CONTENTS

S.No

Contents

Page Number

A.

Design of the Question Paper

B.

Learning Objectives, Methodology And Syllabus

C.

Flashback Assignments:

D.

1 Meaning And Objectives Of Accounting

2 Basic Accounting Terms

3 Accounting Principles

4 Accounting Equation

11

5 Journals

13

6 Cash Book

14

7 Ledger and Trial Balance

16

8 Comprehensive Questions

18

9 Bank Reconciliation Statement

19

10 Depreciation- Straight Line Method

22

11 Depreciation- Written Down Value Method

23

12 Rectification Of Errors

24

13 Accounting For Bills Of Exchange Transactions

26

14 Financial Statements without Adjustments

27

15 Financial Statements With Adjustment

35

Project Work in Accountancy

38

Class XI/ Accountancy/ 1

Subject: Accountancy-Class XI
Design of the Question Paper for Annual Examination:
Chapter wise and Question wise division of marks

Number Of Questions

Marks

TOTAL
MARKS

No. of
Questions

Total Marks

18

20

30

16

90

Subject: Accountancy-Class XI - Chapter wise division of marks

Name of Unit

Periods

Marks

Part A:Financial Accounting-I

Unit 1. Theoretical Framework

25

15

Unit 2. Accounting Process and Special Accounting

Treatment

95

35

120

50

Unit 3. Financial Statements of Sole Proprietorship:

from Complete and Incomplete Records

40

15

Unit 4. Financial Statements of Not-for-Profit

Organisations

30

15

Unit 5. Computers in Accounting

20

10

Part C:Project Work

30

10

TOTAL
Part B:Financial Accounting-II

TOTAL

90

Class XI/ Accountancy/ 2

ACCOUNTANCY (CODE NO. 055)

GENERAL LEARNING OBJECTIVES, METHODOLOGY AND SYLLABUS
FOR THE ACADEMIC YEAR 2016-17
Rationale:
The course in Accountancy is introduced at + 2 stage of Senior Secondary education, as formal
commerce education is provided after first ten years of schooling. With the fast changing
economic scenario and business environment in a state of continuous flux, elementary business
education along with accountancy as the language of business and as a source of financial
information has carved out a place for itself at the Senior Secondary stage. Its syllabus content
should give students a firm foundation in basic accounting principles and methodology and also
acquaint them with the changes taking place in the presentation and analysis of accounting
information, keeping in view the development of accounting standards and use of computers.
Against this background, the course puts emphasis on developing basic understanding about the
nature and purpose of the accounting information and its use in the conduct of business
operations.
This would help to develop among students logical reasoning, careful analysis and considered
judgments. Accounting as an information system aids in providing financial information.
In class XII, Accounting Partnership Firms and Companies are to be taught as a compulsory part.
Students will also be given an opportunity to understand further about Computerized
Accounting System, as an optional course to Analysis of Financial Statements.
General Learning Objectives of the Subject:
To familiarise the students with accounting as an information system;
To acquaint the students with basic concepts of accounting and accounting standards;
To develop an understanding about recording of business transactions and preparation of
financial statements;
To enable the students with accounting for reconstitution of partnership firms;
To enable the students to understand and analyse the financial statements; and
To familiarize students with the fundamentals of computerized system of accounting.

Class XI/ Accountancy/ 3

Accountancy
Class XI
Part A: Financial Accounting I
Unit 1: Theoretical Framework
Introduction to Accounting

Accounting- objectives, advantages and limitations, types of accounting information; users of

accounting information and their needs.
Basic accounting terms: business transaction, account, capital, drawings, liability (internal&
external, long term & short term) asset ( tangible & intangible, fixed, current, liquid and
fictitious) receipts (capital & revenue), expenditure (capital, revenue & deferred), expense,
income, profits, gains and losses, purchases, sales, stock, debtors, bills receivable, creditors,
bills payable, goods, cost, vouchers, discount - trade and cash
Theory Base of Accounting

Fundamental accounting assumptions: going concern, consistency, and accrual.

Accounting principles: accounting entity, money measurement, accounting period, full
disclosure, materiality, prudence, cost concept, matching concept and dual aspect.
Double entry system.
Basis of accounting - cash basis and accrual basis.
Accounting standards: concept & objective. IFRS (International Financial Reporting
Standards).
SYLLABUS

Unit 2: Accounting Process and Special Accounting Treatment

Recording of Transactions

Accounting equation: analysis of transactions using accounting equation.

Rules of debit and credit: for assets, liabilities, capital, revenue and expenses.
Origin of transactions- source documents (invoice, cash memo, pay in slip, cheque),
preparation of vouchers - cash (debit & credit) and non-cash (transfer).
Books of original entry: format and recording - Journal.
Cash book: simple, cash book with bank column, petty cash book,
Other books: purchases book, sales book, purchases returns book, sales returns book, bills
receivable book, bills payable book and journal proper.

Preparation of Ledger, Trial Balance and BRS

Ledger - format, posting from journal, cash book and other special purpose books, balancing of
accounts.
Trial balance: objectives and preparation
Bank reconciliation statement: need and preparation. Corrected cash book balance
Depreciation, Provisions and Reserves
Class XI/ Accountancy/ 4

 Depreciation: concept, need and factors affecting depreciation; methods of computation of

depreciation: straight line method, written down value method (excluding change in
method)
Provisions and reserves: concept, objectives and difference between provisions and reserves;
types of reserves- revenue reserve, capital reserve, general reserve, specific Reserves and
secret reserves.
Accounting treatment of depreciation: by charging to asset account, by creating provision for
depreciation/ accumulated depreciation account, treatment of disposal of asset.
Accounting for Bills of Exchange
Bills of exchange and promissory note: definition, features, parties, specimen and distinction.
Important terms : term of bill ,due date, days of grace, date of maturity, bill at sight, bill after
date, discounting of bill, endorsement of bill, bill sent for collection, dishonor of bill,noting of
bill , retirement and renewal of a bill, insolvency of acceptor.
Accounting treatment of bill transactions
Rectification of Errors
Errors: types-errors of omission, commission, principles, and compensating; Their effect on
Trial Balance.
Detection and rectification of errors; preparation of suspense account.
Part B: Financial Accounting - II
Unit 3: Financial Statements of Sole proprietorship
Financial Statements: objective and importance.
Trading and profit and loss account: gross profit, operating profit and net profit.
Balance Sheet: need, grouping, marshalling of assets and liabilities.
Adjustments in preparation of financial statements : with respect to closing stock, outstanding
expenses, prepaid expenses, accrued income, income received in advance, depreciation, bad
debts, provision for doubtful debts, provision for discount on debtors, managers
commission, abnormal loss, goods taken for personal use and goods distributed as free
sample .
Preparation of Trading and Profit and Loss Account and Balance Sheet of sole proprietorship

Class XI/ Accountancy/ 5

FLASHBACK

Class XI/ Accountancy/ 6

FLASHBACK
ASSIGNMENT I
Topic: MEANING AND OBJECTIVES OF ACCOUNTING

Q1.

What is bookkeeping?

Q2.

Write the activities covered under accounting.

Q3.

List any two characteristics of accounting.

Q4.

What is accounting?

Q5.

Enlist the steps of Accounting Cycle.

Q6.

Distinguish between book-keeping and accounting.

Q7.

Discuss any five limitations of accounting.

Q8.

Accounting records financial transactions in terms of money. Explain.

Q9.

Discuss any five advantages of accounting.

Q10.

Explain reliability and understandability as a characteristic of

accounting information.

Class XI/ Accountancy/ 7

FLASHBACK
ASSIGNMENT II
TOPIC - BASIC ACCOUNTING TERMS
Q.1

Fill in the blanks:

a) A person who owes money to a firm is called ______________________
b) Debtors are ________________________________
c) Sales less ____________________ will give gross profit
d) ___________________ and _______________ are examples of indirect
expenses.
e) Income statement means ______________________________
f) Position statement means ______________________
g) Capital is a ____________________ to the business.
h) Income = ________________________
i) Assets = __________________________
k) If I am a dealer in cycles, buying cycles is
____________________________.
l) If I buy a car for the company it is an______________________
m) If debtors are not able to pay back they are ______________________
to the company

Q2.

Explain any three of the following terms with example:

i.
Current Assets
ii.
Fixed Liabilities
iii.
Creditors
iv.
Capital

Q.3

Differentiate between Cash and Trade Discount.

Q4

Define the following terms:

Q.5

i)

Drawings

ii)

Sales

iii)

Expenses

iv)
v)

Asset
Drawings

Explain any two of the following with an example:

Liabilities, stock, gain.

Q.6

What is a business transaction? Explain with the help of an example.

Class XI/ Accountancy/ 8

FLASHBACK
ASSIGNMENT III
TOPIC - ACCOUNTING PRINCIPLES
Q1

Choose the best alternative :

1. The convention of conservatism takes into account:
a. All prospective profits and all prospective losses.
b. All prospective profits and leaves all prospective losses.
c. All prospective losses but leaves all prospective profits.
d. None of these.
2. According to going concern concept, a business is viewed as
having:
a. A limited life.
b. A very long life.
c. An indefinite life.
d. None of these.
3. According to which of the following accounting concepts, even
the proprietor of a business is treated as creditor to the extent of
his capital:
a. Money measurement concept.
b. Dual aspect concept.
c. Cost concept.
d. Business entity concept.
4. According to which of the following concepts, in determining the
net income from business, all costs which are applicable to the
revenue of the period should be charged against that revenue:
a. Matching concept
b. Money measurement concept
c. Cost concept
d. Dual aspect concept.
5. X Ltd follows the written down value method of depreciation
machinery year after year due to:
a. Comparability
b. Convenience
c. Consistency
d. All of the above.

Q2

State the accounting concept / convention involved in each of the

following situation:
1. The calibre or the quality of management team is not directly
disclosed in the balance sheet.
Class XI/ Accountancy/ 9

2. Advance received from a supplier is not taken as income or sale.

3. Assets are recorded in books at the cost incurred for acquisition
of such assets.
4. Revenue must be recognized when it is realized and expenses are
recognized when incurred.
5. Revenue is generally recorded at the point of sale.
6. Capital contributed by the proprietor is credited to his capital
account.
7. Financial statements of the firm are prepared every year on 31st
March.
8. Goods sold on credit to Ramesh Rameshs account is debited
and sales account is credited.
9. Harpreet has entered into an agreement whereby he will earn Rs
10,00,000 for the services to be provided in the next year. The
revenue should be recognized as the revenue in the next year
after the service has been provided.
10. Purchase of pen is treated as an expense.
Q3.

Explain any two of the following with one example each :

a. Revenue Recognition Concept.
b. Convention of full disclosure.
c. Business Entity Concept.
d. Matching Concept.
e. Convention of consistency.
f. Money Measurement Concept.

Q.4.

Give an example for each and explain how it satisfies that particular
concept or principle.
(i)

Accrual concept

(ii)

Dual aspect principle

(iii)

Objectivity concept

(iv)

Money measurement concept

(v)

Verifiable objective principle

Class XI/ Accountancy/ 10

FLASHBACK
ASSIGNMENT IV
TOPIC 4-ACCOUNTING EQUATION
Q1.

Fill in the blanks

Case

Capital as on
31.12.2001
Rs

I
II
III
IV
V

Q2.

?
12,000
12,600
6,000
9,000

Fill in the blanks

Case
Capital as
on
31.12.20X1
Rs
I
II
III
IV
V

Q3.

i.

?
20,000
21,000
10,000
15,000

Capital as
on
1.1.2001

Profit
Loss during
2001

Rs
6,000
?
6,000
12,000
18,000

Rs
3,000
(600)
?
3,000
(4,800)

Capital as
on
1.1.20X1
Rs
10,000
?
10,000
20,000
30,000

Profit
Loss during
20X1
Rs
5,000
(1,000)
?
5,000
(8,000)

Drawings
during 2001
Rs
1,200
1,800
1,200
?
4,200

Drawings
during
20X1
Rs
2,000
3,000
2,000
?
7,000

Fresh
Capital
introduced
Rs
600
2,400
6000
600
?

Fresh
Capital
introduced
during 20X1
Rs
1,000
4,000
10,000
1,000
?

A had a capital of Rs 75,000 on 1st April 2007. He also had goods

amounting to Rs 15,000 that he had purchased on credit and the
payment had not been made. Find out the value of total assets of the
business.

ii. After a period of one month he came to know that he had suffered a loss
of Rs 1,700. He withdrew Rs 800 for his personal use. Find out his capital
and assets of the business.

Q4.

Prove that the accounting equation is satisfied in all of the following

transactions of Sameer Goel:
a.
b.
c.
d.
e.
f.

Commenced business with Cash Rs 60,000.

Paid rent in advance Rs 500.
Purchased goods for cash Rs 30,000 and credit Rs 20,000
Sold goods for cash Rs 30,000 costing Rs 20,000.
Paid salary Rs 500 and salary outstanding being Rs 100.
Bought motorcycle for personal use Rs 5,000.
Class XI/ Accountancy/ 11

g. Commission received in advance Rs 1000.

Q5.

Show the Accounting Equation on the basis of the following transactions

and prepare the Balance Sheet at last.
i. Shri Ram commenced business with Rs 30,000.
ii. Paid rent in advance Rs 1,200.
iii. Purchased a typewriter for Rs 4,200.
iv. Bought furniture from M/s Mohan Furnitures on credit for Rs 1,800.
v. Purchased goods from Sohan for cash Rs 21,000.
vi. Sold goods to Shyam for cash for Rs 24,000 (costing Rs 18,000).
vii. Bought goods from Ramesh for Rs 18,000.
viii. Sold goods to Shyam costing Rs 18,000 for Rs 30,000.
ix. Purchased household goods for Rs 9,000 giving Rs 3,000 in cash and
the balance through a loan.
x. Goods destroyed by fire (Cost Rs 300, Sale Price Rs 360).
xi. Paid half the amount owed to Mohan Furniture.
xii. Paid cash for Rs 300 for loan and Rs 180 for interest.
xiii. Withdrew goods for personal use (cost Rs 300, sale price Rs 360).
xiv. Received Rs 29,700 from Shyam in full settlement.
xv. Paid Rs 17,820 to Ramesh in full settlement.

Q6.

Prove that the Accounting Equation is satisfied in all the following

transactions. Verify your result with Balance Sheet of the last new
equation:
i.

Anwar started business with :

Cash
Goods
Machine
ii. He purchased goods
iii. Sold goods (Costing Rs. 2,000) for Rs
iv. Purchased goods on credit
v. Payment made to creditors in full settlement
vi. Sold goods on credit (costing Rs 5,400)
vii. Payment received from debtors
Discount Allowed
viii. Salaries Paid
ix. Wages outstanding
x. Prepaid insurance
xi. Rent received
xii. Amount withdrawn
xiii. Interest on drawing
xiv. Depreciation on machinery
xv. Purchased goods on credit

20,000
12,000
8,000
5,000
2,500
7,000
6,900
6,000
5,800
200
4,000
400
100
300
3,000
200
800
17,000

Class XI/ Accountancy/ 12

FLASHBACK
ASSIGNMENT V
TOPIC -JOURNAL
Q1.

Analyze the following transactions, state the nature of accounts and state which
account will be debited and which account credited according to the British
approach.
i.
Dinesh started business with cash Rs 5,00,000
ii.
Borrowed from Naresh Rs 1,00,000
iii.
Purchased furniture from Sunrise furnishing Rs 20,000
iv.
Received a cheque from Sun Rs 5,000
v.
Paid interest on loan Rs 5,000
vi.
Interest allowed by bank Rs 100

Q2.

What are the different types of Accounts under the British approach? Give two
examples for each and write the rules of Debit and Credit for these accounts.

Q3.

What are the different types of Accounts under the American approach? Give two
examples for each and write the rules of Debit and Credit for these accounts.

Q4.

Pass necessary journal entries in the following cases:

a. Paid cash to Bhavana on behalf of Sangeeta Rs 1,100.
b. Received cash from Azhar Rs 2,000 on behalf of Sachin.
c. Exchanged old EC TV for a new Sunsui TV. The old TV was valued at Rs 5,000,
the price of the new TV was Rs 12,000. The balance was paid through bank.
d. Contractors bill for construction of shed in the building for Rs 17,000 was paid
by a crossed cheque.
e. Purchased from Shanti Swaroop goods worth Rs 60,000 and sold on the same day
20% of the goods at a profit of 10%.

Q5.

Pass the journal entries for

1. Purchased goods worth Rs 4,000 from X.
2. Pay Life Insurance Premium of Rs 1,000
3. Y returned goods worth Rs 200
4. Paid Rs 200 as house rent to Arvind
5. Y turned insolvent and 60% in full settlement of his account was received.
6. Discounted a bill of exchange for Rs 10,000 at 1% through bank.
7. Goods worth Rs 1,000 is used as free samples
8. Depreciation on Machinery is Rs 150
9. Outstanding Rent is Rs 500
10. Provide interest on loan from Raghav Rs 1,00,000 at 18% p.a. for 2 months.

Class XI/ Accountancy/ 13

FLASHBACK
ASSIGNMENT VI
TOPIC: CASH BOOK
Q1

Distinguish between cash discount and trade discount.

Q2

Cash book is a journalized ledger. Explain.

Q3.

Prepare a Bank Column Cash Book from the following transactions:

2012
Oct 1

Rs.
Cash in hand

11,800

Cash at bank

11,000

Oct 5

Discounted a B/E at 1% through bank

4,000

Oct 7

Bought goods by cheque

7,000

Oct 8

Bought goods for cash

Oct 10

Honoured our own acceptance by cheque

Oct 14

Paid trade expenses

Oct 16

Paid into bank

Oct 18

Ramesh, who owed us Rs 500 became bankrupt and us @ 50 p

in the rupee

Oct 20

Received cash from Manohar

500
5,000
105
1,000

400

Allowed discount

10

Oct 21

Sales to Ratan tata

10000

Oct 22

Received cheque from Ratan tata

Oct 23

Withdrew from Bank

Oct 23

Ratan tatas cheque dishonoured

Oct 23

Paid to Ghanshyamdas & Co.

400
300

Allowed us discount

10

Oct 24

Received Rs 2,000 from a B/E from Hari Ram and deposited

the same into bank

Oct 25

Withdrew from bank for private expenses

300

Oct 27

Sold goods to Akshay kumar

200

Oct 28

Received cheque for goods sold

Oct 29

Akshays cheque endorsed in favour of Twinkle

Oct 29

Received payment of a loan of Rs 5,000 and deposited Rs 3,000

out of it into bank.
Class XI/ Accountancy/ 14

Oct 30

Q4.

Enter the following transactions in a cash book with cash and bank columns.
2012
Jan 1
Jan 5
Jan 7
Jan 10
Jan 15
Jan 20
Jan 25
Jan 28
Jan 30
Jan 31

Q.5

Bank charges as per Pass Book

Rs
800
5700
3250

Cash in hand
Bank Overdraft
Received a cheque from Ram
Deposited Rams cheque into bank
Paid Sohan by cheque
Rams cheque returned dishonored
Withdrew from bank for office use
Cheque received from Hari
Haris cheque was endorsed in favour of Mukesh
Rent paid by cheque
Bank charges

2425
250
1200
150
25

Prepare a two column cash book of Shri Raman on the basis of the given information:
a) Cash at office Rs 1,600 and Bank Balance (Cr.) 2575
b) Mohan settled his account of Rs 750 by giving a cheque of Rs 730.
c) Mohans Cheque deposited into bank.
d) Discounted a bill for Rs. 5,000 at 1% through bank.
e) Jones who owed us Rs 1000 became insolvent and only 30paisa in a rupee could be
recovered from his estate.
f) Received a cheque of Rs 4,000 for goods sold.
g) Withdrew from bank to pay Income tax of owner Rs 400.
h) Mohans cheque was dishonored.

Q.6

i)

Paid by cheque a bill of Rs 2,500 drawn upon us.

j)

Received a payment of loan of Rs 10,000 and deposited Rs 2,500 out of it into bank.

Prepare a cash book for the following month

2013
Jan 1 Cash in hand Rs 50,000; Cash at Bank Rs 16,000
Jan 5

Discounted a bill at 1% through bank Rs 4,000

Jan 8

Hari a debtor paid Rs 650 in full settlement of his account for Rs 700.

Jan 17

Honoured our own acceptance for Rs 2,000

Jan 19

Withdrew from bank for private use Rs 1,500

Jan 20

Received payment of a loan of Rs 5,000 and deposited Rs 3,000 in the bank.

Jan 21

Received a cheque from Mohan Rs 5,000

Jan 22

Paid trade expenses Rs 1500 by cash.

Class XI/ Accountancy/ 15

Jan 29

Discounted Vinods bill for Rs 3,000 at 2%.

Jan 30

Vinods bill was dishonored.

FLASHBACK
ASSIGNMENT VII
TOPIC : LEDGER & TRIAL BALANCE
Q.1

Prepare a Trial balance with the given balances:

LEDGER ACCOUNTS

AMT LEDGER ACCOUNTS

AMT (Rs.)

(Rs.)
a)
b)
c)
d)
e)
f)
g)
h)

Q2.

Cash
Bank
Capital
Furniture
Raj furniture house (Cr.)
Purchases
Sales
Stationary

i)
j)
k)
l)
m)
n)
o)
p)

R.K. Mart (Cr.)

Electricity charges
Drawings
Purchase returns
Sales returns
Creditors
Bank loan
Debtors

500
200
2,000
2,000
3,000
8,500
8,000
10,000

Enter the following transactions in the journal of Bunty, post to ledger and prepare a Trial
Balance:
2012
Jan 1

Jan 4
Jan 7
Jan 10
Jan 30

Q3.

1,04800
8,000
1,00,000
5,000
5,000
33,500
43,000
500

Assets:

Cash in hand
Cash at bank
Stock
Furniture
Debtors: Mona
Sonu
Liabilities: Ajay
Pankaj
Purchased goods from Pankaj
Paid Ajay by cheque in full settlement of his account
Sold goods to Mona
Paid Salaries

20,000
35,000
15,000
4,500
20,000
10,000
13,500
21,500
5,000
13,000
11,000
6,000

On 1st January, 2012the following were the ledger balance of Rajan & Co. :
Cash in hand, Rs. 900 ; Cash at Bank, Rs. 21,000 ; Soni (Cr.), Rs. 3,000 ; Zahir (Dr.), Rs. 2,400
; Stock, Rs. 12,000 ; Prasad (Cr.), Rs. 6,000 ; Sharma (Dr.), Rs. 4,500 ; Lall (Cr.), Rs. 2,700.
Transactions during the month were:
2012
Jan 2
Bought goods from Prasad
Jan 3
Sold to Sharma

Rs.
2,700
3,000
Class XI/ Accountancy/ 16

Jan 5
Jan 7
Jan 13
Jan 17
Jan 22
Jan 29
Jan 30

Sold to Lall goods for cash

Took goods for personal use
Received from Zahir in full settlement
Paid to Soni in full settlement
Paid cash for stationery
Paid to Prasad by cheque
Discount allowed
Provide interest on capital
Rent due to landlord

3,600
200
2,350
2,920
50
2,650
50
100
200

Enter the above transactions in appropriate subsidiary books, post them to ledger and
prepare the trial balance.
Q.4

Prepare Journal entries, necessary Ledger accounts and a Trial Balance with the given
entries:
a) Started business with cash Rs 1,00,000 and a Machine worth Rs. 50,000.
b) Purchased stock worth Rs. 40,000.
c) Depreciation on machine Rs.5, 000.
d) Sold goods worth Rs 15,000 to A and received Rs. 5,000 immediately.

Class XI/ Accountancy/ 17

FLASH BACK
ASSIGNMENT VIII
TOPIC: COMPREHENSIVE QUESTION
Ques1 Enter the foll: transactions in the subsidiary books and post them into ledger and prepare
a trial balance.
2010
April 1

Mr. Raj started a business with

6,00,000

April 4

Purchased furniture from Modern Furniture worth

50,000

April 5

Purchased goods for cash

1,00,000

April 8

Purchased goods from K.G Khosla and company for Rs.1,50,000,

trade discount 20%

April 10

Opened a bank account by depositing

1,50,000

April 14

Purchased stationery worth Rs.5,000 from R.S Mart

April 15

Sold goods to Sanjay Khan worth

1,00,000

April 20

Goods returned by Sanjay Khan worth

20,000

April 22

Withdrew Rs.10,000 for private use from bank

April 30

Cash Sales

90,000

You are supposed to prepare:

1. Purchases book
2. Sales book
3. Sales returns book
4. Cash book
5. Journal Proper
6. Ledger Accounts: Capital Account, Furniture Account, Modern Furniture Account,
Purchases Account, Sales Account, Sales Returns Account, K.G Khosla Account, R.S Mart
Account, Stationery Account, Sanjay Khan Account, Drawings Account.
7. Trial Balance.
Class XI/ Accountancy/ 18

FLASH BACK
ASSIGNMENT IX
TOPIC: BANK RECONCILIATION STATEMENT
Q1.

Define bank reconciliation statement.

Q2.

Give any three causes for difference between the cash book and pass book balance.

Q.3

On 31st December 20X1 the Cash Book of Ram Lal showed an overdraft of Rs 5,670 from the
following particulars, make out a Bank Reconciliation Statement and ascertain the balance as
per Bank Pass Book.
(a) Cheques drawn but not cashed before 31st December amounted to Rs 3,946.
(b) Cheques paid into the bank but not collected and credited before 31st December amounted
to Rs 4,891.
(c) A bill receivable for Rs 520 previously discounted with bank had been dishonored and
debited in the Pass Book.
(d) Debit is also made in the Pass Book for Rs 120 on account of interest on overdraft and Rs 55
on account of charges for effecting bills and cheques.
(e) The bank has collected interest on investment and credited Rs 760 in the Pass Book.

Q.4

From the following particulars prepare a bank reconciliation statement showing the balance as
per the cash book on 31st December 2012
a) The following cheques were paid into the bank in December but were credited in January Rs
3,500, Rs 2,500, Rs 2,000
b) The following cheques were issued by the firm in December, but were presented in January
Rs 4,000 and Rs 4,500
c) A cheque of Rs 1,000 which was received from a customer, was entered in the bank column
of the cash book in December, but was omitted to be banked in December
d) The passbook showed a debit entry of Rs 1,000 as bank charges and credit entry of Rs 2,000
for interest.
e) Interest on investment Rs 2,500 collected by bank appears in the passbook.
f) The bank balance as per passbook was Rs 62,000 on 31st December 2012.

Q5.

From the following particulars, ascertain the balance by means of the statement that would
Class XI/ Accountancy/ 19

appear in the pass book of Mr. Atul as on 31st December, 2012:

a.
b.
c.
d.
e.
f.

Overdraft as per cash book (on 31st Dec 2012) Rs. 7,190.
Interest on overdraft for six months ending 31st Dec, 2012 Rs. 160.
Bank charges for the above period Rs. 70.
Cheques drawn but not cashed by the customers prior to 31st Dec, 2012 Rs. 1,270
Cheques paid into bank but not cleared before 31st Dec, 2012 Rs. 2,210.
A bill receivable (discounted with bank in November) dishonored on 31st Dec, 2012 Rs.
600.

Q6.

On 31st Dec, 2012 the pass book of a merchant showed a credit balance of Rs. 3,357.
The cheques and drafts sent to the bank but not collected and credited amounted to Rs. 790 and
three cheques for Rs. 300, Rs. 150 and Rs. 200 respectively were not presented for payment till
31st January next.
Bank has paid a bill amounting to Rs. 1,000 but it has not been entered in the cash book and a
bill receivable for Rs. 500 which was discounted with the bank was dishonored on the due
date.
The bank has charged Rs. 13 as its commission for collection of outstation cheques and has
allowed interest Rs. 10 on the traders balance.
Prepare a bank reconciliation statement.

Q7.

On 30th June 2012,the bank column of the cash book showed a balance of Rs.12,000 but the pass
book shows a different balance due to the following reasons:
1) Cheques paid into bank Rs. 8,000 but out of these only cheques of Rs. 6,500 credited by
bankers.
2) The receipt column of the cash book undercast by Rs. 200.
3) On 29th June, a customer deposited Rs. 3,000 direct in the bank account but it was entered in
the pass book only.
4) Cheques of Rs. 9,200 were issued of which Rs. 2,200 were presented for payment on 15th
July. Pass book shows a credit of Rs. 330 as interest and a debit of Rs. 60 as bank charges.
Prepare a reconciliation statement as on 30th June, 2012.

Q8.

From the following particulars make out a Bank reconciliation statement on 31st December in
the books of D.K:
1. Pass book showed an overdraft of Rs. 15,000 on 31st December, 2013.
2. A cheque of Rs. 200 was deposited in the bank but not recorded in the cash book.
3. Cheques of Rs. 17,000 were issued but cheques worth only Rs. 10,000 were presented for
payment up to 31st December, 2013.
4. Cheques of Rs. 10,000 were sent to the bank for collection. Out of these, cheques of Rs. 2,000
and Rs. 1,000 were credited respectively on 7th January and 9th January and remaining
cheques were credited before 31st December, 2013.
5. Bank paid Rs. 300 as Chamber of Commerce fee on behalf of D.K which was not recorded
in the cash book.
6. Bank charged interest on overdraft Rs. 800.
7. Rs. 40 for bank charges was recorded two times in the cash book and bank expenses of Rs.
Class XI/ Accountancy/ 20

35 were not at all recorded in the cash book.

8. Payment side of cash book was Rs. 1,000 short.
9. Bank received Rs. 200 as interest on debentures on behalf of D.K.

FLASH BACK
ASSIGNMENT X
TOPIC: DEPRECIATION(Straight Line Method)
1. A firm bought a machine costing Rs 1,00,000 with an expected life of nine years and scrap
value of Rs 10,000 at the end of its expected life. Show the machinery account for the first
three years.

2. A firm bought a building for Rs 20,00,000 and spent Rs 2,00,000 on its repair before use.
Depreciation is to be charged at 10% per annum. Prepare Building a/c for the first three
years.

3. A firm bought an asset on 31st of July 2014 and paid Rs 12,00,000 for the same.
Depreciation is to be charged at 10% pa on Straight-line basis and the financial year is
from 1st April to 31st March. Prepare asset account for three financial years.

4. A firm imported a machine on 1st of April 2012and paid Rs 1,00,000 for it and Rs 20,000 as
import duty. The machine was to be depreciated on Straight-line basis @10% pa. On 30th
of June 2014, the machine was sold for Rs 85,000. Prepare machine account.

5. A firm bought a vehicle for Rs 14,00,000 on 1st of April 2010 and another one on 31st of
August 2011 for Rs 10,00,000. The first vehicle was sold on 30th of September2013 for Rs
10,00,000 and a third car was bought for Rs 6,00,000 on 31st December 2013. Prepare
Vehicle Account. Depreciation is charged @12% pa on the Straight-line method,

6. On the 1st of April 2011 a firm bought an asset and paid Rs 5,00,000 for it. On 1st of July
2013 1/4th of the asset was lost due to fire and had to be sold off .The firm could recover
Class XI/ Accountancy/ 21

only Rs 2,500 as scrap. Prepare asset a/c when depreciation is charged @ 12% pa on
straight-line basis.

FLASH BACK
ASSIGNMENT XI
TOPIC: DEPRECIATION (Written Down Method)

1. A firm bought a building for Rs 20,00,000 and spent Rs 2,00,000 on its repair before use.
Depreciation is to be charged at 10% per annum. Prepare Building a/c for the first three
years.

2. A firm bought an asset on 31st of July 2014 and paid Rs 12,00,000 for the same.
Depreciation is to be charged at 10% pa on Written down value basis and the financial
year is from 1st April to 31st March. Prepare asset account for three financial years.

3. A firm imported a machine on 1st of April 2011and paid Rs 1,00,000 for it and Rs 20,000 as
import duty. The machine was to be depreciated on Written down value basis @10% pa.
On 30th of June 2013, the machine was sold for Rs 85,000. Prepare machine account.

4. A firm bought a vehicle for Rs 14,00,000 on 1st of April 2010 and another one on 31st of
August 2011 for Rs 10,00,000. The first vehicle was sold on 30th of September2013 for Rs
10,00,000 and a third car was bought for Rs 6,00,000 on 31st December 2013. Prepare
Vehicle Account. Depreciation is charged @12% pa on the Written down value method.

5. On the 1st of April 2010 a firm bought an asset and paid Rs 5,00,000 for it. On 1st of July
2012 1/4th of the asset was lost due to fire and had to be sold off .The firm could recover
only Rs 2,500 as scrap. Prepare asset a/c when depreciation is charged @ 12% pa on
Written down value basis.

Class XI/ Accountancy/ 22

FLASHBACK
ASSIGNMENT XII
TOPIC: RECTIFICATION OF ERRORS
Q1.

Fill in the blanks :

a. If total debits exceed the total credit of trial balance, suspense account will show
___________________ balance.
b. If the suspense account indicates a credit balance it shows that _________ column of the
trial balance is more than the ___________ column.
c. Undercasting in salaries account is rectified by _____________ suspense account and
______________ salaries account.
d. Errors of principle _______________ affect the Trial Balance.

Q2.

Which of the following errors will affect the trial balance?

a. The total of the Sales Book has not been posted to the Sales Account.
b. Rs. 1,000 paid as installation charges of a new machine has been debited to Repairs
Account.
c. Goods costing Rs. 4,000 taken by the proprietor for personal use have been debited to the
Debtors Account.
d. Rs. 1,000 paid for repairs to building have been debited to Building Account.

Q3.

Multiple Choice Questions:

a. If the trial balance agrees, it implies that:
i. There is no error in the books.
ii. There may be two sided errors in the books.
iii. There may be one sided errors in the books.
iv. There may be both two sided and one sided errors in the books.
b. If suspense account does not balance off even after rectification of errors it implies that:
i. There are some one sided errors only in the books yet to be located.
ii. There are no more errors yet to be located.
iii. There are some two sided errors only yet to be located.
iv. There may be both one sided errors and two sided errors yet to be located.

Q4.

Give two examples each of the following types of errors:

(a)Compensating errors
Class XI/ Accountancy/ 23

(b)Error of commission
(c)Error of principle
Q5.

Pass journal entries to rectify the following errors:

a. Sale of goods for Rs. 250 to Neelam was recorded in purchases book by mistake.
b. A promissory note for Rs. 1,000 was received from Gautam for which an entry of Rs.
10,000 was made in the bills receivable book.
c. Goods invoiced at Rs. 35 were received back from Gulab Rai, a customer but no entry was
passed in the books of account.
d. Furniture for office was purchased on credit from Modern Furniture House for Rs. 540. An
entry was passed for Rs. 450 in the purchases book.
e. Repairs to furniture for Rs.15 were debited to furniture account.
f. Rs.760 paid for the construction of showcase(furniture),wrongly debited to the wages a/c
as Rs.670.
g. Rs.500 received from Anand against a debt previously written off as bad debt has been
credited to his personal a/c.
h. Goods purchased from Sonu for Rs.800 wrongly passed through sales book.
i. Rs.750 was outstanding on a/c of wages.
j. The debit side of Radhey Lal, a debtor, is overcast by Rs. 7,000.
k. A cheque of Rs. 1,400 received from Rajneesh & Sons was dishonored and debited to
Allowances Account.
l. A fax machine purchased for the office for Rs. 6,200 was entered in the purchase book.
m. Purchase of goods from Sushil & Co. for Rs. 3,800 was entered in the sales books to Rs.
4,800.

Q6.

A book-keeper while balancing his books finds that he is out excess credit Rs.88.Being required to
prepare his final accounts, he places the difference to a newly opened suspense account which he
carries forward to the next year. the following mistakes were discovered.
i. Goods bought from a merchant of Rs.5 had been posted to the credit of his a/c as Rs.55.
ii. A dishonoured B/R for Rs.200 returned by the bank has been credited to the bank a/c and
debited to the B/R a/c.
iii. An item of Rs.10 entered in the sales return book had been posted to the debit of the
customer who returned the goods.
iv. Sundry item of plant sold for Rs.260 had been entered in the sales book.
v. An amount of Rs.60, owing by a customer had been omitted from the schedule of sundry
debtors.
vi. Discount of Rs.2 from a creditor had been duly entered in his a/c but not posted to
discount a/c
Draft journal entries for rectifying the above errors. Also prepare the suspense a/c.

Q7.

A trial balance of a merchant shows a difference which has been carried to suspense account and
the following errors were subsequently discovered:
a. Sales book was undercast by Rs. 1,000.
b. Discount column on credit side of cash book overcast by Rs. 60.
c. Goods sold to Ram Rs. 1,500 was posted to Krishnas account as Rs. 1,050
d. B/R from Suresh Rs. 2,000 was posted to the credit of B/P account and credit to Suresh
account.
e. A cash sales of Rs. 1,500 to Anil correctly entered in nthe cash book was posted to the
credit of Anils account.
f. Goods of an invoice of Rs. 500 returned by Deepak were taken into stock but no entries
were made in the books.
Give journal entries to rectify the errors and show their effect on the net profit of the year.
Class XI/ Accountancy/ 24

Q.8.

On going through the trial balance of X ltd. you found that the debit is an access by Rs 250. This
was credited to the suspense account on a close scrutiny of the book the following mistakes were
noted. Pass necessary journal entries for correcting the above and prepare and suspense account.
a) the total of debits side of expense account has been cast in excess by Rs 150.
b) the sales account has been totaled in short by Rs 200.
c) One item of purchases of Rs 25 has been posted from the purchase book to the ledger as Rs 350.
d) the sale return of Rs 200 from a party has not been posted to that account though the partys
account has been credited.
e) a cheque of Rs 200 issued to the supplier account towards his due has been wrongly debited to
the purchases.
f) a credit sale of Rs 100 has been credited to the sales and also to the sundry debtors account.

FLASH BACK
ASSIGNMENT XIII
TOPIC: BILLS OF EXCHANGE
Q.1

Write any two differences and promissory note a bill of exchange.

Q.2

What is meant by endorsing a bill. Explain it with an example.

Q.3. What are the ways open to a holder for dealing with bills of exchange?
Q.4. What is meant by Renewal of a Bill?
Q.5

On 1st January, B owes Rs 10,000 and accepts a 3 month bill for the amount. On the date of
maturity not being able to meet the bill offers A Rs 4,000 and asks him to draw another
bill for 3 months for the balance plus interest at 15% per annum. A agrees to this proposal.
Pass the necessary Journal Entries in the books for A and B.

Q.6

B owed to A Rs 60,000 on 1st January, 2005. On the same date, A drew upon B a bill for
the amount at 2 months and B returned the bill duly accepted.
A got the bill discounted at his bank at 15% per annum. Before the bill was due for
payment, B told A that he was not able to pay the full amount and requested A to accept
Rs 20,000 immediately and drew upon another bill for the remaining amount for two
months together with interest at 18% per annum, A agreed. The second bill was duly met.
Give journal entries in the books of both A and B.

Q.7. Nikita accepted a bill of exchange for Rs. 40,000 drawn on him by Arun on 1st of
May,2005 for 3 months. This was for the ammount that Nikita owed Arun. Arun got the
bill discounted for Rs.39,000. Just before the due date, Nikita approached Arun for
renewal of the bill. Arun accepted on the condition that Rs.10,000 be paid immediately
along with an interest of 12% per annum on the balance amount for 3 months and agreed
to draw up another bill for Rs.30,000. On 7th november, Nikita was declared insolvent and
her estate paid only 40 paisa in a rupee. Pass necessary entries in the books of Arun .
Class XI/ Accountancy/ 25

Q8

Journalise the following transaction in the books of J Jaggi:

D. Dutts bill receivable for Rs. 7,000 which we had endorsed in favour of P. Mukerjee
dishonored. P. Mukerjee paid Rs. 10 as noting charges. We pay P. Mukerjee by cheque
and accept from D. Dutt another bill for the amount due plus interest, Rs. 315.

Q9

Mr. David draws two Bills of Exchange on 1.1.2001 for Rs. 6,000 and Rs. 10,000. The Bills
of Exchange for Rs. 6,000 is for two months while the Bills of Exchange for Rs. 10,000 is for
three months. These bills are accepted by Mr. Thomas. On 4.3.2001 Mr. Thomas requests
Mr. David to renew the first bill with the interest at 18% p.a. for a period of two months.
Mr. David agrees to this proposal. On 20.3.2001 Mr. Thomas retires the acceptance of Rs.
10,000, the interest rebate, i.e., discount, being Rs. 100. Before the due date of the renewed
bill, Mr. Thomas becomes insolvent and only 50 paise in a rupee could be recovered from
his estate. You are to give the journal entries in the books of Mr. David.

FLASH BACK
ASSIGNMENT XIV
TOPIC: FINANCIAL STATEMENTS WITHOUT ADJUSTMENTS
Q.1

Explain with the help of an example what is meant by Revenue Expenditure.

Q.2.

Define Income Statement of a firm.

Q.3.

From the following Trial Balance given for the year ended 31st March,2014, prepare
Financial Statements for Rohan:
Name of Account
Capital
Plant & Machinery
Land and Building
Sales
Furniture & other
Equipment
Sundry Debtors
Trade Expenses
Cash in Hand
Cash at Bank
Wages and Salaries
Repairs

Amount (Rs.)

Name of Account

5,00,000
1,00,000
1,20,000
9,00,000
50,000

Purchases
Opening Stock
Sundry Creditors
Purchase Returns
Rent

1,00,000
30,000
1,00,000
1,50,000
60,000
10,000

Discount (Dr.)
Drawings
Bills Recievable
Bills Payable
Bad Debts
Interest (Cr.)

Amount (Rs.)
6,00,000
2,00,000
1,20,000
10,000
12,000
8,000
10,000
40,000
30,000
4,000
10,000

The stock on 31st March 2014 was valued at Rs. 1,40,000.

Q.4. From the following trial balance of Mr. A, prepare a trading and profit and loss Account for
the year ending 31st March, 20X2 and a balance sheet as on that date :

Particulars
Cash

TRIAL BALANCE
Dr. ( Rs.)
Particulars
10,000 Sales

Cr. (Rs.)
1,80,500
Class XI/ Accountancy/ 26

Stock
Wages
Purchases
Returns
Repairs
Bad debts
Interest on Loan
Salaries
Sales Tax
Octroi
Insurance
Charity
Rent
Machinery
Debtors
Total

40,800
22,525
1,30,295
2,400
1,675
2,310
600
8,000
800
500
1,000
125
2,000
16.000
30,000
2,69,030

Returns
12% Loans
Creditors
Discount
Capital

195
20,000
30,305
530
37,500

2,69,030

Q.5. From the following trial balance and additional information, prepare trading and profit and
loss account of Mr. Charat Tulsian for the year ended 31st March, 20X2 and balance sheet as
at that date :
TRIAL BALANCE
Particulars
Capital/ Drawings
Plant & Machinery
Sales / Purchases
Returns
Bad Debts / Bad Debts Recovered
Freight Inward
Freight Outward
Discount
Commission
Rent
Interest
Office &Administration Expenses
Selling & Distribution Expenses
Creditors / Debtors
Bills Payable / Bills Receivable
Loan
Investments
Opening Stock
Cash in hand
Cash at Dena Bank
Bank Overdraft at Canara Bank
Wages & Salaries
Total

Dr. (Rs.)
10,000
1,10,000
84,000
5,000
5,000
5,000
7,000
2,000
4,000
3,000
2,500
6,000
10,000
2,15,000
10,000
20,000
50,000
54,000
5,000
45,550
---

Cr. (Rs.)
1,70,000
--1,65,000
4,000
26,450
----1,000
3,000
4,000
3,000
----2,02,000
5,600
50,000
--------20,000

1,000

---

6,54,050

6,54,050

Class XI/ Accountancy/ 27

TOPIC 16-FINANCIAL STATEMENTS WITH ADJUSTMENTS

i. Closing Stock
ii. Outstanding Expenses
iii. Prepaid Expenses
iv. Accrued Income
v. Income Received N Advance
vi. Depreciation
vii. Bad Debts
viii. Provision For Doubtful Debts
ix. Povision For Discount On Debtors
x. Managers Commission
xi. Abnormal Losses
xii. Goods Taken For Personal Use
xiii. Goods Given As Free Samples
xiv. Interest on capital
xv. Interest on Drawings
xvi. Interest on Loans

Class XI/ Accountancy/ 28

TEM

WHERE TO SHOW IN FINAL ACCOUNTS IF IT APPEARS

WITHIN THE TRIAL BALANCE

i. Closing Stock

Balance Sheet Asset

AS AN ADJUSTMENT
Trading a/c - Cr
Balance Sheet - Asset

ii. O/s expenses/expenses

Balance Sheet Liability

payable / expenses due but

iii. Prepaid Expenses

Add to Expense in
Trading/P&L a/c

not paid

ADJUSTMENT ENTRY

Closing stock account

dr

To trading account
Expenses account

dr

To outstanding exp.

Balance Sheet - Liability

Balance Sheet Asset

Deduct from expense in

Trading/ P & L a/c

Prepaid expenses a/c

dr

To expenses account xxx

Balance Sheet - Asset

iv. Accrued Income

Balance Sheet Asset

Add to Income inP&L a/c

Balance Sheet - Asset

v. Income Received in Advance

Balance Sheet Liability

Deduct from income in

P & L a/c

Income Receivable/Accrued Income a/c

dr

To income account
Income account

dr

To income received in advance account

Balance Sheet - Liability

vi. Depreciation

Expense - P & L A/c Dr

Deduct from asset in Balance

Sheet

Depreciation account

dr

To respective asset account

Expense- Dr in / P & L a/c

vii. Bad Debts

Expense - P & L A/c Dr

Expense - P & L A/c Dr

Reduce from debtors

Bad Debts account

dr

To Debtors Account
Class XI/ Accountancy/ 29

ITEM

WHERE TO SHOW IN FINAL ACCOUNTS IF

ADJUSTMENT ENTRY

IT APPEARS AS AN ADJUSTMENT
viii. Provision For Doubtful Debts

Expense - P & L A/c Dr

Reduce from debtors

ix. Povision For Discount On

Debtors
x. Managers Commission

Expense - P & L A/c Dr

Reduce from debtors
Expense - P & L A/c Dr
Liability if not paid in cash

Provision For Doubtful Debts account

dr

To Debtors Account
Povision For Discount On Debtors account

dr

To Debtors Account
Commission account

dr.

To outstanding commission

Reduce from cash only( if question states so)

xi. Abnormal Losses stock if its
uninsured

Credit side of trading account

Loss by fire or accident account

dr.

To trading a/c

Profit and loss accounts debit side

Profit and loss account

dr.

To loss by fire / accident

xii. Abnormal Losses stock if its
insured

Credit side of trading account with the total

Loss by fire or accident account

To trading a/c

value of the loss

Profit and loss accounts debit side (with
amount of loss not covered by insurance)
Insurance company will appear as an asset in
the asset side of the balance sheet with the
claim admitted.

dr

Profit and loss account

dr

To loss by fire / accident

(amount not covered by insurance claim)
Insurance Company a/c

dr

To loss by fire / accident

(amount covered by insurance claim)
Class XI/ Accountancy/ 30

xiii. Abnormal Losses asset if it is

not insured

Profit and loss accounts debit side

Loss by fire or accident account

To Asset a/c

Reduce from the value of asset in the Balance

sheet

dr.

Profit and loss account

dr.

To loss by fire / accident

xiv. Abnormal Losses asset if it is
insured

Reduce the total value of the loss from the

Loss by fire or accident account

To Asset a/c

value of asset in the Balance sheet

Profit and loss accounts debit side (with
amount of loss not covered by insurance)
Insurance company will appear as an asset in
the asset side of the balance sheet with the
claim admitted.

dr.

Profit and loss account

dr

To loss by fire / accident

(amount not covered by insurance claim)
Insurance Company a/c

dr

To loss by fire / accident

(amount covered by insurance claim)

xv. Goods Taken For Personal Use

Deduct from purchase in the debit side of

trading account ( purchase drawing in

Drawings account

dr

To Purchases account

goods)
Deduct from capital in the liabilities side of
balance sheet (capital- drawing in goods)
xiii. Goods Given As Free Samples

Deduct from purchase in the debit side of

trading account ( purchase Advertisement

Advertisement Expenses account

dr

To Purchases account

Expenses)
Profit and loss accounts debit side

Class XI/ Accountancy/ 31

Trading and Profit and Loss A/c

For the year ending

PARTICULARS
To Opening Stock
To Purchases

AMT

PARTICULARS

AMT

By Sales
Less Sales Returns

Less Purchase Returns

Less Goods Given As Free Samples
Less Goods Taken By The Owner For Personal Use
Less Goods Used To Make Some Asset For The
Business

By Loss Of Goods Due To

Fire/Theft/Accident
By Closing Stock

To Direct Expenses
Add Outstanding Expenses
Less Prepaid Expenses
To Gross Profit C/F

To Expenses
Add Outstanding Expenses
Less Prepaid Expenses
To Depreciation
To Loss Of Goods Or Asset Due To Fire/
Theft/Accidents(Amount Not Covered By Insurance
Claim)

By Gross Profit B/F

By Income
Add Accrued Income
Less Income Received In Advance
By Interest On Drawings

To Bad Debts (Given In Trial Balance)

Add Further Bad Debts(Given As Adjustment)
Add New Provision Created For Bad Debts
Less Old Provision For Bad Debts Already Shown In The
Trial Balance
Add Provision For Discount On Debtors
To Managers Commission
To Interest On Capital
To Net Profit

Class XI/ Accountancy/ 32

BALANCE SHEET
As on..
PARTICULARS

AMT

PARTICULARS

Capital

Fixed assets

Less Drawings

Less depreciation

Less goods taken for personal use

Add amount if stock has been used to

Less Interest on Drawings

make fixed assets

AMT

Add interest on capital

Add Net Profit/Less net Loss

Long term investments

Add interest accrued on investments

Fixed Liabilities
Current Assets
Long term loans

Debtors

Add interest accrued on long term loans

Less further bad debts

Less new provision for bad debts

Reserves

Less provision for discount on debtors

Current Liabilities

Prepaid expenses

Outstanding expenses

Accrued incomes

Incomes received in advance

Managers commission

Insurance company(claim admitted by

Insurance Company)

Class XI/ Accountancy/ 33

FLASH BACK
ASSIGNMENT XV
TOPIC: FINANCIAL STATEMENTS WITH ADJUSTMENTS

Q1. From the following adjustments and the trial balance prepare the final accounts for 31st Dec. 2013.
Dr. Balance
Insurance charges
Salaries &wages
Cash in hand
Cash at bank

RS Cr. Balance

Rs

2,400 Capital

1,70,000

19,400 Creditors

20,000

200 Sales

1,20,000

26,500 Return outwards

1,200

Trade expenses

400 Provision for doubtful debts

400

Postage & telegraphs

800 Discount

800

Drawings
Plant & machinery1-1-13

6,000 Rent received for 1 year up to 306-14

1,20,000

Addition 1-7-88

5,000

Stock on 1-1 88

15,000

Purchases

82,000

Return inwards
Debtors

2,000
20,800

Furniture & fittings

5,000

Freight & duty

2,000

Carriage outwards

1,200

500

Rent,rates,taxes

4,600

Printing & stationery

1,000
3,13,600

3,13,600

Adjustments: Stock on 31-12-13 was valued at Rs 24,000 and stationery unused at the end was Rs 250.
The provision for doubtful debts to be maintained at 6% on debtors.
Create a provision for discount on debtors and creditor at 2%.
Write off Rs 800 as bad debts.
Provide dep: on plant & machinery at 10% p.a.
Insurance is paid up to 31st March 1989.

Class XI/ Accountancy/ 34

Q.2. Show how the following adjustments will be recorded in the final accounts of ABC Ltd.
Rent ofRs.5, 000 shown in the credit side of the trial balance includes Rs. 1,000 for the next year.
Goods worth Rs.15, 000 lost due to fire. Insurance company admitted to a claim of Rs.5, 500
only.
Goods costing Rs.lO, 500 sent on approval basis. Selling price for the same was fixed at Rs.15,
500.Debtors and Sales for the period was given as Rs.80,000 and Rs.60,000 in the trial balance.
The firm charged Rs.3, 500 from the owner as interest on the amount withdrawn by the owner
from the business.
The Trial balance shows Rs.l, 00,000 as 'Investments @1O%' in the Debit side. No further
information w.r.t this item is given either in the Trial balance or in the adjustments.
Q.3. Prepare Trading, Profit & Loss Account and Balance Sheet from the following particulars as on 31
st December 2013:

Cash in hand
Cash at bank
Purchases and sales
Return Inwards
Return Outwards
Carriage on Purchases
Carriage on Sales
Fuel and Power
Stock (1-1-13)
Bad Debts
Bad Debts Provision
Debtors and Creditors
Capital
Investments
Interest on Investments
18% Loan from X
Repairs
General Expenses
Land & Buildings
Wages & Salaries
Miscellaneous Receipts
Sales Tax Collected
Stationary

Dr.Rs.
2,000
18,000
2,20,000
6,000

Cr. Rs.

3,50,000
7,500

4,400
2,100
15,500
36,000
6,200
82,000

2,500
30,000
2,17,000

20,000
2,000
10,000
1,520
10,600
1,80,000
18,000
120
5,200
2,000
6,24,320

6,24,320

Other information:
Write off Rs. 2,000 as bad debts and provision for doubtful debts to be maintained @ 5% on
debtors.
Loan from X was taken on May 01, 2013. No interest has been paid so far.

Class XI/ Accountancy/ 35

 Included in general expenses is insurance premium of Rs. 1,200 paid for the year ending
31/3/14.
1/3 0f wages and salaries is to be charged to trading account and balance to Profit and Loss
Account.
Entire stationery was used by proprietor for own purpose.
Closing Stock was valued at Rs. 50,000.

4 Sanjiv Sondhi starts business on 1st April, 20X1 with a capital of Rs 30,000. The following
trial balance was drawn from his book at the end of the year :
Particulars
Drawings
Plant and Fixtures
Purchases
Carriage Inward
Returns Inward
Wages
Salaries
Printing and Stationery
Advertisement
Trade Charges
Rent and Taxes
Sundry Debtors
Bills Receivable
Investments
Discount
Cash at Bank
Cash in hand

Dr. (Rs)
4,500
8,000
1,16,000
2,000
4,000
8,000
10,000
800
1,200
600
1,400
25,000
5,000
15,000
500
16,000
3,000
2,21,000

Particulars
Capital
Sales
Sundry Creditors
Bills Payable

Cr. (Rs)
40,000
1,60,000
12,000
9,000

2,21,000

Additional Information:
Closing Stock was valued at `45,000
Provide Provision for Doubtful Debts @ 10% and Provision for discount on debtors @ 5%
Charge depreciation on Plant @ 20%
Advertisement expenses are outstanding to the extent of `1,000
Trade charges are prepaid to the extent of `500
Allow managers commission @10% after charging such commission

Class XI/ Accountancy/ 36

ACCOUNTANCY PROJECT CLASS XI 2016-17

TERM II
GENERAL GUIDELINES:
The project should be presented in a neat folder with your name and section written on the
cover page. The projects need to be submitted by the Friday, the 17th of January,2017
The Accountancy Project must be done on inter-leaf sheets, should be neat and well presented
and must be completely hand-written.
No whiteners to be used or written matter to be crossed out. In case of any mistakes, redo the
sheet.
STEP BY STEP GUIDELINES FOR DOING THE PROJECT
STEP 1: (Group submission)
Prepare a list of 15 business transactions. You cannot select more than 2 entries from each of the
XIV categories of entries given below:
I. INITIAL CAPITAL INVESTED BY OWNER IN THE FORM OF CASH, STOCK OR ANY
OTHER ASSET.
II. GOODS RELATED ENTRIES (3 allowed from this category)
A. Entry for Purchased goods/ Received a V.P.P for goods - cash or credit
B. Entry for Sales - cash or credit
C.Entry for Purchase returns
D. Entry for Sales Returns
E. Entry for goods withdrawn for personal use
F. Entry for goods given as charity
G. Entry for goods given as free samples
H. Entry for goods lost in theft
I. Entry for goods used to make office furniture
III. PAYMENTS MADE TO CREDITORS AND RECEIVED FROM DEBTORS.
IV. CASH DISCOUNT AND TRADE DISCOUNT
V. BAD DEBTS RELATED ENTRIES

Class XI/ Accountancy/ 37

A. Entry for bad debts

B. Entry for bad debts recovered
VI. EXPENDITURE ON INSTALLATION OF MACHINERY AND CONSTRUCTION OF
BUILDING
VII. BANKING TRANSACTIONS
A. Entry for opening of an account
B. Entry for payment made by draft
C.Entry for bank charges
D. Entry for cheque received and deposited in bank on the same date
E. Entry for cheque received and not deposited in bank.
F. Entry for the above cheque deposited on a later date.
G. Entry for deposited cheque dishonoured
VIII. EXPENSES/WAGES/RENT
A. Entry for expenses paid
B. Entry for outstanding expenses/wages/rent
C.Entry for prepaid expenses/wages/rent
IX. RECEIVED INCOME/INTEREST, DIVIDEND etc.
A. Entry for incomes received
B. Entry for accrued or outstanding income/interest, dividend
C.Entry for incomes received in advance
X. DEPRECIATION ON ASSET
XI. INTEREST ON CAPITAL AND INTEREST ON DRAWINGS
XII. INCOME TAX PAYMENT
XIII. XI. SALES TAX COLLECTED ON SALES
A. Entry for receiving sales tax from customers
B. Entry for depositing sales tax with the government
XIV. VALUE ADDED TAX

Class XI/ Accountancy/ 38

A. Entry on Purchases
B. Entry at Sales
C.Entry, when VAT is paid to the government
(ALL THE TRANSACTIONS CHOOSEN NEEDS TO BE APPROVED BY YOUR SUBJECT TEACHER)
STEP 2: (Group submission)
Once you get the 15 entries approved by your subject teacher,
Write a story that encompasses the above 15 transactions.
The story should incorporate the reason for choosing the particular line of business.
Also, choose an appropriate name for the business.
Choose only a sole proprietorship form of organisation and not a partnership or a company.
(STORY WEAVED TO BE APPROVED BY YOUR SUBJECT TEACHER)
STEP 3: (Group submission)
Prepare journal.
Ledgers should be made only when the journal entries are corrected your subject teacher.
(JOURNAL ENTERIES TO BE APPROVED BY YOUR SUBJECT TEACHER)
STEP 4: (Group submission)
Prepare ledger and Trial Balance.
(LEDGER AND TRIAL BALANCE TO BE APPROVED BY YOUR SUBJECT TEACHER)
STEP 5: (Individual submission)
Each member will prepare its project file in the following order:
A. DETAILS OF THE PROJECT:
1. Name of Project:
To study the operational efficiency and financial soundness of _( name of the business)________
2. Objective of Project:

Class XI/ Accountancy/ 39

The objective of the project is to let the students have an understanding of the complete accounting
cycle and therefore completely appreciate the meaning of Accounting as a process of recording,
classifying, summarizing accounting information and its analysis and interpretation.
3. Period of project: (Choose a period for which your business was operational)
4. Source Material: The case study for which accounting cycle has to be completed

5. Processing of Data:
Journals
Ledgers
Trial Balance
Adjusting entries
Final accounts
B. STORY PREPARED:
Write the story which is weaved and approved
C.JOURNAL ENTRIES:
Write the Journal entries in the format given below:
JOURNAL
In the books of (Name of the business)
S.No.

Particulars

Lf

Debit
Amt(`)

Credit
Amt(`)

TOTAL
NOTE: Narration must be written for every journal entry
D. LEDGER ACCOUNTS:
Ledger Accounts to be prepared in the format given below
For Real and Personal A/cs always carry the closing balance of the current year as the opening
balance of the next year and then close the account.
For Nominal A/cs, transfer the balance to the Trading A/c OR the profit and loss A/c as the
case may be.

Class XI/ Accountancy/ 40

Name of Account

Dr
Date

Particulars

Jf

Amt
(`)

(To
be left
blank
)

Date

Cr
Particulars

Jf

Amt
(`)

(To
be
left
blank
)
Total

Total

E. TRIAL BALANCE:
Trial Balance to be prepared in the format given below:
Trial Balance of ---(Name of the business)----as at
S No

Particulars

Debit

Credit

Amt(`)

Amt(`)

TOTAL

Class XI/ Accountancy/ 41