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ACCOUNTANCY(Including Project Work)
Class XI
ACCOUNTANCY(Including Project Work)
CLASS XI
Strictly according to new syllabus prescribed by
Central Board of Secondary Education (CBSE)and
State Boards of Chhattisgarh, Haryana, Bihar, Jharkhand,Kerala, Mizoram, Meghalaya, Punjab, Uttarakhand and
other States following NCERT curriculum
By
ABHISHEK SINGHM.Phil, MBA(F), M.Com, B.Com(H), SAPM
LAXMI PUBLICATIONS (P) LTD(An ISO 9001:2008 Company)
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ACCOUNTANCY–XI
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CONTENTS
Preface (ix)
Acknowledgements (x)
Units Pages
1. Introduction and Theory Basis of Accounting ... 1.1–1.43• Summary ... 1.1• Frequently Asked Questions ... 1.2• Theoretical Questions ... 1.7• NCERT Questions (Solved) ... 1.13• Value Based Questions ... 1.15• Accounting Overview ... 1.16
I. Fundamental of Accounting ... 1.17II. Principles of Accounting ... 1.24
III. Accounting Policies ... 1.29IV. Basis of Accounting ... 1.30V. System of Accounting ... 1.30
VI. Accounting Standards ... 1.31VII. Understanding of IFRS ... 1.34
• Foundation Examination Questions (CA-CPT, CMA, CS) ... 1.352. Accounting Equations and Vouchers ... 2.1–2.45
• Summary ... 2.1• Frequently Asked Questions ... 2.2• Theoretical Questions ... 2.5• Viva Questions ... 2.7• Value Based Questions ... 2.8• Conceptual Questions (Solved) ... 2.8• NCERT Questions (Solved) ... 2.27• Practice Questions (Unsolved) ... 2.35• Foundation Examination Questions (CA-CPT, CMA, CS) ... 2.42
3. Journal and Ledger ... 3.1–3.67• Summary ... 3.1• Frequently Asked Questions ... 3.2• Theoretical Questions ... 3.4• Rules of Journal, Ledger and Trial Balance ... 3.8• Viva Questions ... 3.10• Value Based Questions ... 3.10• Conceptual Questions (Solved) ... 3.11
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• NCERT Questions (Solved) ... 3.41• Practice Questions (Unsolved) ... 3.56• Foundation Examination Questions (CA-CPT, CMA, CS) ... 3.66
4. Cash Book and Other Subsidiary Books ... 4.1–4.60• Summary ... 4.1• Frequently Asked Questions ... 4.2• Theoretical Questions ... 4.4• Viva Questions ... 4.6• Value Based Questions ... 4.7• Proforma of Various Accounts ... 4.7• Conceptual Questions (Solved) ... 4.8• NCERT Questions (Solved) ... 4.28• Practice Questions (Unsolved) ... 4.38• Foundation Examination Questions (CA-CPT, CMA, CS) ... 4.56
5. Bank Reconciliation Statement ... 5.1–5.53• Summary ... 5.1• Frequently Asked Questions ... 5.2• Theoretical Questions ... 5.5• Viva Questions ... 5.7• Value Based Questions ... 5.7• Conceptual Questions (Solved) ... 5.10• NCERT Questions (Solved) ... 5.29• Practice Questions (Unsolved) ... 5.36• Foundation Examination Questions (CA-CPT, CMA, CS) ... 5.49
6. Rectification of Errors ... 6.1–6.56• Summary ... 6.1• Frequently Asked Questions ... 6.2• Theoretical Questions ... 6.4• Viva Questions ... 6.6• Value Based Questions ... 6.7• Conceptual Questions (Solved) ... 6.8• NCERT Questions (Solved) ... 6.31• Practice Questions (Unsolved) ... 6.43• Foundation Examination Questions (CA-CPT, CMA, CS) ... 6.53
7. Depreciation, Provisions and Reserves ... 7.1–7.60• Summary ... 7.1• Frequently Asked Questions ... 7.2• Theoretical Questions ... 7.4• Viva Questions ... 7.9• Value Based Questions ... 7.9• Accounting Entries ... 7.10• Conceptual Questions (Solved) ... 7.11
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• NCERT Questions (Solved) ... 7.31• Practice Questions (Unsolved) ... 7.46• Foundation Examination Questions (CA-CPT, CMA, CS) ... 7.55
8. Bills of Exchange ... 8.1–8.72• Summary ... 8.1• Frequently Asked Questions ... 8.2• Theoretical Questions ... 8.6• Viva Questions ... 8.11• Value Based Questions ... 8.12• Conceptual Questions (Solved) ... 8.12• NCERT Questions (Solved) ... 8.40• Practice Questions (Unsolved) ... 8.60• Foundation Examination Questions (CA-CPT, CMA, CS) ... 8.69
9. Financial Statement of Sole Proprietorship ... 9.1–9.118• Summary ... 9.1• Frequently Asked Questions ... 9.2• Theoretical Questions ... 9.6• Viva Questions ... 9.12• Value Based Questions ... 9.13• Proforma Under Financial Statement of Sole Proprietor ... 9.14• Adjustments and Treatments ... 9.16• Conceptual Questions (Solved) ... 9.37• NCERT Questions (Solved) ... 9.65• Practice Questions (Unsolved) ... 9.90• Foundation Examination Questions (CA-CPT, CMA, CS) ... 9.114
10. Accounting from Incomplete Records ... 10.1–10.43• Summary ... 10.1• Frequently Asked Questions ... 10.2• Theoretical Questions ... 10.3• Viva Questions ... 10.7• Value Based Questions ... 10.8• Proforma of Various Accounts Under Incomplete Records ... 10.8
1. Statement of Affairs ... 10.82. Conversion Method ... 10.9
• Conceptual Questions (Solved) ... 10.12• NCERT Questions (Solved) ... 10.24• Practice Questions (Unsolved) ... 10.33• Foundation Examination Questions (CA-CPT, CMA, CS) ... 10.41
11. Not-for-Profit Organization ... 11.1–11.81• Summary ... 11.1• Frequently Asked Questions ... 11.2• Theoretical Questions ... 11.5
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• Viva Questions ... 11.9• Value Based Questions ... 11.9• Proforma of Accounts ... 11.10• Adjustments and Treatments ... 11.12• Conceptual Questions (Solved) ... 11.18• NCERT Questions (Solved) ... 11.47• Practice Questions (Unsolved) ... 11.64• Foundation Examination Questions (CA-CPT, CMA, CS) ... 11.80
12. Computerized System of Accounting ... 12.1–12.29• Summary ... 12.1• Frequently Asked Questions ... 12.2• Theoretical Questions ... 12.7• NCERT Questions (Solved) ... 12.22
Project Work ... 1–18
Glossary ... 1–5
Sample Question Papers ... 1–8
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PREFACE
Accountancy has been thoroughly revised as per the latest CBSE syllabus andguidelines issued on the subject. As Accountancy curriculum has undergone various types ofchanges from time to time to integrate itself with the global accounting norms. This bringsnew challenges for the students to prepare themselves to have a strong base for advancedlearning of the subject.
Accountancy is based on functional approach of the subject and covers all theimportant aspects, which serves as a foundation for the Class 11 students. In order to havemore clarity in accountancy and to understand the complex transactions, it will only be pos-sible if an individual has a firm theoretical and practical understanding of the subject. Thisbook will serve the purpose and help him to score high in their school exam as well as inprofessional courses exams (like CA-CPT, CMA, CS).Salient Features of the Book
• Summary of each topic has been mentioned in beginning to provide topic overview.• Frequently Asked Questions and Theoretical Questions are arranged in chronological
order for student to grip on theoretical concepts of the relevant topic.• Viva Voce and Value Based Questions have been formulated for each chapter according
to the latest guidelines issued by CBSE Board.• Conceptual Questions, NCERT Questions and Practice Questions are arranged in
chronological order to help the students for better understanding.• Inclusive of Multiple Choice Questions for the students who wish to pursue Professional
Courses (like CA-CPT, CMA, CS).• Sample Test Papers and Glossary at the end of the book, to grip the accounting
terminology.• Relevant Accounting Standards have been discussed wherever students need to be
made aware of the regulatory framework affecting the accounting process.• Logical and effective presentation of topics creates a lot of interest while reading the
book and makes it easy to understand even the complex topics.Although I have taken care and laid down all efforts to remove errors, any discrepancy
which might have crept in, yet criticism or suggestions are always solicited. Thanking you inanticipation for your cooperation and I would also like to seek the valuable suggestions fromfaculty members so that the book could be improved further.
Outstanding people have one thing in common; an absolute sense of mission.Wishing for your success…..
—AUTHOR
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ACKNOWLEDGEMENTS
The author takes the opportunity to thank gratefully the following learned andexperienced teachers for sending suggestions and compliments for this book. It is our firmconviction that they will continue this process of sending their valuable suggestions in futurealso.
Mrs. Poornima Narayan (Principal), Cambridge School, Sriniwas Puri, Delhi.Mr. P.S. Laxmi Naraynan (Head of Department of Commerce), Cambridge School,Sriniwas Puri, Delhi.Dr. Dinesh Madan, Founder and General Secretary, Commerce Teachers’ Foundation(Head of Department of Commerce), Navyug School, Lodhi Road, New Delhi.Mr. S.K Taneja, President, Commerce Teachers’ Foundation.Mrs. Kiran Agarwal (Head of Department of Commerce), Ramjas Anand Parvat, Delhi.Mrs. Vaishali Dudeja (Head of Department of Commerce), Rawal Public School.Ms. Sudesh Suryavanshi (Head of Department of Commerce), Modern School VasantVihar, Delhi.Dr. Praveen Kumar Taneja (Head of Department of Commerce), Indraprastha Interna-tional School.Mrs. Jyotsna Tyagi (Lecturer Commerce), Ahlcon Public School.Mr. Sudhir Sapra (Design Lecturer Commerce), Sarvodaya Co Ed Sr. Secondary School,Jaidev Park, Delhi.Mrs. Vandana Lal (PGT Commerce), Maharaja Agarsen Public School, Ashok Vihar,Delhi.Mr. Inderjeet Singh Punjwaria (PGT Commerce), Dr. Radhakrishanan InternationalSchool, Delhi.Mr. Gaurav Palia (PGT Commerce), DAV Centenary Public School, Paschim Enclave.Mr. Himanshu Saxena (PGT Commerce), Dharam Public School, Gr. Noida.Mr. R.K. Mahajan (PGT Commerce), ApeeJay School, Saket, Delhi.Mrs. Poornima Khanna (PGT Commerce), Kendriya Vidyalaya, Janakpuri, Delhi.Mr. Hitendra Virani (PGT Commerce), Rajkiya Pratibha Vikas Vidyalaya, Delhi.Mr. Alok Bhaskar (PGT Commerce), Amity International School, Noida.Mr. C.M. Jain (PGT Commerce), N.K Bagrodia Public School.Mrs. Shalini Arora(PGT Commerce), G.L.T Saraswati Bal Mandir, Nehru Nagar, Delhi.Mrs. Rachna Grover (PGT Commerce), Saraswati Bal Mandir, Mehrauli, New Delhi.Mrs. Manisha Bajpai (PGT Commerce), St. Mary Senior Secondary School, PaschimVihar, Delhi.
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Mr. Brijesh Singh (PGT Commerce), Sardarni Khalsa School, Delhi.Mrs. Sheetal Khanna (PGT Commerce), Saraswati Bal Mandir, Mehrauli, New Delhi.Mrs. Seema Chakraborty (PGT Commerce), GHPS Hemkunt Colony, G.K. I.
I express my special thanks to Mr. Chandan Agarwal (Director, Edu-Comp LearningHour), for providing V-SAT platform for Accountancy, Mr. Ajay Lal (Faith Academy School-Prasad Nagar, Delhi), Mrs. Shikha Gupta who has been my source of inspiration.
I am thankful to my family and my brother CA Devesh Vaish for having extendedtheir fullest co-operation in completing the task in time.
—AUTHOR
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SYLLABUS
CLASS XI
One Paper 3 hours Theory: 90 Marks
Units Periods Marks
Part A: Financial Accounting-I
Unit-1: Theoretical Framework 25 15
Unit-2: Accounting Process and Special Accounting Treatment 95 35
120 50
Part B: Financial Accounting-II
Unit-3: Financial Statements of Sole Proprietorship from 40 15
Complete and Incomplete Records
Unit-4: Financial Statements of Not-for-Profit Organisations 30 15
Unit-5: Computers in Accounting 20 10
90 40
Part C: Project Work 30 10
Part A: Financial Accounting-I (50 Marks)
Unit 1 : Theoretical Framework (Periods 25)
Introduction to Accounting (Periods 11)
Accounting—Objectives, Advantages and Limitations, Types of Accounting Information;Users of Accounting Information and their Needs.Basic Accounting Terms—Business Transaction, Account, Capital, Drawings, Liability(Non-current and Current); Asset (Non-current; Fixed Assets: Tangible & IntangibleAssets and Current Assets): Receipts (Capital & Revenue), Expenditure (Capital,Revenue & Deferred), Expense, Income, Profits, Gains and Losses, Purchases, PurchasesReturns, Sales, Sales Returns, Stock, Trade Receivables (Debtors and Bills Receivable),Trade Payables (Creditors and Bills Payable), Goods, Cost, Vouchers, Discount—Tradeand Cash.
Theory Base of Accounting (Periods 14)
Fundamental Accounting Assumptions: Going Concern, Consistency, and Accrual.Accounting Principles: Accounting Entity, Money Measurement, Accounting Period, FullDisclosure, Materiality, Prudence, Cost Concept, Matching Concept and Dual Aspect.
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Bases of Accounting—Cash Basis and Accrual Basis.Accounting Standards and IFRS (International Financial Reporting Standards): Conceptand Objectives.
Unit 2: Accounting Process and Special Accounting Treatment (Periods 95)
Recording of Transactions (Periods 23)Accounting Equation: Analysis of Transactions using Accounting Equation.Rules of Debit and Credit: For Assets, Liabilities, Capital, Revenue and Expenses.Origin of Transactions—Source Documents (Invoice, Cash Memo, Pay-in-Slip, Cheque),Preparation of Vouchers—Cash (Debit & Credit) and Non-Cash (Transfer).Books of Original Entry: Format and Recording—Journal.Cash Book: Simple Cash Book, Cash Book with Discount Column and Cash Book withBank and Discount Column, Petty Cash Book.Other Books: Purchases Book, Sales Book, Purchases Returns Book, Sales Returns Bookand Journal Proper.
Preparation of Bank Reconciliation Statement, Ledger and Trial Balance
(Periods 23)Bank Reconciliation Statement: Calculating Bank Balance at an Accounting Date: Needand Preparation. Corrected Cash Book Balance.Ledger—Format, Posting from Journal, Cash Book and Other Special Purpose Books,Balancing of Accounts.Trial Balance: Objectives and Preparation.(Scope: Trial Balance with Balance Method only)
Depreciation, Provisions and Reserves (Periods 16)Depreciation: Concept, Need and Factors Affecting Depreciation; Methods ofComputation of Depreciation: Straight Line Method, Written Down Value Method(Excluding Change in Method).Accounting Treatment of Depreciation: By Changing to Asset Account, By CreatingProvision for Depreciation/Accumulated Depreciation Account, Treatment of Disposalof Asset.Provisions and Reserves: Concept, Objectives and Difference between Provisions andReserves; Types of Reserves—Revenue Reserve, Capital Reserve, General Reserve andSpecific Reserves.
Accounting for Bills of Exchange (Periods 16)Bills of Exchange and Promissory Note: Definition, Features, Parties, Specimen andDistinction.Important Terms: Term of Bill, Due Date, Days of Grace, Date of Maturity, Discountingof Bill, Endorsement of Bill, Bill Sent for Collection, Dishonour of Bill, Noting of Bill,Retirement and Renewal of a Bill.Accounting Treatment of Bill Transactions.
Rectification of Errors (Periods 17)Errors: Types—Errors of Omission, Commission, Principles, and Compensating; TheirEffect on Trial Balance.Detection and Rectification of Errors; Preparation of Suspense Account.
Golden Accountancy Class XI (NewEdition)
Publisher : Laxmi Publications ISBN : 9789351381570 Author : Abhishek Singh
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