Financial accounting, the field of accounting concerned with analysis and reporting of financial transactions related to the business is one of the topics included under the Class 11 Accountancy syllabus. This chapter holds a weightage of up to 12 marks in the exam. 

The preparation of financial accounts involves preparing a set of accounts and statements at the end of a financial year.

To help you better understand the importance of financial accounting, we have explained definitions of each topic and provided important Financial Accounts Problems for Class 11 that are commonly asked in the exam.

Highlights of Financial Accounting

The main objective of preparing the financial accounts are as follows:

  • To verify profit and loss experienced by a company in a given period of the financial year.
  • To figure out the position of the company in a particular financial period.
  • Also, convey the users of accounting information about the capacity to meet its long-term financial commitments.

Financial Statements of Sole Proprietorship (with Adjustments) 

Closing Stock: It is an amount of unsold stock that is present in your business on a given date.

Outstanding Expenses: These are the expenses that are incurred during the financial period but are not paid by the company.

Prepaid Expenses: These are the future expenses that have been paid in advance.

Accrued Income: Delivered the goods but payment has yet to be received.

Unearned Income: Money received by a company for a product that has yet to be delivered.

Depreciation: It is the expense that is debited from the profit and loss account.

Interest on Capital: It is the interest paid to owners for providing a firm with the required capital to start a business.

Provision for Bad and Doubtful Debts: It is an estimated amount of bad debt that will arise from accounts receivable that have been issued but not yet collected.

Important Financial Accounts Problems for Class 11 

Solving previous year's Class 11 Accounts Sample Papers will help you know the difficulty level of the paper and the type of questions asked in the exam.

The following are some of the most important questions that will be asked from the financial accounting chapter in the class 11 board exams.

Q1. On which side of the balance sheet are prepaid expenses shown?

Q2. The following information is given in the trial balance

Bad debt Rs 3,000
Provision for bad debts Rs 3,500
Debtors Rs 40,000

Additional information
It is desired to make a provision for doubtful debts @ of 10% on debtors. The amount debited to the profit and loss account is.

Q3. Is provision for discount on debtors made before making provision for doubtful debts?

Q4. While Preparing final accounts, what treatment is made of prepaid expenses?

Q5. Extract of Trial Balance as of 31st March 2013

Name of Accounts Debit Balance(Rs) Credit Balance(Rs)
Wages Paid 66,000
Salary Paid 16,500

Additional Information
Wages Rs 6,000 and salary Rs 1,500 are outstanding.
Pass an adjusting entry and show how will this appear in final accounts

Download Class 11 Accountancy Study Notes

Q6. Why is it necessary to record the adjusting entries in the preparation of final accounts?

Q7. Extract of Trial Balance as of 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 the company

Q8. From the following balances, prepare the final accounts of M/s Mangal & Sons for the year ended 31st March 2018 :

Rs.
Opening Stock 12,500
B/R 2,000
Sales 70,000
Purchases 37,500
Creditors 20,000
Salaries 3,850
Insurance 200
Debtors 32,500
Carriage 1,450
Commission 750
Interest 900
Printing 250
B/P 3,150
Returns in 1,300
Returns out 500
Bank 5,250
Rent and Taxes 1,300
Furniture 1,000
Capital 7,100

Closing Stock on 31-3-2018 Rs.15,000

Q9. From the following balances obtained from the accounts of Mr. Ranjeet, Prepare the Trading and Profit & Loss Account:

Particulars Rs. Particulars Rs.
Stock on April 01, 2012 8,000 Bad debts 1,200
Purchases for the year 22,000 Rent 1,200
Sales for the year 42,000 Discount (Dr.) 600
Wages 2,500 Commission paid 1,100
Salaries & Wages 3,500 Sales Expenses 600
Advertisement 1,000 Repairs 600

Closing stock on March 31, 2013, is Rs. 4,500

Click here to download Answers PDF

FAQ's

What is the best preparation strategy for accountancy?

Regular study, practice questions, solving question papers and not keeping things for the last minute will be the best preparation method for the exam.

Will there be practical problems in the exam?

Yes. Problem based questions can come in the exam. Refer to the tips before the questions in each chapter for topics on which problem based questions can come.

What is the most important thing for problem based questions?

If you have understood the concept for e.g. preparation of a balance sheet, and remember the format you will certainly be able to solve the example.

How many chapters are there in Class 11 Accountancy subject?

There are a total of 15 chapters in Class 11 Accountancy subject. Some of them are i.e. Introduction to Accounting, Theory Base of Accounting, Recording of Transaction - I, Recording of Transaction - II, Bank Reconciliation Statement, Trial Balance and Rectification of Errors, Depreciation, Provision, and Reserves, Bill of Exchange.

Which is the best book for studying Class 11 Accountancy Syllabus?

Some of the most recommended Class 11 Accountancy Books are:

  • Accountancy Financial Accounting Part - 1 Textbook for Class - 11… NCERT. ...
  • Accountancy Financial Accounting Part - 2 for Class - 11- 11112. NCERT. ...
  • Accountancy Class- XI. D.K. Goel. ...
  • Business Studies Textbook for Class - 11 - 11108. NCERT. ...
  • NCERT. Paperback

How many units are there in Class 11 Accountancy Syllabus?

There are a total of four units that are divided into 2 parts:

  • PART A: Financial Accounting - 1: Unit-1: Theoretical Framework; Unit-2: Accounting Process
  • PART A: Financial Accounting - 2: Unit-3: Financial Statements of Sole Proprietorship from Complete and Incomplete Records; Unit-4: Computers in Accounting