CBSE Class 11 – Accountancy Question Paper 2023 

1. Which of the following is not a business transaction?

a) Withdrew ₹10,000 from business for personal use by the proprietor.

b) Proprietor Withdrew ₹20,000 from the Bank Account of the firm to pay the school fees of his son.

c) Proprietor withdrew ₹12,000 from his personal account to pay the school fees of his son.

d) Goods taken worth ₹3,000 for personal use.

2. Out of the following assets which one is not an intangible asset?

a) Investment

b) Patents

c) Goodwill

d) Trade Mark

Answer: a) Investment

3. Which qualitative characteristic of accounting information is reflected when accounting information is clearly presented?

a) Reliability b) Relevance c) Comparability d) Understandability  

OR

A person to whom money is owed by a firm for purchase of goods on credit is called a

a) creditor.

b) debtor.

c) Both (a) and (b)

d) None of these.

Answer: a) creditor.

4. Assertion (A): Accrual basis of accounting makes a complete record of all cash as well as credit transactions. It, however does not follow matching principle of accounting.

Reason (R): Accrual basis of accounting is superior to cash basis of accounting because it depicts true profit or loss of the business and is recognised by Companies Act, 2013.

a) Both (A) and (R) are true and (R) is the correct explanation of (A).

b) Both (A) and (R) are true but (R) is not the correct explanation of (A).

c) (A) is true, but (R) is false.

d) (A) is false, but (R) is true.

5. IFRS are

a) rule based accounting standards.

b) principle based accounting standards.

c) partially rule based and partially principle based accounting standards.

d) None of the above.  

Ind-AS are

a) rule based accounting standards.

b) principle based accounting standards.

c) partially rule based and partially principle based accounting standards.

d) None of the above.  

6. If seller receives back the goods sold, he will prepare

a) Credit Note

b) Debit Note

c) Both (a) and (b).

d) None of these

7. Under the Companies Act, all companies are required to maintain their accounts according to

a) Cash basis

b) Accrual basis

c) Either Cash or Accrual basis

d) None of the above  

8. IFRS are based on

a) historical cost

b) fair value

c) both historical cost and fair value.

d) None of these

9. According to the Money Measurement Concept

a) all transactions and events are recorded.

b) all transactions and events which can be estimated in money terms are recorded in the books of account.

c) all transactions and events which can be measured in money terms are recorded in the books of account.

d) None of the above.  

OR

Which of the following statements correctly describes the Cost Concept?

a) Assets are shown in the books at the price at which it was purchased plus cost of improvement minus depreciation till date.

b) Assets are shown in the books at the price it was purchased.

c) Assets are shown in the books at the price it was purchased plus cost of improvement.

d) Assets are shown in the books at the price it was purchased or market price whichever is lower.

10. Bank Reconciliation Statement is prepared:

(a) at the end of each week.

(b) at the end of each month. (Correct)

(c) at the end of the accounting year.

(d) whenever a bank statement is received

11. The preparation of Trial Balance helps in:

(a) Assessing the Financial Position. (Correct)

(b) Locating Errors of all Types.

(c) Preparation of Final Accounts.

(d) None of these.

OR

Preparation of a Trial Balance is:

(a) compulsory. (Correct)

(b) optional.

(c) compulsory or optional.

(d) None of these.

12. A business receives its bank statement showing the closing balance as ₹ 8,500 overdrawn. It is found that there were unpresented cheques of ₹2,000 and uncredited deposits of ₹1,500. Overdraft as per Cash Book is:

• (a) ₹5,000.
• (b) ₹5,000.
• (c) ₹9,000 (Correct)
• (d) ₹12,000.

OR

Bank Reconciliation Statement is prepared by comparing:

(a) entries in Bank Pass Book with entries in bank columns of Cash Book. (Correct)

(b) entries in Bank Pass Book with entries in cash columns of Cash Book.

(c) entries in Bank Pass Book with entries in bank columns and cash columns of Cash Book.

(d) All of the above.

13. According to which of the following accounting concepts, even the proprietor of a business is treated as a creditor to the extent of his capital? ¹   

(a) Money Measurement Concept

(b) Dual Aspect Concept

(c) Cost Concept

(d) Business Entity Concept (Correct)

14. Reserve is shown in:

(a) Trading A/c

(b) Profit & Loss A/c

(c) Asset side of Balance Sheet

(d) Liability side of Balance Sheet (Correct)

15. Depreciation is provided on:

(a) Current Assets

(b) Fictitious Assets

(c) Fixed Assets (Correct)

(d) Intangible Assets

Question 16:

We are given two scenarios with different purchase dates, methods of depreciation, and amounts. Let’s tackle them separately:

Scenario 1:

• Purchase date: 1st October 2021
• Cost of machine: ₹3,60,000
• Installation cost: ₹40,000
• Total cost of machine: ₹3,60,000 + ₹40,000 = ₹4,00,000
• Depreciation rate: 10% p.a. on original cost
• Depreciation period: 31st March 2021 to 31st March 2023 (2 years)

Depreciation for each year = 10% of ₹4,00,000 = ₹40,000

Therefore, the depreciation charged on 31st March 2023 will be ₹40,000.

Scenario 2:

• Purchase date: 1st July 2020
• Cost of machine: ₹1,75,000
• Installation cost: ₹25,000
• Total cost of machine: ₹1,75,000 + ₹25,000 = ₹2,00,000
• Depreciation rate: 10% p.a. on diminishing balance method
• Depreciation period: 31st March 2020 to 31st March 2023 (3 years)

Year 1 (2020-2021):

Depreciation = 10% of ₹2,00,000 = ₹20,000 Book value at the end of year 1 = ₹2,00,000 – ₹20,000 = ₹1,80,000

Year 2 (2021-2022):

Depreciation = 10% of ₹1,80,000 = ₹18,000 Book value at the end of year 2 = ₹1,80,000 – ₹18,000 = ₹1,62,000

Year 3 (2022-2023):

Depreciation = 10% of ₹1,62,000 = ₹16,200

Therefore, the depreciation charged on 31st March 2023 will be ₹16,200.

Question 17:

To prepare a Trial Balance, we need to list all the accounts with their respective debit or credit balances. Let’s analyze the information given:

Total Debits: ₹31,200 Total Credits: ₹30,000

As the total debits and credits are not equal, there is an error in the information provided. A Trial Balance can only be prepared if the total debits and total credits are equal.

Question 18

Part 1: Journalize the following transactions:

1. Allow interest on capital amounting to ₹50,000 @ 8% p.a.

Journal Entry:

Interest on Capital A/c Dr. 4,000
     To Capital A/c Cr. 4,000

Explanation: Interest on capital is treated as an expense for the business and a revenue for the owner. Therefore, we debit Interest on Capital and credit the Capital account.

2. Goods costing ₹1,000, sale price ₹1,250, was stolen.

Journal Entry:

Loss by Theft A/c Dr. 1,000
     To Purchases A/c Cr. 1,000

Explanation: Since the goods were stolen, the business incurs a loss. We debit Loss by Theft and credit Purchases to record the loss of inventory.

3. Rent paid ₹2,000 and rent is still owing ₹1,000

Journal Entry:

Rent A/c Dr. 2,000
     To Cash A/c Cr. 2,000

Rent A/c Dr. 1,000
     To Rent Outstanding A/c Cr. 1,000

Explanation: The first entry records the payment of rent. The second entry records the outstanding rent, which is a liability for the business.

Part 2: Prepare Journal Entries from the following postings:

1. Purchase A/c Dr. 50,000 To Cash A/c Cr. 50,000

Journal Entry:

Purchases A/c Dr. 50,000
     To Cash A/c Cr. 50,000

Explanation: This posting indicates that goods worth ₹50,000 were purchased on cash.

2. Interest A/c Dr. 800 By Cash A/c Cr. 800

Journal Entry:

Interest A/c Dr. 800
     To Cash A/c Cr. 800

Explanation: This posting shows that interest of ₹800 was paid in cash.

3. Mohan A/c Dr. 40,000 To Sales A/c Cr. 40,000 To Output CGST A/c Cr. 3,600 To Output SGST A/c Cr. 3,600

Journal Entry:

Mohan A/c Dr. 40,000
     To Sales A/c Cr. 40,000
     To Output CGST A/c Cr. 3,600
     To Output SGST A/c Cr. 3,600

Explanation: This posting indicates that goods were sold to Mohan on credit for ₹40,000. CGST and SGST are also charged on the sale.

Question 19:

What do you mean by Accounting? Explain any two limitations of Accounting.

Answer:

Accounting is the process of systematically recording, analyzing, and interpreting financial transactions of a business. It involves identifying, measuring, and communicating economic information to various stakeholders such as investors, creditors, and management.

Two Limitations of Accounting:

1. Historical Cost Principle: Accounting records assets at their historical cost, which is the original purchase price. This can lead to assets being undervalued in the balance sheet if their market value has increased over time.

2. Subjectivity in Estimates: Accounting involves making estimates for various items such as depreciation, bad debts, and inventory valuation. These estimates can be subjective and may vary depending on the accountant’s judgment, leading to potential inaccuracies in financial reporting.

OR

Explain the following:

1. Profit: Profit is the excess of revenue over expenses. It represents the financial gain generated by a business during a specific period.

2. Gain: Gains are increases in economic benefits that do not arise from the ordinary activities of the business. They are typically non-operating in nature, such as gains on the sale of assets or investments.

3. Expenses: Expenses are the costs incurred by a business in generating revenue. They include costs of goods sold, operating expenses, and other expenses associated with running the business.

Question 20:

Differentiate between Provision and Reserve on the following basis:

1. Meaning:

• Provision: A provision is a liability of uncertain timing or amount. It is created to account for future obligations or losses that are probable but uncertain in terms of timing or amount. Examples include provisions for bad debts, warranties, and litigation.
• Reserve: A reserve is a portion of profits that is retained by a company for future use rather than being distributed as dividends to shareholders. Reserves are created for specific purposes such as expansion, debt repayment, or future losses.

2. Object:

• Provision: The object of a provision is to provide for future liabilities or losses.
• Reserve: The object of a reserve is to retain profits for specific purposes and strengthen the financial position of the company.

3. Presentation in Balance Sheet:

• Provision: Provisions are presented as liabilities in the balance sheet.
• Reserves: Reserves are typically presented as part of the shareholders’ equity section in the balance sheet.

Question 21: Prepare Sales Book of Ganesh Electronics, Kolkata (West Bengal) assuming CGST @ 9% and SGST @ 9%.

Sales Book of Ganesh Electronics, Kolkata

Calculations:

• Net Amount: Cost per unit * Quantity – Trade Discount
• CGST/SGST: Net Amount * 9%

Question 22: Trial balance of Anita did not agree and she put the difference to suspense account. She discovered the following errors.

Rectification of Errors and Suspense Account:

1. Sales return book overcast by ₹8,175.

• Journal Entry:

  Sales Return A/c Dr. 8,175
  Suspense A/c Cr. 8,175
  

2. Purchase return to Arpit ₹3,125 was not posted.

• Journal Entry:

  Purchase Returns A/c Dr. 3,125
  Suspense A/c Cr. 3,125
  

3. Goods purchased on credit from Kamakshi ₹11,500 were taken into stock but no entry was passed in the books.

• Journal Entry:

  Purchases A/c Dr. 11,500
  Suspense A/c Cr. 11,500
  

4. Installation charges on new machinery purchased ₹1,750 were debited to sundry expenses account as ₹175.

• Journal Entry:

  Sundry Expenses A/c Dr. 1,575
  Machinery A/c Cr. 1,575
  

5. Rent paid for residential accommodation of Anita (the proprietor) ₹5,200 was debited to rent account as ₹5,000.

• Journal Entry:

  Rent A/c Dr. 200
  Drawings A/c Cr. 200
  

Suspense Account:

Therefore, the difference in the Trial Balance is ₹10,625.