ACCOUNTANCY

                                                                  CLASS 11

CH-3 and 4 Theory base of Accounting

Bases of Accounting

1.       M/s Ghanshyam Das Industries appointed sales girl Priya. She is smart and impressive. Though, her personality can have great positive influence on the business but her smartness cannot be measured in terms of money.

a.       Which accounting principle is being highlighted above.

b.      Explain in brief the limitation of the principle being referred above.

2.       Name and explain the assumption according to which a business enterprise will not be closed or sold in the near future.

3.       State True or False:

a.       The accountants’ prudence states that preference should be given for errors in measuring assets and recognizing revenues in the direction of understatement rather than overstatement.

b.      The accounting data should be verifiable and free from bias.

c.       The cash withdrawn by the owner to meet personal expenses are termed as drawings.

4.       In accounting the sole proprietor and his business are treated not as one but different entities. Why?

5.       The irrelevant information or facts need not be disclosed. Which principle is applied here? Explain.

6.       There are two basis of accounting. But who decides which method to follow while recording transactions and maintaining books of accounts?

CH-5 Accounting Equation

1.       Shyam commenced his business on 1^st April,2012 with the assets having value of Rs.3,15,000 and liabilities owing to outsiders Rs.20,000. During the year 2012-13, he suffered a loss of Rs.25,000 and had withdrawn Rs.31,000 from business.

a.       Calculate the value of its capital as on March 31,2013.

b.      Identify the value which is being reflected in the concept of accounting equation.

2.       Show the accounting equation on the basis of following transactions:

a.       Paramjeet commenced business with Rs.11,50,000.

b.      Wages paid Rs. 4,000 and outstanding Rs.6,000.

c.       Goods purchased for Rs.80,000.

d.      Computer purchased from Star Computers worth Rs.30,000 and paid half the amount in cash.

e.      Invested Rs.90,000 into the bank.

f.        Goods purchased from Vaibhav for Rs.8,000 and made the payment by cheque.

g.       Purchased a building for Rs.6,00,000 and the payment made by cash.

h.      ½ of the stock available was sold to Mohit at a profit of 20% on cost.

Also prepare a Balance Sheet with the final balances.

3.       If net worth of the business is Rs. 1,21,700 and the total equity is Rs.2,00,200.Calulate Creditor’s Equity.

4.       Vivek commenced a business a business on 1^st April,2012 with cash Rs.6,25,000.He bought a personal computer from his home to the business worth Rs.16,000;Besides this, the following transactions were entered into by him during the year:

A.      Goods purchased from Vikram for Rs.28,000.

B.      Opened a new account in SBI with Rs.80,000.

C.      Rent paid for 15 months Rs.90,000.

D.      Sold goods to Harilal (costing Rs.6,000) for Rs.6,700

E.       Received cheque from Harilal of Rs.6500 in full settlement.

F.       Withdrew Rs.4,000 for personal use.

G.     Donated goods costing Rs. 1,000 to a charitable trust.

H.      Received commission Rs.1,100.

I.        Goods destroyed (sales price Rs.3,000) during flood costing Rs.2,500.

J.        Securities were purchased for Rs.10,000.

Show accounting equation and also prepare Balance Sheet.

CH-6 Rules of debit & credit

1. Analyse the following transactions according to the Modern Approach and state the accounts to be debited or credited:

a. Purchased goods from Shyam on credit

b. Sold goods to Mahesh on credit

c. Borrowed from Rohan

d. received cash from Mahesh

e. Interest allowed by bank

f Paid installment of loan.

CH-7 JOURNAL

1. Paid Rs.5,00,000 for installation of machinery for making eco friendly paper bags.

a. Journalise the above transaction.

b. Identify the value involved in the above transaction.

2.Journalise the following transactions:

a. Sold goods to M on list price Rs.15,000 trade discount 5% and cash discount 2%. He paid the amount on the same day and availed the cash discount.

b. Purchased goods for cash on the list price of Rs.20,000 at 10% trade discount and 5% cash discount.

3. Record the following transactions in the journal of M/s Mukul:

a. Paid salaries-Rs.25,000.

b. Received interest on investment-Rs.4,500.

c. Sold goods to Mohan on list price Rs.30,000 less 10% trade discount and 5% cash discount, if paid within five days. Mohan paid immediately and availed the cash discount.

d. Telephone bill of Rs.2,500 paid in cash.

e. Provide depreciation on machinery Rs.15,000

f. Received cash from Raman Rs.1,500 which was written off as bad debt in the previous year.

4. Journalise the following transactions:

a. Insurance premium due but not paid Rs.3,500.

b. Received a V.P.P. for Rs.2,150, sent a peon to collect it and paid Rs.35 for cartage.

c. Purchased a computer for personal use of proprietor Rs.28,000.

d. Paid Rs.2,000 for petrol for car used by proprietor for office work.

e. Goods worth Rs.3,000 and cash Rs.1,000 were stolen.

CH-8 CASH BOOK

1. Enter the following transactions in Single Column Cash Book in the books of A:

2014      

June 1   Mr. A commenced business with cash	1,25,000
June 2 Purchased goods for cash for	30,000
June 5 Purchased goods on credit	5,000
June 10 Sold goods on credit (costing Rs.5000)	7,500
June 15 Paid rent to landlord	1,800
June 18 Purchased furniture from XYZ	2,000
June 22 Cash sales to Hari Ram	21,000
June 25 Sold goods to Smita on credit	2,000
June 30 Paid salaries to Jeewan(an Accountant)	12,000
June 30 Paid Wages to Staff	500
June 30 Received from Smita	1,200

               

                               

               

                               

                               

               

                                               

                                                               

2. Prepare a Cash Book with Bank column for the following transactions made by Simran Traders in the month of May, 2014.

2014

May 1    Balance of cash in hand Rs. Overdraft with Canara Bank	Rs 2210  Rs  890
May 3    Purchased goods for cash & payment       made by cheque, Discount received	Rs. 5000 Rs. 50
May 7    Discounted a Bill of Exchange at 1% through Bank	Rs. 20,000
May 10 Conveyance paid	Rs.      315
May 12   Honored own acceptance by cheque	Rs.    3500
May 15   Received cash from Hind & Co.	Rs.      380
Discount allowed	Rs.        20
May 18 Sent a cheque for payment of household expenses	Rs.    2120
May 22 Withdrew from Bank	Rs.      550
May 26 Received cash for a Bills of Exchange from Mr. Suleman and deposited the same into the bank	Rs.12,000
May 30 Commission Paid	Rs. 310
May 31 Interest collected by Bank	Rs. 200
May 31 Cash Sales	Rs. 18,120

               

3. Prepare a Petty Cash Book on the basis of following transactions in the books of Swami Agencies. The Cash Book is maintained on imprest system.

Date                      Particulars                                                                           Amount (Rs.)

2014

Jan 1      Opening balance                                                                                    2,000

Jan 1      Postage stamps purchased                                                                          55

                Conveyance paid                                                                                      65

Paid for snacks in office                                                                             130           

                Cartage paid                                                                                             15

                Paid for snacks in office                                                                          85

Cartage paid                                                                                                78

                Stationery purchased                                                                              24

Jan 10 Taxi fare paid                                                                                              12

                Telegram charges                                                                                     6

                Stamps purchased                                                                                320

                Drawing pins purchased                                                                         20

Jan 18 Sundry expenses                                                                                       100

                Bus fare paid                                                                                          80

                Advance to sweeper                                                                              20

Jan 25 Refreshment expenses paid                                                                       80

Jan 31 Paid for cartage                                                                                         25

                                                                                                                                                                                               

Business Studies Case studies Class 11; Chapters 3,4 and 5

                                 Chapter: 3 Private, Public and Global Enterprises

Q:1 It is a public enterprise established under the Indian Companies Act and conducts business in competition with companies in private sector.

i)                    Identify the type of public enterprise highlighted above.

ii)                  What is the minimum investment government has to make in such companies.

iii)                In whose name shares of this type of company are purchased.

iv)                State any two merits and any one demerit of such type of company.

Q:2 Multinational companies establish themselves in developing countries to enjoy huge profits by selling consumer goods or luxury item. They start business by offering wide variety of goods at a cheaper prices than local retailers offer. But once they are established they increase prices.

Q:3 Identify the type of public sector enterprises in the following statements:

i)                    RBI and FCI are the examples of this form of enterprise.

ii)                  It enjoys maximum autonomy in all business decisions.

iii)                These are established under an act of Parliament.

iv)                Where national security is concerned, this form is most suitable.

v)                  This enterprise is financed directly from the government treasury.

vi)                Indian Railways and Post and Telegraph are the examples of this form of enterprise.

vii)              Minimum 51% of the paid up capital is held by the government.

viii)            Hindustan Aircrafts is the example of this form of enterprise.

Q:4 Maharashtra Pharmaceuticals Ltd, registered under the companies Act, 1956, was started with a paid up capital of Rs 50,00,000. 40% of this paid up capital is in  the hands of private individuals and balance is held by the government of Maharashtra. Maharashtra Pharmaceuticals Ltd belongs to which form of public sector enterprise. State its any two features and any two merits.

Q:5 ABC Ltd is a leading marketing company of soft drinks. Its 32% of total paid up capital is held by Central Government and 21% is by Delhi Government.

i)                    Identify the type of public sector enterprises in the above statement.

ii)                  State any four features of such an enterprise.

Q:6  Malhotra Ltd is a company established in India. They extended their operations to the Dubai and USA by establishing places of business in these countries.

i)                    Identify the type of company Malhotra Ltd is?

ii)                  State any of its four features.

                                      

                                 Chapter: 4 Business Services

Q:1 It is a prime responsibility of he insured to take reasonable steps to minimise loss/ damage to the insured property . Identify and explain the principle of insurance highlighted in the given statement.

Q:2 Paul Ltd. insures its stock against fire for Rs 20 lakh. A fire broke down and the total stock was lost. At the time of fire there was stock worth RS 20 lakh. What is the value of compensation company would be entitled to?

Q:3 Mr. Akshit gets his factory insured against fire of Rs 40 lakh with insurer A and Rs 10 lakh insurer B. A loss of Rs 5 lakh occurred.

(a)   How much compensation can be claimed from A and B separately and why? Name the principle of insurance highlighted in the above case.

(b)   The residues of the barat factory were sold for Rs 15,000. Who will rightly avail the amount and why?

Q:4 Identify the principle of insurance highlighted in the given statement :

(a)   To claim for insurance the insured must take reasonable steps to minimise the loss.

(b)   Insured is entitled to recover the loss suffered by him, up to the limit of policy amount.

(c)   The insured is expected to disclose all the important facts related to the property insured.

(d)   Insured must have some economic interest in the subject – matter of insurance contract.

Q:5 Sarthak Electronics Ltd. has a loss of Rs 15,00,000 to pay. They are short of fund so they are trying to find means to arrange fund. Their manager suggest to claim from insurance company against stock lost due to fire in the warehouse. He actually meant that they can put their warehouse on fire and claim from insurance company against stock insured. They will use the claim money to play loan.

(a)   Will the company receive claim if the surveyor from insurance company comes to know the real cause of fire?

(b)   Write any two Values which the company ignore while planning to arrange money from false claim.

(c)   State any three elements of fire insurance

Q:7 Rishabh has taken a life insurance policy hiding the fact that he is a heart patient. Later on he dies of a heart attack. Is insurance company liable to pay the insured amount to heirs of Rishabh? Why?

Q:8 A company had undertaken a fire insurance policy for Rs 5 lakh. After three months the company incurred a loss of Rs 2.5 lakh due to fire. How much compensation? Name and explain the principle also.

Q:9 Deepanshu is a very good friend of shubham. Can Deepanshu take life insurance policy on the life of Shubham? Give reason in support of your answer.

Q:10 Sail gets his godown insured (worth Rs 8 lakh) from three insurance companies X-(Rs 2 lakh), Y-(Rs 4 lakh), Z-(Rs 2 lakh). At the time of loss, the compensation is paid by insurance companies in the ratio of 2:4:2. Which principle of insurance is applied here? Explain.

Q:11 Speed Ltd. is a transport company took an accident insurance policy or all its vehicles. A truck of that company carrying tomatoes met with an accident. Due to that accident there was no damage to tomatoes but tomatoes were unloaded from truck and reloaded to anther. Due to the time wasted in unloading and reloading the tomatoes got spoiled will the company get compensation for loss of tomatoes from the insurance company? Which principle of insurance is reflected in this case? Explain that principle also.

Q:12 Mr. ‘H’ a husband took the life insurance policy of Mrs. ‘W’ his wife. After one year , the couple got divorced and after two years his wife died. Is husband ‘H’ entitled to got compensation from the insurance company, if husband was regularly paying the premium amount?

                           

                                   Chapter:5 Emerging Modes of Business

Q:1 Himanshu Ltd wanted to sell his mobile phone but does not get any buyer. On his friends suggestion he posted the mobile on sale on www.olx.com and found a buyer within two days. Identify and explain the type of e-business highlighted here.

Q:2 Amul Chocolate manufacturing company wants to advertise their products. They appointed Premier Advertising Agency for this purpose.

a)     Identify and explain the type of activity highlighted above.

b)     State any two benefits.

Q:3 Amulya purchased a mobile phone through online and payment was made through internet by using his credit card.

a)     Identify the modern banking facility used by Aman.

b)     State any four benefits of this facility.

Q:4 Www.olx.com and qicker.com are examples of well known websites used to conduct business. Tarasha’s sofa set got spoilt in rain. Her friend suggested that she should change the fabric so that it looks new and put it for sale on olx. Tarasha followed her friend’s advice and got her sofa repaired so that it looked better and uploaded nicely clicked pictures on the website without disclosing the fact that it was damaged from inside. She found a buyer and sold it for Rs 10,000. After five days the buyer found the real state of sofa set and called Tarasha but she did not answer any of the call.

i)                    identify the type of business highlighted in the above case.

ii)                  Identify any two values which are overlooked by Tarasha.

Explain any two benefits and limitations of e-business.