Financial Statements-II
Class 11 · Accountancy
4 ideas in Class 11 Accountancy, explained in plain words, with games and quizzes to practise.
Need for Adjustments
Part of: Need and Core Adjustments
Accrual matches each year income, expenses; outstanding, prepaid, depreciation adjust trial balances into true statements.
Why it matters. True profit shown. Position true.
Key words
- Accrual matching
- : Matching each year income and expenses to that year alone.
- Outstanding income
- : Income earned but not yet received at year end.
- Prepaid expense
- : Expenses paid in advance for the coming year.
- Adjustment entry
- : Year-end corrections turning trial balances into true statements.
Try it in two minutes
- Apply accrual yearly.
- Spot unadjusted items.
- Adjust both places.
Try at home. List unpaid bills.
Depreciation and Debts
Part of: Need and Core Adjustments
Depreciation charges asset use; bad debts write off; provisions guard doubtful debtors; all cut profit, adjust balance sheet.
Why it matters. Assets real. Profit prudent.
Formulas
- Depreciation for the year = asset cost x rate / 100.
Key words
- Depreciation
- : The yearly charge spreading an asset cost over its useful life.
- Bad debts
- : Customer dues written off as never recoverable.
- Provision for doubt
- : The safety reserve set aside against doubtful debtors.
- Profit cutters
- : All three charges cut profit and adjust the balance sheet.
Try it in two minutes
- Charge depreciation.
- Write off bad debts.
- Provide for doubtful.
Try at home. Age a debtor list.
Interest Stock and Manager
Part of: Capital Interest Stock
Interest on capital rewards owners; interest on drawings charges them; closing stock credits trading; manager commission on net profit rewards.
Why it matters. Dues complete. Profit fair.
Formulas
- Interest on capital = opening capital x rate / 100.
- Commission before charging = profit x rate / 100.
- Commission after charging = profit x rate / (100 + rate).
- Closing stock is credited to trading account and shown as an asset.
Key words
- Capital interest
- : The reward on opening capital charged to profit and added to capital.
- Drawings interest
- : The charge on owners withdrawals added back to profit.
- Closing stock
- : Unsold goods credited to trading and carried as next year opening.
- Manager commission
- : The percentage of net profit paid to the manager as reward.
Try it in two minutes
- Reward capital used.
- Charge drawings used.
- Credit closing stock.
Try at home. Interest own savings.
Complete Final Statements
Part of: Capital Interest Stock
Start from trial balance; pass adjustments; trading then profit loss then balance sheet; statements must tally.
Why it matters. Steps ordered. Tallies confirm.
Formulas
- Build statements in order: trading, then profit and loss, then balance sheet.
Key words
- Trial balance start
- : The trial balance list from which adjusted statements are built.
- Statement order
- : Trading for gross profit, then profit and loss, then balance sheet.
- Double effect
- : Every adjustment lands in two places so both sides agree.
Try it in two minutes
- Adjust trial items.
- Trading, profit loss.
- Balance sheet tally.
Try at home. Order statement steps.
What your child will practise
- Complete Final Statements: Jungle Puzzle (Clue Puzzle)
- Complete Final Statements: Jungle Quick Fire (Quick Fire)
- Depreciation and Debts: Candy Puzzle (Clue Puzzle)
- Interest Stock and Manager: Jungle Quest (Flip and Match)
- Need for Adjustments: Space Quick Fire (Quick Fire)
- Quiz: Complete Final Statements (8 questions)
- Quiz: Depreciation and Debts (8 questions)
- Quiz: Interest Stock and Manager (8 questions)
- Quiz: Need for Adjustments (8 questions)