Class 11 Accountancy - RAJASTHAN
Financial Statements - II
The chapter 'Financial Statements - II' in Class 11 Accountancy for Rajasthan Board (RBSE) builds upon the basic preparation of Trading and Profit & Loss Accounts by focusing on adjustments required at the end of the accounting year. It introduces students to the treatment of closing stock, outstanding and prepaid expenses, accrued and unearned incomes, depreciation, bad debts, and provision for doubtful debts. Mastering this chapter is crucial for board exams because it forms the foundation of final accounts problems, frequently appearing as long-answer numerical questions carrying significant weightage.
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 Profit & Loss Account and shown as a liability in the Balance Sheet.
Prepaid Expenses
Expenses paid in advance for the next accounting period. They are deducted from the respective expense in the Profit & Loss Account and shown as a current asset in the Balance Sheet.
Accrued Income
Income earned during the current accounting period but not yet received. It is added to the respective income in the Profit & Loss Account and recorded as an asset in the Balance Sheet.
Provision for Bad and Doubtful Debts
An estimated amount kept aside for debtors who may fail to pay their dues in the future. It is debited to the Profit & Loss Account and deducted from sundry debtors in the Balance Sheet.
Manager's Commission
Commission payable to the manager based on net profit, calculated either before charging such commission or after charging such commission using specific percentage formulas.
Important Formulas
Board Exam Info
In the Rajasthan Board (RBSE) Class 11 Accountancy examinations, this chapter typically carries around 8 to 12 marks. Questions usually include a comprehensive 6-mark or 8-mark numerical problem requiring the preparation of Trading Account, Profit and Loss Account, and Balance Sheet with 4 to 6 major adjustments, along with 1-mark objective or short-answer questions.
Frequently Asked Questions
Why are adjustments shown at two places in financial statements?
According to the Dual Aspect Principle of accounting, every adjustment must be recorded in two places to maintain the balance of the accounting equation—once in the Trading or Profit & Loss Account and once in the Balance Sheet.
What is the difference between Bad Debts given in the Trial Balance and Additional Bad Debts given in adjustments?
Bad debts given in the Trial Balance are already recorded in the books and are directly debited to the Profit & Loss Account. Additional bad debts given in adjustments are unrecorded further losses and are first added to debtors and then debited to the Profit & Loss Account.
How do we treat Closing Stock if it is given inside the Trial Balance?
If Closing Stock appears inside the Trial Balance, it means the entry for opening stock and purchases has already been adjusted. Therefore, it is shown only on the asset side of the Balance Sheet and not in the Trading Account.
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