TEST PAPER-1

ACCOUNTANCY
CLASS – XI
General Instructions
Time-60 Minutes All the questions are compulsory. Each question carries 4 marks. Maximum Marks-40

1. Define accounting. Write any three differences between book-keeping and accounting?
2. Briefly discuss the informational needs of any four external users.
3. Give any four limitations of accounting.
4. Briefly explain qualitative characteristics of accounting information.
5. Why should a business follow the consistency principle? Explain.
6. Explain the following.
1. Going Concern Concept, 2.Disclosure Concept, 3.Accrual Concept and 4.Conservatism Concept

7. Define the following terms.

1. Transaction, 2.Capital, 3.Creditors, 4.Debtors, 5.Expense, 6.Revenue, 7.Loss and 8. Cash Discount
8. Identify which concept of accounting is applied here?
1. Closing stock is valued at lower of cost or market price.
2. Rent for the month of March 2014 is not paid but recorded as expense for the year ended 31st March 2014.
3. When a person brings in some money as capital into his business, in accounting records, it is treated as liability
of the business to the owner.
4. All assets are recorded in the books of accounts at their purchase price, which includes cost of acquisition,
transportation and installation and not at its market price.

9. Fill in the correct word:

1. Recognition of expenses in the same period as associated revenues is called_______________concept.
2. Revenue is generally recognized at the point of sale denotes the concept of _______________.
3. The __________concept requires that the same accounting method should be used from one accounting period to
the next.
4. Entire life of a business is divided into time intervals which are known as --------------.

10. Mr. Sunrise started a business for buying and selling of stationery with Rs. 5,00,000 as an initial investment. Of
which he paid Rs.1,00,000 for furniture, Rs. 2,00,000 for buying stationery items. He employed a sales person and clerk.
At the end of the month he paid Rs.5,000 as their salaries. Out of the stationery bought he sold some stationery for
Rs.1,50,000 for cash and some other stationery for Rs.1,00,000 on credit basis to Mr.Ravi. Subsequently, he bought
stationery items of Rs.1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost Rs.
30,000 worth of stationery. A part of the machinery, which cost Rs. 40,000, was sold for Rs. 45,000.From the above,
answer the following:
1. What are the fixed assets he bought?
2. What is the value of the goods purchased?
3. What is the gain he earned?
4. What is the loss he incurred?