Class 11 Accountancy - Chapter Introduction to Accounting NCERT Solutions | Which qualitative characteristics of acc

Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.

From the above, answer the following :
1. What is the amount of capital with which Mr. Sunrise started business?
2. What are the fixed assets he bought?
3. What is the value of the goods purchased?
4. Who is the creditor and state the amount payable to him?
5. What are the expenses?
6. What is the gain he earned?
7. What is the loss he incurred?
8. Who is the debtor? What is the amount receivable from him?
9. What is the total amount of expenses and losses incurred?
10. Determine if the following are assets, liabilities, revenues, expenses or none of the these: sales, debtors, creditors, salary to manager, discount to debtors, drawings by the owner.

Complete the following sentences with appropriate words:
(a) Information in financial reports is based on .....................
(b) Internal users are the ..................... of the business entity.
(c) A ..................... would most likely use an entities financial report to determine whether or not the business entity is eligible for a loan.
(d) The Internet has assisted in decreasing the ..................... in issuing financial reports to users.
(e) ..................... users are groups outside the business entity, who uses the information to make decisions about the business entity.
(f) Information is said to be relevent if it is ......................
(g) The process of accounting starts with ............ and ends with ............
(h) Accounting measures the business transactions in terms of ............ units.
(i) Identified and measured economic events should be recording in ............ order.

Define accounting and state its objectives.

Enumerate informational needs of management.

'Accounting information should be comparable'. Do you agree with this statement? Give two reasons.

Giving examples, explain each of the following accounting terms:
* Fixed assets              * Revenue              * Expenses
* Gain                           * Profit                    * Capital
* Short-term liabilities

Distinguish between debtors and creditors.

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.

State the different elements of a computer system.

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

State the need for the preparation of bank reconciliation statement?

What entry (debit or credit) would you make to:
(a) increase revenue
(b) decrease in expense,
(c) record drawings
(d) record the fresh capital introduced by the owner.

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

What is petty cash book? How it is prepared?

What are the steps taken by an accountant to locate the errors in the trial balance?

Cash withdrawn by the Proprietor should be credited to:
(i) Drawings account
(ii) Capital account
(iii) Profit and loss account
(iv) Cash account

Give two examples of errors of principle?

Furniture purchased from M/s Rao Furnishigs for 8,000 was entered into the purchases book.
This is the error of ........................................
State the wrong entry recorded in the book of accounts

Correct effect should have been:

The rectification entry will be:

Fill in the correct words :
(i) Depreciation is a decline in the value of ...........
(ii) Installation, freight and transport expenses are a part of ...........
(iii) Provision is a ........... against profit.
(iv) Reserve created for maintaining a stable rate of dividend is termed as...........

Distinguish between ‘provision’ and ‘reserve’ .

What is an operating profit?