(A) Answer one sentence only.
1. What is Balance Sheet?
Ans. Balance sheet
is a statement which shows financial position of all assets and liabilities of
the business on a particular date.
2. State the meaning of debit balance of Trading Account?
Ans. Debit balance
of trading account indicates gross loss of the business for a particular year.
3. When is partner’s current account opened?
Ans. partner’s
capital account is opened if partners adopt fixed capital method.
4. To which account Gross Profit transferred?
Ans. Gross profit
is transferred to the credit side of profit & loss account.
5. What is closing stock?
Ans. Stock of
goods in hand at the end of the accounting year is called as closing stock.
6. What is Final Accounts?
Ans. Final accounts are accounts which are prepared at
the end of the financial year by the partnership firm, consisting of trading
a/c, profit & loss a/c and balance sheet
7. How is closing stock valued?
Ans. Closing stock
is valued at cost price or market price whichever is less.
8. What do you mean by direct expenses?
Ans. Expenses
which are directly related to production of goods and purchases of goods are
called as direct expenses.
9. What do you mean by indirect expenses?
Ans. Expenses
which are not directly related to production of goods and purchases of goods
are called as indirect expenses.
10. What do you mean by accrued income?
Ans. Income which
is due for current accounting year but not yet received is known as outstanding
income.
11. What is Trial balance?
Ans. A list of
debit and credit balances of all ledger accounts is called as Trial balance.
12. What is bad debts?
Ans. The amount
which is irrecoverable from debtor is called as bad debts.
13. In the absence of partnership deed, what is profit
sharing ratio of the partners?
Ans. In the
absence of partnership deed, profit and losses are shared equally by the
partners.
14. What do you mean by carriage inward?
Ans. Transport expenses incurred to carry the goods
purchased by the firm are called as carriage inward.
15. What do you mean by freight?
Ans. Expenses which are paid to railways or airways for
carrying goods are called as freight.
16. What are
tangible assets?
Ans. Tangible
assets are those which are of permanent nature and can be seen by our eyes.
17. What are
intangible assets?
Ans. Intangible assets are those which can not be seen by
our eyes but have realisable value.
18. What are
contingent liabilities?
Ans. A liability
which may or may not occur in future, depending on happening of certain events
is called as contingent liabilities.
19. What do you
mean by Pre- received incomes?
Ans. Income which is not related to the current
accounting year but related to the future period is known as pre-received
incomes.
20. What are
fictitious assets?
Ans. Fictitious
assets are those which are intangible in nature and do not have realisable
value.
21. What are
outstanding expenses?
Ans. Expenses
which are due but not paid in the current accounting year is known as
outstanding expenses
(B) Write a word
or a term or a phrase which can substitute each of the following statements.
1. A statement showing financial position of the business
on a particular date. Balance Sheet
2. The amount which is not recoverable from debtors. Bad
debts
3. Stock in hand at the end of the accounting year.
Closing stock
4. The transport expenses incurred to carry the goods
purchased by the firm. Carriage inward
5. Income which is received before its due date. Pre-received
income
6. The debit balance of Trading Account. Gross Loss
7. The credit balance of Trading Account. Gross Profit
8. A provision which is created on sundry debtors.
Reserve for Doubtful Debts
9. The amount withdrawn by the partners from the business
for their personal use. Drawings
10. The accounts which are prepared at the end of each
financial year. Final Accounts
11. Expenses which are paid before due. Prepaid expenses
12. The statement showing list of all ledger balances.
Trial Balance
13. The credit balance of Profit and Loss Account. Net
profit
14. Expenses which are due but not paid at the end of the
year. Outstanding expenses
15. Assets which are held in the business for a long
period. Fixed assets
16. Goods returned to suppliers Purchase returns
17. An amount paid for the permission to use patents
& copyrights Royalty
18. An account to which net loss is transferred in a
partnership firm. Partners capital a/c
19. Concession given by firm to customer. Discount
allowed
20. Concession given by suppliers to firm Discount
received
21. Example of fictitious asset. Preliminary expenses
22. An account prepared by producer to find cost of
production. Manufacturing a/c
23. Expenses which are paid off in one year but benefit
is availed for number of years Deferred expenses
24. Assets which are not real assets of the business.
Fictitious assets
(C) Fill in the blanks with appropriate
alternative given in the brackets.
1. The gross profit is transferred to __________
account. (a) trading (b)
profit and loss (c) capital
(d) current
profit and loss
2. Wages paid for installation of machinery should be
debited to __________ account. (a) machinery
(b) wages (c)
trading (d) profit and loss
Machinery
3. All indirect expenses are debited to ___________
account. (a) trading (b) capital
(c) profit and loss (d)
current
profit and loss
4. A statement showing finacial position of the business
is called as __________. (a) Balance
sheet (b) trial balalnce (c)
capital (d) trading a/c
balance sheet
5. To find out net profit or net loss of the business
___________ account is prepared. (a)
trading (b) capital
(c) current (d) profit and loss
profit and loss
6. A _____________ is an intangible asset. (a)
goodwill (b) stock
(c) building (d)
cash
Goodwill
7. Trading account is prepared on the basis of
____________ expenses. (a) indirect
(b) direct (c) revenue (d)
other
Direct
8. The interest on drawings is transferred to __________
side of the profit and loss account. (a) debit
(b) credit (c)
asset (d) liability
Credit
9. Final accounts are prepared on the basis of __________
and adjustments. (a) trial balance
(b) capital a/c (c)
trading A/c (d) profit & loss A/c
trial balance
10. ____________ is the list of all ledger balances. (a)
balance sheet (b) trial balance
(c) trading A/c (d)
profit & loss A/c
Trial balance
11. Return outward are deducted from _____________. (a)
purchases (b) sales
(c) capital (d)
debtors
Purchases
12. The withdrawals of partner from the business for
their personal use is called as _________. (a) capital (b)
profit (c) drawings
(d) cash
Drawings
13. Income received in advance is shown on the
___________. (a) debit (b) credit
(c) asset (d)
liability
Liability
14. Prepaid expenses are shown on the _________ side of the
Balance sheet. (a) assets (b) l
iability (c) debit
(d) credit
Assets
15. Profit & Loss Account is _____________ account
(a) Real
(b) nominal (c) income (d)
Personal
Nominal
16. _____________ is a financial statement (a) Income
(b) Trading a/c (c)
balance sheet (d) Profit & loss a/c
Balance Sheet
17. A provision made for debts irrecoverable from the
debtors is called _____________. (a) bad
debts (b) reserve for discount on debtors (c)
reserve for doubtful debts (d)
additional new bad debts
reserve for doubtful debts
18. _____________ is notional loss of the business.
(a) uninsured goods (b)
goods destroyed by fire (c) depreciation
(d) loss from sale of asset
depreciation
19. _____________ a/c prepared by producers to find cost
of production. (a) Manufacturing (b)
Trading (c) Purchase
(d) Profit & loss
Manufacturing a/c
20. Wages & salaries are debited to _____________
account (a) Profit & loss (b)
trading a/c (c) expense a/c
(d) salary a/c
Trading a/c
21. _____________ a/c & _____________ a/c are
recorded to balance sheet (a) profit
& loss (b) nominal, personal (c)
real, nominal (d) real, personal
Real, Personal
22. _____________ are intangible assets and do not have
realisable value. (a) Good will (b)
profit & loss (dr bal) (c) Trade-mark
(d) Copy right.
Profit & loss (dr bal)
(D) State whether
the following statements are TRUE/FALSE
1. All direct expenses are debited to Trading account.
True
2. The Balance Sheet is a nominal account. False
3. Discount allowed to debtors is called as bad debts.
False
4. Profit and loss account is a nominal account True
5. The interest on drawings is an income of the firm.
True
6. The interest on capital is an income of the firm.
False
7. Trading account is a nominal account. True
8. Prepaid expenses are shown on the asset side of the
Balance sheet. True
9. Closing stock is always valued at market price. False
10. Outstanding expenses are shown on the liability side
of the Balance sheet. True
11. Partners must share profits and losses equally. False
12. Trial Balance is the base of Final account. True
13. Debit balance of Trading account shows gross profit.
False
14. Credit balance of profit and loss account shows net
profit of the business. True
15. Return inward is deducted from purchases. False
16. Unproductive wages are debited to trading a/c. False
17. Royalty is debited to profit & loss a/c. False
18. Wages & salaries is treated as indirect expense.
False
19. Balance sheet is not an account. True
20. Fictitious assets are intangible assets. True
21. Current assets are also called as floating assets.
True
22. Income received, but not earned is an asset. False
23. Outstanding wages is a nominal a/c. False
24. Final accounts are prepared end of the accounting
year. True
TEXTUAL
PROBLEMS WITH COMPLETE SOLUTION.
ADDITIONAL
PROBLEMS WITH COMPLETE SOLUTION .
1. Jitesh and Lailesh are in
partnership sharing profits and losses in the ratio of 2:1. [15] [October
2014 Board Question]
10. Sachin & Ganguly
25. Kamesh and Mani
28. Dalal & Raja
30. Asha and Nisha
35. Mano and Prakash
37. Meena and Reena
