Class 11
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Financial Accounting 1
Recording of Transactions - I
NCERT Solutions
NCERT Solutions
Recording of Transactions - I
43 Solutions
Exercise:
All Exercises
Questions for Practice - Long Answers
Questions for Practice - Numerical Questions
Questions for Practice - Short Answers
Test Your Understanding - I
Test Your Understanding - II
Test Your Understanding - III
Test Your Understanding - IV
Test Your Understanding - V
Q1
Questions for Practice - Long Answers
Describe the events recorded in accounting systems and the importance of source documents in those systems?
Q2
Questions for Practice - Long Answers
Describe how debits and credits are used to analyse transactions.
Q3
Questions for Practice - Long Answers
Describe how accounts are used to record information about the effects of transactions?
Q4
Questions for Practice - Long Answers
What is a journal? Give a specimen of journal showing at least five entries.
Q5
Questions for Practice - Long Answers
Differentiate between source documents and vouchers.
Q6
Questions for Practice - Long Answers
Accounting equation remains intact under all circumstances. Justify the statement with the help of an example.
Q7
Questions for Practice - Long Answers
Explain the double entry mechanism with an illustrative example.
Q1
Questions for Practice - Numerical Questions
Prepare accounting equation on the basis of the following :
(a)
Harsha started business with cash ₹2,00,000
(b)
Purchased goods from Naman for cash ₹ 40,000
(c)
Sold goods to Bhanu costing ₹10,000/₹ 12,000
(d)
Bought furniture on credit ₹ 7,000
(Ans: Asset = cash ₹ 1,60,000 + Goods ₹ 30,000 + Debtors ₹ 12,000 + Furniture ₹ 7,000 = ₹ 2,09,000; Liabilities = Creditors ₹ 7,000 + Capital ₹ 2,02,000 = ₹ 2,09,000 )
Q2
Questions for Practice - Numerical Questions
Prepare accounting equation from the following:
(a)
Kunal started business with cash ₹2,50,000
(b)
He purchased furniture for cash ₹ 35,000
(c)
He paid commission ₹ 2,000
(d)
He purchases goods on credit ₹ 40,000
(e) He sold goods (Costing ₹20,000) for cash ₹ 26,000
(Ans: Asset = Cash ₹ 2,39,000 + Furniture ₹ 35,000 + Goods ₹ 20,000 = ₹ 2,94,000; Liabilities = Creditors ₹ 40,000 + Capital ₹ 2,54,000 = ₹ 2,94,000 )
Q3
Questions for Practice - Numerical Questions
Mohit has the following transactions, prepare accounting equation:
(a)
Business started with cash ₹ 1,75,000
(b)
Purchased goods from Rohit ₹ 50,000
(c)
Sales goods on credit to Manish (Costing ₹ 17,500) ₹ 20,000
(d)
Purchased furniture for office use ₹ 10,000
(e) Cash paid to Rohit in full settlement ₹ 48,500
(f) Cash received from Manish ₹ 20,000
(g) Rent paid ₹ 1,000
(h) Cash withdrew for personal use ₹ 3,000
(Ans: Cash ₹ 1,32,500 + Goods ₹ 32,500 + Furniture ₹ 10,000 = ₹ 1,75,000; Liabilition = Capital ₹ 1,75,000 )
Q4
Questions for Practice - Numerical Questions
Rohit has the following transactions :
(a)
Commenced business with cash ₹1,50,000
(b)
Purchased machinery on credit ₹ 40,000
(c)
Purchased goods for cash ₹ 20,000
(d)
Purchased car for personal use ₹ 80 ,000
(e) Paid to creditors in full settlement ₹ 38,000
(f) Sold goods for cash costing ₹ 5,000 for ₹ 4,500
(g) Paid rent ₹ 1,000
(h) Commission received in advance ₹ 2,000
Prepare the Accounting Equation to show the effect of the above transactions on the assets, liabilities and capital.
(Ans: Assets = Cash ₹ 17,500 + Machine ₹ 40,000 + Goods ₹ 15,000 = ₹ 72,500; Liabilities = Commission ₹ 2,000 + Capital ₹ 70,500 = ₹ 72,500)
Q1
Questions for Practice - Short Answers
State the three fundamental steps in the accounting process.
Q2
Questions for Practice - Short Answers
Why is the evidence provided by source documents important to accounting?
Q3
Questions for Practice - Short Answers
Should a transaction be first recorded in a journal or ledger? Why?
Q4
Questions for Practice - Short Answers
Are debits or credits listed first in journal entries? Are debits or credits indented?
Q5
Questions for Practice - Short Answers
Why are some accounting systems called double accounting systems?
Q6
Questions for Practice - Short Answers
Give a specimen of an account.
Q7
Questions for Practice - Short Answers
Why are the rules of debit and credit same for both liability and capital?
Q8
Questions for Practice - Short Answers
What is the purpose of posting J.F numbers that are entered in the journal at the time entries are posted to the accounts.
Q9
Questions for Practice - Short Answers
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.
Q10
Questions for Practice - Short Answers
If a transaction has the effect of decreasing an asset, is the decrease recorded as a debit or as a credit? If the transaction has the effect of decreasing a liability, is the decrease recorded as a debit or as a credit?
Q1
Test Your Understanding - I
Double entry accounting requires that:
(i)
All transactions that create debits to asset accounts must create credits to liability or capital accounts;
(ii)
A transaction that requires a debit to a liability account require a credit to an asset account;
(iii)
Every transaction must be recorded with equal debits equal total credits.
Q2
Test Your Understanding - I
State different kinds of transactions that increase and decrease capital.
Q3
Test Your Understanding - I
Does debit always mean increase and credit always mean decrease?
Q4
Test Your Understanding - I
Which of the following answers properly classifies these commonly used accounts: (1) Building (2) Wages (3) Credit sales (4) Credit purchases (5) Electricity charges due but not yet paid (outstanding electricity bills) (6) Godown rent paid in advance (prepaid godown rent) (7) Sales (8) Fresh capital introduced (9) Drawings (10) Discount paid
Assets Liabilities Capital Revenue Expense
(i)
5,4, 3, 9,6 2,10 8,7
(ii)
1,6 4,5 8 7,3 2,9,10
(iii)
2,10,4 4,6 8 7,5 1,3,9
Q1
Test Your Understanding - II
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
Q1
Test Your Understanding - III
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.
Q2
Test Your Understanding - III
The journal entry to record the sale of services on credit should include:
(a)
Debit to debtors and credit to capital.
(b)
Debit to cash and Credit to debtors.
(c)
Debit to fees income and Credit to debtors.
(d)
Debit to debtors and Credit to fees income.
Q3
Test Your Understanding - III
The journal entry to record purchase of equipment for ₹ 2,00,000 cash and a balance of ₹ 8,00,000 due in 30 days include:
(a)
Debit equipment for ₹ 2,00,000 and Credit cash ₹ 2,00,000.
(b)
Debit equipment for ₹ 10,00,000 and Credit cash ₹ 2,00,000 and creditors ₹ 8,00,000.
(c)
Debit equipment ₹ 2,00,000 and Credit debtors ₹ 8,00,000.
(d)
Debit equipment ₹ 10,00,000 and Credit cash ₹ 10,00,000.
Q4
Test Your Understanding - III
When an entry is made in journal:
(a)
Assets are listed first.
(b)
Accounts to be debited listed first.
(c)
Accounts to be credited listed first.
(d)
Accounts may be listed in any order.
Q5
Test Your Understanding - III
If a transaction is properly analysed and recorded:
(a)
Only two accounts will be used to record the transaction.
(b)
One account will be used to record transaction.
(c)
One account balance will increase and another will decrease.
(d)
Total amount debited will equals total amount credited.
Q6
Test Your Understanding - III
The journal entry to record payment of monthly bill will include:
(a)
Debit monthly bill and Credit capital.
(b)
Debit capital and Credit cash.
(c)
Debit monthly bill and Credit cash.
(d)
Debit monthly bill and Credit creditors.
Q7
Test Your Understanding - III
Journal entry to record salaries will include:
(a)
Debit salaries Credit cash.
(b)
Debit capital Credit cash.
(c)
Debit cash Credit salary.
(d)
Debit salary Credit creditors.
Q1
Test Your Understanding - IV
Fill in the blanks:
Issued a cheque for ₹ 8,000 to pay rent. The account to be debited is ________
Collected ₹ 35,000 from debtors. The account to be credited is ________
Purchased office stationary for ₹ 18,000. The account to be credited is ________
Purchased new machine for ₹ 1,70,000 and issued cheque for the same. The account to be debited is ________
Issued cheque for ₹ 70,000 to pay off on of the creditors. The account to be debited is ________
Returned damaged office stationary and received ₹ 50,000. The account to be credited is ________.
Provided services for ₹ 65,000 on credit. The account to be debited is ________
Q1
Test Your Understanding - V
Voucher is prepared for:
(i)
Cash received and paid
(ii)
Cash/Credit sales
(iii)
Cash/Credit purchase
(iv)
All of the above
Q2
Test Your Understanding - V
Voucher is prepared from:
(i)
Documentary evidence
(ii)
Journal entry
(iii)
Ledger account
(iv)
All of the above
Q3
Test Your Understanding - V
How many sides does an account have?
(i)
Two
(ii)
Three
(iii)
one
(iv)
None of These
Q4
Test Your Understanding - V
A purchase of machine for cash should be debited to:
(i)
Cash account
(ii)
Machine account
(iii)
Purchase account
(iv)
None of these
Q5
Test Your Understanding - V
Which of the following is correct?
(i)
Liabilities = Assets + Capital
(ii)
Assets = Liabilities - Capital
(iii)
Capital = Assets - Liabilities
(iv)
Capital = Assets + Liabilities.
Q6
Test Your Understanding - V
Cash withdrawn by the Proprietor should be credited to:
(i)
Drawings account
(ii)
Capital account
(iii)
Profit and loss account
(iv)
Cash account
Q7
Test Your Understanding - V
Find the correct statement:
(i)
Credit a decrease in assets
(ii)
Credit the increase in expenses
(iii)
Debit the increase in revenue
(iv)
Credit the increase in capital
Q8
Test Your Understanding - V
The book in which all accounts are maintained is known as:
(i)
Cash Book
(ii)
Journal
(iii)
Purchases Book
(iv)
Ledger
Q9
Test Your Understanding - V
Recording of transaction in the Journal is called:
(i)
Casting
(ii)
Posting
(iii)
Journalising
(iv)
Recording
More from this chapter
Chapter overview
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Important Points
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