PM SHRI KV SILCHAR

QUESTION BANK- ACCOUNTANCY (055)

CLASS- XI C SESSION- 2023-24

SR QUESTIONS
NO
1 External users of accounting information are not :
(A) Lenders (B) Officers (C) Employees (D) Public
2 Assertion (A) : Purchase of Asset on credit will not increase the Creditors of the firm. Reason (R)
: List of creditors include only those to whom amount is payable for credit purchase of goods.
Choose the correct option:
(A) Both Assertion and Reason are correct and Reason is the correct explanation of the
Assertion.
(B) Both Assertion and Reason are correct but reason is not the correct explanation of the
Assertion
(c) Assertion is correct but Reason is incorrect
(D) Assertion is incorrect but Reason is correct
3 Book keeping is an art of _________.
a) analyzing the financial results
b) recording of business transactions
c) recording of non-monetary events
d) communicating the analyzed results
4 The efficiency of management and workforce improves the earning the of a business, but these
factors cannot be recorded in the books of accounts
Identify the limitation of accounting described above.
A. Ignores qualitative elements
B. Leads to window dressing
C. Ignores price level changes
D. Not free from bias
5 Which of the following is not a business transaction?
A Purchase goods for resale
B. Payment of salary to domestic servant from personal A/c
C. Payment of freight while purchasing raw material.
D. Payment of installation cost for machinery.
6 State which Accounting Principle/Assumption is applicable while dealing with the following
situation:
A Truck is purchased (Expected life 15 years) for delivery of goods. The cost of the Truck is
spread over the next 15 years for the calculation of Profit/Loss for each year. Identify the
concept :
(a) Going Concern Assumption
(b) Matching Principle
(c) Historical Cost Principle
(d) Prudence Principle
7 According to which concept the same accounting methods should be used each year:
(A) Prudence (B) Materiality (C) Full Disclosure (D) Consistency
Or
 Outstanding Expenses A/c is:
(A) Artificial Personal Account (B) Representative Personal Account
(C) Natural Personal Account (D) All of the above
8 Long term assets having no physical existence but, possessing a value are called
A) Intangible assets
B) Fixed assets
C) Current assets
D) Investments
9 If a trial balance totals do not agree, the difference must be entered in:
(A)The Profit & Loss account
(B) A Nominal account
(C)The Capital account
D) Suspense Account
OR
Suspense Account is the net effect of __________ errors
(a) Two sided errors
(b) One sided errors
©Errors of Principle
(d) None of the above
10 If wages paid for installation of new machinery is debited to wages Account, it is an error of -----
---------.
a) Commission b) Principle c) Omission d) Partial Omission
11 Which of the following limitations of accounting states that accounts may be manipulated to
conceal vital information?
(a) Accounting leads to window dressing
(b) Accounting is not fully exact
(c) Accounting ignores price level changes
(d) Accounting ignores qualitative concepts
12 Which term is used for an accrual accounting technique used to allocate the cost of extracting
natural resources such as timber, minerals and oil from the earth
(a) Amortization (b) Obsolescence
(c) Depletion (d) None of these
13 Using “lower of cost and net realisable value’ for the purpose of inventory valuation is the
implementation of which of the following concepts
(a) Cost (b) Money measurement
(c) Objectivity (d) Prudence
14 Goods purchased from Raghav for ₹ 4,500 but goods recorded as ₹ 5,400 in the Purchases Book.
The type of error related to:
(a) Error of Omission (b) Error of Commission
(c) Error of Partial Omission (d) Error of Principle
or
Bank Reconciliation Statement is prepared by:
(a) Debtors of the firm (b) Creditors of the firm
(c) Account holder of bank (d) Bank
15 Which of the following transaction will be recorded in books of accounts?.
(A) Order received from customer for supply of goods of Rs. 50,000
(B) Purchases a Scooter of Rs. 20,000 for personal use and paying amount from
 personal saving account.
(C ) Personal LED sold for Rs. 12,000 and given that money as advance to suppliers
for supply of goods.
(D) Conducting interview and selecting Ramesh as an accountant on monthly
salary of Rs. 42,000
16 Assertion: Accounting is a way to facilitate the communication of information to users of
accounting information.
Reason : Each step of Accounting provides information which is communicated to the users.
In the context of the above two statements, which of the following is correct?
Code:
(A) Both (A) and (R) are correct and (R) is the correct reason of (A).
(B) Both (A) and (R) are correct but (R) is not the correct reason of (A).
(C) Only (R) is correct.
(D) Both (A) and (R) are wrong.
17 Creditors of the business want to know:
(A) Profitability of the business
(B) Capability of the business to pay higher salaries
(C) Creditworthiness of the business
(d) Employment opportunities
18 Ledger is related to :
(A) Provide information to various parties who are interested in business enterprise.
(B) Record transactions in the books.
(C) To make summary in the form of financial statements.
(D) To classify the transactions under separate heads in the ledger.
19 Sumit, who owed Rs. 10,000 become insolvent. 70 paise in a rupee was received from his
estate. Bad Debts Account will be debited by:
(A) Rs. 10,000
(B) Rs. 5,000
(C) Rs. 1,500
(D) Rs. 3,000
20 The differences between the cash-book and bank pass-book is caused by:
(A) Timing differences on recording of the transactions.
(B) Errors made by the business
© Errors made by the bank
(D) All of the above
21 Amount directly deposited by debtors in bank of 20,000. How will it be treated for the purpose
of bank reconciliation statement if Balance as per Cash Book is taken as base?
(a) 20,000 will be deducted from the balance as per cash book.
(b) 20,000 will be added to the balance as per pass book.
(c) 20,000 will be added to the balance as per cash book.
(d) None of the above
22 What will be the journal entry if salary of 25,000 is outstanding?
(a) Outstanding Salary A/c Dr 25,000 To Salary A/c 25,000
(b) Salary A/c Dr 25,000 To Cash A/c 25,000
(c) Salary A/c Dr 25,000 To Outstanding Salary A/c 25,000
(d) None of the above
23 Which of the following accounts will be affected by the statement ‘Started business with
 cash 1,00,000 and goods 40,000’?
(a) Cash and capital
(b) Cash, stock and capital
(c) Cash, stock, liabilities and capital
(d) Cash and stock
24 There are two statements marked as Assertion (A) and Reason (R).
Assertion (A) Charging depreciation is important to represent true and fair financial position.
Reason (R) If depreciation on assets is not provided for, then the assets will be overvalued.
Read the statements and choose the appropriate option from the options given below:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A)
(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct
explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
25 Process of recording in the journal is called ……… ; the process of recording in the ledger is
known as ……… .
(a) Journalising; Posting
(b) Posting; Journalising
(c) Posting; Recording
(d) Recording; Writing
26 Sold goods to Ajay of the list price ₹40,000 allowing 10% Trade Discount and 2% Cash Discount.
Ajay paid 40% immediately. Cash Discount allowed to Ajay will be ________.
27 The accounting concept which suggested that each transaction should be recorded in the books
of account by supporting vouchers of transactions ___________.
(a) Objectivity (b) Dual aspect (c) Materiality (d) Consistency
28 Assertion (A): Trade discount improves sales by encouraging the purchaser to buy large
quantities.
Reason (R): Trade discount is not shown separately but purchases or sales is recorded at value
after Trade discount.
a. A & R are true and R is the correct explanation of A.
b. A & R are true but R is not the correct explanation of A.
c. A is true, but R is false.
d. A is false but R is true.
29 GST is imposed on the production of all services and goods except….
(a) Liquor intended for human ingestion
(b) Tobacco
(c) Health care service
(d) All of the above
30 Errors of omission does not affect trial balance True / False
31 Prove that the Accounting Equation is satisfied in all the following transactions of Rajaram. Also
prepare a Balance Sheet:-
(i) Started business with Cash 1, 20,000.
(ii) Purchased a typewriter for Cash for ₹8,000 for office use.
(iii) Purchased goods for 50,000 for cash.
(iv) Purchased goods for 40,000 on credit.
(v) Goods costing ₹60,000 sold for ₹80,000 on credit.
 (vi) Paid for Rent 1,500 and for salaries ₹2,000.
32 Calculate closing stock from the following details: ₹ Opening Stock. 4, 80,000 Purchase. 13,
60,000 Sales. 19, 50,000 G.P. is 30% on Cost.
33 Identify the accounting concept involved in each of the following situation:
(i) The method selected for depreciating fixed assets is followed year after year.
(ii) Business records an anticipated loss in the books of account.
(iii) At the end of accounting period the factory rent of ₹10,000 is remaining outstanding
34 Define GST. State two characteristics of GST.
OR
State the three categories of GST
35 Identify and state the errors that have occurred in the following transactions:
1. Minor repairs to building debited to building account.
2. Wages paid Rs 500 recorded with Rs 50.
3. Depreciation charged but credited to Assets a/c only.
36 Differentiate between Provision and Reserve on the basis of following:
(a) Basic Nature
(b) Purpose
(c) Use for payment of dividend
Or
Differentiate between capital and revenue reserve on the basis of following
(a) definition (b) tenure (c) dividend payout
37 From the following business transactions of a business firm for the month of July 2020, prepare
Accounting Equation:
July 01: Balance of Cash ₹ 1, 20,000; Goods ₹45,000; Debtors ₹24,000; Capital ₹ 1, 79,000 and
creditors ₹10,000.
July 05: Goods sold (costing ₹15,000) on credit to Dinesh at 20% profits on cost.
July 12: Outstanding salary ₹9,000.
July 17: Commission received in advance ₹12,000.
July 26: Goods purchased for cash ₹25,000.
July 31: Goods given as charity ₹1,000.
38 Give any three examples of revenue receipts
39 Explain the qualitative features of Accounting information
40 Explain the following and give two examples of each of the following-
a. Intangible Assets
b. External Liability
41 Record the following transactions in the Sales Book of Ganesh Electronics, Kolkata (West
Bengal) assuming CGST @ 9% and SGST @ 9% :

Sold to Ruchika Electronics, Kolkata, Vide Invoice No. 431 5 colour T.V. Sets @ 20,000 each Less:
Trade Discount 20% 10.
Sold to Garima Electronics , Patna (Bihar), Vide Invoice No. 432 10 Washing Machines @ 8,000
each Less: Trade Discount 25%.
Sold toRaghav& Sons, Kolkata, Vide Cash Memo No. 2510 6 Colour T.V. Sets @ 18,000 each Less
Trade Discount 15%.
Sold to NitinTrading Company, Ranchi (Jharkhand) Vide Invoice No. 433. 8 Music Systems @
15,000 10 Colour T.V. Sets @22,000 each Less: Trade Discount 20%
42 A Company purchased a second-hand machine on 1st April, 2020, for Rs 30,000 and
immediately spent Rs 4,000 on its repair and Rs 1,000 on its installation. On Oct. 1, 2022, the
machine was sold for Rs 25,000. Prepare Machine Account after charging depreciation @ 10%
p.a. by diminishing balance method, assuming that the books are closed on 31st March every
year. I GST was charged @12% on purchase and sale of machine.
43 Define the following terminologies:
(i)Current Liability; (ii) Trade Receivable; (iii) Gain; (iv) Tangible assets
44 Journalise the following transactions:-
(a.) Out of rent paid, Rs. 3,000 are related to next year
(b.) Goods costing Rs. 8,000 sold to Naresh at a trade discount of 20% and cash discount of 5%.
(c.) Received a commission of Rs. 2,500 from Mahesh.
(d) Received Rs 600 from a debtor, which had been written off as bad debt previous year.
45 Write the further classification of Assets on basis of non-current assets and currents assets
Or
Write the further classification of liabilities on basis of non-current liabilities and current
liabilities
46 Identify the users of accounting information
a) To know the repayment capacity of loan of the entity
b) To ensure creditworthiness of the firm
c) To know about regularity of adequate return on their invested capital
d) To know frequent information with regard to cost price ,selling price
47 Identify the term
a) Revenue – Expense b) Dealer of goods is allowed reduction in the price of goods c)
Economic unit engaged in performing economic activities d) amount irrecoverable
from a debtor
48 State four differences between capital and revenue expenditure
49 Rectify the following errors assuming that Suspense Account was opened.
(a) Credit sales to Mohan ₹ 7,000 were recorded in Purchase Book. However, Mohan's Account
was correctly debited.
(b) Credit purchases from Rohan ₹ 9,000 were recorded in Sales Book. However, Rohan's
Account was correctly credited.
(c) Goods returned to Rakesh ₹ 4,000 were recorded in Sale Returns Book. However, Rakesh's
Account was correctly debited.
(d) Goods returned from Mahesh ₹ 1,000 were recorded through Purchase Returns Book.
However, Mahesh's Account was correctly credited.
(e) Goods returned to Naresh ₹ 2,000 were recorded through Purchases Book. However,
Naresh's Account was correctly debited
50 What will be the effect of the following on the Accounting Equation?
(i) Harish started business with cash ₹ 1, 80,000.
(ii) Purchased goods for cash ₹ 60,000 and on credit ₹ 30,000.
(iii) Sold goods for cash ₹ 40,000; costing ₹ 24,000.
(iv) Rent paid ₹ 5,000; and rent outstanding ₹ 2,000.
(v) Sold goods on credit ₹ 50,000 (costing ₹ 38,000).
(vi) Salary paid in advance ₹ 3,000
51 Verma Bros. Kolkata carry on business as wholesale cloth dealer. From the following, write up
their Purchases Book for January, 2019:

52 Explain the following:

i). Revenue Recognition Principle
ii). Prudence or Conservatism Principle
53 i). Calculate the total equity and Owner’s Equity at the end if:
Owner’s Equity in the beginning is ₹60, 000;
Equity of creditors at the end is ₹50, 000;
Revenue during the period is ₹70, 000;
Expenses during the same period are ₹65, 000.
ii). Show the accounting treatment for the following conditions:
a) Paid Rent for the current period ₹500.
b) Rent is outstanding for the current period ₹1, 000.
c) Prepaid expenditure for the future benefit as Prepaid rent ₹2, 000.
54 From the following information supplied by Sanjay, prepare his Bank Reconciliation statement
as on December 31, 2022.
(i) Bank overdraft as per pass book. 16,500
(ii) Cheque issued but not presented for payment. 8,750
(iii) Cheque deposited with the Bank but not collected 10500
(iv) Cheques recorded in the cash book but not sent to the bank for collection Rs 2000
(v) Payments received from customers directly by the bank Rs 3,500
(vi) Bank charges debited in the pass book Rs 200
(vii) Premium on life policy of Sanjay paid by the bank on standing advice Rs1,980
55 On 1-4-2017, a Company purchased plant and machinery for Rs 2,00,000. New machinery for Rs
10,000 was purchased on 1-1-2018 and for Rs 20,000 on 1-10-2018. On 1-7-2019, a machinery
whose book value had been Rs 30,000 on 1-4-2017 was sold for Rs 16,000 and the entire
amount was credited to Plant and Machinery Account. Depreciation had been charged at 10%
per annum on straight-line method. Accounts are closed on 31st March every year. Show the
Plant and Machinery Account from 1-4-2017 to 31-3-2020.
56 There was a difference of ₹430 in a Trial Balance. It was placed on the Debit side of a Suspense
A/c. Later on the following errors were discovered. Pass rectifying entries and prepare Suspense
 (i) Purchases book was overcast by 100.
(ii) Sales book was overcast by 1000
(iii) Goods for 800 purchased from Umakant, though entered in the purchase book, has not
been posted to his account.
(iv) An amount of 500 has been posted to the credit side of commission account instead of 570.
(v) Goods sold to Bharti for ₹4,400 has been posted to her account as ₹4,000.
(vi) Goods sold to X for 750 were recorded in purchase book.
57 Pass the journal entries in the books of Ranjeet, a retailer
2023
May 1
Purchased goods from Amit, List Price ₹ 40,000 at a trade discount of 20% and paid half of the
amount after a cash discount of 10%.
May 4
Paid salaries to staff by cheque ₹ 5,000 and by giving away stock of goods costing ₹ 1,000.
May 8
Paid rent to the landlord ₹24,000, half of the building was used by the owner for residential
purpose.
May 10
Stock worth ₹ 15,000 (Market price ₹18,000) was stolen, the insurance company accepted the
claim to compensate ₹9,000.
58 Write the journal entries, post them into ledger and extract the balance to prepare a Trial
Balance:
2023
July 1. Started business with cash of ₹15,000 and machinery ₹50,000
July 3. Deposited ₹5,000 into bank.
July 6. Purchased goods from Rahul ₹8,000.
July10. Sold goods to Rakesh ₹5,000.
July 15. Paid Rahul ₹7,000 in full settlement.
July 30. Machine is depreciated by 10%.
July 31. Received a cheque of ₹2,000 from Rakesh on account.
59 Prepare a Double Column Cash Book having Cash and Bank columns from the following
Transactions: -
2020
Jan 1 Cash In hand Rs. 18,000
Bank Overdraft Rs. 8,000
Jan 5 Goods costing Rs. 25,000 sold at a trade discount of 20%.
Jan 9 Cash deposited in to bank Rs. 15,000.
Jan 10 Goods costing Rs. 15,000 sold to Deepak at a Trade discount of 25%.
Jan 15 Received a cheque of Rs. 9,000 from Deepak.
Jan 17 The above cheque was deposited into bank.
Jan 20 Deepak’s Cheque was dishonoured by bank and bank charged Rs. 200 as
bank Charges.
Jan 22 Withdrew Rs. 2,000 from bank for personal use and Rs. 3,000 for office use
Jan 30 Deposited with bank the entire balance after retaining Rs. 5,000 cash in hand.

60 DST Limited purchased a machinery on 1st August, 2015 for Rs. 90,000. On 1st October, 2016 it
purchased another
 machine for Rs. 40,000. On 30th June, 2017 it sold off the first machine purchased in 2015 for
Rs. 58,000 and on
the same date purchased a new machinery for Rs. 1,00,000. Depreciation is provided at 20%
p.a. on the original
cost each year. Accounts are closed each year on 31st March.
Show the Machinery Account for three years.
OR
Distinguish between Reserves and Provisions
61 Prepare the profit and loss account and balance sheet from the following information as on
March 31, 2021
Debtors 80,000
Bad debts 2,000
Provision for doubtful debts 5,000
Adjustments :
Bad debts ₹500 Provision on debtors @ 5%.
62 From the following particulars of Mr. Vinod, prepare bank reconciliation statement as on March
31, 2005.
1. Bank balance as per cash book ₹ 50,000.
2. Cheques issued but not presented for payment ₹ 6,000.
3. The bank had directly collected dividend of ₹ 8,000 and credited to bank account but was not
entered in the cash book.
4. Bank charges of ₹ 400 were not entered in the cash book.
5. A cheque for ₹ 8,000 was deposited but not collected by the bank.
6. Discounted bill from the bank was dishonoured but not taken into cash book of ₹ 12,000.
63 Journalise the following transactions in the books of Himanshu:
Jan. 02: Goods use for household’s₹ 2,000.
Jan. 08: Charge depreciation @ 10% p.a. for two months on Machinery costing ₹ 30,000.
Jan. 12: Provide interest on capital on ₹ 1,50,000 at 6% p.a. for 9 months.
Jan. 15: Goods destroyed by fire ₹ 4,500.
Jan. 19: Goods sold (list price ₹ 20,000) at 10% trade discount and at 5% cash discount, to
Mukesh. Half of payment received in cash and the balance by a cheque.
Jan. 29: Invested in the shares of Government sector ₹ 50,000.
64 B & Company purchased Machinery on 1st April, 2019, for Rs 54,000 and spent Rs 6,000 on its
installation. On 1st December, 2020, it purchased another machine for Rs 30,000.On 30th June
2021, the first machine purchased on 1st April, 2019, is sold for Rs 36,000 and on the same date
it purchased new machinery for Rs 80,000. Depreciation was provided on machinery @ 10% p.a.
on Original Cost Method annually on 31st March. Give the machinery account for three years.
Or
On April 1 , 2015 following balances appeared in the books of M/s Kamisha traders : furniture
account Rs 50,000 , provision for depreciation on furniture Rs 22,000.on October 1,2015 a part
of furniture purchased for Rs 20,000 on 01 April ,2011 was sold for Rs 5000.on the same date a
new furniture costing Rs 25,000 was purchased .the depreciation was provided @10% p.a on
original cost of the asset and no depreciation was charged on the asset in the year of sale
.prepare furniture account and provision for depreciation account and disposal of furniture
account for the year ending march 31,2016.
65 Identify the following limitations of accounting and explain them
a) Different persons have different opinions about the valuation of stock and making
 provision for doubtful debts
b) Accounts are prepared on the basis of number of accounting concepts and
conventions
c) Assets in the balance sheet are shown at their original cost while they should be
shown at their current market value
66 journalise the following:−
2017
March 4
Purchased building for ₹ 1, 50,000 and incurred expenses of ₹ 10,000 on its purchase.
March 10
Satish who owed us ₹ 20,000 is declared insolvent and 60 paise per ₹ is received from his estate.
March 15
Paid ₹ 500 for repairing the office furniture.
March 18
Proprietor withdrew for his personal use cash ₹ 5,000 and goods worth ₹ 2,000.
March 20
Purchased the following items for business:
Iron Safe ₹ 15,000; Filing Cabinet ₹ 5,000; Computer ₹12,000; Postage ₹ 200 and Stationery ₹
150.
March 28
Paid electricity charges ₹ 1,600.
March 31
Charge depreciation on Machinery @ 10% for one year (Machinery ₹ 75,000).
March 31
Outstanding wages at the end of the year ₹ 6,000.
67 Analyze the following transactions, state their nature, and identify the accounts to be Debited
and Credited as per Traditional Approaches well as Modern approach.
Transactions Amount (₹) 1) Sold goods to X for cash 5,000 2) Sold goods to X 2,000 3) Salary
Outstanding 10,000 4) Purchased goods from Hari 6,700 5) Purchased goods from Asha for cash
3,400 6) Rent received in advance 2,500
68 Prepare Bank Reconciliation statement on 31st March 2018 from the following particulars:
(A)
R’s overdraft as per the Pass Book Rs.12,000 as on 31st March
(B)
On 30th March, Cheques had been issued for Rs.70,000 of which cheques worth Rs.3,000 only
had been encashed up to 31st March.
(C)
Cheques amounting to Rs.3,500 had been paid into the bank for collection but of this only
Rs.500 had been credited in the Pass Book.
(D)
Bank has charged Rs.500 as interest on overdraft and the intimation of which has been received
on 2nd April 2018.
(E)
Bank Pass Book shows credit for Rs.1,000 representing Rs.400 Paid by debtor of R direct into the
Bank and Rs.600 collected directly by Bank in respect of interest on R’s investment. R had no
knowledge of these items.
(F)
 A cheque for Rs.200 has been debited in bank column of Cash Book by R, but it was not sent to
Bank at all.
(G)
Passbook shows a debt of Rs.1,000 for bank charges and credit of Rs.2,000 as interest
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