CBSE Class 11 Accountancy Introduction of Accounting Worksheet Set A

CBSE Class 11 Accountancy Chapter 1 Introduction To Accounting And Basic MCQs

Question. It is the cost incurred in producing goods and services:
(a) Expenses
(b) Incomes
(c) Profit
(d) Loss
Answer: Expenses 

Question. Which is received at the time of making the payment is known as:
(a) Trade discount
(b) Rebate
(c) Cash discount
(d) None of these
Answer: Cash discount 

Question. Amount or kinds which the proprietor has invested in a business is known as:
(a) Investment
(b) Capital
(c) Assets
(d) Liabilities
Answer: Capital 

Question. The documentary evidence in support of a transaction is known as:
(a) Debit note
(b) Credit note
(c) Voucher
(d) Invoice
Answer: Voucher 

Question. A document given by the seller to the buyer for sale of goods or provision of service on credit, is known as:
(a) Invoice
(b) Debit note
(c) Cash memo
(d) All of these
Answer: Invoice

Question. Any dealing between two parties or persons which must be recorded and which can be Measured in terms of money is called:
(a) Debtors
(b) Transactions
(c) Creditors
(d) Investor
Answer: Transactions

Question. The excess of current assets over the current liabilities is called:
(a) Working capital
(b) Net current assets
(c) a and b both
(d) None of these
Answer: a and b both 

Question. Current liabilities are liabilities that are payable with in:
(a) 2 years
(b) 1 year
(3) years
(d) 4 years
Answer: 1 year

Question. Current assets minus current liabilities is equal to:
(a) Working capital
(b) Profit
(c) Capital
(d) Loss
Answer: Working capital 

Question. Double entry system of accounting means:
(a) Entry in two sets of books
(b) Entry in two dates
(c) Entry for two aspects of the transaction
(d) Entry for one aspects of the transaction
Answer: Entry for two aspects of the transaction

Question. The activities of selecting, processing and reporting the information can be described as:
(a) Book-keeping
(b) Accounting
(c) Auditing
(d) Casting
Answer: Accounting

Question. Resources minus capital equities is equal to:
(a) Assets
(b) Equity
(c) Revenue
(d) Liabilities
Answer: Liabilities

CBSE Class 11 Accountancy Chapter 1 Introduction To Accounting And Basic Match The Following

Question.
1. Goods        A. Assets
2. Rent           B. Commodities to be bought and sold
                      C. Expenses
Answer. 1.B ; 2.C

Question.
1. Fictitious assets       A. Income
2. Revenue                  B. Expense
                                    C. Deferred revenue expenditure
                                    D. Machinery
Answer.1.C ; 2.A

Question.
1. Trade discount       A. Which is allowed at the time of sale
2. Liabilities               B. Bank overdraft
                                 C. Which is received at the time of making payment
                                 D. Cash at Bank
Answer. 1. A ; 2.B

Question.
1. Voucher        A. Cash book
2. Gain             B. Invoice
                        C. Excess of revenue over expense
                        D. Winning a court case
Answer.1.B ; 2.D

Question.
1. Cash discount                   A. Which is allowed at the time of sale
2. Non financial character     B. Discount received
                                             C. Which is received at the time of making payment
                                             D. Strike by employees
Answer.1.C ; 2.D

Question. Define Book – Keeping? 
Answer. According to J.R. Batliboi, bookkeeping is, ‘book – keeping is an art of recording Business dealings in a set of books’.

Question. What is the end product of financial Accounting? 
Answer. End product of financial Accounting is ‘Financial Statement ‘

Question. Mention Two Qualitative Characteristics of accounting information? 
Answer. 1. Reliability
2. Comparability

Question. What are the traditional functions of Accounting? 
Answer. Recording of Financial Transaction

Question. Book Keeping begins where Accounting ends. True or False?
Answer. True

Answer the question:-

Question. What are the 5 roles of Accounting? 
Answer. Roles of Accounting are ;
(a) Role of Language
(b) Role of the Historical Record
(c) Role of the service Provider
(d) Role of information System
(e) Role of determining the net profit

Question. Mention the Functions of Accounting? 
Answer. Functions of accounting are ;
(a) Maintaining complete and systematic records
(b) Trusteeship
(c) Compliance of legal needs

Question. List any five users who have indirect interest in Accounting?
Answer. The five users who have indirect interest in accounting are given below;
(a) Trade Associations
(b) Labour Unions
(c) Customers
(d) Stock Exchanges
(e) Tax authorities

Question. State the nature of Accounting information required by long term lenders? 
Answer. Accounting information required by the long term lenders are repaying capacity of the business, profitability, liquidity, operational, efficiency, potential growth of business, etc.

Question. Enumerate main objectives of Accounting?
Answer. The main objectives of accounting are given below.
(a) To Keep a systematic record of all business transaction.
(b) To Determine the profit earned or loss incurred during an accounting period by Preparing Profit and loss account.
(c) To ascertain the financial position of the business at the end of each accounting period by preparing balance sheet.
(d) To Communicate information to various users.

Answer the following question:

Question. How will you define revenue and expenses?
Answer. Revenues: Revenues refers to the amount received from day to day activities of the business, like sale proceeds of goods and rendering services to the customers. Rent
received, commission received, royalties and interest received are considered as revenue, as they are regular in nature and concerned with day to day activities. It is shown in the credit side of the profit and loss account or trading account.
Expenses: Expenses refers to those costs that are incurred to earn revenue for the business. It is incurred for maintaining profitability of the business. It indicates the amount spent to meet short term needs of the business. It is shown in the debit side of the profit and loss account or trading account. For Eg. Wages, rent paid, salaries paid, outstanding wages, etc.

Question. Giving Examples and explain each of the following accounting terms :
- Fixed Assets
- Gain
- Profit
- Revenue
- Expenses
- Short Term Liability
- Capital
Answer. Fixed Assets: Those Assets which are purchased in the business with a view to produced goods or to provide services are known as fixed assets. For eg :- Land , car machinery ,building etc.
Gain: Gain is a monitory benefit, profit or advantage that arises from transactions which are incidental in nature. Gain is a profit of irregular nature.
Profit: Profit is the excess of total revenue over total expenses of the business for an accounting period. It normally increases the capital.
Revenue: Revenue is the total received or receivable amount from sale of goods and services.
Expenses: Expenses is the cost incurred in producing goods and services for selling purpose. For eg:- Payment of salary , rent , bank charges , advertisement etc.
Short Term Liability: A Liability which is payable within one year.
Capital: - The Amount which is invested by a trader in the business from his personal source is known as capital.

Question. What is the primary reason for the business students and others to familiarize themselves with the Accounting discipline?
Answer. Every Monetary transaction must be recorded in such a manner that various accounting users must understand and interpret these results in the same manner without any ambiguity. The reasons for why business students and other should familiarize themselves with the accounting discipline are given below.
(a) It Helps in learning the various aspects of accounting.
(b) It helps in learning how to maintain books of accounts.
(c) It helps in learning how to summarize accounting information.
(d) It helps in learning how to interpret the accounting information with accuracy.

Question. Explain the factors, which necessitated systematic accounting. 
Answer. The Factors that necessitated accounting are given below.
(a) Only Financial transaction are recorded:- Those events that are Financial in nature are only recorded in the books of accounts. For eg:- salary of an employee is recorded in the books but his/her educational qualification is note recorded .
(b) Transactions are recorded in monetary terms:- Only those transactions which Can be expressed in monetary terms are recorded in the books.
(c) Art of recording:- Transactions are recorded in the order of their occurrence .
(d) Classification of transaction:- Business transactions of similar nature are classified and posted under their respective accounts.
(e) Summarizing of data:- All business transactions are summarized in the form of trialBalance, Trading Account , Profit and Loss Account and Balance Sheet that provides necessary information to various users.

Question. Describe the brief history of Accounting.
Answer. The history of accounting can be traced long back in civilization. Around 4000 B.C., in Babylonia and Egypt, payment of wages and taxes were recorded on clay tablets. As history claims that Egyptians kept the record of gold and valuable deposits and withdrawals from the treasuries. These records were reported on daily basis by the incharge of treasuries to the wazir, who used to forward the monthly report to the king. Babylonia and Egypt used this method to rectify and remove errors, frauds and inefficiency from the records. Around 2000 B.C., China used sophisticated form of accounting. In Greece, accounting was used to maintain total receipts and total payments and to balance government accounts. In Rome, around 700 B.C., receipts and payment were recorded in daybook and were posted in that ledger at the end of the month. In India, around twenty three centuries ago, Kautilya wrote the book Arthshastra, which describes how accounting records have to be maintained. In 1494, Luca Pacioli wrote the book Summa de Aeirhmetica Geometria Proportioni et Proportionalita. In this, he explained the term debit and credit, which are used in accounting till date .