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CBSE Questions for Class 11 Commerce Accountancy Accounts From Incomplete Records Quiz 2 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Accounts From Incomplete Records
Quiz 2
In order to find out the correct profit, drawings are ___________ to the closing capital.
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0%
Deducted
0%
Added
0%
Divided
0%
Multiplied
Explanation
As Drawing refers to withdrawal of capital, Due to drawings, closing capital is decreased resulting a reduced Profit.
Hence, to ascertain correct profit Drawings are added back to closing capital.
The difference between assets and liabilities is called as ___________.
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0%
Capital
0%
Drawings
0%
Incomes
0%
Expenses
Explanation
As assets represents the total funds applied in the business from capital (owners fund) and liabilities(external funds e.g bank loan, creditors etc).
therefore the difference between Assets and Liabilities will represent Capital.
The difference between capital at the end of year and capital at the beginning of year is called ____________.
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0%
Profit
0%
Income
0%
Drawings
0%
Expenses
Explanation
An increment of closing capital is a result of excess revenue earned during the year against the opening capital at the beginning thus representing Profit.
Incomplete record mechanism of book keeping is ___________.
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0%
Scientific
0%
Unscientific
0%
Unsystematic
0%
Both (b) and (c)
Explanation
Book keeping is an
unsystematic
method of
recording
transactions.It is observed, that many businessmen
keep incomplete records
because of the following reasons :
(a) This system can be adopted by people who do not have the proper knowledge of
accounting
principles;
(b) It is an inexpensive
mode
of maintaining
records
.
The capital balances are ascertained by preparing __________.
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0%
Statement of affairs
0%
Cash accounts
0%
Drawings account
0%
Debtors account
Explanation
Profit or loss earned by the business under single entry system is based on the difference between its Opening and closing capital.
To ascertain this capitals Statements of affairs are prepared.
capital = Assets - Liabilities.
The capital at the end of the accounting year is ascertained by preparing _______.
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0%
Cash Account
0%
Closing statement of affairs
0%
Total debtors account
0%
Opening statement of affairs
Explanation
Statement of Affairs is Based under Accounting Equation " Assets = Capital + Liabilities"
thus to ascertain the Closing Capital at the end of the year Closing Liabilities are deducted from closing assets.
A statement of ____________ is to be prepared in order to find out the profit and loss under a single entry system.
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0%
Income
0%
Affairs
0%
Revenue
0%
Profit and loss
Explanation
Profit or loss earned by the business under single entry system is based on the difference between its Opening and closing capital.
To ascertain this capital Statement of affairs are prepared.
A statement of affairs is a summarised statement of an estimated _____________.
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0%
Financial position
0%
Profit
0%
Income
0%
Loss
Explanation
To ascertain the Capital, Statements of affairs are prepared.
Capital = Assets - Liabilities
The above equation under which statement of affairs are prepared reflects the financial position of the business.
Profit can be ascertained from the incomplete records under single entry by using ________.
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0%
Statement of affairs
0%
Conversion method
0%
Either A or B
0%
None of the above
Explanation
The Statement of Affairs Method: takes the difference of opening and closing capitals for calculation of profit or loss under Single Entry System
The Conversion Method of single entry system: tries to convert the records from single entry to double entry system to find the Profit or loss earned by the business.
The capital in the beginning of the accounting year is ascertained by preparing ______.
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0%
closing statement of affairs
0%
cash account
0%
statement of profit or loss
0%
opening statement of affairs
Explanation
D. Opening statement of affairs.
We need to prepare the opening statement of affairs which contains the opening balances of the assets and liabilities. It is usually prepared where the books of accounts are kept as per the single entry system. It is prepared in the same manner as a Balance Sheet is prepared.
Find the total at assets at the end of the year if the net profit, drawing during the year and assets at the beginning of the year were 12,000, 7,000 and 15,000 respectively.
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0%
20,000
0%
10,000
0%
9,000
0%
8,000
Explanation
Calculation of total assets at the end of the year :-
Assets in the beginning of the year =Rs 15000
Less : Drawing made during the year (7000)
Add : Net profit for the year 12000
= Rs 20000
Find the closing stock from the following details.
Opening stock Rs. 80,000, Purchase Rs.1,40,000, wages Rs.60,000, Sales Rs.3,20,000, GP on sales 25%
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0%
Rs.60,000
0%
Rs.40,000
0%
Rs.45,000
0%
Rs.30,000
Explanation
Step-1
Gross Profit on Sales = 25%
Sales = 320000 (given)
GP = 25% x 320000
= 80,000
Step-2
Sales - Gross Profit = Cost
Therefore, Cost = 320000-80,000
Cost of Goods Sold = 240,000.
Step-3
Cost of Goods Sold = Opening Stock + Purchases + Direct Expenses - Closing Stock
2,40,000 = 80,000 + 140000 + 60,000 - Closing Stock
Closing Stock = 280000-240000
Closing Stock = 40,000
A and B enter into a joint venture to sell a consignment of biscuits sharing profits and losses equally. A provides biscuits from stock Rs. 10,He pays expenses amounting to Rs. 1,B incurs further expenses on carriage Rs. 1,He receives cash for sales Rs. 15,He also takes over goods to the value of Rs. 2,What will be the amount to be remitted by B to A?
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0%
Rs. 13,500
0%
Rs. 15,000
0%
Rs. 11,000
0%
Rs. 10,000
State whether the following statement is True or False.
Share forfeited balance is transferred to Capital Reserve Account.
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0%
True
0%
False
Explanation
Option A is Correct One.
If the loss on re-issue is less than the amount forfeited, the surplus should be transferred to capital reserve account.
From the following details estimate the capital as on 31.12.07, Capital as on 01.01.07 Rs. 205,000, Drawing Rs. 20,000, Profit during the year Rs. 25,000.
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0%
Rs. 205000
0%
Rs. 225000
0%
Rs. 210000
0%
Rs. 200000
Income -tax of the sole trader paid is shown ___________.
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0%
Debited to profit and Loss A/c
0%
Debited to Trading A/c
0%
Debited to his Capital A/c
0%
None of the above
Explanation
For a Sole Proprietor
,
income tax
is not an expense incurred to generate
revenue
hence it is not treated as an expense to be
paid
out
of
profits. In this case,
income tax
is treated as
a
personal expense resulting in drawings from the business concluding to
a
reduction
of
capital.
Kumar and Shanu-entered into a joint venture to purchase and sell new year gifts. They agreed to share the profit and losses equally. Kumar purchased goods worth Rs. 1,00,000 and spent' Rs. 10,000 in sending the goods to Shanu. He also paid Rs. 5,000 for insurance. Shanu spent Rs. 10,000 as selling expenses and sold goods for 2,00,Remaining goods Were taken over by him at Rs. 5,What will be the amount to be remitted by Shanu to Kumar as final settlement?
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0%
Rs. 1,55,000
0%
Rs. 1,50,000
0%
Rs. 1,15,000
0%
Rs. 80,000
X had started business with $$Rs. 2,00,000$$ in the beginning of the year. During the year, he borrowed $$Rs. 1,00,000$$ from Y. He further introduced $$Rs. 2,00,000$$ in the business. He also gave $$Rs. 50,000$$ as loan to his son. Goods given away as charity by him were $$Rs. 20,000$$. Profits earned by him were $$Rs. 2,50,000$$. He also withdraw $$Rs. 30,000$$ from the business. His capital at the end of the year would be__________.
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0%
$$Rs. 5,00,000$$
0%
$$Rs. 4,00,000$$
0%
$$Rs. 6,20,000$$
0%
$$Rs. 4,80,000$$
Explanation
In case there is no double entry system is followed, profit can be calculated by comparing the opening and closing capital. In the given situation this can be calculated as:
Opening Capital Rs.200000
Add: Capital Introduced Rs.200000
Add: Profit for the year Rs. 250000
Less: Loss for the year Rs.NIL
Less: Drawings Rs. 30000
--------------------
Capital at the end of the year Rs.620000
-------------------
Loan taken is a liability and loan given is asset, that will not affect the capital.
The closing balance of owner's equity is $$Rs. 2,10,000$$. During the year, the owner contributed $$Rs. 60,000$$ and withdrew $$Rs. 40,000$$. If the firm had $$Rs. 80,000$$ net income for the year, what was the owner's equity at the beginning?
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0%
$$RS. 2,30,000$$
0%
$$Rs. 2,10,000$$
0%
$$Rs. 1,90,000$$
0%
$$Rs. 1,10,000$$
Explanation
In case there is no double entry system is followed, profit can be calculated by comparing the opening and closing capital. In the given situation this can be calculated as:
Opening Capital Rs. XXXX
Add: Capital Introduced Rs. 60000
Add: Profit for the year Rs. 80000
Less: Loss for the year Rs. NIL
Less: Drawings Rs. 40000
--------------------
Capital at the end of the year Rs.210000
-------------------
Opening Capital=Closing Capital+Drawings -Profit for the year-Capital introduced
=Rs.210000+Rs.40000-Rs.80000-Rs.60000
Opening Capital = Rs.110000.
In cash accounting system _________.
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0%
revenues of assets are shown only when cash is received irrespective of the period
0%
revenues of assets are shown only of the cash received for the transactions of the financial year
0%
revenues of assets are shown only of the cash received for the current year.
0%
none of the above
Explanation
There are two system of accounting i.e. accrual system and cash system.
As per the accrual system of accounting, transactions of incomes and expenses are recorded in the period in which actually occurred, irrespective of their payment status.
Cash system of accounting is just opposite to the accrual system. Here the transactions are recorded when cash is received irrespective of the period.
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