ACCOUNTANCY

CLASS – XI (2023-24)
ASSIGNMENT-4
CHAPTER 1 to 4

Q1 According to the Going Concern Concept

(a) assets are recorded at cost and are depreciated over their useful life
(b) assets are valued at their market value at the year end and are recorded in the
books of accounts
(c) assets are valued at their market value, recorded in the books and depreciation is
charged on the market value
(d) None of the above
Q2. Income is measured on the basis of
(a) Matching Concept
(b) Consistency Concept
(c) Cost Concept
(d) None of the above
Q3. According to the Business Entity Concept
(a) transactions between the business and its owners are not recorded
(b) transactions between the business and its owners are recorded considering them
to be one single entity
(c) transactions between the business and its owners are recorded from the business
point of view
(d) None of the above
Q4. According to the Accrual Concept
(a) transactions and events are recorded in the books at the time of their settlement
in cash
(b) transactions and events are recorded in the books at the time when they are
entered into
(c) transactions and events may be recorded either at the time of the settlement or
when they are entered into
(d) None of the above
Q5. As per Income Tax Act, accounting period is:
(a) From 1st January to 31st December
(b) From 1st April to 31st March
(c) From 1st July to 30th June
 (d) From Diwali to Diwali
Q6. As per Dual Aspect Concept:
(a) Assets Liabilities – Capital
(b) Assets Capital - Liabilities
(c) Assets Liabilities + Capital
(d) Capital Assets + Liabilities
Q7. Which of the following is revenue expenditure?
(a) Purchase of Plant and Machinery
(b) Repairs on Plant and Machinery
(c) Installation of Plant and Machinery
(d) Erection of Plant and Machinery
Q8. Identify the revenue receipts from the following transactions.
(a) Purchased goods for Rs. 80,000.
(b) Freight paid on the above purchase Rs. 1,200.
(c) Goods sold for cash Rs. 1,20,000.
(d) Commission paid on above sale Rs. 2,500.
(e) Interest received from bank. Rs. 3,500.
Q9. Concept of Consistency means:
(a) All the firms in the same industry should use identical accounting principles and
(b) All principles and procedures of accounting are utilized
(c) Accounting principles and methods should remain consistent from one year to an
(d) All of the above
Q10. Convention of conservatism takes into account:
(a) All future profits and losses
(b) All future profits and not losses
(c) All future losses and not profits
(d) Neither profits nor losses of the future
Q11. According to Convention of Conservatism closing stock is valued
(a) At cost Price
(b) At Realisable value
(c) Cost price or realisable
(d) At Real value value whichever is less

Q12. According to Convention of Conservatism:

(a) Provision is made for bad and doubtful debts
(b) Depreciation is charged on assets
(c) Recording is made of outstanding expenses
(d) All of the above

Q13. Which of the following is revenue expenditure?

a. Purchase of Plant and Machinery
b. Repairs on Plant and Machinery
 c. Installation of Plant and Machinery
d. Erection of Plant and Machinery
Q14. A person to whom firm owes money is known as ______.

Q15. Cash basis of accounting violates GAAP as it does not follow ______ principle and
________ concept.

Q16. Answer the following questions:

a. What is the need of having accounting principles?
b. Give two drawbacks of cost concept.
c. What can be the limitation of money measurement concept?
d. Prudence concept may lead to generation of hidden profits or creation of secret
reserves in the books of accounts. How?
e. If the External Equities of a business are of Rs. 55,00,000 and the total assets are
worth Rs. 87,00,000. Find the value of owner’s equity. Which principle is applicable
here?
f. A finance company has securities as current assets having market value substantially
very lower than cost price. The company continues to show them at cost. Which
principle is violated and how?

Q17. An accountant of a firm was busy preparing the Trial Balance of the firm on 31 st
March, 2021. Due to some undetected error he was unable to tally the trial balance
and decided to transfer the difference to suspense account. You are required to
identify the step of accounting process discussed in the given lines. Explain the steps
preceding the identified step.

Q18. William commenced business with cash Rs. 18,00,000; bank balance Rs. 5,60,000 and
furniture worth Rs. 3,40,000. He purchased goods worth Rs. 9,25,000 from Sherlyn
and issued a cheque worth Rs. 5,15,000 immediately. A laptop was purchased from
the dealer worth Rs. 32,000 and paid by cheque. Vinay purchased goods worth Rs.
2,14,000 from Williams and paid Rs. 95,000 through RTGS.
You are required to find the monetary value of the following for William.
a. Creditors d. Fixed Assets
b. Debtors e. Revenue Expenditure
c. Capital f. Current Assets.

Q19. Disha commenced business as a books and stationery dealer with Rs. 10,00,000 as her
investment. She purchased stationery worth Rs. 2,50,000 and books worth Rs.
3,00,000 for sale. She also purchased furniture worth Rs. 70,000 for business and
deposited the remaining amount in bank. She sold books for Rs. 2,80,000 in cash and
for Rs. 1,90,000 on credit. She purchased more stationery for Rs. 80,000 from Naina
on credit, of which half were meant for sale and half for use in business.
Answer the following questions on the basis of above information.
 i. What is the value of goods sold?
ii. What is the value of goods purchased?
iii. Calculate the total amount of current liabilities for Disha.

Q20. Tanvi purchased goods for Rs 7,15,000 in the year 2020-21. During the year she had a
cash sale of Rs. 4,20,000 which was 70% total sale. At the end of financial year
creditors stood at Rs 30,000. Find profit or loss on cash basis and accrual basis.

Q21. Shikha a tax consultant earned a fee of Rs. 14,25,000 during the year 2020-21. This
fee includes Rs. 6,75,000 for the year 2019-20 and Rs. 85,000 for the year 2021-22.
During the year 2020-21 her total expenses were Rs. 7,70,000 which includes Rs.
64,000 paid for 2019-20 and Rs. 35,000 for 2021-22.
Find Profit or Loss for Shikha for the year 2020-21
a. As per accrual basis
b. As per cash basis
Q22. Mohan purchased goods for Rs 8,00,000 out of which Rs 1,20,000 is still to be paid. He
sold to be paid. He sold goods worth Rs 25,00,000 out of which 19,00,000 was
received during the year. He also received 4,00000 for last year.
Find Profit or Loss for Mohan
a. As per accrual basis
b. As per cash basis

Q23. Vinod purchased goods for Rs. 3,45,000 during the accounting year 2021-22. The
creditors for Rs. 38,000 were shown as on 31st March, 2022. The credit sales recorded
during the year was Rs. 5,40,000 which was 90% of total sales. Total expenses
incurred during the year were Rs. 24,000. An advance salary was paid in the previous
year of Rs. 4,000. One of the customer paid Rs. 30,000 on 10 th April, 2022. You are
required to calculate the profit or loss for Vinod.
a. As per cash basis of accounting
b. As per accrual basis of accounting

Q24. Financial Statements of Aryan & Co. gives you the following information:
Total Purchases during the year (2022-23)= Rs. 24,00,000
Total Sales during the year (2022-23)= Rs. 45,00,000
Debtors as on 31.3.23= Rs. 22,50,000
Creditors as on 31.3.23= Rs. 17,45,000
Outstanding Expenses= Rs.55,000
Accrued Income= Rs. 1,20,000
Find Profit or Loss for Aryan
a. As per accrual basis
b. As per cash basis

Q25. Identify the concept/ accounting principle discussed in the following cases:
 i. The cost of stationery is accounted as an expense and not shown as an asset in
financial statements.
ii. In accounting provision for discount on debtor is created whereas the provision for
discount on creditor is not created.
iii. Murlidhar purchased a building for Rs 20 lakhs. After a period of five years, the
depreciation charged on building amounted to Rs. 3 Lakhs. However due to boom in
property market the value of Building is Rs. 28 Lakhs. State the value at which the
building should be recorded in the books of accounts and Why?
iv. Closing stock is valued at a price valued at lower of cost or realizable value.
v. Items having an insignificant effect or being irrelevant to the users of financial
statements need not be disclosed.
vi. Under this accounting principle it becomes necessary for business concerns to take
their unsold stock at the end of the year to the next year.
vii. One of the qualitative characteristic of accounting information is comparability i.e.
the financial statements must be comparable from year to year. It is possible only
when this accounting principle is followed.
viii. Income is recorded when sales are made or services are rendered and it is immaterial
Whether cash is received or not.
ix. Personal transactions are distinguished from business transactions in accordance with
this concept.
x. It is because of this concept a distinction is made between capital and revenue
expenditure.
xi. This states that assets of a business are always equal to claim of the owner and the
outsider.
xii. Accounting transactions should be free from the personal bias of the accountant.
xiii. In case of long term contracts, the construction of building will be completed in three
years it would not be wise to recognize its sale after 3 years, in such case
proportionate amount of revenue based on part of contract completed at the end of
accounting year is treated as recognized.
xiv. The recording of transactions is in monetary form and not in physical units.