CBSE Class 11 Accountancy Humanities Worksheet

HUMANITIES

1 MARK QUESTION

1 Give any two examples of current assets.

→ Debtors, Bills Receivables ,Stock , Prepaid Expenses

2 What is a capital?

→ Capital = Assets - Liabilities

3 What are Vouchers?

→ Voucher is an evidence of a business transaction.

4 What is the end product of financial accounting? 

→ Financial Statements (i.e) (1) Income Statement (2) Balance Sheet 

5 Expand GAAP.

→ Generally Accepted Accounting Principles.

6 What is an account?

→ Account is a summarized record of relevant transactions at one place relating to a particular head..

7 Write the rule of debiting and crediting the personal account.

→ Debit the Receiver, Credit the Giver.

8 What is accrued income?

→ Accrued incomes are those incomes which have been earned during the accounting period but have not been received till the end of accounting period.

9 What is the difference between loss and expense?

→ Loss is an expenditure without any benefit to the firm; whereas expense is incurred to result in some benefit

10 Give one word for the following:

→ a. Financial obligation of an enterprise other than owner’s funds. Liability

b. Amount charged for the goods sold or service rendered. Revenue /sales

11 What is meant by Accounting Cycle?

→ Accounting Cycle is a complete sequence beginning with the recording of the transaction and ending with the preparation of final accounts.

12 What are fictitious assets? Give one example.

→ Fictitious Assets are the assets which do not exist in real. No amount can be realized from these assets nor can any benefit be derived. Any one example:

1. Preliminary expenses

2. Discount of Issue of debentures/shares

3. Deferred revenue expenditure, etc.

13 Name the qualitative characteristic of accounting information which states that accounts of a firm must be prepared honestly and free from errors.

→ Reliability

14 Explain briefly why a business concern should follow consistency principle.

→ According to this principle, whatever accounting practices (whether logical or not) are selected for a given category of transactions, they should be followed on a horizontal basis from one accounting period to another to achieve compatibility. If this principle of consistency is not followed, the intra-firm comparison and pattern comparison can’t be made

15 State any two advantages of accounting standards.

→ Any two advantages of accounting standards are

a. uniform and standard presentation of accounts
b. removal of ambiguity
c. prevention of accounting scandals
d. globalization of business
e. internationalization of financial institutions

16 Which principle is also considered as an exemption to the full disclosure principle?

→ Materiality principle

17 Give any two examples of intangible fixed assets.

→ Goodwill
ii. Patents
iii. Copyrights
iv. Trade marks etc.

18 Which of the following generally shows a Debit balance in the ledger?

→ a. Machinery a/c c. Salary a/c
b. Creditors a/c d. Sales a/c

19 How is ignoring of price level changes a limitation to accounting?

→ Accounts are prepared on historical cost basis, therefore fixed assets are shown at cost of acquisition less depreciation and not at replacement value which is generally higher than book value. As a result, financial statements do not always reveal the correct position of a firm

20 Define ‘Relevance’ as a qualitative characteristic of accounting information.

→ Accounting information in order to be useful must have the quality of relevance by helping the users to evaluate past, present and future events

21 What is meant by Accrual Basis of accounting?

→ As per Accrual Basis of accounting, the legal right to receive income is recorded in the books of accounts rather than the actual receipt of cash in respect of income earned and the legal obligation to pay for expenses is recorded rather the actual payment of cash for expenses incurred.

22 How are customers interested in the accounting information of a business?

→ Customers are interested in the accounting information of a business to check whether they would continue to get the supply of products and parts.

23 Define the term ‘Revenue’.

→ Revenue is the gross inflow of cash and receivables on account of selling of goods or rendering of services or from letting other use firm’s resources.

24 According to which principle of accounting, ‘the practice of appending notes’ is followed.

→ Full Disclosure Principle

25 Recording of Leasehold Assets in the books of accounts’ – Name and explain the principle of accounting followed here.

→ Substance over Form principle. According to this principle, transactions should be recorded in accordance with their substance and financial reality and not merely with their legal form

26 Why do accounting principles emphasize the use of historical cost as a basis for measuring assets?

→ The use of historical cost provides verifiable and objective accounting information and it is also free from all personal bias.

27 What do you mean by Substance over form?

→ Substance over form means transactions and other events should be accounted for and presented in accordance with their substance and financial reality and not merely with their legal form

28 Define Financial accounting.

→ It is the process of identifying, measuring, recording, classifying, summarizing, analyzing, interpreting, and communicating the financial transactions and events. The purpose of this branch of accounting is to keep systematic records to ascertain financial performance and financial position and to communicate the accounting information to the interested parties.

29 List any four external users who are interested in accounting information.

→ i) Investors and potential investors
ii) Unions and employee groups
iii) Lenders and financial institutions
iv) Suppliers and creditors

30 If the accounting information is not clearly presented, which of the qualitative characteristic of accounting information is violated?

→ Understandability.

31 What is meant by expenditure?

→ Expenditure are the costs incurred in acquiring an asset or service in the form of outflow or depletion of assets or incurrence of liability. Cost is the measure of expenditure. It may be expired or unexpired. Eg. Advertising expenses

32 What is Matching Principle?

→ According to this principle, the expenses incurred in an accounting period should be matched with the revenues recognized in that period, ie, if revenue is recognised on all goods sold during the period, cost of those goods sold should also be charged to that period. It is wrong to recognize revenue on all sales but charge expenses only on such sales as are collected in cash till that period.

33 Define Creditor.

→ Creditor is person to whom business needs to pay.

34 What is meant by GAAP?

→ Generally, Accepted Accounting Principles may be defined as those rules of action or conduct, which are derived from experience and practice, and when they prove useful, they become accepted as principle of accounting.

35 Explain money measurement concept and its drawback.

→ Business transactions which are capable if being expressed in terms of money are included in the accounting records. Drawbacks: a) ignoring non monetary facts b) Ignore the changes in purchasing power of the monetary unit

36 What is an Accounting Cycle?

It is a complete sequence beginning with the recording of the transactions and ending with the preparation of the final accounts.

37 List two main objectives of Accounting.

→ Maintain systematic accounting records
Ascertain financial performance
Ascertain financial position
Communicate the information to the users. (any two) one mark each

38 The accountant of a firm does not want to give the previous years’ figures, a practice followed by the firm since long. Is it a good decision? If not, why?

→ No. Comparability of accounting information with that of previous year’s is a qualitative characteristic of financial information. Discontinuation of this practice will harm the good practice being followed.

39 How the accounting information useful to the following users:

→ a) Government b) creditors

a) Access the correct tax dues, to compile national income accounts.

b) Creditworthiness of the business, to restrict the flow of credit to an business

40 When should revenue generally be recognized?

→ Revenue is recognized at the point of sale or while rendering services.

41 Name any two advantages of setting Accounting Standards.

→ Reduction in variations, Disclosure beyond that required by Law, Facilities Comparison ( any two) one mark each

42 What is Matching Principle?

→ The expenses incurred in an accounting period should be matched with the revenues recognized in that period.

43 What is meant by drawing?

→ The amount drawn by the proprietor for his personal or domestic expenses

44 What is Neutrality of accounting information means?

→ The accounting information should be free from any bias.

45 Who is a debtor?

→ Those who owe money to the business are debtors.

46 Name any two fictitious assets

→ Preliminary Expenses, Discount on issue of Shares

47 Name the relevant accounting assumption: Appending Notes to the financial statements

→ Full Disclosure Principle

48 What do you mean by Consistency Principle?

→ The accounting principles and practices followed in recording and reporting should remain consistent over a period of time.

49 Revenue is reorganized at point of sale. Which principle is applied herein?

→ Revenue Recognition

50 Under which concept assets are recorded at cost ,even if the market price is more or less

→ Cost Concept

Please click on below link to download CBSE Class 11 Accountancy Humanities Worksheet