Class 11 Accountancy - HARYANA
Financial Statements - II
Financial Statements - II (with adjustments) for Class 11 Accountancy covers the preparation of Trading Account, Profit and Loss Account, and Balance Sheet after incorporating various year-end adjustments. In business, several transactions remain unrecorded or outstanding at the end of the accounting period. This chapter teaches Haryana Board (BSEH) students how to treat important adjustments such as closing stock, outstanding and prepaid expenses, accrued and unearned incomes, depreciation, bad debts, and provision for doubtful debts. Mastering this chapter is crucial as it forms the foundation for advanced accounting and frequently features as a compulsory 8-mark numerical question in board exams.
Start Learning FreeKey Concepts
Outstanding Expenses
Expenses that relate to the current accounting period but remain unpaid at the end of the year; they are added to the respective expense in the P&L Account and shown as a liability on the Balance Sheet.
Prepaid Expenses
Expenses paid in advance for the next accounting period; they are deducted from the respective expense in the P&L Account and shown as an asset on the Balance Sheet.
Accrued Income
Income that has been earned during the current year but has not yet been received; it is added to the respective income in the P&L Account and shown as an asset on the Balance Sheet.
Provision for Doubtful Debts
A calculated estimate of potential bad debts from current sundry debtors, created out of profits to maintain financial prudence; it is debited to the P&L Account and deducted from debtors in the Balance Sheet.
Manager's Commission
Commission payable to the manager usually calculated as a percentage of net profit, either before charging such commission or after charging such commission.
Important Formulas
Board Exam Info
In the Haryana Board (BSEH) Class 11 Accountancy examination, this chapter is extremely important. It typically carries around 8 to 12 marks. Students can definitely expect one long-answer numerical question requiring the preparation of the Trading and Profit & Loss Account and Balance Sheet with 4 to 6 adjustments, alongside 1 or 2 objective-type questions.
Frequently Asked Questions
Why is an item given in the trial balance shown only once, while adjustment items appear twice?
Items inside the trial balance have already been double-entered in the ledger, so they appear only once in the final accounts. Adjustments are unrecorded transactions at year-end, requiring a double effect to satisfy the dual aspect principle of accounting.
What is the difference between Bad Debts and Provision for Doubtful Debts?
Bad debts are actual losses from debtors who cannot pay, whereas provision for doubtful debts is an estimated reserve kept aside for potential future losses from current debtors.
How do we treat closing stock if it is given inside the Trial Balance?
If closing stock is given inside the trial balance, it has already been adjusted against purchases (or is part of opening stock/purchases), so it is shown ONLY on the asset side of the Balance Sheet and not in the Trading Account.
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