CBSE Sample Papers for Class 11 Accountancy Set 1 with Solutions

Students must start practicing the questions from CBSE Sample Papers for Class 11 Accountancy with Solutions Set 1 are designed as per the revised syllabus.

CBSE Sample Papers for Class 11 Accountancy Set 1 with Solutions

Time : 3 Hr.
Max. Marks : 80

General Instructions:

This question paper contains two parts, A and B.
All questions in both the parts are compulsory.
All parts of the questions should be attempted at one place.

Part-A (56 Marks)
Financial Accounting-I

Question 1.
Which of the following is not a subsidiary book?
(A) Sales Book
(B) Purchases Book
(C) Pass Book
(D) Bills Receivable Book [1]
Answer:
(C) Pass Book

Explanation: Subsidiary books of accounting refers to the journals meant for specific transactions of similar nature. These are just sub-division of Journal. Pass book is not a subsidiary book while it is only a copy of customer’s bank Account.

Question 2.
The benefit of which expenditure is not exhausted within a year it is incurred and is extended to future years? [1]
Answer:
Deferred revenue expenditure.

Explanation: Heavy revenue expenditure which give benefit for more than one year are called deferred revenue expenditure.

Question 3.
Meeta and Vaishali are two partners of a firm. Firm receives an order for goods. Vaishali wants to include it in the sales figure but Meeta opposes it. How should the issue be settled? [1]
Answer:
Amount of goods should not be included in sales as the goods have not yet been delivered to the customer.

Explanation: As per the accrual basis, the transaction is first recorded only when Economic consideration is involved.

Question 4.
Amongst the following, whose objective is to ensure uniformity in the preparation and presentation of financial statements: [1]
(A) Cost Accounting
(B) CS
(C) AS
(D) None of the above
Answer:
(C) AS

Question 5.
The journal entry to record the sale of services on credit should include : [1]
(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.
Answer:
(D) Debit to debtors and Credit to fees income.

Question 6.
The periodic total of sales returns journal is posted to : [1]
(A) Sales account
(B) Goods account
(C) Purchases returns account
(D) Sales returns account
Answer:
(D) Sales returns account

Question 7.
State whether the statement is ‘True’ or ‘False’:
One debit account and more than one credit account in an entry is called compound entry. [1]
Answer:
True

Question 8.
Pass book is a copy of:
(A) Customer Account according to bank’s records
(B) Bank column of cash book
(C) Cash column of cash book
(D) Receipts and payments [1]
Answer:
(A) Customer Account according to bank’s records

Explanation: Pass book is issued by the bank to its customers. It is a copy of the $ account of the holder.

Question 9.
When a banker collects the bills and credits the account, pass book overdraft shows …………………… balance. [1]
Answer:
Less

Question 10.
Which of the following is a type of reserve according to the nature of profit, out of which it is created?
(A) Revenue Reserve
(B) Capital Reserve
(C) Both (A) and (B)
(D) None of the above
Answer:
(C) Both (A) and (B)

Question 11.
It is necessary to create ………………….. even if there is no or inadequate profit or loss. [1]
Answer:
Provision

Question 12.
……………… refers to writing off the proportionate value of the intangible assets such as goodwill, copyright, etc. [1]
Answer:
Amortisation

Question 13.
Which of the following is not true regarding ledger?
(A) It is a principal Book of Entry
(B) It is helpful in preparing trial Balance
(C) It shows the net profit or loss earned by the firm
(D) None of These [1]
Answer:
(C) It shows the net profit or loss earned by the firm

Explanation: Ledger is a principal book of entry in which classified and summarised business transactions. It is helpful in preparing trial balance. But to show the net profit or net loss earned by the firm is disclosed by the income statement.

Read the hypothetical text given below and answer the Questions 14 to 17.
Ravindra Tyagi is a businessman of Agra, He had the following transactions in the month of February 2020:
Feb. 02 Sold Goods to Ravi of list price ₹ 25,000 @ 10% trade discount.
Feb. 05 Paid salary to shyam of ₹ 10,000 by cheque
Feb. 10 Lal who had to pay ₹ 10,000 paid ₹ 9,500 in full settlement
Feb. 15 Anupam was appointed as manager @ 20,000 per month salary
Feb. 20 Rajat sold a machine to us of ₹ 50,000

Question 14.
How will trade discount be shown in the book of Accounts?
(A) ₹ 2,500 of trade discount will be debited.
(B) ₹ 2,000 of trade discount will be credited.
(C) ₹ 2,500 of trade discount will be credited.
(D) Will not be shown in the books at all. [1]
Answer:
(D) Will not be shown in the books at all.

Explanation: Trade discount (which is given to increase the sales) not shown in the book of accounts at all.

Question 15.
Which account will be debited for transaction on 5th Feb?
(A) Salary A/c
(B) Shyam’s A/c
(C) Cash A/c
(D) Bank A/c [1]
Answer:
(A) Salary A/c

Explanation: Following entry will be passed:

[Being salary paid]

Question 16.
Which account will be credited for the transaction on 15th Feb?
(A) Anupam’s A/c
(B) Manager’s Commission
(C) Bank A/c
(D) None of These [1]
Answer:
(D) None of These

Explanation: As per the accrual basis, transaction is recorded in the books only when economic consideration is satisfied. It is not satisfied in the transaction, hence will not be shown in the books.

Question 17.
Which account will be credited for transaction on 20th Feb?
(A) Purchase A/c
(B) Machinery A/c
(C) Rajat’s A/c
(D) None of These [1]
Answer:
(C) Rajat’s A/c
Explanation: Following entry will be passed:

[Being machinery purchased on credit]

Read the hypothetical text given below and answer the Questions 18 tp 21.
Rachna and company appointed a new accountant. He prepared the trial balance for the company. But the following mistakes were observed in this trial balance:
(a) Creditors were shown in debit side.
(b) Wages and commission received both were shown in debit side.
(c) Bills Receivable was shown on the credit side.
(d) Closing stock was shown on the credit side.
(e) A repair of machinery of ₹ 2,000 was shown in debit side by way of adding to value of machinery.

Question 18.
What is the nature of the account a stated in mistake (a)?
(A) Real Account
(B) Personal A/c
(C) Nominal Account
(D) None of These [1]
Answer:
(B) Personal A/c

Explanation: Creditors are those to whom the firm has to pay, this account shows the persons to whom the firm will pay. So it is a real A/c.

Question 19.
What was the mistake in point (b) ?
(A) Wages should be shown in credit side.
(B) Commission received should be shown in credit side.
(C) Both wages and commission received should be shown in credit side.
(D) None of These [1]
Answer:
(B) Commission received should be shown in credit side.

Explanation: Commission received is an income for the firm and incomes have the credit balance. Hence it should be shown in credit side.

Question 20.
What is the correct treatment of closing stock?
(A) It is never shown in trial balance
(B) Should be shown in debit side
(C) Should remain in credit side
(D) None of These [1]
Answer:
(B) Should be shown in debit side

Explanation: It is an asset for the firm so has debit balance. Hence should be shown in debit side.

Question 21.
What is the correct treatment of mistake (e)?
(A) ₹ 2 ,000 should be shown in debit side by the name of repairs A/c
(B) It is not a mistake
(C) Should be subtracted from machinery and shown in credit side
(D) None of These [1]
Answer:
(A) ₹ 2 ,000 should be shown in debit side by the name of repairs A/c

Explanation: Repair of machinery is a revenue expenditure, so should be shown separately in debit side by the name of repairs A/c.

Question 22.
Explain the following terms with example:

Sales
Cost [3]

Explain the usefulness or importance of IFRS. [3]
Answer:
(i) Sales: Sales means transfer of ownership of goods or services to customers for a price. Sales may either be cash sales or credit sales. For example, if Varun sells a television set to Tarun, the ownership of television set will be transferred to Tarun from Varun. If Varun receives the payment immediately it would be cash sale and if Varun has to receive the payment after sometime it would be credit sale.

(ii) Cost: Cost means the amount of expenditure, actual or notional, attributable to or incurred on a given activity, product or service. For example, Mohit purchases a machine for his factory. The cost of machinery will include not only the purchase price but also freight, installation expenses, etc.

Following points highlight the importance or usefulness of IFRS:
(i) Growth in International Business: IFRS will facilitate enormous expansion in world trade and international investment. IFRS will make accounting reports as a universal means of communication among businessmen, entrepreneurs and investors.

(ii) Investors: With the use of IFRS, it will be convenient for investors to assess the relative merits of alternative investment opportunities by making comparison of the financial performance of companies in different countries.

(iii) Multinational Companies: Multinational companies will find raising of funds from global markets easy. Consolidation of overseas subsidiaries would be easier due to IFRS.

(iv) International Audit Firms: The adoption of IFRS is in interest of international audit firms as it would facilitate sale of their services in different parts of the world.

(v) Developing Countries: Many countries do not have their domestic accounting standards. IFRS would enable them to adopt a ready-made system without spending any time, money or efforts. The adoption of IFRS would promote foreign investors to invest in developing countries. (Any four) [4]

Commonly Made Errors

Proper headings are not given by some students.
Explanations are repeated under different headings.

Answering Tip
Learn the benefits of IFRS with proper headings and their explanations.

Question 23.
Mohit has following transactions. Prepare Accounting Equation:

Business started with cash ₹ 1,75,000
Purchased goods from Rohit ₹ 50,000
Sold goods on credit to Manish (costing ₹ 17,500) ₹ 20,000
Purchased furniture for office use ₹ 10,000
Cash paid to Rohit in full settlement ₹ 48,000
Cash received from Manish ₹ 20,000 [4]

Pass necessary Journal Entries in the books of Rohit Industries :

Wages due but not paid ₹ 1,000.
Received ₹ 600 from Mohan, which were written off as bad debts 2 years ago.
Shyamlal who owed us ₹ 4,000 became insolvent and a final dividend of 40 paise in rupee is received from his house.
Goods distributed as free samples ₹ 3,000. [4]

Answer:
Accounting Equation

Commonly Made Errors

Students decrease cash instead of increasing creditor.
Wrong treatment is done for goods sold by most of the students.

Answering Tips

Understand when goods are sold for cash and when on credit.
Capital is to be increased by the amount of profit.
Students need to do a lot of practice of accounting equations.

In the Books of Rohit Industries
Journal Entries

Commonly Made Errors

Some students are not able to pass the first entry of wages.
Some students debit “Capital A/c” for free distribution of goods.

Answering Tips

When wages are due but not paid “Outstanding Wages A/c” is credited.
Goods are freely distributed for sales promotion and therefore “Sales Promotion A/c” is to be debited.

Question 24.
Prepare a Bank Reconciliation Statement as at 30th June, 2014 for Jyoti Sales Private Limited from the information given below:

Bank Overdraft as per Cash Book on 30th June, 2014 ₹ 1,10,450
Cheques issued on 20th June, 2014 but not yet presented ₹ 15,000
Cheques deposited but not yet credited by Bank ₹ 22,750
Bills for collection not advised by bank but credited to the account ₹ 47,200
Interest debited by bank on 27th June, 2014 but no advice received ₹ 12,115
Subsidy received from the authorities by bank on our behalf, credited to the account ₹ 22,000
Amount wrongly debited by the bank ₹ 2,400
Amount wrongly credited by the bank. ₹ 5,000 [4]

Answer:
Bank Reconciliation statement
as on 30th June, 2014

Question 25.
Prepare a Cash book with Cash and Bank Columns : [4]
2014 ₹
Jan. 1 Cash in Hand ₹ 5,000
Bank Overdraft ₹ 1,000
Jan. 2 paid Wages ₹ 1,500
Jan. 3 Deposited into bank ₹ 2,000
Jan. 4 Cash Sales ₹ 7,500
Jan. 5 Sold goods for cheque which was deposited in bank on the same day ₹ 5,000
Jan. 6 Purchased goods from Hariom on credit. ₹ 4,000
Jan. 7 Drew from bank for personal use ₹ 1,000
Jan. 8 paid to Hariom in full settlement ₹ 3,500

How will you make posting into ledger from a simple Cash Book.
Answer:
Dr. Cash Book Cr.

Note: There will be no entry for credit transaction on Jan. 6. [4]

Cash Book is a book of original entry, therefore, transactions recorded in Cash Book must be posted into ledger. While posting from simple Cash Book following points should be kept in mind:
(i) Cash Book is a subsidiary book as well as a principal book. It serves as a Cash Book as well as a Cash account. Therefore, cash account is not prepared in the Ledger.

(ii) Transactions recorded on the Debit side of Cash Book are posted to the credit side of the affected accounts in ledger by writing the words “By Cash Account” in the ‘Particulars’ column.

(iii) Transactions, recorded on the Credit side of Cash Book, are posted to the Debit side of the accounts [4]

Question 26.

“Accounting information should be comparable.” Do you agree with this statement ? Give two reasons.
“The role of the accounting has changed over the period of time.” Explain.
Enumerate informational needs of management. [6]

Answer:
(i) I t is not sufficient that financial information is relevant and reliable at a particular time in a particular
circumstances or for a particular reporting entity. The users of the general purpose financial reports need to be able to compare an aspect of an entity at one time and over the time; and between entities at time and over the time.

(ii) For centuries, the role of accounting has been changing with the changes in economic development increasing societal demands. It describes and analyses a mass of data of an enterprise through measurement, classification & summarisation, and reduces that data into reports and statements, which show the financial condition and results of operations of that enterprise.

(iii) Management is interested to review the firm’s short term solvency and long term solvency, effective utilisation of resources and profitability in relation to investment and turnover and to decide upon the future course of action on the above decisions. Management needs a lot of other information for the efficient running of the business such as increase or decrease in sales, increase in cost of production etc. all such information are provided by accounting which helps the management in planning, decision making and controlling the business.

Question 27.
On April 1, 2011, X Ltd. purchased Machinery for ₹ 1,00,000 with CGST and SGST @ 6% each. The accounting
year of the Company ends on 31st Dec. every year. Depreciation @ 10% p.a. on the initial cost is charged to P and L account and credited to a separate account known as ‘Provision for Depreciation’ account. On 1st July, 2013, the machine purchased on 1st April, 2011 was sold for ₹ 60,000. You are required to prepare Machinery Account and Provision for Depreciation Account upto 2013. [6]
Answer:
Dr. Machinery Account Cr.

Dr. Provision For Depreciation Account Cr.

Commonly Made Errors

Students add the amount of CGST and SGST in the purchase price of machinery.
For the year 2011 students charge ‘ 10,000 as depreciation. w In the year of sale students charge depreciation for full year.

Answering Tips
(i) CGST and SGST are not a part of purchase price and are shown separately. Therefore, depreciation is not calculated on these amounts.

(ii) Students should properly calculate the number of months for which depreciation is to be calculated. w Depreciation is charged only till the date of sale.

Question 28.

Explain the following with one example:
- Errors of Commission
- Errors of Principle.
Under which side of the Trial Balance the following ledger balances will appear :
- Purchases
- Capital
Trade Receivable
Drawings
Discount Received
Buildings. [8]

Rectify the following errors :

Goods purchased from Amar ₹ 3,000 were recorded in sales book.
A credit sale of ₹ 2,000 to Arun was posted to Varun’s account.
Repair of furniture was debited to Furniture Account ₹ 700.
Material of ₹ 1,800 and wages ₹ 1,200 was related to making of furniture but no entry was passed for it. [8]

Answer:
(i) Errors of Commission: When any transaction is incorrectly recorded either wholly or partly, error of commission arises. It may consist of incorrect posting, calculation and balancing. Such an error is committed when an item is posted to the credit instead of to the debit of an account or vice-versa. For example: A credit purchase of ₹ 675 is entered in the Purchases Book as ₹ 576 or posting of ₹ 2,000 to the credit of Ranu instead of the credit of Manish.

(ii) Errors of Principle: Error of principle is committed when a transaction is recorded in a fundamentally incorrect manner. Such an error involves an incorrect allocation of expenditure or receipt between capital and revenue. For example: freight paid for bringing new machinery is posted to freight account or asset purchased is recorded in the purchases book.’

(iii)

Account	Side of Trial Balance
Purchases	Debit
Capital	Credit
Trade Receivable	Debit
Drawings	Debit
Discount Received	Credit
Building	Debit

Rectifying Entries

Part-B [24 Marks]
Financial Accounting-II

Question 29.
Which of the following is correct:
(A) Operating profit = Operating profit – Non operating expenses – Non-operating incomes
(B) Operating profit = Net profit + Non-operating Expenses + Non-operating incomes
(C) Operating profit = Net profit + Non-operating expenses – Non-operating incomes
(D) Operating profit = Net profit – Non-operating expenses + Non-operating incomes [1]
Answer:
(C) Operating profit = Net profit + Non-operating expenses – Non-operating incomes

Question 30.
Name one item which is shown as deduction from purchases in Trading Account. [1]
Answer:

Goods taken for personal use of proprietor.
Goods distributed as free samples.
Abnormal loss of stock. (Any one)

Question 31.
Which of the following adjustments will be shown in assets side of balance sheet?
(A) Prepaid Exp.
(B) Outstanding Exp.
(C) Unearned income
(D) None of These [1]
Answer:
(A) Prepaid Exp.

Explanation: Prepaid expenses represent those to whom we have paid in advance. So these are assets for the firm.

Question 32.
………………….. income means income due but not yet received. [1]
Answer:
Accrued.

Explanation: Accrued income refers to that income which has been earned in the current year but has not been received in that particular year.

Question 33.
Prepaid expenses are shown on/in :
(A) assets side of balance sheet
(B) liabilities side of balance sheet
(C) contingent liabilities
(D) None of These [1]
Answer:
Option (A) is correct.

Explanation: Prepaid Expenses are the assets for a firm. Hence shown in the assets side of the balance sheet.

Question 34.
Salaries paid to the employees should be debited to account. [1]
Answer:
Option (D) is correct.

Question 35.
At the end of the year, purchase Account is transferred to :
(A) Capital A/c
(B) Sales A/c
(C) Purchase Return A/c
(D) Trading A/c [1]
Answer:
(D) Trading A/c

Question 36.
Write a short note on operating profit. [3]
Answer:
Operating profit is a profit earned through normal activities of a business. It is the excess of gross profit over operating expenses. In other words, it is the excess of operating revenue over operating cost. It is also termed as earning before interest and tax (EBIT). It does not include income and expenses that are not related to main course of the business. It is calculated by following formula: Operating Profit = Gross Profit – Operating Expenses

Operating Profit = Sales – Operating Cost
Operating Profit = Sales – COGS – Operating Expenses
Operating expenses include office and administrative expenses, selling and distribution expenses, discount, bad debts, etc.

Question 37.
Calculate the amount of Gross Profit and Operating Profit on the basis of the following balances extracted from the books of M/s Rajiv and Sons for the year ended March 31, 2014 :

Answer:
In the Books of M/s Rajiv & Sons.
Trading Account
Dr. For the year ended March 31, 2014 Cr.

Operating Profit = Sales – (Opening Stock + Net Purchases + Direct Expenses + Administration Expenses + Selling and Distribution Expenses) + Closing Stock
= ₹ 11,00,000 – ₹ (50,000 + ₹ 6,00,000 + ₹ 60,000 + ₹ 45,000 + ₹ 65,000) + ₹ 70,000 = ₹ 3,50,000

Question 38.
Prepare Trading and Profit & Loss Account and Balance Sheet from the following particulars as at 31st March, 2014:
Trial Balance

Further, you are required to take into consideration the following information :

Salary ₹ 100 and taxes ₹ 400 are outstanding but insurance ₹ 50 prepaid.
Commission amounting to ₹ 100 has been received in advance for work to be done next year.
Interest accrued on investments ₹ 210.
Provision for Doubtful Debts is to be maintained at 20%.
Depreciation on furniture is to be charged at 10% p.a.
Stock on 31st March, 2014 was valued at ₹ 4,500.
A fire occurred on 25th March, 2014 in the god own and stock of the value of ₹ 1,000 was destroyed. It was fully insured and the insurance company admitted the claim in full. [8]

Prepare a Trading and Profit & Loss account of M/s Green Club Ltd. year ending March 31, 2014, and a balance sheet on that date from the following figures taken from trial balance :
Table
Adjustments :

Depreciation charged on Machinery @ 5%p.a.
Further bad debts ₹ 1,500, discount on debtors @ 5% and provision on debtors @ 6%.
Wages prepaid ₹ 1,000.
Interest on investment @ 5% p.a is accrued.
Closing stock ₹ 10,000.

Answer:
Trading and Profit & Loss Account
Dr. for the year ended 31st March, 2014 Cr.

Balance Sheet
as on 31st March, 2014