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Students Of CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship Important Notes

Students Of CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship Important Notes

CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship :  Cakart team members are collected some Best Important notes Of The Students Of CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship . Here we gave direct link pdf format. Download and read well.

Students Of CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship Important Notes

CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship : CBSE is a reputed educational board of India and it provides updated syllabus for different classes. Several proficient subject experts are associated with this board and based on current research; they evaluate the syllabus of each subject from time to time. Thus, they make students up-to-date with current information and also maintain its standard in all respects. All essential subjects including Math, Chemistry, Physics, Biology, History, Geography, English and other language subjects are included in the syllabus designed for different classes. CBSE syllabus is known for its standard educational pattern and comprehensive marking scheme. The most important thing is that each subject gets equal focus in the entire syllabus so that students can get adequate information on different subjects.

Students Of CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship Important Notes

CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship : The fundamentals of accounting and including it as an information system play and important role in this field of study. The important points and syllabus structure is given here.

The whole syllabus is divided into 3 parts, Part A- Financial accounting 1, Part B- Financial accounting 2 and Part C- Project work.

Part A has 2 units -Theoretical framework and accounting process. Part B has 3 units- Financial statements of sole proprietorship from complete and incomplete records, Financial statements of not for profit organizations and Computers in accounting.

Details of project work is added in this link. Theory contains 90 marks while project work is of 10 marks.

Students Of CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship Important Notes

CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship : Download CBSE class 11 Accountancy study material and notes  in PDF format. MyCBSEguide provides solved papers, board question papers, revision notes and NCERT solutions for CBSE class 11 Accountancy. The topics included are introduction to accounting, theory base of accounting, recording of transactions, preparation of Journal, ledger account, trial, bank reconciliation statement, depreciation, provisions and reserves, bill of exchange, rectification of error, financial statements of sole proprietorship, financial statements of non profit organisation, accounts from incomplete records, applications of computers in accounting.

Download here Complete details of CBSE class 11 Accountancy study material in PDF format

Part B: Financial Accounting – II (40 Marks)

Unit 3: Financial Statements of Sole Proprietorship: From Complete and Incomplete Records (40 Periods)

  • Financial statements: objective and importance.
  • Trading and profit and loss account: gross profit, operating profit and net profit.
  • Balance sheet: need, grouping, marshalling of assets and liabilities.
  • Adjustments in preparation of financial statements : with respect to closing stock, outstanding expenses, prepaid expenses, accrued income, income received in advance, depreciation, bad debts, provision for doubtful debts, provision for discount on debtors, abnormal loss, goods taken for personal use, goods distributed as free samples and manager’s commission.
  • Preparation of Trading and Profit and Loss account and Balance Sheet of sole proprietorship.
  • Incomplete records: uses and limitations.
  • Ascertainment of profit/loss by statement of affairs method.

Download here CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship Important Notes

Students Of CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship Important Notes

CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship : While preparing Final Acoount the items which are given inside the Trail Balance are written only once either in Trading Account or in the Balance Sheet.(Assuming that they have been already adjusted in the respective account). On the other hand, the items which are given outside the Trial Balance (known as adjustments) are to be written twice because the double entry in respect of all adjustments is to be completed in the final accounts itself).

Adjustment in Preparation of Financial Statement of Sole Proprietorship

There are a number of transaction related to expenses and incomes which are not entered in the books of accounts, have to be adjusted. Like expenses due but not paid, income receivable but not received, expenses paid in advance, income received in advance etc.

For adjustment entries, the general principle of double entry must be followed.

1. Closing Stock : Goods remained unsold at the end of year is called closing stock. It is values at cost or market value whichever is lower.

 Adjustment entry : Closing Stock A/c Dr.

To Trading A/c

(Being closing stock recorded in the books)

Accounting Treatment : (i) it will be recorded in Credit side of trading account.

(ii) It will be shown in the assets side of balance sheet.

If closing stock is given inside the Trial Balance, it will be shown only on the Asset the Asset side of the Balance Sheet.

2. Outstanding Expenses (unpaid exp) : The expenses whose benefit has been derived during the current year but payment is not made at the end of year are called outstanding expenses. e.g. outstanding salary, outstand ing wages etc.

(Expenses or portion or exp. due but not paid)
Adjustment entry : Concerned expenses A/c Dr.
To Outstanding Expenses A/c
(Being unpaid exp. recorded in the books)

The word expenses may be replaced by the name of exp. like salary, wages, rent etc.

Accounting Treatment : (i) outstanding expenses are shown as current liabilities inliabilities side of balance Sheet.

(ii) The amount actually paid for the concerned expenses will be increased by the outstanding expenses amount in the Dr. side of trading or profit loss A/c as per the case.

If outstanding expenses have been mentioned inside the Trial Balance, they will be shown on the liabilities side of Balance sheet only.

3. Prepaid expenses (Exp. paid in advance) : These are exepenses which have been paid in current year and benefit of it will be available in next accounting year also like prepaid insurance, prepaid rent.

Adjustment entry : Prepaid expenses A/c Dr.
To concerned expenses A/c
(Being exp. paid in advance recorded in the books)

The word expenses may be replaced by the name of exp. like salary, wages, rent etc.

Accounting Treatment : (i) Prepaid expenses are shown as current Assets in Assets side of balance sheet.

(ii) The amount actually paid for the concerned expenses will be reduced by the prepaid expenses amount in the Dr. side of trading or profit and loss A/c as per the case.

If prepaid expenses have been mentioned inside the Trial Balance, they will be shown on the Asset side only.

4. Accrued income or outstanding income / income receivable : Income which have been earned during the current accounting period but not received till the end of accounting period is called accrued income. e.g. interest on investment due but not yet received.

Adjustment entry : Accrued Income A/c Dr.
To Concerned Income A/c
(Being income accrued during the year)

The word income may be replaced by the name of income like commission, interest etc.

Accounting Treatment : (i) Accured income are shown as current Assets in Assets side of balance sheet.

(ii) The concerned income will be increased by the amount of accrued income amount in the credit side of Trading or Profit and loss Account. If Accrued Incomes have been mentioned inside the Trial Balance, they will be shown on the Asset side only.

5. Unearned income or income received in advance : The income or portion of income which is received during the current current accounting year but it has not been earned. so it is called income received in advance.

Adjustment entry : Concerned Income A/c Dr.
To income received in advance A/c →
(Being Income Received in Advance during the year)

The word income may be repalced by the name of income like commission interest, rent etc.

Accounting Treatment : (i) Income received in advance is a part of current liabilities and is to be shown in the liabilities side of balance sheet.

(ii) The concerned income will be reduced by the amount of income received in advance in the credit side of Trading or Profit and Loass Account. If unearned incomes have been mentioned inside the Trial Balance, they will be shown on the Liabilities side only.

6. Depreciation : Depreciation is the loss or fall in the value of fixed assets due to their constant use or expiry of time. Depreciation is charged at the end of accounting period.

It is a non cash expense.
Adjustment entry : Depreciation A/c Dr.
To concerned Fixed Assets A/c
(Being income accrued during the year)
Profit and Loss A/c Dr.
To Depreciation A/c
(Being the dep. transferred to P and L A/c)

Accounting Treatment : (i) The amount of depreciation will be debited to profit and loss account.

(ii) The amount of concerned assets will be reduced by the amount of Depreciation in the Assests side of Balance Sheet.

If mentioned inside the Trial Balance, it will appear on the Dr. side of Profit and Loss account only.

Students Of CBSE Class 11 Commerce Accountancy Financial Statements Of Sole Proprietorship Important Notes

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