Class 11th CBSE Board Accountancy Question Paper with Answers

Section A: Multiple Choice Questions

1. Which of the following is not a principle of accounting?
a) Going Concern
b) Consistency
c) Materiality
d) None of the above

Answer: d) None of the above

2. What is the purpose of a trial balance?
a) To check the arithmetical accuracy of the accounts
b) To prepare financial statements
c) To identify errors and rectify them
d) All of the above

Answer: d) All of the above

3. What is the accounting equation?
a) Assets = Liabilities + Equity
b) Assets + Liabilities = Equity
c) Liabilities = Assets + Equity
d) Equity = Assets + Liabilities

Answer: a) Assets = Liabilities + Equity

4. What is the journal entry to record the purchase of goods on credit?
a) Debit Purchases, Credit Accounts Payable
b) Debit Accounts Payable, Credit Purchases
c) Debit Cash, Credit Purchases
d) Debit Purchases, Credit Cash

Answer: b) Debit Accounts Payable, Credit Purchases

Section B: Short Answer Questions

1. Explain the concept of depreciation.

Answer: Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It represents the reduction in the value of the asset due to wear and tear, obsolescence, or any other factor. Depreciation is necessary to match the cost of an asset with the revenue it generates over its useful life. It helps in determining the true profit or loss of an organization by spreading the cost of an asset over its entire life. Depreciation can be calculated using various methods such as straight-line method, declining balance method, and units of production method.

2. Discuss the importance of cash flow statement.

Answer: The cash flow statement is a financial statement that shows the inflows and outflows of cash and cash equivalents during a particular period. It is important because it provides vital information about an organization's ability to generate cash, its liquidity position, and its cash flow from operating, investing, and financing activities. The cash flow statement helps in assessing the cash generating capacity of a business, identifying cash flow problems, and making informed financial decisions. It also assists in evaluating the company's ability to meet its short-term and long-term obligations, and enables comparison with other organizations in the same industry.

Section C: Long Answer Questions

1. Explain the accounting cycle.

Answer: The accounting cycle refers to the sequence of steps or processes followed in recording, classifying, summarizing, and interpreting the financial transactions of an organization. It typically consists of the following steps:

a) Identification and analysis of transactions: The first step involves identifying and analyzing the financial transactions that have occurred during a specific period.

b) Recording in the journal: The transactions are recorded in the journal, which is a chronological record of all transactions in a standardized format.

c) Posting to the ledger: The journal entries are then transferred to the respective accounts in the ledger, which is a collection of all accounts maintained by an organization