case study questions on accounting principles

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Class 11 Accountancy Case Studies Questions

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CBSE introduced case-based questions in class 11 accountancy question papers last year to enhance and develop analytical and reasoning skills among students. Class 11 Accountancy Case Studies Questions are given in CBSE model question papers too. Last year sample case-based questions were released by the CBSE and immediately an air of confusion was created among all. This concept was uncharted territory for both students and teachers.

A hypothetical text was provided on the basis of which the student was required to solve the given case-based question asked by CBSE in the accountancy class 11 exam. Initially, the case-based questions appeared to be tedious for both the students and the teachers as they were unprepared to deal with the new pattern of questions but now a lot more clarity is there that has made the question paper quite student-friendly.

Case Study Questions in class 11 (Accountancy)

Case-based questions in Accountancy are considered to be quite challenging by the class 11 students. The questions need to be well prepared and adequately practiced before attempting the class 11 accountancy exam. The accountancy class 11 syllabus is a well-integrated program that facilitates the students to comprehend and learn the basic accounting theories/principles. The subject is the base of major accounting fundamentals that are studied in depth at an advanced level in class 12. For students appearing for grade 11 exams from the Commerce stream, Accountancy is a prime subject. Accountancy is considered to be the most difficult of all other core subjects in the class 11 commerce stream.

The subject is consuming and the case studies are termed to be troublesome for they do require conceptual clarity. To ace this CBSE exam, students need to put in the extra effort. Among all the core subjects of the Commerce stream i.e accountancy, economics and business studies, it’s accountancy that renders a tough time for the students because of its complex theories and principles. It is an arduous task to score well in the 11-grade accountancy examination without adequate practice and knowledge. Many students who opt for the commerce stream after their 10-grade exams target chartered accountancy as a career option, so the subject is of paramount importance for them.

Accountancy syllabus of class 11 CBSE

The entire Accountancy course is divided into 2 parts:

• Part A, Financial Accounting _ I
• Part B, Financial Accounting _ II

Most of the case study questions are centered around the exercises of NCERT textbooks. It is recommended to read the textbooks religiously. There are 2 prescribed textbooks for class 11 Accountancy that have been published by NCERT. But Accountancy has an extensive curriculum and students need to go through other reference books too. Adhering only to NCERT textbooks will not be adequate to achieve proficiency in this subject.

CBSE Class – 11

Accountancy (Code No. 055) Syllabus

Case Study Passage (Accountancy class 11)

In these questions, the students would go through a paragraph with a hypothetical situation, based on which critical reasoning type questions will have to be answered by them. It is important for the students to inspect the passage carefully before trying to attempt the questions. In the coming examination cycle (2022-23), case-based questions will carry a weightage of around 15 to 20%. These questions can be centered on any chapter from the NCERT textbook for accountancy, class 11. Students need to brace well for the case-based questions prior to appearing for their accountancy examination as these questions require a thorough understanding of the key concepts in their syllabus. CBSE aims to increase the weightage of such questions in the years to come.

Kind of case-based Questions in Accountancy

Accountancy is a subject that deals with trade and commerce. The subject records allocate and outline the transactions of a business. The subject is for sure demanding thus requiring a greater effort from the students in order to strive for a perfect score. It is believed to be demanding but at the same time, it is scoring.

The case-based questions asked in the CBSE accountancy question paper for class 11 are of two types:

• Objective- Such questions are asked in the MCQ format
• Subjective- The questions would be answered briefly only but these questions are the ones that would require detailed analysis and application of some fundamental accountancy theories.

How To Prepare For Case-based Questions in Accountancy Grade 11

Students need to prepare well for the case-based questions before appearing for their class 11 Accountancy exams. Here are some tips which will help the student to solve the case-based questions at ease:

• Go through the provided text carefully
• Analyze the situation provided as part of the question asked
• Focus on following correct formats in your responses, accountancy is one subject where apart from the concepts students need to be careful about the formats.
• Brush up well on the theory portion of accountancy, this is the key to scoring a perfect score.
• Practice rigorously
• Provide to-the-point responses

Students need to solidify their concepts in order to ace the accountancy class 11 exam. Case studies can be easily solved if your key fundamentals are crystal clear. These simple points if kept in mind will definitely help the students to fetch good marks in case study questions in class 11 Accountancy .

Case study question examples in accountancy

Here are some given case study questions for CBSE class 11 Accountancy. If you wish to get more case study questions and other study material, download the myCBSEguide app now. You can also access it through our student dashboard.

Accountancy Case Study 1

Read the hypothetical text given and answer the following questions:

Sachin and Dravid are partners in firm sharing profits and losses in the ratio of 3:2. Their balance sheet is given below:

Balance Sheet as on 31.03.2017

On 01.04.2017, they admit Ashwin as a new partner into partnership on the following terms a) He brings in 40,000 as capital and 18,000 towards goodwill for 1/4th share in future profits b) Depreciate furniture by 10% and buildings are revalued at 45,000

• c) PDD is increased to 3,500
• d) Prepaid insurance * 2,000.

Prepare: i) Revaluation Account

. ii) Partners’ Capital Accounts

iii) New Balance

Accountancy Case Study 2

Ram and Shyam are two friends who both have just attended their first class of accountancy. The friends were intrigued by the different branches of accounting and their widespread application. Ram personally liked the branch of accounting in which fund flow statement and budgetary control is used and that branch helps in planning and controlling of operations. As the concept of accounting was further explored, they began discussing the different users of accounting. Ram said that he finds it interesting that even the employees demand information relating to business. Shyam said he finds more interesting the fact that even competitors want information on the relative strengths and weaknesses of the enterprise and for making comparisons, Shyam further said that even accounting helps owners to compare one year’s costs, expenses, and sales with those of other years. However, they were quite shocked by the fact that the management-worker relations were not taken into consideration in the accounting. Meanwhile, Ram and Shyam had an argument at the end of the discussion. Ram was saying that accounting is an art whereas Shyam was saying that accounting is a science. Their teacher came in and said something to them which made them stop the argument.

Q1. What might their teacher have said to solve their argument?

• Ram, please understand, Shetty is correct in this situation

(b) Shyam, please understand, Ram is correct In this situation.

(c) Both are correct

(d) None is correct

Q2. Shyam talked about which type of users of accounting?

(a) Internal users

(b) External users

(c) Both (a) and (b)

(d) None of these.

Q3. Which limitation of accounting is being talked about by them?

(a) Influenced by personal judgment

(b) Omission of qualitative information.

(c) Incomplete information

(d) Based on historical costs

Q4. Which advantage of accounting is being talked about by Shyam in the last part of the first para?

(a) Provides information regarding profit and loss

(b) Provides completes and systematic record

(c) Enables comparative study

(d) Evidence in legal matters

Q5. Which branch of accounting is liked by Ram?

(a) Financial accounting

(b) Cost accounting

(c) Management accounting

(d) Tax accounting

Accountancy Case Study 3

Read the following case study and answer questions

Sam and Jay started with Cash 10,000 and Machinery 1,00,000. They decided to set up a production line for PPE kits for. the protection from Covid 19 virus. As their demand rose, they decided to buy one more piece of machinery. For the same, they took bank overdraft and purchased the machinery. The quality of the company’s product was extremely high and therefore, it could develop a reputation for itself in the market and business was flourishing. After 1.5 years, their old machinery turned obsolete so they decided to sell the same. They sold it and got some cash proceeds. To further increase the brand presence among the concerned stakeholders, they decided to run advertisements from the cash proceeds of machinery sold. As more and more customers demanded their product, they decided to launch a discount for bulk purchases. The discount was not to be recorded in the books of accounts. This campaign was successful and they earned a lot of profits from the same.

Q1. Which type of discount is being discussed in the last part of the passage?

(a) Trade discount

(b) Cash discount

(d) Can’t be determine

Q2. Which asset is discussed in the line, “The quality of the company’s product was very high and therefore, it could develop a reputation for itself in the market and business was flourishing”?

(a) Tangible

(b) Intangible

(c) Current.

(d) Both (a) and (c)

Q3. Which type of liability is discussed in the passage?

(a) Non-current

(b) Current

(d) Can’t be determined

Q4. What was the capital initially invested?

(b) 1,00,000

(c) 1,10,000

Q5. The passage involves capital receipts (apart from initial capital invested).

Advantages of case study questions in Accountancy

The entire class 11 Accountancy syllabus is divided into 2 textbooks that are prescribed by NCERT. The examiner can ask case study questions from any chapter or concept. Students are expected to prepare themselves thoroughly. They ought to practice class 11 Accountancy case-based questions from the various options available to them, so as to ace the subject.

• Uplift the analytical skills of students
• Provide a well-rounded understanding of the concepts
• Enhance intellectual capabilities in students
• Help students to retain knowledge in their long-term memory
• The questions would help to discard the concept of rote learning
• Case studies encourage practical learning.

“Procrastination is the thief of time”

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The first article in this series of two on Paper P7 case study questions discussed question style, what to look for in the requirements, how higher-level skills are tested, and the meaning of professional marks within a question requirement. This second article goes through part of a typical Section A case study question, applying the recommended approach described in the previous article. This approach comprises four stages.

Stage 1 – understanding the requirement

The first thing to do is to read and fully understand the question requirement. Here is the requirement we will be looking at in this article:

‘Prepare a report, to be used by a partner in your firm, in which you identify and evaluate the professional, ethical, and other issues raised in deciding whether to accept the appointment as provider of an assurance opinion as requested by Petsupply Co.’ (12 marks)

Note: this requirement includes two professional marks.

Having read the requirement, break it down. You are asked to do two things:

• identify, ie state from the information provided
• evaluate, ie discuss from a critical point of view.

The requirement asks you to consider ‘professional, ethical, and other issues’. This could cover a wide range of considerations, such as:

• ethics: independence, competence, conflicts of interest, confidentiality, assessing integrity
• professional issues: the risk profile of the work requested, the fee – and whether it is sufficient to compensate for high risk, availability of staff, managing client expectations, logistical matters such as timing, legal and regulatory matters – such as money laundering, and (in some cases) obtaining professional clearance
• other issues: whether the work ‘fits’ with the commercial strategy of the audit firm, the potential knock-on effect of taking on the work – such as the impact on other clients, or on other work performed for this client.

You are asked to produce a report, so remember that the professional marks available will be awarded for using the correct format, the use of professional business language, and for presenting your comments as a logical flow culminating in a conclusion.

From reading the requirement, you know that the question scenario will be based on a potential assurance assignment and will be broadly based around acceptance issues.

Stage 2 – reading the scenario

When reading through the detail of the scenario, you should now be alert to information relevant to this requirement. Highlight important points that you think are relevant to the scenario and remember to focus on issues that could affect your acceptance of a potential assurance assignment.

Now read the following extract from the scenario and highlight the salient points – remember to look out for any factors relevant to the ethical, professional, and other issues described above.

Extract: You are a senior manager in Dyke & Co, a small firm of Chartered Certified Accountants, which specialises in providing audits and financial statement reviews for small to medium-sized companies. You are responsible for evaluating potential assurance engagements, and for producing a brief report on each prospective piece of work to be used by the partners in your firm when deciding whether to accept or decline the engagement. Dyke & Co is keen to expand the assurance services offered, as a replacement for revenue lost from the many small‑company clients choosing not to have a statutory audit in recent years. It is currently May 2007.

Petsupply Co has been an audit client of Dyke & Co for the past three years. The company owns and operates a chain of retail outlets selling pet supplies. The finance director of Petsupply Co recently communicated with your firm to enquire about the provision of an assurance report on data provided in the Environmental Report published on the company’s website. The following is an extract from the e-mail sent to your firm from the finance director of Petsupply Co:

‘At the last board meeting, my fellow directors discussed the content of the Environmental Report. They are keen to ensure that the data contained in the report is credible, and they have asked whether your firm would be willing to provide some kind of opinion verifying the disclosures made. Petsupply Co is strongly committed to disclosing environmental data, and information gathered from our website indicates that our customers are very interested in environmental matters. It is therefore important to us that Petsupply Co reports positive information which should help to retain existing customers, and to attract new customers. I am keen to hear your views on this matter at your earliest convenience. We would like verification of the data as soon as possible.’

You have looked at Petsupply Co’s Environmental Report on the company website, and found a great deal of numerical data provided, some of which is shown below in Table 1.

Table 1: Petsupply Co's environmental report – numerical data

Stage 3 – take time to think about the requirement and the scenario.

As discussed in the previous article, you must take time and not rush to answer. When evaluating this particular scenario try to think widely about the information provided. Your answer should cover a broad range of issues rather than concentrating on one or two. Your comments must be tailored to the scenario. It is pointless, for example, to write about a general acceptance issue which is not specifically related to Petsupply Co.

It is important to appreciate that few marks will be available for stating the issue. The higher-level skill marks in this question will be awarded for a discussion of why the issue is relevant to the decision about whether or not to provide the assurance service to Petsupply Co. The requirement is to evaluate the scenario and therefore it is crucial to demonstrate an appreciation that there may be two conflicting sides to the discussion.

Table 2 shows an example of a thought process which identifies the issues and explains why each issue is relevant to the requirement; the issues are shown in the order in which they appear in the question.

Table 2: Example of a thought process which identifies issues and shows relevance to the requirement

Table 2 is not an answer, it is a thought process. This is what you should be thinking about after reading through the scenario. The previous article stressed the importance of thinking through the scenario. It may help to jot these ideas down in an answer plan before making a start on your written answer, as this will help you to prioritise the points and give the report a logical flow.

Stage 4 – writing the report

The requirement states that two professional marks are available. As discussed in the previous article, these marks are not for the technical content of the answer, but for the way the relevant points are communicated. The report will be evaluated on the following:

• Use of a report format – a brief introduction, clear separate sections each discussing a different point, and a final conclusion.
• Style of writing – the report is addressed to the partner and so language should be appropriate. You do not need to explain things that would be obvious to a partner, and you must be tactful.
• Clarity of explanation – make sure that each point is explained simply and precisely, and avoid ambiguity.
• Evaluation skills – demonstrate that each point may have a positive and a negative side.

Remember, when answering any question requirement it is quality not quantity that counts. You should make each point succinctly and remain focused on the specific requirement. Questions can be time pressured, but it is important to remember that you should be able to read the requirement, think about it, and write an answer in the time available. This means that there is only a limited amount of time available for actually writing the answer, so keep it short and to the point. Irrelevant waffle earns no marks and will detract from the professional skills evaluation. What follows is an outline report format for this requirement:

Introduction

• Report is internal, addressed to a partner, covering proposed assurance service for existing audit client

Section 1 – ethical matters

• Provision of non-audit service
• Impact on total fee from client
• Competence to perform work – specialised engagement

Section 2 – risk-related matters

• High inherent risk – figures prone to manipulation
• Data highly subjective
• Need to rely on systems put in place by client

Section 3 – commercial matters

• Fee will have to be high enough to compensate for high risk
• Fee may need to compensate for specialists if used
• Strategic fit – assignment in line with commercial goals of Dyke & Co
• Build up experience in non-audit service
• Ascertain whether assignment will be recurring

Section 4 – other matters

• Managing client expectation regarding type of opinion sought
• Managing client expectation regarding timeframe
• Summary of key issues and decision on acceptance

Note: not all of the above points are necessary to secure a pass mark; the marking scheme is also flexible enough to cater for comments that may not appear in the ‘model answer’.

This article shows how to approach one requirement from a typical Section A question in Paper P7. It is important to practise technique by attempting as many questions as possible, starting with the Pilot Paper for Paper P7.

Written by a member of the Paper P7 examining team

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Multiple Choice

A computerized accounting information system performs the same steps in the accounting cycle as a manual accounting system. Therefore, understanding how a manual system works helps us understand what a computerized system does. We cannot take a computer apart and show how the accounting information fits together, but we can show the different pieces in a paper-based system. We want an accounting information system to be more than just a black box.

Scanners can input data faster and typically would produce fewer input errors.

All of these areas need an accounting information system. Keeping up with all of the data for an entire year without it would be difficult. Some companies have their own accounting information to process all of their transactions except for payroll. They sometimes use a payroll processing company that specializes in processing payroll transactions for many companies. However, that payroll company also uses computers.

Any special journal can require an entry to the subsidiary ledger if the entry involves accounts receivable or accounts payable.

The cash column is not posted to the subsidiary ledger. Only the accounts receivable and accounts payable columns are posted to the subsidiary ledgers.

Any amounts posted to Accounts Receivable or Accounts Payable should be posted daily (to the subsidiary ledger), and the account totals should be posted monthly. We also post the accounts in the Other Accounts column individually and may post daily or at the end of the month. We post all other total column amounts monthly.

The four main special journals are sales journal, purchases journal, cash receipts journal, and cash disbursements journal.

We would record the purchase of equipment for cash in the cash disbursements journal.

We post entries from the sales journal daily to the accounts receivable subsidiary ledger but monthly to Sales and to the Accounts Receivable general ledger account.

We record purchases of inventory for cash in the cash disbursements journal.

Forensic accountants analyze a company’s transactions to determine if a crime has been committed. If they find evidence, they can testify in court as to their findings.

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Access for free at https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters

• Authors: Mitchell Franklin, Patty Graybeal, Dixon Cooper
• Publisher/website: OpenStax
• Book title: Principles of Accounting, Volume 1: Financial Accounting
• Publication date: Apr 11, 2019
• Location: Houston, Texas
• Book URL: https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters
• Section URL: https://openstax.org/books/principles-financial-accounting/pages/chapter-7

© Dec 13, 2023 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

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What Are Accounting Principles?

• How They Work

What Are the Basic Accounting Principles?

• Accounting Principles FAQs

The Bottom Line

• Corporate Finance
• Financial statements: Balance, income, cash flow, and equity

Accounting Principles Explained: How They Work, GAAP, IFRS

Katrina Ávila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications.

Accounting principles are the rules and guidelines that companies and other bodies must follow when reporting financial data. These rules make it easier to examine financial data by standardizing the terms and methods that accountants must use.

The International Financial Reporting Standards (IFRS) is the most widely used set of accounting principles, with adoption in 167 jurisdictions. The United States uses a separate set of accounting principles, known as generally accepted accounting principles (GAAP) .

Key Takeaways

• Accounting standards are implemented to improve the quality of financial information reported by companies.
• In the United States, the Financial Accounting Standards Board (FASB) issues generally accepted accounting principles (GAAP).
• GAAP is required for all publicly traded companies in the U.S.; it is also routinely implemented by non-publicly traded companies as well.
• Internationally, the International Accounting Standards Board (IASB) issues International Financial Reporting Standards (IFRS).
• The FASB and the IASB sometimes work together to issue joint standards on hot-topic issues, but there is no intention for the U.S. to switch to IFRS in the foreseeable future.

Ryan Oakley / Investopedia

The Purpose of Accounting Principles

The ultimate goal of any set of accounting principles is to ensure that a company’s financial statements are complete, consistent, and comparable.

This makes it easier for investors to analyze and extract useful information from the company’s financial statements, including trend data over a period of time. It also facilitates the comparison of financial information across different companies. Accounting principles also help mitigate accounting fraud by increasing transparency and allowing red flags to be identified.

The ultimate goal of standardized accounting principles is to allow financial statement users to view a company’s financials with certainty that the information disclosed in the report is complete, consistent, and comparable.

Comparability

Comparability is the ability for financial statement users to review multiple companies’ financials side by side with the guarantee that accounting principles have been followed to the same set of standards.

Accounting information is not absolute or concrete, and standards are developed to minimize the negative effects of inconsistent data. Without these rules, comparing financial statements among companies would be extremely difficult, even within the same industry. Inconsistencies and errors also would be harder to spot.

Some of the most fundamental accounting principles include the following:

• Accrual principle
• Conservatism principle
• Consistency principle
• Cost principle
• Economic entity principle
• Full disclosure principle
• Going concern principle
• Matching principle
• Materiality principle
• Monetary unit principle
• Reliability principle
• Revenue recognition principle
• Time period principle

The most notable principles include the revenue recognition principle, matching principle, materiality principle, and consistency principle. Completeness is ensured by the materiality principle, as all material transactions should be accounted for in the financial statements. Consistency refers to a company’s use of accounting principles over time.

When accounting principles allow a choice among multiple methods, a company should apply the same accounting method over time or disclose its change in accounting method in the footnotes to the financial statements .

Generally Accepted Accounting Principles (GAAP)

Generally accepted accounting principles (GAAP) are uniform accounting principles for private companies and nonprofits in the U.S. These principles are largely set by the Financial Accounting Standards Board (FASB) , an independent nonprofit organization whose members are chosen by the Financial Accounting Foundation .

A similar organization, the Governmental Accounting Standards Board (GASB) , is responsible for setting the GAAP standards for local and state governments. And a third body, the Federal Accounting Standards Advisory Board (FASAB), publishes the accounting principles for federal agencies.

Although privately held companies are not required to abide by GAAP, publicly traded companies must file GAAP-compliant financial statements to be listed on a stock exchange. Chief officers of publicly traded companies and their independent auditors must certify that the financial statements and related notes were prepared in accordance with GAAP.

Privately held companies and nonprofit organizations also may be required by lenders or investors to file GAAP-compliant financial statements. For example, annual audited GAAP financial statements are a common loan covenant required by most banking institutions. Therefore, most companies and organizations in the U.S. comply with GAAP, even though it is not a legal requirement.

Accounting principles differ around the world, meaning that it’s not always easy to compare the financial statements of companies from different countries.

International Financial Reporting Standards (IFRS)

The International Accounting Standards Board (IASB) issues International Financial Reporting Standards (IFRS). These standards are used in more than 120 countries , including those in the European Union (EU).

The Securities and Exchange Commission (SEC) , the U.S. government agency responsible for protecting investors and maintaining order in the  securities  markets, has expressed interest in transitioning to IFRS. However, because of the differences between the two standards, the U.S. is unlikely to switch in the foreseeable future.

However, the FASB and the IASB continue to work together to issue similar regulations on certain topics as accounting issues arise. For example, in 2014, the FASB and the IASB jointly announced new revenue recognition standards.

Since accounting principles differ around the world, investors should take caution when comparing the financial statements of companies from different countries. The issue of differing accounting principles is less of a concern in more mature markets. Still, caution should be used, as there is still leeway for number distortion under many sets of accounting principles.

Who sets accounting principles and standards?

Various bodies are responsible for setting accounting standards. In the United States, generally accepted accounting principles (GAAP) are regulated by the Financial Accounting Standards Board (FASB). In Europe and elsewhere, International Financial Reporting Standards (IFRS) are established by the International Accounting Standards Board (IASB).

How does IFRS differ from GAAP?

IFRS is a standards-based approach that is used internationally, while GAAP is a rules-based system used primarily in the U.S. IFRS is seen as a more dynamic platform that is regularly being revised in response to an ever-changing financial environment, while GAAP is more static.

Several methodological differences exist between the two systems. For instance, GAAP allows companies to use either first in, first out (FIFO) or last in, first out (LIFO) as an inventory cost method . LIFO, however, is  banned under IFRS .

When were accounting principles first set forth?

Standardized accounting principles date all the way back to the advent of double-entry bookkeeping in the 15th and 16th centuries, which introduced a T-ledger with matched entries for assets and liabilities. Some scholars have argued that the advent of double-entry accounting practices during that time provided a springboard for the rise of commerce and capitalism. What would become the American Institute of Certified Public Accountants (AICPA) and the New York Stock Exchange (NYSE) attempted to launch the first accounting standards to be used by firms in the United States in the 1930s.

What are some critiques of accounting principles?

Critics of principles-based accounting systems say they can give companies far too much freedom and do not prescribe transparency. They believe because companies do not have to follow specific rules that have been set out, their reporting may provide an inaccurate picture of their financial health. In the case of rules-based methods like GAAP, complex rules can cause unnecessary complications in the preparation of financial statements. These critics claim having strict rules means that companies must spend an unfair amount of their resources to comply with industry standards.

Accounting principles are rules and guidelines that companies must abide by when reporting financial data. Which method a company chooses at the outset—or changes to at a later date —must make sound financial sense. Whether it’s GAAP in the U.S. or IFRS elsewhere, the overarching goal of these principles is to boost transparency and basically make it easier for investors to compare the financial statements of different companies.

Without these rules and standards, publicly traded companies would likely present their financial information in a way that inflates their numbers and makes their trading performance look better than it actually was. If companies were able to pick and choose what information to disclose and how, it would be a nightmare for investors.

International Financial Reporting Standards (IFRS) Foundation. “ Who Uses IFRS Accounting Standards? ”

Financial Accounting Standards Board. “ About the FASB .”

Governmental Accounting Standards Board. “ About the GASB .”

Federal Accounting Standards Advisory Board. “ Standards and Guidance .”

CFA Institute. “ US GAAP: Generally Accepted Accounting Principles .”

American Institute of Certified Public Accountants. “ IFRS FAQs .”

U.S. Securities & Exchange Commission. “ Spotlight on Work Plan for Global Accounting Standards .”

Financial Accounting Standards Board, via Internet Archive. “ Revenue Recognition .”

American Institute of Certified Public Accountants. “ Is IFRS That Different from U.S. GAAP? ”

International Accounting Standards Board. “ Accounting Policies and Accounting Estimates ,” Page 16.

Financial Accounting Foundation. “ Accounting Standards .”

Securities and Exchange Commission Historical Society. “ The Richard C. Adkerson Gallery on the SEC Role in Accounting Standards Setting .”

• Accounting Explained With Brief History and Modern Job Requirements 1 of 51
• What Is the Accounting Equation, and How Do You Calculate It? 2 of 51
• What Is an Asset? Definition, Types, and Examples 3 of 51
• Liability: Definition, Types, Example, and Assets vs. Liabilities 4 of 51
• Equity Meaning: How It Works and How to Calculate It 5 of 51
• Revenue Definition, Formula, Calculation, and Examples 6 of 51
• Expense: Definition, Types, and How Expenses Are Recorded 7 of 51
• Current Assets vs. Noncurrent Assets: What's the Difference? 8 of 51
• What Is Accounting Theory in Financial Reporting? 9 of 51
• Accounting Principles Explained: How They Work, GAAP, IFRS 10 of 51
• Accounting Standard Definition: How It Works 11 of 51
• Accounting Convention: Definition, Methods, and Applications 12 of 51
• What Are Accounting Policies and How Are They Used? With Examples 13 of 51
• How Are Principles-Based and Rules-Based Accounting Different? 14 of 51
• What Are Accounting Methods? Definition, Types, and Example 15 of 51
• What Is Accrual Accounting, and How Does It Work? 16 of 51
• Cash Accounting Definition, Example & Limitations 17 of 51
• Accrual Accounting vs. Cash Basis Accounting: What's the Difference? 18 of 51
• Financial Accounting Standards Board (FASB): Definition and How It Works 19 of 51
• Generally Accepted Accounting Principles (GAAP): Definition, Standards and Rules 20 of 51
• What Are International Financial Reporting Standards (IFRS)? 21 of 51
• IFRS vs. GAAP: What's the Difference? 22 of 51
• How Does US Accounting Differ From International Accounting? 23 of 51
• Cash Flow Statement: What It Is and How to Read One 24 of 51
• Breaking Down The Balance Sheet 25 of 51
• Income Statement: How to Read and Use It 26 of 51
• What Does an Accountant Do? 27 of 51
• Financial Accounting Meaning, Principles, and Why It Matters 28 of 51
• How Does Financial Accounting Help Decision-Making? 29 of 51
• Corporate Finance Definition and Activities 30 of 51
• How Financial Accounting Differs From Managerial Accounting 31 of 51
• Cost Accounting: Definition and Types With Examples 32 of 51
• Certified Public Accountant: What the CPA Credential Means 33 of 51
• What Is a Chartered Accountant (CA) and What Do They Do? 34 of 51
• Accountant vs. Financial Planner: What's the Difference? 35 of 51
• Auditor: What It Is, 4 Types, and Qualifications 36 of 51
• Audit: What It Means in Finance and Accounting, and 3 Main Types 37 of 51
• Tax Accounting: Definition, Types, vs. Financial Accounting 38 of 51
• Forensic Accounting: What It Is, How It's Used 39 of 51
• Chart of Accounts (COA) Definition, How It Works, and Example 40 of 51
• What Is a Journal in Accounting, Investing, and Trading? 41 of 51
• Double Entry: What It Means in Accounting and How It's Used 42 of 51
• Debit: Definition and Relationship to Credit 43 of 51
• Credit: What It Is and How It Works 44 of 51
• Closing Entry 45 of 51
• What Is an Invoice? It's Parts and Why They Are Important 46 of 51
• 6 Components of an Accounting Information System (AIS) 47 of 51
• Inventory Accounting: Definition, How It Works, Advantages 48 of 51
• Last In, First Out (LIFO): The Inventory Cost Method Explained 49 of 51
• The FIFO Method: First In, First Out 50 of 51
• Average Cost Method: Definition and Formula with Example 51 of 51

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Case Study Questions Class 11 Accountancy With Answers

Students should practice Case Study Questions for Class 11 Accountancy with Answers before appearing in Class 11 Accountancy Board exams. We have provided below the class 11 Accountancy Case Study questions based on each chapter in your NCERT Book for Class 11 Accountancy. These chapter-wise questions have been prepared by teachers based on the latest examination pattern and syllabus issued by CBSE, NCERT KVS. The following Case Study questions and answers will be really useful to understand the type of questions that can be asked in exams

Class 11 Accountancy Case Study Questions and Answers

Practicing by going through the past year and Case Study questions for CBSE Class 11 Accountancy is very important to prepare for the Grade 11 Accountancy exams. We have provided below the best collection of questions which can come in your exams.

Chapter Wise Important Questions for Class 11 Accountancy with Answers

Class 11 Accountancy Part 1 Chapter 1 Introduction to Accounting Chapter 2 Theory Base of Accounting Chapter 3 Recording of Transactions – I 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 8 Bill of Exchange

Class 11 Accountancy Part 2 Chapter 9 Financial Statements – I Chapter 10 Financial Statements – II Chapter 11 Accounts from Incomplete Records Chapter 12 Applications of Computers in Accounting Chapter 13 Computerised Accounting System

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Introduction to Accounting: Case Based Type Questions | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year PDF Download

Read the following hypothetical Case Study and answer the given questions: Accounting is the most important part of any business entity. It gives the framework to record all the business transactions and events that happens during the working of the business entity. Accounting is the language of business with books of accounts being its script and debit-credit its style i.e. the way of expressing it. According to the American Accounting Association, “Accounting is the process of identifying, measuring and communicating information to permit judgement and decisions by the users of accounts.” According to American Institute of Certified Public Accountants – ‘‘Accounting is the art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events which are, in part at least of a financial character and interpreting the result thereof.” Accounting is an Art as well as Science. It records Financial Transactions only which can be expressed in terms of money. First the transactions are recorded and then they are classified and summarised to interpret the financial position of the business. One needs to keep in mind that Accounting and Accountancy are two different concepts. Accounting is the recording, classifying and summarising business transactions to ascertain the financial position of the business firm. On the other hand, Accountancy is the body of knowledge based on principles for recording, classifying and summarising business transactions to help in the decision making function of management. Accounting is an art of recording, classifying and summarising all the business transactions. It is a science as well as it follows certain guiding accounting principles and standards. Question 1: Accounting gives the _________ to record all the business transaction. (a)  Framework (b)  Process (c) Money (d)  Classification

Correct Answer is Option (a) Business transactions are ordinarily summarized in books called journals and ledgers. You can buy them at your local stationery or office supply store. A journal is a book where you record each business transaction shown on your supporting documents.

Question 2:  Accounting is the art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events which are, in part at least of a financial character and interpreting the result thereof. This definition of Accounting is given by: (a) Indian Institute of Chartered Accountants (b) American Accounting Association (c) American Institutes of Certified Public Accountants (d) International Financial Regulation System

Correct Answer is Option (c) In 1941, The american institute of Certified Public Accounts (AICPA) had defined accounting as the art of recording, classifying and summerising in a significant manner and in terms of ,money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof. With greater economic development resulting in changing role of accounting its scope become broader.

Question 3:   Accounting is called science because it follows certain guiding ___________.

Answer:  Accounting principles and standards

Question 4:   Accounting records only __________ transactions.

Answer:  Financial

Read the following hypothetical Case Study and answer the given questions: Business Transactions are only recorded in the Accounting Books of a firm and no other transaction that happens in the day to day functioning of the business. Now the question arises what exactly is the Business transactions? To answer this basic question we need to see that the transaction fulfils the basic criteria. First one being the transaction should be an economic activity, that is it should create an income for the firm or an expense for it. Like we can say that the payment of salary to the staff is a business transaction but persuading a customer to buy a product or hiring a staff for that matter is not a business transaction. Secondly, the transaction should change the financial position of the firm, that is it should either raise the income of the firm or create debt for the firm. For example, even if the goods are bought on credit, increasing creditors of the firm, it is a business transaction as it is creating a debt for the firm. But obviously, praising a staff for his work to sell the product at a better profit, is not termed as business transaction although it motivates the employee but does not result in changing the financial position of the firm. Lastly, the transaction should be able to be expressed in terms of money. Every business transaction lead to an event, that is a consequence of the transaction. Say for example, when the goods bought for ₹30,000 is sold for ₹32,000, the profit ₹2,000 is the event. In other words, we can say that event is what a transaction does for the business entity. Every transaction is supported by a document that provides the authorisation and allows the transaction to be recorded in the books of accounts. It varies from entity to entity and every transaction needs to have a separate uniquely numbered voucher. When we talk of business transactions, everything inclusive of acquiring of assets, whether current or non-current, and incurring of liability, whether internal, external, current or non-current, is present. The change in stock due to sale or purchase whether cash or credit, the expenses incurred, and other revenue generated are all business transactions, that are called events and have separate unique vouchers. Question 5: Business Transaction of _____________ nature. (a)  Economic (b)  Monetary (c)  Financial   (d)  All of the above

Correct Answer is Option (d) The purchase and sale of goods for cash or on credit, the receipts and payments of cash etc., are termed as business transactions since these activities involve exchange of values between parties. A business transaction therefore results in some property, goods or services changing hands.

Question 6: Business Transactions leads to an _________, that is nothing but its consequence.

Answer:  Event

Question 7:  Which of the following is not a business transaction? (a)  Buying of Furniture (b) Paying salaries of the accountant (c)  Giving a motivation speech to the employee (d) Buying a good for personal use from the office money

Correct Answer is Option (c) In the context of accounting, a nonfinancial transaction is a transaction in which assets, liabilities, expenses, income, and equity do not change. An example of this would be hiring an employee. No journal entry is necessary for a non-financial transaction.

Question 8: Every business transaction is accompanied by _______________ voucher.

Answer:  Separate uniquely numbered

Question 9: Pick the odd one out: (a) Bank Loan (b)  Cash at Bank (c)  Creditors (d)  Bills Payable

Correct Answer is Option (b) Cash at Bank: The total amount of money held at the bank by a person or company, either in current or deposit accounts. It is included in the balance sheet under current assets.

Question 10: Pick the odd one out: (a)  Cash in Hand (b)  Cash at Bank (c)  Debtors (d) Creditors

Correct Answer is Option (d) A creditor is an entity (person or institution) that extends credit by giving another entity permission to borrow money intended to be repaid in the future. Creditors can be classified as either personal or real. People who loan money to friends or family are personal creditors.

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