ARR SL VIDYASHRAAM SENIOR SECONDARY SCHOOL
A School with Legacy of Excellence
Affiliation No: 1931003, Kumbakonam.
MITTENT TEST (2025 – 26)
Grade : XI Date : 17.07.2025
Subject: Accountancy (055) Marks : 50
General Instructions:
[Link] question paper consists of 34 questions. All questions are compulsory.
[Link] to be written in the separate answer booklet only.
[Link] No. 1 to 10 are short answer type - I questions carrying 1 mark each.
[Link] No. 11 to 14 are short answer type – II questions carrying 3 marks each.
[Link] No. 15 to 18 are short answer type – III questions carrying 4 marks each.
[Link] No. 19 to 20 are long answer type - questions carrying 6 marks each.
There is no overall choice. However, an internal choice has been provided in 3 questions of one
mark, 1 questions of three marks, 1 question of four marks and 1 questions of six marks.
1. Which one of the following is not a main objective of accounting?
(a) Systematic recording of transactions
(b) Ascertainment of the profitability of the business
(c) Ascertainment of the financial position of the business
(d) Solving tax disputes with tax authorities
Ans: (d) Solving tax disputes with tax authorities
2. Which one of the following is not a branch of accounting?
(a) Financial accounting (b) Management accounting
(c) Human resources accounting (d) None of the above.
Ans: (c) Human resources accounting
3. Financial position of a business is ascertained on the basis of
(a) Journal (b) Trial balance (c) Balance Sheet (d) Ledger
Ans: (c) Balance Sheet
Or
Which of the following is not a business transaction
(a) Purchase of goods for resale amounted to ₹50,000
(b) Paid salaries and wages amounted to ₹10,000
(c) Paid rent for office premises ₹5000
(d) Purchased a LED television for personal use
Ans: (d) Purchased a LED television for personal use
4. Who is considered to be the internal user of the financial information?
(a) Creditor (b) Employee (c) Management (d) Government
Ans: (c) Management
5. The business is liable to the proprietor of the business in respect of capital introduced by the person
according to
(a) Money measurement concept (b) Cost concept
(c) Business entity concept (d) Dual aspect concept
Ans: (c) Business entity concept
Or
Given below the stages in Accounting cycle / process. You are required to rearrange the below order if
required.
Stage 1: Preparation of Ledger Accounts
Stage 2. Identification of a Transaction that has money value.
Stage 3. Passing journal entry / entries.
Stage 4. Preparation of Final Accounts (Profit & Loss A/c; Balance Sheet and Trading Account)
Stage 5. Preparation of Trial Balance
Ans: Stage 2. Identification of a Transaction that has money value.
Stage 3. Passing journal entry / entries.
Stage 1: Preparation of Ledger Accounts
Stage 5. Preparation of Trial Balance
Stage 4. Preparation of Final Accounts (Profit & Loss A/c; Balance Sheet and Trading Account)
6. The concept which assumes that a business will last indefinitely is
(a) Business Entity (b) Going concern (c) Periodicity (d) Conservatism
Ans: (b) Going concern
7. The incorrect accounting equation is
(a) Assets = Liabilities + Capital (b) Assets = Capital + Liabilities
(c) Liabilities = Assets + Capital (d) Capital = Assets – Liabilities
Ans: (c) Liabilities = Assets + Capital
8. Real account deals with
(a) Individual persons (b) Expenses and losses
(c) Assets (d) Incomes and gains
Ans: (c) Assets
Or
Match Column I with Column II and select the correct answer using the codes given below the lists:
Column I Column II
(i) Trade Discount (a) Debtor & Creditor
(ii) Cash Discount (b) When goods are purchased in bulk quantities.
(iii)Assets = Liability + Capital (c) When goods are purchased on credit basis
(iv) Credit Transaction (d) Balance Sheet Equation.
a) (i) d; (ii) c; (iii) b; (iv) a b) (i) c; (ii) a; (iii) b; (iv) d
c) (i) c; (ii) b; (iii) d; (iv) a d) (i) b; (ii) c; (iii) d; (iv) a
Ans: d) (i) b; (ii) c; (iii) d; (iv) a
9. Withdrawal of cash from business by the proprietor to meet his / her personal expenses is known as ___.
(a) Drawings (b) Cash (c) Capital (d) Purchases
Ans: (a) Drawings
10. After the preparation of ledger, the next step is the preparation of
(a) Trading account (b) Trial balance (c) Journal (d) Profit and loss account
Ans: (b) Trial balance
11. Classify the below Accounts under the category of Personal A/c; Real A/c; Nominal A/c
a) Ram A/c c) Bank A/c e) Discount Allowed A/c
b) Cash A/c d) Purchases A/c f) Depreciation A/c
Ans: a) Ram A/c – Personal A/c c) Bank A/c – Personal A/c e) Discount Allowed A/c – Nominal A/c
b) Cash A/c – Real A/c d) Purchases A/c – Nominal A/c f) Depreciation A/c – Nominal A/c
12. Write short notes on the following.
a) Depreciation b) Drawings
Ans: a) Depreciation: Depreciation is a decrease in the book value of fixed assets. Depreciation involves
loss of value of assets due to the passage of time and obsolescence. Depreciation is an ongoing process
until the end of the life of assets.
b) Drawings: Drawings refer to the money or assets that a business owner withdraws from the business for
personal use. It's essentially the owner taking money or assets out of the company's funds for their own
personal needs, rather than for business-related expenses. These withdrawals are recorded as a reduction
in the owner's equity and are distinct from business expenses or salaries.
Or
Write any one transaction which
a) Decreases the assets and decreases the liabilities
Ans: paying off a creditor
b) Increases one asset and decreases another asset
Ans: Purchases inventory with cash
13. State the Golden rule of Accounting?
Ans: The three golden rules of accounting are: Debit the receiver, credit the giver (for personal accounts),
Debit what comes in, credit what goes out (for real accounts), and debit all expenses and losses,
credit all incomes and gains (for nominal accounts).
14. Define accounting.
Ans: Accounting is the process of recording, classifying, summarizing, and interpreting financial
transactions of a business or organization. It provides a clear picture of the financial health and
performance of an entity, which is crucial for decision-making by management, investors, and other
stakeholders.
15. Briefly describe the characteristics of Accounting Information
Ans: Relevance: Accounting information should be pertinent to the decisions users are making. It
should be capable of influencing those decisions by helping them assess past, present, or future
events.
• Reliability: Information should be free from material error and bias, accurately representing
the economic events it claims to portray. This includes being verifiable, meaning others can
confirm the information.
• Comparability: Information should be presented in a consistent manner across different
periods or different companies, allowing users to identify trends and make meaningful
comparisons.
• Understandability:
Information should be presented in a clear and concise manner, making it easy for users to grasp the
meaning and implications.
• Faithful Representation:
The information should be complete, neutral, and free from error, accurately reflecting the financial
position and performance of the entity.
• Timeliness:
Information should be available to users when it is needed to make decisions, before it loses its
capacity to influence those decisions.
• Separation of Finances:
The core idea is that a business is not the same as its owner(s), even in a sole proprietorship where
the owner and business are legally the same entity.
• Independent Accounting:
This principle requires that a business maintain its own set of financial records, separate from the
owner's personal finances.
• Examples:
• If an owner pays for a personal expense (like a vacation) with business funds, it's recorded as
a withdrawal or drawing from the business, not a business expense.
• If a business owner takes a loan from the business, it's treated as a liability for the business
and an asset for the owner.
• If an owner invests personal funds into the business, it's recorded as an increase in capital, not
as revenue for the business.
Or
Explain Business Entity Principle
Ans: The business entity principle is an accounting concept that treats a business as separate and distinct
from its owner(s). This means that the financial transactions of the business should be recorded and
reported separately from the personal financial transactions of the owners. This separation ensures clarity,
accuracy, and transparency in financial reporting.
16. Briefly explain the Accounting process
Ans: The accounting process is a systematic way to track and report a company's financial activities. It
involves identifying, recording, classifying, summarizing, analyzing, and interpreting financial transactions to
provide useful information for decision-making. This process culminates in the creation of financial
statements, which summarize a company's financial position and performance.
1. Identifying Transactions:
This involves recognizing which business activities (like sales, purchases, payments) qualify as financial
transactions that need to be recorded.
2. Recording Transactions:
This step involves documenting the identified transactions in a journal, often using double-entry
bookkeeping (recording both a debit and a credit for each transaction).
3. Classifying Transactions:
Transactions are categorized and sorted into specific accounts (like cash, sales, expenses) to organize the
financial data.
4. Summarizing Transactions:
This involves creating a trial balance to ensure debits and credits are equal, and then preparing financial
statements like the income statement, balance sheet, and cash flow statement.
5. Analyzing and Interpreting:
The financial statements are examined to understand the company's financial performance, position, and
cash flows.
6. Communicating Information:
The financial information is then shared with stakeholders (like management, investors, creditors) through
the financial statements.
17. Explain briefly the Branches of Accounting
Ans: Financial Accounting: This branch is concerned with preparing and presenting financial statements
(like the balance sheet and income statement) for external users. It follows specific accounting standards
and aims to provide a clear picture of a company's financial performance and position.
Managerial Accounting: This branch provides information to management within the company to aid in
decision-making, planning, and control. It focuses on internal reports and analyses, such as budgets,
forecasts, and variance analysis, and is not bound by strict accounting standards.
Cost Accounting: This branch focuses on the methods and techniques for determining and controlling the
costs of products, services, or operations. It helps businesses understand where their money is going and
how to manage expenses effectively.
18. Explain the term Transaction with some examples.
Ans: A transaction is a specific event or action involving the exchange of something of value, like goods,
services, or money, between two or more parties. It's a fundamental concept in accounting and business,
representing a completed agreement that changes the financial status of those involved.
19. Difference between Book Keeping and Accounting
Ans:
Or
Read the following story and answer questions given below on the basis of the same.
The Tale of Accounting
Rama Krishnan & Lakshman were childhood friends who had a desire to set up a business after completing
their graduation. Rama Krishnan acquired his Master’s degree in Business Administration from a reputed B
– School and Lakshman successfully completed his Master’s degree in Hotel Management from NIHM.
Rama Krishnan was interested to set up a super market and Lakshman’s desire was to setup a Restaurant.
Rama Krishnan commenced his business on 1st April 2022 and named his Super market as “RMK SUPER
MARKET” and Lakshman started his business on 1st April 2022 and named his Restaurant as “SRI BALAJI
BHAVAN”. In order to set up their ventures both Rama Krishnan and Lakshman have invested an amount
of ₹ 15,00,000 and ₹ 25,00,000 respectively. Rama Krishnan and Lakshman deals with a variety of
products in their respective business. Lakshman decided to procure the monthly Groceries for his
restaurant business from RMK Super Market. It was agreed between Rama Krishnan & Lakshman that the
mode of payment (i.e., Settlement) will be made as follows: 60% of the bill amount will be made
immediately at the time of Purchase and the balance will be made after a weeks’ time. Both Rama Krishnan
& Lakshman opened a Current A/c with Indian Overseas Bank (IOB) and with HDFC Bank for their
business requirements. Though Rama Krishnan and Lakshman started their business on the same date
(i.e., 01.04.2022) Rama Krishnan couldn’t make much profit in his business when compared with
Lakshman’s business. Rama Krishnan wants to know the reason why he couldn’t attain his targeted profit,
for this he started analysing his business transactions and he noticed the following:
1. On 5th April 2022 he sold goods on credit to Shyam for ₹ 1,500 out of which he was
able to receive an amount of ₹ 1450 only. However, an amount of ₹ 50 were
irrecoverable from Shyam.
2. On 8th April 2022 Rama Krishnan took few goods amounting to ₹ 1,650 for his self- consumption.
3. On 12th April 2022 he allowed a discount of 10% to his customer Mr. Rajesh who bought goods from him
on bulk quantity.
4. Rama Krishnan used an amount of ₹ 25,750 from his business to pay his only son’s School Tuition fees
on 15th April 2022.
5. On 10th April 2022 he sold goods ₹ 15,000 @ 5% discount to his customer.
Questions
a) Extract various accounts from the above story and state its nature (i.e., Personal / Real / Nominal)
b) List out Various Accounting Terms and terminologies discussed in the story along with their values if
any.
Ans:
20. Briefly explain the terms Expenditure and Expense with suitable examples.
Ans:
