NCERT Solutions for Class 11 Accountancy Chapter 11 - Accounts from Incomplete Records

*According to the latest update on the CBSE Syllabus 2023-24, this chapter has been removed.

NCERT Solutions are an extremely helpful study material while preparing for the CBSE Class 11 Accountancy examinations. NCERT Solutions contains answers collated by the subject matter experts.

NCERT Solution For Class 11 Commerce Accountancy Chapter 11 – Accounts from Incomplete Records furnishes us with all-inclusive information on all the concepts. As the students would have to learn the basic fundamentals about the subject of accountancy in Class 11, the NCERT Solutions for Class 11 is a comprehensive study material which explains the concepts in a great way.

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Short Questions for NCERT Accountancy Solutions Class 11 Chapter 11

1. State the meaning of incomplete records.

Accounting records prepared without following the double-entry bookkeeping system strictly are called incomplete records. In this type of recording mechanism, some of the transactions are recorded either by making one entry or no entry. In this way, it impacts assets, liabilities, revenue and expenses and hence are known as incomplete records.

2. What are the possible reasons for keeping incomplete records?

Incomplete records are kept due to the following reasons:

• Businesspersons lack the requisite accounting knowledge and are more inclined to follow this method.
• Recording transactions using single entry system tends to be less time consuming and requires less maintenance.
• It is cost effective way of keeping records as it doesn’t require a specialist.
• It gives the owner flexibility to record those transactions which are more important for business.

3. Distinguish between statement of affairs and balance sheet.

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

Following difficulties are faced by traders due to the incompleteness of accounting records:

1. It is not possible to determine the accuracy of accounts and correctly prepare trial balance as the records are not as per the double entry system.

2. It is difficult to make tax authorities believe the reliability of the income that is computed.

3. Determining and evaluating the financial results of a business will not be possible

4. True profit or loss cannot be determined as all transactions are not recorded.

5. Profitability, liquidity and solvency of a business cannot be determined. Hence, investors will be doubtful about investment.

6. Encourages fraud as there is no arithmetical accuracy in the records.

Long Questions for NCERT Accountancy Solutions Class 11 Chapter 11

1. 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?

It is a statement that shows assets and liabilities that are prepared at the beginning and end of one accounting period. Assets and liabilities are shown on two sides, similar to a balance sheet. However, the basic difference between the statement of affairs and the balance sheet is that the former is prepared from incomplete records while the latter is prepared from ledger entries. Capital is said to be the difference between the totals of assets and liabilities.

Capital will be shown at the beginning and end of the accounting period when a statement of affairs is prepared. Using this information, a statement of profit and loss is prepared to find out the profit or loss. Adjustments need to be made for withdrawals by the owner and for fresh capital introduced by owners during the period.

A business earns profit if the net results of calculation are positive and are said to make a loss if the results are negative. Thus, the profit and loss of owners can be determined using this process.

2. 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.

It is possible to prepare a profit and loss account and balance sheet from an incomplete book of accounts by a process known as the conversion method. In this method, the incomplete records get converted to double-entry records. It is easy to convert some of the incomplete entries, such as debtors, creditors, cash payments, cash sales and cash receipts, as they are easily available. However, there will be some transactions for which details are not available. Still, such details can be found using logic. Here are some transactions that are necessary for creating a complete record.

1. Opening capital

2. Credit Purchases

3. Credit sales

4. Bills Payable accepted

5. Opening Capital

6. Payment to creditors

In some cases, the payment is received from debtors and the amount paid to creditors, for such cases, it is essential to prepare a debtor or creditor account to determine the values first. The final accounts can be prepared after these accounts are prepared.

3. 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.

1. Opening capital and closing capital: By preparing the opening statement of affairs at the start of the accounting period, the opening capital value can be determined, while by preparing a closing statement of affairs, the value of closing capital can be determined.

* When the total of liabilities is more than the total of assets, capital is shown on the assets side and represents the debit balance.

When the total assets’ balance exceeds the total liabilities’ balance, capital is shown on the liabilities side.

2. Credit Sales and Credit Purchases: Credit sales are found to be missing from incomplete records. For evaluating it, there is a need to prepare a total debtors account. The total sales return, if there is any, must be deducted from the total debtors account. The credit sales is given by the balancing figure.

Similarly, to evaluate credit purchases, preparing a total creditor account is necessary. Total purchase returns should be deducted from the total creditors account. The balancing figure represents the credit purchase.

3. Payment to creditors and collection from debtors: For determining payment to creditors, preparing the total creditors account is required, by deducting total purchase returns, the balancing figure provides the payment to creditors while for determining collection from debtors, preparing total debtors account is necessary, by deducting total sales returns, the balancing figure provides the collection from debtors.

4. Closing balance of cash: To evaluate the closing balance of cash, preparing a cash book summary is necessary. The cash book summary includes all receipts from debit and all payments done during that period in the credit part, the balancing figure provides the balance of cash. The total creditor or total debtor accounts are required if the amount paid to creditors or received from debtors is not present.

Numerical Questions for NCERT Accountancy Solutions Class 11 Chapter 11

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

The solution is as follows:

2. Manveer started his business on April 01, 2016 with a capital of ₹ 4, 50,000. On March 31, 2017 his position was as under:

He owned ₹ 45,000 from his friend Susheel on that date. He withdrew ₹ 8,000 per month for his household purposes. Ascertain his profit or loss for this year ended March 31, 2017.

The solution is as follows:

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

The solution is as follows:

4. From the following information, calculate capital at the beginning:

The solution is as follows:

5. Following information is given below: calculate the closing capital

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

The solution is as follows:

Capital on March 31, 2017 (Closing) is ₹ 20,000

6. Mrs. Anu started firm with a capital of ₹ 4, 00,000 on 1st October 2016. She borrowed from her friends a sum of ₹ 1, 00,000 @ 10% per annum (interest paid) for business and brought a further amount to capital ₹ 75,000 on March. 31, 2017, her position was:

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

The solution is as follows:

7. 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.

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

The solution is as follows:

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

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

The solution is as follows:

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

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

The solution is as follows:

The profit earned is ₹37,500.

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

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

Working Note:

11. Mr. Girdhari Lal does not keep full double entry records. His balance as on April 01, 2016 is as.

His position at the end of the year is:

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

The solution is as follows:

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

During the year Mr. Ashok sold his private car for ₹ 50,000 and invested this amount into the business. He withdrew from the business ₹ 1,500 per month up to October 31, 2016 and thereafter ₹ 4,500 per month as drawings. You are required to prepare the statement of profit or loss and statement of affair as on March 31, 2017.

The solution is as follows:

The loss during the year 2017 is ₹ 60,900

13. Krishna Kulkarni has not kept proper books of accounts prepare the statement of profit or loss for the year ending December 31, 2011 from the following information:

The following adjustments were made:

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

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

(c) Outstanding Rent ₹ 6,000.

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

The solution is as follows:

14. 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 March 31, 2017

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

The solution is as follows:

Profit earned during year 2017 is ₹1, 71,400

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

Amount paid to Creditors is ₹ 4, 40,175.

16. Find out the credit purchases from the following:

Therefore the Credit Purchases are amounting to ₹ 2, 56,350

17. From the following information calculate total purchases.

18. The following information is given

Calculate credit purchases during the year

The solution is as follows:

Note: The return inwards and discount allowed belong to the Debtors account. So, it is not considered in the creditors account.

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

₹

Bills payable as on April 01, 2016 1, 80,000

Bills payable as on March 31, 2017 2, 20,000

Bills payable dishonoured during the year 28,000

Bills payable honoured during the year 50,000

The solution is as follows:

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

The solution is as follows:

Therefore the Bill Payable matured during the year is ₹ 38,000.

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

The solution is as follows:

Bills payable discharged is ₹ 88,000 and the opening balance of creditors is ₹ 79,000.

22. Calculate the amount of bills receivable during the year.

The solution is as follows:

Therefore, the Bills receivable received from Debtors ₹ 1, 60,000.

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

The solution is as follows:

So the Bills Receivable dishonoured is ₹ 11,500.

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

The solution is as follows:

Credit sales is ₹ 2, 82,300

25. From the following information, prepare the bills receivable account and total debtors account for the year ended March 31, 2017.

The solution is as follows:

The missing figure in the bills receivable account–B/R received from debtors’ is ₹ 1, 61,000 and the missing figure in the debtors account–closing balance is ₹ 3, 01,000.

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

The solution is as follows:

As per the solution, the missing figure in the bills receivable account is B/R dishonoured of ₹ 40,000. The missing figure in the debtors account is the credit sales of ₹ 6, 21,000.

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

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

₹ 85,000 was for cash sales.

The solution is as follows:

Opening balance of debtors is ₹ 54,000 and the closing balance of creditors is ₹ 1, 78,500.

Working Notes:

Total Sales = Cash Sales + Credit Sales

Total Sales = Cost of Goods Sold + Gross Profit

Let us assume the sales to be 100%

Note: It is assumed that all purchases are made on credit.

28. Mrs. Bhavana keeps his books by Single Entry System. You are required to prepare final accounts of her business for the year ended March 31, 2017. Her records relating to cash receipts and cash payments for the above period showed the following particulars:

The following information is also available:

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%.

The solution is as follows:

Plant of ₹ 1, 00,000 has been taken in to the statement of affairs on April 01, 2016, instead of ₹ 10, 00,000.

Concepts covered in this chapter –

• Meaning of incomplete records
• Features of incomplete records
• Reasons for incompleteness and its limitations
• Ascertainment of profit and loss
• Preparing the statement of affairs
• Difference between the statement of affairs and a balance sheet
• Preparing trading and profit and loss account and the balance sheet
• Ascertaining credit purchases
• Ascertainment of credit sales
• Ascertainment of missing information through a summary of the cost

Conclusion

NCERT Solutions for Class 11 Accountancy Chapter 11 provide a wide range of illustrative examples, which assist the students in comprehending and learning quickly. The above-mentioned are the illustrations for the Class 11 CBSE syllabus. For more solutions and study materials of NCERT solutions for Class 11 Accountancy, visit BYJU’S or download the app for more information.