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11th Standard Accountancy - Final Accounts of Sole Proprietors - II Model Question Paper

Published on: 08/10/2019

Final Accounts of Sole Proprietors - II

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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Std: 11th Standard - Accountancy

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Questions:

Generic 3

5 x 3 = 15

What is Credit balance?

The following are the extracts from the trial balance.

Particulars	Debit Rs.	Credit Rs.
Sundry Creditors		30,000
Discount received		1,000

You are required to show how these items will appear in the profit and loss account and balance sheet.

Explain how closing stock is treated in final accounts.

What is the need for preparing final accounts?

Show necessary entries to adjust the following on 31st December, 2017.
(i) Outstanding salaries Rs. 1,200
(ii) Outstanding rent Rs. 300
(iii) Prepaid insurance premium Rs. 450
(iv) Interest on investments accrued Rs. 400
(v) Bad debts written off Rs. 200

Generic 5

2 x 5 = 10

Prepare trading account from the following ledger balances presented by P. Sen as on 31st March 2016.

Particulars	Rs.	Particulars	Rs.
Stock (1-4-2015)	10,000	Sales	3,00,000
Purchases	1,60,000	Returns inward	16,000
Wages	30,000	Returns outward	10,000
Carriage inwards	10,000	Gas and Fuel	8,000
Freight inwards	8,000

Additional information:
(a) Stock on 31st March, 2016 Rs. 20,000
(b) Outstanding wages amounted to Rs. 4,000
(c) Gas and fuel was paid in advance for Rs. 1,000.

From the following particulars, prepare the balance sheet of Madhu, for the year ended 31^st 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 Rs. 3,000 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.

Multiple Choice Question

7 x 1 = 7

Unexpired expenses are also called as_________.

(a)

Outstanding expenses

(b)

Prepaid expenses

(c)

Accrued income

(d)

Income received in advance

Prepaid insurance is _______

(a)

an asset

(b)

a liability

(c)

an income

(d)

an expense

10.

Depreciation is deducted from concerned ______ in the Balance sheet.

(a)

Current asset

(b)

Fictitious asset

(c)

Fixed asset

(d)

None of these

11.

______ earned during the period must be compared with the expenses incurred during the period.

(a)

Incomes

(b)

Revenues

(c)

Profit

(d)

Loss

12.

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

13.

Net profit is ______.

(a)

Debited to capital account

(b)

Credited to capital account

(c)

Debited to drawings account

(d)

Credited to drawings account

14.

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

Generic 2

5 x 2 = 10

15.

Give adjusting entry for depreciation at 10% p.a. on machinery of Rs.25,000.

16.

What is depreciation?

17.

What is provision for discount on debtors?

18.

What is prepaid expense?

19.

What are adjusting entries?

Assertion and reason

2 x 2 = 4

20.

Assertion (A): Expenses which have been incurred in the accounting period but not paid till the end of the accounting period are called outstanding expenses
Reason (R): Drawings represent the amount or goods withdrawn by the proprietor from the business for his personal use
Select the correct answer
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false.
(d) (A) is false, but (R) is true

21.

Assertion (A): The unsold goods in the business at the end of the accounting period are termed as closing stock
Reason (R): Closing stock is the opening stock for the next accounting period.
Select the correct answer.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false.
(d) (A) is false, but (R) is true.

Find the correct statement

2 x 2 = 4

22.

(i) Prepaid expense and accrued income are current assets.
(ii) Provision is created for bad and doubtful debts and discount on debtors in the current accounting period.
(iii) Cash discount is allowed by the suppliers to customers for prompt payment of amount due either on or before the due date.
(a) (i) is correct
(b) (ii) is correct
(c) (ii) and (iii) are correct
(d) (i), (ii) and (iii) are correct

23.

(i) Adjustment entries are made so that the financial statements represent a time and fair view of profitability and financial poistion.
(ii) Opening stock is valued at cost price or net realisable value whichever is lower.
(iii) Outstanding expense and income received in advance are current liabilities
(a) (i) is correct
(b) (ii) is correct
(c) (i) and (ii) are correct
(d) (i) and (iii) are correct

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Answers Key:

Generic 3

5 x 3 = 15

(i) The excess of credit total over the debit total is called the Credit balance.
(ii) When there is only Credit Entries in an Account, the amount itself is the balance of that Account, i.e., the Credit balance.

Dr Profit and loss account Cr
Particulars	Amount Rs	Amount Rs	Particulars	Amount Rs	Amount Rs
			By Discount received A/c		1,000

Dr Profit and loss account Cr
Liabilities	Amount Rs	Amount Rs	Assets	Amount Rs	Amount Rs
Sundry creditors		30,000

(i) The unsold goods in stock at the end of the accounting period is termed as closing stock. The stock is valued at cost price or not realisable value whichever is lower.
(ii) The valuation principle is based on the convention of conservatism.

**Adjusting Entry**
Particulars		Debit Rs	Credit Rs
Closing Stock A/c	Dr	xxxxxx
To Trading A/c			xxxxxx
(Closing Stock brought into Account)

Value of Closing Stock will appear :
(a) On the credit side of trading account and
(b) On the assets side of balance sheet.

The need for preparing final accounts are stated below :
(i) To ascertain the true profit or loss of the business.
(ii) To determine the true financial position of the business.
(iii) To make a record of the transactions earlier omitted in the books.
(iv) To rectify the errors committed in the books.
(v) To complete the incomplete transactions.

Date	Particulars	Debit Rs	Credit Rs
2017	Salaries A/c Dr.	1,200
Dec. 31	To Outstanding salaries A/c		1,200
	(Salaries outstanding provided)
Dec. 31	Rent A/c Dr.	300
	To Outstanding rent A/c		300
	(Provided for rent outstanding)
Dec. 31	Prepaid insurance premium A/c Dr.	450
	To Insurance premium A/c		450
	(Insurance prepaid)
Dec. 31	Accrued Interest on investment A/c Dr.	400
	To Interest on investment A/c		400
	(Provided for interest accrued)
Dec. 31	Bad debts A/c Dr.	200
	To Sundry debtors A/c		200
	(Bad debts written off)

Generic 5

2 x 5 = 10

**Dr. Trading for the year ended 31st March 2016**
Particulars	Rs.	Rs.	Particulars	Rs.	Rs.
To Opening Stock		10,000	By Sales	3,00,000
To Purchases	1,60,000		Less: Returns inward	16,000	2,84,000
Less: Returns outward	10,000	1,50,000	By Closing Stock		20,000
To Wages	30,000
Add: Outstanding	4,000	34,000
To Carriage inwards		10,000
To Freight inwards		8,000
To Gas and fuel	8,000
Less: Prepaid	1,000	7,000
To Gross profit c/d		85,000
		3,04,000			3,04,000

In the books of Madhu Balance Sheet as on 31^st March, 2018
Particulars	Rs.	Rs.	Particulars	Rs.	Rs.
Capital	2,00,000		Goodwill		60,000
Add: Net profit	96,000		Land and Building		50,000
Add: Interest on capital	20,000		Vehicles	80,000
	3,16,000		Less: Depreciation	8,000	72,000
Less: Drawings	40,000	2,76,000	Investments		20,000
Loan from bank	40,000		Stock-in-tracle		1,20,000
Add: Interest outstanding	6,000	46,000	Sundry debtors	80,000
Bills payable		20,000	Less: Bad debts	10,000
Sundry creditors		40,000		70,000
Bank overdraft	20,000
Add: Interest outstanding	3,000	23,000	Less: Provision for bad and doubtful debts	7,000	63,000
Outstanding liabilities:
Salaries	10,000		Bills receivable		10,000
Wages	20,000	30,000	Cash at bank		25,000
			Cash in hand		15,000
		4,35,000			4,35,000

Multiple Choice Question

7 x 1 = 7

(b)
Prepaid expenses

(a)
an asset

10.

11.

(b)
Revenues

12.

(d)
Debited to profit and loss account

13.

(b)
Credited to capital account

14.

Generic 2

5 x 2 = 10

15.

Adjusting Entry
Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Depreciation A/c	Dr.		2,500
	To Machinery A/c (Depreciation provided 10% on machinery at Rs.25,000)				2,500

16.

(i) The decrease in value of fixed assets due to usage or passage of time is called depreciation.
(ii) It is a loss to the business.

17.

(i) Cash discount is allowed by the suppliers to customers for prompt settlement of cash. A provision created on sundry debtors for allowing such discount is called provision for discount on debtors.
(ii) Provision for discount on debtors is made on the basis of past experience at an estimated rate on

18.

(i) Prepaid expenses refer to amount paid in the current accounting year for the benefit or services to be received in the next accounting year.
(ii) They are also called as unexpired expenses. Prepaid expense account is a representative personal account.

19.

(i) In a firm there will be a number of items, both expenses and incomes, which have to be adjusted.
(ii) All unadjusted items which need to be brought into books of accounts at the time of preparing final accounts are called "Adjustments".
(iii) The journal entries passed to effect the required adjustment are known as adjusting entries.

Assertion and reason

2 x 2 = 4

20.

(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)

21.

(a) Both (A) and (R) are true and (R) is the correct explanation of (A)

Find the correct statement

2 x 2 = 4

22.

(d) (i), (ii) and (iii) are correct

23.

(d) (i) and (iii) are correct