NCERT Solutions for Class 11 Accountancy Chapter 3: The NCERT Solutions for Class 11 Accountancy Chapter 3 develop a conceptual understanding of the topics covered on this chapter. Our subject matter experts have written these NCERT solutions in an easy-to-understand format to assist you in better understanding and revising the NCERT accountancy class 11 solution chapter 3. You can also rely on these NCERT Class 11 Accountancy Solutions to help you prepare for exams.
NCERT Solutions For Class 11 Accountancy Chapter 3
NCERT Solutions for Class 11 Accountancy Part 1 Chapter 3
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NCERT Solutions For Class 11 Accountancy Chapter 3: Overview
Debit and credit rules
The reverse accounting procedures known as debit and credit rules are widely used around the world. The credit entries represent the financing sources, whereas the debit entries represent the financing uses.
The term “liability” refers to the source of funds. As a result, when liability rises, it is credited, and when liability falls, it is deducted. Equity, on the other hand, contributes the source of funds. As a result, it gets credited with the increase and debited with the reduction. The utilisation of finances is represented by assets. As a result, when an excess rises, it is debited, and when it falls, it is credited.
Expenses reduce the EQT, hence a rise in expenses is deducted. An increase in income is rewarded since it increases equity.
In our NCERT solutions for class 11 accountancy chapter 3 recording of transactions one, we go through these concepts in further detail. To learn more about accountancy concepts, you can download and reference the PDF of accountancy class 11th chapter 3 mentioned above.
Access NCERT Solutions For Class 11 Accountancy Chapter 3
1. State the three fundamental steps in the accounting process.
The fundamental steps in the accounting process are diagrammatically presented
below.
2. Why is the evidence provided by source documents important to accounting?
The evidence provided by the source document is important in the following manners:
1. It provides evidence that a transaction has actually occurred.
2. It provides important and relevant information about date, amount, parties involved and other details of a particular transaction.
3. It acts as a proof in the court of law.
4. It helps in verifying transactions during the auditing process.
3. Should a transaction be first recorded in a journal or ledger? Why?
A transaction should be recorded first in a journal because journal provides complete
details of a transaction in one entry. Further, a journal forms the basis for posting the
transactions into their respective accounts into ledger. Transactions are recorded in
journal in chronological order, i.e. in the order of occurrence with the help of source
documents. Journal is also known as ‘book of original entry’, because with the help of
source document, transactions are originally recorded in books. The process of
recording the transactions in journal and then in ledger is presented in the below given
flow chart.
3. Are debits or credits listed first in journal entries? Are debits or credits indented?
As per the rule of double entry system, there are two columns of ‘Amount’ in the journal
format namely ‘Debit Amount’ and ‘Credit Amount’. The way of recording in a journal is
quite different from normal recording. Journal entry is recorded in journal format in
which the ‘Debit Amount’ column is listed before the ‘Credit Amount’ column.
Credits are indented. Indentation is leaving a space before writing any word. Journal
entry has its own jargon. While journalising, in the ‘Particulars’ column of journal format,
debited account is written first and credited account is in the next line leaving some.
5. Why are the rules of debit and credit same for both liability and capital?
Every business acquires funds from internal as well as from external sources. According
to the business entity concept, the amount borrowed from the external sources together
with the internal sources like, capital invested by the proprietor, is termed as liability to
the business. Business entity concept treats business and business owner separately.
Capital of the owner is treated as liability to the business because the business has to
repay the amount of capital to the owner, in case of closure of the business. As liability
incurred is credited, in the same way, fresh capital introduced and net profit increases
the owner’s capital, and so, capital is credited. On the other hand, if liability is paid, it
reduces liability, and so, it is debited. Similarly, drawings from capital and net loss
reduce the capital, and so, capital is debited. Thus the rules of debit and credit are
same for both liability and capital.
5. What is the purpose of posting J.F numbers that are entered in the journal at the time entries are posted to the accounts?
J.F. number is the number that is entered in the ledger at the time of posting entries into
their respective accounts. It helps in determining whether all transactions are properly
posted in their accounts. It is recorded at the time of posting and notat the time of
recording the transactions. The purpose of entering J.F. number in the ledger is because of the below given benefits.
1. J.F. number helps in locating the entries of accounts in the journal book. In other words, J.F
number helps to locate the position of the related journal entry and subsidiary book in the
journal book.
2. J.F. number in accounts ensures that recording in the books of original entry has been
posted or not.
6. What entry (debit or credit) would you make to: (a) increase revenue (b) decrease in expense, (c) record drawings (d) record the fresh capital introduced by the owner.
1. Increase in revenue
Increase in revenue is credited as it increases the capital. Capital has credit balance
and if capital increases, then it is credited.
2. Decrease in expense
Decrease in expense is credited as all expenses have debit balance. If expense
decreases, then it is credited.
3. Record drawings
Capital has credit balance; if the capital increases, then it is credited. If capital
decreases, then it is debited. Drawings are debited as they decrease the capital.
4. Record of fresh capital introduced by the owner- credit
Capital has credit balance, if capital increases, then it is credited. The introduction of
fresh capital increases the balance of capital, and so, it is credited.
7. If a transaction has the effect of decreasing an asset, is the decrease recorded as a debit or as a credit? If the transaction has the effect of decreasing a liability, is the decrease recorded as a debit or as a credit?
If a transaction has a decreasing effect on an asset, then this decrease is recorded as
credit. This is because, as all assets have debit balance and if assets decrease, then it
is credited. For example, sale of furniture results in decrease in furniture (asset); so, the
sale of furniture will be credited. If a transaction has a decreasing effect on a liability, then this decrease is recorded as debit. This is because all liabilities have credit balance. If the liability increases, then it is credited and if the liability decreases, then it is debited. For example, payment to the creditors results in a decrease in the creditors (liability); so, the creditors account will be debited.
Access Other NCERT Chapters Solutions of Class 11 Accountancy.
You can download the PDF of NCERT Solutions Class 11 Accountancy for Chapter 3 and other chapters:
Chapter-1 Introduction to Accountancy
Chapter-2 Theory Base Of Accounting
Chapter-4 Recording Of Transactions – II
Chapter-5 Bank Reconciliation Statement
Chapter-6 Trial Balance And Rectification Of Errors
Chapter-7 Depreciation, Provisions And Reserves
Chapter-9 Financial Statements – 1
Chapter-10 Financial Statements – 2
Chapter-11 Accounts From Incomplete Records
Chapter-12 Applications of Computers in Accounting
Chapter-13 Computerised Accounting System
Chapter-15 Bank Reconciliation Statement
We have provided all the important details above in the article regarding the CBSE NCERT Solutions of class 11 Accountancy Chapter-3. If you have any queries, you can mention them in the comment section.
FAQ ON NCERT Solutions For Class 11 Accountancy Chapter 3
Write down the procedure for posting the ledger accounts
A ledger is a book of accounts in which generalized transactions are recorded. Posting is the process of moving debit and credit items from the journal to the ledger in their appropriate accounts.
The procedure for publishing the ledger accounts is as follows:
· The bookkeeper first scanned select entries from any given site, either debit or credit, and then posted all of those transactions in the ledger accounts.
· Bookkeepers can complete all debits and credits and submit entries based on a certain amount. Move on to the other account after you’ve completed all of the specific amounts.
· In a sequence of journal entries, bookkeepers can post entries in accounts. This method works well since the entries are posted as they are made in the journal.
Write a detailed description of the bookkeeping system for double entries.
A ledger is a book of accounts in which generalized transactions are recorded. Posting is the process of moving debit and credit items from the journal to the ledger in their appropriate accounts.
The procedure for publishing the ledger accounts is as follows:
· The bookkeeper first scanned select entries from any given site, either debit or credit, and then posted all of those transactions in the ledger accounts.
· Bookkeepers can complete all debits and credits and submit entries based on a certain amount. Move on to the other account after you’ve completed all of the specific amounts.
· In a sequence of journal entries, bookkeepers can post entries in accounts. This method works well since the entries are posted as they are made in the journal.
Write a detailed description of the bookkeeping system for double entries.
The concept of double-entry bookkeeping was first introduced by Venetian merchants in the 15th century. It is the only system that calculates the costs of different components of a transaction.
The debit credit rules are used in the double-entry system to record transactions and events. This rule specifies how to record or make modifications to the balance sheet’s elements (Liability, cutie, and assets). Every transaction has two impacts, which are explained by the double-entry system.
How do you define debit?
A debit (DR) is an accounting entry that results in an increase or decrease in assets or liabilities.
How do you define credit?
Credit (CR) is defined as an accounting entry, resulting in either an increase in the liabilities and equity or a decrease in the assets, on a company’s balance sheet.