We have compiled the NCERT MCQ Questions for Class 11 Accountancy Chapter 10 Financial Statements 2 with Answers Pdf free download covering the entire syllabus. Practice MCQ Questions for Class 11 Accountancy with Answers on a daily basis and score well in exams. Refer to the Financial Statements 2 Class 11 MCQs Questions with Answers here along with a detailed explanation.
Financial Statements 2 Class 11 MCQs Questions with Answers
Choose the correct option.
Question 1.
Rahul’s trial balance provide you the following information:
Debtors – Rs. 80,000
Bad debts – Rs. 2,000
Provision for bad debts – Rs. 4,000
It is desired to maintain a provision for bad debts of Rs. 1,000. State the amount to be debited/credited in Profit & Loss A/c.
(a) Rs. 5,000 (Debit)
(b) Rs. 3,000 (Debit)
(c) Rs. 1,000 (Credit)
(d) None of these
Answer
Answer: (c) Rs. 1,000 (Credit)
Question 2.
If the rent of one month is still to be paid the adjustment entry will be
(a) Debit outstanding rent account and Credit rent account.
(b) Debit profit and loss account and Credit rent account.
(c) Debit rent account and Credit profit and loss account.
(d) Debit rent account and Credit outstanding rent account.
Answer
Answer: (d) Debit rent account and Credit outstanding rent account.
Question 3.
If the rent received in advance Rs. 2,000. The adjustment entry will be
(a) Debit profit and loss account and Credit rent account.
(b) Debit rent account Credit rent received in advance account.
(c) Debit rent received in advance account and Credit rent account.
(d) None of these
Answer
Answer: (b) Debit rent account Credit rent received in advance account.
Question 4.
If the opening capital is Rs. 50,000 as on April 1, 2005 and additional capital introduced Rs. 10,000 on January 1,2006. Interest charge on capital 10% p.a. The amount of interest on capital shown in profit and loss account as on March 31, 2006 will be:
(a) Rs. 5,250
(b) Rs. 6,000
(c) Rs. 4,000
(d) Rs. 3,000
Answer
Answer: (a) Rs. 5,250
Question 5.
If the insurance premium paid Rs. 1,000 and prepaid insurance Rs. 300. The amount of insurance premium shown in profit and loss account will be
(a) Rs. 1,300
(b) Rs. 1,000
(c) Rs. 300
(d) Rs. 700
Answer
Answer: (d) Rs. 700
Question 6.
Outstanding Expenses are related to-
(a) Current year
(b) Next year
(c) Last year
(d) None of these.
Answer
Answer: (a) Current year
Question 7.
Prepaid expenses are shown in-
(a) Liability side
(b) Asset side
(c) Assets or Liability side
(d) None of these.
Answer
Answer: (b) Asset side
Question 8.
Charity of goods is-
(a) Expenses
(b) Loss
(c) Profit
(d) None of these.
Answer
Answer: (b) Loss
Question 9.
If a person fails to pay his debt, such amount is considered as-
(a) Bad debts
(b) Bad debts recovered
(c) Provision for Bad debt
(d) None of these.
Answer
Answer: (a) Bad debts
Question 10.
The object of non – trading concerns-
(a) Social service
(b) Profit earning
(c) Both of these
(d) None of the above.
Answer
Answer: (a) Social service
Question 11.
Such persons who earn remuneration against their services are called –
(a) Seller
(b) Purchaser
(c) Professional
(d) None of these.
Answer
Answer: (c) Professional
Question 12.
Which of the following is not an item of income of Non – trading concern
(a) Entrance fees
(b) Interest
(c) Govt. Aid
(d) Salary.
Answer
Answer: (d) Salary.
Question 13.
Receipt and payment account is a summary of-
(a) Income & Expenditure account
(b) Profit & Loss A/c
(c) Cash – book
(d) None of these.
Answer
Answer: (c) Cash – book
Question 14.
Which of the following is recorded in income & expenditure account
(a) Revenue items
(b) Capital items
(c) Revenue and capital items
(d) None of these.
Answer
Answer: (a) Revenue items
Fill in the blanks with suitable word/words
Question 1.
Trading and Profit & Loss Account shows the ………………. or ………………..
Answer
Answer: profit, loss
Question 2.
Adjustments are necessary to show the correct ………………., and ………………. of a business concern.
Answer
Answer: profit or loss, financial position
Question 3.
Items of income and expenditure which do not pertain to the accounting period should be ……………….
Answer
Answer: excluded
Question 4.
Items of income and expenditure which relates to the accounting period but are left out should be ……………….
Answer
Answer: accounted for
Question 5.
Expenses related to the current accounting period but have not been paid are known as ……………….
Answer
Answer: outstanding expenses
Question 6.
Part of expenses paid if relates to the next accounting year, it is called ……………….
Answer
Answer: prepaid expenses
Question 7.
Income earned but not received till the end of the accounting year is termed as ……………….
Answer
Answer: accrued income
Question 8.
Income if received before it becomes due is called ……………….
Answer
Answer: income received in advance
Question 9.
While making a provision for possible bad debts or for doubtful debts, we ………………. Reserves Debts Account.
Answer
Answer: credit
Question 10.
An unexpired expenditure is shown on the ………………. side of the Balance Sheet.
Answer
Answer: assets.
Question 11.
Goods given in charity is credited in …………… Account.
Answer
Answer: Purchase
Question 12.
Such Expenses which are paid in current year but are related to next year are called ……………. expenses.
Answer
Answer: Prepaid expenses
Question 13.
Accrued income is ……………. Account.
Answer
Answer: Personal account
Question 14.
There is ……………. fall in the value of Asset due to depreciation.
Answer
Answer: Constant/ gradual
Question 15.
Interest on capital is always shown in …………….. side of profit & loss A/c.
Answer
Answer: Debit
Question 16.
Unearned income is shown on the ……………….. side of balance sheet.
Answer
Answer: Liability
Question 17.
The main object of non – trading concerns is ……………….
Answer
Answer: Social service
Question 18.
The debit side of income & expenditure A/c is called ………………. side.
Answer
Answer: Expenditure
Question 19.
Non – trading concerns maintain their books according to ………………. system.
Answer
Answer: Cash
Question 20.
…………….. account is prepared with the help of cash-book.
Answer
Answer: Receipts & payment A/c
Question 21.
Only …………… item are shown in income & expenditure A/c.
Answer
Answer: Revenue
Question 22.
……………. represents the excess of assets over liabilities.
Answer
Answer: Capital
Mention whether the following are true or false
Question 1.
Income received in advance is written on the liabilities side of the balance sheet.
Answer
Answer: True
Question 2.
Prepaid expenses appearing inside the trial balance will appear on the liabilities side of the balance sheet.
Answer
Answer: False
Question 3.
Outstanding expenses appearing inside the trial balance are shown on the debit side of the profit & loss account.
Answer
Answer: False
Question 4.
Assets are to be shown in the balance sheet at the values realisable on liquidation.
Answer
Answer: True
Question 5.
Salary outstanding account is a personal account.
Answer
Answer: True
Question 6.
The provision for discount on debtors is calculated after deducting the provisions for doubtful debts from debtors.
Answer
Answer: True
Question 7.
Outstanding salaries appearing in the trial balance is shown in Profit & Loss Account.
Answer
Answer: False
Question 8.
Goods sold on approval basis is treated as a complete sale.
Answer
Answer: False
Question 9.
Deferred revenue expenditure is partly debited to Profit & Loss Account and the balance is shown in the Balance Sheet.
Answer
Answer: True
Question 10.
Provision for bad debts is debited to sundry debtors accounts.
Answer
Answer: False
Question 11.
Depreciation is charged only in case of profits.
Answer
Answer: False
Question 12.
Unearned Income is recorded in Asset side.
Answer
Answer: False
Question 13.
Interest on Capital is income for the business.
Answer
Answer: False
Question 14.
Drawing of goods is deducted from purchases.
Answer
Answer: True
Question 15.
Doctor employed with government is an example of non – trading professional.
Answer
Answer: False
Question 16.
Professional people maintain their accounts according to cash system.
Answer
Answer: True
Question 17.
Income & expenditure account reveals cash balance.
Answer
Answer: False
Question 18.
Capital items are written in Receipts & payments account.
Answer
Answer: True
Question 19.
No adjustment is made in Receipt & payment A/c.
Answer
Answer: True
Match the following:
Question 1.
| Column A | Column B |
| 1. Added to Expenses | (a) Interest on Capital |
| 2. Deduced from Expenses | (b) Depreciation |
| 3. Deducted from Assets | (c) Outstanding Expenses |
| 4. Added to capital | (d) Prepaid Expenses |
Answer
Answer:
| Column A | Column B |
| 1. Added to Expenses | (c) Outstanding Expenses |
| 2. Deduced from Expenses | (d) Prepaid Expenses |
| 3. Deducted from Assets | (b) Depreciation |
| 4. Added to capital | (a) Interest on Capital |
Question 2.
| Column A | Column B |
| 1. Outstanding expense of last year | (a) Balance sheet |
| 2. Unearned income of current year | (b) Opening capital |
| 3. Hospital | (c) Professional |
| 4. Manager I Doctor / Surgeon | (d) Non-trading concern |
| 5. School/college | (e) Non-trading concern. |
Answer
Answer:
| Column A | Column B |
| 1. Outstanding expense of last year | (a) Balance sheet |
| 2. Unearned income of current year | (b) Opening capital |
| 3. Hospital | (d) Non-trading concern |
| 4. Manager I Doctor / Surgeon | (c) Professional |
| 5. School/college | (e) Non-trading concern. |
Answer in one word/sentence:
Question 1.
Such Expenses for which services have been received but amount is yet to be paid are called.
Answer
Answer: Outstanding Expenses
Question 2.
Recording of relevant transactions and eliminating non – related transactions is called.
Answer
Answer: Adjustment
Question 3.
Such income which is earned but not yet received is called.
Answer
Answer: Accrued or Earned Income
Question 4.
Unearned income is recorded in which side of the balance sheet?
Answer
Answer: Liability side
Question 5.
Which statement/Account reveals the financial position of the non – trading concerns?
Answer
Answer: Balance sheet
Question 6.
“The receipts and payments account is nothing as more than the summary of the cash book” who said this?
Answer
Answer: Pickles
Question 7.
When a donor provides a continuous source of income to the concerns by endowment of property or money, such a donation is called.
Answer
Answer: Endowment fund
Question 8.
What is the nature of interest on investments?
Answer
Answer: Revenue
Question 9.
The major source of non – trading concern is.
Answer
Answer: Subscription
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