Important Theory Questions in Accountancy Class 11

Important Theory Questions in Accountancy Class 11

Answers

1. Accrual basis of accounting considers all transactions cash transactions as well as credit transactions whereas in case of cash basis of accounting only cash transactions are considered.
2. No transaction can break the accounting equation.
3. Prudence concept or conservatism concept.
4. Manipulation of accounting records to show a different picture is called window dressing.
5. All the transactions relating to cash and Bank are recorded in cash book in chronological order so it becomes a journal. All the transactions relating to cash and Bank can be checked at a single place with its balance so it becomes ledger also.
6. Contra entry is the entry recorded on both sides of cash book one in cash column the other in Bank column.
7. Imprest is the monthly advance given to the petty cashier for petty expense.
8. No, Trial Balance is not a conclusive evidence of accuracy of accounting records. There can still be some errors left after matching of the Trial Balance.
9. The difference in trial balance can be put to suspense account.
10. The nature of suspense account is not fixed as it is an artificial and Temporary account.
11. Nominal accounts are not balanced.
12. The accounts having Nil balance or not taken to trial balance.
13. Nominal accounts are taken to trading and profit and loss account.
14. Real and personal accounts are taken to balance sheet.
15. Cgst is used for intra State transactions means within the same state.
16. a. Cash book , b. journal proper
17. a.  Error of principle, b. clerical errors
18. a. Revenue item, b. capital item
19. a. Order of liquidity, b. order of permanence
20. a. Land and building, stock, cash in hand, b. Capital, bank loan, bills payable
21. Personal accounts, real accounts and nominal accounts.
22. Nominal accounts are taken to trading and profit and loss account and Real and personal accounts are taken to balance sheet.
23. Secret reserve is the Reserve which is not disclosed in the balance sheet, it is also called hidden reserve.
24. Operating expenses are the expenses relating to operating activities of the business that is expenses which are related to to day to day functioning of the business. Non-Operating expenses are the expenses which are not required for the day-to-day functioning of the business.
25. Examples of indirect expenses -  salaries, rent.
26. Net profit is calculated after considering non-operating expenses and non-operating income but operating profit is calculated without considering non-operating expenses and non-operating income.
27. The purpose of making provision is to meet some known liability whereas the purpose of creating reserve is to strengthen the financial position or payment of an unknown liability.
28. Opening journal entry is journal entry passed in the beginning of the accounting year to open the accounting books.
29. Expenses A/c     Dr.   To Outstanding Expenses
30. Depreciation is charged on Fixed assets whereas amortization is used for writing off Intangible Assets.
31. Exhausting of an asset (natural resources) like Coal mine.
32. Gross profit is after meeting cost of production but the net profit is after meeting all the expenses and losses.
33. There is main similarity i.e. Totals of both the sides/ columns of these statements must be same for meaningful results. Both are based on Accounting Equation.
34. Two objectives of GST are: To simplify tax structure and to solve the problem of black money.
35. Journal is called book of prime entry as all transactions are first of all recorded in Various types of journal.
36. The purpose of pay-in-slip is to deposit cash into bank.
37. To calculate correct amount of net profit of business.
38. Relevance, comparability.
39. Debenture Redemption Reserve, Workmen's Compensation Reserve.
40. Single entry system, because it doesn't record both the aspects of a transaction and there is absence of any principles.
41. The expenses on normal day to day business activities the benefit of which is obtained during the same accounting period.
42. The revenue expenditure the benefits of which will be obtained over many accounting years.
43. To bring uniformity in accounting records and provide comparability.
44. ICAI - Institute of Chartered Accountants of India, IFRS - International Financial Reporting Standards.

Important Theory Questions in Accountancy Class 11

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