Chapter 9: Final Accounts of a Proprietary Concern
Balbharati Solutions for Book-keeping and Accountancy 11th Standard HSC Maharashtra State Board
Answer in One Sentence:
What is a Trading A/c?
SOLUTION
An account which gives the overall preview of all trading activities of a business firm, known as Trading Account.
What do you mean by Profit & Loss A/c?
SOLUTION
A part of the final account prepared by the business concern on the basis of indirect expenses and indirect incomes to ascertain net profit or net loss of the business is called Profit and Loss Account.
Why is the Balance Sheet prepared?
SOLUTION
Balance Sheet is prepared to know the financial position of a business unit.
State the meaning of Final Accounts?
SOLUTION
Final Accounts are financial statements which confirm and explain working results (profit or loss) and the financial position of a business for a specific period of time and on a particular date.
What is Net Profit?
SOLUTION
When the total of the credit side of Profit and Loss Account (indirect incomes side) is greater than the debit side of Profit and Loss Account (indirect expenses side), it is known as Net Profit [Credit balance of Profit and Loss A/c].
What do you mean by Gross Profit?
SOLUTION
In the Trading A/c, when the total of the credit side is greater than the total of the debit side, it is known as Gross Profit. [Credit balance of Trading A/c]
State the meaning of Accrued Income?
SOLUTION
The income which is due and supposed to be received in the accounting year, but actually not received during the accounting year, is known as Accrued Income.
State the meaning of Outstanding Expenses?
SOLUTION
The expenses which are incurred during the current accounting year, but not paid partly or fully during the current accounting year are known as Outstanding Expenses.
What is Depreciation?
SOLUTION
Continuous, gradual and permanent decrease in the value of a fixed assets due to factors like wear and tear, passage of time, etc. is known as Depreciation.
What do you mean by Prepaid Expenses?
SOLUTION
The expenses which are paid before they are not partly or fully due for payment during the current accounting year are known as Prepaid Expenses
Give a word, term, or phrase which can substitute the following statement:
Expenses paid before it is due.
SOLUTION
Prepaid expenses
Income due but not yet received
SOLUTION
Accrued income
Carriage paid on sale of goods.
SOLUTION
Carriage outward
Statement of Assets & Liabilities.
SOLUTION
Balance Sheet
Account prepared to know Net Profit or Net Loss.
SOLUTION
Profit and Loss A/c
Value of goods remaining unsold at the end of the year
SOLUTION
Closing stock
The provision was made to compensate the loss on account of likely debts.
SOLUTION
Provision for bad and doubtful debts
The accounts prepared at the end of the accounting year to know the profit or loss and Financial position of business
SOLUTION
Final Accounts
An amount spent on promoting sale of goods.
SOLUTION
Selling expenses
An additional information provided below the Trial Balance.
SOLUTION
Adjustments
Select the most appropriate alternatives given below and rewrite the sentence :
____________ is excess of assets over liabilities
Options
Goodwill
Capital
Investments
Drawings
SOLUTION
Capital is excess of assets over liabilities
Discount earned is transferred to credit side of ___________ account
Options
Current A/c
Profit & Loss
Trading
Capital
SOLUTION
Discount earned is transferred to credit side of Profit and Loss Account.
______________ is a statement which shows the financial position of business on a specific date.
Options
Trading account
Trial Balance
Profit & Loss A/c
Balance Sheet
SOLUTION
Balance Sheet is a statement which shows the financial position of business on a specific date.
Outstanding expenses are shown on the ____________ side of Balance Sheet.
Options
Assets
Liability
Both Assets and Liability
None of these
SOLUTION
Outstanding expenses are shown on the liability side of Balance Sheet.
Interest on Drawing is credited to __________ Account.
Options
Trading
Profit & Loss
Profit & Loss A/c
Balance Sheet
SOLUTION
Interest on Drawing is credited to Profit and Loss Account.
Debit balance of Trading Account means ______,.
Options
Gross Loss
Net Loss
Net Profit
Gross Profit
SOLUTION
Debit balance of Trading Account means Gross Loss.
Carriage Inward is debited to __________ Account
Options
Trading
Profit & Loss
Capital
Bank
SOLUTION
Carriage Inward is debited to Trading Account.
Excess of credit over to debit in Profit and Loss Account indicates ________
Options
Net Profit
Gross Profit
Gross Loss
Net Loss
SOLUTION
Excess of credit over to debit in Profit and Loss Account indicates Net Profit.
Closing stock is always valued at cost or market price which is __________
Options
more
less
zero
equal
SOLUTION
Closing stock is always valued at cost or market price which is less.
When Specific date is not given, in that case interest on drawing is charged for __________ month.
Options
Four
Six
Eight
Nine
SOLUTION
When Specific date is not given, in that case interest on drawing is charged for six month.
State True or False with reasons :
In every adjustment atleast there are three effects.
Options
True
False
SOLUTION
This statement is False.
Adjustments means those financial transactions of business which are not recorded or wrongly recorded in accounts and are required to be rectified and for this purpose, at least two effects are to be passed for every adjustment.
Every item of Trial Balance has only one effect.
Options
True
False
SOLUTION
This statement is True.
In trial balance, balance of every ledger account is recorded, therefore in final accounts, we have to pass only one effect of every item of Trial Balance either in Trading No or in Profit and Loss No or in Balance Sheet.
Income due but not received is a liability.
Options
True
False
SOLUTION
This statement is False.
When any amount/income is receivable, it is an asset for business.
Goodwill is not a fictitious asset
Options
True
False
SOLUTION
This statement is False.
Goodwill is intangible/invisible asset for the business. Main factor affecting value of goodwill is the earning capacity of the business which can‘t be steady during the life period of business. So we can say that Goodwill is a fictitious asset.
Credit balance of Profit and Loss A/c shows net profit
Options
True
False
SOLUTION
This statement is True.
When total of credit side (indirect incomes) of Pro (indirect expenses), then difference of amount is known as net profit.
Fill in the blank:
Gross Profit is transferred to ___________ Account.
Gross Profit is transferred to Profit and Loss Account.
Debit Balance of Trading Account indicates ___________
Debit Balance of Trading Account indicates gross loss.
Income Receivable appears on __________ side of Balance Sheet.
Income Receivable appears on the asset side of Balance Sheet.
Interest on Bank Loan is debited to _________ A/c
Interest on Bank Loan is debited to Profit and Loss A/c.
Profit and Loss account is prepared to find out ___________ results of the business.
Profit and Loss account is prepared to find out net working results of the business.
All indirect / operating expenses are transferred to ________ account.
All indirect/operating expenses are transferred to Profit and Loss Account.
Interest of proprietor's drawing is credited to _________ account.
Interest of proprietor’s drawing is credited to Profit and Loss Account
An excess of debit over credit in the Profit & Loss A/c represents the __________.
An excess of debit over credit in the Profit and Loss A/c represents the net loss.
All direct expenses are transferred to __________ account.
All direct expenses are transferred to Trading Account.
Balance Sheet is __________ of assets & liabilities.
Balance Sheet is a statement of assets and liabilities of business.
Find the odd one :
Rent
Salary
Insurance
Plant and Machinery
Purchases
Closing stock
Debtors
Factory Rent
Capital
Bills Payable
Debtors
Outstanding wages
Advertisement
Travelling Expenses
Factory Rent
Insurance
Cash in Hand
Debtors
Outstanding Income
Reserve for Doubtful Debts
Do you agree or disagree with the following statement :
Reserve for bad debts is created by debiting Profit and Loss Account.
Agree
Disagree
Balance Sheet is a statement as well as an account.
Agree
Disagree
Indirect Expenses are debited to Trading Account.
Agree
Disagree
Bank Overdraft is treated as an Internal Liability
Agree
Disagree
Capital is excess of Liabilities over Assets.
Agree
Disagree
Balbharati solutions for Book-keeping and Accountancy 11th Standard HSC Maharashtra State Board chapter 9 - Final Accounts of a Proprietary Concern.
Balbharati Solutions for Book-keeping and Accountancy 11th Standard HSC Maharashtra State Board Chapterwise List - Free
Chapter 1: Introduction to Book - Keeping and Accountancy
Chapter 2: Meaning and Fundamentals of Double Entry Book-Keeping
Chapter 6: Bank Reconciliation Statement
Chapter 8: Rectification of Errors
Chapter 9: Final Accounts of a Proprietary Concern
Chapter 10: Single Entry System
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Concepts covered in Book-keeping and Accountancy 11th Standard HSC Maharashtra State Board chapter 9 Final Accounts of a Proprietary Concern are Introduction of Final Accounts, Trading Account, Profit and Loss Account, Balance Sheet.
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