Please refer to Chapter 9 Financial Statements I MCQ Class 11 Accountancy with answers below. These multiple-choice questions have been prepared based on the latest NCERT book for Class 11 Accountancy. Students should refer to MCQ Questions for Class 11 Accountancy with Answers to score more marks in Grade 11 Accountancy exams. Students should read the chapter Financial Statements I and then attempt the following objective questions.

MCQ Questions Class 11 Accountancy Chapter 9 Financial Statements I

Financial Statements I MCQ Class 11 Accountancy provided below covers all important topics given in this chapter. These MCQs will help you to properly prepare for exams.

Question. If the rent of one month is still to be paid the adjustment entry will be
(a) Debit outstanding rent account and Credit rent account.
(b) Debit profit and loss account and Credit rent account.
(c) Debit rent account and Credit profit and loss account.
(d) Debit rent account and Credit outstanding rent account.

Question. The profit and loss account is prepared:
(a) At a specific point of time
(b) On a fixed date
(c) For a certain period
(d) All of the above

Question. Which of the following are indirect income?
(a) Commission Received
(b) Interest on Investment
(c) Dividends Received
(d) All of the above

Question. If the insurance premium paid Rs. 1,000 and prepaid insurance Rs. 300. The amount of insurance premium shown in profit and loss account will be
(a) Rs. 1,300
(b) Rs. 1,000
(c) Rs. 300
(d) Rs. 700

Question. Income tax in case of sole trader is treated as ,
(a) Personal expenses
(b) Debtors expenses
(c) Business expenses
(d) None of the above

Question. Profit and loss Account discloses:
(a) Gross profit
(b) Gross profit or Gross loss
(c) Gross profit or Gross loss
(d) None of these

Question. The statistical yardstick that provides a measure of the relationship Between two accounting figures in:-
(a) A operating current ratio
(b) The accounting ratio
(c) Input-output ratio
(d) None

Question. In the case of Ltd. Co. the term financial statement includes:-
(a) P & L A/C & B/S
(b) P & L A/C P & L appropriation A/C & B/S.
(c) B/S
(d) None

Question. If the rent received in advance Rs. 2,000. The adjustment entry will be
(a) Debit profit and loss account and Credit rent account.
(b) Debit rent account Credit rent received in advance account.
(c) Debit rent received in advance account and Credit rent account.
(d) None of these

Question. Which of the following is not an item of income of Non – trading concern –
(a) Entrance fees
(b) Interest
(c) Govt. Aid
(d) Salary..

Question. Accrued income is :
(a) A Liability
(b) Revenue
(c) An Asset
(d) An Expense

Question. Which analysis is considered as dynamic :
(a) Horizontal Analysis
(b) Vertical Analysis
(c) Internal Analysis
(d) External Analysis

Question. Main objective of analysis of financial statements is
(a) To know the financial strength
(b) To make a comparative study with other firms
(c) To know the efficiency of management
(d) All of the Above

Question. Which of the following statements are true
(a) All of the options
(b) External analysis depends entirely on issued financial statements
(c) Interpretation and analysis both are different
(d) Financial analysis covers interpretation

Question. Closing stock is shown in Financial Statements at:
(a) Cost price
(b) Reliasable Value
(c) Cost price or Reliasable Value whichever is greater
(d) Cost price or Reliasable Value whichever is less

Question. Outstanding Salary is _ account:
(a) Real Account
(b) Nominal Account
(c) Personal Account
(d) None of these

Question. The financial statements of a business enterprise include :
(a) Balance sheet
(b) Statement of Profit and loss account
(c) Cash flow statement
(d) All the above

Question. Analysis of financial statements for two or more years is known as
(a) Horizontal analysis
(b) External analysis
(c) Vertical analysis
(d) Internal analysis

Question. Who has the interest in long-term solvency position of the firm?
(a) Creditors
(b) Bankers providing overdraft facilities
(c) Financial Institutions
(d) Short-term money lenders

Question. Goodwill appears in a company’s balance sheet under
(a) Unamortised assets
(b) Non-current investments
(c) Intangible assets
(d) Tangible assets

Question. Which of the following item will not appear under short term provisions
(a) Provision for tax
(b) Proposed Dividend
(c) Provision for retirement benefits
(d) Provision for doubtful debts

Question. The term financial statements includes :
(a) Statement of Profit & Loss
(b) Balance Sheet
(c) Statement of Profit & Loss and Balance Sheet
(d) None of these

Question. The debentures to be redeemed within 12 months from the date of balance sheet is shown under
(a) short term borrowings
(b) long term borrowings
(c) other current liabilities
(d) long term liabilities

Question. The assets of a business can be classified as :
(a) Fixed and Non-fixed Assets
(b) Tangible and Intangible Assets
(c) Non-Current and Current Asset
(d) None of these

Question. The reserve which is created for a particular (specific) purpose and which is a charge against revenue is called:
(a) Capital Reserve
(b) General Reserve
(c) Secret Reserve
(d) Specific Reserve

Question. Calls in advance appear in a Company’s Balance Sheet under ………………..
(a) Share Capital
(b) Current Liability
(c) Long-term Borrowings
(d) Reserve & Surplus

Question. Which of the following is not required to be prepared under the Companies Act
(a) Statement of Profit and Loss
(b) Balance Sheet
(c) Report of Director’s and Auditor’s
(d) Funds Flow Statement

Question. Ratio of ‘net sales’ to’ net W.C’ is a:-
(a) W.C. turnover ratio
(b) Profitability ratio
(c) Liquidity ratio
(d) Can’t say

Question. Tax paid is _________
(a) Application of funds
(b) Source of funds
(c) No flow of funds
(d) None of these

Question. Cash from operations is equal to
(a) Net profit plus the increase in outstanding expenses
(b) Net profit plus the increase in debtors.
(c) Net profit plus the increase in stock
(d) None of these

Question. Sales Rs. 20,000,V.C. Rs.12,000 & F.C Rs.4,000, the break-even sales
(a) 12,000
(b) 10,000
(c) 1,500

Question. The financial statements consist of:
(a) Trial balance
(b) Profit and Loss account
(c) Balance sheet
(d) (a) & (c)
(e) (b) & (c)

Question. Which of the following is correct:
(a) Operating profit = Operating profit – Non-operating expenses – Non-operating incomes
(b) Operating profit = Net profit + Non-operating expenses + Non-operating incomes
(c) Operating profit = Net profit + Non-operating expenses – Non-operating incomes
(d) Operating profit = Net profit – Non-operating expenses + Non-operating incomes

Question. Statements prepared to indicate the profit or loss and financial position of the business are called:
(a) Financial Statements
(b) Bank Reconciliation Statements
(c) Trial Balance
(d) All of these

Question. Closing stock is recorded in the:
(a) Profit and Loss Account
(b) Trading Account and Balance Sheet
(c) Balance Sheet Only
(d) None of the above

Question. Depreciation is necessary to calculate:
(a) Net profitcorrect
(b) Net financial position
(c) Tax
(d) None of them

Question. Prepaid Insurance existing in the Trial Balance is shown in the Balance Sheet in the assets side because of
(a) Accrual Concept.
(b) Matching Principle.
(c) Materiality Principle.
(d) Cost Principle

Fill In The Blanks

Question. Gross profit is Rs. 9,00,000 , Advertisement is Rs. 15,000. Salary Rs. 2,00,000, office expenses Rs. 40,000, Interest on long term loan Rs 25,000 , the amount of operating profit is Rs …………………… .

Question. Trial balance shows debtor of Rs. 10,000, bad debts of Rs. 500. Provision for doubtful debts Rs. 1200. Adjustment shows further bad debts Rs. 600 & new provision for bad & doubtful debts @5%. Amount to be shown on the Debit side of Profit & Loss Account for Bad Debts Adjustment is Rs . …………… .

Question. If opening stock is Rs. 12,000, Adjusted purchases Rs. 40,000, purchase return is Rs. 10,000 and closing stock is Rs. 9,000. The amount to be shown in debit side of Trading Account will be Rs ………………….. .

Question. Loan of Rs. 10,000 @ 12% p.a has been taken from bank on 1st July, 2018, the amount of Interest paid for the year ending 31st March, 2019 is Rs.……… .

Question. If the opening capital is Rs. 90,000 as on 1st April, 2018 and additional capital introduced Rs. 30,000 on 30th November, 2018. Interest to be charged on capital is 10% p.a.. The amount to be debited in profit & loss account as interest on capital on 31st March, 2019 will be Rs …………… .

Question. Trial balance shows total purchases Rs. 30,000, goods distributed as charity costing Rs. 3,000 sales price Rs. 4,500, goods given as samples costing Rs. 2,000 sale price Rs. 2,200, goods given as gifts to employees costing Rs. 7,000 sales price Rs. 8000 The amount of purchase to be shown in Trading account will be Rs …………. .

Question. …………………… type of assets comes first in Assets side of Balance Sheet in order of permanency.

Question. Annual Insurance premium paid Rs. 10,000 on 1st October, 2017. Amount of insurance premium to be shown in profit & Loss account for the year ended 31st March, 2018 is Rs.………… .

Question. Outstanding salary is Shown in balance sheet …………….. Side.

Question. Indirect expenses are a Debited to …………………….. Account.

Question. A manager is entitled for a commission of 8% on net profit before charging such commission. Net profit before charging commission is Rs. 5,00,000. Amount of manager’s commission debited to profit & loss account is Rs.…….. .

Question. Sales is Rs. 1,20,000; Profit is 33 1/3 on cost. Amount of cost of goods sold will be Rs. ……………….. .

Question. While making a provision for possible bad debts or for doubtful debts, we ………………. Reserves Debts Account.  

Question. Items of income and expenditure which relates to the accounting period but are left out should be ……………….

Question. In cost accounting marginal cost does near include ….…….

Question. At I.E.P ……….. is equal to F.C.

Question. Trading and Profit & Loss Account shows the ………………. or ………………..

Question. Gross profit or loss is transferred to …………….. account.

Question. Rearrangement of figures is necessary for ………… & …………

Question. Commission outstanding is …………… of funds.

Question. Increase in capital at the end of the year represents ………………..

Question. The two statements which are generally included in the definition of financial of Statements are …………

Question. When the volume of production is nil, the loss will be equal ………

 True/False

Question. Gross profit is amounted to Rs. 45 000 and the selling expenses are 20,000 and commission received is 2000 and commission paid is Rs. 3000. The amount of operating profit is 24,000.

Question. The balance of insurance premium paid by the firm amounted to Rs. 7200 which was paid on 1 Nov. 2018. The amount of insurance debited to P&L a/c on 31st March 2019 is Rs 3000.

Question. Wages a/c has a balance of Rs. 9,000 in the trial balance. In the adjustment it was given that wages has to be paid Rs 700 per month, the amount of prepaid wages shown in the balance sheet is Rs 700.

Question. Investment amounted to Rs. 50000 was done at a rate of 4% p.a. interest received during the year was 1700. The amount of interest credited to P&L a/c is Rs. 1800.

Question. The value of opening stock is Rs. 25000, net purchases amounted to Rs. 1 40, 000. The salary paid during the year was 10,000 and value of sales is Rs. 1 70,000. The value of gross profit is 1,55,000.

Question. The value of cost of goods sold is 9,000 if sales is 15,000 and gross profit is 24000. 

Question. The formulae for calculating cost of goods sold opening stock + net purchases – closing stock.

Question. The amount of net purchases is 1,21,000. Amount of return outward is 6,000. The purchases debited to trading account is. Rs 1,27,000.

Question. Loan of Rs 1,10,000 was taken on 1 November 2019. At 10%. The amount of interest on loan to be debited to P&L a/c is Rs 11000.

Question. The formula for calculating adjusted purchase is opening stock + net purchases + direct expenses – closing stock.

Question. Match the following

1. Grouping	A. arrangement of assets and liabilities in a particular order
2. Marshalling	B. Putting items of a similar nature under a common accounting head

Question. Match the items in their respective category:

1. Bill receivable discounted from bank but not matured	A. Current Assets
2. Bills receivable	B. Contingent Liability
3. Bills Payable	C. Current Liability
4. Guarantee given by the firm	D. Non Current Liabilities

Question. Match the following transaction with their treatment in accounts:

Transactions	Treatment
1. Machinery purchased for sale purpose	A. added to machinery A/c
2. Machinery purchased for production purpose	B. Added to purchases A/c
3. Installation paid on machinery	C. Debit side of P&L A/c

Question. Match the following:

1. Cost of goods sold	A. Sales 5,00,000 – cost of goods sold 3,00,000
2. Gross Profit 2,00,000	B. Gross profit 8, 00, 000 – Operating Expenses
3. Net Profit	C. Opening stock 2,00,000 + net purchases 50,000 +direct expenses 10,000 – Closing stock 6,000
4. Operating Profit	D. Gross profit 30,000 – Indirect Expenses 10,000

Question. Match the following:

1. Closing stock in Trial Balance	A. Trading A/C
2. Closing stock given as an adjustment	B. Balance sheet
3. Purchase in Trial Balance	C. Trading and profit and loss account
4. Salary as an adjustment in Trial Balance	D. Profit and loss A/c and Balance sheet

Question.Match the taxes levied on type of sales

1. Input IGST	A. on sales within state
2. Output IGST	A. on sales within state
3. Input CGST	C. on sales outside state
4. Output CGST	D. On Purchase from Outside state

Question. Match the effect of transaction on net profit:

Transaction	Effect on Net profit
1. General donation	A. No effect on net profit
2. Bad debts recovered	B. Decrease in net profit
3. Drawing in cash	C. Increase in net
4. profit

Question. Match the following account with their Nature of Account

Account	Nature of Account
1. Rent A/C	Personal A/c
2. Outstanding rent A/c	Nominal A/c
3. Furniture	Real A/c

Question. Match the following

1. Net Profit	A. Excess of debit side of P&L over credit side.
2. Gross profit	B. Excess of credit side of P&L over Debit side.
3. Net Loss	C. Excess of debit side of Trading A/c over credit side.
4. Gross Loss	D. Excess of credit side of Trading A/c over Debit side

Question. Match the following

1. Adjusted purchase	A. Purchases Less purchase returns
2. Net Purchases	B. Opening stock plus purchases less closing stock
3. Cost of goods available for sale	C. Sales less sale returns
4. Net sales	D. openings stock plus purchases

Question. Match the following transaction with their treatment:

Transaction	Treatment
1. Life insurance premium	A. Added into capital
2. Income tax	B. Debited to Profit & Loss A/c
3. Fire insurance premium	C. Deducted from capital
4. Interest on capital

Question. Match the following items on the basis of sides of the balance sheet:

1. Bank Loan	A. Liability side of the balance sheet
2. Advance to harish	B. Assets side of the balance sheet
3. Advance from Sunil
4. Bank Overdraft

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