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NCERT Solutions for Class 11 Accountancy Chapter 9 - Financial Statements

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Last updated date: 22nd Mar 2024
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MVSAT 2024

Class 11 Accountancy NCERT Solutions Chapter 9 Financial Statements 1

Vedantu provides easy to understand NCERT Solutions for Class 11 Accountancy Chapter 9. Our faculty have solved and explained all the questions given in the chapter, as per the CBSE guidelines, in the NCERT Solutions Class 11 Accountancy Chapter 9. The solutions to the questions are provided here in a PDF format to simplify the learning experience. Students can download the NCERT Solutions for Class 11 Accountancy Chapter 9 PDF from Vedantu for free. Referring to these NCERT Solutions will help them revise the chapter properly and secure good marks in the examinations.


Now let's start with the basic questions related to Accountancy Class 11 Chapter 9.


Class:

NCERT Solutions for Class 11

Subject:

Class 11 Accountancy

Chapter Name:

Chapter 9 - Financial Statements

Content-Type:

Text, Videos, Images and PDF Format

Academic Year:

2023-24

Medium:

English and Hindi

Available Materials:

  • Chapter Wise

  • Exercise Wise

Other Materials

  • Important Questions

  • Revision Notes

NCERT Accountancy Class 11 Solutions

What Are the Financial Statements? What Are the Objectives of Financial Statements?

The financial statement reports depict the accounting and financial information concerning the business. A company’s administration uses this statement to communicate with external shareholders. These take into account tax authorities, stakeholders, investors, creditors and regulatory bodies, etc.


These Financial Statements Incorporate the Following Reports.

  • Profit and loss statement 

  • Income sheet 

  • Balance sheet 

  • Statement of cash flow


Objectives of Preparing Financial Statements

Recording - The primary objective of preparing financial statements is recording and regularly summarizing the transactions of a business. It is essential to have an entity to keep a check on the financial transaction of the organization.

Decision-Making - The financial statement helps the organizers to make necessary and relevant strategies and decisions.

Planning - Preparing financial statements helps in determining financial situations and perform necessary actions for the growth of the organization.

Accountability - The financial statement creates liability in an organization which enables them to analyze their performance over the years.

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What is a Balance Sheet? What Are the Features of a Balance Sheet?

A balance sheet is not an account like a profit and loss account but a statement comprising books with balances of business and personal accounts. A balance sheet is prepared to maintain an account of capital assets and liabilities of the organization. The objective behind preparing the balance sheet is to depict a fair and accurate financial situation of the organization at a specific date. Each organization prepares a balance sheet when the accounts year ends. A balance sheet is defined as follows.

It is a record of the liabilities, assets, and capital of the owner on a specific date. 

It is a statement that discloses aggregate liabilities, aggregate assets, and aggregate equity of the owner on a particular date.


The Features of the Balance Sheet Are as Follows.

  1. It is not prepared for a complete period but on a specific date.

  2. The balance comprises both sides, assets, and liabilities, which must be equivalent.

  3. It depicts the financial situation of the business.

  4. It is a mere statement and not an account.

  5. It has no debit and credit option.

  6. Before the names of the account “to” and “by” are not used.

Hope you will get some basic information about CBSE Class 11 Accountancy Chapter 9.


How will Vedantu help you to give NCERT Solutions of Class 11 Financial Statements 1?

Vedantu has the best faculties who give you the most relevant study materials for NCERT Accountancy Book Class 11 Solutions Chapter 9. These NCERT Solutions will help you to gain proper knowledge and better rank in your exams. Along with the solutions, Vedantu provides you with solved MCQ’s. You can download the NCERT Accountancy Book Class 11 Solutions PDF from Vedantu, for free. By studying these solutions you will be able to revise all the topics covered in the chapter and secure good marks in the examination.


How Do Our Experts Help You to Improve Your Knowledge-Base?

Not only Financial Statements 1 Class 11 NCERT Solutions but Vedantu also provides you solved previous year question papers that will help you to understand the question paper pattern and model answers. Our subject-matter experts prepare the solutions based on a detailed explanation for every question. If you have any queries regarding any question, you can contact them on Vedantu. You can also attend the live classes for one-on-one interaction and solve your doubts about Chapter 9 of Accounts Class 11. This will boost your confidence for the exam.


Access Other Chapters of NCERT Solutions for Class 11 Accountancy


Solved Example

Which of Them Is Not an Annual Financial Statement?

  1. Profit and loss account

  2. Balance sheet

  3. Depreciation account

  4. Statement of cash flow

Answer- c) Depreciation account. It is not an annual financial statement but forms a part of the final accounts.


  • Study the definition of the Financial Statements:

Definition of the Financial Statement will be mandatory to be studied. This will clear the basics of the chapter and will also help you to understand which are the financial statements. 

  • Study the Objectives of Preparing Financial Statements:

In this the students are required to study what are the main purposes of preparing the financial statements. This will provide the students with the insights regarding who are affected by the preparation of the financial statements. 

  • Format of the Trading and Profit and Loss Account - Solve the Illustrations related to the chapter:

Students must first practice the format of the Trading, Profit and Loss Account and then study the illustrations and practice them thoroughly. 

  • Format of profit and loss statement - Previous Years Question and Answers are to be done:

Studying the format of the profit and loss statement will give the students the understanding about which items will come in the profit and loss statement and which will not. 

  • Format of balance sheet - Know the items which will come in the balance sheet:

The students must continuously attempt to match the Assets and Liabilities sides of the balance sheet in order to score full marks in the exam. 

FAQs on NCERT Solutions for Class 11 Accountancy Chapter 9 - Financial Statements

1. What is meant by operating profit?

An operating profit measures the profit that a company makes from its underlying business functions. So it is an overall accounting metric. It does not consider the deduction in interest and rules out the calculation of tax. The operating profit of a company is usually available on the income statement as a total amount. This calculation is not necessary to be equivalent to the cash flow of business, but it is to get an idea of the profit-making potential of a company before the accounting of expenses.

 

The calculation formula for operating profit is as follows.

Operating Profit = Net Profit + Non-Operating Expenses – Non-Operating Incomes

2. What is the objective of preparing trading and profit and loss accounts?

A trading account is one of the most imperative books that must be maintained by a business organization in order to successfully maintain accounts for a particular financial year. The objectives of preparing a trading account are as follows.

  1. For determining the total profit or loss in a financial year or for a particular period.

  2. For determining the proportion of direct expenses and sales.

  3. For determining the proportion of gross profit and sales.

The objectives of preparing a profit and loss account are as follows.

  1. To determine the total profit or loss sustained by the business.

  2. To meet the terms and regulations in statutory legislation such as the Partnership Act or Company Act.

3. How can you distinguish between capital and revenue?

In Chapter 9 of Class 11 Accountancy Financial Statements, the distinction is very important in making the trading, profit and loss account and the balance sheet. The revenue is the part of the trading, profit and loss account whereas the capital helps in the preparation of the balance sheet. A more elaborated difference can be obtained on the Vedantu website as well as the mobile app free of cost.

4. What are the main objectives of a business?

The main objective of the business is to have meaningful communication with the stakeholders so that it becomes easier for them to make decisions. A stakeholder is a person who is associated with the business directly or indirectly through a monetary or non-monetary association. He can also be internal or external. Internal means the stakeholder is within the business and external means he is outside the business.

5. What are profit and loss accounts?

Profit and loss account is very important in any business. The profit is said when the expenses are less than the revenue. The loss is said when the expenses are more than the revenue. Profit and the loss account is achieved by transferring the balances of the revenue and the expenses to the profit and loss account taken by the trial balance. This also includes the debit and the credit sides. The debit is transferred towards the loss and the credit balance towards the credit side.

6. What are the tips to prepare the Chapter?

Chapter 9 of Class 11 Accountancy Financial Statements is very important for any person who will be taking care of the accounts. Students should have comprehensive knowledge of all the topics. Each topic is important and is interconnected with one another. You should prepare the topics accordingly by understanding one topic and going to the other. This way, you will have the flow and you can properly get the concept.

7. What do you understand about operating profit?

In Chapter 9 of Class 11 Accountancy Financial Statements Operating profit is the profit earned from the operations and the business activities. Operating profit can be defined as the excess of operating revenue over the operating expenses. While calculating the operating profit the income and the expenses, which are purely financial are not taken into account. Operating profit is the profit before the interest and the tax.