NCERT Solutions for Class 11 Accountancy Chapter 2 Theory Base of Accounting

Accountancy covers different topics like revenues, invoices, matching concepts, money measurement concepts, and transactions. Chapter 2 Theory Base of Accounting, is the second introductory chapter of CBSE Class 11, Accountancy, that includes many fundamental themes and concepts. To help students get acquainted with the concepts explained in the chapter and gauge their learning so far, the NCERT textbook has questions at the end of Chapter 2. Students must attempt every question in the textbook to prepare better for the examination. This is where NCERT Solutions for Class 11 Accountancy Chapter 2 can guide them better.

The solutions have answers to all the textbook questions written in a simple and easy to understand language. Students should refer to the solutions to score higher marks in school and competitive exams.

Class 11 Accountancy NCERT Solutions Chapter 2 Theory Base of Accounting

Access NCERT Solutions for Class 11 Accountancy Chapter 2 – Theory Base of Accounting

NCERT Accountancy Class 11 Solutions

Extramarks as a leading online learning platform has made the NCERT Solutions Class 11 Accountancy Chapter 2 accessible on their official website. With the help of these solutions, students will get an idea of how to answer questions in the right way and score better marks in exams.

What are Accounting Principles?

Accounting principles are the rules and guidelines that accountants of the companies generally follow when recording financial transactions. The rules they follow are called  GAAP (Generally Accepted Accounting Principles). In the U.S., the accounting principles are determined and issued by the Financial Accounting Standards Board (FASB). Accounting standards ensure the improvement of the financial information provided by companies.

These Principles Can Be Classified Into the Following Two Categories

  • Accounting Concepts: Accounting concepts refer to the basic set of rules, guidelines, conditions, and assumptions that interpret the various criterion and limitations of the framework within which accounting works.
  • Accounting Conventions: Accounting conventions refer to rules and guidelines for certain financial transactions that the accounting standards have not completely addressed. They are not legally binding but help the companies in these business transactions.

What Are the Types of Accounting Principles?

The types of accounting principles are given below:

    • Accounting Period Principle: As per this principle, the performance of a business can be analysed regularly in a better way when its period is divided into smaller sections. The profit and loss of the company can then be calculated appropriately. Companies follow an accounting period that extends up to one year, either a financial year or a calendar year.
    • Full Disclosure Principle: According to the full disclosure principle, the material data that contains information about an organisation’s financial status and factors must be included in its financial statements. These financial statements act as a factor that the information is being transferred and not disguised.
    • Verified Objective Concept: The objectivity principle claims that the accounting data of a firm should be accurate and free of personal prejudices or opinions. The data should also include cash receipts, vouchers, invoices, and other evidence to support it. 
    • Money Measurement Principle: A company needs to consider the revenue recognition principle when recording data about its business. During this, the company’s income statement helps determine the revenue.
  • Accounting Entity Principle: A farm is supposed to have its unique existence apart from its owner. Under this principle, a business is an individual, different and separate from its owner.

How are the NCERT Solutions on Extramarks beneficial for students?

The NCERT Solutions on Extramarks are prepared by subject-matter experts who ensure that the solutions are comprehensive and accurate. The NCERT Solutions for Class 11 Chapter 2 Accountancy, have been prepared in such a way that they help students in upgrading their academic performance. The solutions can be referred to by both the students and the teachers. 

Solved Example

Q1. Discuss the meaning of ‘Do not anticipate profits, but provide for all losses’.

A1. The conservatism concept of accounting states that organisations should not anticipate profits, but at the same time, provide for losses. This will help the firm prepare positively for any loss anticipated. This scenario helps a firm deal with an unanticipated situation.  

Fun Fact

  • The co-founder of Nike, Phil Knight, was a Certified Public Accountant CPA).

FAQs (Frequently Asked Questions)

Students can refer to the NCERT textbook and NCERT Solutions for Class 11 Chapter 2 for detailed and authentic answers to the NCERT questions. By preparing relevant questions they can be well prepared for the exam and hence, would perform better.

Financial statements help in making a comparison between the company’s performance with its competitors. If a financial statement is prepared consistently, it will help in assessing the position of a country. Also, it enables comparing the situation of a company under two different periods so that future goals of the company can be determined.