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Accounting Terms | Accountancy Class 11 - Commerce PDF Download
Mr. Monu began business for dealing with electronic goods with Rs. 10,00,000 as a primary expense. He paid an amount Rs. 5,00,000 for the purchase of electronic goods, Rs. 1,00,000 for Refrigerator and Rs. 1,00,000 for Computer and the remaining amount was deposited to the bank. Monu sold some of the Fan which amounted Rs. 4,00,000 for cash and some electronic goods for Rs. 2,00,000 on credit to Mr. Sam. Accordingly, he purchased some laptop of Rs 3,00,000 from Mr. Nayan. In the second week, a fire broke out in his office and stock of goods worth Rs, 2,00,000 was destroyed. Expenses paid in the same month was Rs.20,000. Mr. Monu debited Rs. 50,000 from his trading for his domestic use.
From the above, answer the following:
Q1. What is the total expense of money with which Mr. Monu began the business?
Ans: Mr. Monu began his electronic goods business with a sum of Rs. 10,00,000.
Q2. What are the fixed assets that Mr. Monu bought?
Ans: The fixed assets that Monu bought are Refrigerator and Computer.
Therefore, total assets he bought: Refrigerator + Computer = Rs. 1,00,000+ 1,00,000= Rs. 2,00,000.
Q3. What is the cost of electronic goods he purchased?
Ans: The total number of goods he purchased is Purchase of electronic goods + Purchase of Laptop = 5,00,000 + 3,00,000 = 8,00,000.
Q4. Who is the creditor? What amount is payable to him?
Ans: Mr. Sam is the creditor. The total of Rs. 2,00,000 is payable to him.
Q5. Who is the debtor? What amount is receivable to him?
Ans: Mr. Nayan is the debtor.
To total amount of Rs. 3,00,000 is receivable from him.
Q6. What is Monu’s total amount of expenses?
Ans: The total amount of expenses spend by Monu is Rs. 20,000
Q7. What is Monu’s total drawing amount?
Ans: The total drawing made by Monu is Rs. 50,000
Note: As per this question the total amount of expenses is Rs. 20,000.
However, according to the solution the total amount of expenses will be = Rs. 8,00,000 + Rs. 20,000 = 8,20,000/-
The document Accounting Terms | Accountancy Class 11 - Commerce is a part of the Commerce Course Accountancy Class 11.
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FAQs on Accounting Terms - Accountancy Class 11 - Commerce
| 1. What are the primary financial statements used in accounting? |  |
Ans. The primary financial statements in accounting are the balance sheet, income statement, and cash flow statement. The balance sheet provides a snapshot of a company’s assets, liabilities, and equity at a specific point in time. The income statement summarizes revenues and expenses over a period, indicating how much profit or loss was made. The cash flow statement shows the inflows and outflows of cash, highlighting how well a company manages its cash position during a specific period.
| 2. What is the difference between accounts payable and accounts receivable? | |
Ans. Accounts payable refers to the amounts a company owes to its suppliers for goods and services purchased on credit. It represents a liability on the balance sheet. Conversely, accounts receivable is the amount owed to a company by its customers for goods and services delivered but not yet paid for. This represents an asset on the balance sheet. Essentially, accounts payable is what a company needs to pay, while accounts receivable is what a company expects to receive.
| 3. How does the accrual basis of accounting differ from the cash basis? | |
Ans. The accrual basis of accounting recognizes revenue and expenses when they are incurred, regardless of when cash is exchanged. This means that income is recorded when earned, and expenses are recorded when incurred. The cash basis of accounting, on the other hand, only recognizes revenue and expenses when cash is actually received or paid. The accrual basis provides a more accurate picture of a company’s financial position and performance over time.
| 4. What are the key components of a balance sheet? | |
Ans. The key components of a balance sheet include assets, liabilities, and equity. Assets are resources owned by the company, which can be current (like cash and inventory) or non-current (like property and equipment). Liabilities are obligations the company owes to external parties, which can also be classified as current (due within one year) or long-term (due after one year). Equity represents the owner’s interest in the company, calculated as total assets minus total liabilities.
| 5. What is the significance of the accounting equation? | |
Ans. The accounting equation is fundamental to the double-entry bookkeeping system and states that Assets = Liabilities + Equity. This equation reflects the relationship between what a company owns (assets), what it owes (liabilities), and the residual interest of the owners (equity). It ensures that the balance sheet remains balanced, as every financial transaction affects at least two accounts, maintaining the integrity of the financial records.
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Sep 30, 2025
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