Chapter 9: Final Accounts of a Proprietary Concern 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

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 3: Journal

Chapter 4: Ledger

Chapter 5: Subsidiary Books

Chapter 6: Bank Reconciliation Statement

Chapter 7: Depreciation

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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