Class 11 -

Accountancy
Sample Paper
01

Maximum
Marks: 40 Time
Allowed: 90
minutes

General Instructions:

1. There are a total 55 questions in this paper out of which 45 questions are to be attempted.
2. This paper is divided into three Sections:
1. Section A – Contains 25 questions. Attempt any 20 questions.
2. Section B – Contains 25 questions. Attempt any 21 questions.
3. Section C – Contains 5 questions. Attempt any 4 questions.
3. All questions carry equal marks.
4. There is no negative marking.

Section A
1. Which of the following is treated as an asset?
a. Interest received in advance
b. Accrued interest
c. Outstanding interest
d. Interest received
2. Debit balance of a personal account means the person is a ________ of the firm whereas
credit balance of a personal account indicated that the person is a ________ of the firm.
a. Owner, Creditor
b. Debtor, Owner
c. Creditor, Creditor
d. Debtor, Creditor
3. As per the business entity assumption, the business is different from the
a. Proprietor
b. Politics
c. Government
d. Banker
4. Xcommenced business on 1st April 2013 with a capital of Rs 6,00,000. On 31st March 2014,
his assets were worth Rs 8,00,000 and liabilities Rs 50,000. Find out his closing capital.
a. Rs 5,50,000
b. Rs 7,50,000
c. None of these
d. Rs 2,00,000
5. Debit mean
a. a decrease in asset
 b. an increase in the proprietor’s equity
c. an increase in asset
d. an increase in liability
6. Which source document is sent to inform about the credit made in the account of the buyer along
with
the reasons mentioned in it?
a. Credit receipt
b. Credit note
c. Credit bill
d. Credit slip
7. Which of these accounts has debit balance?
a. Prepaid insurance premium
b. Bank loan
c. Income received in advance
d. Creditors for goods
8. Cash book does not record the ________ transactions.
a. Cash Purchase
b. None of these
c. Credit
d. Cash Sales
9. Journal Proper records transactions of:
a. capital nature
b. different nature
c. similar nature
d. revenue nature
10. Compensating errors are of a ________ nature.
a. accommodating
b. consistent
c. neutralizing
d. concealing
11. Provisions are:
a. external transactions
b. none of these
c. internal transactions
d. Can be external transactions and internal transactions
12. Under the diminishing balance method, depreciation is charged on:
a. Cost of Production
b. Written Down Value
c. Net Profits
d. Original Cost

13. Which account will be credited for the goods given as charity?
a. None of these
b. Charity A/c
c. Sales A/c
d. Purchases A/c
14. Cash, goods or assets invested by the proprietor in the business for earning profit is called:
a. Profit
b. None of these
 c. Capital
d. Fixed assets
15. If total assets of a business are Rs.150000 and capital is Rs.130000.Calculate outside liabilities
a. Rs.15000
b. Rs.25000
c. Rs.30000
d. Rs.20000
16. Consider the following statements with regard to the accounting treatment of various accounts:
i. Increase in asset is debited and decrease in asset is credited.
ii. Increase in expenses/losses is debited and decrease in expenses/ losses is credited.
iii. Increase in liabilities is credited and decrease in liabilities is debited.
iv. Increase in capital is credited and decrease in capital is debited.

Identify the correct statement/statements:

a. i and ii
b. i, iii and iv
c. i, ii, iii and iv
d. ii and iii
17. Credit note is a document evidencing that the
a. None of these
b. Account of the named person is debited for the reason stated therein
c. Credit has been granted to the named person for the reason stated therein
d. Both of these
18. Nominal accounts are transferred to ________ of the firm.
a. Trading and Balance Sheet
b. Trading and Profit and Loss A/c
c. None of these
d. Balance Sheet and Profit and Loss A/c
19. Which of the following is false regarding the cash book:
A. All credit and cash transaction are recorded
B. Opening balance of cash is shown in Dr side of the cash book as ‘To Balance b/d’
C. Only transactions of cash receipt and payments are recorded
D. This book can not show a credit balance
a. (D)
b. (A)
c. (C)
d. (B)
20. Goods taken away by the proprietor from the business for his personal use will be recorded in:
a. Sales Book
b. Purchases Book
c. Purchases Return Book
d. Journal Proper
21. The last step of the accounting process is:
a. to record transactions in the books
b. to classify the transactions under separate heads in the ledger
c. to make a summary in the form of financial statements
d. to provide information to various parties
22. The expense that has been incurred but has not been paid is called:
a. Prepaid expenses
 b. Loss
c. Revenue
d. Outstanding expenses
23. An enterprise prepares its account under the accrual basis. Salaries amounting to Rs. 20000 for
the month of March 2013 was not paid. The owner did not want to account it in the books of
accounts on the ground that the amount was not paid. The enterprise closes its account on
31st March every year. Is he correct?
a. Yes, the expense should be accounted at the time it incurred
b. No, the expense should not be accounted at the time it incurred
c. None of these
d. No, the expense should be accounted at the time it incurred
24. Total assets in a business are Rs 8,00,000 and total liabilities are Rs 5,00,000. The difference
is called ________.
a. expenses
b. income
c. goodwill
d. capital
25. Match the followings options are as follows:
a. Assets
b. Liabilities
c. Revenue
d. Expenses
e. Capital
i. Equity
Shares
ii.Purchase,
Salary paid
iii. Sale, commission received
iv. Trade Payables, short term loans
v. Cash, Debtor, furniture
a. a(v), b(iv), c(iii), d(i), e(ii)
b. a(v), b(iv), c(ii), d(iii), e(i)
c. a(iv), b(v), c(iii), d(ii), e(i)
d. a(v), b(iv), c(iii), d(ii), e(i)
Section B
26. Assertion (A): Accounting information is sometimes based on estimations.
Reason (R): The financial statements always reflects true position of the business.
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.
27. Invoice is a source voucher for the purchaser of goods ________.
a. for cash purchases
b. or cash sales
c. for credit sales
d. for credit purchases
28. Assertion (A): The ICAI gives consideration to the international accounting standards.
Reason (R): India is a member of international account setting body.
 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.
29. Dinesh who owed us Rs 8,000 became insolvent and paid us 60% in full settlement.
Posting will be made to Dinesh A/c:
a. Rs 4,800 on Cr. side
b. Rs 4,800 on Dr. side
c. Rs 8,000 on Dr. side
d. Rs 8,000 on Cr. side
30. Which of the following is false regarding the Imprest system
A. Head cashier is given money at the end of the definite period
B. Head cashier reimburses the amount actually spent the petty cashier
a. Both statements are true
b. Both the statements are false
c. (A)
d. (B)
31. Assertion (A): Journal keeps a chronological record of all transactions.
Reason (R): It provides the basis for posting into ledger.
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.
32. Which of the following transaction will not be recorded in the purchase book
a. None of these
b. Both Purchase of goods for cash and Purchase of assets meant for the long term, not
for resale purpose
c. Purchase of goods for cash
d. Purchase of assets meant for the long term, not for resale purpose
33. Which of the following errors will not affect the trial balance?
A. Wrong balancing of an account
B. Wrong totaling of an account
C. The omission of an account from the trial balance
D. Writing an amount in the wrong account but on the correct side
a. Only D
b. Only B
c. Only C
d. Only A
34. An alternative term used for accumulated depreciation expenses?
a. Depletion
b. Cumulative depreciation
c. Provision for depreciation
d. Targeted depreciation
35. Following are the disadvantages of secret reserves except
a. Unfair presentation of financial statements
b. Absorbing the unforeseen losses
c. Loss to shareholders
d. Mis-use by management
36. Assertion (A): Bank reconciliation statements helps to identify difference between
accounts of Cash book and Pass book.
Reason (R): It reconcile the Cash balance of Cash book.
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.
37. The amount invested by the proprietor in a business is called ________.
a. capital
b. revenues
c. cash
d. loan
38. Received Rs 4,900 from Garima in full settlement of Rs 5,000. Posting of Rs 100 will be made
to the:
a. Dr. side of Discount A/c
b. Cr. side of Discount A/c
c. Dr. side of Garima A/c
d. Cr. side of Garima A/c
39. A mathematical expression, which shows that the ________ and ________ of a firm are equal, is
known as accounting equation.
a. none of these
b. liabilities and assets
c. assets and capital
d. liabilities and capital
40. On which of these items, GST is not applicable?
a. Books
b. Sanitary pads
c. Alcoholic liquor
d. Medicines
41. Preparation of a Trial Balance is:
a. compulsory or optional
b. compulsory
c. none of these
d. optional
42. Assertion (A): Reserve is an appropriation of profit.
Reason (R): It is created after the calculation of net profit by debiting profit and loss accounts.
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.
43. In the following which is not the branch of Accounting?
a. Financial Accounting
b. Management Accounting
c. Cost Accounting
d. Statistics
44. Which of the following assets is/are known as active assets?
a. Tangible assets
b. Current assets
 c. Intangible assets
d. None of these
45. The cost of a small calculator is accounted as an expense and not shown as an asset in a
financial statement of a business entity due to ________.
a. Matching Concept
b. Periodicity Concept
c. Materiality Convention
d. Convention of full disclosure
46. When cheque received from the customer and not deposited into bank same day.
Which account should be debited.
a. None of these
b. Cheques in hand A/c
c. Bank A/c
d. Customer’s personal A/c
47. Depreciation is Charged on:
a. Fixed Tangible Assets
b. None of these
c. Both Current and Fixed Assets
d. Current Assets
48. The main function of Accounting is:
a. Reliability
b. Comparability
c. Calculation of Profit and Loss only
d. Recording and classification of financial transactions
49. Which of the following is not a fixed asset?
a. Computers
b. Furniture
c. Building
d. Cash in hand
50. The business entities follow matching concept mainly to ascertain
a. The changes in the purchasing power of the money
b. None of these
c. True profit or loss during an accounting period
d. The changes in the selling power of the money

Section C

Question No. 51 to 52 are based on the given text. Read the text carefully and
answer the questions:

Dev is the owner of a trading firm with a capital of ₹ 25,000. During the year 2021, he
bought goods at the list price of ₹ 1,00,000 from Rani less 20% trade discount and 2% cash
discount and paid 40% by cheque. He sold goods to Preeti at the list price of ₹ 2,00,000 less
20% trade discount and 2% cash discount and she paid 50% by cheque. He also sold goods to
Tanu for ₹ 40,000 allowing her a trade discount of 5% and cash discount of 10%. She paid
1/4th of the amount in cash at the time of purchase. He received cash from Jaya for a bad
debt written-off last year amounting to ₹ 400.
51. Why does Dev give cash discount to his customers?
a. To encourage quick payment.
b. None of these
c. Because he sells goods to them at a very high price.
d. To make some profit even if goods are sold at catalogue price.
52. How is a trade discount different from cash discount?
i. Trade discount is allowed when goods are purchased in a specified quantity whereas cash
discount is allowed when payment is made on or before a specified date.
ii. Trade discount is not recorded separately in the books of account whereas cash
discount is separately recorded in the books of account.
a. Only (i)
b. Neither (i) nor (ii)
c. Both (i) and (ii)
d. Only (ii)

Question No. 53 to 55 are based on the given text. Read the text carefully and
answer the questions:

On 31st December, 2021, the cash book of Mittal Bros showed a credit balance of ₹6,920.
There is a stark difference in the balance as per pass book. A careful scrutiny points out that
there was a debit by bank for ₹200 on account of interest on overdraft and ₹50 on account of
charges for collecting bills. Cheques drawn but not encashed before 31st December, 2021
were for ₹4,000 . The bank has collected interest and has credited ₹600 in pass book. A bill
receivable for ₹700 previously discounted with the bank had been dishonoured and debited
in the pass book. Cheques paid into bank but not collected and credited before 31st
December, 2021 amounted to ₹6,000.

53. Credit balance in cash book reflects

a. none of these
b. overdraft
c. favourable balance
d. nil balance
54. Credit balance of bank account as per cash book essentially means
a. bank account becomes negative and the businesses in effect have borrowed from the bank
b. none of these
c. there is high positive balance in bank account
d. business has paid all its bank loans
55. While preparing the bank reconciliation statement, bills receivable for ₹700 previously
discounted with the bank now dishonoured, will
a. decrease the credit balance of cash book
b. increase the credit balance of cash book
c. none of these
d. will not affect the credit balance of cash book
 Class 11 -
Accountancy
Sample Paper
01

Solution

Section A
1. (b) Accrued interest
Explanation: Accrued interest is the income which is due but not received so it becomes a Current
asset for the business.
2. (d) Debtor, Creditor
Explanation: Debit balance means the firm has to take the money from person and credit
balance means the firm has to repay the money to the person. Therefore the debit balance of the
personal account is debtor and credit balance is a creditor.
3. (a) Proprietor
Explanation: According to the business entity concept, the task of measuring income and
wealth is undertaken by accounting for an identifiable unit or entity. The Unit or entity so
identified is treated different and distinct from its owners. Business and owner are
different.
4. (b) Rs 7,50,000
Explanation: Assets= Capital + Liabilities
Capital = Assets - Liabilities
Capital = 8,00,000 - 50,000
capital = Rs 7,50,000
5. (c) an increase in asset
Explanation: A debit is an accounting entry that results in either an increase in assets or a
decrease in liabilities.

6. (b) Credit note

Explanation: Credit note
7. (a) Prepaid insurance premium
Explanation: Prepaid insurance (Advance) premium account has a debit balance.
8. (c) Credit
Explanation: Only cash transactions are recorded in the cash book. The non-cash aspect of the
transaction is not recorded in the cash book, i.e. credit transaction it is recorded in other
subsidiary books.
9. (b) different nature
Explanation: Journal proper is a book of original entry (simple journal) in which
miscellaneous transactions are recorded which do not fit in any other books are recorded.
10. (c) neutralizing
Explanation: Compensating errors are of a neutralizing nature.
11. (c) internal transactions
Explanation: Provision is internal transactions.
12. (b) Written Down Value
Explanation: According to the Diminishing Balance Method, depreciation is charged at a fixed
percentage on the book value of the asset. As the book value reduces every year, it is also
known as the Reducing Balance Method or Written-down Value Method.
13. (d) Purchases A/c
Explanation: When goods are given as charity, there is an outflow of the goods
purchased. So the purchases account is credited.
Journal Entry :
Charity A/c ... Dr
To Purchase A/c
14. (c) Capital
Explanation: Cash, goods or assets invested by the proprietor in the business for earning profit is
called capital.
15. (d) Rs.20000
Explanation: The basic accounting Equation is:-
Assets = Capital + Liabilities
150000= 130000+ Liabilities
Liabilities= 150000-130000
Liabilities= 20000
16. (c) i, ii, iii and iv
Explanation: i, ii, iii and iv
17. (c) Credit has been granted to the named person for the reason stated therein
Explanation: Credit note is a document given by seller to the purchaser who has return goods
and he can adjust this amount with future purchases. So this means credit has been granted to the
person named in the credit note.
18. (b) Trading and Profit and Loss A/c
Explanation: Nominal accounts are expenses and income of the firm for the current year and
thus their balances are not to be carried forward to the next year. that is why they are transferred
to trading or profit & loss account. But Real A/c or Personal A/c are shown in Balance Sheet.
19. (b) (A)
Explanation: Cash Book :- Cashbook only records cash transactions that are cash received or paid.
It does not record any credit transaction. Thus the above statement is false. We have separate
subsidiary books to record credit transactions.
20. (d) Journal Proper
Explanation: Goods taken away by the proprietor from the business for his personal use will be
recorded in Journal Proper because in the subsidiary book we record only credit nature of the
transaction.
21. (d) to provide information to various parties
Explanation: Provide information to various parties (internal or external) who are interested in
business enterprise.
22. (d) Outstanding expenses
Explanation: Outstanding Expenses:- These are expenses which are due but not paid.
23. (d) No, the expense should be accounted at the time it incurred
Explanation: As per accrual concept:- Expenses should be accounted for when it is incurred
whether paid or not. Therefore salaries amounting to Rs 20,000 should be recorded in the books
for the month of march 2013 though it is paid or not. Therefore, the owner is not correct in not
recording the expenses in the books of accounts.
24. (d) capital
Explanation: Total assets in a business are Rs 8,00,000 and total liabilities are Rs 5,00,000. The
difference is called capital.
Capital = Total Assets - Total Liabilities
25. (d) a(v), b(iv), c(iii), d(ii), e(i)
Explanation: Assets are business owned property in its name which is cash, debtor furniture.
Liability are debt for the business which are trade payables, short term loans.
Income are amount earned by business which are sale or commission received.
Expenses are the amount paid for purchase or any expense which are purchase and salary.
Capital is amount invested in business which is Equity or owner fund.
Section B
26. (c) A is true but R is false.
Explanation: A is true but R is false.
27. (d) for credit purchases
Explanation: All credit purchases of goods are recorded in the purchase journal. The source
documents for recording entries in the book are inward invoices or bills. The inward invoice is
received by the buyer from the seller.
28. (d) A is false but R is true.
Explanation: A is false but R is true.
29. (d) Rs 8,000 on Cr. side
Explanation: Cash A/c Dr. ... 4,800
Bad debts A/c Dr. ... 3,200
To Dinesh A/c ... 8,000
30. (c) (A)
Explanation: Head cashier gives the money at the beginning of the period to the petty cashier
and then reimburses the amount actually spent by the petty cashier. Therefore the above statement
is false. Head cashier is not given the money, the petty cashier is given the money at the
beginning.
31. (a) Both A and R are true and R is the correct explanation of A.
Explanation: Both A and R are true and R is the correct explanation of A.
32. (b) Both Purchase of goods for cash and Purchase of assets meant for the long term, not for
resale purpose Explanation: In the purchase book:- only purchase of goods on credit is
recorded in the purchase book and thus cash purchases of goods and purchase of long term assets
will not be recorded in the purchase book.
33. (a) Only D
Explanation: Writing an amount in the wrong account but on the correct side. It is compensating error.
34. (c) Provision for depreciation
Explanation: It is used along with the fixed asset in order to report the net asset value.
Accumulated Depreciation is also know as Provision for Depreciation.
35. (b) Absorbing the unforeseen losses
Explanation: Secret Reserve:- Heavy unforeseen Losses of extraordinary nature can be
met without disclosing them in the financial statements without affecting the normal
business profit. This is not a limitation.
36. (c) A is true but R is false.
Explanation: A is true but R is false.
37. (a) capital
Explanation: The amount invested by the proprietor into a business is called capital.
38. (a) Dr. side of Discount A/c
Explanation: Cash A/c ... Dr. ... 4,900
Discount Allowed A/c ... Dr. ... 100
To Garima A/c ... 5,000
(Received from Garima Rs 4,900 in full settlement)
39. (b) liabilities and assets
Explanation: liabilities and assets
40. (c) Alcoholic liquor
Explanation: Alcoholic liquor
41. (d) optional
Explanation: Preparation of Trial Balance is optional.
42. (a) Both A and R are true and R is the correct explanation of A.
Explanation: Both A and R are true and R is the correct explanation of A.
43. (d) Statistics
Explanation: Statistics is not a branch of accounting. It includes cost accounting, financial
accounting and management accounting. There are only three branches of accounting.
44. (b) Current assets
Explanation: Current assets
45. (c) Materiality Convention
Explanation: The cost of a small calculator is accounted as an expense and not shown as an
asset in a financial statement of a business because it is small expenses and such expenses are
not increase the value of assets that entity due to Materiality Convention.
46. (b) Cheques in hand A/c
Explanation: The cheques which are not deposited in the bank on the same day will neither
affect bank and cash. So we debit cheques in hand a/c as cheques received are assets and they
are increasing so it is debited and Customer's A/c is credited.
47. (a) Fixed Tangible Assets
Explanation: Current assets are those assets which keep changing within a year of the business and
are not charged with depreciation. Fixed tangible assets stay in the business for a longer period of
time and the value of these assets keep reducing year after year because of the continuous usage of
 the assets. Hence depreciation is charged on the fixed tangible assets. Depreciation is charged on
Fixed tangible assets having limited life only.
48. (d) Recording and classification of financial transactions
Explanation: Recording and classifying of financial transactions are the first two functions of
accounting. The recording is done in a journal and classifying in the ledger.

49. (d) Cash in hand

Explanation: Cash in hand is a current asset, not a fixed asset.
50. (c) True profit or loss during an accounting period
Explanation: Matching Concept:- The matching concept states that earnings and expenses
shown in an income statement must both refer to the same goods transferred or services
rendered during the accounting period. so that the true profit or loss during an accounting
period can be ascertained.
Section C
51. (a) To encourage quick payment.
Explanation: To encourage quick payment.
52. (c) Both (i) and (ii)
Explanation: Both (i) and (ii)
53. (b) overdraft
Explanation: overdraft
54. (a) bank account becomes negative and the businesses in effect have borrowed from the bank
Explanation: bank account becomes negative and the businesses in effect have borrowed from
the bank
55. (b) increase the credit balance of cash book
Explanation: increase the credit balance of cash book

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