On October 01, 2011 Juneja Transport Company purchased 2 Trucks for ₹ 10,00,000 each. Accident: An asset may lose its value due to mishaps such as a fire accident, theft or by natural calamities and they are permanent in nature. State the three fundamental steps in the accounting process. In the balance sheet, the amount of provision may be shown on the asset side by deducting from the relevant asset or on the liability side along with the current liabilities. Berlia Ltd. The cost of depreciation reduces and the repair and maintenance expenses increase over the yea₹ However, the entire burden will not get ease to the management. Solution: Prepare furniture account, and accumulated depreciation account for the years ended on March 31, 2013, March 31,2014 and March 31,2015. on original cost method annually on December 31. Download Class 11 Accountancy NCERT Solutions in pdf free. Here we have given TS Grewal Accountancy Class 11 Solutions Chapter 5 Journal. Four examples of provision are given below. It strengthens the financial position. Books are closed on December 31, every year. Opened a current account in bank Rs.1,20,000. Creation of secret reserve is not allowed by Companies Act, 1956 which requires full disclosure of all material facts and accounting policies while preparing final statements. Show Computers account in the books of Excel Computers for the years ended on March 31, 2011, 2012, 2013, 2014 and 2015. The Entire Solutions Individual Chapters can be Downloaded Links Provided Official Website. are very helpful for Students in home works, when Preparing for Examination. Solution: NCERT SolutionsAccountancyBusiness StudiesIndian Economic DevelopmentCommerce, Kerala Syllabus 9th Standard Physics Solutions Guide, Kerala Syllabus 9th Standard Biology Solutions Guide, NCERT Solutions For Class 11 Financial Accounting – Depreciation, Provisions and Reserves. Insurance company has agreed to pay ₹ 70,000 in full settlement of the claim. NCERT Solutions for Class 11 Maths consist of solved answers for all the chapters, exercise-wise. It was sold off for ₹ 1,50,000. Therefore, there is burden on the profit and loss account. On March 01, 2012, one fourth of machinery was damaged by fire and ₹ 40,000 were received from the insurance company in full settlement. depreciation on written down value basis. When Depreciation is Charged or Credited to the Assets Account On July 01, 2013, One Truck was involved in an accident and was completely destroyed and ₹ 6,00,000 were received from the insurance company in full settlement. Solution: Q15. Calculate the due dates of the bills in the following cases: Solution: Note: (i) As per this Question, point no. Working note: Contents1 NCERT Solutions For Class 11 Financial Accounting – Depreciation, Provisions and Reserves1.1 Short Answer Type Questions1.2 Long Answer Type Questions1.3 Numerical Questions NCERT Solutions For Class 11 Financial Accounting – Depreciation, Provisions and Reserves Short Answer Type Questions Q1. This will reduce tax liabilities, because the liabilities are overstated. It closes the books on December 31, 2012 and provides for depreciation on 10% written down value. Hence total expenses increase which leads to an excess of debit over credit balance. Reliance Ltd. Solution: Free PDF download of TS Grewal Accountancy Class 11 Solutions Chapter 5 Journal solved by Expert Teachers as per NCERT (CBSE) Book guidelines. Depreciation p.a. CBSE Maths notes, CBSE physics notes, CBSE chemistry notes, Q1. Solution: It can be shown either (i) by way of deduction from the item on the assets side for which it is created, or (ii) in the liabilities side along with the current liabilities. The solutions provided here cover all exercises given at the end of the chapter Accountancy. Solution: Q6. Q1. In the Balance sheet, asset appears at its written down value which is cost less depreciation charged till date. On July 01, 2012 another machine costing Rs.2,50,000 was purchased . NCERT Class 11 Accountancy Books Solutions 2021 for English, Hindi, Urdu Medium. Q4. It is recorded on the credit side of the profit and loss appropriation account. Prepare bad debts account, Provision for bad debts account and profit and loss account. It is utilised only for that purpose for which it is created. In this method, the original cost of an asset and the total amount of depreciation which has been charged cannot ascertain from this balance sheet. The NCERT Class 11th Accountancy textbooks are well known for it’s updated and thoroughly revised syllabus. Solution: on straight line method basis. Explain basic factors affecting the amount of depreciation. NCERT Solution for Class 11 Accountancy Chapter 9 - Financial Statements - 1. Prepare machinery account for 4 years on the basis of calendar year. Free PDF download of NCERT Solutions for Class 11 Accountancy Chapter 4 Recording of Transcations 2 solved by Expert Teachers as per NCERT CBSE Book guidelines. Journal Without Goods and Services Tax (GST) Following transactions of Ramesh for April,2018 are given below. NCERT Solutions for Class 11 – Accountancy. What are the causes of depreciation? = ₹ 5,000. To present correct financial statements: To present a true and fair view of profit and financial statement, the business must maintain provision for known liabilities and losses. Every Year NCERT Standard XI Exam Conducted in Every Year Month of April in Subject for, It So Happened, Students Download NCERT 11th Class Books 2021 for Accountancy etc, Solutions for Class 11 are Detailed to the Point that Makes Preparing Completing homework tasks much easier. 1. Depreciation p.a. on the written down value every year. Shri Krishan Manufacturing Company purchased 10 machines for ₹ 75,000 each on July 01, 2010. Excel Computers has a debit balance of ₹ 50,000 (original cost ₹ 1, 20,000) in computers account on April 01, 2010. Solution: Q7. As depreciation remains same over the years but repair cost increases in the later years, there will be unequal effect over the life of the asset. The main objective of provision is to account all expenses and losses. It is available for any future contingencies or expansion of business. One more computer was purchased on January 01, 2011 for ₹ 30,000. It is made for strengthening the financial position of the business. Book value of the assets becomes zero but still the assets are used in the business. Give four examples each of ‘revenue reserve’ and ‘capital reserve’. On September 01, 2012 another machinery was purchased by the company for ₹ 15,00,000. Provision for depreciation account ₹ 5,50,000 All questions and answers from the NCERT Book of Class 11 Commerce Accountancy Chapter 3 are provided here for you for free. Solution: Double Entry Book Keeping TS Grewal Accountancy Class 11 Solutions for Board Exams 2020 are extremely helpful for exam preparation. State the meaning of a Trial Balance. On March 01, 2013 it purchased another furniture for Rs.3,00,000. On October 01, 2013, one of the trucks is involved in an accident and is completely destroyed. An increase in depreciation will be debited in the profit and loss account which reduces net profit. Q3. It can be utilized for dividend distribution. On the same date another machine is purchased by the company for ₹ 1,25,000. “In case of a long term asset, repair and maintenance expenses are expected to rise in later years than in earlier year”. Interest on capital invested in assets is not provided in this method. on the diminishing balance basis on this truck. Distinguish between ‘general reserve’ and ‘specific reserve’. Solution: Q5. Further, on […] Chapter 4: Recording Of Transactions II. Through the creation of provision account, the amount of liability, losses and expenses are estimated and accounted for the accounting period. On April 01, 2010, Bajrang Marbles purchased a Machine for ₹ 2,80,000 and spent ₹ 10,000 on its carriage and ₹ 10,000 on its installation. Prepare machinery account and depreciation account from the year 2011 to 2014. It is expected that the machine can be sold for ₹ 6,000 at the end of its useful life of 15 yea₹ Moreover an estimated cost of ₹ 1,000 is expected to be incurred to recover the salvage value of ₹ 6,000. Hence, the amount of depreciation is same from period to period over the life of the asset. Answer : The evidence provided […] Prepare machine account and Provision for depreciation account for the first three years charging depreciation by fixed installment Method. Since the benefits from asset keep on decreasing, the cost of asset is allocated rationally. On 1st April, 2018, Mohit started business with a capital of ₹ 50,000. Depreciation amount can be calculated by using the following formula: Written Down Value Method Azad Ltd. purchased furniture on October 01, 2012 for Rs.4,50,000. It is recorded on the debit side of profit and loss account. Purchased goods for Rs.1,00,000 from Rashmi. All NCERT Solutions for class Class 11 Commerce Accountancy are … The following balances appear in the books of Crystal Ltd, on Jan 01, 2015 A new version of the IBM computer was purchased on August 01, 2014 for ₹ 80,000. State the three fundamental steps in the accounting process. Depreciation p.a. ii. (a) Prepare Machine account and Depreciation account for the first four years by providing depreciation on straight line method. On May 01, 2012 it purchased another machine for Rs.8,40,000 (including installation expenses). How are they created? Describe in detail two methods of recording depreciation. = ₹ 6,000-₹ 1,000 Show the journal entry for the year 2011 and prepare necessary ledger accounts for first three years. Depreciation is provided @15% p.a. Types of Reserves: Q6. Over the years, the work efficiency of assets decreases and repair expenses increases. Calculation of annual depreciation Q1. According to this method, a fixed and equal amount is charged as depreciation for every accounting period during the life time of an asset. Download Service Various subjects Published by CBSE – NCERT Accountancy Solutions 2021 for class 11. NCERT 11th Class Students go to Attendance Annual Final Examination 2021, NCERT Standard XI Students Career Very Important  This Academic Year 2021, Standard XI Complete Students Start in your Collages Life, NCERT 12th Class Students get your new NCERT Class 11 Accountancy Solutions 2021 for Accountancy (Financial Accounting-I, Lekhashastra-I, Accountancy-II, Lekhashastra-II, Khatadari-I, Khatadari-II) Pdf Format Chapter Wise Download our Website. All Journal Exercise Questions with Solutions to help you to revise complete Syllabus and Score More marks. On July 01, 2013, one bus was involved in an accident and was completely destroyed and ₹ 7,00,000 were received from the Insurance Company in full settlement. Solution: Q16. Q4. Here we have given TS Grewal Accountancy Class 11 Solutions Chapter 6 Ledger. It is recognised under the income tax act. What are ‘provisions’? Kapil Ltd. purchased a machinery on July 01, 2011 for ₹ 3,50,000. Accounting Treatment CBSE Class 11 Accountancy Worksheet for students has been used by teachers & students to develop logical, lingual, analytical, and problem-solving capabilities. We hope the TS Grewal Accountancy Class 12 Solutions Chapter 8 Accounting for Share Capital help you. The accounts are closed on December 31 every year. On April 01, 2014 the computer which has purchased on July 01, 2010 became obsolete and was sold for ₹ 20,000. The plant was sold for ₹ 1,50,000 on October 01, 2012 and on the same date a new Plant was installed at the cost of ₹ 4,00,000 including purchasing value. Solution: Question 11. =(56,000+28,000)-5,000/15 NCERT Solution for Class 11 commerce Accountancy Chapter 3 – Recording of Transactions – 1 furnishes us with an all-inclusive data to all the concepts. Your email address will not be published. Solution: Q9. The accounts are closed on December 31st, every year. NCERT Solutions for Class 11th: Ch 3 Recording of Transactions - I Accountancy Page No: 79 Questions for practice Short Questions 1. 2. NCERT Books Class 11 Accountancy: The National Council of Educational Research and Training (NCERT) publishes Accountancy textbooks for Class 11. NCERT Solutions are considered an extremely helpful resource for exam preparation. Working Notes: Calculation of Annual Depreciation. Solution: Q5. It is created by management to avoid competition by reducing profit. Q3. If depreciation is accumulated in provision for Depreciation account then prepare machine account and provision for depreciation account for the years 2011, 2012, 2013 and 2014. To meet the legal requirement: To comply with the provisions of the Companies Act and Income Tax Act, it is necessary to charge depreciation. A Noida based Construction Company owns 5 cranes and the value of this asset in its books on April 01, 2011 is ₹ 40,00,000. Explain determinants of the amount of depreciation. Prepare cranes account. Chapter 2: Theory Base Of Accounting. NCERT Solutions for Class 11. Explain the concept of ‘secret reserve’. Discuss in detail the straight line method and written down value method of depreciation. This study material owns a deep knowledge and the Solutions collected by the subject matter wizards are no distinct. An extract of Trial balance from the books of Tahiliani and Sons Enterprises on Mar 31 2015 is given below: Give necessary accounting entries for writing off the bad debts and creating the provision for doubtful debts account. Correct answer is Due Date of 3rd March 2018. Importance of Provision: Therefore, provision is necessarily to be created to ascertain the current income or profit. Give four examples each of ‘provision’ and ‘reserves’. Ganga Ltd. purchased a machinery on January 01, 2011 for Rs.5,50,000 and spent Rs.50,000 on its installation. Solution: Q14. Solutions Very Important Home Work & Half Year, Final Examination Students Better Performance NCERT 11th Class Solutions 2021 for Accountancy Download Pdf Format Chapter Wise and Work Start Easy two Pass 11th Class grad 10 Points. Prepare machinery account and machinery disposal account for the year ended March 31, 2016. All NCERT Solutions for class Class 11 Commerce Accountancy are prepared by experts and are 100% accurate. = Cost-Scrap Value/Estimated Life of Assets(years) On January 01, 2013, first machinery become useless due to technical changes. NCERT Solution For Class 11 Commerce Accountancy Chapter 4 – Recording Of Transactions – 2 furnishes us with an all-inclusive data to all the concepts. NCERT Solutions for Class 11 Accountancy Financial Accounting Part-1 Chapter 3 Recording of Transactions Short answers : Solutions of Questions on Page Number : 79 Q1 : State the three fundamental steps in the accounting process. What are the effects of depreciation on profit and loss account and balance sheet? It is created for increasing the financial position of the business. Prepare the machinery account from 2010 to 2013. Depending on the nature of account, both debit and credit may represent increase or … Answer needs Correction? NCERT solutions for Class 11 Accountancy provides a wide range of concepts and an introduction to the subject which includes all the questions provided in the NCERT class 11 books. The company maintains the calendar year as its financial year. Purchased a Machine for ₹ 1,08,000 and spent ₹ 12,000 on its installation. NCERT solution of Class 11 Accountancy makes it convenient to understand and implement concepts and terms inclusive in financial accounts. You will also love the ad-free experience on Meritnation’s NCERT Solutions. A new machinery was purchased on 01 May, 2012 for ₹ 15,00,000 and another on July 01, 2014 for ₹ 12,00,000. Which method is suitable for charging depreciation if the management does not want to increase burden on profits and loss account on account of depreciation and repair. Working notes: All questions and answers from the NCERT Book of Class 11 Commerce Accountancy Chapter 4 are provided here for you for free. Download Service Various subjects Published by CBSE – NCERT Accountancy Solutions 2021 for class 11. Also, it is considered as a charge against revenue or profits. Why is the evidence provided by source documents important to accounting? Working notes : At the time of purchase it was estimated that the effective commercial life of the machine will be 12 years and after 12 years its salvage value will be ₹ 12,000. To ascertain the correct profit or 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. on original cost method annually on December 31. Solution: Q10. Show the machinery account and provision for depreciation account for 3 years. Provision is a charge against the profit which is debited in the profit and loss account. Prepare truck account and provision for depreciation account for the three years ended on December 31, 2013. The company writes off depreciation @ 20% p.a. Journalise the following : i. Isha invested Rs.2,00,000 in business. on original cost and account are closed on December 31, every year. This method is widely accepted under the Income Tax Act. On December 31, 2013 this Truck was sold for ₹ 5, 00,000. Explain the concept of depreciation. On October 01, 2010, a Truck was purchased for ₹ 8,00,000 by Laxmi Transport Ltd. Depreciation was provided at 15% p.a. Solution: Q11. Profit on revaluation of fixed assets and liabilities. Depreciation is provided on machinery @10% p.a. The two methods of depreciation are. = (56,000+28,000)-5,000/15 Solution: Hence the asset value is reduced by the amount of depreciation. The machine purchased on Rs.01, 2011 was sold for Rs.25,000 on October 01, 2015. Accountancy helps the management of an organization with accurate financial statements, positions, and results which further aids them in making important business decisions. NCERT Solutions 2021 for Class 11 are Prepared by Subject Experts, Solutions are prepared detailed, step by step for all Questions in Text Book Solutions for quick Understanding and easy access. on original cost and closes its books on December 31, every year. Accounts are closed on March 31st every year. The overall balance of asset’s column in the balance sheet gets reduced. Secret reserves are created by overstating liabilities or understating assets which are not shown in the balance sheet. NCERT Solutions are said to be an extremely helpful study material while preparing for the CBSE Class 11 Accountancy examinations. As the students would have to learn the basic fundamentals about the subject of Accountancy in class 11, this curriculum for class 11 is a comprehensive study material; which explains the concepts in an effective way. On July 01, 2010, Ashok Ltd. original cost less depreciation) of fixed asset, Amount of depreciation remains constant for all years, Amount of depreciation keeps on decreasing year after year, At the end of the useful life of an asset, the balance in the asset account will reduce to zero, At the end of the useful life of an asset, the balance in the asset account will not reduce to zero, It is suitable for assets which get completely depreciated on the account of expiry of its useful life, It is suitable for assets which require more and more repairs in the later stage of its useful life, Rate of depreciation is easy to calculate, Rate of depreciation is difficult to calculate. Depreciation p.a. It cannot be used for distribution of dividend. Solution: Q11. Passage of time: Whether assets are used or not, with the passage of time, its effective life will decrease. This method is most favorable for those assets which require increased repairs and maintenance expenses over the years. Treatment on asset side- Provision for doubtful debts is deducted from the amount of sundry debtors and the provision for depreciation is deducted from the relevant asset. Solution: Accountancy-DK Goel 2019 Solutions for Class 11 Accountancy Chapter 3 - Books of Original Entry- Journal; Accountancy-DK Goel 2019 Solutions for Class 11 Accountancy Chapter 4 - Accounting for Goods & Service Tax GST) Accountancy-DK Goel 2019 Solutions for Class 11 Accountancy Chapter 5 - Books of Original Entry- Cash Book = ₹ 9,000 per annum, Q3. Calculation of annual depreciation NCERT Solutions for Class 11 Accountancy. Depreciation means fall in book value of depreciable fixed asset because of. In this method depreciation is charged on the book value of the asset and the amount of depreciation reduces year after year. Saraswati Ltd. purchased a machinery costing ₹ 10,00,000 on January 01, 2011. On September 01, 2011 it purchased another machine for Rs.3,70,000. If depreciation is not charged, the cost of production is underestimated, which will lead to low selling price and thus leads to low profit. It is formed out of revenue profit which is earned from normal activities of business operations. Books are closed on December 31 every year. NCERT Solutions for Class 11 Accountancy Part 1 Financial Accounting. M/s Lokesh Fabrics purchased a Textile Machine on April 01, 2011 for Rs.1,00,000. It implies that a fixed rate on the written down value of the asset is charged as depreciation every year over the expected useful life of the asset. Depreciation is calculated on the original cost of an asset. Accountancy or Accounting is a structure that is meant for measuring trading activities, actioning of information into reports and making the findings obtainable to the decision-makers. Q2. The value of assets can never be zero even though it is discarded. NCERT solutions for class 11th Accountancy has been provides to help students resolve all the queries in the textbooks prescribed by NCERT. These funds will be available for replacement of fixed assets when its useful life ends. CBSE Class 11 Accountancy NCERT Solutions are created by experts of the subject, hence, sure to prepare students to score well. Chapter 3: Recording Of Transactions I. on diminishing balance method. 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NCERT Solutions 2021 for Class 11 Accountancy Online Service Offers easy access to the NCERT for Class 11. Purchased a second hand machine for Rs.56,000 on July 01, 2011 and spent Rs.24,000 on its repair and installation and Rs.5,000 for its carriage. The Entire Solutions Individual Chapters … The effects of depreciation on Profit and Loss Account are as follows: The effects of depreciation on Balance Sheet are as follows: Q8. Prepare machinery account and depreciation account from the year 2011 to 2014, if depreciation is provided on machinery @10% p.a. Disadvantages of Written Down Value Method, Difference between Straight Line and Written Down Value Method. The Solutions here are as per the current Academic year ready to CBSE. = 100000/10 = ₹ 10,000. Four examples of reserve are given below. Chapter 6: Trial Balance Rectification Of Errors. Provision is to be maintained at 2% of Debtors. Journalise them. The company writes off 15% p.a. Carriage Transport Company purchased 5 trucks at the cost of ₹ 2,00,000 each on April 01, 2011. iii. Diminishing amount of depreciation is charged each year over the useful life of the asset. All Chapter wise Questions with Solutions to help you to revise complete Syllabus and Score More marks in … a. on the straight line method. It is estimated that its working life is 10 years and after 10 years its scrap value will be ₹ 20,000. State briefly the need for providing depreciation. Journal and Ledger Rules of Debit and Credit Debit (Dr) means to enter an amount of transaction on the left side of an account and credit (Cr) means to enter an amount on the side of an account. Solution: Q13. It is formed out of capital profit which is a gain from other than normal activities of business operations, such as sale of fixed assets. In this method, depreciation is deducted from the asset value and charged (debited) to profit and loss account. Answer The fundamental steps in the accounting process are: • Analyzing each transaction in terms of its effect on the accounts. Obsolescence: Because of new technologies, innovations and inventions, assets purchased currently may become outdated later which leads to the obsolescence of fixed assets. Purchased goods for Rs.60,000 and paid Rs.2,000 for arrange. Prepare the machinery account and provision for depreciation account for the year ending December 31, 2015. on straight line method. Thus, the balance sheet shows the original cost of the asset and the total amount of depreciation charged on asset. On October 01, 2012, one of the machines got destroyed by fire and an insurance claim of ₹ 45,000 was admitted by the company. Solution: Q20. Book value of the asset becomes zero at the end of its effective life. The written down value method is most appropriate to overcome the burden of the profit and loss account because of high depreciation and repair costs over the years of the asset. Depreciation was provided on machinery @10% p.a. In this method, it is difficult to calculate depreciation. Use of asset: Because of constant use of the fixed assets there exists a normal wear and tear which leads to fall in the value of the assets. NCERT 11th Class Accountancy Solutions 2021 Pdf Chapter Wise Helps Students Prepare and eventually adjust to the Increased load of Chapters and Topics, by Clearing their Doubts from the very basics. iii. Fixed percentage on original cost or straight line method, Fixed percentage on diminishing balance or written down value method. If the asset has a residual value at the end of its useful life, the amount to be written of every year is as follows: If the annual depreciation amount is given then we can calculate the rate of depreciation as follows: Simple to calculate the depreciation amount, Assets can be depreciated up to the estimated scrap value, Easy to understand the amount of depreciation. It is created for the purpose of the Companies Act. Solution: Answer : The fundamental steps in the accounting process are diagrammatically presented below. Some reserves are also mandatory under law. In the balance sheet, the asset will continue to appear at the original cost every year. On January 01, 2011, Satkar Transport Ltd, purchased 3 buses for ₹ 10,00,000 each. On October 01, 2011 it sold one of its cranes whose value was ₹ 5, 00,000 on April 01, 2011 at a 10% profit. Accounts are closed on December 31, every year. Assets are used for earning revenues and its cost is charged in form of depreciation from Profit and Loss Account. On July 01, 2014 it sold off the first furniture purchased in 2012 for Rs.2, 25,000.Depreciation is provided at 15% p.a. NCERT Solutions for Class 11 Accountancy NCERT Solutions for Class 11 Accountancy Part 1. What is ‘Depreciation’? It is not available for any future contingencies or expansion of business.