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CodeVID-M11-WS
Recording of Transactions — Source Documents and the Accounting Equation — Practice Worksheet
Chapter: Recording of Transactions — Source Documents and the Accounting Equation
Topic: Recording of Transactions — Source Documents and the Accounting Equation
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.
An economic event that changes the financial position and is measurable in money is a:
  • A.Transaction
  • B.Rumour
  • C.Plan
  • D.Quotation
2.
Goods sold for cash are supported by a:
  • A.Cash memo
  • B.Invoice
  • C.Pay-in slip
  • D.Credit note
3.
A document prepared when goods are sold on credit is the:
  • A.Cash memo
  • B.Invoice/bill
  • C.Receipt
  • D.Cheque
4.
When a customer returns goods to us, we issue a:
  • A.Debit note
  • B.Credit note
  • C.Cash memo
  • D.Pay-in slip
5.
A form used to deposit cash/cheque into a bank is a:
  • A.Pay-in slip
  • B.Cheque
  • C.Voucher
  • D.Invoice
6.
A document prepared from a source document showing accounts to debit and credit is a:
  • A.Voucher
  • B.Ledger
  • C.Trial balance
  • D.Bill
7.
The accounting equation is:
  • A.Assets = Liabilities + Capital
  • B.Assets = Capital − Liabilities
  • C.Capital = Assets + Liabilities
  • D.Liabilities = Capital − Assets
8.
Capital equals:
  • A.Assets + Liabilities
  • B.Assets − Liabilities
  • C.Liabilities − Assets
  • D.Assets × Liabilities
9.
Debtors are an example of:
  • A.A liability
  • B.An asset
  • C.Capital
  • D.An expense
10.
Buying furniture for cash:
  • A.Increases total assets
  • B.Decreases total assets
  • C.Keeps total assets unchanged
  • D.Increases capital
11.
Taking a bank loan of Rs 50,000:
  • A.Increases an asset and a liability by 50,000
  • B.Reduces capital
  • C.Reduces an asset
  • D.Has no effect
12.
If assets are Rs 9,00,000 and liabilities Rs 4,00,000, capital is:
  • A.Rs 13,00,000
  • B.Rs 5,00,000
  • C.Rs 4,00,000
  • D.Rs 9,00,000
13.
Selling goods costing Rs 20,000 for Rs 26,000 cash changes capital by:
  • A.+26,000
  • B.+6,000 (profit)
  • C.−20,000
  • D.0
14.
Paying rent of Rs 3,000:
  • A.Increases capital
  • B.Decreases capital by 3,000
  • C.Increases a liability
  • D.Has no effect on capital
15.
Owner withdrawing cash for personal use is recorded as:
  • A.An expense
  • B.Drawings (reduces capital)
  • C.A liability
  • D.Revenue
Section B — Challenge / Olympiad (2 marks each) 10 × 2 = 20 marks
16.
A trader merely receives a price quotation from a supplier but places no order. Why is this NOT recorded?
  • A.It does not change the firm's financial position
  • B.Quotations are illegal
  • C.It is too small
  • D.There is no supplier
17.
We return defective goods to our supplier. The document we send and its effect on his account are:
  • A.Debit note; we debit (reduce) his account
  • B.Credit note; we credit his account
  • C.Invoice; we increase his account
  • D.Receipt; no effect
18.
Started business with cash 80,000; bought goods on credit 25,000. After these, total assets and the equation are:
  • A.Assets 1,05,000 = Creditors 25,000 + Capital 80,000
  • B.Assets 80,000 = Capital 80,000
  • C.Assets 1,05,000 = Capital 1,05,000
  • D.Assets 55,000 = Capital 55,000
19.
Goods costing 40,000 are sold for 34,000 cash (a loss). The effect on capital is:
  • A.Capital falls by 6,000
  • B.Capital rises by 34,000
  • C.Capital rises by 6,000
  • D.No effect
20.
Which pair of transactions both keep TOTAL assets unchanged?
  • A.Buy furniture for cash; collect cash from a debtor
  • B.Introduce capital; take a loan
  • C.Pay rent; earn commission
  • D.Buy goods on credit; sell goods at a profit
21.
A firm pays a creditor Rs 10,000 by cheque. The equation effect is:
  • A.Bank (asset) −10,000 and creditors (liability) −10,000
  • B.Capital −10,000
  • C.Cash +10,000
  • D.No change
22.
After all transactions, a student finds Assets 1,50,000 but Liabilities + Capital 1,40,000. This means:
  • A.An error has been made; the equation must balance
  • B.The business made 10,000 profit
  • C.It is normal
  • D.Capital is 1,50,000
23.
Interest of Rs 2,000 received in cash affects the equation as:
  • A.Cash +2,000 and capital +2,000 (income)
  • B.Cash +2,000 and capital −2,000
  • C.A liability +2,000
  • D.No effect on capital
24.
Which is the correct chain from event to books?
  • A.Transaction → source document → voucher → books of account
  • B.Voucher → transaction → books → source document
  • C.Books → voucher → transaction
  • D.Source document → books → transaction
25.
The owner brings in an additional Rs 20,000 cash and the firm repays a loan of Rs 15,000 cash the same day. Net effect on capital and liabilities:
  • A.Capital +20,000; liabilities −15,000
  • B.Capital +5,000 only
  • C.Capital −15,000
  • D.No change anywhere

Answer Key

Section A — Multiple Choice (1 mark each)
  1. (A) Transaction
  2. (A) Cash memo
  3. (B) Invoice/bill
  4. (B) Credit note
  5. (A) Pay-in slip
  6. (A) Voucher
  7. (A) Assets = Liabilities + Capital
  8. (B) Assets − Liabilities
  9. (B) An asset
  10. (C) Keeps total assets unchanged
  11. (A) Increases an asset and a liability by 50,000
  12. (B) Rs 5,00,000
  13. (B) +6,000 (profit)
  14. (B) Decreases capital by 3,000
  15. (B) Drawings (reduces capital)
Section B — Challenge / Olympiad (2 marks each)
  1. (A) It does not change the firm's financial position
  2. (A) Debit note; we debit (reduce) his account
  3. (A) Assets 1,05,000 = Creditors 25,000 + Capital 80,000
  4. (A) Capital falls by 6,000
  5. (A) Buy furniture for cash; collect cash from a debtor
  6. (A) Bank (asset) −10,000 and creditors (liability) −10,000
  7. (A) An error has been made; the equation must balance
  8. (A) Cash +2,000 and capital +2,000 (income)
  9. (A) Transaction → source document → voucher → books of account
  10. (A) Capital +20,000; liabilities −15,000
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