Class 11 Accountancy - Chapter Introduction to Accounting NCERT Solutions | Enumerate informational needs of managem

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.

'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.

The role of accounting has changed over the period of time- Do you agree? Explain.

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 is a journal? Give a specimen of journal showing at least five entries.

State the title of the accounts affected, type of account and the account to be debited and account to be credited :
                                                                                         ₹
1. Bhanu commenced business with cash                  1,00,000
2. Purchased goods on credit from Ramesh               40,000
3. Sold goods for cash                                                 30,000
4. Paid salaries                                                            3,000
5. Furniture purchased for cash                                  10,000
6. Borrowed from bank                                                50,000
7. Sold goods to Sarita                                                10,000
8. Cash paid to Ramesh on account                           20,000
9. Rent paid                                                                 1,500

Write the correct word(s) :

1. Credit sales can be ascertained as the balancing figure in the .......... account.
2. Excess of .......... over ......... represents loss sustained during the period.
3. To ascertain the profit, closing capital is to be adjusted by deducting .......... and adding ..........
4. Incomplete records are generally used by ..........

A sequence of actions taken to transform the data into decision useful information is called.......

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...........

Record the rectification entry for the following transactions:

Credit sales to Rajni 5,000 recorded in Purchases book:
This is an error of ..........................................
State the wrong entry recorded in the book of accounts

Correct effect should have been:

The rectification entry will be:

As an accountant of a company, you are disappointed to learn that the totals in your new trial balance are not equal. After going through a careful analysis, you have discovered only one error. Specifically, the balance of the Office Equipment account has a debit balance of 15,600 on the trial balance. However, you have figured out that a correctly recorded credit purchase of pendrive for 3,500 was posted from the journal to the ledger with a 3,500 debit to Office Equipment and another 3,500 debit to creditors accounts. Answer each of the following questions and present the amount of any misstatement :

(a) Is the balance of the office equipment account overstated, understated, or correctly stated in the trial balance?
(b) Is the balance of the creditors account overstated, understated, or correctly stated in the trial balance?
(c) Is the debit column total of the trial balance overstated, understated, or correclty stated?
(d) Is the credit column total of the trial balance overstated, understated, or correctly stated?
(e) If the debit column total of the trial balance is 2,40,000 before correcting the error, what is the total of credit column.

Why is it necessary to create a provision for doubtful debts at the time of preparation of final accounts?

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:

What is cash book? Explain the types of cash book.