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Principles-of-accounting Chapters

12th Class Chapter 1 Principles of accounting Short Questions

An important facility for 12th class students preparing for short questions principles of accounting 12th class chapter 1 of BISE. Get hundreds of questions to prepare and get better marks in 12th principles of accounting
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Question: 1
What is a net worth method?
Answer: 1
1-17
Net worth method is a way which is used to measure the profit in single entry system.The formula of calculating profit under the net worth method is
Profit of year-Increase in capital -Legacy
Question: 2
Define pure entry system.
Answer: 2
2-17
Under pure entry system ,only person accounts are kept,Real and nominal accounts recorded are not maintained.
Example Mr Ali opened his account with Rs 500
Question: 3
What is closing capital?
Answer: 3
3-17
The money or capital which is net at the ending or closing of the year or opening of the year.
Question: 4
What is meant by single entry system?
Answer: 4
4-17
Under single entry system sometimes both aspects of transactions are recorded sometimes only one aspect of transaction is recorded and sometimes no aspect of transaction is recorded.
Question: 5
What is meant by Additional Capital?
Answer: 5
5-17
The amount of capital which is introduced during the year in the business is called additional capital or fresh capital.
Question: 6
What is opening statement of affairs?
Answer: 6
6-17
The opening statement of affairs is prepared to find out the opening capital under single entry system.
The formula to calculate opening capital is given below
Opening Capital =Closing capital -increse in capital
Question: 7
What is meant by statement of affairs?
Answer: 7
7-17
Statement of affair is a sort of balance sheet.It have assets on left side an liabilities and capital on the right side under single entry system.
Question: 8
What is Drawing?
Answer: 8
8-17
Cash or goods taken away by the owner from the business to personal is called Drawing.
Example : Salman withdraw cash for his personal use from business.
Question: 9
Define Balance Sheet.
Answer: 9
9-17
Balance Sheet is prepared to find out the financial position of business under double entry system.
Question: 10
What is meant by profit or loss statement?
Answer: 10
10-17
Profit or loss statement is prepared to find out the profit or loss of the year under single entry system.
Question: 11
What is opening capital?
Answer: 11
11-17
Opening Capital is the capital or money which is met at the beginning or opening of the year.
Question: 12
What is meant by double entry system?
Answer: 12
12-17
A system in which two sides of every transactions are recorded is called double entry system.
Question: 13
Write down the basic equation of Balance Sheet.
Answer: 13
13-17
Balance Sheet is used to calculate Capital or Money.
Equation: The basic equation of balance sheet is given below
Assets= Liabilities & Capital
Question: 14
What is difference between balance sheet and statement of affairs?
Answer: 14
14-17
Balance Sheet: Balance Sheet is prepared to find out the financial position of business under double entry system.
Question: 15
What is Ending Statement of affairs?
Answer: 15
15-17
The ending statement of affairs is prepared to find out the ending capital under single entry system.
Question: 16
Write any three demerits of single entry system?
Answer: 16
16-17
Three demerits or disadvantages of single entry system as as under:
1.Under this system only partial and in complete record kept.
2.Nominal accounts are not maintained.
3.Real accounts are not maintained,
Question: 17
Write down two advantage of single entry system?
Answer: 17
17-17
Two advantage or characteristics of single entry system are as fellow
1.It is useful for small business.
2.In this system sole properties is free from danger or frauds.

12th Class Principles-of-accounting Chapters Short Questions