NCERT Solutions Class 11 Accountancy Chapter 9

NCERT Solutions for Class 11 Accountancy Chapter 9 Financial Statements – 1

NCERT Solutions are a reliable reference material for students who need help with solving the practise questions given at the end of Class 11 Accountancy Chapter 9 Financial Statements 1. Extramarks provides NCERT Solutions for Class 11 Accountancy Chapter 9 to aid students in finding the right answers and scoring high marks in exams.

Class 11 Accountancy NCERT Solutions Chapter 9 Financial Statements 1

NCERT Accountancy Class 11 Solutions

The NCERT solutions are prepared by subject experts, who have years of experience in their respective fields. The solutions are written in a simple and comprehensive manner while ensuring that they provide accurate information to the students. Additionally, NCERT Accountancy Class 11 Chapter 9 Solutions are prepared as per guidelines by the CBSE.

What are financial statements? What are the objectives of financial statements?

Financial statement depicts information related to accounting and finance. It is one of the crucial chapters for any accounting student. The statements are used for communication with external shareholders by a company’s administration. Also, it concerns many other people who are involved in the business, including stakeholders, investors, creditors, tax authorities, etc. 

Financial statements need to incorporate various reports that include:

  • Income sheet
  • Balance sheet
  • Profit and loss statement
  • Statement of cash flow

Few Objectives of Financial Statements

Decision-making ability: It’s crucial to have decision-making ability, especially in the business field. Hence, the financial statement is one thing that mainly helps the organisation wherever they need to make necessary decisions or employ strategies.

Recording: Indeed, regularly recording and summarising various business transactions is the primary objective of financial statements. For every business, keeping track of financial transactions is necessary.

Planning: Making plans before setting up anything in business is vital. If you prepare financial statements, you would genuinely get help determining various financial situations. Also, these methods would help you take necessary actions that would  be helpful for business growth.

Accountability: Using Financial Statements, one could create credibility in the business that would greatly help determine an organisation’s performance over the years. 

What is a balance sheet? What are the features of a balance sheet?

Many might confuse a balance sheet with a  profit and loss account, which is not true. Fortunately, it is such a statement that entirely comprises books with various business and personal account balances. One prepares a balance sheet to maintain an organisation’s liabilities and capital assets properly.

Interestingly, the primary purpose behind preparing these sheets is to depict such a financial situation that’s fair and accurate for an organisation. Each business needs to prepare a balance sheet on a specific date, especially when the accounting year ends. Now, let us look at the simple definition of a balance sheet, which is given as follows:

“A balance sheet keeps records of the business owner’s assets, liabilities, and capital on a particular date. No doubt, the balance sheet is certainly a statement that discloses aggregations, including aggregate assets, aggregate liabilities, and aggregate equity”.

There are certain features of a balance sheet that are crucial to know, which are as follows:

  • One can’t prepare the balance sheet for an entire period, but it’s only possible for a specific date.
  • It is crucial to balance both liabilities and assets, and both of these must be equivalent to balance the sheet.
  • Indeed, the balance sheet is made to depict the financial situation of a company or business.
  • The balance sheet is not an account but a mere statement.
  • You won’t get any credit or debit option from this particular statement.
  • You don’t have to use “to” or “by” before the names of an account.

How do our experts help improve your knowledge-base?

Undoubtedly, Extramarks is the best choice if you’re looking for NCERT Solutions of Class 11 Financial Statements 1. Our subject matter experts design and develop these solutions meticulously as they have years of experience in their respective fields. Since the answers are elaborated and explained with apt examples or pictures, they help students in understanding the related concept in a better way. Also, by referring to solutions, students get a better idea of how to attempt a question in an exam and score better marks.

Solved Example

Q1. Which of the following is not an annual financial statement?

  • Profit and loss account
  • Balance sheet
  • Statement of cash flow
  • Depreciation account

A1. Depreciation account is not an annual financial statement. However, it forms a part of the final accounts.

FAQs (Frequently Asked Questions)

Students must read the NCERT textbook thoroughly and attempt the practice questions given at the end of the chapter. Students can refer to Extramarks to get accurate answers to these questions.

Operating profit is the measure of the profit a company makes from its underlying business functions. In short, it is an overall accounting metric. The operating profit rules out the tax calculation while not considering the deduction in interest. The income statement as a total amount is usually the operating profit of a company. An operating profit may not be equal to the cash flow of a company, but gives an idea of the profit-making potential of a company prior to the accounting of expenses.

 

Operating profit = Net profit + Non-operating expenses – Non-operating incomes