# MCQ Questions for Class 11 Accountancy Chapter 10 Financial Statements 2 with Answers

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
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

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: (d) Debit rent account and Credit outstanding rent account.

Question 3.
(a) Debit profit and loss account and Credit rent account.
(d) None of these

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

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

Question 6.
Outstanding Expenses are related to-
(a) Current year
(b) Next year
(c) Last year
(d) None of these.

Question 7.
Prepaid expenses are shown in-
(a) Liability side
(b) Asset side
(c) Assets or Liability side
(d) None of these.

Question 8.
Charity of goods is-
(a) Expenses
(b) Loss
(c) Profit
(d) None of these.

Question 9.
If a person fails to pay his debt, such amount is considered as-
(d) None of these.

Question 10.
The object of non – trading concerns-
(a) Social service
(b) Profit earning
(c) Both of these
(d) None of the above.

Question 11.
Such persons who earn remuneration against their services are called –
(a) Seller
(b) Purchaser
(c) Professional
(d) None of these.

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.

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.

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.

Fill in the blanks with suitable word/words

Question 1.
Trading and Profit & Loss Account shows the ………………. or ………………..

Question 2.
Adjustments are necessary to show the correct ………………., and ………………. of a business concern.

Answer: profit or loss, financial position

Question 3.
Items of income and expenditure which do not pertain to the accounting period should be ……………….

Question 4.
Items of income and expenditure which relates to the accounting period but are left out should be ……………….

Question 5.
Expenses related to the current accounting period but have not been paid are known as ……………….

Question 6.
Part of expenses paid if relates to the next accounting year, it is called ……………….

Question 7.
Income earned but not received till the end of the accounting year is termed as ……………….

Question 8.
Income if received before it becomes due is called ……………….

Question 9.
While making a provision for possible bad debts or for doubtful debts, we ………………. Reserves Debts Account.

Question 10.
An unexpired expenditure is shown on the ………………. side of the Balance Sheet.

Question 11.
Goods given in charity is credited in …………… Account.

Question 12.
Such Expenses which are paid in current year but are related to next year are called ……………. expenses.

Question 13.
Accrued income is ……………. Account.

Question 14.
There is ……………. fall in the value of Asset due to depreciation.

Question 15.
Interest on capital is always shown in …………….. side of profit & loss A/c.

Question 16.
Unearned income is shown on the ……………….. side of balance sheet.

Question 17.
The main object of non – trading concerns is ……………….

Question 18.
The debit side of income & expenditure A/c is called ………………. side.

Question 19.
Non – trading concerns maintain their books according to ………………. system.

Question 20.
…………….. account is prepared with the help of cash-book.

Question 21.
Only …………… item are shown in income & expenditure A/c.

Question 22.
……………. represents the excess of assets over liabilities.

Mention whether the following are true or false

Question 1.
Income received in advance is written on the liabilities side of the balance sheet.

Question 2.
Prepaid expenses appearing inside the trial balance will appear on the liabilities side of the balance sheet.

Question 3.
Outstanding expenses appearing inside the trial balance are shown on the debit side of the profit & loss account.

Question 4.
Assets are to be shown in the balance sheet at the values realisable on liquidation.

Question 5.
Salary outstanding account is a personal account.

Question 6.
The provision for discount on debtors is calculated after deducting the provisions for doubtful debts from debtors.

Question 7.
Outstanding salaries appearing in the trial balance is shown in Profit & Loss Account.

Question 8.
Goods sold on approval basis is treated as a complete sale.

Question 9.
Deferred revenue expenditure is partly debited to Profit & Loss Account and the balance is shown in the Balance Sheet.

Question 10.
Provision for bad debts is debited to sundry debtors accounts.

Question 11.
Depreciation is charged only in case of profits.

Question 12.
Unearned Income is recorded in Asset side.

Question 13.
Interest on Capital is income for the business.

Question 14.
Drawing of goods is deducted from purchases.

Question 15.
Doctor employed with government is an example of non – trading professional.

Question 16.
Professional people maintain their accounts according to cash system.

Question 17.
Income & expenditure account reveals cash balance.

Question 18.
Capital items are written in Receipts & payments account.

Question 19.

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

 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.

 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.

Question 1.
Such Expenses for which services have been received but amount is yet to be paid are called.

Question 2.
Recording of relevant transactions and eliminating non – related transactions is called.

Question 3.
Such income which is earned but not yet received is called.

Question 4.
Unearned income is recorded in which side of the balance sheet?

Question 5.
Which statement/Account reveals the financial position of the non – trading concerns?

Question 6.
“The receipts and payments account is nothing as more than the summary of the cash book” who said this?

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.

Question 8.
What is the nature of interest on investments?