Maharashtra Board 11th BK Important Questions Chapter 9 Final Accounts of a Proprietary Concern

Balbharti Maharashtra State Board 11th Commerce Book Keeping & Accountancy Important Questions Chapter 9 Final Accounts of a Proprietary Concern Important Questions and Answers.

Maharashtra State Board 11th Commerce BK Important Questions Chapter 9 Final Accounts of a Proprietary Concern

1. Answer in One Sentence.

Question 1.
What do you mean by pre-received income?
Answer:
Income that is received before it is due for receipt is called pre-received income.

Question 2.
What do you mean by bad debts?
Answer:
The debts which are not recoverable in spite of repeated efforts to collect the same are called bad debts.

Question 3.
What is Capital?
Answer:
Amount invested by the proprietor from time to time in business is known as capital.

Question 4.
What are the adjustments?
Answer:
Adjustments are additional information given below the trial balance and are to be considered for arriving at the correct profit or loss.

Question 5.
State the meaning of Current assets.
Answer:
Assets that are purchased with the intention of converting them into cash during the operating year are called current assets.
E.g. stock of goods.

2. Give a word, term, or phrase which can substitute each of the following statements:

Question 1.
Debit balance of Trading Account.
Answer:
Gross Loss

Question 2.
The credit balance of the Trading Account.
Answer:
Gross Profit

Question 3.
Debit balance of Profit and Loss Account.
Answer:
Net Loss

Question 4.
The credit balance of Profit and Loss Account.
Answer:
Net Profit

Question 5.
A debt that cannot be recovered.
Answer:
Bad debts

Question 6.
Reduction in the value of fixed assets due to its continuous use.
Answer:
Depreciation

Question 7.
Carriage paid on the purchase of goods.
Answer:
Carriage Inwards

Question 8.
Statement of balances of various ledger accounts.
Answer:
Trial Balance

Question 9.
An amount withdraws by a proprietor from a business in cash or kind.
Answer:
Drawings

Question 10.
Account prepared to find out gross profit or gross loss.
Answer:
Trading A/c

Question 11.
Income received before it is due.
Answer:
Pre-received Income

Question 12.
Unpaid expenses of a business.
Answer:
Outstanding Expenses

Question 13.
Account prepared on the basis of direct expenses and direct income of the business.
Answer:
Trading A/c

Question 14.
Account prepared on the basis of indirect expenses and indirect incomes of the business.
Answer:
Profit and Loss A/c

Question 15.
Group of accounts which gives the result of business activities.
Answer:
Final Accounts

3. Select the most appropriate alternatives given below and rewrite the sentence:

Question 1.
A list of balances of all the accounts in ledger is called _______________
(a) Balance Sheet
(b) Profit and Loss A/c
(c) Trading A/c
(d) Trial Balance
Answer:
(d) Trial Balance

Question 2.
Opening stock is entered in a Trading Account on the _______________ side.
(a) credit
(b) debit
(c) asset
(d) liabilities
Answer:
(b) debit

Question 3.
Drawing account is closed by transferring the balance to the _______________ account.
(a) Drawing
(b) Liabilities
(c) Assets
(d) Capital
Answer:
(d) Capital

Question 4.
Outstanding expenses is a _______________ account.
(a) Real
(b) Personal
(c) Nominal
(d) None of them
Answer:
(b) Personal

Question 5.
Depreciation is always charged on _______________ assets.
(a) Current
(b) Fixed
(c) Fictitious
(d) Intangible
Answer:
(b) Fixed

Question 6.
Pre-received income is shown on _______________ side of Balance sheet.
(a) Assets
(b) Liabilities
(c) Credit
(d) Debit
Answer:
(b) Liabilities

Question 7.
Royalty on production is a _______________ expenses.
(a) direct
(b) indirect
(c) capital
(d) none of them
Answer:
(a) direct

Question 8.
Interest on investment is _______________ of business concern.
(a) a profit
(b) a loss
(c) an expense
(d) an income
Answer:
(d) an income

Question 9.
All items of indirect income are shown on the credit side of the _______________ Account.
(a) Balance Sheet
(b) Profit and Loss
(c) Manufacturing
(d) None of them
Answer:
(b) Profit and Loss

Question 10.
Reserve for discount on debtor has a _______________ balance.
(a) credit
(b) debit
(c) nil
(d) positive
Answer:
(a) credit

4. State True or False with reasons:

Question 1.
Closing Stock is valued at cost or market price whichever is more.
Answer:
This statement is False.
Closing stock is valued at cost or market price whichever is less. It is based on the theory of anticipated profit is not brought with the account before actual realization or the Principle of conservatism.

Question 2.
Income received in advance is a liability.
Answer:
This statement is True.
Income received in advance is the liability to the business because it has not yet earned the money and the business has an obligation to deliver the goods or services to the customer.

Question 3.
Prepaid expenses are a liability.
Answer:
This statement is False.
Prepaid means paid in advance for the future period. It is the amount paid but has not yet been used up or has not yet expired. So prepaid expenses are an asset.

Question 4.
A balance Sheet is a real account.
Answer:
This statement is False.
The balance sheet is a statement prepare at the end of the financial or accounting year. It is not an Account. It gives an idea of Total Assets and liabilities on a particular day.

Question 5.
Depreciation need not be provided if the asset is not in use.
Answer:
This statement is False.
The working life of fixed assets decreases with passes of time. The value of these assets decreases every year as new technology introduced in the market old becomes outdated so it is necessary to depreciate an asset even it is not in use.

5. Fill in the blanks:

Question 1.
A Copy Right is _______________ Asset.
Answer:
An intangible

Question 2.
Wages paid for installation of Machinery should be debited to _______________ A/c.
Answer:
Machinery

Question 3.
A provision made for debts irrecoverable from debtors is called _______________
Answer:
Reserve for doubtful debts

Question 4.
In the absence of information interest on Drawings is charged for _______________ months.
Answer:
six

Question 5.
Return outward are deducted from _______________
Answer:
purchases

Question 6.
Net profit is transferred to _______________
Answer:
Balance Sheet Capital A/c

Question 7.
If cash/goods withdrawn by proprietor for domestic use, it is called _______________
Answer:
Drawings

Question 8.
Payment made in advance are shown on _______________ side of Balance Sheet.
Answer:
Asset

Question 9.
Royalty on production is debited to _______________ A/c of final A/c.
Answer:
Trading

Question 10.
General Expenses are recolored to the debit side of _______________ A/c when Office expenses, Sundry expenses, or General expenses are given in the trial balance.
Answer:
Trading

6. Find the odd one:

Question 1.
Salary, Sundry expenses, General Expenses.
Answer:
General Expenses

Question 2.
Creditors, Bank Loan, Investment.
Answer:
Investment

Question 3.
Royalty on purchases, Octroi, Discount Allowed.
Answer:
Discount Allowed

Question 4.
Rent, Factory Lighting, Freight.
Answer:
Rent

Question 5.
Outstanding Salary, Accrued Interest, Outstanding Rent.
Answer:
Accrued Interest

7. Do you agree or disagree with the following statement:

Question 1.
Software expenses paid for the installation of the computer should be debited to Software A/c.
Answer:
Disagree

Question 2.
In absence of information interest on the drawing is charged for twelve months.
Answer:
Disagree

Question 3.
Only carriage means carriage on sales.
Answer:
Disagree

Question 4.
Final accounts are prepared at the end of the month.
Answer:
Disagree

Question 5.
Return Inwards means purchase return.
Answer:
Disagree

8. Correct and Rewrite the following statements:

Question 1.
Bank overdraft is an Asset of the business concern.
Answer:
Bank overdraft is a liability of business concern.

Question 2.
Discount allowed is an income for business
Answer:
Discount allowed is an expense for the business.

Question 3.
To Goods withdrawn by proprietor A/c
Capital A/c……………Dr
(Being goods withdrawn by the proprietor for personal use)
Answer:
To Goods withdrawn by proprietor A/c
To Capital A/c………….Dr
(Being goods withdrawn by the proprietor for use)

Question 4.
Sundry Debtors A/c……………Dr
To Bad debts A/c
(Being Bad debts written off)
Answer:
Bad Debts A/c……………Dr
To Sundry Debtors A/c
(Being Bad debts written off)

Question 5.
Opening stock A/c…………….Dr
Direct expenses A/c…………….Dr
Purchase A/c………………Dr
To Trading A/c
(Being Opening Stock, Direct expenses, and purchase transferred to Trading A/c)
Answer:
Trading A/c……….Dr
To Opening stock A/c
To Direct expenses A/c
To Purchase A/c
(Being opening stock, Direct expenses and purchase transferred to Trading A/c)