CBSE Sample Papers for Class 11 Accountancy Set 2 with Solutions

Students must start practicing the questions from CBSE Sample Papers for Class 11 Accountancy with Solutions Set 2 are designed as per the revised syllabus.

CBSE Sample Papers for Class 11 Accountancy Set 2 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.
…………….. are the liabilities payable to a group of persons within the business enterprise. [1]
Answer:
Internal liabilities

Explanation: Liabilities which are payable internally (means persons or parties within the business enterprise are called internal liabilities)

Question 2.
Which of the following is not an example of current liability ?
(A) Creditors
(B) Bank overdraft
(C) Building
(D) None of These [1]
Answer:
(C) Building

Explanation: Building is an example of tangible fixed asset and all the other are current Liabilities.

Question 3.
“A and B are starting a business. A is of the view that all facts which influence the decision of users should be shown in financial statements.” A is following which accounting principle? [1]
Answer:
Full disclosure concept

Question 4.
……………. voucher records a transaction entailing multiple debits„and one credit or multiple credits and one debit. [1]
Answer:
Compound Voucher

Question 5.
…………….. account will be credited on receipt of ₹ 5,000 from Mr. Z whose account was written off as bad debt. [1]
Answer:
Bad Debts Recovered Account

Explanation: Following entry will be passed for this:

[Being bad debts amount recovered]

Question 6.
The periodic total of purchases return journal is posted to :
(A) Purchase account
(B) Profit & Loss account
(C) Purchase returns account
(D) Furniture account [1]
Answer:
(C) Purchase returns account

Question 7.
Credit balance shown by the bank column in cash book is ……………….. [1]
Answer:
Overdraft

Question 8.
A bank reconciliation statement is prepared with the balance of :
(A) Passbook
(B) Cashbook
(C) Both pass book and cash book
(D) None of These [1]
Answer:
(C) Both pass book and cash book

Explanation: BRS is prepared in order to reconcile the bank balance as per cash book and pass book. It can be prepared by taking any of the two balances.

Question 9.
When the pass book balance is taken as the starting point, items which makes the pass book balance ………….. than the balance in the cash book must be deducted for the purpose of reconciliation. [1]
Answer:
Higher

Question 10.
What is the gradual decrease in the value of fixed assets due to wear and tear, usage and obsolescence, etc. called?
(A) Depreciation
(B) Amortisation
(C) Depletion
(D) Both (A) and (B) [1]
Answer:
(A) Depreciation

Question 11.
…………….. Reserve can be used in distribution of Dividend. [1]
Answer:
Dividend Equalisation Reserve or any other correct.

Question 12.
What is the nature of Building A/c
(A) Real A/c
(B) Nominal A/c
(C) Personal A/c
(D) None of These [1]
Answer:
(A) Real A/c

Explanation: Real accounts are the accounts of all the assets and liabilities of the business, Building is an assets of the business, Hence, It is a real account.

Question 13.
State, Whether the given statement is true or false:
‘Bank column of cash book always shows a debit balance.’ [1]
Answer:
False.

Explanation: Bank column of cash book can show both debit or credit balance. Debit balance refers to the favourable balance in our bank account whereas credit balance refers to overdraft balance in our bank account.

Read the hypothetical Text given below and answer the Questions 14 to 17.
Anjula and company purchased a machinery of ₹ 1,00,000 on 1st july 2018 and spent ₹ 20,000 on its installation. On 1st Oct 2018, company paid ₹ 3,000 on its repairs, on 1st April 2019, company purchased another machinery of ₹ 80,000. On 1 July 2020, the machinery purchased on 1st july 2018, was sold at a loss of ₹ 18,000. Company uses straight line method of depreciation @ 10% p.a. closes its accounts on 31st March every year.

Question 14.
What amount of depreciation will be charged on 1st machinery for the year ended 31st March, 2019?
(A) ₹ 6,329
(B) ₹ 7,800
(C) ₹ 12,000
(D) ₹ 6,000 [1]
Answer:
(D) ₹ 6,000

Explanation: Actual value of 1st machinery = 1,00,000 + 20,000 = ₹ 1,20,000 [ Note: ₹ 3,000 on its repairs is a revenue expenditure, hence will not be added to the value of machinery].
Depreciation will be charged for six months
Amount of depreciation = 1,20,000x \(\frac { 10 }{ 100 }\) x \(\frac { 6 }{ 12 }\)
= ₹ 6,000

Question 15.
Which account will be credited for charging Depreciation on machinery?
(A) Profit & Loss A/c
(B) Machinery A/c
(C) Depreciation A/c
(D) Cash A/c [1]
Answer:
(B) Machinery A/c

Explanation: Following Entry will be passed for charging Dep.
Depreciation A/c Dr.
To machinery A/c
[Being Depreciation charged on machinery]

Question 16.
What is the amount of Depreciation charged on 2nd machinery at the end of the year 2021?
(A) 16,000
(B) 18,000
(C) 8,000
(D) 12,000 [1]
Answer:
(A) 16,000

Explanation: 2nd machinery was purchased on 1st
April 2019. So Depreciation to be charged from lst
April 2019 to 3l March 2021 [It means for 2 complete years]
Depreciation = 80,000 x \(\frac { 10 }{ 100 }\) X \(\frac { 2 }{ 1 }\)
= ₹ 16,000

Question 17.
What is the sales proceed of the 1st machinery?
(A) ₹ 90,000
(B) ₹ 88,000
(C) ₹ 78,000
(D) ₹ 77,000 [1]
Answer:
(C) ₹ 78,000

Explanation: Total Dep. Charged on 1st machinery:
[from 1st July 2018 to 30th June 2020]
= 1,20,000 x \(\frac { 10 }{ 100 }\) x \(\frac { 2 }{ 1 }\) = ₹ 24,000
Actual value of machinery on 1st July 2020 after Dep.
= 1,20,000 – 24,000
= ₹ 96,000
Loss on sale of machinery = ₹ 18,000
Sales proceeds = 96,000 – 18,000
= ₹ 78,000

Read the following text given below and answer the Questions 18 to 21.
Pulkit (a businessman) had the following transactions in the month of January 2021. 2nd Jan. withdrew ₹ 15,000 from bank for personal use 5th Jan. ordered for Goods of worth ₹ 50,000,10th Jan. paid ₹ 2,000 for the renewal of license. 15th Jan. paid ₹ 5,000 to Ram for salary.

Question 18.
Which account will be debited for transaction on 2nd Jan?
(A) Drawings A/c
(B) Cash A/c
(C) capital A/c
(D) None of These [1]
Answer:
(A) Drawings A/c

Explanation: Following entry will be passed:

[Being amount withdrew from bank for personal use]

Question 19.
Which account will be credited for transaction on 5th Jan.?
(A) Purchase A/c
(B) Bank A/c
(C) Creditor’s A/c
(D) None of These [1]
Answer:
(D) None of These

Explanation: As per the accrual basis, this transaction will not be entered into book of accounts as consideration (Economic) has not been received.

Question 20.
Which account will be debited for transaction on 10th Jan.?
(A) Asset A/c
(B) Renewal fees A/c
(C) Bank A/c
(D) Capital A/c [1]
Answer:
(B) Renewal fees A/c

Explanation: Following entry will be passed:

[Being renewal fees paid]
Note: It is a revenue expenditure

Question 21.
Which account will be credited for transaction on 15th Jan.?
(A) Cash A/c
(B) Ram’s A/c
(C) Salary A/c
(D) None of These [1]
Answer:
(A) Cash A/c

Explanation: Following entry will be passed:

[Being salary paid]

Question 22.
Explain the following :

Matching concept
Duality concept (Dual aspect concept). [3]

Explain the following :

What information do the owners need?
What accounting information does the management need? [3]

Answer:
(i) Matching Concept: Matching concept means that the expenses should be matched with the revenues generated in the relevant period. Determination of the period in which revenue is to be realised is the first step in the application of this principle. The various basis used for determining the period in which the revenue is realised are sales basis, cash basis and the production basis. The second step is to find out the costs and expenses to be matched with the revenues.

This requires various adjustments to be made for outstanding expenses, accrued incomes, prepaid expenses, unearned incomes, etc. The accountant must estimate the life span of the asset and allocate a part of the expired cost over accounting periods until its useful life is ended. It is often impossible to determine what benefits have been or remain to be derived from certain cost outlays. Matching concept also requires the application of personal judgements in making the estimates for doubtful debts, discounts, etc.

(ii) Duality (Dual Aspect) Concept: Principle of duality or dual aspect concept means that every transaction affects two accounts. That is why Double Entry System of Book-Keeping came into existence. All business transactions are recorded on the basis of this concept. No transaction is complete without dual aspects. This concept is the foundation on which whole of book-keeping and accountancy is based. This principle has given us the fundamental rule “for every debit there is equivalent credit”. According to this, there is following accounting equation:

Assets = Owners’ Equity (Capital) + Outsiders’ Equity (Liabilities)

(i) Owners need information about performance of the business and its financial position. It helps them to decide whether to continue or shut down the business. In case of companies, shareholders are the owners, they need information to assess whether to buy, hold or sell their investment. They are also interested to know the ability of the business to survive, prosper and to pay dividend.

(ii) In case of companies, ownership and management are separate. Management needs accounting information to take various decisions in performance of their duties. Accounting information is also required to make future plans and controlling the performance of subordinates.

Question 23.
Prepare Bank Reconciliation Statement from the following :

Overdraft as per Pass Book ₹ 20,000
Interest on overdraft ₹ 500
Cheque issued to creditors not yet presented for payment ₹ 3,000
Cheque paid into Bank not yet collected ₹ 30,000
Interest on investment collected by Bank not recorded in Cash Book ₹ 500
The payment side of Bank column of Cash Book Overcast by ₹ 700 [4]

Answer:
Bank Reconciliation Statement

Commonly Made Errors
Students are not able to understand the meaning of interest on overdraft.

Wrong treatment is done by most of the students for overcast of payment side of cash book. They simply deduct this amount in BRS.

Answering Tips
Students should understand the meaning of different terminologies. Interest on overdraft means interest charged by bank on the overdraft balance of pass book.

Since overdraft balance as per pass book is given, the overcast amount will be added to the pass book balance. Students should carefully read the question and then understand what treatment is to be given to different items.

Question 24.
Post the following into the Ledger :
Returns Inward Book

Answer:
In the Books of
Ledger
Dr. M/s Rama Book Co. Account Cr.

Question 25.
Prepare a Cash Book with Cash and Bank Columns from the following transactions:

How will you make posting from a petty cash book. [4]

How will you make posting from a petty cash book.
Answer:
Dr. Cash Book Cr.

Note: There will be no entry for credit transaction.

Petty cash book is considered as a memorandum book. The petty expenses are not directly posted to ledger accounts. A petty cash account is maintained in the ledger. When petty cash is advanced to the petty cashier, the main cashier will record it on the credit side of the Cash Book “By Petty Cash A/c”.

At the end of specified period, for the total expenses paid, a journal entry shall be passed by debiting to individual petty expenses and crediting to Petty Cash Account. All the accounts relating to petty expenses shall be opened in the ledger individually. Posting will be made on the debit side of these accounts by writing “To Petty Cash A/c”.

Question 26.
Distinguish between Capital Expenditure & Revenue Expenditure. [6]
Answer:
Difference between Capital Expenditure and Revenue Expenditure

Question 27.
A Maruti Van was purchased on 01/01/2000 for ₹ 60,000 and ₹ 5,000 were spent on its repair and registration. On 01/07/2001 another van was purchased for ₹ 70,000. On 01/01/2002, the Van purchased on 01/01/2000 was sold for ₹ 45,000 and a new van costing ₹ 1,70,000 was purchased on the same date. Show the Maruti Van Account from 2000 – 02 on the basis of Straight Line Method, if the rate of depreciation charged 10% @ p.a. Assume that books are closed on 31st Dec. every year. [6]
Answer:
Dr. Maruti Van Account Cr.

Commonly Made Errors
While calculating depreciation many students do not add the amount of repair and registration to the purchase price of van.

Answering Tips
Since repair and registration expenses are incurred on the purchase of machinery, they are to be added to the purchase price for calculating depreciation.

Question 28.
Rectify the following errors and ascertain the amount of difference in trial balance by preparing suspense account:

Credit sales to Mohan ₹ 7,000 were not posted to Sales A/c.
Credit purchases from Rohan ₹ 9,000 were not posted in Purchases A/c.
Goods returned to Rakesh ₹ 4,000 were not posted in Purchases Returns A/c.
Goods returned from Mahesh ₹ 1,000 were not posted in Sales Returns A/c.
Cash paid to Ganesh ₹ 3,000 was not posted to his account.
Cash sales ₹ 2000 were not posted to sales A/c. [8]

Rectify the following errors assuming that a suspense account was opened. Ascertain the difference in trial balance.

Credit sales to Mohan ₹ 7,000 were posted to Karan as ₹ 5,000.
Credit purchases from Rohan ₹ 9,000 were posted to the debit of Gobind as ₹ 10,000.
Good returned to Rakesh ₹ 4,000 were posted to the credit of Naresh as ₹ 3,000.
Goods returned by Mahesh ₹ 1,000 were posted to the debit of Manish as ₹ 2,000.
Cash sales ₹ 2,000 were posted to Commission account as ₹ 200.

Answer:
Journal Entries

Dr. Suspense Account Cr.

Journal Entries

Dr. Suspense Account Cr.

Part-B [24 Marks]
Financial Accounting-II

Question 29.
Write the formula for operating profit. [1]
Answer:
Operating Profit = Net Profit + Non-operating
Expenses – Non – operating Incomes

Question 30.
“Full amount of loss is shown in the credit side of Trading Account and is also shown in the assets side of Balance Sheet.” For which item is this adjustment related to? [1]
Answer:
Abnormal loss if it is fully insured.

Question 31.
Identify the correct statement regarding outstanding exp.
(A) Expenses which occur in the current year and are paid in the same year.
(B) Expenses which occur in the current year but have not been paid in the current year.
(C) Income which has been earned and received.
(D) Heavy Expenditure which will give benefit for more than a year. [1]
Answer:
(B) Expenses which occur in the current year but have not been paid in the current year.

Explanation: Outstanding expenses are those expenses which occur in the current year but have not been paid in that year.

Question 32.
Is renewal fee of license a revenue expenditure or a capital expenditure ? [1]
Answer:
Revenue expenditure.

Question 33.
Printing and stationery is an example of ……………. expenses. [1]
Answer:
Indirect.

Question 34.
Balance sheet is a …………….. , not an account. [1]
Answer:
Statement.

Question 35.
……………… is the excess of gross profit on sales over total operating expenses.
(A) Net profit
(B) Net Loss
(C) Operating profit
(D) None of These [1]
Answer:
(C) Operating profit

Explanation: The operating profit is derived by a firm over a period of its normal operations. The difference between gross profit of an enterprise and its operating cost constitute operating profit or loss.

Question 36.
Explain the concept of cost of Goods sold. [3]
Answer:
Cost of goods sold (COGS) is the cost of merchandise that is sold to the customer. It includes cost of raw materials purchased, direct expenses incurred, value of opening stock, i.e., the value of the last year ‘s unsold stock and excludes closing stock, if any, i.e., the value of current year’s unsold stock. The formula to calculate COGS is:

Cost of Goods Sold = Opening Stock + Net Purchases + Direct Expenses – Closing Stock

Question 37.
The following are the extracts from the trial balance of M/s Bhola & Sons as on March 31,2014 :

You are required to record the necessary journal entries and show how the above items will appear in the Trading and Profit & Loss Account and Balance Sheet of M/s Bhola & Sons. The value of closing stock on March 31, 2014 was ₹ 3,00,000. [6]
Answer:
In the Books of M/s Bhola and Sons Journal

Trading and Profit and loss Account
Dr. for the year ended March 31, 2014 Cr.

Balance Sheet as on March 31, 2014

Question 38.
From the following Trial Balance of Mr. Priyank prepare a Trading and Profit & Loss A/c for the year ending 31st March, 2014 and Balance Sheet as on that date :

Adjustments:

Wages include ₹ 2,000 for erection of new machinery on 1.4.2013.
Stock on 31st March, 2014 was ₹ 40,925.
Provide depreciation on machinery @ 5% p.a.
Salaries unpaid ₹ 800.
Half the amount of Shyam’s bill is irrecoverable.
Create a provision at 5% on other debtors
Rent is paid up to 31st July, 2014.
Insurance unexpired ₹ 300. [8]

Prepare a Trading and Profit & Loss account for the year ending March 31, 2014, from the balances extracted of M/s Rahul Sons. Also, prepare a balance sheet at the end of the year :

Adjustments :

Commission received in advance ₹ 1,000.
Rent receivable ₹ 2,000.
Salary outstanding ₹ 1,000 and insurance prepaid ₹ 800.
Further bad debts ₹ 1,000 and provision for bad debts @ 5% on debtors and discount on debtors @ 2%.
Closing stock ₹ 32,000.
Depreciation on building @ 6% p.a. [8]

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

Balance Sheet as at 31st March, 2014

Note: It has been assumed that rent (₹ 2,000) was paid on 1.4.2013 for 16 months ending 31st July, 2014.
Alternatively, it could have been assumed for 12 months. In that case, prepaid rent will be ₹ 667, and net profit will be ₹ 7,327.

Commonly Made Errors
Students wrongly deducted ₹ 800 from debtors.

Answering Tips
Since the bill from Shyam is dishonoured, there is no need to deduct ₹ 800 from the amount of debtors.

Books of M/s Rahul Sons Trading and Profit & Loss Account
Dr. for the year ended, March 31, 2014 Cr.

Balance Sheet
as at March 31, 2014