ACCOUNTANCY FOR CLASS XI STUDENTS - VBQs

VALUE BASED QUESTIONS

Theoretical Framework

Recording of Transactions 1.      what is the value involved in recording transactions on the basis of source documents? ans. source documents ensures the truthful ness of the recorded transactions. 2. Is cash memo a source document or an accounting voucher?     ans. source document. 3. why do the transactions are entered in a journal rather than straight into ledger?    ans. journal contains all important information relating to a transaction where ledger contains only the summary. 4. Is capital account a personal or real account and why?   ans. capital account is personal account because it represents the proprietor of the business  who is a human being. 5. A cheque of Rs 20,000 is received from Geetika  and the same is endosed to Zubeda. how it will be recorded in cash book.    ans. it will not be recorded in cash book . It will be recorded in journal proper. 6. X gets a crossed cheque from Y. can he endorse the cheque in favour of Z?    ans. Yes . X can endorse the cheque to Z. However, in case of “A/c payee only” crossing , he cannot endorse the cheque to Z. 7. How will you write  an “Order “ cheque.   ans. In case word bearer is struck off by drawing a line, the cheque becomes an order cheque. 8. Abdul get a crossed cheque for Rs 10,000. Bank  refused to make payment on its counter. Is Bank justified in refusing the payment? ans. Yes bank can refuse to make payment as it is a crossed cheque.Its payment can only be done when it is deposited in its bank account. 9. what does a credit balance in a Capital account signify?   ans. it shows the positive balance or the amount owed by the firm to the proprietor. 10. what entry is passed when cheques received from the customers are not sent to bank on the same day. ans.   cheque in hand a/c Dr                  To customer personal A/c

BASIC ACCOUNTING TERMS 1. What do you mean by losses in the business. While calculating loss in the business which value is reflected? Losses are unwanted burden that the business is forced to bear Value of alertness, timeliness 2. When drawings are deducted from the capital of business which value is highlighted? Transperency, credibility,

ACCOUNTING STANDARDS AND INTERNATIONAL FINANCIAL REPORTING STANDARDS 1.      X ltd is not disclosing the accounting policies to its shareholders as provided in Accounting Standards. Which value is being violated here.        Ans. Company is not justifying with its shareholders. 2.      ABC ltd is considering the value of stock at the value at cost or market whichever is higher. The accountand told the management this is wrong. But the management is not considering his view.which value is violated by  ABC ltd. Ans. Legal value i. e. non compliance of law is followed here.

Accounting Process and Special Accounting Treatment

Bank reconciliation statement, Ledger and trial balance 1 Mr. A was an employee in a  firm who does all the work related to bank transactions of the business. Due to his negligence a pass book was not updated on time.While preparing BRS it was found that out of received cheques, one received cheque against sale was misplaced by Mr. A. What are the values ignored? Value of time, value of money, trust 2 Mr. Jain was an accountant in a firm when he was preparing the trial balance, he notice some error. Earlier he thought of to balance it by putting some dummy figure in it but he has not done this and he told this fact to hs senior.Which value followed by Mr.Jain? Value of trust,honesty, acceptance 3 Anitha purchased some hand embroided saries for her boutique from Yasmin for Rs.14,000 for cash. Wha are the values highlghted? Women empowerment, Promotion of handicraft items 4 What is the reason that cheques deposited into banks but not yet credited by bank are not recorded in the amended cash book? Because it is already recorded in cash book. 5 Mr.Narayan was an accountant in a firm when he was preparing the trial balance, he notice some error. He thought of to balance it by putting some dummy figure in it and to balance it. He did n’t tell this fact to his superior.Which value violated here? Value of trust,honesty, acceptance

DEPRECIATION Q1:-Reliance Co.did not use a machine during the current year.Should depreciation be charged on this machine also? Ans1:-Yes,Depreciation must be charged because depreciation is caused not only because of its use but also because of efflux of time. Q2:-Should depreciation the be provided even if there is loss in a financial year? Ans2:-Yes.Depreciation is a charge against profit and must be provided even if there is loss in a financial year.If it is not charged,the financial statements will show lower loss and higher value of assets. Q3:-Is reserve a charge against profit or an appropriation of profit? Ans3:-It is created not by debiting to P&L A/C but through P&L Appropriation A/C.As such,it is appropriation of profit because it is created after the calculation of net profit. Q.4 Mr. A manager in ABC Ltd firm charged more depreciation on firm’s machinery than required, so that he can minimize the profit and pay less income tax. Identify the value missing in the above case. Answer. Value of honesty is missing. Q.5. The management of ABC Ltd. charged depreciation method for the last three years. Which principle is not followed? Answer :- The principle of consistency is not followed. Q.6  Reliance limited intensely made excess provisions for depreciation. Which value violated by the company. Answer :- Values of Full Disclose and they are also not providing proper information to its stake holders.  Q7. Aysha limited intensely mad excess provision for doubt full debts . Which values has been affected here. Answer:- value of Honesty has been affected here. Q8.is depreciation the result of fluctuation of fixed assets. Answer:  no, it is a gradual and permanent decreased in the value of asset. Q9. Should depreciation be provided even if there is a loss in a financial year. Answer. Yes, depreciation charged against profit and must be provided even if there is loss in a financial year. Q10. Is it necessary to provide depreciation on a fixed asset of which the market value is higher than the book value why? Answer it is necessary to provide depreciation even if the market value is higher than the book value, it the process of allocation of the cost of an asset to its effective span of life

Financial Statement of Sole Proprietorship from Complete and Incomplete Records

1.      Ram is  a business man .He maintains books under single entry system to undercast  the real profit of business to pay less tax to govt. which value is violated by Ram. Ans. 1.Social responsibility 2. Honesty 2.      Sham follows incomplete records. He charges more depreciation on the assets which leads to undervalue of the profit .which value is ignored here? Ans. Compliance with law, honesty. 3.      Ramya owns business. She employs 5 employees in her organization. She shows them less profit than he occurs and tells them he is unable to pay their salaries. Which value is ignored here. Ans. 1.justice with employees.          2. honesty 4. Mr. gupta owns business .he earns adequate profits and follows single entry system. He pays timely  tax. Which value is not ignored here? Ans. 1.Compliance with law 2.Social responsibility. 5.      MR. X owns fruit business he follows  single entry system of accounting system. Most of the time he sells goods of less weight  to customers and charges the same rate as for proper weight. Which values are being ignored here. Ans. 1.Social responsibilities 2. Honesty

Financial Statement of Not for Profit Organisations

8 Mahila Vikas organisation which was established to help needy women received subsription for Rs.40000 in the year 2012. Subsription in the year 2011 Rs.6000. Subsription includes for the year 2013 Rs.10000. What values are highlighted? Love for life, helping mentality, upliftment of women 9 Gaur Samaj Samiti received a fund for poor girls marriage, donations to the education of poor children. What values are highlighted by the organisation? Sensitive towards society, kind heartedness 10 Rachana Literary Club organises various literary based competitions for the students of lower income group. What are the values highlighted by the club? helping poor children, Promotion of literary activities

RECTIFICATION OF ERRORS AND FINANCIAL STATEMENTS

1.      A business enterprise depicts the information regarding its netprofit year-wise in the form of charts and diagrams. What is the value involved in doing so?

Ans. Honesty

2.      What is the value involved in disclosing the method of valuation of inventory in the financial statements?

Ans.Respect for elders.

3.      A business company discloses the year-wise number of employees in its financial statements in addition to the financial results and financial position of the business. What is the value involved in stating the number of employees in financial statements?

Ans.Respect for employees.

4.      Contingent liabilities are not shown on the liabilities side of a balance sheet. What is the value involved in showing the contingent liabilities in notes to accounts?

Ans.Care for investors.

5.      A legal suit for compensation amounting to Rs. 2 crore is likely to be decided against the firm but it does not disclose this fact in its financial statements. What is the value disregarded by the firm?

Ans.Social responsibility.

6.      Along with statement of profit and loss and balance sheet a business firm presents its financial information in the form of ratios and percentages. What is the value involved in doing so?

Ans.Disclosure to everybody.

7.      A company has taken a loan of Rs.1,00,000 from a bank. But it is not recorded in the books of accounts. Which value is disregarded here by the company?

Ans.Information to interested parties.

8.      Rahul is the main cashier and accountant  of a firm. The firm got a commission of Rs. 20,000 but it was not recorded by him knowingly. Which value is disregarded?

Ans.carefullness

9.      A business enterprise is not disclosing the actual accounting information to the users. Which value is disregarded here?

Ans.Familiar with public.

Financial Statements of sole proprietorship

1.      A firm every year discloses its financial statements to the shareholders. Which value of the company is reflected here?

Ans.Right to information.

2. In order to pay less dividend a business firm is showing fake profit in the accounts. Which value is disregarded by the firm here?

Ans.True and fair information.

3.A business firm is giving donations to charity institutions out of its netprofit every year. Which value is reflected here?

Ans.Social responsibility.

4. A company had an outstanding salary amounted to Rs. 25,000 which was not shown in the final accounts. Which value is disregarded here?

Ans.Fair presentation of information.

5. A company has a depreciation of Rs. 10,000 but it is showing 20,000 in the final accounts. Which value is disregarded here?

Ans.Cheating with government.

6.A firm had a bad debts amounting to Rs. 20,000. Out of these 15,000 were recovered. But the firm decided not to disclose in final accounts. Which value is disregarded here?

Ans.Incomplete disclosure.

7. Received cash Rs. 10,000 from Ram was wrongly entered in the books of accounts. But later after identifying also the firm did not rectify the error. Identify the value being neglected here

Ans.Carefulness and respect.

8. A firm has recorded Rs. 5,000 which was incurred for travelling as donation to a charitable institution. Identify the value disregarded here.

Ans.Respect for poor.

9. A firm has created more amount of provision for doubtful debts for decreasing the profit. Ide ntify the value disregarded here.

Ans.Prepare for future.

10.                  Rent paid Rs. 4,000 is wrongly recorded as Rs. 8,000. But it was not rectified. Identify the value disregarded here.

Ans.Carefulness.

11.                  A company received a commission of Rs. 50,000 belonging to the next year was entered in the final accounts of the current year to increase the profit to disclose to the public. Identify the value disregarded here

Ans. Trust and confidence.

Non Profit organisation

8	Mahila Vikas organisation which was established to help needy women received subsription for Rs.40000 in the year 2012. Subsription in the year 2011 Rs.6000. Subsription includes for the year 2013 Rs.10000. What values are highlighted?
	Love for life, helping mentality, upliftment of women
9	Gaur Samaj Samiti received a fund for poor girls marriage, donations to the education of poor children. What values are highlighted by the organisation?
	Sensitive towards society, kind heartedness
10	Rachana Literary Club organises various literary based competitions for the students of lower income group. What are the values highlighted by the club?
	helping poor children, Promotion of literary activities

Accounts from incomplete records

1.  Ram is  a business man .He maintains books under single entry system to undercast  the real profit of business to pay less tax to govt. which value is violated by Ram.

Ans. 1.Social responsibility 2. Honesty

2.Sham follows incomplete records. He charges more depreciation on the assets which leads to undervalue of the profit .which value is ignored here?

Ans. Compliance with law, honesty.

3.Ramya owns business. She employs 5 employees in her organization. She shows them less profit than he occurs and tells them he is unable to pay their salaries. Which value is ignored here.

Ans. 1.justice with employees.

         2. honesty

4. Mr. gupta owns business .he earns adequate profits and follows single entry system. He pays timely  tax. Which value is not ignored here?

Ans. 1.Compliance with law 2.Social responsibility.

5.MR. X owns fruit business he follows  single entry system of accounting system. Most of the time he sells goods of less weight  to customers and charges the same rate as for proper weight. Which values are being ignored here.

Ans. 1.Social responsibilities 2. Honesty