Class XI
Assignment: Accounting Equation and Theory Base of Accounting
Q1.Z's capital as on April 1,2011 was Rs4,07,000. He had also raised a loan of Rs85,000 During the year ended March 31,2016 he had withdrawn Rs3,000 per month for personal purposes and introduced Rs80,000 as additional capital. Find out his closing capital and the profits or losses earned by him during the year.
Q2. Show the effect of the following transactions on the given accounting equation:
Bank (Rs1,50,000)+ Debtors (Rs5,000) + Stock (Rs40,000)= Loan (Rs1,00,000) + Capital (Rs95,000)
a)Withdrew Rs50,000 from bank to pay the fees of the son.
b)Sold goods costing Rs10,000 at a profit of 12% to Rohit. He paid 30% of the amount by cheque.
Q3. Develop the accounting equation from the following transactions:
a)The following balances existed in the books of Suresh:
Cash (Rs2,50,000), Debtors (Rs50,000) , Stock (Rs40,000), Creditors(Rs2,00,000)
b)Settled the account of creditors at a discount of 10%
c) Debtors became bad and as such only 40 paise in a rupee could be recovered from them
d)1/4th stock was sold at a profit of 15% on cost
e)Rent paid for building Rs20,000. Half the building is used for residential purposes
f)Salaries paid Rs15,000 and Rs5,000 is still outstanding
Q4. Develop the accounting equation from the following transactions:
a)Started Business with Cash 4,50,000, Stock Rs30,000, Furniture Rs60,000, Building Rs2,00,000
b)Took Loan from Bank amounting to Rs5,00,000
c)Commission received Rs60,000 and Rs5,000 is still due
d)Depreciate Building by 10%
e)Extra Furniture worth Rs10,000 was sold for Rs9,200
f)Goods costing Rs20,000 was sold at a profit of 12% to Mohit
g)Paid Rs2,000 as Security Deposit for getting the Telephone Connection
h)Salaries paid Rs30,000 out of which Rs4,000 is in advance
i)Paid Rs1,10,000 towards the repayment of Loan including Interest Rs10,000
Q5. Mohan started business on April 1,2015 with Capital of Rs7,50,000 and a Loan of Rs2,00,000. On March31, 2016 his assets were Rs15,00,000. Find out his capital on March31,2016 and the profits or loss incurred by him.
What would have been the profits if he introduced additional capital Rs1,25,000 and withdrew Rs40,000 for personal purposes.
Q6. Harsh started businesson April 1,2015 with Capital of Rs2,00,000 and a Loan of Rs75,000. On March31, 2016 his assets were Rs3,80,000. During the year he sold his personal investments for Rs60,000 and introduced the amount in his business. He also withdrew Rs9,000 at the end of every quarter for personal purposes. Find out his capital on March31,2016 and the profits or loss incurred by him.
Q7. State clearly what accounting concepts/ principles are violated in each of the following cases. Explain it.
a)A company received the order for supply of goods in the next year but it considered it as sales.
b)The owner of the firm had recorded his own medical expenses in the income statement of his business as the business expense
c)The Closing stock costing Rs40,000 was recorded at the Market Price Rs45,000.
d)The Method of charging Depreciation was changed every year by a company
Q8. Identify and Explainthe concepts/principles followed in the following:
a)A Company discloses Contingent Liabilities as a footnote to the Balance Sheet
b)Prepaid Expenses are shown as an asset in the Balance Sheet as the benefit from it will be received in future
c)The efficiency of management is not recorded in the books of accounts
d)The Fixed assets are not shown at the Market price in the books of accounts.
Q9. Name and Discuss the Accounting Principle upon which Accounting Equation is based.
Q10. Differentiate between Cash Basis of Accounting and Accrual Basis of Accounting.
Q11.Give one example of the following transactions:
a)Increase in asset and liability
b)Increase in one asset and decrease in another
c)Decrease in asset and liability
d)Decrease in asset and capital
e)Increase in asset and capital
Q12. What is meant by Accounting Standards? Discuss its importance.