?

According to the Oxford English Dictionary, Accountancy is the duties or profession of an accountant. It includes a variety of tasks such as processing and transmitting financial information, measuring, managing detailed financial reports or records, preparing tax documents, and keeping track of the economic resources of a firm. So overall, one can say that accountancy is a term that captures various financial areas of the natural world, which involves compilation, reviewing, and preparing. The principles of accountancy are pretty similar to the concepts of accounting taught to the students at their undergraduate and graduate levels.

As defined by the American Institute of Certified Public Accountants (AICPA), accountancy in terms of accounting is recording, distinguishing, classifying, and summarising terms of money or transactions that have financial aspects. The first accounting step begins with the bookkeepers after recording the financial information. To learn about this topic in detail, you can consider checking out the study materials provided by Extramarks for Class 11 accountancy.

Why is Accountancy Needed?

Accountancy or accounting is not  particularly field or profession-oriented. You can find its requirement in many arenas, be they big or small. Given below are a few reasons why accountancy is needed:

  • An accounting system is required by almost every industry.
  • Accountancy or accounting assists in keeping an organisation and its business well maintained.
  • The evaluation of a business’s overall performance is measured with the help of accounting, and it plays a vital role in this regard.
  • To get your business to reach a proper legal standing within the law, an accounting system is required, which ensures healthy management.
  • Budgeting is a vital step in a business, and it, along with future projections, helps in planning for the upcoming year. Accounting in this matter is needed at large.
  • The decision-making of an organisation or business requires the knowledge of accountancy. Accounting also plays a significant role in dealing with ample funds and complex taxes.

What is the Basis of Accounting?

The time in which several financial transactions are recorded is the basis of accounting. There are two basic methods of tracking income and expenses in accounting. They are:

  • Cash basis: The cash-basis accounting or the cash receipts and disbursements method of accounting is the method through which the revenue is recorded when the cash is received and when the expenses are paid in cash.
  • Accrual basis: The accrual basis method of accounting is the method through which the income items are recorded when earned, and the deductions are recorded when the expenses are incurred and not when the payments are made or received

Conclusion

The questions related to Chapter 11 of Accountancy have been answered in an elaborated form in the NCERT Solutions by Extramarks. Some of the answers also come with relevant examples or drawings to increase the understanding leNCERT Solutions for Class 4vel of students. The subject matter experts at Extramarks have ensured that every answer is prepared as per the CBSE guidelines so that students score higher marks in school and competitive exams.

Solved Example

Q1. Explain the phases of process flow in accounting.

A1. A number of steps are involved in the process flow in accounting. These are:

  • Identification of all business activities or transactions
  • Recording transactions or journal entry
  • Daily record keeping of transactions
  • Ascertaining trial balance
  • Register or activity document
  • Amendment of journal book
  • Updating the financial statements of the firm
  • Closing books or accounts for the respective financial year

Fun Fact

  • The first name recorded in the history of humans is Kushim which belonged to an accountant.
  • Bubblegum was invented by an accountant.

Q.1 State the meaning of incomplete records?

Ans.

Accounting records that are not maintained according to Double entry system are known as Accounts from Incomplete Records or Single Entry System of Accounting.

Q.2 What are the possible reasons for keeping incomplete records?

Ans.

Reasons for incompleteness are:

  • This system can be adopted by people who do not have the proper knowledge of accounting principles.
  • It is an inexpensive mode of maintaining records. Cost involved is low as specialised accountants are not appointed by the organisations.
  • Time consumed in maintaining records is less as only a few books are maintained.
  • It is a convenient mode of maintaining records as the owner may record only important transactions according to the need of the business.

Q.3 Distinguish between statement of affairs and balance sheet.

Ans.

Comparison between Statement of Affairs and Balance Sheet:

Basis Statement of affairs Balance sheet
Reliability It is less reliable as it is prepared from incomplete records. It is more reliable as it is prepared from double entry records.
Objective The objective of preparing statement of affairs is to estimate the balance in capital account on a particular date. The objective of preparing balance sheet is to show the true financial position of an entity on a particular date.
Omission Omission of assets or liabilities cannot be discovered easily. Omissions of assets or liabilities can be discovered easily and can be traced from accounting records.
Accounts and Information In view of incomplete accounts, its preparation is based on limited accounts, calculations, estimates and other information. This is prepared exclusively figures, Balance Sheet is regarded as a reliable statement.

Q.4 What practical difficulties are encountered by a trader due to incompleteness of accounting records?

Ans.

Limitation of Incomplete records are as follows:

  • As double entry system is not followed, a trial balance cannot be prepared and accuracy of accounts cannot be ensured.
  • Correct ascertainment and evaluation of financial result of business operations cannot be made.
  • Analysis of profitability, liquidity and solvency of the business cannot be done. This may cause a problem in raising funds from outsiders and planning future business activities.
  • The owners face great difficulty in filing an insurance claim with an insurance company in case of loss of inventory by fire or theft.

Q.5 What is meant by a ‘statement of affairs’? How can the profit or loss of a trader be ascertained with the help of a statement of affairs?

Ans.

A statement of affairs is a statement of assets and liabilities. Under this method, statements of assets and liabilities as at the beginning and at the end of the relevant accounting period are prepared to ascertain the amount of change in the capital during the period.

Statement of affairs shows assets on one side and the liabilities on the other just as in case of a balance sheet. The difference between the totals of the two sides is the capital.

Once the amount of capital, both at the beginning and at the end is computed with the help of statement of affairs, a statement of profit and loss is prepared to ascertain the exact amount of profit or loss made during the year.

The difference between the opening and closing capital represents its increase or decrease which is to be adjusted for withdrawals made by the owner or any fresh capital introduced by him during the accounting period.

If the net result of above computation is a positive amount, it represents the profit earned during the year. In case the net result is a negative amount, it represents the loss during the year.

Profit or Loss = Capital at end – Capital at beginning + Drawings during the year – Capital introduced during the year.

Q.6 ‘Is it possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts kept by a trader? Do you agree? Explain.

Ans.

The main purpose of any business is to earn profit. To prepare proper trading and profit and loss account and the balance sheet one needs complete information regarding expenses, incomes, assets and liabilities.

This can be done in two ways:

  • Preparing the Statement of Affairs as at the beginning and as at the end of the accounting period called statement of affairs or net worth method.
  • Preparing Trading and profit and loss account and the Balance Sheet by putting the accounting records in proper order called conversion method.

Statement of Affairs Method:

A statement of affairs is a statement of assets and liabilities. Under this method, statements of assets and liabilities as at the beginning and at the end of the relevant accounting period are prepared to ascertain the amount of change in the capital during the period.

Once the amount of capital, both at the beginning and at the end is computed with the help of statement of affairs, a statement of profit and loss is prepared to ascertain the exact amount of profit or loss made during the year.

Conversion method:

Converting the accounts from single entry to double entry is called as conversion method.

The steps involved in converting single entry into double entry are:

  • Prepare cash and bank summary.
  • Prepare Total Debtors Account.
  • Prepare Bills Receivable Account.
  • Prepare Total Creditors Account.
  • Prepare Bills Payable Account.
  • Prepare Stock Account.
  • Prepare Revenue Expenses Account.
  • Prepare Revenue Income Account.
  • Prepare Fixed Asset Account.
  • Prepare Opening Statement of Affairs.
  • Then prepare trading account, profit and loss account and balance sheet from the various information given.

Q.7 Explain how the following may be ascertained from incomplete records.

  1. Opening capital and closing capital.
  2. Credit sales and credit purchases.
  3. Payments to creditors and collection from debtors.
  4. Closing balance of cash.

Ans.

a) Opening capital can be ascertained by preparing a Statement of Affairs at the beginning of the accounting period.

Closing capital can be ascertained by preparing a Statement of Affairs at the end of the accounting period.

The difference between the opening and closing capital represents its increase or decrease which is to be adjusted for withdrawals made by the owner or any fresh capital introduced by him during the accounting period in order to arrive at the amount of profit or loss made during the period.

b) Credit purchases can be ascertained by preparing the total creditors account.

Credit sales can be ascertained from total debtors account, the sales returns should be deducted from gross credit sales to get net credit sales.

c) Payment to creditors and collection from debtors can be ascertained by preparing total creditors and total debtors account

d) Closing balance of cash can be ascertained from the cash book summary.

Q.8 Following information is given below prepare the statement of profit or loss:

  • Capital at the end of the year: 5,00,000
  • Capital in the beginning of the year: 7,50,000.
  • Drawings made during the period: 3,75,000.
  • Additional Capital introduced: 50,000.

Ans.

Statement of Profit or Loss

For the year ended

Particulars
Capital at the end of the year 5,00,000
(+) Drawings during the year 3,75,000
8,75,000
(-) Additional Capital introduced 50,000
8,25,000
(-) Capital at the beginning of the year 7,50,000
Profit made during the year (b/f) 75,000

Q.9 Manveer started his business on April 01, 2016 with a capital of 4,50,000. On March 31, 2017 his position was as under:

  • Cash: 99,000
  • Bills receivable: 75,000
  • Plant: 48,000
  • Land & Building: 1,80,000
  • Furniture: 50,000.

He owned 45,000 from his friend Susheel on that date. He withdrew 8,000 per month for his household purposes. Ascertain his profit or loss for this year ended March 31, 2017.

Ans.

Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Loan from Susheel 45,000 Cash 99,000
Capital Bills Receivable 75,000
(Balancing Figure) 4,07,000 Plant 48,000
Land & Building 1,80,000
Furniture 50,000
4,52,000 4,52,000
Statement of Profit or Loss

For the year ended on 31st March, 2017

Particulars
Capital at the end of the year 4,07,000
(+) Drawings during the year

(8,000 × 12)

96,000
5,03,000
(-) Capital at the beginning of the year 4,50,000
Profit made during the year 53,000

Q.10 From the information given below ascertain the profit for the year:

  • Capital at the beginning of the year: 70,000
  • Additional capital introduced during the year: 17,500
  • Stock: 59,500
  • Sundry debtors: 25,900
  • Business premises: 8,600
  • Machinery: 2,100
  • Sundry creditors: 33,400
  • Drawings made during the year: 26,400

Ans.

Statement of Affairs

As on …

Liabilities Assets
Sundry Creditors 33,400 Stock 59,500
Capital Sundry Debtors 25,900
(Balancing Figure) 62,700 Business Premises 8,600
Machinery 2,100
96,100 96,100
Statement of Profit or Loss

For the year ended

Particulars
Capital at the end of the year 62,700
(+) Drawings during the year 26,400
89,100
(-) Additional Capital introduced during the year 17,500
71,600
(-) Capital at the beginning of the year 70,000
Profit made during the year 1,600

Q.11 From the following information, Calculate Capital at the beginning:

  • Capital at the end of the year: 4,00,000
  • Drawings made during the year: 60,000
  • Fresh capital introduce during the year: 1,00,000
  • Profit of the current year: 80,000

Ans.

Statement of Profit or Loss

For the year ended on 31st March, 2017

Particulars
Capital at the end of the year 4,00,000
(+) Drawings during the year 60,000
4,60,000
(-) fresh Capital introduced during the year 1,00,000
3,60,000
(-) Profit of the Current year 80,000
Capital at the Beginning of the Year 2,80,000

Note:
As per the solution, the opening capital should be of 2,80,000; but, the answer given in the book is 2,60,000.

Q.12 Following information is given below: calculate the closing capital:

Particulars 01/04/2016 31/03/2017
Creditors 5,000 30,000
Bills Payable 10,000 _____
Loan _____ 50,000
Bills Receivable 30,000 50,000
Stock 5,000 30,000
Cash 2,000 20,000

Ans.

Statement of Affairs

As on 1st April, 2016

Liabilities Assets
Creditors 5,000 Bills Receivable 30,000
Bills payable 10,000 Stock 5,000
Capital (b/f) 22,000 Cash 2,000
37,000 37,000
Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Creditors 30,000 Bills Receivable 50,000
Loan 50,000 Stock 30,000
Capital (b/f) 20,000 Cash 20,000
1,00,000 1,00,000
Statement of Profit or Loss

For the year ended on 31st March, 2017

Particulars
Capital at the end of the year 20,000
(-) Capital at the beginning of the year 22,000
Loss during the year 2,000

Q.13 Mrs. Anu started firm with a capital of 4,00,000 on 1st October, 2016. She borrowed from her friends a sum of 1,00,000 @ 10% per annum (interest paid) for business and brought a further amount to capital 75,000 on March 31, 2017, her position was:

Particulars
Cash 30,000
Stock 4,70,000
Debtors 3,50,000
Creditors 3,00,000

She withdrew 8,000 per month for the year. Calculate profit or loss for the year and show your working clearly.

Ans.

Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Creditors 3,00,000 Cash 30,000
Loans from friends 1,00,000 Stock 4,70,000
Capital (bal. figure) 4,50,000 Debtors 3,50,000
8,50,000 8,50,000
Statement of Profit or Loss

For the year ended on 31st March, 2017

Particulars
Capital at the end of the year 4,50,000
(+) Drawings during the year

(8000 × 6)

48,000
4,98,000
(-) Additional Capital introduced 75,000
4,23,000
(-) Capital at the Beginning of the Year 4,00,000
Profit made during the year 2017 23,000

Q.14 Mr. Arnav does not keep proper records of his business he provided following information. You are required to prepare a statement showing the profit or loss for the year.

Particulars
Capital at the beginning 15,00,000
Bills receivable 60,000
Cash in hand 80,000
Furniture 9,00,000
Building 10,00,000
Creditors 6,00,000
Stock in trade 2,00,000
Further capital introduced 3,20,000
Drawings made during the period 80,000

Ans.

Statement of Affairs

As on …….

Liabilities Assets
Creditors 6,00,000 Bills Receivables 60,000
Capital (bal. figure) 16,40,000 Cash in Hand 80,000
Furniture 9,00,000
Buildings 10,00,000
Stock in Trade 2,00,000
22,40,000 22,40,000
Statement of Profit or Loss

At the end of the year

Particulars
Capital at the end of the year 16,40,000
(+) Drawings during the year 80,000
17,20,000
(-) Capital introduced during the year 3,20,000
14,00,000
(-) Capital at the Beginning of the Year 15,00,000
Loss during the year (1,00,000)

Q.15 Mr. Akshat keeps his books on incomplete records following information is given below:

Particulars 01/04/2016 31/03/2017
Cash in hand 1,000 1,500
Cash at bank 15,000 10,000
Stock 1,00,000 95,000
Debtors 42,500 70,000
Business premises 75,000 1,35,000
Furniture 9,000 7,500
Creditors 66,000 87,000
Bills payable 44,000 58,000

During the year he withdrew 45,000 and introduced 25,000 as further capital in the business compute the profit or loss of the business.

Ans.

Statement of Affairs

As on 1st April, 2016

Liabilities Assets
Creditors 66,000 Cash in Hand 1,000
Bills Payable 44,000 Cash at bank 15,000
Capital (Bal. figure) 1,32,500 Stock 1,00,000
Debtors 42,500
Business Premises 75,000
Furniture 9,000
2,42,500 2,42,500
Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Creditors 87,000 Cash in Hand 1,500
Bills Payable 58,000 Cash at bank 10,000
Capital (Bal. figure) 1,74,000 Stock 95,000
Debtors 70,000
Business Premises 1,35,000
Furniture 7,500
3,19,000 3,19,000
Statement of Profit or Loss

For the year 31 March 2017

Particulars
Capital at the end of the year 31/03/2017 1,74,000
(+) Drawings during the year 45,000
2,19,000
(-) Additional capital introduced 25,000
1,94,000
(-) Capital at the Beginning of the Year

01/04/2016

1,32,500
Profit earned during the year 61,500

Q.16 Gopal does not keep proper books of account. Following information is given below:

Particulars 01/04/2016 31/03/2017
Cash in hand 18,000 12,000
Cash at bank 1,500 2,000
Stock in trade 80,000 90,000
Sundry debtors 36,000 60,000
Sundry Creditors 60,000 40,000
Loan 10,000 8,000
Office equipments 25,000 30,000
Land & Buildings 30,000 20,000
Furniture 10,000 10,000

During the year he introduced 20,000 and withdrew 12,000 from the business. Prepare the statement of profit or loss on the basis of given information.

Ans.

Statement of Affairs

As on 1st April, 2016

Liabilities Assets
Sundry Creditors 60,000 Cash in Hand 18,000
Loan 10,000 Cash at bank 1,500
Capital (Bal. figure) 1,30,500 Stock in trade 80,000
Sundry Debtors 36,000
Office Equipments 25,000
Land & Building 30,000
Furniture 10,000
2,00,500 2,00,500
Statement of Affairs

As on 31st March , 2017

Liabilities Assets
Sundry Creditors 40,000 Cash in Hand 12,000
Loan 8,000 Cash at bank 2,000
Capital (Bal. figure) 1,76,000 Stock in trade 90,000
Sundry Debtors 60,000
Office Equipments 30,000
Land & Building 20,000
Furniture 10,000
2,24,000 2,24,000
Statement of Profit or Loss

For the year 2017

Particulars
Capital at the end of the year 31/03/2017 1,76,000
(+) Drawings during the year 12,000
1,88,000
(-) Additional capital introduced 20,000
1,68,000
(-) Capital at the Beginning of the Year

01/04/2016

1,30,500
Profit earned during the year 37,500

Note: As per the solution, the profit earned for the year 2017 should be 37,500; whereas, in the text book, the profit earned is 53,500.

Q.17 Mr. Muneesh maintains his books of accounts from incomplete records. His books provide the information:

Particulars 01/04/2016 31/03/2017
Cash 1,200 1,600
Bills receivable _____ 2,400
Debtors 16,800 27,200
Stock 22,400 24,400
Investment _____ 8,000
Furniture 7,500 8,000
Creditors 14,000 15,200

He withdrew 300 per month for personal expenses. He sold his investment of 16,000 at 2% premium and introduced that amount into business.

Ans.

Statement of Affairs

As on 1st April, 2016

Liabilities Assets
Creditors 14,000 Cash 1,200
Capital (Bal. figure) 33.900 Debtors 16,800
Stock 22,400
Furniture 7,500
47,900 47,900
Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Creditors 15,200 Cash 1,600
Capital (Bal. figure) 56,400 Bills Receivable 2,400
Debtors 27,200
Stock 24,400
Investment 8,000
Furniture 8,000
71,600 71,600
Statement of Profit or Loss

For the year 2017

Particulars
Capital at the end of the year 31/03/2017 56,400
(+) Drawings during the year (300 x 12) 3,600
60,000
(-) Additional capital introduced 16,320
43,680
(-) Capital at the Beginning of the Year

01/04/2016

33,900
Profit earned during the year 9,780

Working Note:
Additional capital introduced during the year:
16,000 + 2% = 16,320
Because investment were sold at 2% profit and the same introduced in the business.

Q.18 Mr. Girdhari Lal does not keep full double entry records. His balance as on April 01, 2016 is as:

Liabilities Assets
Sundry creditors 35,000 Cash in hand 5,000
Bills payable 15,000 Cash at bank 20,000
Capital 40,000 Sundry debtors 18,000
Stock 22,000
Furniture 8,000
Plant 17,000
90,000 90,000

His position at the end of the year is:

Particulars
Cash in hand 7,000
Stock 8,600
Debtors 23,800
furniture 15,000
Plant 20,350
Bills payable 20,200
Creditors 15,000

He withdrew 500 per month out of which to spent 1,500 for business purpose. Prepare the statement of profit or loss.

Ans.

Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Bills Payable 20,200 Cash in hand 7,000
Creditors 15,000 Stock 8,600
Capital (Bal. figure) 39,550 Debtors 23,800
Furniture 15,000
Plant 20,350
74,750 74,750
Statement of Profit or Loss

For the year 2017

Particulars
Capital at the end of the year 31/03/2017 39,550
(+) Drawings during the year (500 x 12) 6,000
45,550
(-) Additional capital introduced 1,500
44,050
(-) Capital at the Beginning of the Year

01/04/2016

40,000
Profit earned during the year 4,050

Q.19 Mr. Ashok does not keep his books properly. Following information is available from his books.

Particulars 01/04/2016 31/03/2017
Sundry creditors 45,000 93,000
Loan from wife 66,000 57,000
Sundry debtors 22,500 _____
Land & Building 89,600 90,000
Cash in hand 7,500 8,700
Bank overdraft 25,000 _____
Furniture 1,300 1,300
Stock 34,000 25,000

During the year Mr. Ashok sold his private car for 50,000 and invested this amount into the business. He withdrew from the business 1,500 per month up to October 31, 2016 and thereafter 4,500 per month as drawings.

You are required to prepare the statement of profit or loss and statement of affair as on March 31, 2017.

Ans.

Statement of Affairs

As on 1st April, 2016

Liabilities Assets
Sundry Creditors 45,000 Sundry Debtors 22,500
Loan from wife 66,000 Land & Buildings 89,600
Bank Overdraft 25,000 Cash in Hand 7,500
Capital (Bal. figure) 18,900 Furniture 1,300
Stock 34,000
1,54,900 1,54,900
Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Sundry Creditors 93,000 Land & Buildings 90,000
Loan from Wife 57,000 Cash in Hand 8,700
Furniture 1,300
Stock 25,000
Capital (Bal. figure) 25,000
1,50,000 1,50,000
Statement of Profit or Loss

For the year 2017

Particulars
Capital at the end of the year 31/03/2017 (25,000)
(+) Drawings during the year

(1500 × 7 months = 10,500)

(4,500 × 5 months = 22,500)

33,000
(8,000)
(-) Additional capital introduced (50,000)
(42,000)
(-) Capital at the Beginning of the Year

01/04/2016

(18,900)
Profit earned during the year (60,900)

Note: As per the solution, the loss incurred during the year 2017 is 60,900, whereas the loss given in the book shows 57,900.

Q.20 Krishna Kulkarni has not kept proper books of accounts prepare the statement of profit or loss for the year ending March 31, 2017 from the following information.

Particulars 01/04/2016 31/03/2017
Cash in hand 10,000 36,000
Debtors 20,000 80,000
Creditors 10,000 46,000
Bills receivable 20,000 24,000
Bills Payable 4,000 42,000
Car _____ 80,000
Stock 40,000 30,000
Furniture 8,000 48,000
Investment 40,000 50,000
Bank balance 1,00,000 90,000

The following adjustments were made:

  1. Krishna withdrew cash 5,000 per month for private use.
  2. Depreciation @ 5% on car and furniture @ 10%.
  3. Outstanding Rent 6,000.
  4. Fresh Capital introduced during the year 30,000.

Ans.

Statement of Affairs

As on 1st April, 2016

Liabilities Assets
Creditors 10,000 Cash in hand 10,000
Bills Payable 4,000 Debtors 20,000
Capital (Bal. figure) 2,24,000 Bills Receivable 20,000
Stock 40,000
Furniture 8,000
Investment 40,000
Cash at Bank 1,00,000
2,38,000 2,38,000
Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Creditors 46,000 Cash in Hand 36,000
Bills Payable 42,000 Debtors 80,000
Outstanding Expenses 6,000 Bills Receivable 24,000
Capital (Bal. figure) 3,35,200 Car 80,000
(-) Dep. @5% 4,000 76,000
Furniture 48,000
(-) Dep @10% 4,800 43,200
Investment 50,000
Cash at Bank 90,000
Stock 30,000
4,29,200 4,29,200
Statement of Profit or Loss

For the year 2017

Particulars
Capital at the end of the year 31/03/2017 3,35,200
(+) Drawings during the year

(5,000 × 12 months)

60,000
3,95,200
(-) Fresh capital introduced 30,000
3,65,200
(-) Capital at the Beginning of the Year

01/04/2016

2,24,000
Profit earned during the year 1,41,200

Q.21 M/s Saniya Sports Equipment does not keep proper records. From the following information find out profit or loss and also prepare balance sheet for the year ended March 31, 2017:

Particulars 31/03/2016 31/03/2017
Cash in hand 6,000 24,000
Bank overdraft 30,000 _____
Stock 50,000 80,000
Sundry Creditors 26,000 40,000
Sundry Debtors 60,000 1,40,000
Bills Payable 6,000 12,000
Furniture 40,000 60,000
Bills Receivable 8,000 28,000
Machinery 50,000 1,00,000
Investment 30,000 80,000

Drawing 10,000 per month for personal use, fresh capital introduce during the year 2,00,000. A bad debts of 2,000 and a provision of 5% is to be made on debtors, outstanding salary 2,400, prepaid insurance 700, depreciation charged on furniture and machine @ 10% p.a.

Ans.

Statement of Affairs

As on 31st March, 2016

Liabilities Assets
Bank Overdraft 30,000 Cash in hand 6,000
Sundry Creditors 26,000 Stock 50,000
Bills Payable 6,000 Sundry Debtors 60,000
Capital (Bal. figure) 1,82,000 Furniture 40,000
Bills Receivables 8,000
Machinery 50,000
Investment 30,000
2,44,000 2,44,000
Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Sundry Creditors 40,000 Cash in Hand 24,000
Bills Payable 12,000 Stock 80,000
Outstanding Salary 2,400 Debtors 1,40,000
Capital (Bal. figure) 4,33,400 (-) Bad debts 2,000
1,38,000
(-) Prov. @5% 6,900 1,31,100
Furniture 60,000
(-) Dep. 6,000 54,000
Machinery 1,00,000
(-) Dep@10% 10,000 90,000
Bills Receivables 28,000
Investment 80,000
Prepaid Insurance 700
4,87,800 4,87,800
Statement of Profit or Loss

For the year 31st March, 2017

Particulars
Capital at the end of the year 31/03/2017 4,33,400
(+) Drawings during the year

(10,000 x 12 months)

1,20,000
5,53,400
(-) Fresh capital introduced (2,00,000)
3,53,400
(-) Capital at the Beginning of the Year

01/04/2016

(1,82,000)
Profit earned during the year 1,71,400

Note: As per the solution, the statement of affair with adjustment is 4,87,800; while, as per the book, the adjustment is 4,87,700.

Q.22 From the following information calculate the amount to be paid to creditors:

Particulars
Sundry Creditors as on March 31, 2017 1,80,425
Discount received 26,000
Discount allowed 24,000
Return outwards 37,200
Return inward 32,200
Bills accepted 1,99,000
Bills endorsed to creditors 26,000
Creditors as on April 01, 2016 2,09,050
Total purchases 8,97,000
Cash purchases 1,40,000

Ans.

Sundry Creditors Account
Dt. Particulars Dt. Particulars
2017
To Discount Received 26,000 Mar 31 By Balance b/d 1,80,425
To Return Outwards 37,200 By Purchase

(Credit)

7,57,000
To Bills accepted 1,99,000
To Bills endorsed to creditors (b/r) 26,000
To Creditors as on April 01, 2016 2,09,050
To Balance c/d 4,40,175
9,37,425 9,37,425

Working Note:

Credit purchase = Total purchase – Cash purchase

Credit purchase = (8,97,000 – 1,40,000) = 7,57,000

Amount paid to Creditors = 4,40,175

Q.23 Find out the credit purchases from the following:

Particulars
Balance of creditors April 01, 2016 45,000
Balance of creditors March 31, 2017 36,000
Cash paid to creditors 1,80,000
Cheque issued to creditors 60,000
Cash purchases 75,000
Discount received from creditors 5,400
Discount allowed 5,000
Bills payable given to creditors 12,750
Return outwards 7,500
Bills payable dishonoured 3,000
Bills receivable endorsed to creditors 4,500
Bills receivable endorsed to creditors dishonoured 1,800
Return inwards 3,700

Ans.

Sundry Creditors Account
Dt. Particulars Dt. Particulars
To Cash 1,80,000 2016
To Bank (Cheque) 60,000 Apr 1 By Balance b/d 45,000
To Discount received 5,400 By Bills Payable

(Dishonoured)

3,000
To Bills Payable

(Accepted)

12,750 By Bills Receivable

(Endorsed Dishonoured)

1,800
To Return Outward 7,500 By Purchase

(Credit B/f)

2,56,350
To Bills Receivable

(Endorsed to creditors)

4,500
To balance c/d 36,000
3,06,150 3,06,150

Credit purchases for the year 2017 is 2,56,350.

Q.24 From the following information calculate total purchases:

Particulars
Creditors Apr 01, 2016 30,000
Creditors Mar 31, 2017 20,000
Opening balance of bills payable 25,000
Closing balance of bills payable 35,000
Cash paid to creditors 1,51,000
Bills discharged 44,500
Cash purchases 1,29,000
Return outwards 6,000

Ans.

Sundry Creditors Account
Dt. Particulars Dt. Particulars
2016
To Cash 1,51,000 Apr 1 By Balance b/d 30,000
To Bills Payable 54,500 By Purchase

(net) (b/f)

2,01,500
To Return Outwards 6,000
To Balance c/d 20,000
2,31,500 2,31,500
Bills Payable Account
Dt. Particulars Dt. Particulars
2017
To Cash 44,500 By Balance b/d 25,000
Mar 31 To Balance c/d 35,000 By Creditors 54,500
(Bills Payable)
(Bal. Figure)
79,500 79,500

Total Purchases = Cash Purchase + Credit Purchases

Hence, Total Purchases will be:

1,29,000 + 2,01,500 = 3,30,500

Q.25 The following information is given:

Particulars
Opening creditors 60,000
Cash paid to creditors 30,000
Closing creditors 36,000
Returns inward 13,000
Bills matured 27,000
Bill dishonoured 8,000
Purchases return 12,000
Discount allowed 5,000

Calculate credit purchases during the year.

Ans.

Creditors Account
Dt. Particulars Dt. Particulars
To Cash A/c 30,000 By Balance b/d 60,000
To Purchase Return A/c 12,000 By Bills Payable

(dishonoured)

8,000
To Bills Payable (Accepted) 27,000 By Purchase (Credit) (Bal. figure) 37,000
To Balance c/d 36,000
1,05,000 1,05,000

Q.26 From the following calculate the amount of bills accepted during the year.

Particulars
Bills payable as on Apr 01, 2016 1,80,000
Bills payable as on March 31, 2017 2,20,000
Bills payable dishonoured during the year 28,000
Bills payable honoured during the year 50,000

Ans.

Bills Payable Account
Dt. Particulars Dt. Particulars
2016
To Creditors Apr 1 By Balance b/d 1,80,000
(Bills Payable Dishonoured) 28,000 By Creditors
To Cash Bank (Bills Payable) 1,18,000
(Bills Payable paid) 50,000 (Bal. Figure)
To Balance c/d 2,20,000
2,98,000 2,98,000

Bills accepted during the year is 1,18,000.

Q.27 Find out the amount of bills matured during the year on the basis of information given below:

Particulars
Bills payable dishonoured 37,000
Closing balance of bills payable 85,000
Opening balance of Bills payable 70,000
Bills payable accepted 90,000
Cheque dishonoured 23,000

Ans.

Bills Payable Account
Dt. Particulars Dt. Particulars
To Creditors

(Bills Dishonoured)

37,000 By Balance b/d 70,000
To Balance c/d 85,000 By Creditors

(Bills Payable)

90,000
To Cash/Bank (Bal. figure) 38,000
1,60,000 1,60,000

The amount of bills matured during the year is 38,000.

Q.28 Prepare the bills payable account from the following and find out missing figure if any:

Particulars
Bills accepted 1,05,000
Discount received 17,000
Purchases returns 9,000
Return inwards 12,000
Cash paid to accounts payable 50,000
Bills receivable endorsed to creditor 45,000
Bills dishonoured 17,000
Bad debts 14,000
Balance of accounts payable (Closing) 85,000
Credit purchases 2,15,000

Ans.

Bills Payable Account
Dt. Particulars Dt. Particulars
To Creditors

(Bills Dishonored)

17,000 By Creditors

(Acceptance)

1,05,000
To Cash/ Bank

(Bal. figure)

88,000
1,05,000 1,05,000
Creditors Account
Dt. Particulars Dt. Particulars
To Discount Received 17,000 By Purchases (Credit) 2,15,000
To purchase Return 9,000 By Bills Payable

(Dishonored)

17,000
To Cash A/c 50,000 By Balance b/d

(Bal. figure)

79,000
To Bills Receivable 45,000
To Bills Payable

(Acceptance)

1,05,000
To Balance c/d 85,000
3,11,000 3,11,000

Opening Balance of creditors is 79,000

Q.29 Calculate the amount of bills receivable during the year.

Particulars
Opening balance of bills receivable 75,000
Bills dishonoured 25,000
Bills collected (honoured) 1,30,000
Bills receivable endorsed to creditors 15,000
Closing balance of bills receivable 65,000

Ans.

Bills Receivable Account
Dt. Particulars Dt. Particulars
To Balance b/d 75,000 By Debtors

(Bill dishonoured)

25,000
To Debtors

(Bills Receivable Acceptance) b/f

1.60,000 By Cash/Bank

(Bills honoured)

1,30,000
By Bills Endorsed 15,000
By Balance c/d 65,000
2,35,000 2,35,000

Bills receivable received from debtors is 1,60,000.

Q.30 Calculate the amount of bills receivable dishonoured from the following information:

Particulars
Opening balance of bills receivable 1,20,000
Bills collected (honoured) 1,85,000
Bills receivable endorsed 22,800
Closing balance of bills receivable 50,700
Bills receivable received 1,50,000

Ans.

Bills Receivable Account
Dt. Particulars Dt. Particulars
To Balance b/d 1,20,000 By Cash/Bank

(Bills honoured)

1,85,000
To Debtors

(Bills Received)

1,50,000 By Bills Endorsed (Creditors) 22,800
By Debtors

(Bill dishonored) b/f

11,500
By Balance c/d 50,700
2,70,000 2,70,000

The amount of Bills Receivable dishonoured is 11,500.

Q.31 From the details given below. Find out the credit sales and total sales.

Particulars
Opening debtors 45,000
Closing debtors 56,000
Discount allowed 2,500
Sales returns 8,500
Irrecoverable amount 4,000
Bills receivable received 12,000
Bills receivable dishonoured 3,000
Cheque dishonoured 7,700
Cash sales 80,000
Cash received from debtors 2,30,000
Cheque received from debtors 25,000

Ans.

Debtor’s Account
Dt. Particulars Dt. Particulars
To Balance b/d 45,000 By Discount Allowed 2,500
To Bills Receivable

(dishonoured)

3,000 By Sales Return 8,500
To Bank

(Cheque dishonoured)

7,700 By Bad debts 4,000
To Sales (b/f) 2,82,300 By Bills Receivable 12,000
By Cash 2,30,000
By Bank

(Cheque Received)

25,000
By Balance c/d 56,000
3,38,000 3,38,000

Total Sales = Cash Sales + Credit Sales

Total Sales = 80,000 + 2,82,300 = 3,62,300

Q.32 From the following information, prepare the bills receivable account and total debtors account for the year ended March 31, 2017.

Particulars
Opening balance of debtors 1,80,000
Opening balance of bills receivable 55,000
Cash sales made during the year 95,000
Credit sales made during the year 14,50,000
Return inwards 78,000
Cash received from debtors 10,25,000
Discount allowed to debtors 55,000
Bills receivable endorsed to creditors 60,000
Cash received (bills matured) 80,500
Irrecoverable amount 10,000
Closing balance of bills receivable on March 31, 2017 75,500

Ans.

Debtor’s Account
Dt. Particulars Dt. Particulars
To Balance b/d 1,80,000 By Return Inwards 78,000
To Sales (Credit) 14,50,000 By Discount allowed 55,000
By Cash 10,25,000
By Bad debts 10,000
By Bills Receivable

(Acceptance received)

1,61,000
By Balance c/d

(Bal. figure)

3,01,000
16,30,000 16,30,000
Bills Receivable Account
Dt. Particulars Dt. Particulars
To Balance b/d 55,000 By Cash/Bank 80,500
To Debtors

(Acceptance received) b/f

1,61,000 By Creditors

(Endorsed)

60,000
By Balance c/d 75,500
2,16,000 2,16,000

Q.33 Prepare the suitable accounts and find out the missing figure if any:

Particulars
Opening balance of debtors 14,00,000
Opening balance of bills receivable 7,00,000
Closing balance of bills receivable 3,50,000
Cheque dishonoured 27,000
Cash received from debtors 10,75,000
Cheque received and deposited in the bank 8,25,000
Discount allowed 37,500
Irrecoverable amount 17,500
Returns inwards 28,000
Bills receivable received from customers 1,05,000
Bills receivable matured 2,80,000
Bills discounted 65,000
Bills endorsed to creditors 70,000

Ans.

Debtor’s Account
Dt. Particulars Dt. Particulars
To Balance b/d 14,00,000 By Cash 10,75,000
To Bank

(Cheque dishonoured)

27,000 By Bank

(Cheque)

8,25,000
To Bills Receivable

(dishonoured)

40,000 By Bad debts 17,500
To Sales

(Credit) b/f

6,21,000 By Return Inwards 28,000
By Discount allowed 37,500
By Bills receivable 1,05,000
20,88,000 20,88,000
Bills Receivable Account
Dt. Particulars Dt. Particulars
To Balance b/d 7,00,000 By Cash

(B/R matured)

2,80,000
To Debtors

(Bills Receivable)

1,05,000 By Bank

(Bill endorsed)

65,000
By Creditors

(endorsed)

70,000
By Debtors

(dishonoured) b/f

40,000
By Balance c/d 3,50,000
8,05,000 8,05,000

Note: As per solution, the missing figure in the bills receivable account is B/R dishonoured of 40,000. The credit sales is 6,21,000, however, the NCERT book shows a credit sales 5,16,000.

Q.34 Mrs. Bhavana keeps her books by Single Entry System. You are required to prepare final accounts of her business for the year ended March 31, 2017. Her records relating to cash receipts and cash payments for the above period showed the following particulars:

Dr. Summary of Cash Cr.
Receipts Payments
Opening balance of cash 12,000 Paid to creditors 53,000
Further capital 20,000 Business expenses 12,000
Received from debtors 1,20,000 Wages paid 30,000
Bhavana’s drawings 15,000
Balance at bank on Mar 31, 2017 35,000
Cash in hand 7,000
1,52,000 1,52,000

The following information is also available:

Particulars 01/04/2016 31/03/2017
Debtors 55,000 85,000
Creditors 22,000 29,000
Stock 35,000 70,000
Plant 10,00,000 1,00,000
Machinery 50,000 50,000
Land & Buildings 2,50,000 2,50,000
Investment 20,000 20,000

All her sales and purchases were on credit. Provide depreciation on plant and building by 10% and machinery by 5%. Make a provision for bad debts by 5%.

Ans.

Debtor’s Account
Dt. Particulars Dt. Particulars
2016 2017
Apr 1 To Balance b/d 55,000 By Cash A/c 1,20,000
To Sales (Credit) 1,50,000 Mar 31 By Balance b/d 85,000
2,05,000 2,05,000
Creditor’s Account
Dt. Particulars Dt. Particulars
2017 2016
To Cash A/c 53,000 Apr 1 By Balance b/d 22,000
Mar 31 To Balance c/d 29,000 By Purchase

(Credit) b/f

60,000
82,000 82,000
Statement of Affairs

As on 31st March, 2017

Liabilities Assets
Creditors 22,000 Debtors 55,000
Capital at beginning 5,00,000 Stock 35,000
(Bal. Figure) Plant 1,00,000
Machinery 50,000
Land & Building 2,50,000
Investment 20,000
Cash 12,000
5,22,000 5,22,000
Trading & Profit & Loss Account

As on 31st March, 2017

Particulars Particulars
To Opening Stock 35,000 By Sales 1,50,000
To purchases 60,000 By Closing Stock 70,000
To Wages 30,000
To Gross Profit c/d

(Bal. figure)

95,000
2,20,000 2,20,000
To Business Expenses 12,000 By Gross Profit b/d 95,000
To Provision for Doubtful Debts 4,250
To Depreciation
On Plant 10,000
On Building 25,000
On Machinery 2,500 37,500
To Net Profit (b/f) 41,250
95,000 95,000
Balance Sheet

As on 31st March, 2017

Liabilities Assets
Capital 5,00,000 Cash in Hand 7,000
(+) Net profit 41,250 Cash at Bank 35,000
5,41,250 Investment 20,000
(+) Further Capital 20,000 Debtors 85,000
5,61,250 (-) Provision@5% 4,250 80,750
(-)Drawings 15,000 5,46,250 Plant 1,00,000
Creditors 29,000 (-) Dep. @10% 10,000 90,000
Machinery 50,000
(-) Dep @5% 2,500 47,500
Land & Building 2,50,000
(-) Dep.

@10%

25,000 2,25,000
Closing Stock 70,000
5,75,250 5,75,250

Q.35 From the following information ascertain the opening balance of sundry debtors and closing balance of sundry creditors:

Particulars
Opening stock 30,000
Closing stock 25,000
Opening creditors 50,000
Closing debtors 75,000
Discount allowed by creditors 1,500
Discount allowed to customers 2,500
Cash paid to creditors 1,35,000
Bills payable accepted during the period 30,000
Bills receivable received during the period 75,000
Cash received from customers 2,20,000
Bills receivable dishonored 3,500
Purchases 2,95,000

The rate of gross profit is 25% on selling price and out of the total sales 85,000 was for cash sales.

Ans.

Debtor’s Account
Dt. Particulars Dt. Particulars
To Balance b/d 54,000 By Discount Allowed 2,500
To Bills Receivable

(dishonoured)

3,500 By Bills Receivable

(Received)

75,000
To Sales Credit 3,15,000 By Cash 2,20,000
By Balance c/d 75,000
3,72,500 3,72,500
Creditor’s Account
Dt. Particulars Dt. Particulars
To Discount Received 1,500 By Balance b/d 50,000
To Cash A/c 1,35,000 By Purchases

(Credit)

2,95,000
To Bills Receivable

(Acceptance)

30,000
To Balance c/d

(Bal. figure)

1,78,500
3,45,000 3,45,000

Working Note:

Computation of Credit Sales:

Sales = Cost of goods sold + Gross Profit

Cost of goods sold = Opening stock + Purchases – Closing stock

= 30,000 + 2,95,000 – 25,000

= 3,00,000

When the cost of goods sold is 3,00,000.

Sales will be = 3,00,000 + 25% Gross profit

Gross profit is calculated on sales hence to calculate it on cost of goods sold, the formula will be:= Cost of goods sold × 2510025= 3,00,000 × 2575= 1,00,000Total Sales = 3,00,000 + 1,00,000 = 4,00,000

As we know that cash sales is 85,000. So credit sales will be: = 4,00,000 – 85,000 = 3,15,000

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FAQs (Frequently Asked Questions)

1. What is accountancy with regards to Class 11 Accountancy Chapter 11?

Accountancy is considered both the subject of science and the subject of arts involving business activities. It is the structural procedure associated with a business involving the aspects of financial gain or loss. 

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The incomplete records are those records for which the balance sheet is missing. In this accounting practise, a significantly less amount of the company’s financial activities are recorded.