Important Questions for CBSE Class 11 Accountancy Chapter 11 – Accounts From Incomplete Records
Important Questions Class 11 Accountancy Chapter 11- Accounts from Incomplete Records
Accountancy is an important subject in Class 11 which will be very useful for any commerce or management courses in future. Many small ventures do not maintain records as per the double bookkeeping system. Chapter 11 of Accounts from Incomplete Records is essential as it deals with the profit or loss ascertainment for ventures that don’t maintain records per the double entry system or otherwise have incomplete records.
Here the students will learn to make the “Statement of Affairs”, understand the difference between a Statement of Affairs and a Balance sheet, and prepare relevant accounts to find the missing information. A great aid to students can be the Important Questions Class 11 Accountancy Chapter 11 provided by Extramarks which can help them brush up on the concepts mentioned above and practise before their examinations.
Extramarks is trusted by students all over the country for providing essential resources that help study, revise, and prepare for examinations. The Important Questions Class 11 Accountancy Chapter 11 is created keeping the recent CBSE syllabus in mind so that students get the most out of their study session.. The subject experts at Extramarks make the questions list from various sources such as NCERT books, reference books, CBSE past years’ papers, etc., so students can rely on these resources for their exam revision.
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Access CBSE Class 11 Accountancy Important Questions and Answers
Class 11 Accountancy Chapter-wise important questions are available for free to students, and these questions are perfect for self-study.
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|CBSE Class 11 Accountancy Important Questions|
|Sr No.||Chapters||Chapters Name|
|1||Chapter 1||Introduction to Accounting|
|2||Chapter 2||Theory Base of Accounting|
|3||Chapter 3||Recording of Transactions – 1|
|4||Chapter 4||Recording of Transactions II (Financial Accounting – I)|
|5||Chapter 5||Bank Reconciliation Statement|
|6||Chapter 6||Trial Balance and Rectification of Errors|
|7||Chapter 7||Depreciation, Provisions & Reserves|
|8||Chapter 8||Bill of Exchange|
|9||Chapter 9||Financial Statements – 1|
|10||Chapter 10||Financial Statements 2|
|11||Chapter 11||Accounts from Incomplete Records|
|12||Chapter 12||Applications of Computers in Accounting|
|13||Chapter 13||Computerised Accounting System|
Important Questions Class 11 Accountancy Chapter 11 with Solutions
Chapter 11 introduces a different approach to ascertaining profit and loss calculations for firms with incomplete records or those that do not follow the double-entry bookkeeping system. For this reason, studying the Important Questions Class 11 Accountancy Chapter 11 is imperative to grasp the essential concepts and practise the practical questions.
Here are some of the Important Questions Class 11 Accountancy Chapter 11 with solutions for student’s revision:
Question 1. A system of accounting which isn’t based on a double entry system is known as-
- cash system
- mahajani system of accounting
- incomplete accounting system
- none of these.
Answer 1: c) incomplete Accounting System.
Explanation: Incomplete accounting system is one in which a single entry system of bookkeeping is used, or the business venture keeps an incomplete account of records.
Question 2. ______ is the statement of assets and liability under the single entry system.
Answer 2: A statement of affairs is the statement of assets and liability under a single entry system.
Question 3. State two accounts maintained from incomplete records.
Answer 3: The two accounts that are kept in the books using incomplete records are:
- Cash account
- Personal Account
Question 4. Trial balance can be prepared from incomplete records. State true or false.
Answer 4: False. As it doesn’t record the accounts of expenses, income, assets, and obligations, it is impossible to produce a trial balance when a venture maintains incomplete records.
Question 5. Distinguish between the statement of affairs and the balance sheet.
Answer 5: The points of distinction between the statement of affairs and balance sheet are below:
|Basis of Difference||Statement of Affairs||Balance Sheet|
|Meaning||It is a statement representing a business entity’s assets, liabilities, and capital based on a single entry system of bookkeeping.||It is a statement of a corporate entity’s assets, liabilities, and capital that is created using the double entry method of bookkeeping.|
|Reliability||It is not reliable as the data is based on estimates.||It proves more reliable as it is created based on a tested data entry method.|
|Accounting Method||Statement of Affairs is prepared from incomplete records.||A balance sheet is prepared from a double entry system of bookkeeping.|
|Accuracy||It shows a less accurate position.||It shows a largely accurate position.|
Question 6. What is meant by the ‘statement of affairs? How can the profit or loss of a venture be ascertained with the help of a statement of affairs?
Answer 6: Statement of Affairs is similar to a Balance Sheet; it is the statement of assets and liabilities of the business enterprise. A statement of affairs differs from a balance sheet because the statement of affairs is prepared based on improper source documents.
The company’s capital is the difference between assets and liabilities (also known as the balancing amount). The statement of affairs format is shown below.
|Statement of Affairs as of|
|Bills Payable||–||Land and Building||–|
|Creditors||–||Plant and Machinery||–|
|Capital (Balancing Figure)@||Stock||–|
|Cash and Bank||–|
|Capital-Deficiency (Balancing Figure, if any)*|
When liabilities exceed assets, the capital deficit is indicated as the balancing figure on the asset side of the statement of affairs. When the balance of assets exceeds the balance of liabilities, capital is shown on the liabilities side of the statement of affairs as the balancing figure.
Suppose the capital, in the beginning, is not provided. In that case, the opening statement of affairs is prepared to determine the capital in the beginning and is used to determine profit or loss.
A Statement of Profit or Loss is created after the opening and closing capital have been calculated. Statement of Profit and Loss helps to identify how much profit or loss is incurred during the accounting period.
|Statement of Profit or Loss for the year ended|
|Closing capital at the end of the year||–|
|Add: Drawings made during the year||–|
|Less: Additional capital introduced during the year||–|
|Adjusted capital at the end of the year||–|
|Less: Capital in the beginning of the year||–|
|Profit (Loss) for the year||–|
Question 7. Explain how the following are calculated from incomplete records:
- Opening capital and closing capital
- Credit sales and credit purchases
- Payments to creditors and collection from debtors
- The closing balance of cash.
- Opening Capital and Closing Capital:
The value of opening capital can be calculated by creating an opening statement of affairs at the beginning of the accounting period. The value of closing capital can be calculated by making a closing statement of affairs.
|Statement of Affairs as of
|Bills Payable||–||Land and Building||–|
|Creditors||–||Plant and Machinery||–|
|Opening Capital (Balancing Figure)*||–||Stock||–|
|Opening Capital (Balancing Figure)*||–|
- Credit Sales & Credit Purchases:
Credit sales are missing from incomplete records. Hence, it is necessary to prepare a total debtor’s account to evaluate it. The total debtor’s account must be reduced by the full sales return, if any. The balancing figure provides the credit sales.
Similarly, preparing a total creditor account is essential to analyse credit purchases. The total amount of creditors’ accounts should be reduced by the total purchase returns. The balance amount represents the credit purchase.
|Total Debtors Account|
|Balance b/d||–||Cash (Cash Received)||–|
|Bills Receivable||–||Bank (Cheque Received)||–|
|(Bill Dishonoured)||Discount Allowed||–|
|Bank (Cheque Dishonoured)||–||Bad Debts||–|
|Credit Sales (Balancing Figure)||–||Sales Returns||–|
|Total Creditors Account|
|Cash Paid||–||Balance b/d||–|
|Bank (Cheque Issued)||–||Bank
|Bills Payable (Bills Accepted)||–||Bills Payable (Bills Dishonoured)||–|
|Discount Received||–||Credit Purchases||–|
|Purchases Returns||–||(Balancing Figure )||–|
- Payment to Creditors and Collection from Debtors:
When determining the payment to creditors, a total creditors account is prepared. The payment to creditors is then determined by subtracting the total amount of purchase returns from the balancing figure, while the total debtors account determines the collection from debtors; the collection from debtors is then determined by subtracting the total amount of sales returns from the balancing figure.
- The closing balance of cash :
Preparing a cash book summary is required to assess the closing cash balance. All receipts from debit and all payments made within that time are also included in the cash book summary, and the balancing figure shows the balance. The total creditor or total debtor accounts are necessary if the amount paid to creditors or collected from debtors is not present.
Question 8. What are the difficulties faced by companies due to incomplete records?
Answer 8: The following are the difficulties the companies face due to incomplete records:
- The accuracy of the accounts cannot be evaluated because a trial balance cannot be derived.
- It is challenging to convince tax authorities that the computation on the record is accurate.
- It is impossible to generate a financial statement from incomplete records.
- Insurance claims are difficult to submit with missing documentation.
Question 9. Manveer started a business on April 01 2016, with a capital amounting to Rs. 4 50,000. On March 31, 2017, his firm’s position was as below :
|Land and Building||1,80,000|
He owed ₹ 45,000 from his friend Susheel on that date. He withdrew ₹ 8,000 per month for household purposes. Ascertain the profit or loss for this year ended March 31, 2017.
|Books of Manveer
Statement of Affairs as of March 31, 2017
|Liabilities||Amount ₹||Assets||Amount ₹|
|Loan from Susheel||45,000||Cash||99,000|
|4,07,000||Land and Building||1,80,000|
|Statement of Profit and Loss as of March 31, 2017|
|Capital on March 31, 2017||4,07,000|
|Add: Drawings during the year (₹ 8,000 × 12)||96,000|
|Less: Capital on April 01, 2016||(4,50,000)|
|Profit during the year 2017||53,000|
Question 10. Mr Arnav doesn’t keep proper records of his business. He provides the following information, and you are required to prepare a statement showing the profit or loss for the year.
|Capital at the beginning of the year||15,00,000|
|Cash in hand||80,000|
|Stock in trade||2,00,000|
|Further capital introduced||3,20,000|
|Drawings made during the period||80,000|
Ascertain the statement of affairs at the beginning and end of the year and calculate the profit or loss.
|Books of Mr. Arnav
Statement of Affairs at the end of year
|Capital (Balance figure)||16,40,000||Cash in Hand||80,000|
|Stock in Trade||2,00,000|
|Statement of Profit and Loss|
|Capital at the end of the year||16,40,000|
|Add: Drawings during the year||80,000|
|Less: Capital at the beginning of the year||(15,00,000)|
|Less: Further capital introduced||(3,20,000)|
|Loss during the year||1,00,000|
Question 11. Calculate the value of profit earned during the period of opening capital is ₹ 50,000, drawings is ₹ 5,000, additional capital introduced during the period is ₹ 20,000, closing capital ₹ 1,00,000.
Add: Drawings during the year
Less: Additional capital introduced during the year
Adjusted capital at the end of year
Less: beginning capital Profit during year
Hence profit at the beginning of the year is Rs. 35000
Question 12. From the following information calculate the amount to be paid to creditors:
|Sundry creditors as of March 31, 2017||1,80,425|
|Bills endorsed to creditors||26,000|
|Creditors as of April 01, 2016||2,09,050|
Answer 12 : The creditors account is as follows:
|Discount Received||26,000||By Balance b/d||1,80,425|
|Return Outwards||37,200||Purchases – credit|
|Bills accepted||1,99,000||(8,97,000 – 1,40,000)||7,57,000|
|B/R (endorsed to creditors)||26,000|
|Cash/Bank (Balancing figure)||4,40,175|
Benefits of Solving Important Questions Class 11 Accountancy Chapter 11
The chapter on Accounts from Incomplete Records deals with the ascertainment of profit and loss for business ventures that do not maintain complete records. This chapter is among the final chapters for Class 11.It teaches students what needs to be done in such a situation. Practising from the list of Important Questions Class 11 Accountancy Chapter 11 will help students gain a good grasp of the chapter, which will help them during their examinations.
Following are the benefits of practising from the Accountancy Class 11 Chapter 11 Important Questions:
- Subject experts prepare the questions and solutions with years of experience in the field of Accountancy; hence the students can trust and rely on the study material.
- The Chapter 11 Class 11 Accountancy Important Questions are created from essential sections of the chapter; practising them will help the students revise the entire chapter for the examination.
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Q.1 Mathew does not maintain his book of accounts properly. Following is the data from records maintained by him:
|Particulars||March 31, 2020 ()||March 31, 2021 ()|
|Income received in advance||1,250||1,600|
|Advance from customers||7,000||81,00|
i. Depreciation machinery by 5% p.a.
ii. Provide a reserve for bad debt @10% on debtors.
iii. Interest of 2,500 is accrued.
iv. There is prepaid insurance of 1,250.
v. Rent and insurance paid during the year were 5,000 and 3,750 respectively.
You are required to prepare the following accounts-
a. Total creditors a/c
b. Bills payable a/c
c. Total debtors a/c
d. Bills receivable a/c
|Dr.||Total creditors account||Cr.|
|Bills payable a/c||2,000||Balance b/d||6,150|
|Balance c/d||10,150||Purchase (b/f)||6,000|
|Dr.||Bills payable account||Cr.|
|Balance c/d||5,000||Balance b/d||3,000|
|Total creditors a/c (b/f)||2,000|
|Dr.||Total Debtors account||Cr.|
|Balance b/d||20,000||Bills receivable a/c||5,000|
|Sales a/c (b/f)||4,000||Balance c/d||19,000|
|Dr.||Bills Receivable account||Cr.|
|Total debtors a/c (b/f)||5,000||Balance c/d||15,000|
Q.2 Under Single Entry System, only one aspect of all transactions is recorded. Is it true or not
No as there are no set rules, for some transactions both the aspects are recorded while for some transactions only one aspect is recorded and some transactions are ignored.
Q.3 Amits capital as on 31st December, 2018 is 37,400 and as on 1st January, 2021 his capital was 38,400. He informs that during the year he withdrew for his household purposes 16,840. He once sold his investment of 4,000 at 2% premium and brought that money into the business. You are required to prepare a statement of profit or loss.
|Statement of Profit or Loss for the year ended 31 Dec., 2021|
|Capital at the end||37,400|
|Add: Drawing during the year||16,840|
|Less: Capital Introduced during the year||4,080|
|Less: Capital at the beginning of the year||38,400|
|Profit for the year||11,760|
FAQs (Frequently Asked Questions)
1. Is Chapter 11 for Class 11 Accountancy important?
Chapter 11 deals with finding the missing information for business ventures that maintain a single-entry system of bookkeeping, hence ascertaining profit and loss. This chapter is essential when it comes to increasing students’ knowledge base. Regular practise of the questions and brushing up on the theoretical concepts can help students achieve good grades in the examinations. To achieve good grades, students can first go through the NCERT books, after which they can refer to various reference books. The Class 11 Accountancy Chapter 11 Important Questions can also greatly aid in studying, revising, and practising the chapter.
2. What are the topics taught under Accounts from Incomplete Records?
Chapter 11 Accounts from Incomplete Records covers the following topics:
- Meaning of incomplete records
- Features of incomplete records
- Reasons for incompleteness and its limitations
- Ascertainment of profit and loss
- Preparing the statement of affairs
- The distinction of the statement of affairs and balance sheet
- Preparing the trading and profit and loss account and the balance sheet
- Ascertaining of the credit purchases
- Ascertainment of the credit sales
- Ascertainment of missing information through the summary of the cost.