Class 11 Accountancy Important Chapter 9 Financial Statements – II

Class 11 Accountancy Important Chapter 9 Financial Statements – II Solutions English Medium As Per AHSEC New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters ASSEB Class 11 Accountancy Important Solutions and select need one. AHSEC Class 11 Accountancy Additional Notes English Medium Download PDF. HS 1st Year Accountancy Important Solutions in English.

Class 11 Accountancy Important Chapter 9 Financial Statements – II

Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. ASSEB Class 11 Accountancy Additional Question Answer are part of All Subject Solutions. Here we have given HS 1st Year Accountancy Important Notes in English for All Chapters, You can practice these here.

Financial Statements – II

Chapter: 9

IMPORTANT QUESTION AND ANSWER

Short Question and Answer:

1. What is accounting?

Ans: Accounting is the process of recording, classifying, and summarizing financial transactions to provide useful information for decision-making.

2. What are the two primary types of accounting?

Ans: The two primary types of accounting are financial accounting and management accounting.

3. What is the importance of a trial balance?

Ans: A trial balance is important as it helps ensure that the total of debit balances equals the total of credit balances, thereby verifying the accuracy of financial records.

4. Define ‘depreciation’ in accounting.

Ans: Depreciation refers to the systematic allocation of the cost of a tangible asset over its useful life.

5. What is the purpose of a financial statement?

Ans: The purpose of financial statements is to provide a summary of a company’s financial performance and position, helping stakeholders make informed decisions.

6. What is the distinction between capital and revenue expenditure?

Ans: Capital expenditure refers to the money spent on acquiring or improving long-term assets, while revenue expenditure refers to the costs incurred for daily operations.

7. What are the main components of a balance sheet?

Ans: The main components of a balance sheet are assets, liabilities, and equity.

8. What is the operating profit (EBIT)?

Ans: Operating profit (EBIT) is the profit a company makes from its regular operations, excluding income from non-operational activities such as investments.

9. What is the purpose of the trading account?

Ans: The purpose of the trading account is to determine the gross profit or loss by subtracting the cost of goods sold from the sales revenue.

10. What is the significance of prepaid expenses?

Ans: Prepaid expenses are payments made in advance for goods or services to be received in the future, and they are recorded as assets until they are used.

11. What is accrued income?

Ans: Accrued income refers to income that has been earned but not yet received or recorded in the accounts.

12. How is bad debt treated in accounting?

Ans: Bad debts are amounts owed by customers that are unlikely to be paid, and they are written off as an expense in the financial statements.

13. What is a provision for doubtful debts?

Ans: A provision for doubtful debts is an allowance made for receivables that are expected to be uncollectible, to account for potential losses.

14. What is the role of a manager’s commission in financial statements?

Ans: A manager’s commission is a payment made to a manager based on the company’s profits, which is recorded as an expense in the profit and loss account.

15. What is the impact of closing stock on financial statements?

Ans: Closing stock is recorded as an asset and affects the calculation of the cost of goods sold, which in turn impacts the gross profit or loss.