Master Vedantu's Financial Statements 2 Class 11 Ncert Solutions For Better Understanding
In NCERT Solutions Class 11 Accountancy Chapter 9, you’ll learn all about financial statements—how businesses record, understand, and present their financial health. This chapter covers topics like the trading and profit & loss accounts, balance sheet, and the difference between capital and revenue expenditure. You’ll also get to solve practical numerical questions, which can make learning accountancy much clearer.
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If you ever get confused with journal entries or want to understand the purpose of various financial statements, these NCERT Solutions will make things much simpler. At Vedantu, you’ll find step-by-step answers designed to help you score better and clear your doubts. Need to check the whole Class 11 Accountancy syllabus? You can find it quickly on our syllabus page.
You can easily download the full NCERT Solutions for this chapter or view them online anytime. Use these, along with your textbook, to prepare confidently for your Accountancy exams!
FAQs on NCERT Solutions For Class 11 Accountancy Chapter 9 Financial Statements 2
1. Where can I find reliable, step-by-step NCERT Solutions for Class 11 Accountancy Chapter 9 for the 2025-26 session?
You can find accurate and step-by-step NCERT Solutions for Class 11 Accountancy Chapter 9, Financial Statements – II, prepared by subject matter experts. These solutions are fully aligned with the latest CBSE 2025-26 syllabus and provide clear, methodical guidance for solving all the practical problems and theoretical questions in the textbook.
2. What is the correct method to solve a practical problem on Financial Statements with Adjustments from the NCERT textbook?
To correctly solve a practical problem from Chapter 9, follow this systematic method:
- First, carefully prepare the Trading Account to find the Gross Profit or Gross Loss.
- Next, prepare the Profit & Loss Account. Start with the result from the Trading Account and incorporate all indirect expenses and incomes.
- While preparing these accounts, treat each adjustment by applying its dual effect—one in the Trading/P&L Account and the other in the Balance Sheet.
- Finally, prepare the Balance Sheet, ensuring that the total of Assets equals the total of Liabilities.
3. How are 'Outstanding Expenses' and 'Prepaid Expenses' correctly treated when preparing the final accounts?
The correct accounting treatment as per the NCERT syllabus involves a dual entry:
- Outstanding Expenses: These are expenses incurred but not yet paid. You must add the amount to the respective expense on the debit side of the Trading or P&L Account and show the same amount on the Liabilities side of the Balance Sheet.
- Prepaid Expenses: These are expenses paid in advance. You must deduct the amount from the respective expense in the P&L Account and show the same amount on the Assets side of the Balance Sheet.
4. What is the correct sequence for treating further bad debts, new provision for doubtful debts, and provision for discount on debtors in NCERT problems?
To get the correct answer for Sundry Debtors' adjustments, you must follow this specific sequence:
- First, deduct any Further Bad Debts from the Sundry Debtors amount given in the Trial Balance.
- Second, calculate the New Provision for Doubtful Debts on the remaining balance of debtors (after deducting further bad debts).
- Finally, calculate the Provision for Discount on Debtors on the amount that remains after deducting both further bad debts and the new provision for doubtful debts.
Following this order is crucial for an accurate solution.
5. How do you correctly calculate and show the adjustment for depreciation in the final accounts?
Depreciation is treated as a non-cash business expense. The correct method for its adjustment is:
- 1. In the Profit & Loss Account: Show the depreciation amount on the debit side, as it is a loss/expense for the business.
- 2. In the Balance Sheet: Deduct the depreciation amount from the cost of the specific asset on the Assets side to show its written-down value.
6. How is the manager's commission on net profit calculated in NCERT solutions for 'before' vs 'after' charging cases?
The calculation method depends on the specific instruction in the problem:
- Commission on Net Profit before charging: This is calculated directly on the profit before the commission expense. The formula is: Net Profit (before commission) × (Rate / 100).
- Commission on Net Profit after charging: This is calculated on the profit that remains after deducting the commission itself. The formula is: Net Profit (before commission) × (Rate / (100 + Rate)).
7. Why does every adjustment entry in Chapter 9 have a dual effect on the final accounts?
Every adjustment entry reflects a transaction that was omitted from the Trial Balance. To incorporate it correctly, the fundamental double-entry principle of accounting must be applied. One aspect of the transaction typically affects a nominal account (like an expense or income), which is shown in the Trading & P&L Account. The other aspect affects a real or personal account (an asset or liability), which is shown in the Balance Sheet to ensure it remains balanced.
8. Why must the provision for doubtful debts be calculated before the provision for discount on debtors?
The logic is based on prudence and practical business sense. A provision for discount on debtors is an incentive for prompt payment. A business would only offer this discount to debtors it expects to receive payment from. Since doubtful debts are amounts the business anticipates it might not collect, it is illogical to offer a discount on them. Therefore, you must first remove the doubtful portion from debtors and then calculate the discount on the remaining, more reliable amount.
9. How does the Principle of Prudence (Conservatism) justify creating a Provision for Doubtful Debts?
The Principle of Prudence states that an accountant should provide for all possible losses but should not anticipate any future profits. Creating a Provision for Doubtful Debts is a direct application of this. Even if we don't know which specific debtors will default, we can anticipate a likely loss based on experience. By creating a provision, we recognise this foreseeable loss in the current period, ensuring that both profits and assets (debtors) are not overstated in the financial statements.
10. What is the fundamental difference in the accounting treatment of 'Interest on Capital' versus 'Interest on Drawings'?
The key difference lies in who is paying whom. Interest on Capital is an expense for the business, as it is paying the proprietor for using their capital. Therefore, it is debited to the P&L Account and added to Capital in the Balance Sheet. Conversely, Interest on Drawings is an income for the business, as the proprietor is paying the business for withdrawing funds. Therefore, it is credited to the P&L Account and deducted from Capital in the Balance Sheet.
11. How does omitting the adjustment for closing stock lead to an incorrect calculation of both Gross Profit and financial position?
Omitting the closing stock adjustment causes two major errors.
- First, in the Trading Account, closing stock is credited to correctly calculate the 'Cost of Goods Sold' (COGS). Without it, COGS appears higher, which incorrectly reduces the Gross Profit.
- Second, in the Balance Sheet, closing stock is a current asset. Its omission understates the total assets, thus failing to present a true and fair view of the company's financial position.
