RBSE Class 11 Accountancy Important Questions Chapter 11 Accounts from Incomplete Records

Rajasthan Board RBSE Class 11 Accountancy Important Questions Chapter 11 Accounts from Incomplete Records Important Questions and Answers. 

RBSE Class 11 Accountancy Important Questions Chapter 11 Accounts from Incomplete Records

Very Short Answer Type Questions

Question 1.
What is meant by incomplete records?
Answer:
The records of accounting which are not strictly kept according to double entry system are known as incomplete records. 

Question 2.
Name the business persons who maintain accounts under single entry system?
Answer:
Small businessmen, shopkeepers, grocers, vendors etc.

Question 3. 
Which type of accounts are normally prepared under single entry system?
Answer:
Transactions relating to cash, debtors and creditors are normally recorded.

Question 4.
State benefits of single entry system.
Answer:
Benefits of single entry system:
(a) It is easy to maintain.
(b) It is cost saving system of accounts.

Question 5. 
State two limitations of single entry system of accounting.
Answer:
Limitations of single entry system:
(a) It is unscientific and unreliable.
(b) Its results are not comparable.

Question 6. 
State the formula to calculate profit or loss under single entry system.
Answer:
Profit / Loss = Closing capital + Drawings + Capital withdrawn - Further Capital Introduced - Opening capital 

Question 7. 
What is statement of affairs?
Answer:
it is a statement which shows the value of assets and liabilities on a particular date and it is used to find out balance of capital.

Question 8. 
State two reasons, why should small scale business organisations prepare accounting records under single entry system. 
Answer:
(a) They cannot afford double entry book keeping system as it requires hiring of accountant and accounting softwares. 
(b) There is no public accountability for such small scale enterprises and even government exempts them to prepare records if their revenue does not reach a particular level.

Short Answer Type Questions

Question 1.
What is single entry system of accounting?
Answer:
This system is a misnomer as there is no such system of marinating accounting records. It is basically a mechanism of recording of transactions whereby some transactions are recorded with proper debits and credit while in case of other, either one sided or no entry is passed. Normally, under this system, records of cash and personal accounts of debtors and creditors are properly maintained while information relating to assets liabilities, expenses and revenue is partially recorded.

Question 2.
State the methods to ascertain profit or loss under single entry system of accounting.
Answer:
Under single entry system, profit or loss can be ascertained in two ways:
(a) By preparing statement of affairs.
(b) By preparing trading account, profit and loss account and balance sheet after converting single entry system to double entry system.

Question 3.
How would you calculate profit or loss under single entry system?
Answer:
The following procedure is adopted to find out profit or loss:
(a) Ascertain opening capital in the beginning of the year by preparing statement of affairs in the beginning of the year.
(b) Ascertain closing capital at the end of the year by preparing statement of affairs at the end of the year.
(c) Simply, profit or loss is ascertained by comparing closing capital with opening capital 

Question 4. 
Differentiate between statement of affairs and balance sheet.
Answer:
Differentiate between statement of affairs and balance sheet:

Basis	Statement of affairs	Balance sheet
Objective	Its objective is to find out capital in the beginning or at the end of the year.	Its objective is to find out true financial position at the end of the year.
Reliability	It is less reliable as it is prepared from incomplete records	It is more reliable as it is prepared from complete records
Omission of items	Omission of assets and liabilities cannot be detected easily.	Omission of assets and liabilities can easily be traced from the trial balance.

Higher Order Thinking Skills Questions

Question 1.
Why is single entry system of accounting called incomplete system of accountancy?
Answer:
Single entry system of accountancy is called incomplete as some information are completely recorded. some are partially recorded and for others, no entry is passed.

Question 2. 
Can large sized business organistion prepare incomplete records of accountancy?
Answer:
Yes, the large sized organisations may be rendered to the state of incompleteness due to natural calamity, theft or fire.

Question 3. 
Which generally accepted accounting principle is followed while preparing the accounts under single entry system?
Answer:
Money measurement concept.

Question 4. 
What is the common objective between single entry system and double entry system?
Answer:
Both systems help determine financial position of a business firm.

Question 5. 
Though single entry system of accounting is incomplete, unreliable and unscientific, still some businessmen prepare their accounts through this system. Why, explain with reasons.
Answer:
Many businessmen prepare records under single entry system due to following reasons:
(a) Any person who does not have proper knowledge of accounting principles can adopt this system.
(b) It is inexpensive mode of maintaining records.
(c) It is time saving as limited records are prepared.
(d) It is convenient mode of maintaining accounts as owner maintain accounts of his/her choice.

Question 6. 
How can reliable financial statements be maintained?
Answer:
Reliable financial statements can be prepared when a systematic approach to maintenance of records is followed.

Question 7. 
Then Singh runs a small general store, state which system of accounting will be followed by him.
Answer:
He would follow single entry system.

Question 8.
State which principle of accounting is violated in case of single entry system.
Answer:
Dual aspect principle.

Question 9.
Then Single converts his small business of general store in One Person Company. Can he continue his business with single entry system?
Answer:
No, he would require to prepare accounts under double entry system as his business has been formed under Companies Act 2013.

Question 10.
Is it possible to prepare trial balance under single entry system of accounting?
Answer:
No, it is not possible to prepare trial balance under single entry system as complete information of accounts is not available under this system.

Question 11. 
State the reason, why statement of affairs is not called as balance sheet though the components in both statements are same.
Answer:
Balance sheet is prepared with the help of recorded balances whereas statement of affairs is prepared with the help of estimates. This is the reason, statement of affairs is not called balance sheet.

I. Multiple Choice Questions

Question 1. 
Incomplete records are generally prepared by ..............
(a) A trader 
(b) Society
(c) Company 
(d) Government
Answer:
(a) A trader 

Question 2. 
Statement of affairs is prepared to calculate ..............
(a) Capital 
(b) Cash 
(c) Total assets 
(d) Total liabilities
Answer:
(a) Capital 

Question 3. 
Single entry system is suitable for ...............
(a) For partnership 
(b) For companies
(c) Sole proprietor 
(d) For multinational companies
Answer:
(c) Sole proprietor 

Question 4. 
Which of the following is not the advantage of single entry system?
(a) It is simple to operate
(b) Partial use of double entry book keeping
(c) It is suitable for small enterprises
(d) It is easy ascertain profit and loss
Answer:
(b) Partial use of double entry book keeping

Question 5. 
In single entry book keeping ..............
(a) All personal, real and nominal accounts are prepared
(b) All personal and nominal accounts are prepared
(c) All personal, cash and bank account are prepared
(d) All real and nominal accounts are prepared
Answer:
(c) All personal, cash and bank account are prepared

Question 6. 
In the absence of drawings and further capital introduced, excess of closing capital over opening capital represents
(a) Loss 
(b) Profit
(c) Profit if there is further capital introduced 
(d) Neither profit nor loss
Answer:
(b) Profit

Question 7. 
Single entry system carnes certain limitations except
(a) Trial balance is not prepared 
(b) Audit of records is not possible
(c) it is not suitable when size of the business is small 
(d) Accrual concept is not followed
Answer:
(c) it is not suitable when size of the business is small 

Question 8. 
The following balances extracted by the sole trader: Capital at the end of the year ₹18,000, drawing  ₹4,000, loss incurred ₹1,000 and capital in the beginning of the year  ₹ 20,000. The capital further introduced during the year will be
(a) 6,000 
(b) 3,000
(c) 1,500 
(d) 1,000
Answer:
(b) 3,000

Question 9. 
From incomplete records, it is possible to prepare ........
(a) Ledger accounts 
(b) Trial balance
(c) Statement of affairs 
(d) Special purpose subsidiary books
Answer:
(c) Statement of affairs 

Question 10.
Single entry system method of accounting records is ........
(a) Ledger accounts 
1. emotional
2. Unscientific
3. Unsystematic
4. Inconsistent
Choose the correct option:
(a) 1 
(b) 1&2 
(c) 1,2&3 
(d)1,2,3&4
Answers: 
(d)1,2,3 & 4

II. State Wheather the following statements are true or false.

1. There are certain transactions where no aspect is recorded in the single entry system.
2. There are two methods to prepare accounts under single entry system.
3. Trial balance is prepared before preparing financial statements under single entry system.
4. Profit or loss is calculated by deducting opening capital from the opening capital under single entry system.
5. Statement of affairs is similar to balance sheet.
6. Statement of affairs tells about the correct position of assets and Liabilities.
7. To convert single entry into double entry, trial balance is essential to be prepared.
Answers: 
1. True 
2. True 
3. False 
4. True 
5. True
6. False 
7. False

III. Fill in the blanks with correct answer:

1. Incomplete system of accounting is adopted by  _____
2. Statement of affairs is prepared to find out _____
3. Under single entry system, only _____ accounts and book are prepared.
4. Only ______ profit! loss is determined under single entry book keeping.
5. ____ balance is not prepared under single entry system.
Answers: 
1. Small traders 
2. Capital 
3. Personal/cash 
4. Estimated
5. Trial