Use these NCERT Solutions for Class 11 Accountancy to review textbook questions and chapter-wise explanations available on SaralStudy. Curriculum verification is still being completed for this subject, so legacy chapter resources are preserved without being labelled as the current syllabus.
Accounting is the process of collecting, recording, summarising and communicating financial information to its users for correct decision making. Accounting is an art as well as science. Bookkeeping is a part of accounting and mainly concerned with recording of financial data. Users of accounting information may be internal users and external users. Internal users include owners, management etc, External users include Banks and financial institutions, creditors etc. Importance accounting terms are business transactions expenses all include and income all include, profit, loss, purchase, liabilities, assets, inventory etc.
Generally Accepted Accounting Principles (GAAP) are the basic rules which have been generally accepted by accounting all over to the world as general guidelines for preparing the accounting statements. Accounting concepts include money measurement concept dual concept, matching concept objectivity concept etc. Accounting conventions include conventions of full disclosure, convention of consistency, convention of conservatism and convention of materiality. Double entry system of accounting is based on the principle that every business transaction is recorded in at least two accounts.
Bills that provide evidence of a transaction are called source documents on the basis of the source documents, entries are first recorded on the vouchers and then on the basin of the vouchers, entries are made in journal. Accounting equation means assets are equal to liabilities plus capital. Left hand side records sources of funds (liabilities), while right hand side records application of funds (Assets).
Special purpose books include cash book sales book, sales return book, purchase book purchase return book, bills receivable book, bills payable book and journal proper. Single column cash book itself is a cash account. Bank overdraft is a situation in which cash drawn from the bank exceeds the amount of deposits. Contra entry is an entry which is recorded on both sides of the cash book. Advantages of a petty cash book are that the burden of the main cash book is reduced, helps in preparation of ledger accounts, etc. Cash is maintained on the basis of ordinary system or imprest system.
A Bank reconciliation statement is a document that matches the cash balance on a company balance sheet to the corresponding amount on its bank statement. They also help detect fraud and any cash manipulations.
A trial balance is a statement showing the balances, or total of debits and credits, of all the accounts in the ledger with a view to verify the arithmetical accuracy of posting into the ledger accounts. The task of preparing the statements is simplified because the accountant can take the balances of all accounts from the trial balance instead of going through the whole ledger. The trial balance is prepared to fulfill the following objectives : 1) To ascertain the arithmetical accuracy of the ledger accounts. 2) To help in locating errors. 3) To help in the preparation of the financial statements. (Profit & Loss account and Balance Sheet).
"Depreciation" means decline in the value of a fixed asset due to use, passage of time or obsolescence. In other words, if a business enterprise procures a machine and uses it in the production process then the value of the machine declines with its usage. Depreciation may be described as a permanent, continuing and gradual shrinkage in the book value of fixed assets. It is based on the cost of assets consumed in a business and not on its market value.
According to the Negotiable Instruments Act 1881, a bill of exchange is defined as an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.
The financial statements provide a summary of the accounts of a business enterprises the balance sheet reflecting the assets liabilities and capital as on a certain date and income statement showing the result of operations during a certain period. Capital expenditure is an expenditure benefit of which is discussed over a number of years, expenditure shown in the balance sheet. Deferred Revenue expenditure are those expenses whose benefits expand more than one accounting period not as long as capital is expenditure.
Since final accounts are prepared on an actual basis, this is a need for adjustment. Closing stock is the goods lying unsold at the end of the current accounting period. It is shown in the trading account and assets side of the balance sheet. Such expenses are shown in a profit and loss account and liabilities side of the balance sheet. Prepaid expenses are the expenses which have been paid in advance during the current financial year. Such expenses are shown in the assets side of the balance sheet and deducted from the concerned expenses in trading and profit & loss accounts.
Accounts from incomplete records, is a system of bookkeeping in which accounting records are not kept according to the double entry principle of bookkeeping; it is called a single entry system. It is a simple method suitable for small businesses and there is no need for the knowledge of principles of book keeping etc. The difference between the opening capital and closing capital profit earned during the year. The difference between opening capital and closing capital is the profit earned during the year.
A computer is an electronic device, which is capable of performing a variety of operations as directed by a set of instructions. This set of instruments are capable of instrument is instructions is called a computer programme or software. Computer components that can be physically touched such as keyboard, C.P.U, monitor, mouse etc. are known as computer hardware limitations of computer systems include lack of common issue of sense, lack of own intelligence etc. Components of the computer system are input, central processing unit and output.
A computerised accounting system (CAS) refers to use of computers in performing accounting function with the help of application softwares i.e. accounting softwares. Need of computerised accounting varies with numerous transactions, instant reporting, flexible reporting reduction is paperwork, on-line facility, accuracy and security etc.
Fresh educational articles and updates.
Most-read articles from SaralStudy.
Fast access to frequently used study resources.
Recently viewed articles based on SaralStudy activity.