State True or False with reasons:Statement of Affairs and Balance Sheet are one and the same. - Book Keeping and Accountancy

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MCQ
True or False

State True or False with reasons:
Statement of Affairs and Balance Sheet are one and the same.

Options

  • True

  • False

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Solution

This statement is True.
A statement of affairs is a statement of assets and liabilities. In a statement of affairs, right hand side is used for recording assets and left side is used for recording liabilities. Therefore, we can say that statement of affairs and balance sheet are one and the same.
Concept: Preparation of Opening and Closing Statement of Affairs
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Chapter 10: Single Entry System - Exercises [Page 356]

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Balbharati Book-keeping and Accountancy 11th Standard HSC Maharashtra State Board
Chapter 10 Single Entry System
Exercises | Q 4. 3) | Page 356

RELATED QUESTIONS

Answer in one sentence only.
What is Statement of Affairs?


Write a word, term, or phrase which can substitute the following statement.
 A statement which is similar to Balance Sheet.


Write a word, term, or phrase which can substitute the following statement.
A statement similar to Balance Sheet prepared to find out the amount of opening capital


Select the most appropriate answer from the alternatives given below and rewrite the sentence.
The capital balances are ascertained by preparing ________


Fill in the blank:
Statement of Affairs is just like a  ______________.


Closing Capital   Opening Capital   Profit
₹ 10,000 - ₹ 5,000 = ?

Closing Assets    Closing Liabilities   Closing Capital
₹ 10,000 - ₹ 5,000 = ?

Sujit a small trader provides you with the following details of his business.

Particulars 1.4.2017 (₹) 31.3.2018 (₹)
Cash in Hand 2,000 7,000
Debtors 40,000 60,000
Creditors 50,000 80,000
10% Govt. Bonds   9,000
Bank Overdraft 70,000 30,000
Motor Van 50,000 70,000
Furniture 15,000 15,000
Stock  70,000 90,000
Bills Receivable 70,000 90,000

Additional information:

1. Sujit withdraws ₹ 5,000 for his personal use, on 1st Oct. 2017.

2. He had also withdrawn ₹ 30,000 for rent of his residential flat.

3. Depreciation Furniture by 10% p.a. and writes off ₹ 1,000 from Motor Van.

4. Charge interest on Drawings ₹ 3,000.

5. 10% Govt. Bonds were purchased on 1st Oct. 2017.

6. Allow interest on capital at 10% p.a.

7. ₹ 1,000 is written off as bad debts and provides 5% p.a. R.D.D. on Debtors.

Prepare Opening Statement of Affairs, Closing Statement of Affairs, and Statement of Profit or Loss for the year ending 31st March 2018.


Anjali keeps her books by the Single Entry System. Her position on 1.4.2016 was as follows.

Cash at Bank ₹ 4,000, Cash in Hand ₹ 1,000, Stock ₹ 6,000; Sundry Debtors ₹ 8,400, Plant and Machinery ₹ 7,500, Bill Receivable ₹ 2,600, Creditors ₹ 3500; Bills Payable ₹ 4,000

On 31.3.2017 her position was as follows; cash at Bank ₹ 3,900, Cash in Hand ₹ 2,000. Stock ₹ 9000, Sundry Debtors, ₹ 7,500; Plant and Machinery ₹ 7,500; Bills Payable ₹ 2,200, Bills Receivable ₹ 3,400; Creditors ₹ 1,500.

During the year Anjali introduced further Capital of ₹ 1,500 and she spent ₹ 700 per month for her personal use.
Depreciation Plant and Machinery by 5% p.a. and create Reserve for Doubtful debts @ 5% p.a. on the debtor.

Prepare Opening and Closing Statement of Affairs and Statement of Profit or Loss for the year ended 31.3.2017.


Mr. Vijay is dealing in the business of fruits. He maintains an accounting record with a single entry. The following figures are taken from his record.

Particulars 31.3.2017 (₹) 31.3.2018 (₹)
Building 50,000 60,000
Furniture 30,000 30,000
Plant and Machinery 20,000 40,000
Sundry Debtors 30,000 50,000
Stock  15,000 25,000
Cash Balance 10,000 20,000
Bills Receivable 5,000 10,000
Sundry Creditors 30,000 15,000
Bank Overdraft 8,000  
Bank Balance   12,000

Additional information:

1. Mr. Vijay introduced ₹ 7,000 as fresh capital.

2. He spent ₹ 40,000 from his business for his daughter’s marriage.

3. Depreciate Building by ₹ 6,000.

4. Create a 5% reserve for doubtful debts on Sundry Debtor.

Prepare:

1. Opening Statement of Affairs.

2. Closing Statement of Affairs

3. Statement of Profit or Loss for the year ended 31.3.2018.


Miss. Fiza keeps her books on the Single Entry System and disclosed the following information about her business.

Particulars 1.4.2017 (₹) 31.3.2018 (₹)
Debtors 25,000 45,000
Investments   40,000
Plant and Machinery 10,000 10,000
Creditors 30,000 33,000
 Stock 32,000 35,000
Cash at Bank 16,000 50,000
Bills Payable 5,000 8,000

Additional information:

1. Miss. Fiza transferred ₹ 2,000 per month during the first half-year and ₹ 1000 per month for the second half-year from a business account to her personal account.

2. She sold her private asset for ₹ 40,000 and brought the proceeds into her business.

3. She also took goods worth ₹ 12,000 for private use.

4. Plant and Machinery is to be depreciated by 10% p.a.

5. Provide R.D.D. on debtors at 5% p.a.

Prepare:
1. Opening Statement of Affairs

2. Closing Statement of Affairs

3. Statement of Profit or Loss for the year ended 31.3.2018
Solution:


Miss. Sanika keeps her books on the Single Entry System. The statement of affairs is given on 31st March 2018.

Liabilities  Amt (₹)  Assets  Amt (₹) 
Creditors 12,000 Plant and Machinery 17,000
Bills Payable 8,500 Debtors 19,500
Capital Balance 38,500 Stock 9,000
    Cash in Hand 7,500
    Bills Receivable 6,000
  59,000   59,000

On 31st March 2018 their Assets and Liabilities were as follows:

Plant and Machinery ₹ 42,000, Stock ₹ 38,000, Cash in Hand ₹ 10,000, Creditors ₹ 7,000, Debtors ₹ 25,000, Bills Payable ₹ 6,000

Drawings during the year were ₹ 5,500, Plant and Machinery were found Overvalued by 5% p.a. and Stock was found Undervalued by 20% p.a., R.D.D. was to be created at 10% p.a. on Debtors, Interest on Capital was allowed at 10% p.a.

Prepare:

1. Closing Statement of Affairs.

2. Statement of Profit or Loss for the year ended 31st March 2018.


Peter keeps his books on the Single Entry System. From the following particulars, Prepare Opening and Closing Statement of Affairs and Statement of Profit or Loss for the year ending 31st March 2018.

Particulars 31.3.2017 (₹) 31.3.2018 (₹)
Bank Balance 46,000 38,000
Cash Balance 8,500 15,000
Sundry Debtors 80,000 1,30,000
Stock  70,000 1,00,000
Furniture 18,000 18,000
Sundry Creditors 40,000 45,000
Bills Payable 15,000 30,000

Additional Information:

1. Peter has withdrawn ₹ 15,000 from the business for his personal use.

2. He has introduced additional capital of ₹ 10,000 in the business on 1st January 2018.

3. Depreciate furniture @ 10% p.a.

4. Maintain reserve for doubtful debts @ 5% on Sundry Debtors.

5. Closing Stock is overvalued by 25% in the books.


Suresh keeps his books by the Single Entry System. His position on 1.4.2017 was as follows.

Cash at Bank ₹ 4,000, Cash in Hand ₹ 3,000; Stock ₹ 8,000; Sundry Debtors ₹ 9,000; Plant & Machinery ₹ 10,000; Bills Receivable ₹ 3000; Creditors ₹ 1500; Bills Payable ₹ 2000.

On 31st March 2018, his position was as follows:
Cash at bank ₹ 6,400; Cash in Hand ₹ 1,800; Stock ₹ 10000; Sundry and Debtors ₹ 8,000; Plant & Machinery ₹ 10,000; Bills Payable ₹ 4,000; Bills Receivable ₹ 5,200; Creditors ₹ 2,000 During the year Suresh introduced further capital of ₹ 3,000 and his drawings were ₹ 700 per months. Depreciate Plant & Machinery by 5% and create a reserve for bad doubtful debts @ 5%.

Prepare:

1. Opening Statement of Affairs

2. Closing Statement of Affairs

3. Statement of Profit or Loss for the year ended 31.3.2018.


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