NCERT solutions class 11 Accountancy chapter 11 Accounts from Incomplete Records

NCERT Solutions for Chapter 11: Accounts from Incomplete Records

NCERT solutions for Chapter 11, Accounts from Incomplete Records, are provided below to help students strengthen their understanding of accountancy. SimplyAcad has meticulously prepared the solutions to each question, offering detailed explanations in simple language so that students can easily comprehend them.

Chapter Overview: Chapter 11, Accounts from Incomplete Records, provides in-depth knowledge and analysis of incomplete records and the various treatments associated with them. Regular revision of these solutions is recommended to help students perform better in their examinations.

How to Use the Solutions: Students can access the NCERT Solutions for Chapter 11, Accounts from Incomplete Records, by scrolling below.

NCERT Solutions for Class 11 Accountancy Chapter 11: Accounts from Incomplete Records

Short Questions for NCERT Solutions Class 11 Accounts from Incomplete Records

Question 1: State the meaning of incomplete records.
Solution 1: Accounting records prepared without strictly following the double-entry bookkeeping system are called incomplete records. In this type of recording mechanism, some transactions are recorded either by making one entry or no entry. This impacts assets, liabilities, revenue, and expenses, which is why they are known as incomplete records.

Question 2: What are the possible reasons for keeping incomplete records?
Solution 2: Incomplete records are kept due to the following reasons:

• Lack of Accounting Knowledge: Businesspersons may lack the requisite accounting knowledge and are more inclined to follow this method.
• Time Efficiency: Recording transactions using the single-entry system tends to be less time-consuming and requires less maintenance.
• Cost-Effective: It is a cost-effective way of keeping records as it doesn’t require a specialist.
• Flexibility: It gives the owner flexibility to record transactions that are more important for the business.

Question 3: Distinguish between a statement of affairs and a balance sheet.

Basis of Difference	Statement of Affairs	Balance Sheet
Meaning	It is a statement that shows the assets, liabilities, and capital of a business entity on the basis of a single-entry system of bookkeeping.	It is a statement showing the assets, liabilities, and capital of a business entity prepared on the basis of a double-entry system of bookkeeping.
Reliability	As the data is based on estimates, it is not reliable.	It is more reliable as it is based on a tested method of data entry.
Accounting Method	Incomplete records form the basis of its preparation.	Prepared from double-entry bookkeeping.
Accuracy	Very Less	Accurate to a large extent

Question 4: What practical difficulties are encountered by a trader due to the incompleteness of accounting records?
Solution 4: The following difficulties are faced by traders due to the incompleteness of accounting records:

• Accuracy: It is not possible to determine the accuracy of accounts and correctly prepare a trial balance as the records are not as per the double-entry system.
• Tax Compliance: It is difficult to make tax authorities believe in the reliability of the computed income.
• Financial Results: Determining and evaluating the financial results of a business is not possible.
• Profit and Loss: True profit or loss cannot be determined as all transactions are not recorded.
• Business Analysis: Profitability, liquidity, and solvency of a business cannot be determined, which may cause investors to be doubtful about investment.
• Fraud Risk: The lack of arithmetical accuracy in the records encourages fraud.

Long Questions for NCERT Solutions Class 11 Accounts from Incomplete Records

Question 1: What is meant by a ‘statement of affairs’? How can the profit or loss of a trader be ascertained with the help of a statement of affairs?
Solution 1: A statement of affairs is a statement that shows assets and liabilities, prepared at the beginning and end of an accounting period. Assets and liabilities are shown on two sides, similar to a balance sheet. However, the basic difference between the statement of affairs and the balance sheet is that the former is prepared from incomplete records, while the latter is prepared from ledger entries. Capital is said to be the difference between the totals of assets and liabilities.

Capital will be shown at the beginning and end of the accounting period when a statement of affairs is prepared. Using this information, a statement of profit and loss is prepared to determine the profit or loss. Adjustments need to be made for withdrawals by the owner and for fresh capital introduced by the owners during the period.

A business earns profit if the net results of the calculation are positive and is said to make a loss if the results are negative. Thus, the profit and loss of owners can be determined using this process.

Question 2: Is it possible to prepare the profit and loss account and the balance sheet from the incomplete book of accounts kept by a trader? Do you agree? Explain.
Solution 2: Yes, it is possible to prepare a profit and loss account and balance sheet from an incomplete book of accounts through a process known as the conversion method. In this method, the incomplete records are converted to double-entry records. Some of the incomplete entries, such as debtors, creditors, cash payments, cash sales, and cash receipts, are easily convertible as they are readily available. However, there will be some transactions for which details are not available; such details can be found using logical deductions. The following transactions are necessary for creating a complete record:

• Opening Capital
• Credit Purchases
• Credit Sales
• Bills Payable Accepted
• Payment to Creditors
• Receipt from Debtors

In some cases, it is essential to prepare a debtor or creditor account to determine the values first. After preparing these accounts, the final accounts can be prepared.

Question 3: Explain how the following may be ascertained from incomplete records:

(a) Opening capital and closing capital
Solution 3(a): The opening capital value can be determined by preparing the opening statement of affairs at the start of the accounting period. Similarly, the closing capital value can be determined by preparing a closing statement of affairs.

Statement of Affairs as on…

Liabilities	Amount ₹	Assets	Amount ₹
Bills Payable	–	Land and Building	–
Creditors	–	Plant and Machinery	–
Outstanding Expenses	–	Furniture	–
Opening Capital (Balancing Figure)	–	Stock	–
		Debtors	–
		Bank	–
		Cash	–
		Prepaid Expenses	–

Note: When the total of liabilities is more than the total of assets, capital is shown on the assets side and represents the debit balance. When the total assets’ balance exceeds the total liabilities’ balance, capital is shown on the liabilities side.

(b) Credit Sales and Credit Purchases
Solution 3(b): Credit sales can be determined by preparing a total debtors account. The total sales return, if any, must be deducted from the total debtors account. The balancing figure in the account represents the credit sales.

Similarly, credit purchases can be determined by preparing a total creditors account. The total purchase returns should be deducted from the total creditors account, and the balancing figure represents the credit purchase.

Total Debtors Account

Dr.			Cr.
Particulars	J.F.	Amount ₹	Particulars	J.F.
Balance b/d	–	–	Cash (Cash Received)	–
Bills Receivable	–	–	Bank (Cheque Received)	–
(Bill Dishonoured)	–	–	Discount Allowed	–
Bank (Cheque Dishonoured)	–	–	Bad Debts	–
Credit Sales (Balancing Figure)	–	–	Sales Returns	–
Bills Receivable (Bill Received)	–	–	Balance c/d	–

Total Creditors Account

Dr.			Cr.
Particulars	J.F.	Amount ₹	Particulars	J.F.
Cash Paid	–	–	Balance b/d	–
Bank (Cheque Issued)	–	–	Bank (Cheque Dishonoured)	–
Bills Payable (Bills Accepted)	–	–	Bills Payable (Bills Dishonoured)	–
Discount Received	–	–	Credit Purchases (Balancing Figure)	–
Purchases Returns	–	–	Balance c/d	–

(c) Payments to Creditors and Collection from Debtors
Solution 3(c): To determine payment to creditors, a total creditors account should be prepared. By deducting total purchase returns, the balancing figure provides the payment to creditors. Similarly, to determine the collection from debtors, a total debtors account should be prepared. By deducting total sales returns, the balancing figure provides the collection from debtors.

(d) Closing Balance of Cash
Solution 3(d): To evaluate the closing balance of cash, a cash book summary needs to be prepared. The cash book summary includes all receipts on the debit side and all payments during that period on the credit side. The balancing figure provides the balance of cash. The total creditor or total debtor accounts are required if the amount paid to creditors or received from debtors is not present.

Numerical Questions for NCERT Solutions Class 11 Accounts from Incomplete Records

1. Following information is given below prepare the statement of profit or loss:

The solution is as follows:

2. Manveer started his business on April 01, 2016 with a capital of ₹ 4, 50,000. On March 31, 2017 his position was as under:

 

He owned ₹ 45,000 from his friend Susheel on that date. He withdrew ₹ 8,000 per month for his household purposes. Ascertain his profit or loss for this year ended March 31, 2017.

The solution is as follows:

 

3. From the information given below ascertain the profit for the year:

 

The solution is as follows:

 

4. From the following information, calculate capital at the beginning:

 

The solution is as follows:

5. Following information is given below: calculate the closing capital

Calculation of profit or loss and ascertainment of statement of affairs at the end of the year (Opening Balance is given)

 

The solution is as follows:

 

Capital on March 31, 2017 (Closing) is ₹ 20,000

6. Mrs. Anu started firm with a capital of ₹ 4, 00,000 on 1st October 2016. She borrowed from her friends a sum of ₹ 1, 00,000 @ 10% per annum (interest paid) for business and brought a further amount to capital ₹ 75,000 on March. 31, 2017, her position was:

He withdrew ₹ 8,000 per month for the year. Calculate profit or loss for the year and show your working clearly.

The solution is as follows:

 

7. Mr. Arnav does not keep proper records of his business he provided following information, you are required to prepare a statement showing the profit or loss for the year.

Ascertainment of statement of affairs at the beginning and at the end of the year and calculation of profit or loss.

 

The solution is as follows:

 

8. Mr. Akshat keeps his books on incomplete records following information is given below:

During the year he withdrew ₹ 45,000 and introduced ₹ 25,000 as further capital in the business compute the profit or loss of the business.

The solution is as follows:

 

 

9. Gopal does not keep proper books of account. Following information is given below:

During the year he introduced ₹ 20,000 and withdrew ₹ 12,000 from the business. Prepare the statement of profit or loss on the basis of given information

The solution is as follows:

 

 

The profit earned is ₹37,500.

10. Mr. Muneesh maintains his books of accounts from incomplete records. His books provide the information:

 

 

He withdrew ₹ 300 per month for personal expenses. He sold his investment of ₹ 16,000 at 2% premium and introduced that amount into business.

 

 

Working Note:

 

11. Mr. Girdhari Lal does not keep full double entry records. His balance as on April 01, 2016 is as.

 

 

His position at the end of the year is:

 

He withdrew ₹ 500 per month out of which to spent ₹ 1,500 for business purpose. Prepare the statement of profit or loss.

The solution is as follows:

 

 

 

12. Mr. Ashok does not keep his books properly. Following information is available from his books.

 

 

During the year Mr. Ashok sold his private car for ₹ 50,000 and invested this amount into the business. He withdrew from the business ₹ 1,500 per month up to October 31, 2016 and thereafter ₹ 4,500 per month as drawings. You are required to prepare the statement of profit or loss and statement of affair as on March 31, 2017.

The solution is as follows:

 

 

The loss during the year 2017 is ₹ 60,900

13. Krishna Kulkarni has not kept proper books of accounts prepare the statement of profit or loss for the year ending December 31, 2011 from the following information:

 

 

The following adjustments were made:

(a) Krishna withdrew cash ₹ 5,000 per month for private use.

(b) Depreciation @ 5% on car and furniture @10%.

(c) Outstanding Rent ₹ 6,000.

(d) Fresh Capital introduced during the year ₹ 30,000.

The solution is as follows:

 

 

 

 

14. M/s Saniya Sports Equipment does not keep proper records. From the following information find out profit or loss and also prepare balance sheet for the year ended March 31, 2017

 

 

Drawing ₹ 10,000 p.m. for personal use, fresh capital introduce during the year ₹ 2, 00,000. A bad debts of ₹ 2,000 and a provision of 5% is to be made on debtors outstanding salary ₹ 2,400, prepaid insurance ₹ 700, depreciation charged on furniture and machine @ 10% p.a.

The solution is as follows:

 

 

Profit earned during year 2017 is ₹1, 71,400

15. From the following information calculate the amount to be paid to creditors:

 

Amount paid to Creditors is ₹ 4, 40,175.

16. Find out the credit purchases from the following:

 

Therefore the Credit Purchases are amounting to ₹ 2, 56,350

17. From the following information calculate total purchases.

 

 

 

18. The following information is given

 

Calculate credit purchases during the year

The solution is as follows:

 

Note: The return inwards and discount allowed belong to the Debtors account. So, it is not considered in the creditors account.

19. From the following, calculate the amount of bills accepted during the year.

₹

Bills payable as on April 01, 2016 1, 80,000

Bills payable as on March 31, 2017 2, 20,000

Bills payable dishonoured during the year 28,000

Bills payable honoured during the year 50,000

The solution is as follows:

 

20. Find out the amount of bills matured during the year on the basis of information given below;

The solution is as follows:

 

Therefore the Bill Payable matured during the year is ₹ 38,000.

21. Prepare the bills payable account from the following and find out missing figure if any:

 

The solution is as follows:

 

Bills payable discharged is ₹ 88,000 and the opening balance of creditors is ₹ 79,000.

22. Calculate the amount of bills receivable during the year.

The solution is as follows:

 

Therefore, the Bills receivable received from Debtors ₹ 1, 60,000.

23. Calculate the amount of bills receivable dishonoured from the following information.

The solution is as follows:

 

So the Bills Receivable dishonoured is ₹ 11,500.

24. From the details given below, find out the credit sales and total sales.

The solution is as follows:

Credit sales is ₹ 2, 82,300

25. From the following information, prepare the bills receivable account and total debtors account for the year ended March 31, 2017.

The solution is as follows:

 

The missing figure in the bills receivable account–B/R received from debtors’ is ₹ 1, 61,000 and the missing figure in the debtors account–closing balance is ₹ 3, 01,000.

26. Prepare the suitable accounts and find out the missing figure if any.

The solution is as follows:

 

 

As per the solution, the missing figure in the bills receivable account is B/R dishonoured of ₹ 40,000. The missing figure in the debtors account is the credit sales of ₹ 6, 21,000.

27. From the following information ascertain the opening balance of sundry debtors and closing balance of sundry creditors

 

The rate of gross profit is 25% on selling price and out of the total sales

₹ 85,000 was for cash sales.

 

The solution is as follows:

 

Opening balance of debtors is ₹ 54,000 and the closing balance of creditors is ₹ 1, 78,500.

Working Notes:

Total Sales = Cash Sales + Credit Sales

Total Sales = Cost of Goods Sold + Gross Profit

Let us assume the sales to be 100%

 

 

 

Note: It is assumed that all purchases are made on credit.

28. Mrs. Bhavana keeps his books by Single Entry System. You are required to prepare final accounts of her business for the year ended March 31, 2017. Her records relating to cash receipts and cash payments for the above period showed the following particulars:

The following information is also available:

 

All her sales and purchases were on credit. Provide depreciation on plant and building by 10% and machinery by 5%, make a provision for bad debts by 5%.

The solution is as follows:

 

 

Plant of ₹ 1, 00,000 has been taken in to the statement of affairs on April 01, 2016, instead of ₹ 10, 00,000.