NCERT Solutions for Class 11 Accountancy Financial Accounting Part-2 Chapter 3

Accounts from Incomplete Records Class 11

Chapter 3 Accounts from Incomplete Records Exercise Solutions

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Short answers : Solutions of Questions on Page Number : 464

Q1 :  

State the meaning of incomplete records?


Answer :

Accounts that are not recorded as per the double entry system are known as incomplete records. According to Kohler (Dictionary for Accountants), single entry system is defined as, " A system of book-keeping in which as a rule, only records of cash and of personal accounts are maintained; it is always incomplete double entry, varying with circumstances."

Many small-sized business firms maintain incomplete records of their business transactions. They do not maintain proper books of accounts and mainly prepare books like, Cash Book, personal accounts (of debtors and creditors) and Balance Sheet at the end of the year. They maintain books as per their needs. This system is also known as defective double entry system. The preparation of financial statements is neither as easier nor as effective, as it is under double entry system. Consequently, accurate profit or loss is not possible to ascertain.

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Q2 :  

What are the possible reasons for keeping incomplete records?


Answer :

The possible reasons for keeping incomplete records are:

1. Simple method: Proprietors, who do not have the proper knowledge of accounting principles, find it much convenient and easier to maintain their business records under this system.

2. Less time consuming: Maintaining books according to the single entry system is less time consuming, as only few books are to be maintained. Further, the books are not as comprehensive as they are under double entry system.

3. Less expensive: It is an economical mode of maintaining records, as there is no need to appoint specialised accountant.

4. Flexible: Owner may record transactions as per his/her own needs. It can be easily adjusted or changed whenever needed.

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Q3 :  

Distinguish between statement of affairs and balance sheet.


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Q4 :  

What practical difficulties are encountered by a trader due to incompleteness of accounting records?


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Long answers : Solutions of Questions on Page Number : 464

Q1 :  

What is meant by a 'statement of affairs'? How can the profit or loss of a trader be ascertained with the help of a statement of affairs?


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Q2 :  

Is it possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts kept by a trader'? Do you agree? Explain.


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Q3 :  

Explain how the following may be ascertained from incomplete records:

(a) Opening capital and closing capital

(b) Credit sales and credit purchases

(c) Payments to creditors and collection from debtors

(d) Closing balance of cash.


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Numerical questions : Solutions of Questions on Page Number : 464

Q1 :  

Following information is given below prepare the statement of profit or loss:

 

Rs

Capital at the end of the year

5,00,000

Capital in the beginning of the year

7,50,000

`Drawings made during the period

3,75,000

Additional Capital introduced

50,000

 

 


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Q2 :  

Manveer started his business on January 01, 2005 with a capital of Rs 4,50,000. On December 31, 2005 his position was as under:

 

Rs

Cash

99,000

Bills receivable

75,000

Plant

48,000

Land and Building

1,80,000

Furniture

50,000

 

He owned Rs 45,000 from his friend Susheel on that date. He withdrew Rs 8,000 per month for his household purposes. Ascertain his profit or loss for this year ended December 31, 2005

 

 


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Q3 :  

From the information given below ascertain the profit for the year:

 

Rs

Capital at the beginning of the year

70,000

Additional capital introduced during the year

17,500

Stock

59,500

Sundry debtors

25,900

Business premises

8,600

Machinery

2,100

Sundry creditors

33,400

Drawings made during the year

26,400

 

 


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Q4 :  

From the following information, calculate capital at the beginning:

 

Rs

Capital at the end of the year

4,00,000

Drawings made during the year

60,000

Fresh capital introduce during the year

1,00,000

Profit of the current year

80,000

 

 


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Q5 :  

Following information is given below: calculate the closing capital

 

Jan.01, 2005

Dec.31, 2005

 

 

Rs

 

Rs

Creditors

 

5,000

 

30,000

Bills payable

 

10,000

 

-

Loan

 

-

 

50,000

Bills receivable

 

30,000

 

50,000

Stock

 

5,000

 

30,000

Cash

 

2,000

 

20,000

Calculation of profit or loss and ascertainment of statement of affairs at the end of the year (Opening Balance is given)

 

 


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Q6 :  

Mrs Anu started firm with a capital of Rs 4,00,000 on 1st July 2005. She borrowed from her friends a sum of Rs 1,00,000 @ 10% per annum (interest paid) for business and brought a further amount to capital Rs 75,000 on Dec. 31, 2005, her position was :

 

Rs

Cash

30,000

Stock

4,70,000

Debtors

3,50,000

Creditors

3,00,000

He withdrew Rs 8,000 per month for the year. Calculate profit or loss for the year and show your working clearly.

 

 


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Q7 :  

Mr. Arnav does not keep proper records of his business he provided following information, you are required to prepare a statement showing the profit or loss for the year.

 

Rs

Capital at the beginning of the year

15,00,000

Bills receivable

60,000

Cash in hand

80,000

Furniture

9,00,000

Building

10,00,000

Creditors

6,00,000

Stock in trade

2,00,000

Further capital introduced

3,20,000

Drawings made during the period

80,000

Ascertainment of statement of affairs at the beginning and at the end of the year and calculation of profit or loss.

 

 


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Q8 :  

Mr. Akshat keeps his books on incomplete records following information is given below:

 

April 01, 2004

March 31, 2005

 

 

Rs

 

Rs

Cash in hand

 

1,000

 

1,500

Cash at bank

 

15,000

 

10,000

Stock

 

1,00,000

 

95,000

Debtors

 

42,500

 

70,000

Business premises

 

75,000

 

1,35,000

Furniture

 

9,000

 

7,500

Creditors

 

66,000

 

87,000

Bills payable

 

44,000

 

58,000

During the year he withdrew Rs 45,000 and introduced Rs 25,000 as further capital in the business compute the profit or loss of the business.

 

 


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Q9 :  

Gopal does not keep proper books of account. Following information is given below:

 

Jan. 01, 2005

Dec. 31, 2005

 

 

Rs

 

Rs

Cash in hand

 

18,000

 

12,000

Cash at bank

 

1,500

 

2,000

Stock in trade

 

80,000

 

90,000

Sundry debtors

 

36,000

 

60,000

Sundry creditors

 

60,000

 

40,000

Loan

 

10,000

 

8,000

Office equipments

 

25,000

 

30,000

Land and Building

 

30,000

 

20,000

Furniture

 

10,000

 

10,000

During the year he introduced Rs 20,000 and withdrew Rs 12,000 from the business. Prepare the statement of profit or loss on the basis of given information

 

 


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Q10 :  

Mr. Muneesh maintains his books of accounts from incomplete records. His books provide the information:

 

 

Jan. 01, 2005

Dec. 31, 2005

 

 

Rs

 

Rs

Cash

 

1,200

 

1,600

Bills receivable

 

-

 

2,400

Debtors

 

16,800

 

27,200

Stock

 

22,400

 

24,400

Investment

 

-

 

8,000

Furniture

 

7,500

 

8,000

Creditors

 

14,000

 

15,200

 

He withdrew Rs 300 per month for personal expenses. He sold his investment of Rs 16,000 at 2% premium and introduced that amount into business.

 

 


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Q11 :  

Mr. Girdhari Lal does not keep full double entry records. His balance as on January 01, 2006 is as.

 

Liabilities

Amount

Rs

Assets

Amount

Rs

Sundry creditors

35,000

Cash in hand

5,000

Bills payable

15,000

Cash at bank

20,000

Capital

40,000

Sundry debtors

18,000

 

 

Stock

22,000

 

 

Furniture

8,000

 

 

Plant

17,000

 

90,000

 

90,000

 

 

 

 

 

His position at the end of the year is:

 

Rs

Cash in hand

7,000

Stock

8,600

Debtors

23,800

Furniture

15,000

Plant

20,350

Bills payable

20,200

Creditors

15,000

 

He withdrew Rs 500 per month out of which to spent Rs 1,500 for business purpose. Prepare the statement of profit or loss.

 

 


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Q12 :  

Mr. Ashok does not keep his books properly. Following information is available from his books.

 

 

Jan. 01, 2005

Dec. 31, 2005

 

 

Rs

 

Rs

Sundry creditors

 

45,000

 

93,000

Loan from wife

 

66,000

 

57,000

Sundry debtors

 

22,500

 

-

Land and Building

 

89,600

 

90,000

Cash in hand

 

7,500

 

8,700

Bank overdraft

 

25,000

 

-

Furniture

 

1,300

 

1,300

Stock

34,000

25,000

 

During the year Mr. Ashok sold his private car for Rs 50,000 and invested this amount into the business. He withdrew from the business Rs 1,500 per month upto July 31, 2005 and thereafter Rs 4,500 per month as drawings. You are required to prepare the statement of profit or loss and statement of affair as on December 31, 2005.

 

 


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Q13 :  

Krishna Kulkarni has not kept proper books of accounts prepare the statement of profit or loss for the year ending December 31, 2005 from the following information:

 

 

Jan. 01, 2005

Dec. 31, 2005

 

 

Rs

 

Rs

Cash in hand

 

10,000

 

36,000

Debtors

 

20,000

 

80,000

Creditors

 

10,000

 

46,000

Bills receivable

 

20,000

 

24,000

Bills payable

 

4,000

 

42,000

Car

 

-

 

80,000

Stock

 

40,000

 

30,000

Furniture

 

8,000

 

48,000

Investment

 

40,000

 

50,000

Bank balance

 

1,00,000

 

90,000

 

The following adjustments were made:

(a) Krishna withdrew cash Rs 5,000 per month for private use.

(b) Depreciation @ 5% on car and furniture @10%.

(c) Outstanding Rent Rs 6,000.

(d) Fresh Capital introduced during the year Rs 30,000.

 

 


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Q14 :  

M/s Saniya Sports Equipment does not keep proper records. From the following information find out profit or loss and also prepare balance sheet for the year ended December 31, 2005

 

 

Dec. 31, 2004

Dec. 31, 2005

 

 

Rs

 

Rs

Cash in hand

 

6,000

 

24,000

Bank overdraft

 

30,000

 

-

Stock

 

50,000

 

80,000

Sundry creditors

 

26,000

 

40,000

Sundry debtors

 

60,000

 

1,40,000

Bills payable

 

6,000

 

12,000

Furniture

 

40,000

 

60,000

Bills receivable

 

8,000

 

28,000

Machinery

 

50,000

 

1,00,000

Investment

 

30,000

 

80,000

 

Drawing Rs 10,000 p.m. for personal use, fresh capital introduce during the year Rs 2,00,000. A bad debts of Rs 2,000 and a provision of 5% is to be made on debtors outstanding salary Rs 2,400, prepaid insurance Rs 700, depreciation charged on furniture and machine @ 10% p.a.

 

 


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Q15 :  

From the following information calculate the amount to be paid to creditors:

 

Rs

Sundry creditors as on March 31, 2005

1,80,425

Discount received

26,000

Discount allowed

24,000

Return outwards

37,200

Return inward

32,200

Bills accepted

1,99,000

Bills endorsed to creditors

26,000

Creditors as on April 01, 2006

2,09,050

Total purchases

8,97,000

Cash purchases

1,40,000

 

 


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Q16 :  

Find out the credit purchases from the following:

 

Rs

Balance of creditors April 01, 2004

45,000

Balance of creditors March 31, 2005

36,000

Cash paid to creditors

1,80,000

Cheque issued to creditors

60,000

Cash purchases

75,000

Discount received from creditors

5,400

Discount allowed

5,000

Bills payable given to creditors

12,750

Return outwards

7,500

Bills payable dishonoured

3,000

Bills receivable endorsed to creditors

4,500

Bills receivable endorsed to creditors dishonoured

1,800

Return inwards

3,700

 

 


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Q17 :  

From the following information calculate total purchases.

 

Rs

Creditors Jan. 01, 2005

30,000

Creditors Dec. 31, 2005

20,000

Opening balance of Bills payable

25,000

Closing balance of Bills payable

35,000

Cash paid to creditors

1,51,000

Bills discharged

44,500

Cash purchases

1,29,000

Return outwards

6,000

 

 


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Q18 :  

The following information is given

 

Rs

Opening creditors

60,000

Cash paid to creditors

30,000

Closing creditors

36,000

Returns Inward

13,000

Bill matured

27,000

Bill dishonoured

8,000

Purchases return

12,000

Discount allowed

5,000

 

Calculate credit purchases during the year

 

 


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Q19 :  

From the following, calculate the amount of bills accepted during the year.

Rs

Bills payable as on April 01, 2005 1,80,000

Bills payable as on March 31, 2006 2,20,000

Bills payable dishonoured during the year 28,000

Bills payable honoured during the year 50,000

 

 


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Q20 :  

Find out the amount of bills matured during the year on the basis of information given below;

 

Rs

Bills payable dishonoured

37,000

Closing balance of Bills payable

85,000

Opening balance of Bills payable

70,000

Bills payable accepted

90,000

Cheque dishonoured

23,000

 

 


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Q21 :  

Prepare the bills payable account from the following and find out missing figure if any :

 

Rs

Bills accepted

1,05,000

Discount received

17,000

Purchases returns

9,000

Return inwards

12,000

Cash paid to accounts payable

50,000

Bills receivable endorsed to creditor

45,000

Bills dishonoured

17,000

Bad debts

14,000

Balance of accounts payable (closing)

85,000

Credit purchases

2,15,000

 

 


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Q22 :  

Calculate the amount of bills receivable during the year.

 

Rs

Opening balance of bills receivable

75,000

Bill dishonoured

25,000

Bills collected (honoured)

1,30,000

Bills receivable endorsed to creditors

15,000

Closing balance of bills receivable

65,000

 

 


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Q23 :  

Calculate the amount of bills receivable dishonoured from the following information.

 

Rs

Opening balance of bills receivable

1,20,000

Bills collected (honoured)

1,85,000

Bills receivable endorsed

22,800

Closing balance of bills receivable

50,700

Bills receivable received

1,50,000

 

 


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Q24 :  

From the details given below, find out the credit sales and total sales.

 

Rs

Opening debtors

45,000

Closing debtors

56,000

Discount allowed

2,500

Sales returns

8,500

Irrecoverable amount

4,000

Bills receivables received

12,000

Bills receivable dishonoured

3,000

Cheque dishonoured

7,700

Cash sales

80,000

Cash received from debtors

2,30,000

Cheque received from debtors

25,000

 

 


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Q25 :  

From the following information, prepare the bills receivable account and total debtors account for the year ended December 31, 2005.

 

Rs

Opening balance of debtors

1,80,000

Opening balance of bills receivable

55,000

Cash sales made during the year

95,000

Credit sales made during the year

14,50,000

Return inwards

78,000

Cash received from debtors

10,25,000

Discount allowed to debtors

55,000

Bills receivable endorsed to creditors

60,000

Cash received (bills matured)

80,500

Irrecoverable amount

10,000

Closing balance of bills receivable on Dec. 31, 2005

75,500

 

 


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Q26 :  

Prepare the suitable accounts and find out the missing figure if any.

 

Rs

Opening balance of debtors

14,00,000

Opening balance of bills receivable

7,00,000

Closing balance of bills receivable

3,50,000

Cheque dishonoured

27,000

Cash received from debtors

10,75,000

Cheque received and deposited in the bank

8,25,000

Discount allowed

37,500

Irrecoverable amount

17,500

Returns inwards

28,000

Bills receivable received from customers

1,05,000

Bills receivable matured

2,80,000

Bills discounted

65,000

Bills endorsed to creditors

70,000

 

 


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Q27 :  

From the following information ascertain the opening balance of sundry debtors and closing balance of sundry creditors

 

Rs

Opening stock

30,000

Closing stock

25,000

Opening creditors

50,000

Closing debtors

75,000

Discount allowed by creditors

1,500

Discount allowed to customers

2,500

Cash paid to creditors

1,35,000

Bills payable accepted during the period

30,000

Bills receivable received during the period

75,000

Cash received from customers

2,20,000

Bills receivable dishonoured

3,500

Purchases

2,95,000

 

The rate of gross profit is 25% on selling price and out of the total sales

Rs 85,000 was for cash sales.

 

(Hint: Total sales = 4,00,000 = 3,00,000 x 100 x

100

)

75

 

 


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Q28 :  

Mrs Bhavana keeps his books by Single Entry System. You.re required to prepare final accounts of her business for the year ended December 31, 2005. Her records relating to cash receipts and cash payments for the above period showed the following particulars :

 

Summary of Cash

Dr.

 

 

Cr.

Receipts

Amount Rs

Payments

Amount Rs

Opening balance of cash

12,000

Paid to creditors

53,000

Further capital

20,000

Business expenses

12,000

Received from debtors

1,20,000

Wage paid

30,000

 

 

Bhavana's drawings

15,000

 

 

Balance at bank on

35,000

 

 

Dec. 31,2005

 

 

 

Cash in hand

7,000

 

1,52,000

 

1,52,000

 

 

 

 

 

The following information is also available:

 

Jan. 01, 2005

Dec. 31, 2005

 

 

Rs

 

Rs

Debtors

 

55,000

 

85,000

Creditors

 

22,000

 

29,000

Stock

 

35,000

 

70,000

Plant

 

10,00,000

 

1,00,000

Machinery

 

50,000

 

50,000

Land and Building

 

2,50,000

 

2,50,000

Investment

 

20,000

 

20,000

 

All her sales and purchases were on credit. Provide depreciation on plant and building by 10% and machinery by 5%, make a provision for bad debts by 5%.

 

 


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