CBSE Sample Papers for Class 11 Accountancy Set 10 with Solutions

Students must start practicing the questions from CBSE Sample Papers for Class 11 Accountancy with Solutions Set 10 are designed as per the revised syllabus.

CBSE Sample Papers for Class 11 Accountancy Set 10 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

Questions 1.
Which is the first step of accounting process?
(A) Identifying business transaction
(B) Posting to ledger
(C) Analysis and Interpretation
(D) Communicating the results [1]
Answer:
(A) Identifying business transaction

Explanation: Accounting is a process as it contains a number of stages and the first step of this process is to identify the business transaction.

Questions 2.
According to ___________ assumption assets are shown in the accounting records at cost less depreciation. [1]
Answer:
Historical Cost Concept

Questions 3.
Which of the following is not a classification of supporting voucher?
(A) Cash memo
(B) Bill
(C) Debit Note
(D) Cash voucher [1]
Answer:
(D) Cash voucher

Questions 4.
………………. is a book containing all accounts to which entries are transferred from the books of original entry. [1]
Answer:
Ledger

Questions 5.
Voucher is prepared for which among the following?
(A) Cash received and paid
(B) Cash/Credit sales
(C) Cash/Credit purchase
(D) All of the above [1]
Answer:
(D) All of the above

Questions 6.
What letter is used to indicate a Contra Entry? [1]
Answer:
‘c’

Questions 7.
An old machinery was sold to Manish for ₹ 56,000. In which book will this entry be recorded?
(A) Cash Book
(B) Journal Proper
(C) Sales Book
(D) None of the above [1]
Answer:
(B) Journal Proper

Explanation: Credit transactions that do not pertain to sales, purchase, sales return or purchase return book, they are recorded in journal proper.

Questions 8.
………………… is prepared to reconcile bank balance as per cash book with balance as per pass book. [1]
Answer:
Bank Reconciliation Statement

Questions 9.
What is the effect of depreciation on Profit & Loss Account? [1]
Answer:
It reduces the profit.

Questions 10.
Which of the following is not an example of provisions?
(A) Provision for depreciation
(B) Provision for taxation
(C) Premium on issue of shares
(D) Provision for discount on debtors [1]
Answer:
(C) Premium on issue of shares

Questions 11.
Where do you record Trade Expense in Financial Statement ? [1]
Answer:
Debit Side of Profit and loss A/c

Questions 12.
Errors which are committed in such a way that they nullify the effect of each other on debits and credits are
called …………….. [1]
Answer:
Compensating errors

Questions 13.
Which of the following errors do not affect the trial balance?
(A) Errors of principle
(B) Compensating errors
(C) Errors in carrying forward
(D) Both (A) and (B) [1]
Answer:
(D) Both (A) and (B)

Explanation: Principle errors and compensating errors both do not have the single side effect. So, they do not affect the trial balance.

Read the following hypothetical Case Study and answer the given questions 14 to 17:
The cash book of Rarnesh showed the cash balance of ₹ 15,000 and a bank balance of ₹ 25,000 as on 30th April 2019.

On 1st of May, he purchased goods from Ramesh worth ₹ 12,000 and paid it by cheque. He sold goods on 3 of May for cash and deposited the proceeds into bank worth ₹ 10,000. On 14th of May, he paid the electricity bill by cheque worth ₹ 9,000. On 15th of may he purchased goods worth ₹ 10,000 at a discount of 20% and sold it to juhi after adding 25% profit.

Both the transactions were on credit. On 26th of May, he withdrew ₹ 5,000 for office use. On 29th May, he received 70% of the cash from Juhi and paid 50% of it to Rashi and deposited the remaining in the bank. He also paid ₹ 1,500 as salaries to his employee on 31st of May. He also had the following transactions:

He received a telephone bill worth ₹ 500.
He withdrew ₹ 2,500 for his personal use.
He gave ₹ 500 from the cash register to his nephew as a gift.
Goods worth ₹ 2,000 were lost due to damages.

Question 14.
Where will the transaction of jSI of May recorded?
(A) Cash Column
(B) Bank Column
(C) Discount Column
(D) Petty Cash Book [1]
Answer:
(B) Bank Column

Explanation: It is clearly mentioned in the case study that on 1st May. Payment has been made by cheque. Hence it will be recorded in bank column of cash book.

Questions 15.
Goods lost due to damages will be recorded in …………… [1]
Answer:
Journal Proper

Questions 16.
There will be a contra entry for the transaction on which date?
(A) 3rd of May
(B) 15th of May
(C) 26th of May
(D) 31st of May [1]
Answer:
(A) 3rd of May

Explanation: The transaction on 3rd May has dual effect to cash balance as well as inverse bank balance. Hence it will be a contra entry.

Questions 17.
The transaction where he gave cash to his nephew will be recorded as ………………. in the Cash column of the Cash Book. [1]
Answer:
Drawings

Study the following hypothetical transactional detail of Mr. Keshav and answer the given questions 18 to 21:
On 31st March, 2019 the bank column of the Cash Book of Mr. Keshav disclosed an overdraft balance of ?8,300. On

examining the cash book and bank statement you find that:
1. Cheques were deposited into bank for ₹ 16,000 out of these cheques for ₹ 4,600 were cleared and credited in April 2015.

2. Cheques were issued for ₹ 7,500 out of which cheques for ₹ 6,000 had been presented for payment in March 2019.

3. In March Mr. Keshav had discounted with bank a bill of exchange for ₹ 10,000 and had entered this amount in the Cash Book, but the proceeds credited as shown by the Passbook, amounted to ₹ 9,600.

4. No entry is made in the Cash Book of an amount of ₹ 6,100 directly deposited by a customer in the bank accounts.

5. Bank Column of the payment side of the Cash Book was undercast by ₹ 1,000.

6. Payment of Insurance premium of ₹ 2,000 and receipt of insurance claim of ₹ 8,000 appear in the Passbook but not entered in the Cash Book.

7. A cheque for ₹ 3,500 issued to Mr. Kapil was omitted to be recorded in the Cash Book.

8. A cheque for ₹ 2,800 issued to Mr. Darshan was entered in the cash column of the Cash Book.

Questions 18.
The amount of cheque not credited until April 2015 will be recorded as a ……………….. item in the bank reconciliation
statement. [1]
Answer:
Minus

Questions 19.
The amount not entered in the cash book as it was directly deposited in the bank by a customer will be recorded
as a item in the bank reconciliation statement. [1]
Answer:
Plus

Questions 20.
Which of the following amount will be shown in the plus item column of the bank reconciliation statement with regard to the cheques that were issued but not presented to the bank?
(A) ₹ 7,500
(B) ₹ 6,000
(C) ₹ 1,500
(D) None of the above [1]
Answer:
(C) ₹ 1,500

Explanation: Cheques issued = ₹ 7,500 Cheques presented for payment = ₹ 6,000 Cheques not presented for payment = ₹ 17,500 – ₹ 6,000 = ₹ 1,500

Questions 21.
Where will the payment of insurance premium be recorded?
(A) Plus item side
(B) Minus item side
(C) Not recorded
(D) Both (A) and (B) [1]
Answer:
(B) Minus item side

Questions 22.
List any three source documents.

What are the advantages of preparing Journal? [3]
Answer:
The following are the most common source documents:

Voucher
Cheque
Pay-in-slip
Debit note
Receipt
Invoice or Bill
Cash memo
Credit note (Any three)

Following are the advantages of preparing a journal:
1. Journal provides a chronological record of all transactions.

2. Journal provides an explanation of the transaction recorded. In Journal, a complete explanation is written as narration along with journal entry.

3. It reduces the possibility of errors: The amounts to be debited and credited are recorded side- by-side, hence the two can be compared to see that they are equal.

Questions 23.
Explain the qualitative characteristics of accounting information. [4]

Explain the Accounting Period Concept. [4]
Answer:
The following are the qualitative characteristics of accounting information:
Reliability: It means that the user can rely on the accounting information. All accounting information can be verified from the source document (voucher), viz cash memos, bills, etc. Hence, the available information should be free from any errors and unbiased.

Relevance: It means that essential and appropriate information should be easily and timely available and any irrelevant information should be avoided. The users of accounting information need relevant information for decision-making, planning and predicting the future conditions.

Understandability: Accounting information should be presented in such a way that every user is able to interpret the information without any difficulty in a meaningful and appropriate manner.

Comparability: It is the most important quality of accounting information. Comparability means accounting information of a current year can be compared with that of the previous years. Comparability enables intra firm and inter-firm comparison. This assists in assessing the outcomes of various policies and programmes adopted in different time horizons by the same or different businesses. Further, it helps to ascertain the growth and progress of the business over time and in comparison to other businesses. [4]

Accounting Period Concept:
(i) According to Accounting Period Concept, the economic life of an enterprise is divided into some shorter and convenient periods for the measurement of income.

(ii) An accounting period is the interval of time at the end of which financial statements are prepared in order to show the results of the business.

(iii) Since the life of the business is considered to be indefinite, the measurement of income in studying the financial position of the business after a very long period will not be helpful to various groups interested in the business. Therefore, accountants choose some shorter and convenient time for accounting period.

(iv) Various tax laws like Companies Act, Income Tax Act, Sales Tax etc., recognize one year as accounting period. This concept facilitates the preparation of financial statements. [4]

Questions 24.
Prepare a Cash Book with Cash and Bank Columns from the following transactions: [4]

2017

Particulars

₹

Jan. 1

Jan. 2

Jan. 3

Jan. 7

Jan. 10

Jan. 12

Jan. 15

Cash in hand ₹ 5,000, Bank overdraft ₹ 1,000

Deposited into bank

General Expenses paid

Purchased goods from Mudit on credit

Drew from bank for personal use

Paid to Mudit in full settlement

Recovered from Sunny, who owes us ₹ 3,000 but was written off as bad debt

1,000

600

2,000

1,200

1,800

1,500

Answer:
Dr. Cash Book Cr.

Note: There will be no entry for credit transaction.

Commonly Macle Errors

Bank overdraft is wrongly posted by many students.
Students get confused in the transaction of credit purchases.
Some students pass contra entry for withdrawal of cash for personal use.
For recovery of money from Sunny, many students credit the account of Sunny.

Answering Tips

It should be kept in mind that bank overdraft is a credit balance.
No entry is passed for any credit transaction.
It should be clear to students that withdrawal of cash for personal use does not result in a contra entry but it is a drawing.
Since it is a recovery “Bad debts recovered NC” is to be credited.

Questions 25.
From the following information, prepare Bank Reconciliation Statement as on 31 March, 2016: [4]

Particulars	₹
(i) Bank overdraft as per Cash Book	1,70,000
(ii) Directly deposited into the bank by Sudhir (customer)	12,000
(iii) Cheques issued but not presented for payment	83,000
(iv) Cheques entered in Cash book but not banked	42,000

Answer:
Bank Reconciliation Statement as on 31st March, 2016

Questions 26.
What do you mean by an asset and what are different types of assets? (2+4) [6]

Discuss any four advantages or benefits of accounting standards. [6]
Answer:
Assets are economic resources of an enterprise that can be usefully expressed in monetary terms. Assets are things of value used by the business in its operations. For example, Super Bazar owns a fleet of trucks, thus, provides economic benefit to the enterprise. These items will be shown on the assets side of the balance sheet of the Super Bazar.

Assets can be broadly classified into two types: fixed assets & current assets.
(a) Fixed Assets are assets held on a long-term basis, such as land, building, machinery, plant, furniture and fixtures. These assets are used for the normal operation of the business. Fixed assets provide economic benefits for more than one year.

(b) Current Assets are assets held on a short-term basis such as debtors (account receivable), stock, cash, bank balance etc. Current assets provide economic benefits for less than one year. [4]

Following are the benefits of accounting standards:
(i) Creditability and Reliability of Financial Statements: Accounting standards provide a structured framework within which credible financial statements can be produced. Accounting standards standardize diverse accounting policies and practices and eliminate the non-comparability of financial statements.

(ii) Beneficial to Accountants and Auditors: Accounting standards provide the norms on the basis of which business transactions are recorded and financial statements are prepared. Accountants are not required to use personal judgment and discretion while recording business transactions. Accounting standards help the auditors in the audit of accounts.

(iii) Managerial Accountability : Accounting standards help in assessing managerial skills in ensuring profitability of the enterprise and in measuring the effectiveness of management’s stewardship. It will be difficult for the management to manipulate financial data.

(iv) Development of Accounting Theory: Accounting standards provide a coherent, logical, conceptual framework and structure for accounting measurements, financial reporting and usefulness of accounting data. This has facilitated the making of accounting theory which commands universal acceptance.

Comnionly Made Error:
Same explanation or improper explanation is given for different advantages.

Answering Tip:
Learn the advantages of AS point wise with proper explanation.

Questions 27.
An asset is purchased for ₹ 1,10,000. Depreciation is to be provided annually according to the straight line method. The useful life of the asset is 10 years and the residual value is ₹ 10,000. You are required to find out the amount of annual depreciation and prepare asset account for the first three years. (2+4) [6]
Answer:
Depreciation = \(\frac { 1,10,000 -10,000 }{ 10 }\) = \(\frac { 1,00,000 }{ 10 }\)
Depreciation = ₹ 10,000 p.a.

In the Books of…
Dr. Machineiy Account Cr.

Commonly Made Error:
While calculating the amount of depreciation students forget to deduct the residual value from the purchase price of asset.

Answering Tip:
For calculating the amount of depreciation, residual value is required to be deducted from the purchase price of assets.

Questions 28.
From the following Ledger Balances draw up the Trial Balance:

Particulars	Amount (₹)
Capital	50,000
Purchases	18,000
Input CGST	2,640
Input SGST	2,640
Input IGST	4,200
Output CGST	3,000
Output SGST	3,000
Output IGST	3,480
Carriage	2,000
Sales	30,000
Returns Inward	3,000
Salaries	7,000
Sundry Debtors	20,000
Cash	10,000
Rent and Taxes	2,000
Drawings	3,000
Bank Balance	5,000
Furniture	10,000

Rectify the following errors:

Credit purchases from Raghu ₹ 20,000 were not recorded.
Were recorded as ₹ 10,000.
Were recorded as ₹ 25,000.
Were not posted to his A/c.
Were posted to his account as ₹ 2,000.
Were posted to Raghav’s A/c.
Were posted to the debit of Raghu’s A/c. m
Were posted to the debit of Raghav. m

Answer:
Trial Balance

Rectifying Entries

Part-B (24 Marks)
Financial Accounting – II

Questions 29.
Purpose of Income statement is:
(A) to know the exact financial position of the business on a specified date.
(B) to present a periodical review of financial performance and the financial position of a business enterprise.
(C) to ascertain the profit earned by the business during a specified period.
(D) all the above [1]
Answer:
(C) to ascertain the profit earned by the business during a specified period.

Questions 30.
Method of marshalling adopted by Indian Companies while preparing Balance Sheet is …………………. [1]
Answer:
Order of permanence

Questions 31.
A newly appointed accountant is confused as to which expenses should be treated as deferred revenue expenditure. Help him by giving him an example of deferred revenue expenditure. [1]
Answer:

Research and development expenditure.
Expenses related to issue debentures. of shares and
Preliminary expenses. (Any one)

Questions 32.
Which of the following expenses is shown on the Assets side of Balance sheet?
(A) Prepaid expenses
(B) Outstanding expenses
(C) Both (A) and (B)
(D) None of the above [1]
Answer:
(A) Prepaid expenses

Questions 33.
…………….. is a provision made for the amount that a business enterprise may not be able to realize in future
from its debtors. [1]
Answer:
Provision for doubtful debts

Questions 34.
What is the difference of total assets and external Liabilities called ?[1]
Answer:
The difference of total assets and external liabilities is called capital.

Questions 35.
While preparing final accounts, where will you show wages? [1]
Answer:
Wages is a direct expense, hence while preparing final accounts, it is shown in trading account.

Questions 36.
Opening capital ₹ 60,000, Drawings ₹ 5000, capital added during the year ₹ 10,000, closing capital ₹ 90,000. Calculate profit or loss. [3]
Answer:
Profit = Closing Capital + Drawings – Additional Capital – Opening Capital.
= ₹ 90,000 + ₹ 5,000 – ₹ 10,000 – ₹ 60,000.
= ₹ 25,000

Questions 37.
Radhika is operating his firm very well. All the and of the year on 31st March 2021. She prepared final account for her firm. She made some mistakes that were observed by her friend Kamla. These were as follows:

Closing stock was Shown only in trading Account. While it had not been entered into books.
She had paid rent for two month in advance but no adjustment was made for it.
Sales return was shown on the debit side of Profit and Loss Account.
Freight inward was shown in Profit and Loss Account.

Now answer the given Questions based on the above text
(A) What should be the correct treatment of closing stock while preparing final account? How the wrong
treatment affected the balance sheet? [2]

(B) Name the adjustment being talked in point. What will be its treatment? [2]

(C) What should be the correct treatment of sales return? Will it affect the balance sheet? [2]
Answer:
(a) As per the above information, closing stock has not been entered into books so it should be considered as an adjustment and will also be shown in the assets of the balance sheet. Not showing the closing stock on Assets side of balance sheet will decline the assets side and balance sheet will not match.

(b) Prepaid Expenses. The rent paid in advance will be subtracted from the actual rent paid and will also be shown in the assets side of balance sheet.

(c) Sales return is shown in trading account by way of subtracting from sales. Sales return will not affect balance sheet.

Questions 38.
From the following Trial balance and Adjustments, prepare Trading Account, Profit & Loss Account and Balance Sheet as on 31-12-2011:
Trial Balance

Particulars	Dr. (₹)	Cr. (₹)
Opening Stock	15,000
Purchases and Sales	81,000	1,60,000
Furniture	15,000
Building	45,000
Capital		85,000
Bills Payable		6,400
Cash	8,000
Advertisement	1,400
Wages	20,000
Salaries	15,000
Returns Inward and Returns Outward	2,000	1,000
Carriage	4,500
Plant and Machinery	30,000
Audit Fee	3,000
Debtors and Creditors	26,000	20,000
Bank Loan		18,000
Commission Received		600
Travelling Expenses	4,500
Rent and Taxes	5,000
Drawings	10,000
Insurance	1,000
General Expenses	4,600
	2,91,000	2,91,000

Adjustments:

Wages outstanding ₹ 2,500
Closing Stock ₹ 30,000 (Market Value ₹ 35,000)
Salaries of ₹ 1,200 are yet to be paid.
Insurance is prepaid to the extent of ₹ 200

Show the effect of the following information in the Profit & Loss Account and Balance Sheet, being prepared on March 31,2014:

Particulars	Debit (₹)	Credit (₹)
Salaries	5,000	–
Establishment Expenses	7,700	–
Wages Owing	–	250
Unexpired Insurance	300	–
Rent	22,000	–
Plant and Machinery	50,000	–
Land and Building	80,000	–

Adjustments:

Outstanding Salaries amounted to ₹ 1,000.
Prepaid Rent amounted to ₹ 2,000.
The value of Plant and Machinery to be decreased by 10%.
The value of Land and Building to be increased by 20%.
Establishment expenses of ₹ 700 are still to be paid.

Answer:
Trading and Profit & Loss Account
Dr. for the year ended 3l December, 2011 Cr.

Balance Sheet
as at 31st December, 2011

Commonly Made Error:
Some students enter the wrong amount of closing stock in Trading A/c and Balance sheet.

Answering Tip:
Students should keep in mind the prudence concept which states that closing stock is valued either at cost or
market price.

Profit & Loss Account (Extract)
for the year ended March 31, 2014

Balance Sheet (Extract)
as on March 31, 2014

Commonly Made Error:
Some students do not add the outstanding establishment expenses to establishment expenses in Profit & Loss
A/C.

Answering Tip:
Remember how the treatment is made for outstanding expenses in Profit & Loss A/C.