Short answers : Solutions of Questions on Page Number : 474 Q1 :State the meaning of ‘Not-for-Profit’ Organisations. Answer : Not-for-Profit Organisations (NPO) are set up with the prime objective of providing services and not to earn profit thereby enhancing the welfare of society. Such organisations include schools, hospitals, trade unions, religious organisations, etc. The person/s or the groups of individuals who govern and manage the working of an NPO are known as trustees. NPO’s main sources of income are donations, subscriptions, life membership fees, grants etc. As these organisations are not set up with profit motive, they do not…
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Short answers : Solutions of Questions on Page Number : 464 Q1 :State the meaning of incomplete records? Answer : Accounts that are not recorded as per the double entry system are known as incomplete records. According to Kohler (Dictionary for Accountants), single entry system is defined as, ” A system of book-keeping in which as a rule, only records of cash and of personal accounts are maintained; it is always incomplete double entry, varying with circumstances.” Many small-sized business firms maintain incomplete records of their business transactions. They do not maintain proper books of accounts and mainly prepare books…
Short answers : Solutions of Questions on Page Number : 422 NCERT Solutions for Class 11 Accountancy Financial Accounting Part-2 Chapter 2 – Financial Statements Q1 :Why is it necessary to record the adjusting entries in the preparation of final accounts? Answer : It is extremely important to record the adjusting entries in the preparation of final accounts. 1. This is done in order to assess the true net profit or net loss of the business organisation. 2. It helps us record those adjustments which were left or omitted and were not recorded in the accounts. 3. It assists us…
Short answers : Solutions of Questions on Page Number : 364 NCERT Solutions for Class 11 Accountancy Financial Accounting Part-2 Chapter 1 – Financial Statements – I Q1 :What are the objectives of preparing financial statements? Answer : The following are the objectives of preparing financial statements. 1. To ascertain profit earned or loss incurred by a business during an accounting period. This is estimated by preparing Trading and Profit and Loss Account. 2. To ascertain the true financial position of a business. This is reflected by the Balance Sheet. 3. To enable comparison of current year’s performance with that…
Short answers : Solutions of Questions on Page Number : 322 Q1 :Name any two types of commonly used negotiable instruments. Answer : The two types of commonly used negotiable instruments are: 1. Cheques 2. Bills of exchange NCERT Solutions for Class 11 Accountancy Financial Accounting Part-1 Chapter 8 – Bills of Exchange Q2 :Write two points of distinction between bills of exchange and promissory note. Answer : Basis of Difference Bills of Exchange Promissory Note Drawer It is drawn by a creditor. It is drawn by a debtor. Parties There are three parties involved, namely drawer, drawee and payee.…
Short answers : Solutions of Questions on Page Number : 272 Q1 :What is Depreciation? Answer : Every business acquires fixed assets for its use in the business over a period of time. As the benefits of these assets can be availed over a long period of time, thus, due to their regular use, there occurs continuous wear and tear and consequently fall in their value. This fall in the value of fixed assets, due to their regular use or expiry of time is termed as depreciation.A machinery costing Rs 1,00,000 and its useful life is 10 years; so, depreciation…
Short answers : Solutions of Questions on Page Number : 217 Q1 :State the meaning of a Trial Balance? Answer : Trial Balance is a statement prepared with debit and credit balances of all accounts in ledger, to verify the arithmetical accuracy of the accounts. It is prepared after balancing all the accounts of ledger. There are two columns in a Trial Balance: debit and credit. While debit side includes all the debit balances, credit side includes all the credit balances of the accounts. It also helps in preparing financial statements, as it is a summarise version of the ledger.…
Short answers : Solutions of Questions on Page Number : 171 Q1 :State the need for the preparation of bank reconciliation statement? Answer : The need to prepare Bank Reconciliation Statement are given below. It helps in finding out the errors and omissions committed in the Cash Book and the Pass Book. It shows uncleared cheques, which have already been debited in the Cash Book but have not been yet recorded in the Pass Book. It helps in checking embezzlement of money from the bank account. It helps in measuring the accuracy of the transactions recorded in the Cash Book.…
Short answers : Solutions of Questions on Page Number : 142 Q1 :Briefly state how the cash book is both journal and a ledger? Answer : Transactions are recorded directly from source documents in the Cash Book, so there is no need to record transactions in the Journal book. Further, on the basis of the cash transactions recorded in the Cash Book, cash and bank balances can be determined, and so there is no need to prepare cash account (which is a part of ledger) separately. Thus, the Cash Book serves the purpose of both Journal as well as ledger.…
Short answers : Solutions of Questions on Page Number : 79 NCERT Solutions for Class 11 Accountancy Financial Accounting Part 1 Chapter 3 Recording of Transactions – I Q1 : State the three fundamental steps in the accounting process. Answer : The fundamental steps in the accounting process are diagrammatically presented below. Q2 :Why is the evidence provided by source documents important to accounting? Answer : The evidence provided by the source document is important in the following manners: It provides evidence that a transaction has actually occurred. It provides important and relevant information about date, amount, parties involved and…