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Class 11 - Accountancy
Term-2 Sample Paper-01

Maximum Marks: 40
Time Allowed: 2 hours

General Instructions:

1. This question paper comprises three parts – A, B and C. There are 12 questions in the question paper. All
questions are compulsory.
2. Question nos. 1,4,5 and 10 are short answer type–I questions carrying 2 marks each.
3. Question nos. 6, 7, 11 and 12 are short answer type–II questions carrying 3 marks each.
4. Question nos. 2, 3, 8 and 9 are long answer-type questions carrying 5 marks each.
5. There is no overall choice. However, an internal choice has been provided in 4 questions of five marks.

PART-A
1. Define a Promissory Note. What are the features of a Promissory Note?
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2. A Book-keeper prepared a Trial balance on 31st March, 2019, which showed a difference of ₹2,715. The
difference was placed to the Debit of a Suspense A/c. The undermentioned errors were subsequently
discovered:
i. ₹710, the total of Sales Return Book has been posted to the credit of the Purchases Return Account.
ii. An item of ₹626 written off as a bad-debt from Chanderkant has not been debited to Bad-Debts A/c.
iii. Goods sold to X and Y for ₹1,600 and ₹1,200 respectively, but were recorded in the Sales Book as to X
₹1,200 and Y as ₹1,600.
iv. Goods of ₹850 were returned to Bhardwaj. It was recorded in Purchase Book as ₹580.
v. An amount of ₹675 for a Credit Sale to Govind, although correctly entered in the Sales Book, has been
wrongly posted as ₹756.
vi. A sum of ₹375 owed by Ravi has been included in the list of Sundry Creditors.
vii. An amount of ₹750 spent on the repairs of second-hand machinery has been debited to ‘Repairs A/c’.
Pass Journal entries to rectify the errors and prepare a Suspense Account.

OR

How will be the following errors rectified?

i. Sales Book is short casted by ₹5,000.
ii. Sales Return Book is short casted by ₹500.
iii. Balance of Sales Book is carried forward short by ₹1,000.
iv. Balance of Sales Return Book is carried forward short by ₹100.
3. On 15th October, 2016, Y purchased goods worth ₹75,000 from X, and accepted a three months bill for this
amount drawn by X. On the due date, it was dishonoured. Noting charges paid by X ₹600. On 18th January,
2017, Y requested X for renewal of the bill for another two months, for which X agrees, provided that
interest is paid @ 15% p.a. in cash. Make Journal entries of these transactions in the books of X and Y.

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OR

On 1st January, 2015 Rao sold goods Rs. 10,000 to Reddy. Half of the payment was made immediately and
for the remaining half, Rao drew a bill of exchange upon Reddy payable after 30 days. Reddy accepted the
bill and returned it to Rao. On the due date, Rao presented the bill to Reddy and received the payment.
Journalise the above transactions in the books of Rao and prepare Rao's account in the books of Reddy.
PART-B
4. Distinguish between Capital Receipts and Revenue Receipts.
5. State the meaning of capital expenditure and revenue expenditure. What is the difference between them?
6. Kartik started a firm on 1 st April, 2012 with a capital of Rs 30,000. On 1 st July, 2012 he borrowed from his
wife a sum of Rs 12,000 @ 9% per annum (interest not yet paid) for business and introduces a further
capital of his own amounted to Rs 4,500. On 31st March, 2013 his position was, cash Rs 1,800, stocks28,200,
debtors Rs 21,000 and creditors Rs 18,000.
Ascertain his profit or loss taking into account Rs 6,000 for his drawing during the year.

7. Extract of Trial Balance

as on 31st March, 2013

Name of Accounts Debit Balance(Rs) Credit Balance(Rs)

Bad Debts 1,600

Provision for doubtful Debts(1st April, 2012) 5,000

Debtors 1,60,000
Additional Information
Create a provision for doubtful debts @ 5% on debtors.
Pass necessary adjustment entries and show how will it appear in the financial statements of company.
8. Prepare Trading and Profit & Loss Account for the year ended 31st March, 2017 and Balance Sheet as at that
date from the following Trial Balance:
Dr. (₹) Cr. (₹)

Capital 10,000

Cash 1,500

Bank Overdraft 2,000

Purchases and Sales 12,000 15,000

Returns 1,000 2,000

Establishment Expenses 2,200

Taxes and Insurance 500

Bad-debts and Bad-debts Provision 500 700

Debtors and Creditors 5,000 2,000

Commission 500

Deposits 4,000

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Opening Stock 3,000

Drawings 1,400

Furniture 600

B/R and B/P 3,000 2,500

34,700 34,700

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Adjustments:
i. Salaries ₹100 and taxes ₹200 are outstanding but insurance ₹ 50 is prepaid.
ii. Commission ₹100 is received in advance for next year.
iii. Interest ₹210 is to be received on Deposits and Interest on Bank overdraft ₹300 is to be paid.
iv. Bad-debts provision is to be maintained at ₹1,000 on Debtors.
v. Depreciate furniture by 10%.
vi. Stock on 31st March, 2017 was valued at ₹4,500.

OR

From the following figures prepare the Trading and Profit and Loss Account for the year ended 31st March,
2019 and the Balance Sheet as at that date:-
Particulars ₹ Particulars ₹

Stock (1st April, 2018) 75,000 Sundry Debtors 82,000

Purchases 8,00,000 Loan from X 10,000

Sales 12,00,000 Interest on X Loan 1,500

Motor Car 1,50,000 Furniture 20,000

Car Expenses 42,000 Land and Building 2,00,000

Rent 5,500 Capital 2,50,000

Salaries 35,200 Sundry Creditors 91,300

Bad Debts 1,500 Returns Inward 7,500

Provision for bad debts 8,100 Returns Outward 6,000

Commission (Cr.) 4,600 Cash in hand 16,400

Wages 1,25,000

Insurance 8,400
Adjustments:-
i. Commission include ₹1,600 being commission received in advance.
ii. Write off ₹2,000 as further Bad-debts and maintain Bad-debts provision at 5% on debtors.
iii. Expenses paid in advance are: Wages ₹5,000 and Insurance ₹1,200.
iv. Rent and Salaries have been paid for 11 months.
v. Loan from A has been taken at 18% p.a. interest.

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vi. Depreciate furniture by 15% p.a. and Motor Car by 20% p.a.
vii. Closing Stock was valued at ₹60,000.
9. The following information is available from Sachin, who maintains books of accounts on a single entry
system:
1 st April, 2016 (₹) 31 st March, 2017 (₹)

Cash and Bank 20,000 21,000

Sundry Debtors 17,000 25,000

Stock 40,000 60,000

Furniture 29,000 29,000

Sundry Creditors 32,000 22,000

10% Loan from Mrs. Sachin 30,000 30,000

Sachin withdrew ₹ 5,000 from the business every month for meeting his household expenses. During the
year, he sold investments held by him privately for ₹ 35,000 and invested the amount in his business.
At the end of the year 2016 - 17, it was found that the full year’s interest on loan from Mrs. Sachin had not
been paid. Depreciation @ 10% per annum was to be provided on furniture for the full year. Shop assistant
was to be given a share of 5% on the profits ascertained before charging such share.
Calculate profit earned during the year ended 31st March, 2017 by Sachin.

OR

Kumaran, a trader, does not keep proper books of account. However, he furnishes you the following
particulars
Items 31st March, 2012 Amt(Rs) 31st March, 2013 Amt(Rs)

Cash at bank 4,500 3,000

Cash in hand 300 4,000

Stock-in-trade 40,000 45,000

Debtors 12,000 20,000

Office equipment 5,000 5,000

Sundry Creditors 30,000 20,000

Furniture 4,000 4,0000

During the year, Kumaran introduced Rs 6,000 as further capital and withdrew Rs 4,000 as drawings. Write
off depreciation on furniture at 10% and on office equipment at 5%. Prepare a statement showing the profit
or loss made by him for the year ended on 31st March, 2013.
PART-C
10. What is meant by the Accounting Information System? List four features of a good Accounting Information
System.
11. What is a computer? Explain its important features.
12. The processing of data is accomplished either through batch processing or real time processing. In the light
of above statement, explain batch processing and real time processing.

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Class 11 - Accountancy
Term-2 Sample Paper-01

Solution

PART-A
1. A promissory note is defined as a written agreement to pay a specific amount at a future date or on-
demand to a specific party.
Features of promissory notes are as follows:
i. It must be in writing.
ii. It must contain an unconditional promise to pay.
iii. The sum payable must be certain.
iv. The promissory notes must be signed by the maker.
v. It must be payable to a certain person.
vi. It should be properly stamped.

2. JOURNAL

Dr. Cr.
Date Particulars L.F.
(₹) (₹)

2019

March
Purchase Return A/c Dr. 710
31

(i) Sales Return A/c Dr. 710

To Suspense A/c (710+710) 1420

(Total of Sales Return wrongly credited to Purchase Letum A/c now

rectified)

(ii) Bad-Debts A/c Dr. 626

To Suspense A/c 626

(Amount omitted to be recorded in Bad-debts A/c now corrected)

(iii) X A/c (1,600-1,200) Dr. 400

To Y A/c 400

(Amount of sales wrongly posted to X and Y now corrected)

(iv) Bhardwaj a/c (580+850) Dr. 1,430

To Purchase A/c 580

To Purchase Return A/c 850

(Purchase Return of ₹850 wrongly recorded in purchase book as

₹580 now rectified)

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(v) Suspense A/c (756-675) Dr. 81

To Govind a/c 81

(Excess amount debited to Govind now rectified)

(vi) Sundry Creditors A/c Dr. 375

Sundry Debtors A/c Dr. 375

To Suspense A/c (375+375) 750

(The amount of Debtors wrongly included in the list of creditors)

(vii) Machinery A/c

Dr. 750

750
To repairs A/c

(Repair of second-hand machinery debited to repair account now

rectified)

SUSPENSE ACCOUNT

Dr. Cr.

Date Particulars J.F. ₹ Date Particulars J.F. ₹

2019 2019

March To Difference in Trial March By Purchase Return

2,715 710
31 Balance 31 A/c

March March
To Govind 81 By Sales Return A/c 710
31 31

March
By Bad Debts A/c 626
31

March By Sundry Creditors

375
31 A/c

March By Sundry Debtors

375
31 A/c

2,796 2,796

OR

Journal

Debit Credit
Date Particulars L.F. Amount Amount
(₹) (₹)

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(i) Suspense A/c Dr. 5,000

To Sales A/c
5,000
(Sales book was undercasted by ₹5,000, now rectified)

(ii) Sales Return A/c Dr. 500

To Suspense A/c
(Sales return book was undercasted by ₹500, now 500
rectified)

(iii) Suspense A/c Dr. 1,000

To Sales A/c
(Sales book balance carried forward was short by ₹ 1,000
1,000, now rectified)

(iv) Sales Return A/c Dr. 100

To Suspense A/c
(Sales return book’ balance carried forward was short 100
by ₹100, now rectified)
Single-sided errors are rectified by opening suspense account.
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3. In The Books of X
Journal Entries

Debit Credit
Date Particulars L.F.
Amount (₹) Amount (₹)

2016

Oct.
Y A/c Dr. 75,000
15

To Sales A/c 75,000

(Goods sold to Y on credit)

Oct.
Bills Receivable A/c Dr. 75,000
15

To Y A/c 75,000

(Y accepted the bill)

2017

Jan.
Y A/c (75,000+600) Dr. 75,600
18

To Bills Receivable A/c 75,000

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To Cash A/c 600

(Bill dishonoured on due date and noting

charges paid)

Jan.
Y A/c Dr. 1,890
18

To Interest A/c 1,890

(Interest due to be received)

Jan.
Cash A/c Dr. 1,890
18

Bills Receivable A/c (77,490-1,890) Dr. 75,600

To Y A/c 77,490

(Y accepted the new bill)

Mar.
Cash A/c Dr. 75,600
21

To Bills Receivable A/c 75,600

(Bill honoured on maturity)

In The Books of Y
Journal Entries

Debit Credit
Date Particulars L.F.
Amount (₹) Amount (₹)

2016

Oct.
Purchases A/c Dr. 75,000
15

To X A/c 75,000

(Goods purchased from X)

Oct.
X A/c Dr. 75,000
15

To Bills Payable A/c 75,000

(Bill drawn by X, accepted)

2017

Jan.
Bills Payable A/c Dr. 75,000
18

Noting Charges A/c Dr. 600

To X A/cc 75,600

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(Bill dishonoured on due date and noting

charges paid)

Jan.
Interest A/c Dr. 1,890
18

To X A/c 1,890

(Interest due to be paid)

Jan.
X A/c Dr. 77,490
18

To Cash A/c 1,890

To Bills Payable A/c 75,600

(New bill drawn by X, accepted)

Notes:
i. Amount of Interest = ₹1,890
ii. Amount of Renewed Bill = ₹75,600

OR

In the books of Rao

JOURNAL

Amount Amount
Date Particulars L.F.
(Dr) (Cr)

2015

Jan 1 Reddy Dr 10,000

To Sales A/c 10,000

(Being goods sold to Reddy on credit)

Jan 1 Cash A/c Dr 5,000

Bills Receivable A/c Dr 5,000

To Reddy 10,000

(Being half of the amount received in cash and Bill received

for remaining half amount)

Feb 3 Cash A/c Dr 5,000

To Bills Receivable A/c 5,000

(Being Bill amount received on due date)

In the Books of Reddy

Rao's Account

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Date Particulars JF Amount (Rs.) Date Particulars JF Amount (Rs.)

2015 2015

Jan 1 To Cash A/c 5,000 Jan 1 By Purchase A/c 10,000

Jan 1 To Bills Payable A/c 5,000

10,000 10,000
Note: Calculation of Due date of Bill - It will be 3 February: Bill Date 1 January + 30 days + 3 days of
grace = 3 February
PART-B
4.
Capital Receipts Revenue Receipts

Amount received from the sale of fixed assets or investments i.e., non- Money obtained from the
current assets. sale of goods or services.

Commission and fees

Capital contributed by proprietors, partners or money obtained from
received for services
the issue of shares and debentures in case of the company.
rendered.
5. Any expenditure which is incurred in acquiring or increasing the value of a fixed asset is treated as
capital expenditure. For example:- Purchases of Land and Building, Purchases of Plant and Machinery.
Whereas Any expenditure the benefit of which is received during the current year itself is termed as
revenue expenditure. For example:- Expenses incurred for the purpose of day to day running of the
business.

6. Statement of Affairs
(as at 31st March, 2013)

Liabilities Amt (Rs) Assets Amt (Rs)

Creditors 18,000 Cash 1,800

Mrs Kartik's Loan 12,000 Stock 28,200

(+)Interest on Loan 810 12,810 Debtors 21,000

Capital(Balancing figure) 20,190

51,000 51,000

Statement of Profit or Loss

(for the year ended 31st March, 2013)

Particulars Amt (Rs)

Capital at the End 20,190

(-)Capital introduced During the year 4,500

15,690

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(+)Drawings 6,000

Adjusted capital at the end 21,690

(-) Capital in the Beginning 30,000

Net Loss for the Year (8,310)

Notes:
i. In single entry system, for ascertaining the profit or loss during a particular period Statement of
Profit or Loss is prepared.
ii. Statement of Affairs is prepared to ascertain the capital of entity.
iii. Interest ion loan will be calculated for 9 months as loan is taken on July.
7. The following entries will be passed for recording the provision for doubtful debts :

JOURNAL

Date Particulars LF Dr.(₹) Cr.(₹)

Mar 31 Provision for Doubtful Debts A/c Dr. 1,600

To Bad Debts A/c

1,600
(Being bad debts transferred to old provision)

Mar 31 Profit and Loss A/c Dr. 4,600

To Provision for Doubtful Debts A/c

4,600
(Being creation of provision at 5% on debtors)
The Provision for doubtful debts will be recorded in financial statements in the following manner:

Extract of Profit and Loss Account

for the year ended 31st March, 2013

Dr Cr

Particulars Amt(₹) Particulars Amt(₹)

To Provision for Doubtful Debts A/c :

Bad Debts 1,600

Add : New Provision on Rs 1,60,000 @ 5% 8,000

9,600

Less : Old Provision (5,000) 4,600

Balance Sheet
as at 31st March, 2013

Liabilities Amt(₹) Assets Amt(₹)

Debtors 1,60,000

Less :New Provision

8,000 1,52,000
(@5% on ₹1,60,000)

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8. Trading Account
for the year ended March 31, 2017

Dr. Cr.

Amount Amount
Particulars Particulars
(₹) (₹)

To Opening Stock 3,000 By Sales 15,000

To Purchases 12,000 Less: Return Inwards 1,000 14,000

Less: Return Outwards 2,000 10,000 By Closing Stock 4,500

To Gross Profit (Balancing Figure) 5,500

18,500 18,500

Profit and Loss Account

for the year ended March 31, 2017

Dr. Cr.

Amount Amount
Particulars Particulars
(₹) (₹)

To Depreciation on Furniture 60 By Gross Profit 5,500

To Establishment Charges 2,200 By Commission received 500

Less: Comm. received in

To Outstanding Salaries 100 100 400
advance

By accrued Interest on
To Taxes & Insurance 500 210
Deposits

Add: Outstanding Taxes 200

Less: Prepaid Insurance 50 650

To Old Bad Debts 500

Add: New Bad Debts -

Add: New Provision 1,000

Less: Old Provision 700 800

To Outstanding Interest on Bank

300
Overdraft

To Net Profit (Balancing Figure) 2,000

6,110 6,110

Balance Sheet

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as on March 31, 2017

Amount Amount
Liabilities Assets
(₹) (₹)

Capital 10,000 Fixed Assets

Add: Net Profit 2,000 Furniture 600

Less: Drawings 1,400 10,600 Less: Depreciation 60 540

Current Liabilities Current Assets

Creditors 2,000 Closing Stock 4,500

Outstanding Salaries 100 Prepaid Insurance 50

Outstanding Taxes 200 Debtors 5,000

Less: Provision for Bad

Bills Payable 2,500 1,000 4,000
Debts

Bank Overdraft 2,000 Bills Receivables 3,000

Commission received in advance 100 Deposits 4,000

Oustanding Interest on Bank

300 Add: Accrued Interest 210 4,210
Overdraft

Cash in Hand 1,500

17,800 17,800

Working Note -
Calculation of Depreciation:-
Depreciation on Furniture = ₹600 10%
Depreciation on Furniture = ₹60
Adjustments shown in trial balance will be shown in balance sheet only while adjustments shown after
trial balance will be recorded in trading and profit and loss account and balance sheet.

OR

Trading Account
for the year ended March 31, 2019

Dr. Cr.

Amount Amount
Particulars Particulars
(₹) (₹)

To Opening Stock 75,000 By Sales 12,00,000

Less: Return
To Purchases 8,00,000 7,500 11,92,500
Inwards

Less: Return Outwards 6,000 7,94,000 By Closing Stock 60,000

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To Wages 1,25,000

Less: Prepaid 5,000 1,20,000

To Gross Profit (Balancing

2,63,500
Figure)

12,52,500 12,52,000

Profit and Loss Account

for the year ended March 31, 2019

Dr. Cr.

Amount Amount
Particulars Particulars
(₹) (₹)

To Depreciation: By Gross Profit 2,63,500

Furniture 3,000 By Commission 4,600

Less: comm. received in

Motor Car 30,000 33,000 1,600 3,000
advance

By Old Provision for Doubtful

Salaries 35,200 8,100
Debts

Add: Outstanding 3,200 38,400 Less: New Provision 4,000 4,100

To Rent 5,500

Add: Outstanding Taxes 500 6,000

To Insurance 8,400

Less: Prepaid 1,200 7,200

To Interest on Loan 1,500

Add: Outstanding (WN2) 300 1,800

To Old Bad Debts 1,500

Add: Further Bad Debts 2,000 3,500

To Car Expenses 42,000

To Net Profit (Balancing

1,38,700
Figure)

2,70,600 2,70,600

Balance Sheet
as on March 31, 2019

Liabilities Amount Assets Amount

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(₹) (₹)

To Capital 2,50,000 By Fixed Assets

Add: Net Profit 1,38,700 3,88,700 Land & Buidling 2,00,000

To Loan from X 10,000 Furniture 20,000

Add: Outstanding Int. on Loan 300 10,300 Less: Depreciation 3,000 17,000

Current Liabilities By Motor Car 1,50,000

Creditors 91,300 Less: Depreciation 30,000 1,20,000

Outstanding Salaries 3,200 By Current Assets

Outstanding Rent 500 By Closing Stock 60,000

Commission received in
1,600 By Prepaid Insurance 1,200
advance

By Prepaid Wages 5,000

By Debtors 82,000

Less: Further Bad

2,000
Debts

Less: Pro. for Bad

4,000 76,000
Debts

By Cash in Hand 16,400

4,95,600 4,95,600

Working Note:-
Calculation of Depreciation:-
Depreciation on Furniture = 20,000 15%= ₹3,000
Depreciation on Motor Car = 1,50,000 20% = ₹30,000
Calculation of Provision for Doubtful Debts:-
Provision Doubtful Debts = Sundry Debtors - Further Bad Debts Rate
Provision Doubtful Debts = 82,000 - 2,000 5%
Provision Doubtful Debts = ₹4,000
Loan from X = Rs.10,000
Interest on loan @18% = 10,000 18% = 1,800
Interesty received = Rs.1,500
Interest outstanding = 1,800 - 1,500 = Rs.300
Adjustments of prepaid or outstanding given in trial balance will be shown in balance sheet
only.Adjustments given after trial balance will be shown in trading and profit and loss account as well
as balance sheet.

9. STATEMENT OF AFFAIRS
as on March 31, 2016

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Dr. Cr.

Liabilities Amount (₹) Assets Amount (₹)

10% Loan from Mrs.

30,000 Cash at Bank 20,000
Sachin

Creditors 32,000 Debtors 17,000

Capital (Balancing Figure) 44,000 Stock 40,000

Furniture 29,000

1,06,000 1,06,000

STATEMENT OF AFFAIRS
as on March 31, 2017

Liabilities Amount (₹) Assets Amount (₹)

10% Loan from Mrs. Sachin 30,000 Cash at Bank 21,000

Creditors 22,000 Debtors 25,000

Capital (Balancing Figure) 83,000 Stock 60,000

Furniture 29,000

1,35,000 1,35,000

Statement of Profit or Loss

for the year ended March 31, 2017

Particulars Amount (₹)

Capital at the end of the year 83,000

Add: Drawings made during the year (5,000 12) 60,000

Less: Additional capital introduced during the year 35,000

Adjusted capital at the end of the year 1,08,000

Less: Capital in the beginning of the year 44,000

Profit Before Adjustment 64,000

Less: Depreciation on Furniture 2,900

Less: Outstanding Interest on Loan 3,000

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58,100

Less: Shop Assistant's Share (58,100 ) 2,905

Profit made during the year 55,195

Final Statement of Affairs

as on March 31, 2017

Amount
Liabilities Amount (₹) Assets
(₹)

Opening
44,000 Cash at Bank 21,000
Capital

Add: Net
55,195 Debtors 25,000
Profit

Add:
Additional
35,000 Stock 60,000
Capital
Intro.

Less:
60,000 74,195 Furniture 29,000
Drawings

Less:
Creditors 22,000 2,900 26,100
Depreciation

Shop's Assistant
2,905
Share

10% Loan
30,000
from Sachin

Add:
Outstanding 3,000 33,000
Interest

1,32,100 1,32,100

Note: Shop Assistant's share will be of 58,100.

A statement of affairs is like a balance sheet of the business. It is prepared to know the capital of
business when firm has incomplete records.

OR

Statement of Affairs
(as on 31st March, 2012)

Liabilities Amt(Rs) Assets Amt(Rs)

Sundry Creditors 30,000 Cash at Bank 4,500

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Capital(Balancing figure) 35,800 Cash in hand 300

Stock-in-trade 40,000

Debtors 12,000

Office Equipment 5,000

Furniture 4,000

65,800 65,800

Statement of Affairs
(as on 31st March, 2013)

Liabilities Amt(Rs) Assets Amt(Rs)

Sundry Creditors 20,000 Cash at Bank 3,000

Capital(Balancing figures) 60,350 Cash in hand 4000

Stock-in-trade 45,000

Debtors 20,000

Office Equipment 5,000

(-) Depreciation 250 4,750

Furniture 4,000

(-) Depreciation 400 3,600

80,350 80,350

Statement of Profit or Loss

(for the year ended 31st March, 2013)

Particulars Amt(Rs)

Capital at 31st March, 2013 60,350

(+) Drawings During the year 4,000

64,350

(-) Capital Introduced During the year 6,000

Adjusted capital at the end 58,350

(-) Capital in the beginning on 31st March, 2012 35,800

Net Profit for the year 22,550

Working Notes :
Calculation of Depreciation on Office Equipment = 5,000* 5% = 250
Calculation of Depreciation on Furniture = 4000* 10% = 400
Statement of Affair is made to ascertain the Opening and Closing Capital.

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Above is Net Worth Method of ascertaining the Profit/ Loss in Single Entry System.
PART-C
10. An Accounting Information System is a system of collecting, processing, summarising, and reporting
information about a business organization in monetary terms.
The main characteristics of an Accounting Information System (AIS) are as follows:
i. AIS helps in handling and manipulating accounting and financial transactions of an organization.
ii. AIS is responsible for meeting information needs by generating reports. These reports are two
types:
a. Reports for the outsiders
b. The Internal Reports
iii. AIS is helping in producing futuristic data in the form of budget forecasts etc.
iv. AIS is helpful in maintaining accounting information as per the guidelines of the law.
11. A computer is a device which has functions of receiving, storing and suitably processing data. A
computer is automated to perform logical or arithmetic operations.
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The main features of a computer are as follows:
i. Speed: Modern digital computer works at very fast speed. the speed or execution of operations by
modern computers is several million operations per second. its speed has facilitated the industry to
make desired data available within seconds.
ii. Storage: a large volume of information can be stored in a temporary memory computer can store
almost limitless volume of information in secondary media such as floppy, disk, magnetic disk and
tapes, etc. storage of voluminous data in secondary devices saves space and time both in storing
and extraction of information.
iii. Accuracy: the computer produces 100% accurate results but it depends upon the computer
operator. the term 'GIGO' is popularly used regarding computer accuracy. GIGO means "garbage in,
garbage out". its means if the operator gave wrong instructions to the computer or feeds wrong
data, the result is bound to be inaccurate. Errors in computer results are, without exception, due to
humans rather than due to the technological weakness of the computer.
iv. Versatility: Computers have high versatility.
v. Reliability: Computers have high-reliability power.
12. Batch Processing : It applies to large and voluminous data that is accumulated offline from various
units i.e., branches or departments. The entire accumulated data is processed in one shot to generate
the desired reports according to decision requirement. Batch processing requires separate programs
for input, process and output. An example is Payroll and billing system.
Real-time Processing : It provides online outcome in the form of information and reports without
time lag between the transaction and its processing. The accounting reports are generated by query
language popularly called Structured Query Language (SQL). It allows the user to retrieve report
relevant information that is capable of being laid out in pre-designed accounting report.. Real - Time
Data Processing is also known as Stream Processing. Example : ATMs, Radar systems.

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