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Accountancy · Class 11 Commerce

Ch 12Final Accounts of Sole Proprietors – I — Class 11 Accountancy, concept-first.

Every accounting year ends with the same two questions: how much profit or loss did the business make, and what does the business own and owe on the closing date? A sole trader answers these by preparing a set of Final Accounts — the Trading and Profit and Loss Account (an income statement, answering the profit questio…

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Key concepts

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Trading Account and Gross Profit

The Trading Account matches Net Sales and Closing Stock (credit side) against Opening Stock, Net Purchases, and Direct Expenses — wages, carriage inward, and other costs of getting goods ready for sale (debit side) — to…

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Chapter contents

The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.

Overview

Every accounting year ends with the same two questions: how much profit or loss did the business make, and what does the business own and owe on the closing date? A sole trader answers these by prepar…

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Meaning of Final Accounts

Final Accounts are the set of accounting statements prepared at the END of an accounting period, using the balances carried forward in the Trial Balance, to show: 1.

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Trading Account

Meaning: the first part of the Final Accounts, prepared to find out the Gross Profit (or Gross Loss) — the profit earned purely from BUYING and SELLING goods, before considering any other operating ex…

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Profit and Loss Account

Meaning: the second part of the Final Accounts, prepared to find out the Net Profit (or Net Loss) — the overall profit of the business after considering ALL other operating (indirect) expenses and inc…

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Balance Sheet

Meaning: a STATEMENT (not an account, since it has no debit/credit totalling in the trading sense) showing the assets, liabilities, and capital of a business as on a particular date.

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Preparing Final Accounts from a Trial Balance

Every item in a Trial Balance goes to EXACTLY ONE of three places — the Trading Account, the Profit and Loss Account, or the Balance Sheet. The method:

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Worked Illustration — A Complete Set of Final Accounts

From the following Trial Balance of a sole trader as on 31st March 2024, the Trading and Profit and Loss Account and the Balance Sheet are prepared (Closing Stock as on 31st March 2024 is given separa…

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 20 questions20 questions
  1. Q1Salaries appearing in the trial balance is shown on the : (a) Liabilities side of the balance sheet (b) Debit side of Trading account (c) As…Preview
  2. Q2Closing stock is an item of ________. (a) Fictitious asset (b) Fixed asset (c) Intangible asset (d) Current assetPreview
  3. Q3Prepare trading account in the books of Mr. Sanjay for the year ended 31st December 2017. | Particulars | ₹ | Particulars | ₹ | | --- | ---…Preview
  4. Q4Compute cost of goods sold from the following information. | Particulars | ₹ | Particulars | ₹ | | --- | --- | --- | --- | | Opening stock |…Preview
  5. Q5From the following details, prepare profit and loss account. | Particulars | ₹ | Particulars | ₹ | | --- | --- | --- | --- | | Gross profit…Preview
  6. Q6Financial position of a business is ascertained on the basis of : (a) Balance sheet (b) Journal (c) Ledger (d) Trial BalancePreview
  7. Q7Net profit of the business increases the ______. (a) Debts (b) Drawings (c) Capital (d) ReceivablesPreview
  8. Q8Balance Sheet shows the ______ of the business. (a) Sales (b) Profitability (c) Purchases (d) Financial PositionPreview
  9. Q9Compute the cost of goods sold from the following information. | Particulars | Rs. | Particulars | Rs. | | --- | --- | --- | --- | | Opening…Preview
  10. Q10Salaries appearing in the Trial Balance is shown on the : (a) Liabilities side of the Balance Sheet (b) Debit side of Trading a/c (c) Assets…Preview
  11. Q11________ is the amount of sales when cost of goods sold is ₹ 1,64,000 and gross profit is ₹ 36,000. (a) ₹ 1,50,000 (b) ₹ 2,00,000 (c) ₹ 1,75…Preview
  12. Q12Financial position of a business is ascertained on the basis of : (a) Balance Sheet (b) Journal (c) Ledger (d) Trial BalancePreview
  13. Q13What is grouping of accounts ?Preview
  14. Q14Find out the amount of sales from the following information. Opening Stock ₹ 30,000 Closing Stock ₹ 20,000 Purchases less returns ₹ 2,00,000…Preview
  15. Q15Financial position of a business is ascertained on the basis of (a) Journal (b) Trial balance (c) Balance Sheet (d) LedgerPreview
  16. Q16Goodwill is classified as (a) A current asset (b) A liquid asset (c) A tangible asset (d) An intangible assetPreview
  17. Q17Drawings appearing in the trial balance is (a) Added to the purchases (b) Subtracted from the purchases (c) Added to the capital (d) Subtrac…Preview
  18. Q18Net Loss is (a) Debited in capital account (b) Credited to capital account (c) Debited to drawings account (d) Credited to drawings accountPreview
  19. Q19Name any two direct expenses and indirect expensesPreview
  20. Q20From the following information, prepare profit and loss account for the year ending 31st December, 2016. | Particulars | ₹ | Particulars | ₹…Preview

More questions

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+Show 5 questions5 questions
  1. Q1The Trading Account is prepared to find out: (A) Net Profit or Net Loss (B) Gross Profit or Gross Loss (C) The financial position of the bus…Free
  2. Q2Which of the following is a Direct Expense, correctly shown in the Trading Account? (A) Office Rent (B) Carriage Inward on Purchases (C) Adv…Free
  3. Q3Which financial statement shows the position of a business as on a particular DATE, rather than for a period? (A) Trading Account (B) Profit…Preview
  4. Q4Arranging assets in the Balance Sheet starting with the LEAST liquid item (such as Goodwill or Land) and ending with Cash is known as: (A) O…Preview
  5. Q5Net Profit shown by the Profit and Loss Account is finally transferred to: (A) Trading Account (B) Purchases Account (C) Capital Account (D)…Preview
+Show 2 questions2 questions
  1. Q6State whether each of the following Trial Balance items would appear in the Trading Account, the Profit and Loss Account, or the Balance She…Free
  2. Q7Distinguish between Grouping and Marshalling of the Balance Sheet, with one example of each.Preview
+Show 3 questions3 questions
  1. Q8From the following Trial Balance of Mr. Anand as on 31st March 2024, prepare the Trading and Profit and Loss Account for the year ended 31st…Free
  2. Q9From the following balances extracted from the books of Mrs. Meena as on 31st March 2024, prepare the Trading and Profit and Loss Account fo…Preview
  3. Q10From the following Trial Balance of Mr. Ravi as on 31st March 2024, prepare the Trading and Profit and Loss Account for the year ended 31st…Preview