Exercise Solutions Available
Step-by-step answers for all textbook questions in this chapter
Accounts from Incomplete Records — NCERT Class 11 Accountancy Solutions
How to Use These Solutions
1. Attempt every question on your own first. Write the full working notes and format before looking at the solution. 2. Compare your answer with the solution given here. Focus on format, workings, and balancing figures. 3. If your answer does not match, identify the specific step where you went wrong — wrong formula, missing adjustment, or arithmetic error. 4. Re-attempt the question from scratch the next day without looking at the solution.
Key Concepts Recap
Before solving the exercises, make sure you remember these fundamentals:
Statement of Affairs Method:
- Capital = Total Assets - Total Liabilities
- Profit = Closing Capital - Opening Capital + Drawings - Additional Capital Introduced
- Prepare two Statements of Affairs: one at the beginning and one at the end of the year
Conversion Method:
- Prepare missing accounts first: Cash A/c, Debtors A/c, Creditors A/c
- The balancing figure in each account gives the missing item
- Then prepare Trading A/c, P&L A/c, and Balance Sheet in the standard format
Missing Figures:
- Missing Credit Sales = Closing Debtors + Cash Received from Debtors - Opening Debtors - Returns Inward - Discount Allowed
- Missing Credit Purchases = Closing Creditors + Cash Paid to Creditors - Opening Creditors - Returns Outward - Discount Received
- Missing Cash Balance = balancing figure in Cash Account
Intext Questions
Question 1 (Page 246)
Q: What are the possible reasons for incomplete records?
Question 2 (Page 248)
Q: Distinguish between Statement of Affairs and Balance Sheet.
| Basis | Statement of Affairs | Balance Sheet |
|---|---|---|
| Basis of preparation | Prepared from incomplete records | Prepared from complete double-entry books |
| Reliability | Less reliable, may contain estimates | More reliable, based on verified data |
| Arithmetical accuracy | Cannot be verified | Can be verified through Trial Balance |
| Purpose | To find capital indirectly | To show true financial position |
| Omission of items | Some assets/liabilities may be omitted | All assets/liabilities are included |
| Compliance | Does not comply with accounting standards | Complies with accounting standards |
Question 3 (Page 252)
Q: How is profit calculated under the Statement of Affairs method?
Profit = Closing Capital - Opening Capital + Drawings - Additional Capital Introduced
Steps: 1. Prepare Opening Statement of Affairs to find Opening Capital 2. Prepare Closing Statement of Affairs to find Closing Capital 3. Apply the formula
If the result is positive, it is profit. If negative, it is loss.
Chapter-End Exercise Solutions
Exercise 1
Q: From the following details, ascertain the profit or loss for the year ending 31st March 2025.
| Particulars | 1st April 2024 (Rs) | 31st March 2025 (Rs) |
|---|---|---|
| Cash in Hand | 5,000 | 7,000 |
| Cash at Bank | 20,000 | 25,000 |
| Debtors | 30,000 | 40,000 |
| Stock | 40,000 | 50,000 |
| Plant and Machinery | 60,000 | 60,000 |
| Creditors | 20,000 | 25,000 |
| Loan | 10,000 | 10,000 |
Drawings during the year Rs 15,000. Additional capital introduced Rs 10,000.
Step 1: Opening Statement of Affairs (1st April 2024)
| Liabilities | Rs | Assets | Rs |
|---|---|---|---|
| Creditors | 20,000 | Cash in Hand | 5,000 |
| Loan | 10,000 | Cash at Bank | 20,000 |
| Opening Capital (Bal.) | 1,25,000 | Debtors | 30,000 |
| Stock | 40,000 | ||
| Plant and Machinery | 60,000 | ||
| Total | 1,55,000 | Total | 1,55,000 |
Opening Capital = (5,000 + 20,000 + 30,000 + 40,000 + 60,000) - (20,000 + 10,000) = Rs 1,25,000
Step 2: Closing Statement of Affairs (31st March 2025)
| Liabilities | Rs | Assets | Rs |
|---|---|---|---|
| Creditors | 25,000 | Cash in Hand | 7,000 |
| Loan | 10,000 | Cash at Bank | 25,000 |
| Closing Capital (Bal.) | 1,47,000 | Debtors | 40,000 |
| Stock | 50,000 | ||
| Plant and Machinery | 60,000 | ||
| Total | 1,82,000 | Total | 1,82,000 |
Closing Capital = (7,000 + 25,000 + 40,000 + 50,000 + 60,000) - (25,000 + 10,000) = Rs 1,47,000
Step 3: Profit Calculation
Profit = Closing Capital - Opening Capital + Drawings - Additional Capital = 1,47,000 - 1,25,000 + 15,000 - 10,000 = 22,000 + 15,000 - 10,000 Profit = Rs 27,000
Exercise 2
Q: From the following information, prepare a Statement of Affairs and find out the profit or loss.
| Particulars | 1st Jan 2024 (Rs) | 31st Dec 2024 (Rs) |
|---|---|---|
| Land and Building | 2,00,000 | 2,00,000 |
| Furniture | 50,000 | 50,000 |
| Stock | 80,000 | 1,00,000 |
| Debtors | 60,000 | 70,000 |
| Cash | 10,000 | 15,000 |
| Creditors | 40,000 | 50,000 |
| Bills Payable | 20,000 | 25,000 |
Additional information: (a) Drawings Rs 24,000, (b) Additional capital introduced Rs 30,000, (c) Depreciation on furniture Rs 5,000.
Opening Statement of Affairs (1st Jan 2024)
| Liabilities | Rs | Assets | Rs |
|---|---|---|---|
| Creditors | 40,000 | Land and Building | 2,00,000 |
| Bills Payable | 20,000 | Furniture | 50,000 |
| Opening Capital (Bal.) | 3,40,000 | Stock | 80,000 |
| Debtors | 60,000 | ||
| Cash | 10,000 | ||
| Total | 4,00,000 | Total | 4,00,000 |
Opening Capital = Rs 3,40,000
Closing Statement of Affairs (31st Dec 2024)
| Liabilities | Rs | Assets | Rs |
|---|---|---|---|
| Creditors | 50,000 | Land and Building | 2,00,000 |
| Bills Payable | 25,000 | Furniture | 45,000 (50,000 - 5,000 dep.) |
| Closing Capital (Bal.) | 3,60,000 | Stock | 1,00,000 |
| Debtors | 70,000 | ||
| Cash | 15,000 | ||
| Total | 4,35,000 | Total | 4,35,000 |
Closing Capital = (2,00,000 + 45,000 + 1,00,000 + 70,000 + 15,000) - (50,000 + 25,000) = Rs 3,60,000
Profit Calculation
Profit = Closing Capital - Opening Capital + Drawings - Additional Capital = 3,60,000 - 3,40,000 + 24,000 - 30,000 = 20,000 + 24,000 - 30,000 Profit = Rs 14,000
Exercise 3 (Conversion Method)
Q: From the following balances and transactions, prepare Trading and P&L A/c and Balance Sheet for the year ended 31st March 2025.
Opening Balances (1st April 2024): Cash Rs 5,000; Bank Rs 20,000; Debtors Rs 40,000; Stock Rs 60,000; Furniture Rs 30,000; Creditors Rs 35,000.
Cash Book Summary: Receipts: Cash Sales Rs 1,00,000; Received from Debtors Rs 80,000. Payments: Cash Purchases Rs 50,000; Paid to Creditors Rs 60,000; Expenses Rs 30,000; Drawings Rs 20,000.
Closing Balances (31st March 2025): Debtors Rs 50,000; Creditors Rs 30,000; Stock Rs 70,000.
Step 1: Sundry Debtors Account
| Dr. | Rs | Cr. | Rs |
|---|---|---|---|
| Opening Balance b/d | 40,000 | Cash Received | 80,000 |
| Credit Sales (Bal.) | 90,000 | Closing Balance c/d | 50,000 |
| Total | 1,30,000 | Total | 1,30,000 |
Credit Sales = 1,30,000 - 40,000 = Rs 90,000 Total Sales = 1,00,000 + 90,000 = Rs 1,90,000
Step 2: Sundry Creditors Account
| Dr. | Rs | Cr. | Rs |
|---|---|---|---|
| Cash Paid | 60,000 | Opening Balance b/d | 35,000 |
| Closing Balance c/d | 30,000 | Credit Purchases (Bal.) | 55,000 |
| Total | 90,000 | Total | 90,000 |
Credit Purchases = 90,000 - 35,000 = Rs 55,000 Total Purchases = 50,000 + 55,000 = Rs 1,05,000
Step 3: Opening Capital
Opening Capital = (5,000 + 20,000 + 40,000 + 60,000 + 30,000) - 35,000 = Rs 1,20,000
Step 4: Trading Account
| Dr. | Rs | Cr. | Rs |
|---|---|---|---|
| Opening Stock | 60,000 | Sales | 1,90,000 |
| Purchases | 1,05,000 | Closing Stock | 70,000 |
| Gross Profit c/d | 95,000 | ||
| Total | 2,60,000 | Total | 2,60,000 |
Step 5: Profit and Loss Account
| Dr. | Rs | Cr. | Rs |
|---|---|---|---|
| Expenses | 30,000 | Gross Profit b/d | 95,000 |
| Net Profit | 65,000 | ||
| Total | 95,000 | Total | 95,000 |
Step 6: Closing Capital
Closing Capital = Opening Capital + Net Profit - Drawings = 1,20,000 + 65,000 - 20,000 = Rs 1,65,000
Step 7: Balance Sheet as on 31st March 2025
| Liabilities | Rs | Assets | Rs |
|---|---|---|---|
| Capital (1,20,000 + 65,000 - 20,000) | 1,65,000 | Cash (5,000 + 1,00,000 + 80,000 - 50,000 - 60,000 - 30,000 - 20,000) | 25,000 |
| Creditors | 30,000 | Bank | 20,000 |
| Debtors | 50,000 | ||
| Stock | 70,000 | ||
| Furniture | 30,000 | ||
| Total | 1,95,000 | Total | 1,95,000 |
Practice Tips
1. Always prepare the Statement of Affairs carefully — check your arithmetic twice. 2. In the conversion method, prepare Debtors and Creditors accounts first before attempting the Trading Account. 3. Remember: Profit = Closing Capital - Opening Capital + Drawings - Additional Capital. This formula is the most frequently tested. 4. For the Balance Sheet, Capital = Opening Capital + Additional Capital - Drawings + Net Profit. 5. If the Balance Sheet does not tally, re-check your Cash Account balancing figure.
Related Pages
- [Chapter 7 Guide — Accounts from Incomplete Records](/school/cbse/class/11/accountancy/cbse-accounts-incomplete-records)
- [All Class 11 Accountancy Solutions](/school/cbse/class/11/accountancy/solutions)
- [Class 11 Accountancy Subject Guide](/school/cbse/class/11/accountancy)