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

Preparing 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 objectives of preparing the financial accounts are as follows:

• To verify the 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, conveys to the users of accounting information about the capacity to meet its long-term financial commitments.

Download Free Study Material for CBSE Class 11 Accounts By SuperGrdas

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: 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

Q6. Why is it necessary to record the adjusting entries to prepare 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