Final Accounts of Sole Proprietors - II Book Back Questions

11th Standard

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Accountancy

Time : 00:45:00 Hrs
Total Marks : 30
    5 x 1 = 5
  1. A prepayment of insurance premium will appear in

    (a)

    The trading account on the debit side

    (b)

    The profit and loss account on the credit side

    (c)

    The balance sheet on the assets side

    (d)

    The balance sheet on the liabilities side

  2. Net profit is

    (a)

    Debited to capital account

    (b)

    Credited to capital account

    (c)

    Debited to drawings account

    (d)

    Credited to drawings account

  3. Closing stock is valued at

    (a)

    Cost price

    (b)

    Market price

    (c)

    Cost price or market price whichever is higher

    (d)

    Cost price or net realisable value whichever is lower

  4. Accrued interest on investment will be shown

    (a)

    On the credit side of profit and loss account

    (b)

    On the assets side of balance sheet

    (c)

    Both (a) and (b)

    (d)

    None of these

  5. If there is no existing provision for doubtful debts, provision created for doubtful debts is

    (a)

    Debited to bad debts account

    (b)

    Debited to sundry debtors account

    (c)

    Credited to bad debts account

    (d)

    Debited to profit and loss account

  6. 3 x 2 = 6
  7. What is outstanding expense?

  8. What is prepaid expense?

  9. What are accrued incomes?

  10. 3 x 3 = 9
  11. Pass adjusting entries for the following on 31st March, 2018.
    (i) Charge interest on drawings at Rs 50
    (ii) Write off bad debts by Rs 500
    (iii) Depreciate furniture by Rs 1,000

  12. Give the adjusting entries for interest on capital and interest on drawings.

  13. Explain the accounting treatment of bad debts, provision for doubtful debts and provision for discount on debtors.

  14. 2 x 5 = 10
  15. From the following particulars, prepare the balance sheet of Madhu, for the year ended 31st March, 2018.

    Particulars Rs Particulars Rs
    Capital 2,00,000 Sundry creditors 40,000
    Drawings 40,000 Bills payable 20,000
    Cash in hand 15,000 Goodwill 60,000
    Loan from bank 40,000 Sundry debtors 80,000
    Bank overdraft 20,000 Land and building 50,000
    Investments 20,000 Vehicles 80,000
    Bills receivable 10,000 Cash at bank 25,000

    The following adjustments were made at the time of preparing final accounts:
    (a) Outstanding liabilities: Salaries Rs 10,000; Wages Rs 20,000; Interest on Bank overdraft Rs3,000 and Interest on bank loan Rs 6,000
    (b) Provide interest on capital @ 10% p.a.
    (c) Bad debts amounted to Rs 10,000 and make a provision for bad debts @ 10% on sundry debtors.
    (d) Closing stock amounted to Rs 1,20,000
    (e) Depreciate vehicles @ 10% p.a.
    Net profit for the year amounted to Rs 96,000 after considering all the above adjustments.

  16. Abstracts from trial balance as on 31st December 2016 are as follows:

     Particulars   Debit Rs.   Credit Rs. 
      Bad debts written off     1,800  
      Discount allowed 600  
      Sundry debtors  20,000  
      Provision for bad and doubtful debts      1,500
      Provision for discount on debtors   500

    A provision for doubtful debts @ 5% and a provision for discount @ 2% on sundry debtors are to be maintained by the trader. Show how these items would appear in the final accounts.

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