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11th Accountancy Chapter 12 Final Accounts of Sole Proprietors - I Book Back Questions

Published on: 07/09/2019

Final Accounts of Sole Proprietors - I

Download Tamil Nadu 11th Standard Accountancy question papers, model tests, one-mark questions, important questions, and public exam papers in PDF format. Free study materials and answer keys for TN State Board students.

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Questions:

Generic 5

2 x 5 = 10

From the following balances extracted from the books of a trader, ascertain gross profit and net profit for the year ended March 31, 2017.

Particulars	Rs	Particulars	Rs
Sales	72,250	Purchases	32,250
Opening stock	7,600	Sales returns	1,250
Purchases returns	250	Rent	300
Stationery and printing (office)	250	Salaries	3,000
Miscellaneous expenses	200	Travelling expenses (on sales)	1,800
Advertisement	500	Commission paid	150
General expenses	2,500	Office Expenses	1,600
Dividend received	2,500	Wages	2,600
Loss on sale of old furniture	300	Profit on sale of investments	500

From the following particulars, prepare profit and loss account for the year ended 31st December 2017.

Particulars	Rs	Particulars	Rs
Gross profit	21,05,000	Discount allowed	30,000
Trade expenses	20,000	Office lighting	19,800
Carriage on sales	1,00,000	Commission received	14,400
Office salaries	2,38,000	Interest on loan	22,000
Postage (office)	2,200	Stationery (office)	14,000
Legal charges	4,000	Export duty (on sales)	23,000
Audit fees	16,000	Miscellaneous receipts	5,000
Donation given	11,000	Travelling expenses related to sales	66,000
Sundry expenses	3,600	Selling expenses	53,200

Multiple Choice Question

5 x 1 = 5

Goodwill is classified as _______.

(a)

A current asset

(b)

A liquid asset

(c)

A tangible asset

(d)

An intangible asset

Current assets does not include _______.

(a)

Cash

(b)

Stock

(c)

Furniture

(d)

Prepaid expenses

Salaries appearing in the trial balance is shown on the _______.

(a)

Debit side of trading account

(b)

Debit side of profit and loss account

(c)

Liabilities side of the balance sheet

(d)

Assets side of the balance sheet

Balance sheet shows the ________ of the business.

(a)

Profitability

(b)

Financial position

(c)

Sales

(d)

Purchases

Closing stock is an item of ______.

(a)

Fixed asset

(b)

Current asset

(c)

Fictitious asset

(d)

Intangible asset

Generic 2

3 x 2 = 6

What are fixed assets?

What are wasting assets?

10.

Write a note on trading account.

Generic 3

3 x 3 = 9

11.

What is meant by grouping and marshalling of assets and liabilities?

12.

What are the advantages of preparing a balance sheet?

13.

“Balance sheet is not an account”- Explain.

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Answers Key:

Generic 5

2 x 5 = 10

Dr. Trading and Profit and Loss account for the year ended 31.03.2017 Cr.
Particulars	Rs.	Rs.	Particulars	Rs.	Rs.
To Opening stock		7,600	By Sales	72,250
To Purchases	32,250		Less: Sales return	1,250	71,000
Less: Purchases returns	250	32,000
To Wages		2,600
To Gross profit c/d		28,800
		71,000			71,000
To Stationery and printing		250	By Gross-profit b/d		28,800
To Miscellaneous expenses		200	By Dividend received		2,500
To Advertisement		500	By Profit on sale of investments		500
To General expenses		2,500
To Loss on sale of old furniture		300
To Rent		300
To Salaries		3,000
To Travelling expenses		1,800
To Commission paid		150
To Office expenses		1,600
To Net profit c/d		21,200
(Transferred to capital accounts)
		31,800			31,800

Dr. Profit and loss account for the year ended 31st December, 2017 Cr.
Particulars	Rs	Particulars	Rs
To Trade expenses	20,000	By Gross Profit b/d	21,05,000
To Carriage on sales	1,00,000	By Commission received	14,400
To Office salaries	2,38,000	By Miscellaneous receipts	5,000
To Postage	2,200
To Legal charges	4,000
To Audit fees	16,000
To Donation given	11,000
To Sundry expenses	3,600
To Selling expenses	53,200
To Discount allowed	30,000
To Office lighting	19,800
To Interest on loan	22,000
To Stationery (office)	14,000
To Export duty	23,000
To Travelling expenses	66,000
To Net Profit (transferred to capital account)	15,01,600
	21,24,400		21,24,400

Multiple Choice Question

5 x 1 = 5

(d)
An intangible asset

(b)
Debit side of profit and loss account

(b)
Financial position

(b)
Current asset

Generic 2

3 x 2 = 6

Fixed assets are those assets which are acquired or constructed for continued use in the business and last for many years such as land and building, plant and machinery, motor vehicles, furniture, etc.

Wasting assets are the assets which get exhausted gradually in the process of excavation.

10.

(i) Trading refers to buying and selling of goods with the intention of making profit.
(ii) The trading accounts a nominal account which shows the result of buying and selling of goods for an accounting period.
(iii) Trading Account is prepared to find out the difference between the revenue from sales and cost of goods sold.
(iv) Cost of goods sold refers to directly related cost.

Generic 3

3 x 3 = 9

11.

(i) The assets and liabilities shown in the balance sheet are grouped and presented in a particular order. The term 'grouping' means showing the items of similar nature under a common heading.
(ii) For example, the amount due from various customers will be shown under the head 'Sundry Debtors'.
(iii) Similarly, under the head 'Current Assets', the balance of cash, bank, debtors, stock and other current assets will be shown.
(iv) 'Marshalling' is the arrangement of various assets and liabilities in a proper order.
(v) Marshalling can be made in one of the following two ways :
(a) In the order of liquidity.
(b) In the order of permanence

12.

Advantages of Balance Sheet:
(i) It is helpful in ascertaining the financial position of the business by showing assets and liabilities of the concern on a specific date.
(ii) It discloses the solvency of business by showing how much assets are available for payment of liabilities.
(iii) It also disclose the proprietary interest of owner.
(iv) It helps in calculation of various ratios which help in better management of business.
(v) It helps in comparison of assets and liabilities of business on two dates to ascertain the progress being made by business.
(vi) It helps to ascertain the amount of capital employed in business.

13.

(i) The balance sheet is a statement prepared for showing the financial position of the business summarising its assets and liabilities at a given date.
(ii) It is prepared at the end of the accounting period after the trading and profit and loss account have been prepared.
(iii) It is called a balance sheet because it is a statement of balances of ledger accounts which have not been closed even after the preparation of the trading and profit and loss account.