NIOS Class 10 Accountancy Chapter 14 Financial Statements (Without Adjustments)

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NIOS Class 10 Accountancy Chapter 14 Financial Statements (Without Adjustments) Solutions to each chapter is provided in the list so that you can easily browse through different chapters NIOS Class 10 Accountancy Chapter 14 Financial Statements (Without Adjustments) and select need one. NIOS Class 10 Accountancy Chapter 14 Financial Statements (Without Adjustments) Question Answers Download PDF. NIOS Study Material of Class 10 Accountancy Notes Paper 224.

NIOS Class 10 Accountancy Chapter 14 Financial Statements (Without Adjustments)

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Also, you can read the NIOS book online in these sections Solutions by Expert Teachers as per National Institute of Open Schooling (NIOS) Book guidelines. These solutions are part of NIOS All Subject Solutions. Here we have given NIOS Class 10 Accountancy Chapter 14 Financial Statements (Without Adjustments), NIOS Secondary Course Accountancy Solutions for All Chapters, You can practice these here.

Financial Statements (Without Adjustments)

Chapter: 14

Intext Questions 14.1

Fill in the blanks with suitable word/words: 

(i) Carriage is debited to ____________ account. 

Ans: Trading Account.

(ii) Total Sales – Sales Returns = ____________ .

Ans: Net Sales.

(iii) Wages are debited to ____________ account. 

Ans: Trading Account.

(iv) Closing stock is shown on the ____________ side of the Trading Account. 

Ans: Credit side.

(v) Total Purchases – Purchase Returns = ____________.

Ans: Net purchase.

Intext Questions 14.2

State whether the following statements are True or False: 

(i) Carriage inward is shown in the Profit & Loss Account. 

Ans: False.

(ii) Telephone expenses are shown in the Trading Account. 

Ans: False.

(iii) Carriage outward is shown in P&L A/c. 

Ans: True.

(iv) Gross Profit is transferred from Profit & Loss Account to Trading Account.

Ans: False.

Intext Questions 14.3

I. Fill in the Blanks: 

(i) Assets are shown on the _________ side of the Balance Sheet. 

Ans: Right hand side.

(ii) Capital is shown on the liabilities side of _________. 

Ans: Balance sheet.

(iii) Total of Assets side and liabilities side of the balance sheet are always _________. 

Ans: Equal.

(iv) Stock is an example of ___________ asset. 

Ans: Current.

(v) Furniture is an example of ___________ asset.

Ans: Fixed.

II. Classify the following assets as fixed assets and current assets:

AssetsTypes of Asset (Fixed or Current)
(i) Debtors
(ii) Land & Building
(iii) Plant & Machinery
(iv) Cash at Bank
(v) Motor Vehicle
(vi) Cash in hand

Ans:

AssetsTypes of Asset (Fixed or Current)
(i) DebtorsCurrent.
(ii) Land & BuildingFixed
(iii) Plant & MachineryFixed.
(iv) Cash at BankCurrent.
(v) Motor VehicleFixed
(vi) Cash in handCurrent

Intext Questions 14.4

I. Mention whether following statements are True or False: 

(i) A Balance Sheet shows the financial position of a business for the whole year. 

Ans: False.

(ii) Both P & L Account and Balance Sheet are position statements. 

Ans: False.

(iii) Asset side of a balance sheet shows only the fixed assets of a business. 

Ans: False.

(iv) Liabilities side of a Balance Sheet shows both internal and external liabilities. 

Ans: True.

II. 

Multiple Type Questions

(i) Which of the following financial statements is prepared to ascertain gross profit of a business? 

(a) Profit and Loss Account. 

(b) Trading Account.

(c) Balance Sheet. 

(d) None of the above. 

Ans: (b) Trading Account.

(ii) Which of the following financial statements is prepared to ascertain the positions of assets and liabilities of the business? 

(a) Balance Sheet. 

(b) Profit and Loss Account. 

(c) Trading Account. 

(d) None of the above. 

Ans: (a) Balance Sheet.

(iii) Gross profit is the difference between 

(a) Total assets and total liabilities. 

(b) Sales and all expenses. 

(c) Sales and indirect expenses. 

(d) Sales and cost of goods solds. 

Ans: (d) Sales and cost of goods solds.

(iv) Which of the following is not an indirect expense? 

(a) Freight inward. 

(b) Discount allowed. 

(c) Rent paid. 

(d) Commission paid. 

Ans: (a) Freight inward.

(v) Which of the following is a current asset? 

(a) Land. 

(b) Building. 

(c) Cash at bank. 

(d) Machinery.

Ans: (c) Cash at bank.

Terminal Exercise

1. What do you mean by term financial statements?

Ans: The businessman also wants to know the financial position of his business on a particular date. This date is normally the last date of the financial year for which the accounts have been prepared. The statements, prepared to know the result of the business and the financial position of the business, are called financial statements.

2. State the objectives of preparing financial statements.

Ans: Following are the objectives of preparing financial statements: 

(i) Ascertain the result of business activities: One of the important objectives of preparing financial statements is to ascertain the Income. Financial statements provide information about the profit earned or loss incurred during a particular accounting period or year. 

(ii) Ascertain the financial position of business: Balance Sheet provides information about the financial position of business on a particular date. 

(iii) Correct decision making: Financial statements are helpful in decision making for the business on the basis of the information provided by financial statements, future decisions can be taken correctly. 

(iv) Judging the performance of management: Financial statements are helpful in judging the performance of management and utilisation of resources of a business house. 

(v) Ascertaining the cash position of the business: The cash position indicated by the financial statements helps the business in planning the payment of cash to creditors, suppliers etc.

3. State the objectives of preparing a Balance Sheet.

Ans: Balance sheet is prepared to achieve following objectives: 

(i) To know the financial position of the business. 

(ii) To know the position of internal liabilities and external liabilities of the business so that timely arrangements can be made for their payment. 

(iii) To know the position of fixed assets and current assets. 

(iv) To plan activities for the future on the basis of present financial position.

4. Distinguish between direct expenses and indirect expenses.

Ans: 

BasisDirect expenseIndirect Expense
DefinitionDirect expenses are costs that can be specifically traced to a particular product, service, or department within a business.Indirect expenses are costs that are not directly attributable to a specific product, service, or department.
NatureThese expenses are directly related to the production or acquisition of goods or services that a business offers.These expenses are incurred for the general operation of the business and cannot be easily associated with a particular revenue-generating activity.
TraceabilityDirect expenses can be easily identified and allocated to a specific cost centre or cost object.Unlike direct expenses, indirect expenses cannot be directly linked to a specific cost centre or cost object without some form of allocation or apportionment.

5. Distinguish between Trading Account and Profit and Loss Account.

Ans:

S.No.Trading AccountProfit and Loss Account
(i)This account shows the gross  profit or gross loss for an accounting year.This account shows the net profit or net loss for an accounting year.
(ii)All direct expenses relating to  business are shown on the debit side of this account. All indirect expenses relating to  business are shown on the debit side of this account.
(iii)All direct revenue items are shown on the credit side of this account.All indirect revenue items are shown on the credit side of this account.
(iv)The balance of this account i.e. gross profit or gross loss is transferred to P&L. A/c.The balance of this account i.e. net  profit or net loss is transferred to the  capital account of the proprietor.

6. Give five examples each of fixed assets and current assets.

Ans: (i) Five examples of fixed assets are: Land, Buildings, Machinery and Equipment, Vehicles and furniture. 

(ii) Five examples of current assets are: Cash, Accounts receivable, inventory, short – term investments and prepaid expenses.

7. Give three examples each of internal liabilities and external liabilities.

Ans: (i) Three examples of Internal liabilities are: Accrued Salaries and Wages, Accrued Bonuses and Benefits and Unearned Revenue.

(ii) Three examples of External liabilities are: Accounts Payable,Bank Loans and Bonds Payable.

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