Class 11 Accountancy - Chapter Financial Statements - 1 NCERT Solutions | What are closing entries? Give four exam

Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure :
(a) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.
(b) Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order.
(c) Registration fees paid at the time of purchase of a building.
(d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four years.
(e) Depreciation charged on a plant.
(f) The expenditure incurred in erecting a platform on which a machine will be fixed.
(g) Advertising expenditure, the benefits of which will last for four years.

What is meant by Grouping and Marshalling of assets and liabilities. Explain the ways in which a balance sheet may be marshalled.

Choose the correct chronological order of ascertainment of the following profits from the profit and loss account :
(i) Operating Profit, Net Profit, Gross Profit
(ii) Operating Profit, Gross Profit, Net Profit
(iii) Gross Profit, Operating Profit, Net Profit
(iv) Gross Profit, Net Profit, Operating Profit

Match the items given under ‘A’ with the correct items under ‘B’
(i) Closing stock is credited to                                                  (a) Trial balance
(ii) Accuracy of book of account is tested by                            (b) Trading account
(iii) On returning the goods to seller, the buyer sends              (c) Credit note
(iv) The financial position is determined by                              (d) Balance sheet
(v) On receiving the returned goods from the                          (e) Debit note
buyer, the seller sends

While calculating operating profit, the following are not taken into account.
(i) Normal transactions
(ii) Abnormal items
(iii) Expenses of a purely financial nature
(iv) (ii) & (iii)
(v) (i) & (iii)

Choose the correct option in the following questions :

The financial statements consist of:
(i) Trial balance
(ii) Profit and loss account
(iii) Balance sheet
(iv) (i) & (iii)
(v) (ii) & (iii)

State True or False :
(i) Gross profit is total revenue.
(ii) In trading and profit and loss account, opening stock appears on the debit side because it forms the part of the cost of sales for the current accounting year.
(iii) Rent, rates and taxes is an example of direct expenses.
(iv) If the total of the credit side of the profit and loss account is more than the total of the debit side, the difference is the net profit.

Which of the following is correct :
(i) Operating Profit = Operating profit – Non-operating expenses – Non-operating incomes
(ii) Operating profit = Net profit + Non-operating Expenses + Non-operating incomes
(iii) Operating profit = Net profit + Non-operating Expenses – Non-operating incomes
(iv) Operating profit = Net profit – Non-operating Expenses + Non-operating incomes

Explain the concept of cost of goods sold?

What is a balance sheet. What are its characteristics?

Name any two types of commonly used negotiable instruments.

Why is it necessary to record the adjusting entries in the preparation of final accounts?

State the meaning of incomplete records?

What is ‘Depreciation’?

Briefly state how the cash book is both journal and a ledger.

State the meaning of a trial balance?

State the four basic requirements of a database applications.

Define accounting.

State the different elements of a computer system.

Why is it necessary for accountants to assume that business entity will remain a going concern?

Briefly state how the cash book is both journal and a ledger.

Choose the Correct Answer :

The ledger folio column of journal is used to:
(a) Record the date on which amount posted to a ledger account.
(b) Record the number of ledger account to which information is posted.
(c) Record the number of amounts posted to the ledger account.
(d) Record the page number of the ledger account.

Distinguish between a ‘ready-to-use’ and ‘tailored’ accounting software.

What adjusting entries would you record for the following :
(a) Depreciation
(b) Discount on debtors
(c) Interest on capital
(d) Manager’s commission

Explain briefly the procedure of calculating the date of maturity of a bill of exchange? Give example.

Indicate against each amount wheather it is a debit or a credit balance, and prepare a trial balance as at March 31, 2014 based on the following balances:
     Accounts                       Title Amount ₹
 Capital                               1,00,000
 Drawings                           16,000
 Machinery                          20,000
 Sales                                  2,00,000
 Purchases                          2,10,000
 Sales return                        20,000
 Purchases return                30,000
 Wages                                40,000
 Goodwill                             60,000
 Interest received                15,000
 Discount allowed                6,000
 Bank overdraft                    22,000
 Bank loan                           90,000
 Debtors :
 Nathu                                 55,000
 Roopa                                20,000
 Creditors :
 Reena                                 35,000
 Ganesh                               25,000
 Cash                                   54,000
 Stock on April 01, 2013      16,000

What are the different types of errors that are usually committed in recording business transactions?

Cash paid to Neha 2,000 was not posted to her account.
This is an error of ..................................
The wrong effect has been:

The correct effect should have been:

The rectification entry will be.

What kinds of errors would cause differences in the trial balance. Also list examples that would not be revealed by a trial balance?

Explain the errors of commission and give two examples with measures to rectify them.