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CodeVID-M11-WS
Financial Statements with Adjustments — II — Practice Worksheet
Chapter: Financial Statements with Adjustments — II
Topic: Financial Statements with Adjustments — II
Maximum Marks: 35
Time: 30 minutes
Name: ____________________ Roll No.: __________ Date: ____________

General Instructions

  • All questions are compulsory.
  • Choose the correct option (A, B, C or D) for each question.
  • The answer key is at the end — try the paper first!
Section A — Multiple Choice (1 mark each) 15 × 1 = 15 marks
1.
Adjustments are needed mainly to satisfy the ____ concept.
  • A.Matching
  • B.Money measurement
  • C.Cost
  • D.Entity
2.
Every adjustment has a:
  • A.Single effect
  • B.Double effect
  • C.Triple effect
  • D.No effect
3.
An outstanding expense is added to the expense and shown as a:
  • A.Current asset
  • B.Current liability
  • C.Fixed asset
  • D.Income
4.
A prepaid expense is shown as a:
  • A.Current liability
  • B.Current asset
  • C.Capital
  • D.Expense only
5.
Accrued income (earned, not received) is shown as a:
  • A.Current asset
  • B.Current liability
  • C.Expense
  • D.Drawing
6.
Income received in advance is shown as a:
  • A.Current asset
  • B.Current liability
  • C.Fixed asset
  • D.Capital
7.
Closing stock given in adjustments appears in the Trading Account on the:
  • A.Debit side
  • B.Credit side
  • C.Both sides
  • D.Neither
8.
Depreciation in adjustments is charged to P&L and ____ the asset.
  • A.Added to
  • B.Deducted from
  • C.Equal to
  • D.Doubled in
9.
Further bad debts are deducted from:
  • A.Creditors
  • B.Debtors
  • C.Cash
  • D.Capital
10.
Provision for doubtful debts is created on debtors:
  • A.Before bad debts
  • B.After deducting further bad debts
  • C.On creditors
  • D.On stock
11.
Debtors 1,00,000; further bad debts 4,000; provision 5%. Provision amount =
  • A.Rs 5,000
  • B.Rs 4,800
  • C.Rs 4,000
  • D.Rs 5,200
12.
A trial-balance item is used ____ in the final accounts.
  • A.Once
  • B.Twice
  • C.Three times
  • D.Never
13.
Net profit in the balance sheet is:
  • A.Added to capital
  • B.Deducted from capital
  • C.A liability to outsiders
  • D.An asset
14.
Rent (TB) 10,000; outstanding rent 2,000. Amount charged to P&L:
  • A.Rs 8,000
  • B.Rs 12,000
  • C.Rs 10,000
  • D.Rs 2,000
15.
If the balance sheet does not tally, the likely cause is an adjustment:
  • A.Used twice correctly
  • B.Used once or on the wrong side
  • C.Ignored fully
  • D.Used four times
Section B — Challenge / Olympiad (2 marks each) 10 × 2 = 20 marks
16.
Debtors Rs 2,00,000; further bad debts Rs 10,000; provision for doubtful debts 6%. The debtors shown in the balance sheet are:
  • A.Rs 1,78,600
  • B.Rs 1,90,000
  • C.Rs 1,88,000
  • D.Rs 1,80,000
17.
Wages Rs 30,000 in the trial balance and 'wages outstanding Rs 4,000' as an adjustment. The Trading Account shows wages of:
  • A.Rs 34,000
  • B.Rs 30,000
  • C.Rs 26,000
  • D.Rs 4,000
18.
Why is closing stock usually NOT in the trial balance, yet appears twice in the final accounts?
  • A.It is an adjustment (valued at year-end), so it has a double effect
  • B.It is a trial-balance item used twice
  • C.It is an error
  • D.It is capital
19.
Old provision for doubtful debts Rs 6,000; new provision required Rs 9,000; further bad debts Rs 2,000. The amount charged to P&L is:
  • A.Rs 5,000
  • B.Rs 9,000
  • C.Rs 11,000
  • D.Rs 3,000
20.
Manager's commission of 10% on net profit BEFORE charging such commission, where profit before commission is Rs 55,000, equals:
  • A.Rs 5,500
  • B.Rs 5,000
  • C.Rs 6,050
  • D.Rs 4,500
21.
Insurance Rs 24,000 was paid for the year ending 30 June, but accounts close on 31 March. The prepaid portion is:
  • A.Rs 6,000 (3 months)
  • B.Rs 12,000
  • C.Rs 24,000
  • D.Nil
22.
Goods costing Rs 5,000 taken by the proprietor for personal use (not yet recorded) should be:
  • A.Deducted from purchases and added to drawings
  • B.Added to sales
  • C.Added to closing stock
  • D.Ignored
23.
Depreciation on machinery omitted by a student would make the net profit and the machinery figure:
  • A.Both overstated
  • B.Both understated
  • C.Profit understated only
  • D.Unaffected
24.
Commission earned Rs 8,000 but only Rs 6,000 received. The Rs 2,000 is treated as:
  • A.Accrued income — added to commission and shown as a current asset
  • B.Unearned income
  • C.An expense
  • D.A liability
25.
A balance sheet tallies only if every adjustment is:
  • A.Given its full double effect on the correct sides
  • B.Used once
  • C.Ignored
  • D.Added to capital

Answer Key

Section A — Multiple Choice (1 mark each)
  1. (A) Matching
  2. (B) Double effect
  3. (B) Current liability
  4. (B) Current asset
  5. (A) Current asset
  6. (B) Current liability
  7. (B) Credit side
  8. (B) Deducted from
  9. (B) Debtors
  10. (B) After deducting further bad debts
  11. (B) Rs 4,800
  12. (A) Once
  13. (A) Added to capital
  14. (B) Rs 12,000
  15. (B) Used once or on the wrong side
Section B — Challenge / Olympiad (2 marks each)
  1. (A) Rs 1,78,600
  2. (A) Rs 34,000
  3. (A) It is an adjustment (valued at year-end), so it has a double effect
  4. (A) Rs 5,000
  5. (A) Rs 5,500
  6. (A) Rs 6,000 (3 months)
  7. (A) Deducted from purchases and added to drawings
  8. (A) Both overstated
  9. (A) Accrued income — added to commission and shown as a current asset
  10. (A) Given its full double effect on the correct sides
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