rtgh

1st Puc Accountancy Chapter 9 Financial Statements – 1 Notes | ಪ್ರಥಮ ಪಿಯುಸಿ ಲೆಕ್ಕಶಾಸ್ತ್ರ ಅಧ್ಯಾಯ – 9 ನೋಟ್ಸ್

1st Puc Accountancy Chapter 9 Financial Statements – 1 Notes Question Answer Mcq Pdf Download 2023 Chapter 9 Accountancy Class 11Solutions Accountancy Class 11 Chapter 9 Solutions 2023 Financial Statements 1 Class 11 Notes Chapter 9 Accounts Class 11 Practical Questions Class 11 Accounts Chapter 9 Journal Practical Problems Solutions Kseeb Solutions For Class 11 Accountancy Chapter 9 Notes ಪ್ರಥಮ ಪಿಯುಸಿ ಲೆಕ್ಕಶಾಸ್ತ್ರ ಅಧ್ಯಾಯ – 9 ನೋಟ್ಸ್

 

1st Puc Accountancy Chapter 9 Notes

1st Puc Accountancy Chapter 9 Financial Statements - 1 Notes | ಪ್ರಥಮ ಪಿಯುಸಿ ಲೆಕ್ಕಶಾಸ್ತ್ರ ಅಧ್ಯಾಯ - 9 ನೋಟ್ಸ್
1st Puc Accountancy Chapter 9 Financial Statements – 1 Notes

One And Two Marks Questions

Q1. What do you mean by financial statements?

A: The statements which explains the financial position of the concern for a particular period. Called financial statements.

Q2. Why do you prepare final accounts?

A: For knowing the exact financial position and nang of the concern, final accounts to be prepared.

Q3. What is trading account?

A: Trading a/c is a financial statement for the purpose of finding out trading result or a gross profit or loss of a business concern for a particular period.

Q4. What is profit and loss a/c?

A: It is a financial statement prepared at the period end for knowing business result, ie., profit or loss. It is a nominal a/c contain all indirect expenses loss and indirect income and profit.

Q5. What is balance sheet?

A: Balance sheet is prepared for the purpose of knowing financial position of a business in a given period. It contains assets and liabilities of a business.

Q6. Mention the statements prepared under final accounts.

A: The Financial statements prepared under final accounts are :

  • Trading account
  • Profit and Loss a/c
  • Profit and loss appropriation a/c
  • Balance sheet

Q7. Arrange the following assets in the balance sheet of a sole trading concern in
the order of permanence.

  • Cash
  • Building
  • Closing stock
  • Machinery

A:

  • Cash
  • Stock
  • Machinery
  • Building.

Q8. Where do you show the following in the balance sheet of a sole trading concern.

  1. Bills payable
  2. Plant and machinery

(a) Bills payable = Balance sheet liability side
(b) Plant and machinery = Balance sheet assets side.

Q9. Name any four current assets.

  1. Cash
  2. Bank
  3. Stock
  4. Debtors

Q10. Name any four fixed assets.

  1. Machinery
  2. Goodwill
  3. Building
  4. Furniture

Q11. Mention any four items appeared in trading account debit side.

A: The items appeared in trading a/c debit side are:

  1. Purchases
  2. Wages
  3. Freight charges
  4. Factory expenses

Q12. What is Net profit?

A: Net profit is the surplus remaining after meeting all indirect expenses out of
gross profit.

Q13. What is profit and loss appropriation a/c?

A: The financial statement prepared at the period and to show now the profit of a company appropriat or the internal profit of the company allocation called ‘profit and loss appropriation’ account.

Q14. Write the object of balance sheet preparation.

A: Balance sheet is prepared for the purpose of knowing financial position of a
business concern.

Q15. Who is debtor?

A: The person who purchase goods from business on credit it called debtor.

Q16. Mention four types of assets.

  1. Tangible assets
  2. Intangible assets oO
  3. Fixed assets
  4. Current assets

Q17. What is bad debts?

A: If the debtors Hint able or agree to pay their debts that protion treated as bad
debts.

Q18. Write the meaning of gross profit.

A: It is a positive trading result. The excess of sales and closing stock over purchases, direct expenses and opening stock called gross profit.

Q19. What is direct expenses?

A: The expenses which directly involved in production called direct expenses. All
direct expensses are recorded in trading a/c debit side.

Q20. What is Indirect expenses?

A: The expenses which is not directly involved in production but relating to the
business called indirect expenses. There expenses are recorded in profit and loss a/c debit side.

Q21. What is Final Accounts?

A: Final accounts is the process of preparation of nen statements at the end of the year.

Karnataka 1st PUC Accountancy Chapter 9 Financial Statements – I Notes

Six Marks Qs

 Q1. What is an operating profit?

A: Operating profit referred to as EBIT, is an accounting metric that measures, the profits a company generates from its core business functions. It does not take into account interest deduction and exclusion of tax from calculation. The following equation is used to calculate the operating profit.

The following equation can be used to represent

Operating Profit = Net Profit + Non-Operating Expenses – Non Operating Incomes

Q2. What are the objectives of preparing financial statements?

A: Financial statements are prepared with the following objective:

1. Determine the financial position of a business.

2. Ascertain the financial performance of the business.

3. To measure the changes in financial position of a business.

4. To compare financial performance of business both intra and inter farm wise.

Q3. What is the purpose of preparing trading and profit and loss account?

A: Trading account is prepared for the following purpose:

1. To determine the gross profit or loss in a financial year or period.

2. Determine the ratio of gross profit to sales.

3. To determine ratio of direct expense to sales.

Profit and Loss account is prepared for the following purpose:

1. Determining net profit or loss incurred by the business

2. To comply with statutory requirements such as Company act or Partnership Act

Q4. Explain the concept of cost of goods sold.

A: Costs incurred in production of goods that are sold by company is known as Cost of Goods Sold or COGS

No goods left out: In this case all goods are sold out. Hence, it can be calculated as:

Cost of goods sold = Purchases + Direct Expenses

Presence of a closing stock: There can be some stock that are yet to get sold at the end of accounting period. At that time it can be calculated as:

Cost of goods sold = Purchases + Direct Expenses – Closing Stock

Presence of an Opening stock: Stock that is carried forward at the beginning of the accounting period from the previous accounting period is considered as opening stock and is calculated as:

Cost of goods sold = Opening Stock + Purchases + Direct Expenses – Closing Stock

Q5. What is a balance sheet? What are its characteristics?

A: A statement prepared to determine assets and values of a business on a particular date is known as Balance Sheet. Debits represent the assets while credits signify the liabilities.

It has the following characteristics:

1. Reflects financial position of a business.

2. It is dependent on other statements such as trading and P & L account.

3. It is prepared at the end of an accounting period.

4. The balance of both sides should tally.

Q6. Distinguish between capital and revenue expenditure and state whether the following statements are items of capital or revenue expenditure:

(a) Expenditure incurred on repairs and whitewashing at the time of purchase of an old building in order to make it usable.

(b) Expenditure incurred to provide one more exit in a cinema hall in compliance with a government order.

(c) Registration fees paid at the time of purchase of a building

(d) Expenditure incurred in the maintenance of a tea garden which will produce tea after four years.

(e) Depreciation charged on a plant.

(f) The expenditure incurred in erecting a platform on which a machine will be fixed.

(g) Advertising expenditure, the benefits of which will last for four years.

Basis of DifferenceCapital ExpenditureRevenue Expenditure
MeaningExpenditure beared for acquiring or improving an asset.Expenses beared for running daily business activities
TermLong Term, can span many accounting periodsShort term limited to an accounting period
BenefitsBenefits can be achieved across many accounting periodsBenefits can be availed only in the current year
NatureNon-recurringRecurring
Shown inIt is shown in Income Statement and Balance SheetIt is shown in Income statement

(a) Capital expenditure

(b) Revenue expenditure

(c) Capital expenditure

(d) Capital expenditure

(e) Revenue expenditure

(f) Capital expenditure

(g) Deferred revenue expenditure

Q7. Operating profit earned by M/s Arora and Sachdeva in 2016-17 was ₹ 17, 00,000. Its non-operating incomes were ₹ 1, 50,000 and non-operating expenses were ₹ 3, 75,000. Calculate the amount of net profit earned by the firm.

A: Net Profit = Operating Profit + Non-operating Income – Non-operating Expenses

= 17, 00,000 + 1, 50,000 – 3, 75,000

= ₹ 14, 75,000

Net profit earned by M/S Arora and Sachdeva in 2016–17 is ₹ 14,75,000

Twelve Marks Qs

Q1.What is meant by Grouping and Marshalling of assets and liabilities? Explain the ways in which a balance sheet may be marshalled.

Grouping refers to including assets and liabilities of similar nature under o common heading. For example different types of creditors can be placed in one heading. Similarly work in progress, raw material and finished goods can be placed.

Marshalling refers to arranging of assets and liabilities in order of liquidity and permanence.

In order of Liquidity: It shows how easily an asset can be converted into cash or a liability can be paid off. The asset examples arranged as follows:

1. Cash

2. Bank

3. Debtors

In order of permanence: In this system the most important asset or a liability gets the top position in balance sheet and remaining assets are arranged in reducing level of permanence: For e.g.

1. Debtors

2. Bank

3. Cash

Similarly, liabilities in order of permanence is as follows:

1.Capital

2. Long term loan

3. Creditors

Q2. What are financial statements? What information do they provide?

Statements that contain financial information about business which can satisfy the information requirements of internal and external users are known as financial statements. It serve as a source of financial information that caters to diverse information requirement of users. It is prepared with the purpose of representing a true and fair view of business.

To do so it requires the creation of three statements namely, trading and profit and loss account and balance sheet.

The financial statements related to gross/net profit or loss, the assets and liabilities. The users of information can be the following:

Current Owners: These internal users would like to know the profits in the previous accounting period and current position of the assets and liabilities.

Government: Government is an external user and want to know the financial position of a business so that stakeholder’s rights are protected.

Prospective Owner: These external users would like to know the past profits and financial position and also the future performance of the business to make an informed decision whether to invest in the business or not

Q3. What are closing entries? Give four examples of closing entries.

A journal entry that is made at the end of an accounting period that transfers balances from the temporary accounts to a permanent account is known as closing entries. Some examples are here as follows:

1. The purchases returns are closed by transferring the balance in purchases account. Following entries are made:

Purchases return A/c Dr

To Purchases A/c

2. Sales return account is closed by transfer of balance to sales account. Entries will be

Sales A/c Dr

To Sales return A/c

3. Purchases account closed by transferring to debit side of trading and P & L Account

Trading A/c Dr

To Purchases A/c

4. Sales account closed by transferring balance to credit side of trading and P & L account.

Sales A/c Dr.

To Trading A/c

Q5. From the following balances extracted from the books of M/s Ahuja and Nanda. Calculate the amount of:

(a) Cost of goods available for sale

(b) Cost of goods sold during the year

(c) Gross Profit

Opening stock 25,000

Credit purchases 7,50,000

Cash purchases 3,00,000

Credit sales 12,00,000

Cash sales 4,00,000

Wages 1,00,000

Salaries 1,40,000

Closing stock 30,000

Sales return 50,000

Purchases return 10,000

a) Cost of Goods Sold Available for Sales

Or

Cost of Goods Manufactured = Opening Stock + Net Purchases + Wages

= 25,000 + 10, 40,000 + 1, 00,000

= ₹ 11, 65,000

(b) Cost of Goods Sold = Opening Stock + Net Purchases + Wages – Closing Stock

= 25,000 + 10, 40,000 + 1, 00,000 – 30,000

= ₹ 11, 35,000

Or

Cost of Goods Sold = Net Sales – Gross Profit

= 15, 50,000 – 4, 15,000

= ₹ 11, 35,000

(c) Trading Account

Dr. Cr.

Particulars AmountParticularsAmount
Opening Stock
Purchases
Add: Credit Purchases7,50,000
Add: Cash Purchases 3,00,000
10,50,000
Less: Purchases
Return (10,000)
Wages
Gross Profit
25,000






10,40,000
1,00,000
4,15,000
Sales
Add: Credit Sales12,00,000
Add: Cash Sales 4,00,000
16,00,000
Less: Sales
Return (50,000)


Closing Stock





15,50,000


30,000
15,80,00015,80,000

Q6. From the following balances taken from the books of Simmi and Vimmi Ltd. for the year ending March 31, 2017, calculate the gross profit.

Closing stock 2,50,000

Net sales during the year 40,00,000

Net purchases during the year 15,00,000

Opening stock 15,00,000

Direct expenses 80,000

The gross profit is calculated below:

Trading Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Opening Stock15,00,000Net Sales40,00,000
Net Purchases15,00,000Closing Stock2,50,000
Direct Expenses80,000
Gross Profit11,70,000
42,50,00042,50,000

Q7. Calculate the amount of gross profit and operating profit on the basis of the following balances extracted from the books of M/s Rajiv and Sons for the year ended March 31, 2017.

Opening stock 50,000

Net sales 11,00,000

Net purchases 6,00,000

Direct expenses 60,000

Administration expenses 45,000

Selling and distribution expenses 65,000

Loss due to fire 20,000

Closing stock 70,000

The solution is as follows:

Trading Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Opening Stock50,000Net Sales11,00,000
Net Purchases6,00,000Closing Stock70,000
Direct Expenses60,000
Gross Profit4,60,000
11,70,00011,70,000
Operating Profit=Sales – (Opening Stock + Net Purchases + Direct Expenses + Administration Expenses +Selling and Distribution Expenses) + Closing Stock
 =11,00,000 – (50,000 + 6,00,000 + 60,000 + 45,000 + 65,000) + 70,000
 =₹ 3,50,000

Q8. The following are the extracts from the trial balance of M/s Bhola and Sons as on March 31, 2017

Account titleDebitCredit
Opening Stock2,00,000 
Purchases8,10,000 
Sales 10,10,000
 10,10,00010,10,000

(Only relevant items)

Closing Stock as on date was valued at ₹ 3, 00,000.

You are required to record the necessary journal entries and show how the above items will appear in the trading and profit and loss account and balance sheet of M/s Bhola and Sons.

Books of M/s Bhola and SonsJournal

DateParticularsL.F.Debit
Amount₹
Credit Amount ₹
2017
Mar.31
Trading A/c Dr
To Opening Stock A/c
To Purchases A/c
(Balances from Purchases Account and Stock Accounttransferred to Trading Account)


10,10,000







 

2,00,000
8,10,000




Mar.31Sales A/c Dr.
Closing Stock A/c Dr
To Trading A/c
(Balance from sales and closing stock transferred to Trading Account)
10,10,000
3,00,000


13,10,000
Mar.31Trading A/c Dr.
To Profit and Loss (Gross Profit) A/c
(Balance of Trading Account (gross profit) transferred to Profit and Loss Account)
3,00,000


3,00,000

Trading Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Opening Stock2,00,000Sales10,10,000
Purchases8,10,000Closing Stock3,00,000
Profit and Loss A/c – Gross Profit3,00,000
13,10,00013,10,000

Balance Sheet as on March 31, 2017

LiabilitiesAmountAssetsAmount
Closing Stock3,00,000

Q9. Prepare trading and profit and loss account and balance sheet, as on March 31, 2017:

Account TitleAmountAccount TitleAmount
Machinery27,000Capital60,000
Sundry debtors21,600Bills payable2,800
Drawings2,700Sundry creditors1,400
Purchases58,500Sales73,500
Wages15,000  
Sundry expenses600  
Rent and taxes1,350  
Carriage inwards450  
Bank4,500  
Openings stock6,000  

Closing stock, as on March 31, 2017 ₹ 22,400

Trading and profit and loss account and balance sheet is prepared as follows:

Trading Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Opening Stock6,000Sales73,500
Purchases58,500Closing Stock22,400
Wages15,000
Carriage Inwards450
Profit and Loss (Gross Profit)15,950
95,90095,900

Profit and Loss Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Sundry Expenses600Trading (Gross Profit)15,950
Rent and Taxes1,350
Net Profit14,000
15,95015,950

Balance Sheet as on March 31, 2017

LiabilitiesAmountAssetsAmount
Capital 60,000
Add: Net Profit 14,000
74,000
Less: Drawings 2,700

Sundry Creditors
Bills Payable

71,300


1,400
2,800
Fixed Assets 
Machinery
Current Assets 
Bank
Closing Stock
Sundry Debtors

27,000

4,500
22,400
21,600
75,50075,500

Q10. The following trial balance is extracted from the books of M/s Ram on March 31, 2017. You are required to prepare trading and profit and loss account and the balance sheet as on date:

Account titleAmountAccount titleAmount ₹
Debtors12,000Apprenticeship premium5,000
Purchases50,000Loan10,000
Coal, gas and water6,000Bank overdraft1,000
Factory wages11,000Sales80,000
Salaries9,000Creditors13,000
Rent4,000Capital20,000
Discount3,000  
Advertisement500  
Drawings1,000  
Loan6,000  
Petty cash500  
Sales return1,000  
Machinery5,000  
Land and building10,000  
Income tax100  
Furniture9,900  

Trading and profit and loss account and balance sheet is prepared as follows:

Trading Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Purchases50,000Sales 80,000
Less: Sales 1,000
Return
79,000
Coal, Gas and Water6,000
Factory Wages11,000
Profit and Loss (Gross Profit)12,000
79,00079,000

Profit and Loss Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Salaries9,000Trading (Gross Profit)12,000
Rent4,000Apprenticeship Premium5,000
Discount3,000
Advertisement500
Net Profit500
17,00017,000

Balance Sheet as on March 31, 2017

LiabilitiesAmountAssetsAmount
Capital 20,000
Add: Net Profit 500
20,500
Less: Drawings (1,000)
Less: Income Tax (100)

Loan (Taken)

Creditors
Bank Overdraft



19,400

10,000

13,000
1,000
Machinery
Land and Building

Furniture

Loan (Given)

Debtors

Petty Cash



5,000
10,000

9,900

6,000

12,000

500



43,40043,400

Q11. The following is the trial balance of Manju Chawla on March 31, 2017. You are required to prepare trading and profit and loss account and a balance sheet as on date:

Account titleDebit Amount ₹Credit Amount ₹
Opening stock10,000 
Purchases and sales40,00080,000
Returns200600
Productive wages6,000 
Dock and Clearing charges4,000 
Donation and charity600 
Delivery van expenses6,000 
Lighting500 
Sales tax collected 1,000
Bad debts600 
Misc. incomes 6,000
Rent from tenants 2,000
Royalty4,000 
Capital 40,000
Drawings2,000 
Debtors and Creditors6,0007,000
Cash3,000 
Investment6,000 
Patents4,000 
Land and Machinery43,000 

Closing stock ₹ 2,000.

Trading and profit and loss account and balance sheet is prepared as follows:

Trading Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Opening Stock10,000Sales 80,000
Less: Sales Returns (200)
79,800
Purchases 40,000
Less: Purchases (600)
Returns
39,400Closing Stock2,000
Productive Wages6,000
Dock and Clearing Charges4,000
Royalty4,000
Profit and Loss (Gross Profit)18,400
81,80081,800

Profit and Loss Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Donation and Charity600Trading (Gross Profit)18,400
Delivery Van Expenses6,000Misc. Incomes6,000
Lighting500Rent from Tenants2,000
Bad Debts600
Net Profit18,700
26,40026,400

Balance Sheet as on March 31, 2017

LiabilitiesAmountAssetsAmount
Capital 40,000
Add: Profit and
Loss (Net Profit) 18,700
58,700
Less: Drawings (2,000)
56,700Patents4,000
Sales Tax Collected1,000Land and Machinery43,000
Creditors7,000Investment6,000
Debtors6,700
Cash3,000
Sales Tax Collected1,000Closing Stock2,000
Creditors7,000
64,70064,700

Q12. Prepare trading and profit and loss account of M/s Sports Equipments for the year ended March 31, 2017 and balance sheet as on that date:

Account TitleDebit Amount
Credit Amount
Opening stock50,000 
Purchases and sales3,50,0004,21,000
Sales returns5,000 
Capital 3,00,000
Commission 4,000
Creditors 1,00,000
Bank overdraft 28,000
Cash in hand32,000 
Furniture1,28,000 
Debtors1,40,000 
Plants60,000 
Carriage on purchases12,000 
Wages8,000 
Rent15,000 
Bad debts7,000 
Drawings24,000 
Stationery6,000 
Travelling expenses2,000 
Insurance7,000 
Discount5,000 
Office expenses2,000 

Closing stock as on March 31, 2017 ₹ 2,500

Trading and profit and loss account and balance sheet is prepared below:

Trading Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Opening Stock50,000Sales 4,21,000
Less: Sales Return 5,000
4,16,000
Purchases3,50,000Closing Stock2,500
Carriage on Purchases12,000Profit and Loss (Gross Loss)1,500
Wages8,000Profit and Loss (Gross Loss)1,500
4,20,0004,20,000

Profit and Loss Account as on March 31, 2017

Dr. Cr.

ParticularsAmountParticularsAmount
Trading (Gross Loss)1,500Commission4,000
Rent15,000Net Loss41,500
Bad Debts7,000
Stationery6,000
Travelling Expenses2,000
Insurance7,000
Discount5,000
Office Expenses2,000
45,50045,500

Balance Sheet as on March 31, 2017

LiabilitiesAmountAssetsAmount₹
Capital 3,00,000
Less: Net Loss (41,500)
Less: Drawings (24,000)
2,34,500Plants60,000
Furniture1,28,000
Debtors1,40,000
Creditors1,00,000Closing Stock2,500
Bank Overdraft28,000Cash in Hand32,000
3,62,5003,62,500

Concepts covered in this chapter

  • Stakeholders and Their Information Requirements
  • Distinction between Capital and Revenue
  • Expenditure
  • Receipts
  • Importance of Distinction between Capital and Revenue
  • Financial Statements
  • Trading and Profit and Loss Account
  • Relevant Items in Trading and Profit and Loss Account
  • Closing Entries
1. Why do you prepare final accounts?

For knowing the exact financial position and nang of the concern, final accounts to be prepared

2. What is trading account?

Trading a/c is a financial statement for the purpose of finding out trading result or a gross profit or loss of a business concern for a particular period

3. What is balance sheet?

Balance sheet is prepared for the purpose of knowing financial position of a business in a given period. It contains assets and liabilities of a business.

ಇತರೆ ವಿಷಯಗಳು:

1st Puc All Subject Notes

ಪ್ರಥಮ ಪಿ.ಯು.ಸಿ ಕನ್ನಡ ಪಠ್ಯಪುಸ್ತಕ Pdf

First PUC All Textbooks Pdf

1 ರಿಂದ 12 ನೇ ತರಗತಿ ಎಲ್ಲಾ ನೋಟ್ಸ್

1 ರಿಂದ 12ನೇ ತರಗತಿ ಎಲ್ಲಾ ಪಠ್ಯಪುಸ್ತಕಗಳ Pdf

1 ರಿಂದ 9ನೇ ತರಗತಿ ಕಲಿಕಾ ಚೇತರಿಕೆ 

All Notes App

Leave a Reply

Your email address will not be published. Required fields are marked *