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Karnataka Class 11 Commerce Accountancy NCERT Solution  For 2017 Exams

Karnataka Class 11 Commerce Accountancy NCERT Solution  : The Bombay legislature of the erstwhile Bombay Presidency established Karnatak University through the Karnatak University Act 1949. It became a statutory University on 1st March 1950. The jurisdiction of the University covers Dharwad. Gadag, Haveri and Uttar Kannada districts. It has several Post Graduate centres. The University (888 acres) is offering courses in the faculties of Arts, Commerce, Education, Law, Management, Science and Technology and Social Sciences. Symbolic of the University’s vision and mission the emblem of the University consists of papal tree at the centre, an open book. Figures of a bull, a rising sun and the legend ‘Arive Guru’ i.e., Wisdom is Guru, implying that both wisdom and knowledge should be all pervading like the ramifying papal tree and light up the world with knowledge and eradicate illiteracy.

Karnataka Class 11 Commerce Accountancy NCERT Solution  For 2017 Exams

Karnataka Class 11 Commerce Accountancy NCERT Solution  : Here we provides complete details about Karnataka Class 11 Commerce Accountancy NCERT Solution For 2017 Exams and other Karnataka  Class 12 Commerce Accountancy important notes in pdf format. Here we provide direct download links for Karnataka Class 11 Commerce Accountancy NCERT Solution For 2017 Exams notes in pdf format. Download these Karnataka Class 11 Commerce Accountancy NCERT Solution in pdf format and read well.

Karnataka Class 11 Commerce Accountancy NCERT Solution  For 2017 Exams

Important Note – Preparing for XI & XII Commerce?
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better.
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Karnataka Class 11 Commerce Accountancy NCERT Solution  : Accounts is a demanding subject of Commerce stream. It deals with the income, expenses, assets and other relevant things. However, it is appreciated in the sectors of finance and banking. It has been observed that most students are interested to learn this subject as it provides good job opportunities. Some important areas of accounting career are budget analysis, audit, tax, management accounting, and others. With thorough knowledge in Accounts, students can apply for the jobs in the government as well as corporate sectors. Additionally, they can work independently.

Karnataka Class 11 Commerce Accountancy NCERT Solution  For 2017 Exams

Karnataka Class 11 Commerce Accountancy NCERT Solution  :  NCERT Solutions for Class 11 Accountancy

class 11 commerce ncert solutions:-Accountancy : Financial Accounting Part-1

Karnataka Class 11 Commerce Accountancy NCERT Solution  : 

Q1 :  Define accounting.

Answer :Accounting is a process of identifying the events of financial nature, recording them in Journal, classifying in their respective ledgers, summarising them in Profit and Loss Account and Balance Sheet and communicating the results to the users of such information, viz. owner/s, government, creditors, investors etc.

According to the American Institute of Certified Accountants, 1941, “Accounting is an art of recording, classifying and summarising in a significant manner and in terms of money transactions and events that are, in part at least, of a financial character and interpreting the results thereof.”

Karnataka Class 11 Commerce Accountancy NCERT Solution  : 

Q2 :  State what is end product of financial accounting?

Answer :

class 11 commerce ncert solutions

class 11 commerce ncert solutions

  1. Income statements (Trading and/or Profit and Loss Account)- An income statement that includes Trading and Profit and Loss Account, ascertains the financial results of a business in terms of gross (or net) profit or loss.
  1. Balance Sheet- It depicts the true financial positions of a business that provides required information like assets and liabilities of a business firm, to the users of accounting information like owners, creditors, investors, government, etc.

Q3 :  Why is it necessary for accountants to assume that business entity will remain a going concern?

Answer : Going Concern Concept assumes that the business entity will continue its operation for an indefinite period of time. It is necessary to assume so, as it helps to bifurcate revenue expenditure (i.e. expenditure related to current year), and capital expenditure (i.e. expenditure whose benefits accrue over a period of time). For example, a machinery that costs Rs 1,00,000, having an expected life of 10 years, will be treated as a capital expenditure, as its benefit can be availed for more than one year; whereas, the per year depreciation of the machinery, say Rs 10,000, will be regarded as a revenue expenditure.

Q4 :  When should revenue be recognised? Are there exceptions to the general rule?

Answer : Revenue should be recognised when sales take place either in cash or credit and/or right to receive income from any source is established. Revenue is not recognised, in case, if the income or payment is received in advance or the payment is actually received from the debtors. In a nutshell, revenue will be recognised when the right to receive income is established. For example, Mr. A sold goods in January and received payment in February; then revenue is considered to be recognised in the month of January and not in February. However, if Mr A received cash in advance, i.e. in December and goods are sold in January, then the revenue is recognised in January and not in December.

The exceptions to this rule are given below.

1) Hire purchase- When goods are sold on hire-purchase system , the amount received in instalments is treated as revenue.

2) Long term construction contract- The long term projects like construction of dams, highways, etc. have long gestation period. Income is recognised on proportionate basis of work certified and not on the completion of contract.

Karnataka Class 11 Commerce Accountancy NCERT Solution  For 2017 Exams

Karnataka Class 11 Commerce Accountancy NCERT Solution  : Karnataka  class 11 commerce accountancy study material are available here for free. The solutions and answers provided are easy to understand. We understand the pressure you guys have about your studies. Therefore, we here at cakart.in are doing our best to help you out in you education in every possible way we can.

Karnataka Class 11 Commerce Accountancy NCERT Solution  : 

class 11 commerce accountancy study material:-Chapter 1 – Introduction to Accounting

  •  Define accounting.:- Accounting is a process of identifying the events of financial nature, recording them in Journal, classifying in their respective ledgers, summarizing them in Profit and Loss Account and Balance Sheet and communicating the results to the users of such information, viz. owner/s, government, creditors, investors etc.According to the American Institute of Certified Accountants, 1941, “Accounting is an art of recording, classifying and summarising in a significant manner and in terms of money transactions and events that are, in part at least, of a financial character and interpreting the results thereof.”
  • State what is end product of financial accounting?
    • Income statements (Trading and/or Profit and Loss Account)- An income statement that includes Trading and Profit and Loss Account, ascertains the financial results of a business in terms of gross (or net) profit or loss.
    • Balance Sheet- It depicts the true financial positions of a business that provides required information like assets and liabilities of a business firm, to the users of accounting information like owners, creditors, investors, government, e

Karnataka Class 11 Commerce Accountancy NCERT Solution  : 

class 11 commerce accountancy study material:-Chapter 2 – Theory Base of Accounting

  • Q. Why is it necessary for accountants to assume that business entity will remain a going concern?
  • Answer:- Going Concern Concept assumes that the business entity will continue its operation for an indefinite period of time. It is necessary to assume so, as it helps to bifurcate revenue expenditure (i.e. expenditure related to current year), and capital expenditure (i.e. expenditure whose benefits accrue over a period of time). For example, a machinery that costs Rs 1,00,000, having an expected life of 10 years, will be treated as a capital expenditure, as its benefit can be availed for more than one year; whereas, the per year depreciation of the machinery, say Rs 10,000, will be regarded as a revenue expenditure.
  • Q2 :  When should revenue be recognised? Are there exceptions to the general rule?
  • Answer :Revenue should be recognised when sales take place either in cash or credit and/or right to receive income from any source is established. Revenue is not recognised, in case, if the income or payment is received in advance or the payment is actually received from the debtors. In a nutshell, revenue will be recognised when the right to receive income is established. For example, Mr. A sold goods in January and received payment in February; then revenue is considered to be recognised in the month of January and not in February. However, if Mr A received cash in advance, i.e. in December and goods are sold in January, then the revenue is recognised in January and not in December.The exceptions to this rule are given below.
  • Hire purchase- When goods are sold on hire-purchase system , the amount received in installments is treated as revenue.
  • Long term construction contract- The long term projects like construction of dams, highways, etc. have long gestation period. Income is recognized on proportionate basis of work certified and not on the completion of contract.

Karnataka Class 11 Commerce Accountancy NCERT Solution  : 

class 11 commerce accountancy study material:-Chapter 3 – Recording of Transactions – I

  • Q1 :  State the three fundamental steps in the accounting process.
     Answer :The fundamental steps in the accounting process are diagrammatically presented below.
  • Q2 :  Why is the evidence provided by source documents important to accounting?
     Answer :The evidence provided by the source document is important in the following manners:
  • It provides evidence that a transaction has actually occurred.
  • It provides important and relevant information about date, amount, parties involved and other details of a particular transaction.
  • It acts as a proof in the court of law.
  • It helps in verifying transactions during the auditing process.

class 11 commerce accountancy study material:-Chapter 4 – Recording of Transactions – II

  • Q1 :  Briefly state how the cash book is both journal and a ledger?
     Answer :Transactions are recorded directly from source documents in the Cash Book, so there is no need to record transactions in the Journal book. Further, on the basis of the cash transactions recorded in the Cash Book, cash and bank balances can be determined, and so there is no need to prepare cash account (which is a part of ledger) separately. Thus, the Cash Book serves the purpose of both Journal as well as ledger.
  • Q2 :  What is the purpose of contra entry?
     Answer :Contra entry represents deposits or withdrawals of cash from bank or vice versa. The purpose of contra entry is to indicate the transactions that effect both cash and bank balances. This entry does not affect the financial positions of a business. A contra entry is recorded in both sides of a two column Cash Book and is denoted by ‘C’ in the ledger folio column.

class 11 commerce accountancy study material:-Chapter 5 – Bank Reconciliation Statement

  • Q1 :  State the need for the preparation of bank reconciliation statement?
     Answer :The need to prepare Bank Reconciliation Statement are given below.
    1. It helps in finding out the errors and omissions committed in the Cash Book and the Pass Book.
    2. It shows uncleared cheques, which have already been debited in the Cash Book but have not been yet recorded in the Pass Book.
    3. It helps in checking embezzlement of money from the bank account.
    4. It helps in measuring the accuracy of the transactions recorded in the Cash Book.
    5. It facilitates in preparing revised Cash Book that reflects true bank balance.
  • Q2 :  What is a bank overdraft?
     Answer :Bank overdraft is a liability to an account holder. When the account holder withdraws excess amount over his/her available bank balance, he/she runs a negative bank balance. The negative bank balance is an obligation to the account holder and is called bank overdraft. In other words, bank overdraft is the excess of withdrawal over deposits.

class 11 commerce accountancy study material:-Chapter 6 – Trial Balance and Rectification of Errors

  • Q1 :  State the meaning of a Trial Balance?
     Answer :Trial Balance is a statement prepared with debit and credit balances of all accounts in ledger, to verify the arithmetical accuracy of the accounts. It is prepared after balancing all the accounts of ledger. There are two columns in a Trial Balance: debit and credit. While debit side includes all the debit balances, credit side includes all the credit balances of the accounts. It also helps in preparing financial statements, as it is a summarise version of the ledger. It is generally prepared on monthly or yearly basis.
  • Q2 :  Give two examples of errors of principle?
     Answer :‘Errors of principle’ refer to those errors that are committed when recording of transactions is done against the accounting principle. Below given are the examples of error of principle

    1. Wages paid for construction of building debited to Wages Account

    In this transaction, wages paid for the construction of building is a capital expenditure and accordingly building account should have been debited. However, in this case, it is treated as revenue expenditure and is debited to Wages Account. This error violates the accounting principle.

    2. Amount spent on repair of machinery debited to Machinery Account

    In this transaction, amount of repair is a revenue expenditure and not a capital expenditure. It should have been debited as ‘Repairs’, but was wrongly debited to the Machinery Account.

class 11 commerce accountancy study material:-Chapter 7 – Depreciation, Provisions and Reserves

  • Q1 :  What is Depreciation?
     Answer :Every business acquires fixed assets for its use in the business over a period of time. As the benefits of these assets can be availed over a long period of time, thus, due to their regular use, there occurs continuous wear and tear and consequently fall in their value. This fall in the value of fixed assets, due to their regular use or expiry of time is termed as depreciation.

    A machinery costing Rs 1,00,000 and its useful life is 10 years; so, depreciation is calculated as:

  • Q2 :  State briefly the need for providing depreciation.
     Answer :The needs for providing depreciation are given below.
    1. To ascertain true net profit or net loss- Correct profit or loss can be ascertained when all the expenses and losses incurred for earning revenues are charged to Profit and Loss Account. Assets are used for earning revenues and its cost is charged in form of depreciation from Profit and Loss Account.
    1. To show true and fair view of financial statements- If depreciation is not charged, assets are shown at higher value than their actual value in the Balance Sheet; consequently, the Balance Sheet  does not reflect true and fair view of financial statements.
    1. For ascertaining the accurate cost of production- Depreciation on plant and machinery and other assets, which are engaged in production, is included in the cost of production. If depreciation is not included, cost of production is underestimated, which will lead to low sale price and thus leads to low profit.
    1. Distribution of dividend out of profit- If depreciation is not charged, which leads to overestimating of profit and consequently more profit is distributed as dividend, out of capital instead of the profit. This leads to the flight of scarce capital out of the business.
    1. To provide funds for replacement of assets- Unlike other expenses, depreciation is not a cash expense. So, the amount of depreciation charged will be retained in the business and will be used for replacement of fixed assets after its useful life.
    1. Consideration of tax- If depreciation is charged, then Profit and Loss Account will disclose lesser profit as to when the depreciation is notcharged. This depicts reduced profit and thus the business will be liable for lesser tax amount.

class 11 commerce accountancy study material:-Chapter 8 – Bills of Exchange

  • Q1 :  Name any two types of commonly used negotiable instruments.
     Answer :The two types of commonly used negotiable instruments are:

    1. Cheques

    2. Bills of exchange

  • Q2 :  Write two points of distinction between bills of exchange and promissory note.Answer :
    Basis of Difference Bills of Exchange Promissory Note
    Drawer It is drawn by a creditor. It is drawn by a debtor.
    Parties There are three parties involved, namely drawer, drawee and payee. There are two parties involved, namely maker and payee.

Karnataka Class 11 Commerce Accountancy NCERT Solution  For 2017 Exams

Karnataka Class 11 Commerce Accountancy NCERT Solution  :  Accounts is a demanding subject of Commerce stream. It deals with the income, expenses, assets and other relevant things. However, it is appreciated in the sectors of finance and banking. It has been observed that most students are interested to learn this subject as it provides good job opportunities. Some important areas of accounting career are budget analysis, audit, tax, management accounting, and others. With thorough knowledge in Accounts, students can apply for the jobs in the government as well as corporate sectors. Additionally, they can work independently.

Part A: Financial Accounting – I (50 Marks)

Unit 1: Theoretical Framework

Introduction to Accounting

  • Accounting: objectives, advantages and limitations, types of accounting information; users of accounting information and their needs.
  • Basic accounting terms: business transaction, account, capital, drawings, liability (Non – current and current); asset (Non – current; tangible and intangible assets and current assets), receipts (capital and revenue), expenditure (capital, revenue and deferred), expense, income, profits, gains and losses, purchases, purchases returns, sales, sales returns, stock, trade receivables (debtors and bills receivable), trade payables (creditors and bills payable), goods, cost, vouchers, discount – trade and cash.

Theory Base of Accounting

  • Fundamental accounting assumptions: going concern, consistency, and accrual.
  • Accounting principles: accounting entity, money measurement, accounting period, full disclosure, materiality, prudence, cost concept, matching concept and dual aspect.
  • Bases of accounting – cash basis and accrual basis.
  • Accounting Standards and IFRS (International Financial Reporting Standards): Concept and Objectives

Unit 2: Accounting Process

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Recording of Transactions

  • Accounting equation: analysis of transactions using accounting equation.
  • Rules of debit and credit: for assets, liabilities, capital, revenue and expenses
  • Origin of transactions- source documents (invoice, cash memo, pay in slip, cheque), preparation of vouchers – cash (debit and credit) and non cash (transfer).
  • Books of original entry: format and recording – Journal.
  • Cash Book: Simple Cash Book, Cash Book with Discount Column and Cash Book with Bank and Discount Columns, Petty Cash Book.
  • Other books: purchases book, sales book, purchases returns book, sales returns book and journal proper.

Preparation of Bank Reconciliation Statement, Ledger and Trial Balance.

  • Bank reconciliation statement- calculating bank balance at accounting date: need and preparation. Corrected cash book balance.
  • Ledger – format, posting from journal, cash book and other special purpose books, balancing of accounts.
  • Trial balance: objectives and preparation

(Scope: Trial Balance with balance method only)

Depreciation, Provisions and Reserves

  • Depreciation: concept need and factors affecting depreciation; methods of computation of depreciation: straight line method, written down value method (excluding change in method)
  • Accounting treatment of depreciation: by charging to asset account, by creating provision for depreciation/ accumulated depreciation account, treatment of disposal of asset.
  • Provisions and reserves: concept, objectives and difference between provisions and reserves; types of reserves- revenue reserve, capital reserve, general reserve and specific reserves.

Accounting for Bills of Exchange

  • Bills of exchange and promissory note: definition, features, parties, specimen and distinction.
  • Important terms : term of bill, due date, days of grace, date of maturity, discounting of bill, endorsement of bill, bill sent for collection, dishonour of bill, noting of bill, retirement and renewal of a bill.
  • Accounting treatment of bill transactions.

Rectification of Errors

  • Errors: types-errors of omission, commission, principles, and compensating; their effect on Trial Balance.
  • Detection and rectification of errors; preparation of suspense account.

Part B: Financial Accounting – II (40 Marks)

Unit 3: Financial Statements of Sole Proprietorship

  • Financial Statements: objective and importance.
  • 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, manager’s commission, abnormal loss, goods taken for personal use and goods distributed as free samples.
  • Preparation of Trading and Profit and Loss Account and Balance Sheet of sole proprietorship.
  • Incomplete records: use and limitations. Ascertainment of profit/loss by statement of affairs method.

Unit 4: Financial Statements of Not-for-Profit Organizations

  • Not-for-profit organizations: concept.
  • Receipts and Payment account: features.
  • Income and Expenditure account: features. Preparation of Income and Expenditure account and Balance Sheet from the given Receipts and Payments account with additional information.

Scope:

  1. Adjustments in a question should not exceed 3 or 4 in number and restricted to subscriptions, consumption of consumables, and sale of assets/ old material.
  2. Entrance/ admission fees and general donations are to be treated as revenue receipts.
  3. Trading Account of incidental activities is not to be prepared.

Unit 5: Computers in Accounting

Important Note – Preparing for XI & XII Commerce?
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  • Introduction to Computer and Accounting Information System {AIS}: Introduction to computers (Elements, Capabilities, Limitations of Computer system),
  • Introduction to operating software, utility software and application software. Introduction to Accounting Information System (AIS), as a part of MIS
  • Automation of Accounting Process. Meaning
  • Stages in automation (a) Accounting process in a computerised environment (Comparison between manual accounting process and Computerised accounting process.) (b) Sourcing of accounting Software (Kinds of software: readymade software; customised software and tailor-made software; Generic Considerations before sourcing accounting software)(c)Creation of Account groups and hierarchy ( d) Generation of reports -Trial balance, Profit and Loss account and Balance Sheet.

Scope:

  • The scope of the unit is to understand accounting as an information system for the generation of accounting information and preparation of accounting reports.
  • It is presumed that the working knowledge of Tally software will be given to the students for the generation of accounting software. For this, the teachers may refer Chapter 4 of Class XII NCERT textbook on Computerized Accounting System.

Karnataka Class 11 Commerce Accountancy Question Paper

The last year question Paper are available for download:

Karnataka Question Paper 2016(Set 1)

Karnataka Question Paper 2016(Set 2)

Karnataka Question Paper 2016(Set 3)

Karnataka Question Paper 2016(Set 4)

Karnataka Question Paper 2016(Set 5)

Karnataka Question Paper 2015

Karnataka Question Paper 2014

Karnataka Question Paper 2013

Karnataka Question Paper 2012

Karnataka Question Paper 2011

Karnataka Question Paper 2010

Karnataka Question Paper 2009

Karnataka Question Paper 2008

Karnataka Question Paper 2007

Karnataka Question Paper 2006

Karnataka Class 11 Commerce Accountancy NCERT Solution  For 2017 Exams

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