Class 11 Accountancy NCERT Solutions Chapter 1 Introduction to Accounting
Class 11 Accountancy Chapter 1 Introduction to Accounting deals with the fundamental concepts of accounting. The theory covered in Accountancy Class 11 Chapter 1 is easily comprehensible and understandable so that students score well in the exams. Vedantu provides NCERT Accountancy book Class 11 Solutions Chapter 1 that would help students understand the concepts more clearly. Vedantu furnishes the answers to the numerical problems and exercises in the Class 11 Accountancy Chapter 1 NCERT Solutions so that it is easy for students to verify the concepts learnt.
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NCERT Accountancy Class 11 Solutions
What Are the Types of Accounting?
Financial Accounting: In this type of account, a process of identifying, distinguishing, recording and analysis of the phases of accounting are performed to signify the financial status or condition of a business entity. All the transactions that are financial i.e. which involves the flow of money either as an income or an item of expenditure are recorded in the books of accounting like a ledger or a balance sheet.
These transactions are analysed on basis of the effect they produce on the business entity and then the overall status of the firm is decided. These aspects are completely covered in Class 11th Accountancy Chapter 1. This process is carried based on the conventional rules, laws, regulations and principles such that these are applied while recording transactions based on their influence on the firm which is taken into consideration.
What is Financial Accounting?
Financial Accounting can be defined as the section or branch of accounting that mainly deals with all the financial-related operations of a business entity. It is a comprehensive process of maintaining accounts or a record of all the financial transactions occurring daily in a firm. Accountancy Class 11 Chapter 1 covers some rules and principles of finance.
Financial Accounting makes an emphasis on the periodic review of all the cash flow mechanisms existing during a regular course of business continuity. Certain predefined rules and regulations are to be followed which guide accountants to register, record, interpret and analyse all the transactions occurring during a particular interval of time which is covered in Class 11th Accountancy Chapter 1.
Generally, accounting or more precisely financial accounting is done from the beginning of April to March 31st of the consecutive year. The first or primary reason for the formulation of financial accounting is to ascertain the financial status of the entity and also to identify the potential sources which ensure a continuous loss to the business activity. Hence, these are identified and rectified immediately to enhance the financial status and encourage investments or facilitate the acceptance of loans for capital to perform an economic function.
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What is the Necessity of Financial Accounting?
The quintessential aspect of the financial accounting of an organisation is the scope for representing the status of the firm to the concerned faculty. The concerned authorities can be banks, lending institutes, dealers, wholesalers or even the general public.
NCERT Accountancy book Class 11 solutions Chapter 1 consists of the necessary solutions that are covered in financial accounting. The reason for exhibiting the financial resources to the general public is to encourage them to buy a considerable number of shares to gain a percentage of ownership in case of a public limited company. Banks and financial organisations can also grant some loans based on the financial statements issued by the organization. Vedantu facilitates the access of all the previous year board exam question papers making it possible to predict the aspiring problems in further examinations.
Financial Accounting can also be utilized within the organisation to determine the total aggregate share of liquid cash available, the net worth, assets and liabilities etc. This could be easily deduced from the respective financial statements. Also, an in-depth retrospection of the financial aspects of the firm could be easily understood without any ambiguities and confusion.
1896 was marked as a beginning for Accounting. New York was the first and primary state to introduce the examination to accountants to officially observe them as a certified authority. They facilitated people to gain official recognition in accounting for the people who cleared the Certified Public Accountant Examination which was introduced in 1896.
Q1: What are the Principle Objectives of Accounting?
Ans: The principal objectives of accounting are as follows
To maintain the continuity of transactions of a firm or a business entity
To ascertain the assets, liabilities, revenue and liabilities of an organization
To determine the financial condition of an organization and make suitable decisions
To prepare the balance sheet of the business activity
To provide relevant data to the potential investors, customers, wholesalers and dealers
FAQs (Frequently Asked Questions)
1. What is a balance sheet?
Balance Sheet is one of the financial statements that is prepared during the process of maintenance of the accounts of a particular firm or business entity. As accounting is a continuous process, the balance sheet is also periodically added particulars that are related to the firm. It mainly comprises the chronological representation of the total assets, liabilities and the equity owned by the business entity. So, the organization’s financial status can be accessed and understood at any interval of time to make crucial management decisions and implement them immediately to improve the financial condition of the firm.
2. What is a Ledger Book?
Ledger Book or more precisely Ledger Account is the most primary and chief journal in the accounting of an organization or a business entity. It includes complete information of all the aspects related to the financial transactions made by the business entity within the stipulated period. It comprises all the details of the organization’s income, expenses, inventory, stocks receivable, stocks deliverable, shares, liabilities and also assets. It also consists of the cash in hand and cash in the bank. The salaries, wages, bonds, properties and loans etc. are indicated in the ledger. Thus, a ledger account gives a complete bird’s eye view of all the essentialities possessed by the organization.
3. What does Accounting in Class 11 Accountancy Chapter 1 mean?
As mentioned in Class 11 Accountancy Chapter 1, accounting is referred to as the process of identifying, documenting, classifying, summarizing, analyzing, and conveying information about financial transactions to accounting information users such as investors, creditors, owners etc. In order to avoid the potential of omission and fraud, financial transactions in books of accounts must be kept methodical and full. It assists business owners in comparing one year's performance to those of previous years in order to identify the variables that cause changes.
4. What do you study in Class 11 Accountancy Chapter 1?
Students will be able to learn the following topics in Class 11 Accountancy Chapter 1:
Meaning, significance and objectives of accounting
Identification, measurement, recording and communication
Meaning of Organisation
Interested users of information
Accounting as a source of information
Qualitative characteristics of accounting information
Objectives of accounting
Maintenance of record of business transactions
Calculation of profit and loss
Depiction of financial position
Providing accounting information to its users
Role of accounting
5. How much will it cost to download the NCERT Solution PDFs of Class 11 Accountancy Chapter 1?
The main motive of providing PDF files of Class 11 Accountancy Chapter 1 is to give all the students easy access to these files. If you want NCERT Solutions or revision notes, important questions or sample papers, you can easily avail these amenities at the online website of Vedantu or the vedantu app. Now the best part is, understanding the importance of these PDF files, Vedantu makes sure that every single student gets to use these resources without paying any charge for them.
6. What does the term ‘revenue’ mean?
A company's revenue is defined as the money it makes from selling its products during a specific time period. Profits that a company makes by selling its goods or delivering services to customers are referred to as sales revenue. Other than that the following revenue sources are common to many companies: commissions, interest, dividends, royalties, rent earned, etc. The term "revenue" can be used interchangeably with the term "income." Revenue is a basic terminology that is frequently used in the subject of Accountancy.
7. Is Class 11 Accountancy Chapter 1 important for exams?
Class 11 Accountancy Chapter 1 ‘Introduction to Accounting’ is a very crucial chapter for the students belonging to the commerce stream. This chapter gives the students in-depth information about what accounting is and what its aspects are. Students must be very much aware of these concepts as this chapter holds the foundation of the entire study of commerce. If you want to learn more about Class 11 Accountancy Chapter 1 ‘Introduction to Accounting’, then you must give a glance through the website of Vedantu.