ACCOUNTANCY ASSIGNMENT, CLASS XI
CHAPTER 5, ACCOUNTING EQUATION


1.”Accounting equation remains intact under all circumstances.” Justify the statement with the help of an example.

2. Prepare accounting Equation:

     Rs.

a.      Bill started business                                                                      12,00,000

b.      Bought goods for cash                                                                  2,00,000

c.       Bought goods on credit                                                                 3,00,000

d.      Bought a machine                                                                         2,20,000

e.      Sold goods (costing Rs. 40,000)                                                    46,000

f.        Sold goods (cost Rs. 12,000) and received a cheque                   18,000

g.      Charged depreciation on machine                                               4,000

h.      Goods destroyed by fire                                                                50,000

i.        Purchased goods for Rs.20,000 and paid Rs.12,000 by cheque and balance in cash

j.        Paid Telephone bill                                                                       3,000

k.       Constructed night shelters for the homeless                               21,000

3.      Mr. Rameshwar Das started business on 1^st Jan 2015 with a capital of Rs. 150000. During the year, the following transaction took place:

1.      Furniture purchased for cash                                        2,00,000

2.      Purchased goods from Manish for credit                      2,50,000

3.      Sold goods(costing Rs.1,00,000) to Mohan for cash     1,40,000

4.      Additional capital introduced                                        2,00,000

5.      Commission received in advance                                  20,000

6.      Paid to  creditors(Manish) Rs.2,25,000 in full settlement

7.      Sold goods (costing Rs.1,50,000) for Rs. 1,80,000 out of which Rs. 50,000 received in cash.

8.      Depreciation on furniture provided @ 10%.

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

a.      Started business with cash Rs.10,000.

b.      Paid rent in advance Rs.300.

c.       Purchased goods for cash Rs. 5000 and credit Rs.2000.

d.      Sold goods for cash Rs. 8000 (costing Rs.4000).

e.      Paid salary in cash Rs. 450 and salary outstanding Rs. 100.

f.        Bought motorcycle for personal use Rs. 3000.

5.      Amit started business with cash investment of Rs.35000. The following business transactions have been recorded:

a.      Paid 3 months advance rent for office accommodation Rs. 2100.

b.      Bought car for office use Rs.21000.

c.       Purchased office furniture Rs.7000.

d.      Bought office typewriter from S.S.Comapny Rs. 3000.

e.      Sold extra office furniture at cost to Amar Rs.1000.

f.        Amar paid the amount  of the bill at maturity and Amit paid half of the amount he owed to S.S. Company.

g.      Collected Rs.6000 as commission.

h.      Paid telephone bill amounting to Rs.150.

6.      Pramod had the following transactions. Use accounting equation to show their  effect on his assets, liabilities and capital:

a.      Invested Rs.1,00,000 in cash.

b.      Purchased equity shares in A Co. Ltd. For cash Rs,15000.

c.       Purchased a land for Rs. 15,000, giving Rs.5,000 in cash and balance through loan.

d.      Sold equity shares costing Rs.2000 for Rs.2500.

e.      Purchased an old car for Rs.10,000 cash.

f.        Received cash as commission Rs.4,000.

g.      Paid cash for loan Rs.1000 and Rs.100 for interest.

h.      Paid cash for domestic expense Rs.500.

i.        Received cash for dividend on shares Rs.200.

7.      On May1,2015 Mahendra opened a dry cleaning business. He completed the following transactions during the month of May:

a.      Invested Rs.25000 in the business and deposited deposited the amount in the bank account.

b.      Purchased an account cleaning supplies Rs. 1900.

c.       Purchased for cash office equipment Rs.10,000.

d.      Paid telephone bill Rs.250.

e.      Billed customers for completed work Rs.2500.

f.        Paid Rs.900 on account for cleaning supplies purchased in transaction (b).

g.      Paid wages Rs2000.

h.      Received Rs.1500 cash from customers previously billed in transaction (g).

8.      Form the Accounting Equation:

a.      Brij Mohan started business with cash Rs.1,00,000.

b.      Brought goods for cash Rs.60,000.

c.       1/3^rd of the above goods sold at a profit of 20% on cost.

d.      Half of the payment received in cash.

e.      Purchased typewriter for office use Rs. 15000.

f.        Purchased goods on credit from X Rs.15000.

g.      Paid salary  Rs. 3000.

h.      Paid to X Rs.15000.

9.      The assets of A on 31^st December,1996 were Rs.1,00,000. His liabilities were:

Creditors Rs.10,000 Bank overdraft Rs.8000, Bills Payable Rs.9000, outstanding salaries Rs.4000.

Calculate his capital on that date.

10.  Calculate Total equity and Owner’s Equity:

a.      Owner’s Equity at the beginning Rs120000.

b.      Revenue during the period is Rs. 140000.

c.       Equity of creditors is Rs.1,00,000.

d.      Expenses during the period are Rs.1,30,000.

11.  On 31^st March 2015, the total assets and the external liabilities were Rs.1,00,000 and Rs.3000 respectively. During the year, the proprietor had introduced additional capital of Rs.10,000 and had withdrawn Rs.6000 for personal use. He made a profit of Rs.10,000 during the year. Calculate capital as on 1^st April,2014.

12.  Prove that the accounting equation is satisfied in all the following transactions of Suresh:

(a)   Commenced business with cash Rs 36000.

(b)   Paid rent in advance Rs 300.

(c)    Purchased goods for cash Rs 18000 and credit Rs. 12000.

(d)   Sold goods for cash Rs. 18000 costing Rs. 12000.

(e)   Paid salary Rs 300

13.  (a)Ramesh commenced business on 1st Jan. 2015 with a Capital of Rs. 5,00,000 and a loan of Rs. 1,00,000 borrowed from Citi Bank. On 31st Dec 2015, his assets were Rs. 8,00,000. Calculate his closing capital and profits earned during the year.

           (b) If in the above case, the proprietor had introduced fresh capital of Rs. 40,000 and had                     withdrawn Rs. 10,000 for personal purposes, calculate his profits.

14.  Show the accounting equation on the basis of following transactions and present a balance sheet on the last new equation balances:

Varun and Raj entered into a partnership agreement to deal in furniture. They contributed Rs.2,10,000 and Rs.1,50,000 as capital respectively. Other transactions were as under:

                                                                                                            Rs.

a.      Timber purchased by them                                                    1,20,000

b.      Wages paid to carpenters                                                      90,000

c.       Furniture sold(costing Rs.1,20,000)                                        1,50,000

d.      Furniture sold on credit (costing Rs.27,000)                          30,000

e.      Amount received from debtors                                              29,700

Discount allowed                                                                    300

f.        Timber purchased on credit                                                   18,000

g.      Furniture purchased                                                               15,000

h.      Payment to creditors Rs. 17,850 in full settlement

i.        Amount withdrawn

Varun                                                                                      6,000

Raj                                                                                           3,000

ACCOUNTANCY ASSIGNMENT, CLASS XI
CHAPTER: 3, Accounting Concepts And Principles

Q:1 Purchase of stationery even if it is kept in use for more than one year is shown as an expense but not shown as an asset. Which Accounting Principle does it relate to?

i)             Matching Principle

ii)            Historical Cost concept

iii)          Revenue Recognition Concept

iv)          Accrual Principle

Q:2 In cash basis of accounting, Machinery is shown in the books of accounts when it is paid for at the time of its purchase. It is not depreciated over its life. Which Accounting principle is ignored?

i)             Historical Cost concept

ii)            Accrual Principle

iii)          Going Concern Concept

iv)          Revenue Recognition Concept

Q:3 Salary of the current year is paid in the next financial year but it is recorded in the profit and Loss A/c of the current year and is used in calculating profit and loss. It adheres to the requirement of which accounting principle.

i)             Matching Principle

ii)            Accrual Principle

iii)          Double Entry Concept

iv)          Revenue Recognition Concept

Q:4 According thich principle, Closing stock is shown on the credit side of Trading A/c, as a deduction from purchase.

i)               Historical Cost concept

ii)            Accrual Principle

iii)          Matching Principle

iv)          Revenue Recognition Concept

Q:5 A Jeweler is left with a stock of gold at the end of the financial year which has a cost of Rs 50,000 but a market value of Rs 70,000. At what value the closing stock be shown and in adherence to which principle?

i)             Rs 70,000 & Principle of conservatism and prudence

ii)            Rs 70,000 and Matching Principle

iii)          Rs 50,000 and & Principle of conservatism and prudence

iv)          Rs 50,000 and Matching Principle

Q:6 Income tax paid by the owner on the firm’s income is treated as drawings. Which principle is followed?

i)             Going Concern Principle

ii)            Business Entity Concept

iii)          Double Entry Concept

iv)          Revenue Recognition Concept

Q:7 Mr X buys a TV set from an electronics showroom. He pays the amount immediately but agrees to take its delivery only after 15 days. The bill is made and given to buyer. After one week, the fire occurred in the godown causing complete damage to the TV set kept by Mr X. Can Mr X recover the money from the showroom owner.

i)             Yes, Revenue Recognition

ii)            No , Revenue Recognition

iii)          Yes, Going Concern

iv)          No , Going Concern

Q:8 Income received in advance is not treated as income but is shown as a liability. It is according to which accounting Principle?

i)             Accrual Principle

ii)            Historical Cost

iii)          Going Concern

iv)          Business Entity

Q:9 The principle that leads to the equality of Debit and Credit balances in Trial balance

i)             Accrual Principle

ii)            Dual Aspect

iii)          Accounting Period

iv)          Business Entity

Q:10 Apple files a suit against Samsung for infringement of patent laws. Apple is quite sure of receiving Rs 120 crore out of it. But the verdict has not been given by the court yet. Can Rs 120 crore be shown as an income.

i)             Yes Accrual principle

ii)            No, Prudence principle

iii)          Yes, Prudence principle

iv)          No, Accrual principle

Q:11 Purchase of machinery Rs 1,00,000 having a life of 10 years wrongly debited to purchase A/c. Which Accounting principle is violated?

i)             Matching Principle

ii)            Accrual Principle

iii)          Going Concern

iv)          Business Entity Concept

Q:12 Which Accounting principle is violated if an Account of Rs 400 withdrawn by the proprietor for his personal use has been debited to repairs A/c.

i)             Consistency

ii)            Going Concern

iii)          Business Entity

iv)          Dual Aspect

Q:13 According to which accounting principle Prepaid expenses is shown in the Balance Sheet not in Profit and Loss A/c.

i)             Accrual

ii)            Matching

iii)          Accrual and matching both

iv)          Revenue Recognition

Q: 14 Value of machine purchased on 1/4/2015 was Rs 1,00,000. The fair value of the machine is Rs 80,000 as on 31/03/2016. The life of the machine is 10 years. What is the amount of depreciation to be charged to P&L A/c as per a) Indian GAAP, b) IFRS

i)             20,000; 10,000

ii)            20,000; 10,000

iii)          10,000; 10,000

iv)          10,000; 20,000

Q: 15 Different Accountants may follow different accounting methods for same items like depreciation. This violates the Accounting principle of  i)Prudence  

ii) Objectivity

iii) Consistency

v)           Objectivity & Consistency.

Accountancy Assignment

                                         Class 11

                                 Chapter: 1,2 and 4

Q:1 Which stakeholder group would be most interested in :

i)             VAT and other tax liabilities of the firm.

ii)            Potential for pay awards and bonus details.

iii)          The ethical and environmental activities of the firm.

iv)          Whether the firm has a long term future.

v)           Profitability and share performance.

vi)          The ability of the firm to carry on providing a service or producing a product.

Q:2 Which qualitative feature of accounting is reflected in the following cases:

i)             Unnecessary and irrelevant information is not included in financial statements.

ii)            Facilitates intra firm and inter firm comparisons.

iii)          Information is clearly presented.

iv)          Free from errors and bias.

Q:3 Book keeping has a wider scope as compared to Accounting. Defend or refute.

Q:4 Which qualitative characteristic of accounting information is reflected when accounting information is clearly represented?

Q;5 Accounting information should be verifiable and free from personal bias. Name the qualitative characteristic of accounting information denoted by this statement.

Q:6 Classify the following as Capital Expenditure, Revenue Expenditure and Deferred Revenue Expenditure:

i)             Preliminary expenses

ii)            Purchase of furniture

iii)          Payment of salary

iv)          Underwriting commission

v)           Installation of machinery

vi)          Purchase of goods and services

Q: 7 Classify the following as Current and Non Current Assets

i)             Bank balance

ii)            Trademarks

iii)          Goodwill

iv)          Bill Receivable

v)           Land and Building

vi)          Debtors

Q:8 During the Accounting period 2014-15, the total sales of a firm were Rs 7,00,000, out of which cash sales were Rs 4,50,000. The total expenses for the year were Rs 5,00,000, out of which Rs 2,10,000 are still outstanding. Determine income of the firm for 2014-15 as per :

i)             Cash basis of accounting

ii)            Accrual basis of accounting

Q:9 Mr Sunrise started a business for buying and selling stationery with Rs 5,00,000 as an initial investment. Of which, he paid Rs 1,00,000 for furniture, Rs 2,00,000 for buying stationery. He employed a sales person and clerk. At the end of the month paid Rs 5,000 as their salaries. Out of the stationery bought, he sold some stationery for Rs 1,50,000 for cash and some other stationery for Rs 1,00,000 on credit basis to Mr Ravi . Subsequently, he bought stationery item of Rs 1,50,000 from Mr Peace. In the first week of the next month there was a fire accident and he lost Rs 30,000 worth of stationery. A part of the furniture, which cost Rs 40,000 was sold for Rs 45,000.

From the above, answer the following:

i)             What is the amount of capital with which the business is started?

ii)            What are the fixed assets?

iii)           What is the value of goods purchased?

iv)          Who is the creditor and state the amount payable to him.

v)           What are the expenses?

vi)          What is the gain he earned?

vii)        What is the loss he incurred?

viii)       Who is the debtor and what is the amount receivable from him?

ix)          What is the total amount of expenses and losses incurred?

x)           Determine if the following are assets , liabilities, revenues, expenses or none of these:                                                                                sales, debtors, creditors, salary to manager, discount to debtor, drawings by the owner.