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Introduction to Accounting — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountIntroduction to Accounting4 Marks
Question
Why assets are classified into current and non-current?
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Answer

Classification of assets into current and non-current helps in ascertaining the liquidity position of the business entity. Non-Current Assets are held for continued use in the business whereas current assets are expected to be converted into cash within one year.

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A Trial Balance disclosed a difference of ₹ 417 placed on the credit side of the Suspense Account. Later on the following errors were located:
  1. Goods worth ₹ 200 purchased from Sohan had been posted to his account as ₹ 250.
  2. A purchase of furniture for ₹ 500 was recorded in the Purchases Book.
  3. Instead of crediting Gian’s Account with ₹ 512, it was debited with ₹ 215.
  4. Goods worth ₹ 130 returned by Gian were entered in the Sales Book and posted therefrom to the credit of Gian’s Personal Account.
Pass the rectifying entries and prepare a Suspense Account.
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Give the similarities of Cash Book with Ledger.
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Prepare Accounting Equation from the following:
  1. Started business with Cash ₹ 2,00,000.
  2. Purchased goods for Cash ₹ 60,000 and on Credit ₹ 1,50,000.
  3. Sold goods for Cash costing ₹ 40,000 at a profit of 20% and on Credit costing ₹ 72,000 at a profit of 25%.
  4. Paid for Rent ₹ 5,000.
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  1. Mohan started a business on $1^{\text {st }}$ April, $2018$ with a capital of $₹ 10,000$ and borrowed $₹\ 3,000$ from a friend. He earned a profit of $₹\ 5,000$ during the year ended $31^{\text {st }}$ March, 2019 and withdrew cash $₹\ 4,000$ for personal use. What is his capital on $31^{\text {st }}$ March, $2019?$
  2. Mahesh started a business with a capital of $₹\ 15,000$ on $1^{\text {st }}$ April, $2018.$ During the year, he made a profit of $₹$ 3,000. He owes $₹\ 2,500$ to suppliers of goods. What is the total of assets in his business on $31^{\text {st }}$ March, $2019?$
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Show the effect of the following transactions on Assets, Liabilities and Capital through accounting equation:
a.
Started business with cash
₹ 1,20,000
b.
Rent received
₹ 10,000
c.
Invested in shares
₹ 50,000
d.
Received dividend
₹ 5,000
e.
Purchase goods on credit from Ragani
₹ 35,000
f.
Paid cash for house hold Expenses
₹ 7,000
g.
Sold goods for cash (costing ₹ 10,000)
₹ 14,000
h.
Cash paid to Ragani
₹ 35,000
i. Deposited into bank ₹ 20,000
(Ans: Assets = Cash ₹ 37,000 + Shares ₹ 50,000 + Goods ₹ 25,000 + Bank ₹ 20,000 = ₹ 1,32,000; Liabilities = Capital ₹ 1,32,000)
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In the following Bank Reconciliation Statement. determine the missing amount:
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Rectify the following errors:
  1. Bought Radio for ₹ 1,000 for the proprietor was debited to General Expenses A/c.
  2. Bought goods from Mohan ₹ 2,000 was passed through the Sales Book, however, the account of Mohan was credited correctly.
  3. Wages due ₹ 1,500 has not been taken into account.
  4. Goods Returned by Kamal ₹ 240 has been debited to his account ₹ 420.
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State any six reasons when the balance as per Cash Book will be higher than the balance as per Bank Pass Book or Bank Statement.
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Differentiate between Provision and Reserve on the basis of:
  1. Appropriation or Charge.
  2. Financial Position.
  3. Distribution.
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Define Accounting Standards. Who is responsible for issuing Accounting Standards in India?
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