Category: Class 11

Balbharti Maharashtra State Board Bookkeeping and Accountancy 11th Solutions Chapter 5 Subsidiary Books Textbook Exercise Questions and Answers.

Maharashtra State Board Bookkeeping and Accountancy 11th Solutions Chapter 5 Subsidiary Books

Objective Type Questions & Answers

1. Answer the following questions in one sentence.

Question 1.
What are Subsidiary Books?
Answer:
Subdivision of journals on the basis of nature of transactions is known as Subsidiary Books.

Question 2.
What is a Cash Book?
Answer:
The subsidiary book in which details of cash are received in the form of cash, cheques, drafts, etc., and details of payment made in the form of cash, cheques, drafts, etc. is called a cash book.

Question 3.
State the meaning of ‘Contra entry’.
Answer:
The accounting entries which appear on both the sides of cash book are called contra entries.

Question 4.
State the meaning of the imprest system of Petty Cash Book.
Answer:
Imprest System of Petty cash book is a system in which head cashier gives fixed (imprest) amount to the petty cashier at the beginning of month/fortnight to meet the expenses of that period. Later on the shortfall after meeting the expenses is reimbursed by the head cashier.

Question 5.
Which transactions are recorded in Purchase Book?
Answer:
Goods purchased on credit for resale are only recorded in the Purchase Book.

Question 6.
Which sales are recorded in Sales Book?
Answer:
Credit sales of goods are recorded in Sales Book.

Question 7.
Which transactions are recorded in the Journal Proper?
Answer:
Journal Proper is meant for recording opening entries, closing entries, adjustment entries, transfer entries, and rectification entries.

Question 8.
Who is a Petty Cashier?
Answer:
A cashier in charge of recording transactions in a petty cash book is known as Petty Cashier.

2. Give a word/term or phrase for each of the following statements:

Question 1.
A person who maintains Petty Cash Book.
Answer:
Petty Cashier

Question 2.
A bank account which the businessman prefers to open.
Answer:
Current Account

Question 3.
Petty Cash Book in which the payment side is ruled in suitable columns.
Answer:
Analytical Petty Cash Book

Question 4.
Subsidiary book in which only credit purchases of goods are recorded.
Answer:
Purchase Book

Question 5.
Subsidiary book in which return of goods sold on credit is recorded.
Answer:
Sales Return Book

Question 6.
The entry is recorded on both sides of the cash book.
Answer:
Contra Entry

Question 7.
Name the account which encourages personal savings.
Answer:
Saving Account

Question 8.
A note was issued by the buyer to the seller giving full details of goods returned.
Answer:
Debit Note

Question 9.
A note was issued by the seller on receipt of defective goods from the customer.
Answer:
Credit Note

Question 10.
Name the bank account on which overdraft facility is given to the Account holder.
Answer:
Current Account

3. Select the most appropriate answers from the alternatives given below and rewrite the sentences.

Question 1.
Cash column of Cash Book can never have ____________ balance.
(a) credit
(b) debit
(c) zero
(d) none of the above
Answer:
(a) credit

Question 2.
Any entry recorded on both sides of Cash Book is known as ____________ entry.
(a) opening
(b) rectifying
(c) transfer
(d) contra
Answer:
(d) contra

Question 3.
The source document for recording in Sales book is ____________
(a) Inward Invoice
(b) Outward Invoice
(c) Voucher
(d) Cash Memo
Answer:
(b) Outward Invoice

Question 4.
Credit purchase of Machinery is recorded in the ____________
(a) Purchase Book
(b) Cash Book
(c) Journal Proper
(d) Returns Outward Book
Answer:
(c) Journal Proper

Question 5.
Sub-division of journal is known as ____________ book.
(a) Subsidiary
(b) Purchase Return
(c) Purchase
(d) Journal Proper
Answer:
(a) Subsidiary

Question 6.
Additional cash introduced in business is recorded in ____________
(a) Purchase Book
(b) Cash Book
(c) Journal Proper
(d) Returns Inwards Book
Answer:
(b) Cash Book

Question 7.
Entry for bad debts is recorded in the ____________
(a) Sales Book
(b) Purchase Book
(c) Cash Book
(d) Journal Proper
Answer:
(d) Journal Proper

Question 8.
Direct deposit made by the customer into our bank is recorded in the ____________ side of the Cash Book.
(a) payments
(b) credit
(c) receipts
(d) both
Answer:
(c) receipts

Question 9.
The person who draws the cheque and signs on it is the ____________
(a) drawer
(b) drawee
(c) payee
(d) all of the above
Answer:
(a) drawer

Question 10.
A fixed amount is deposited for a fixed period in ____________ deposit account.
(a) Current
(b) Savings
(c) Fixed
(d) Recurring
Answer:
(c) Fixed

4. State whether the following statements are True or False with reasons:

Question 1.
Journal is a book of secondary entry.
Answer:
This statement is False.
Journal is a book of prime entry.

Question 2.
Assets sold on credit are entered in Sales Journal.
Answer:
This statement is False.
Assets sold on credit are entered in Journal Proper.

Question 3.
Cash and credit purchases are entered in Purchase Book.
Answer:
This statement is False.
Only credit purchases are entered in Purchase Book.

Question 4.
Cash sales are entered in Sales Journal.
Answer:
This statement is False.
Cash sales are entered in the cash book.

Question 5.
Cash Book records transactions relating to receipts and payments of cash.
Answer:
This statement is True.
Cashbook is prepared for cash transactions only. All incomes are receipts and they are recorded on the debit side of Cashbook. All expenses are payments recorded to the credit side.

5. Do you agree with the following statements.

Question 1.
Trade discount is recorded in Cash Book.
Answer:
Disagree

Question 2.
Petty Cash Book is a book with having a record of big payments.
Answer:
Disagree

Question 3.
Cash received is entered on the debit side of the Cash Book.
Answer:
Agree

Question 4.
Transactions recorded on both debit and credit side of Cash Book is known as Contra Entry.
Answer:
Agree

Question 5.
Credit purchase of machinery is entered in Purchase Journal.
Answer:
Disagree

6. Complete the following sentences:

Question 1.
Cash Book is a ____________ Journal.
Answer:
Subsidiary

Question 2.
In Journal Proper, only ____________ discount is recorded.
Answer:
Cash

Question 3.
Return of goods purchased on credit to the suppliers will be entered in ____________ Journal.
Answer:
Purchase return

Question 4.
Assets sold on credit are entered in ____________
Answer:
Journal proper

Question 5.
Double column Cash Book records transactions relating to cash and ____________
Answer:
Bank

Question 6.
Credit purchases of goods are recorded in ____________
Answer:
Purchase Book

Question 7.
Cash Book does not record the ____________ Transactions.
Answer:
Credit

Question 8.
Credit balance shown by a bank column in Cash Book is ____________
Answer:
Overdraft

Question 9.
Petty Cash Book is used for recording ____________ expenses.
Answer:
Petty

Question 10.
In Purchase Book goods purchased on ____________ are recorded.
Answer:
Credit

7. Correct the following sentences and rewrite them the same.

Question 1.
Cash purchases of goods are recorded in the Purchase book.
Answer:
Cash purchases of goods are recorded in Cashbook.

Question 2.
Cash Book records cash transactions as well as credit transactions.
Answer:
Cash Book records only cash transactions.

Question 3.
Small and large business records all transactions in subsidiary books.
Answer:
Large business records all transactions in subsidiary books.

Question 4.
The person who maintains the Petty Cash Book is called Chief Cashier.
Answer:
The person who maintains the Petty Cash Book is called Petty Cashier.

8. Calculate the following.

Question 1.
Cash purchases for ₹ 1,60,000 at 10% T.D. and 5% C.D. What is the amount of Net purchases?
Answer:
Gross Price = ₹ 1,60,000
Less: 10% T.D. = ₹ 16,000
Net Price = ₹ 1,44,000
Less: 5% C.D. = ₹ 7,200
Net Purchases = ₹ 1,36,800

Question 2.
Purchased goods from Harish for ₹ 12,000 @ 7% T.D. What is the amount of Trade discount?
Answer:
Trade Discount = Purchases Price × Percentage of T.D.
= 12,000 × \(\frac{7}{100}\)
= ₹ 840

Question 3.
Sold 50 Shirts at ₹ 300 per shirt and 40 Trousers at ₹ 600 each. What is the amount of sales?
Answer:
(1) 50 Shirts × ₹ 300 = ₹ 15,000
(2) 40 Trousers × ₹ 600 = ₹ 24,000
Total Sales = ₹ 39,000

Question 4.
Sold 30 Jackets at ₹ 500 per Jacket at 8% Trade discount, What is the amount of Trade discount?
Answer:
Sales Value = 30 Jackets × ₹ 500 = ₹ 15,000
Trade Discount = 15,000 × \(\frac{8}{100}\) = ₹ 1,200

9. Complete the following Table.

Question 1.

Answer:
2,000

Question 2.

Answer:
45,000

Question 3.

Answer:
1,84,000

Question 4.

Answer:
1,10,000

Question 5.

Answer:
8,000

Question 6.

Answer:
1,40,000

Question 7.

Answer:
1,10,000

Question 8.

Answer:
1,580

Question 9.

Answer:
1,650

Question 10.

Answer:
600

Practical Problems

Question 1.
Prepare a two-column Cash Book with the help of the following information for January 2018.

January 2018		Amt (₹)
01	Started business with cash	1,20,000
03	Cash paid into Bank of Baroda	50,000
05	Purchased goods from Sakshi on credit	20,000
06	Sold goods to Divakar and received a bearer cheque	20,000
10	Paid to Sakshi cash	20,000
14	Cheque received on December 06, 2018, deposited into Bank
18	Sold goods to Shivaji on credit	12,000
20	Cartage paid in cash	500
22	Received cash from Shivaji	12,000
27	Commission received	5,000
30	Drew cash for personal use	2,000

Solution:
In the books of ____________


Note: Transactions dated 5th and 18th are credit transactions, hence not to be recorded in the cash book.

Question 2.
Prepare a two-column Cash Book from the following transaction for the year July 2018.

July 2018		Amt (₹)
01	Cash in hand	17,500
01	Cash at Bank	5,000
03	Purchased goods for cash	3,000
05	Received cheque from Arun	10,000
08	Sold goods for cash	8,000
10	Arun’s cheque deposited into the bank	–
12	Purchased goods and paid by cheque	20,000
15	Paid establishment expenses through bank	1,000
18	Cash Sales	7,000
20	Deposited into bank	10,000
24	Paid General Expenses	500
27	Received commission by Cross cheque	6,000
29	Paid Rent	2,000
30	Withdrew cash for personal use	1,200
31	Wages paid	6,000

Solution:
In the books of ____________

Question 3.
Record the following transactions in the Cash Book of M/s Kamal Traders. Balance for the month of July 2018: Cash in hand ₹ 2,000 and balance in Bank Current account ₹ 8,000.

July 2018		Amt (₹)
03	Cash Sales	2,300
05	Purchased goods and amount paid by cheque	6,000
08	Cash Sales	10,000
12	Paid General Expenses	700
15	Sold goods and amount received by Cheque and deposited into Bank	20,000
18	Purchased Motor Car paid by Cheque	15,000
20	Cheque received from Mrunal deposited into Bank	10,000
22	Cash Sales	7,000
25	Mrunal’s cheque returned dishonoured
28	Paid Rent	2,000
29	Paid Telephone expenses by cheque	500
31	Cash is withdrawn from Bank for personal use	2,000

Prepare a two-column Cash Book.
Solution:
In the books of M/s Kamal Traders

Question 4.
Prepare Analytical Petty Cash Book from the following transactions in the books of Swarali General Stores, Kolhapur. The imprest amount is ₹ 1,500 received from the main cashier.

2018 January		Amt (₹)
01	Paid Cartage	50
02	Telephone Charges	40
02	Bus Fare	20
03	Postage	30
04	Refreshment to Employees	80
06	Courier Charges	30
08	Refreshment to Customers	50
10	Cartage	35
15	Taxi Fare to Manager	70
18	Purchased Stationery	65
20	Bus Fare	10
22	Xerox Charges	30
25	Internet Charges	35
27	Postage Stamps	200
29	Repair on Furniture	105
30	Cleaning Expenses	115
31	Miscellaneous Expenses	100

Solution:
Analytical Petty Cash Book of Swarali General Stores

Question 5.
From the following information prepare Columnar Petty Cash Book kept on imprest system in the books of Manisha Books Stall, Beed.

2018 April		Amt (₹)
01	Opening petty cash balance	200
02	Received a bearer cheque to make up the imprest amount	1,200
03	Gave a tip to peon	40
04	Purchased stationery	150
05	Paid Taxi Fare	35
06	Purchased Stamp pad	140
07	Paid Cartage	40
08	Paid Bus Fare	30
11	Paid to sweeper	50
13	Purchased a box of pencils	40
14	Paid Mobile charges	35
15	Gave it to Sohan on account	250
19	Paid for Refreshment to staff	150
20	Paid Railway Fare	30
21	Paid Carriage	65

Solution:
Analytical Petty Cash Book of Manish a Books Stall, Beed

Question 6.
Prepare proper Subsidiary Books and post them to the ledger from the following transactions for the month of February 2018.

2018 February		Amt (₹)
01	Goods sold to Virat	5,000
04	Purchased goods from Khushboo Traders	2,480
06	Sold goods to Shankar Traders	2,100
07	Virat returned goods	600
08	Returns goods to Khusboo Traders	280
10	Sold goods to Mahesh	3,300
14	Purchased from Kunti Traders	5,200
15	Furniture purchased from Arun	3,200
17	Bought goods from Kunti Traders	4,060
20	Return goods to Kunti Traders	200
22	Return goods from Mahesh	250
24	Purchased goods from Kirti less 10% T.D.	5,700
25	Sold goods to Shri Surya goods less 5% T.D.	6,600
26	Sold goods to Prakash Brothers	4,000
28	Return goods to Kirti less 10% T.D.	1,000
28	Prakash Brothers returned goods	500

Solution:
In the books of ____________
Purchase Book

Sales Book

Purchase Return Book

Sales Return Book

In the books of ____________

Question 7.
Enter the following transactions in the books of Vijay in Purchase Book, Sales Book, Purchase Returns Book and Sales Returns Book and Journal Proper for the month of August 2018.
2018 August
01 Purchased goods from Vikas Stores ₹ 18,000 at 5% Trade Discount
02 Sold goods of ₹ 9,000 to Prabhakar Traders
05 Veena sold goods of ₹ 16,000 to us at 5% Trade Discount as per our order dated 28th July, 2018.
08 Sent a Debit Note to Vikas Stores ₹ 1,600 (Gross) for goods returned.
10 Sold goods of ₹ 12,000 on credit to Shamal & Sons at 6% Trade Discount.
18 Received Credit Note from Veena ₹ 900 (Gross) for goods returned.
22 Sent Credit Note to Prabhakar Traders for ₹ 1,500 for goods returned. Received Dedit note from Shamal & Sons for ₹ 1,200 (Net) for goods returned.
23 Purchased goods of ₹ 16,600 from Priya Stores and paid for Carriage ₹ 150.
25 Purchased goods from Sadhana Stores ₹ 12,000 and sold the same to Aradhana Stores at a profit of 20% on cost.
28 Aradhana Stores returned goods of ₹ 2,400 as they were defective and the same were returned to Sadhana Stores.
31 Purchased Furniture for office use ₹ 30,000 from Art Furniture Works on credit.
Solution:
In the books of Vijay
Purchase Book

Sales Book

Purchase Return Book

Sales Return Book

Journal Proper

Question 8.
Mr. Akash gives you the following information and asks you to prepare Purchase Book, Sales Book, Purchase Returns Book and Sales Return Book for the month of January 2018.
2018 January
01 Purchased goods on credit from Dhanal Traders for ₹ 15,000 and sold the same to Kunal Traders at a profit of 25% on cost.
05 Placed an order with Sunetra for goods of ₹ 10,000 less 5% Trade discount.
08 Purchased goods of ₹ 20,000 at 10% Trade Discount from Saurabha Traders.
13 Sold goods to Vinayak Stores ₹ 8,000 at 5% Trade Discount.
15 Vinayak Stores returned goods to us ₹ 200.
18 Sunetra executed our order placed on 5th Jan. 2018.
20 Sold goods to Vishnu Traders ₹ 21,000 less 5% Trade Discount.
22 Returned goods to Sunetra ₹ 1,000 (Gross).
28 Kunal Traders returned goods to us ₹ 500
30 Returned goods to Sourabh Traders ₹ 1,500.
Solution:
In the books of Mr. Akash
Purchase Book

Sales Book

Purchase Return Book

Sales Return Book

Question 9.
Enter the following transactions in the Subsidiary Book of Kamal Traders.
2018 April
01 Bought from Suhas goods of ₹ 12,000 as per his Invoice No. 41.
04 Purchased from Virat goods of ₹ 11,870 less 10% Trade Discount vide Bill No. 12.
07 Bought from Kuldip goods of ₹ 11,000 less 25% Trade Discount vide Bill No. 12.
08 Bought from M/s. Art Furniture Works, Furniture for ₹ 13,000 vide Invoice No. 84.
12 Sold to Dhiraj goods of ₹ 11,500 vide Sales Invoice No. 27
13 Sold to Raja goods of ₹ 12,780 less 5% Trade Discount, vide invoice No. 88
21 Sold to Suresh goods of ₹ 8,000 less 20% Trade Discount
23 Dhiraj returned goods of ₹ 500 vide our Credit note No. 14
26 Suresh returned goods of ₹ 150 (gross) vide our Credit Note No. 115
28 Returned to Suhas goods ₹ 1,200 vide our Debit Note No. 09
30 Returned to Virat goods of ₹ 1,300 (Gross) vide our Debit Note No. 10.
30 Returned to Kuldip goods of ₹ 1,100 (Gross) vide our Debit Note No. 11.
Solution:
In the books of Kamal Traders
Purchase Book

Sales Book

Purchase Return Book

Sales Return Book

Journal Proper

Question 10.
Enter the following transactions in the Subsidiary Books of Navyug Traders:
2018 March
01 Sold to Bharat Patil goods ₹ 10,000 at 10% Trade discount.
04 Purchased from Naresh goods of ₹ 11,000 less 10% Trade discount.
06 Purchased Furniture from M/s. Sham Furniture Works, of ₹ 15,000 for office use.
07 Bharat Patil returned 20% of the goods bought by him on 1st March above and we gave him fresh goods in exchange.
08 Sold to Sundar goods of ₹ 13,000 less 15% Trade Discount.
10 Sold to Sumit Computer for ₹ 23,800 with a book value of ₹ 24,000.
12 Placed an order with Sajan for goods of ₹ 12,000.
17 Purchased from Naresh goods of ₹ 14,000 and sold them to Kamesh for ₹ 16,000.
19 Kamesh returned us goods of ₹ 1,600 and immediately returned the same to Naresh.
23 Sold to Rakesh for ₹ 4,500 old Furniture with a book value of ₹ 4,800.
26 Returned to M/s. Sham Furniture Works, office Furniture of ₹ 4,500.
28 Sajan executed our order dated 12th March, 2018.
Solution:
In the books of Navyug Traders
Purchase Book

Sales Book

Purchase Return Book

Sales Return Book

Journal Proper

Balbharti Maharashtra State Board Bookkeeping and Accountancy 11th Solutions Chapter 4 Ledger Textbook Exercise Questions and Answers.

Maharashtra State Board Bookkeeping and Accountancy 11th Solutions Chapter 4 Ledger

1. Answer in one sentence only.

Question 1.
What is Ledger?
Answer:
Ledger is an important book of account in which individual records business transactions with respect to persons, properties, expenses, or losses are maintained.

Question 2.
What is ledger posting?
Answer:
Transferring the entry passed in the journal to the ledger for the individual record is called ledger posting.

Question 3.
When does an account show a nil balance?
Answer:
When the total credit side of an account equals the total of the debit side, such an account shows a nil balance.

Question 4.
What is Folio?
Answer:
Page number of the account opened in the ledger is called Ledger folio.

Question 5.
Where is the statement form of ledger A/c is used in actual practice?
Answer:
The statement form of ledger A/c is used in the banks and financial institutions to prepare the client’s account showing balances of accounts after each transaction is complete.

Question 6.
Why Proprietor’s Capital account is a liability for the business?
Answer:
Capital invested in the business by the proprietor is an asset for the proprietor and liability for the business.

Question 7.
Why does a cash account never shows a credit balance?
Answer:
Available cash with the business is an asset of the business and the account of every asset shows debit, cash account always shows debit balance.

Question 8.
What is ‘Trial Balance’?
Answer:
Trial Balance is an abstract or list of all the ledger accounts as on a specified date showing debit total and the credit total of all the accounts or their net balance.

2. Write the word, term, phrase, which can substitute each of the statements.

Question 1.
Principal Book of accounts.
Answer:
Ledger

Question 2.
Transferring a journal entry to the appropriate accounts in the Ledger.
Answer:
Posting

Question 3.
Page number of Ledger to which an entry is posted.
Answer:
Ledger folio

Question 4.
The process of extracting the balance and inserting it on the lesser side of an account.
Answer:
Balancing

Question 5.
A debit balance to Personal Accounts.
Answer:
Debtor

Question 6.
A credit balance to Bank Account.
Answer:
Bank overdraft

Question 7.
An account to be debited for goods damaged by fire.
Answer:
Loss by fire

Question 8.
A Trial Balance in which only net balances of all ledger accounts are transferred.
Answer:
Net Trial Balance

3. Select appropriate alternatives from those given below and rewrite the sentences.

Question 1.
In case of a credit transaction one of the account must be a ______________ account.
(a) Cash
(b) Credit
(c) Personal
(d) Debit
Answer:
(c) Personal

Question 2.
‘c/d’ indicates ______________ balance.
(a) Opening
(b) Closing
(c) Positive
(d) Negative
Answer:
(b) Closing

Question 3.
______________ Column of ledger is used for writing page number of Journal.
(a) J.F.
(b) L.F.
(c) Date
(d) Particulars
Answer:
(a) J.F.

Question 4.
Debtors Account shows ______________ balance.
(a) Real
(b) Negative
(c) Credit
(d) Debit
Answer:
(d) Debit

Question 5.
______________ is the process of deriving the difference between totals of the debit and credit side of each ledger a/c.
(a) Totalling
(b) Journalizing
(c) Balancing
(d) Posting
Answer:
(c) Balancing

Question 6.
Total of Purchase book is ______________ to Purchase Account.
(a) posted
(b) moved
(c) given
(d) entered
Answer:
(a) posted

Question 7.
Real account always shows ______________ balance.
(a) minimum
(b) maximum
(c) debit
(d) credit
Answer:
(c) debit

Question 8.
______________ is prepared to test arithmetical accuracy of Books of Accounts.
(a) Trial Balance
(b) Ledger
(c) Journal
(d) List
Answer:
(a) Trial Balance

4. State whether the following statements are ‘True or False’ with reasons.

Question 1.
Ledger is a book of Original Entry.
Answer:
This statement is False.
Ledger is a book of Secondary Entry.
Journal is a book of Original Entry: First, all transactions are recorded to journal or subsidiary books, and then they are pasted to the respective ledger accounts.

Question 2.
The process of recording a transaction in the Journal is called Posting.
Answer:
This statement is False.
The process of recording a transaction in the Journal is called Journalising. Posting means transferring journal entries to respective ledger accounts.

Question 3.
A cash withdrawal from business by the trader should be credited to Drawings A/c.
Answer:
This statement is False.
Cash withdrawn from the business by the trader should be debited to Drawing A/c. It is a personal account and as per the golden rules of a personal account Debit the receiver.

Question 4.
Balances of Nominal Accounts are carried forward to the next year.
Answer:
This statement is False.
Balances of Nominal Accounts are transferral to Trading and Profit and loss accounts of the year to find Gross Profit and Net Profit.

Question 5.
When the debit side of an account is greater than the credit side, the account shows a debit balance.
Answer:
This statement is True.
While balancing the ledger account the side which is greater is the balance of that account so when the debit side of an account is greater the account shows debit balances.

Question 6.
The name of an account written on top of each account is called ‘Head of Account’.
Answer:
This statement is True.
There are many ledger accounts in the ledger book. To identity, the name of the account, every account on the Top Head of Account is written.

Question 7.
Agreement of Trial Balance always proves accounting accuracy.
Answer:
This statement is False.
Even though the Trial balance is tally there may be some mistake like the complete omission of transaction or compensatory error so Agreement of Trial Balance does not always prove accounting accuracy.

Question 8.
The trial balance is based on the double-entry principle that for every debit there is an equal amount of corresponding credit.
Answer:
This statement is True.
Trial balance is an extract of ledger balances. Ledger is prepared of journal book which follows the Double Entry System of book-keeping. When both the effects of debit and credit with equal amount is given. The trial balance will be tally.

5. Fill in the blanks.

Question 1.
______________ Balance on Nominal Account shows expenses or loss.
Answer:
debit

Question 2.
Cash account always shows ______________ balance.
Answer:
debit

Question 3.
The right hand side of an account is called ______________ side.
Answer:
credit

Question 4.
Creditors shows ______________ balance.
Answer:
credit

Question 5.
______________ accounts are closed by transferring its balances to Profit and Loss Account.
Answer:
Nominal

Question 6.
‘b/d’ means ______________
Answer:
brought down

Question 7.
Rent paid for the residential quarter will be debited to ______________ account.
Answer:
Drawings

Question 8.
Sold goods of ₹ 24,000 at 20% Profit on cost, the purchase price of the goods is ______________
Answer:
₹ 20,000

6. Complete the following table.

Question 1.

Answer:
Ledger

Question 2.

Answer:
Return outward

Question 3.

Answer:
J.F.

Question 4.

Answer:
Credit balance

Question 5.

Answer:
Nominal A/c

7. Put ‘4’ mark for the nature of balance for the following.

Question 1.


Answer:

Account	Dr. Balance	Cr. Balance
1. Capital A/c		4
2. Goodwill	4
3. Bank Overdraft		4
4. Bills Receivable	4
5. Creditors		4
6. Drawings	4
7. Advertisement	4
8. Prepaid Rent	4
9. Outstanding Salary		4
10. Bad debts	4

Practical Problems

Question 1.
Give Journal entries of the following posting from the ledger account.
In the books of Sopan



Solution:
Journal of Sopan

Question 2.
Prepare necessary Ledger Accounts from the following Subsidiary Books.
Purchase Book

Purchase Return Book

Solution:
In the Ledger of ______________

Question 3.
From the following transactions prepare necessary Ledger Accounts in the Books of Vinay and balance the same.
2019 Jan.
1 Started business with Cash ₹ 10,000
6 Bought goods from Vikas ₹ 3,000
9 Sold goods to Bhushan ₹ 2,400
12 Paid to Vikas on account ₹ 1,600
19 Received on account from Bhushan ₹ 1,000
25 Cash Purchases ₹ 3,600
30 Cash Sales ₹ 5,000
31 Paid Wages ₹ 400
Solution:
In the Ledger of Vinay

Question 4.
Journalise the following transactions and prepare Cash A/c only.
2019 July
1 Hardik started the business with Cash ₹ 15,000 and Machinery ₹ 20,000.
4 Purchased goods for ₹ 9,000 less 10% Cash Discount.
9 Sold goods to Amar ₹ 3,000.
12 Distributed goods worth ₹ 700 as free samples.
14 Bought Stationery for ₹ 550 for office use.
18 Received ₹ 950 from Dhanashree, a customer, whose account was earlier written off as a bad debt.
21 Abhiram invoiced us goods worth ₹ 3,000.
24 Settled Abhiram’s account, he allowed 5% cash discount.
27 Exchanged goods worth ₹ 2,500 against Furniture of the same amount.
29 Withdrawn cash from ATM ₹ 5,000 for office use and ₹ 3,000 for personal use.
Solution:
Journal of Hardik ______________


Ledger of Hardik

Question 5.
Prepare Aparna’s account in the books of Suparna.
2019 Jan.
1 Balance due from Aparna ₹ 60,000
4 Sold goods to Aparna ₹ 15,000 at 10% Trade Discount.
7 Goods returned by Aparna ₹ 1,500 (Gross)
11 Received crossed cheque from Aparna ₹ 50,000
17 Invoiced goods to Aparna ₹ 12,000
25 Sold goods to Aparna in cash ₹ 6,000
30 Received cash from Aparna ₹ 33,000 in full settlement of her account.
Solution:
Ledger of Suparna

Working Notes:
Jan. 4:
Trade discount = 10% on ₹ 15,000
= \(\frac {10}{100}\) × ₹ 15,000
= ₹ 1,500
Net Selling Price = Catalogue price – Trade discount
= 15,000 – 1,500
= ₹ 13,500

Question 6.
Prepare Cash A/c, Bank A/c, Purchases A/c, Sales A/c, and Capital A/c and balance the same in the books of Madanlal.
2019 Aug.
1 Started business with a bank balance of ₹ 40,000.
2 Purchased goods from Aseem worth ₹ 15,000 less 10% Trade Discount.
3 Sold goods to Arun for ₹ 8,000 in cash.
4 Paid Rent ₹ 3,000 and Electricity bill ₹ 500.
5 Purchased 100 Shares of Perfect Technologies for ₹ 55 per share and paid Brokerage ₹ 250 by transfer through net banking.
6 Withdrawal of goods for personal use ₹ 500.
7 Sold goods for cash ₹ 5,000 less 10% Cash Discount.
8 Deposited cash into Bank ₹ 2,000.
9 Paid ₹ 3,000 for daughter’s tuition fees by Debit Card.
10 Purchased a Table for ₹ 2,000.
19 Received ₹ 1,500 by selling the scrap.
27 Paid cash into a bank in excess of ₹ 2,000
Solution:
In the Ledger of Madanlal

Question 7.
Journalise the following transactions; post them into Ledger for February 2019
1 Sunil Started business with a stock of goods ₹ 20,000 and Cash ₹ 1,70,000 out of which ₹ 50,000 borrowed from his friend Kedar @ 10 p.a.
5 Placed an order for goods worth ₹ 7,000 with Mohan for which an advance of ₹ 5,500 was paid.
9 Purchased Stationery for office use ₹ 4,500
12 Goods distributed as free samples ₹ 2,000
17 Paid Freight ₹ 400 on behalf of Mr. Dev.
24 Received Goods from Mohan as per our order dated 5th Feb and settled his account.
27 Bought goods from Shekhar on two months credit for ₹ 7,000 at 20% Trade Discount with instructions to send them to Sagar.
28 Sent to Sagar Outward Invoice for goods supplied by Shekhar, at list price less 10% Trade Discount.
Solution:
Journal of Sunil

Ledger of Sunil

Question 8.
Journalise the following transactions and Prepare ledger accounts in the books of Sanjeev.
2019 June
1 Cash Received from Raju ₹ 10,000 for commission.
3 Intra-state sale to Rakesh ₹ 3,000 and SGST @ 2.5% and CGST @ 2.5% applicable.
5 Received full amount from Rakesh.
8 Intra-state purchases from Mangesh ₹ 2,000 and SGST @ 2.5% and CGST @ 2.5% applicable.
11 Paid the necessary amount to Mangesh.
18 Paid Rent ₹ 2,500
24 Paid mobile bill ₹ 1,000 out of which ₹ 700 for office use and for ₹ 300 for personal use.
Solution:
Journal of Sanjeev


In the Ledger of Sanjeev

Question 9.
The following ledger balances were extracted from the books of Pawan Pawar, Pune as of 1st July 2019.

The following transactions took place during July 2019. Post them into Ledger and prepare Trial Balance as of 31st July 2019.
1 Introduced additional Capital ₹ 40,000
4 Bought goods from Rakesh ₹ 80,000 @ 10% Trade Discount
7 Sold goods to Rashmi ₹ 30,000
9 Returned goods to Rakesh ₹ 20,000 (Gross)
11 Rashmi returned goods to us ₹ 400
14 Paid to Rakesh ₹ 40,000 @ 2% Cash Discount
22 Made purchases ₹ 17,000 and amount paid by cheque
24 Cash Sales ₹ 8,000
27 Bought Stationery ₹ 3,000
28 Received from Rashmi ₹ 39,000 by RTGS and discount allowed ₹ 1000
29 Paid Salary ₹ 10,000
29 Sold goods to Rashmi ₹ 20,000
31 Bought goods from Rakesh ₹ 36,000 and paid by cheque.
Solution:
Ledger of Pawan Pawar, Pune

Trial Balance as of 31st July 2019

Balbharti Maharashtra State Board Bookkeeping and Accountancy 11th Solutions Chapter 3 Journal Textbook Exercise Questions and Answers.

Maharashtra State Board Bookkeeping and Accountancy 11th Solutions Chapter 3 Journal

1A. Answer in One Sentence:

Question 1.
What is Journal?
Answer:
Journal is a book of account in which all types of day-to-day business transactions are recorded in chronological
order.

Question 2.
What is Narration?
Answer:
Explanation of transaction which is written just below the accounting entry in the particular column is called narration.

Question 3.
What is GST?
Answer:
GST is an abbreviated form of Goods and Service Tax that is levied by the Government on specific goods and services in the place of different taxes levied earlier.

Question 4.
In which year GST was imposed by the Central Government of India?
Answer:
In the year 2017 GST was imposed by the Central Government of India.

Question 5.
What is meant by simple entry?
Answer:
An entry in which only two accounts are affected viz. one account is debited and the other account is credited is called simple entry.

Question 6.
What is the meaning of combined entry?
Answer:
A journal entry that combines more than one debit or more than one credit or both is called a combined/compound entry.

Question 7.
Which account is debited, when rent is paid by Debit card?
Answer:
The rent account is debited when rent is paid by debit card.

Question 8.
Which discount is not recorded in the books of account?
Answer:
Trade discount is not recorded in the books of the account.

Question 9.
In which order monthly transactions are recorded in a Journal?
Answer:
In chronological (date wise) order monthly transactions are recorded in the journal.

Question 10.
Which account is credited, when goods are sold on credit?
Answer:
Sales account is credited, when goods are sold on credit.

2. Give one word/term or phrase for each of the following statements:

Question 1.
A book of prime entry.
Answer:
Journal

Question 2.
The tax imposed by Central Government on Goods and Services.
Answer:
GST

Question 3.
A brief explanation of an entry.
Answer:
Narration

Question 4.
The process of recording transactions in the Journal.
Answer:
Journalising

Question 5.
The French word from which the word Journal is derived.
Answer:
Jour

Question 6.
Concession is given for immediate payment.
Answer:
Cash discount

Question 7.
Entry in which more than one accounts are be debited or credited.
Answer:
Combined Entry

Question 8.
Anything took by the proprietor from the business for his private use.
Answer:
Drawings

Question 9.
Tax payable to the Government on purchase of goods.
Answer:
Input Tax

Question 10.
Page number of the ledger.
Answer:
Ledger Folio

3. Select the most appropriate alternative from the alternatives given below and rewrite the statements.

Question 1.
___________ means explanation of the transactions recorded in the Journal.
(a) Narration
(b) Journalising
(c) Posting
(d) Casting
Answer:
(a) Narration

Question 2.
___________ discount is not recorded in the books of accounts.
(a) Trade
(b) Cash
(c) GST
(d) VAT
Answer:
(a) Trade

Question 3.
Recording of transaction in Journal is called ___________
(a) posting
(b) journalising
(c) narration
(d) prime entry
Answer:
(b) journalising

Question 4.
Every Journal entry require ___________
(a) casting
(b) posting
(c) narration
(d) journalising
Answer:
(c) narration

Question 5.
The ___________ column of the Journal is not recorded at the time of journalising.
(a) date
(b) particulars
(c) ledger folio
(d) amount
Answer:
(c) ledger folio

Question 6.
Goods sold on credit should be debited to ___________
(a) Purchase A/c
(b) Customer A/c
(c) Sales A/c
(d) Cash A/c
Answer:
(b) Customer A/c

Question 7.
Wages paid for installation of Machinery should be debited to ___________
(a) Wages A/c
(b) Machinery A/c
(c) Cash A/c
(d) Installation A/c
Answer:
(b) Machinery A/c

Question 8.
The commission paid to the agent should be debited to ___________
(a) Drawing A/c
(b) Cash A/c
(c) Commission A/c
(d) Agent A/c
Answer:
(c) Commission A/c

Question 9.
Loan taken from Dena Bank should be credited to ___________
(a) Capital A/c
(b) Dena Bank A/c
(c) Cash A/c
(d) Dena Bank Loan A/c
Answer:
(d) Dena Bank Loan A/c

Question 10.
Purchase of animals for cash should be debited to ___________
(a) Livestock A/c
(b) Goods A/c
(c) Cash A/c
(d) Bank A/c
Answer:
(a) Livestock A/c

4. State whether the following statements are True or False with reasons.

Question 1.
Narration is not required for each and every entry.
Answer:
This statement is False.
Correct statement: Narration is required for each and every entry.
Reasons: Narration is a brief explanation of the Journal Entry. It is written in the bracket just below the accounting entry. By reading the narration, the reader understands the meaning and significance of accounting entry and the nature and type of business transactions. Narration should be as short as possible and it should be simple and easy to understand.

Question 2.
A journal voucher is a must for all transactions recorded in the Journal.
Answer:
This statement is True.
Reasons: A voucher is a document that supports a payment made by the businessmen. It is legal evidence that a certain sum of money has been paid to a specific person or party. A Journal voucher is an original or basic voucher on the basis of which business transactions are journalized in the journal. Journal voucher provides legal proof for the business transactions. Therefore a journal voucher is necessary for all transactions recorded in the journal.

Question 3.
Cash discount allowed should be debited to discount A/c.
Answer:
This statement is True.
Reasons: Any allowance or reduction in payment allowed by the seller to the buyer or creditor to the debtor on payment of cash is called cash discount. It is the concession given to encourage prompt payment. The gash discount allowed is an expense or a loss to the receiver. Expenses or Losses are always to be debited. Cash discount allowed is an expense or loss and therefore it is debited to Discount A/c.

Question 4.
Journal is a book of prime entry.
Answer:
This statement is True.
Reasons: Journal is the most important book of accounts. It is a book of daily records. It is the main book of accounts in which transactions are recorded for the first time from source documents. Therefore this book is known as the book of original entry or first entry or prime entry. Business transactions are first entered in the journal and then they are recorded in other accounts book. For these reasons, the journal is called a book of prime entry.

Question 5.
Trade discount is recorded in the books of accounts.
Answer:
This statement is False.
Correct statement: Trade discount is never recorded in the books of accounts.
Reasons: The discount which is allowed or given by the manufacturer to wholesalers and by wholesalers to retailers and retailers to customers on the bulk purchases is called trade discount. By custom or by law trade discount is calculated on the catalog or printed price of the goods. Trade discount is directly deducted from the printed price and net prices of the goods or services are recorded in the books of accounts. A trade discount is given to encourage the buyers to increase their purchases. It is given to traders to enable them to earn a sizeable profit on the printed prices.

Question 6.
Goods lost by theft are debited to the goods account.
Answer:
This statement is False.
Correct statement: Goods lost by theft is credited to the goods account.
Reasons: Goods account is a real account because unsold goods are the property of the business. If goods are purchased or acquired, the Goods account is debited and if goods are sold or lost from the business, they are credited. As per the traditional approach, goods lost means go away from the business, and whatever goes out an account of it is credited. As per the modern approach if loss of business increases account of such loss is credited in the hooks of account.

Question 7.
If rent is paid to the landlord, the landlord’s A/c should be debited.
Answer:
This statement is False.
Correct Statement: If rent is paid to the landlord, the Rent account should be debited.
Reasons: Rent paid is an expense and hence it is a nominal account. When rent is paid to the landlord, the rent account is affected and not the landlord’s account. Rent is an expense to a tenant who pays it and it is an income for the landlord. Such payment is not personally due to the landlord as there is no lending and borrowing of money between landlord and rent payer. As per the rule of nominal account, the rent account is debited because it is an expense. As cash goes out cash account is credited.

Question 8.
Book Keeping records monetary and non-monetary transactions.
Answer:
This statement is False.
Correct Statement: Book Keeping records only monetary transactions.
Reasons: According to the money measurement concept, in the books of accounts accountant records only those business transactions which are monetary or financial in nature and capable to be expressed in monetary terms. It means the qualitative and quantitative aspects which cannot be measured in terms of money are not recorded in the books of account personal or non-monetary transactions are not recorded, in the books of accounts e.g. giving lift from car to neighbour, drinking tea along with friends in the restaurant, etc. are not recorded in the books of account as these transactions are not monetary in nature.

Question 9.
Drawings made by the proprietor increase his capital.
Answer:
This statement is False.
Correct statement: Drawings made by the proprietor decreases his capital.
Reasons: Total amount of goods and services withdrawn by the proprietor from the business from time to time for personal use or family use is called drawings. Withdrawals made by a businessman for business purpose is not treated as drawings. Drawings are always adjusted or deducted from capital. Heavy withdrawals made by a businessman for self-use reduces capital in the business. If the businessman controls the drawings more funds are made available for the development of the business. Drawing made by the proprietor reduces his capital investment.

Question 10.
GST paid on the purchase of goods Input tax A/c should be debited.
Answer:
This statement is True.
Reasons: GST is abbreviated from Goods and Service Tax. GST is levied by the government on the purchases of Goods and Services at a specified rate. Since it is imposed on purchases of goods and services, it increases its cost. GST is added to the purchase price. Purchases are always debited and hence GST i.e. Input tax account is also debited along with purchases. In the case of sales of goods and services, the output tax account is credited.

5. Fill in the blanks.

Question 1.
The first book of original entry is the ___________
Answer:
Journal

Question 2.
The process of recording transaction into journal is called ___________
Answer:
Journalising

Question 3.
An explanation of the transaction recorded in the journal ___________
Answer:
Narration

Question 4.
___________ discount is not recorded in the books of accounts.
Answer:
Trade

Question 5.
___________ is concession allowed for bulk purchase of goods or for immediate payment.
Answer:
Discount

Question 6.
Every Journal Entry requires ___________
Answer:
Narration

Question 7.
___________ discount is always recorded in the books of accounts.
Answer:
Cash

Question 8.
___________ is the document on the basis of which the entry is recorded in the journal.
Answer:
Voucher

Question 9.
There are ___________ parties to a cheque.
Answer:
Three

Question 10.
The ___________ cheque is safer than other cheques as it cannot be encashed on the counter of the bank.
Answer:
Crossed.

6. Specimen and Proforma.

Question 1.
Prepare specimen of Tax Invoice.
Answer:

Question 2.
Prepare specimen of Receipt.
Answer:

Question 3.
Prepare specimen of the Crossed cheque.
Answer:

Question 4.
Prepare specimen of Cash voucher.
Answer:

7. Correct the following statements and rewrite the statements.

Question 1.
All business transactions are recorded in the Journal.
Answer:
Only monetary transactions are recorded in the Journal.

Question 2.
A cash discount is not recorded in the books of accounts.
Answer:
A cash discount is recorded in the books of accounts.

Question 3.
Journal is a book of Secondary entry.
Answer:
Journal is a book of Prime entry.

Question 4.
GST is imposed by the Government of India from 1st July 2018.
Answer:
GST is imposed by the Government of India from 1st July 2017.

Question 5.
The machinery purchased by the Proprietor decreases his capital.
Answer:
Machinery purchased by the proprietor increases his Capital.

8. Do you agree or disagree with the following statements.

Question 1.
Narration is required for every entry.
Answer:
Agree

Question 2.
GST stands for Goods and Sales Tax.
Answer:
Disagree

Question 3.
Trade discount is not recorded in the books of accounts.
Answer:
Agree

Question 4.
Wages paid for the installation of Machinery is debited to Wages Account.
Answer:
Disagree

Question 5.
The process of entering or recording the transactions in a Journal is called Journalising.
Answer:
Agree

9. Calculate the following:

Question 1.
Purchased Motor Car from Tata & Company worth ₹ 2,00,000 at 18% GST. Find out GST amount.
Solution:
Cost of the Motor Car = ₹ 2,00,000
GST @ 18% = 2,00,000 × \(\frac{18}{100}\) = ₹ 36,000
Net value of the Motor Car = ₹ 2,00,000 + ₹ 36,000 = ₹ 2,36,000

Question 2.
Paid Transport charges ₹ 10,000 @ 5% GST. Calculate CGST & SGST.
Solution:
Transport charges = ₹ 10,000 @ 5% GST.
CGST = Transport charges × 2.5%.
= 10,000 × \(\frac{2.5}{100}\)
= 10,000 × \(\frac{25}{1000}\)
= ₹ 250
SGST = Transport charges × 2.5%.
= 10,000 × \(\frac{2.5}{100}\)
= 10,000 × \(\frac{25}{1000}\)
= ₹ 250
Net value = 10,000 + 250 + 250 = ₹ 10,500.

Question 3.
Bought goods from Ranjan ₹ 10,000 @ 5% GST and 10% cash discount. Calculate cash discount.
Solution:
Cost of the goods bought = ₹ 10,000 @ 5% GST and 10% cash discount.
GST on Goods Purchased = Cost of goods × 5%.
= 10,000 × \(\frac{5}{100}\)
= ₹ 500.
Net value of Goods Purchased = 10,000 + 500 = ₹ 10,500
Cash discount = Net value × 10%.
= 10,500 × \(\frac{10}{100}\)
= ₹ 1,050.

Question 4.
Received cheque of ₹ 90,000 from Kiran in full settlement of his account ₹ 1,00,000/-. Calculate discount rate.
Solution:
Discount allowed to Kiran = Amount due – Amount received
= 1,00,000 – 90,000
= ₹ 10,000.
Rate of discount allowed to Kiran = \(\frac{100 \times \text { Total Discount allowed }}{\text { Amount on which discount allowed }}\)
= \(\frac{100 \times 10,000}{1,00,000}\)
= 10%

Question 5.
Sold goods of ₹ 1,00,000 at 10% Trade Discount and 10% cash discount to Ram and received 50% amount by cheque. Calculate the amount of cheque received.
Solution:
Trade Discount = Catalogue price × Rate of trade discount
= 1,00,000 × \(\frac{10}{100}\)
= ₹ 10,000
Net amount receivable = Catalogue price – Trade Discount
= 1,00,000 – 10,000
= ₹ 90,000
50% of net amount received.
∴ Amount receivable = 50% of 90,000
= \(\frac{50}{100}\) × 90,000
= ₹ 45,000
Cash discount allowed = 10% on ₹ 45,000
= \(\frac{10}{100}\) × 45,000
= ₹ 4,500
Amount of cheque received = 50% of total amount – Cash discount
= 45,000 – 4,500
= ₹ 40, 500
Amount received by cheque = ₹ 40,500.

10. Complete the following table.

Question 1.

Answer:
1. Drawings A/c
2. Sonali’s A/c
3. Bad debts A/c
4. Livestock A/c
5. Capital A/c

Practical Problems

Question 1.
Journalise the following transactions in the books of Anand General Merchants.
2019 April
1 Mr. Anand started the business with cash of ₹ 60,000.
5 Purchased goods for cash ₹ 30,000.
7 Sold goods of ₹ 10,000 to Suresh.
10 Purchased Furniture from Mr. Govind on credit ₹ 30,000.
15 Paid for Rent ₹ 3000 and paid by debit card.
21 Purchased goods from Urmila on credit ₹ 70,000.
27 Paid for Transport ₹ 1,000 to United Transport.
30 Paid to Urmila ₹ 20,000 on behalf of Sharmila.
Solution:
In the Journal of Anand General Merchants

Question 2.
Journalise the following transactions in the books of Gajanan.
2019 May
3 Purchased goods for ₹ 90,000 and amounts paid by Bank directly.
7 Sold goods to Satish on credit ₹ 30,000.
9 Paid for Postage ₹ 10,000.
12 Paid for Wages ₹ 15,000.
15 Received cheque of ₹ 30,000 from Satish.
21 Received Dividend ₹ 5000.
25 Purchased Laptop of ₹ 40,000 and paid by cheque.
28 Deposited cash ₹ 10,000 into State Bank of India.
31 Purchased goods for ₹ 40,000 and paid by RTGS.
Solution:
Journal of Gajanan

Question 3.
Journalise the following transactions in the books of Ashok General Stores.
2019 May
1 Received ₹ 5,000 from Ram on behalf of Bharat.
4 Purchased Goods for cash ₹ 55,000.
8 Paid for Salary ₹ 8,000.
12 Purchased goods from Ganesh ₹ 30,000 on credit.
17 Sold goods to Mrs. Neha ₹ 60,000 on credit.
20 Purchased Machinery of ₹ 80,000 @ 12% GST and amount paid by cheque.
25 Paid to SG & Sons by cheque ₹ 30,000.
28 Received Commission ₹ 10,000 from Ganesh.
30 Paid Rent ₹ 5000.
31 Purchased Shares of Atul Company Ltd. for ₹ 10,000 through Demat account.
Solution:
Journal of Ashok General Stores


Working Note:
Dated 20th May 2019:
Calculation of CGST and SGST on Machinery
Catalogue price of ₹ 80,000 @ 12%.
CGST i.e. Central Goods and Services Tax = 12% × \(\frac{1}{2}\) = 6%.
CGST = Price of Machinery × 6%.
= 80,000 × \(\frac{6}{100}\)
= ₹ 4,800.
SGST i.e. State Goods and Service Tax = 12% × \(\frac{1}{2}\) = 6%.
SGST = 80,000 × \(\frac{6}{100}\) = ₹ 4,800.

Question 4.
Journalise the following transactions in the books of Sanjay General Stores.
2019 June
1 Started business with cash ₹ 50,000, Bank ₹ 1,00,000, Goods worth ₹ 50,000.
5 Purchased goods from Mohan on credit ₹ 80,000 at 10% Trade Discount.
9 Sold goods to Urmila ₹ 30,000 at 5% Trade Discount.
12 Paid into Dena Bank ₹ 40,000.
15 Goods worth ₹ 5000 were distributed as a free samples.
22 Paid for Commission ₹ 5,000 to Anand.
24 Received ₹ 28,000 from Urmila in full settlement of her account by Debit Card.
29 Paid for Advertisement ₹ 9,000.
30 Purchased Laptop for ₹ 20,000 @ 28% GST and amount paid by NEFT.
Solution:
Journal of Sanjay General Stores

Working Note:
5th June 2019:
Calculation of Trade discount
Purchased goods for ₹ 80,000 @ 10% Trade discount
Trade discount = 80,000 × \(\frac{10}{100}\) = ₹ 8,000
Net Purchase Price = 80,000 – 8,000 = ₹ 72,000

24th June 2019:
Discount allowed to Urmila = Amount due – Amount received
= 28,500 – 28,000
= ₹ 500

30th June 2019:
Calculation of CGST and SGST
Price of Laptop = ₹ 20,000 @ 28% GST.
CGST = (Price of Laptop) × Rate of CGST
= 20,000 × \(\frac{14}{100}\)
= ₹ 2,800
SGST = (Price of Laptop) × Rate of SGST
= 20,000 × \(\frac{14}{100}\)
= ₹ 2,800

Question 5.
Journalise the following transactions in the books of Kunal Stores.
2018 August
1 Purchased goods of ₹ 90,000 at 10% Trade Discount and 10% Cash Discount from Rakesh and 1/3rd amount paid by cheque.
5 Opened current account in State Bank of India by depositing ₹ 60,000.
8 Cash purchases ₹ 85,000.
10 Goods sold on credit to Tushar ₹ 20,000 @ 10% Trade Discount.
12 Paid Salary ₹ 4,000.
16 Tushar returned goods of ₹ 250.
17 Goods taken by Kunal for his private use ₹ 2,000.
20 Purchased Laptop of ₹ 40,000 from Joshi Electronics @ 18% GST and paid by cheque.
22 Rent paid by cheque ₹ 15,000.
25 Purchased Motor car worth ₹ 2,00,000 for cash @ 18% GST and paid by Bank.
26 Goods distributed as free sample ₹ 4,000.
28 Purchased goods from Amit of ₹ 60,000 on credit.
30 Paid by ECS cash to Amit ₹ 58,500, who allowed us a discount of ₹ 1,500.
30 Sold goods ₹ 5,000 at a loss of ₹ 1,000
31 Sold goods for ₹ 20,000.
Solution:
Journal of Kunal Stores


Working Notes:
1. 2018 Aug. 1st:
Trade discount = 10% on Purchase catalogue price
= \(\frac{10}{100}\) × 90,000
= ₹ 9,000
Net Purchase price = 90,000 – 90,00 = ₹ 81,000
Amount paid = \(\frac{1}{3}\) × 81,000 = ₹ 27,000
Cash discount = 10% on 27,000
= \(\frac{10}{100}\) × 27,000
= ₹ 2700
Amount paid by cheque = 27,000 – 2700 = ₹ 24,300

2. Aug. 10th:
Net price of Goods sold to Tushar = 20,000 – 10% Trade discount
= 20,000 – \(\frac{10}{100}\) × 20,000
= 20,000 – 2,000
= ₹ 18,000

3. 20th Aug. 2018:
Calculation of GST
CGST = 9% on ₹ 40,000
= \(\frac{9}{100}\) × 40,000
= ₹ 3,600
SGST = 9% on ₹ 40,000
= \(\frac{9}{100}\) × 40,000
= ₹ 3,600

4. 25th Aug. 2018:
Calculation of GST
CGST = 9% on ₹ 2,00,000
= \(\frac{9}{100}\) × 2,00,000
= ₹ 18,000
SGST = 9% on ₹ 2,00,000
= \(\frac{9}{100}\) × 2,00,000
= ₹ 18,000

Question 6.
Journalise the following transactions in the books of Nina General Stores.
2018 Sept
1 Sold goods of ₹ 50,000 at 10% Trade Discount and 10% Cash Discount to Raj and received 50% by cheque and 20% by cash.
3 Bought goods worth ₹ 60,000 from Prashant at 7.5% Trade Discount and half amount paid by cash.
5 Returned goods worth ₹ 550 to Prashant.
7 Sold goods worth ₹ 90,000 to Ranvir on credit at 10% Trade Discount.
12 Received Commission ₹ 4,500.
15 Received cheque of ₹ 80,000 from Ranvir in full settlement of his account.
18 Purchased Computer worth ₹ 80,000 from Reliance Company by cheque at 28% GST.
22 Wages paid ₹ 13,000.
23 Paid for Life Insurance premium ₹ 17,000.
27 Sold goods worth ₹ 28,000 to Tushar who paid us ₹ 18,000 immediately
Solution:
Journal of Nina General Stores


Working Notes:
1. 1st Sept. 2018:
Selling (invoice) price = ₹ 50,000
Trade Discount = 10% on ₹ 50,000
= \(\frac{10}{100}\) × 50,000
= ₹ 5,000
Net selling price = 50,000 – 5,000 = ₹ 45,000
50% of the Net selling price received by cheque
Amount of cheque received = 50% of Net selling price – Cash discount
= \(\frac{50}{100}\) × 45,000 – 10% on ₹ 22,500
= 22,500 – 2,250
= ₹ 20,250
20% of Net selling price received by cash.
Net amount of cash received = 20% of Net selling price – Cash discount
= \(\frac{20}{100}\) × 45,000 – Cash discount
= 9,000 – \(\frac{10}{100}\) × 9000
= 9,000 – 900
= ₹ 8,100
30% of Net Selling price is not received
∴ Amount not received = \(\frac{30}{100}\) × 45,000 = ₹ 13,500
Total of cash discount = 2,250 + 900 = ₹ 3,150

2. 3rd Sept. 18:
Trade discount = 7.5% on 60,000
= \(\frac{7.5}{100}\) × 60,000
= ₹ 4,500
Net Purchase price = 60,000 – 4,500 = ₹ 55,500

3. 18th Sept. 18:
Calculation of GST
CGST = (Purchase Price of Computer) × 14%
= 80,000 × \(\frac{14}{100}\)
= ₹ 11,200
SGST = 80,000 × \(\frac{14}{100}\) = ₹ 11,200
Net Purchase price of Computer = 80,000 + 11,200 + 11,200 = ₹ 1,02,400

Question 7.
Journalise the following transactions in the books of Varun
2018 Oct.
1 Purchased Machinery of ₹ 95,000 and paid ₹ 5,000 for freight.
3 Purchased goods for ₹ 1,50,000 and amount paid by Bank.
6 Purchased Laptop from Nagesh & Co. worth ₹ 1,80,000 @ 18% GST.
10 Paid into Bank of Baroda ₹ 70,000.
12 Paid for Rent ₹ 4,000 and Commission ₹ 3,000.
15 Bought goods from Tushar Company Ltd. ₹ 1,20,000 at 12% GST and paid 1/2 amount by RTGS.
16 Cash purchases ₹ 50,000 amount paid by cheque.
20 Invoiced goods to Satish ₹ 80,000 at 12% GST and the amount received by cheque.
25 Paid for Telephone charges ₹ 90,000
27 Mrs. Varsha bought goods from us ₹ 90,000 at a 12% Trade Discount.
28 Purchased goods from Abhijeet & Sons ₹ 1,50,000 at 18% GST.
30 Paid to Abhijeet & Sons and received 10% Cash Discount by cheque.
31 Paid for Advertisement ₹ 8,000 and Brokerage ₹ 12,000.
Solution:
Journal of Varun

Question 8.
Journalise the following transactions in the books of Dhoni Auto Car Centre
2018 Nov
1 Sold 1,000 shares for ₹ 100 each and paid brokerage @ 1% and the amount credited to our account.
4 Purchased goods from Ashish & Co. of ₹ 2,00,000.
6 Sold goods to Virat & Co. ₹ 1,50,000.
8 Paid for Advertisement ₹ 30,000 to Times of India.
10 Paid for Printing and Stationery ₹ 7,000.
12 Purchased goods from Prakash & Co. ₹ 1,50,000 @ 18% GST.
15 Paid for Transport charges ₹ 10,000 @12% GST.
20 Purchased goods from Vikram & Sons ₹ 1,20,000 @ 18% GST and paid half the amount immediately.
25 Paid to Prakash & Co. less 10% discount.
30 Invoiced Goods to Sanjay ₹ 60,000.
31 Sanjay returned goods of ₹ 10,000.
31 Sanjay became insolvent and recovered only 50 paise in a rupee as a final settlement from him.
Solution:
Journal of Dhoni Auto Car Centre


Working Notes:
1. 2018, Nov. 1:
Amount credited to Bank A/c = Sales proceed – Brokerage @ 1%
= 1,000 × 100 – \(\frac{1}{100}\) × 1,000 × 100
= 1,00,00 – 1,000
= ₹ 99,000

2. Nov. 12:
Net Purchase price = Purchase price + 9% CGST + 9% SGST
= 1,50,000 + \(\frac{9}{100}\) × 1,50,000 + \(\frac{9}{100}\) × 1,50,000
= 1,50,000 + 13,500 + 13,500
= ₹ 1,77,000

3. Nov. 20:
Net Purchase price = Purchase price + 9% CGST + 9% SGST
= 1,20,000 + \(\frac{9}{100}\) × 1,20,000 + \(\frac{9}{100}\) × 1,20,000
= 1,20,000 + 10,800 + 10,800
= ₹ 1,41,600
Amount paid = \(\frac{1}{2}\) of 1,41,600 = ₹ 70,800 and credit purchased = ₹ 70,800.

4. Nov. 25:
Cash discount = Amount due to Prakash & Co × 10%
= 1,77,000 × \(\frac{10}{100}\)
= ₹ 17,700

5. Bad debts = Amount due from Sanjay – Amount recovered
= 50,000 – 50% of 50,000
= 50,000 – 25,000
= ₹ 25,000

Question 9.
Journalise the following transactions in the books of Hero Enterprises.
Balance on 1st April 2019
Cash at Bank ₹ 80,000, Sundry Debtors Ram ₹ 20,000, Rahim ₹ 30,000, Stock ₹ 55,000, Building ₹ 1,50,000.
Credit Balances on 1st April 2019
Sundry Creditors Swapna ₹ 20,000, Rohit ₹ 30,000, Bank Loan ₹ 50,000.
2019 April
1 Purchased goods worth ₹ 1,50,000 from Prashant & Co., less 10% Trade Discount.
4 Sold goods to Mr. Amit Sharma ₹ 70,000 at 10% Trade Discount on credit.
9 Purchased goods for cash ₹ 2,00,000 @ 28% GST amount paid by NEFT.
12 Sold Goods to Aditya Ray of ₹ 90,000 @ 28% GST.
15 Paid for Rent ₹ 5000 and Salary ₹ 18,000.
17 Paid for Proprietor’s house Rent ₹ 12,000.
20 Sold half of the goods purchased on 9th April at 20% Profit and 28% GST.
25 Paid for Wages ₹ 1,500.
25 Purchased Furniture ₹ 1,80,000 @ 12% GST and amount paid by RTGS.
28 Sold an old Furniture of ₹ 20,000 for ₹ 12,000.
30 Sold shares of ₹ 10,000 for ₹ 15,000 and the amount received by cheque.
Solution:
Journal of Hero Enterprises


Working Notes:
1. 2019 April, 20:
Cost of Goods sold = \(\frac{1}{2}\) of purchases on 9th April, 2019
= \(\frac{1}{2}\) × 2,00,000
= ₹ 1,00,000
Selling price of Goods sold = \(\frac{120}{100}\) × ₹ 1,00,000 = ₹ 1,20,000

2. April, 28:
Loss on sale of furniture = Cost of furniture – Selling price
= 20,000 -12,000
= ₹ 8,000

3. April, 30:
Profit on sale of shares = Selling price – Cost of shares
= 15,000 – 10,000
= ₹ 5,000

Question 10.
Journalise the following transactions in the books of Harbhajan & Co. for the month of 1st April 2019.
Balance on 1st April 2019
Cash in hand ₹ 35,000, Cash at Bank ₹ 25,000, Furniture ₹ 1,50,000, Laptop ₹ 1,00,000
Debtors: Sangita ₹ 40,000, Viru ₹ 30,000
Creditors: Ganesh ₹ 10,000, Garima ₹ 40,000, Bank loan ₹ 50,000.
2019 April
1 Purchased goods from Ajay Kumar worth ₹ 2,50,000 at 10% Trade discount @ 18% GST and paid 1/4 amount in Cash.
5 Purchased shares of Infosys Company ₹ 50,000 and ₹ 500 paid as a brokerage for Demat A/c.
8 Sold goods to Raj worth ₹ 90,000 at 10% Trade discount and 1/3 amount received by cash and 5% cash discount is allowed.
12 Paid house rent of proprietor ₹ 9,000 and office rent ₹ 5,000.
15 Purchased Laptop of ₹ 60,000 @ 18% GST and paid amount by cheque.
20 Paid transport charges on the above Laptop ₹ 1,000 @ 18% GST.
25 Paid Commission ₹ 20,000 to Ram.
26 Paid Telephone Charges ₹ 1,000.
28 Transferred from private Bank A/c of proprietor to business Bank A/c ₹ 40,000.
30 Bought goods for ₹ 1,50,000 @ 12% as GST by cheque.
30 Exchanged our Furniture of ₹ 30,000 against a Motor car of the same value for business.
Solution:
Journal of Harbhajan & Co.


Working Notes:
1. 8 April 2019:
Net selling price = Selling price – 10% Trade discount
= 90,000 – 10% on 90,000
= 90,000 – 9,000
= ₹ 81,000
Cash received = \(\frac{1}{3}\) of 81,000
= \(\frac{1}{3}\) × 81,000
= ₹ 27,000
Net cash received = 27,000 – Cash discount @ 5%
= 27,000 – \(\frac{5}{100}\) × 27,000
= 27,000 – 1,350
= ₹ 25, 650
Credit sale = \(\frac{2}{3}\) of 81,000
= \(\frac{2}{3}\) × 81,000
= ₹ 54,000

Balbharti Maharashtra State Board Bookkeeping and Accountancy 11th Solutions Chapter 2 Meaning and Fundamentals of Double Entry Book-Keeping Textbook Exercise Questions and Answers.

Maharashtra State Board Bookkeeping and Accountancy 11th Solutions Chapter 2 Meaning and Fundamentals of Double Entry Book-Keeping

1. Answer in one sentence only.

Question 1.
What is a Double Entry System?
Answer:
A system of accounting is which double or two-fold effects of every business transaction are recorded systematically in the books of accounts is called a double-entry book-keeping system.

Question 2.
What is an Account?
Answer:
The summarised record of all transactions related to a person, an institution, an income, and expenditure, an asset, a liability, a profit, gain as per the accounting principles is called an account.

Question 3.
State the meaning of the Single Entry System.
Answer:
A book-keeping system in which only one aspect of every business transaction is considered and systematically recorded in the books of accounts and other aspects are completely ignored is called Single Entry System.

Question 4.
What is Personal Account?
Answer:
Account of person or account relating to a person with whom a business keeps dealings is called Personal Account.
e.g. Kishor’s A/c, Bank of India’s A/c.

Question 5.
State the rules of Nominal Account.
Answer:
The rules of Nominal Account state that Debit all expenses or loses and Credit all incomes and gains.

Question 6.
Give two examples of intangible assets.
Answer:
Goodwill and Patents or Trademark are two examples of intangible assets.

Question 7.
State the meaning of Real Account.
Answer:
Account of tangible as well as intangible property or anything owned and possessed by the business is called real account, e.g. Cash A/c.

Question 8.
Give two examples of income and gains.
Answer:
Interest received, Discount earned, sales, etc. are examples of income and gains.

Question 9.
State the rule for Personal Account.
Answer:
The rule of personal account states that Debit the receiver and Credit the giver.

Question 10.
How many methods of recording accounting information are there?
Answer:
The methods of recording accounting information are broadly classified as (i) Indian System and (ii) English System. It is sub-classified as (a) a Single Entry System and (b) a Double Entry System.

2. Write one word/term or phrase which can substitute each of the following statements.

Question 1.
Method of Accounting which records both aspects of the transaction.
Answer:
Double Entry System

Question 2.
The right-hand side of an account.
Answer:
Credit side

Question 3.
Name of the account which is debited when proprietor uses business money for personal use.
Answer:
Drawings A/c

Question 4.
Accounts of Assets and Properties.
Answer:
Real A/c

Question 5.
Accounts of Expenses and Losses and Incomes and Gains.
Answer:
Nominal A/c

Question 6.
The left-hand side of an account.
Answer:
Debit side

Question 7.
The Assets which cannot be seen, touched or felt.
Answer:
Intangible Asset

Question 8.
A person who invented the Double Entry System.
Answer:
Luca D. Bargo Pacioli

Question 9.
Incomplete system of recording business transactions.
Answer:
Single Entry System

Question 10.
A scientific system of recording business transactions.
Answer:
Double Entry system

3. Select the most appropriate alternatives from those given below and rewrite the statements.

Question 1.
International Accounting day is observed on _______________
(a) 10th November
(b) 12th November
(c) 10th December
(d) 15th December
Answer:
(a) 10th November

Question 2.
Conventional system of accounting is _______________
(a) English entry system
(b) Double entry system
(c) Indian System
(d) None of these
Answer:
(c) Indian System

Question 3.
Every debit has corresponding _______________
(a) Debit
(b) Credit
(c) Right hand side
(d) None of these
Answer:
(b) Credit

Question 4.
Radha’s Account is a type of _______________ account.
(a) Nominal
(b) Personal
(c) Real
(d) Expenses
Answer:
(b) Personal

Question 5.
Machinery Account is _______________ account.
(a) Nominal
(b) Income
(c) Personal
(d) Real
Answer:
(d) Real

Question 6.
Goodwill is _______________ asset.
(a) Tangible
(b) Current
(c) an intangible
(d) None of these
Answer:
(c) an intangible

Question 7.
Prepaid expenses is _______________ account.
(a) Real
(b) Personal
(c) Nominal
(d) Income
Answer:
(b) Personal

Question 8.
Debit the receiver, Credit the _______________
(a) Goes out
(b) Giver
(c) Income and gains
(d) Comes in
Answer:
(b) Giver

Question 9.
Debit what comes in, Credit what _______________
(a) Giver
(b) Expenses and losses
(c) Goes out
(d) Income and gains
Answer:
(c) Goes out

Question 10.
Debit all _______________ and Credit all income and gains.
(a) Giver
(b) Expenses and losses
(c) Goes out
(d) None of these
Answer:
(b) Expenses and Losses

4. State whether the following statements are True or False with reasons.

Question 1.
Outstanding expense is a nominal account.
Answer:
This statement is False.
Outstanding expenses are personal accounts. It is a representative personal account. Expenses are payable to some person.

Question 2.
A capital account is a real account.
Answer:
This statement is False.
Capital is a personal account. Amount invested in the business by the proprietor is capital. A proprietor is a natural person.

Question 3.
Every debit has equal and corresponding credit.
Answer:
This statement is True.
Under the Double Entry System, the two-fold effects of each transaction are recorded. Under this system one account is to be debited and another is to be credited with an equal amount.

Question 4.
The discount received is a nominal account.
Answer:
This statement is True.
Discount received in an income for the business. All expenses and income come under the Nominal account.

Question 5.
The drawings account is a nominal account.
Answer:
This statement is False.
The drawing is a Personal account. Drawing means cash on goods withdrawn by the proprietor for personal use. As the proprietor is a Personal account his drawings are also a Personal account.

Question 6.
Outstanding salary is a nominal account.
Answer:
This statement is False.
Outstanding salary is Personal account. Salary is the amount payable to staff. As he is a person, the amount payable to him is a personal account. It is a Representative Personal account.

Question 7.
A loan account is a personal account.
Answer:
This statement is True.
The loan is taken from a person or bank and they are persons either natural or person or artificial persons.

Question 8.
A goodwill account is a real account.
Answer:
This statement is True.
All properties/assets come under real accounts. Goodwill is an intangible asset so goodwill is a Real account.

Question 9.
A discount account is a nominal account.
Answer:
This statement is False.
Trade discount is a noncash transaction it is not recorded in the books of account so it doesn’t fall under any account.

Question 10.
Personal transactions of proprietors are recorded in the books of account of business.
Answer:
This statement is False.
Personal transactions of proprietors are not recorded in the books of account of business. Only business transactions are recorded in the books of account of business as businesses have a separate entity.

Question 11.
A motor car account is a Real Account.
Answer:
This statement is True.
All properties and assets fall under real accounts. Motor car is property so it is a real account.

Question 12.
The rule of a Nominal Account is to Debit the receiver and Credit the giver.
Answer:
This statement is False.
The rule of the Nominal account is to debit all expenses and losses Credit all incomes and gains.

Question 13.
A bank loan account is a Nominal account.
Answer:
This statement is False.
The bank account is a Personal account. It is a representative person.

Question 14.
Assets = Capital + Liabilities
Answer:
This statement is True.
Total assets are always equal to total liabilities. Total liabilities include capital also.
So Assets = Capital + Liabilities.

Question 15.
A Trademark account is a personal account.
Answer:
This statement is False.
Trademark is a real account. All tangible and intangible assets are properties and they fall under real account.

5. Fill in the blanks.

Question 1.
Increase in asset is debited and decrease in asset is _______________
Answer:
Credited

Question 2.
Assets = Liabilities + _______________
Answer:
Capital

Question 3.
Increase in capital is credited and decrease in capital is _______________
Answer:
Debited

Question 4.
Scientific and complete system of recording is known as _______________
Answer:
Double Entry System

Question 5.
Debit all expenses and losses, Credit all _______________
Answer:
Income and Gains

Question 6.
Land and Building account is _______________ account.
Answer:
Real

Question 7.
Cash Book and Personal Accounts are only maintained under _______________ system.
Answer:
Single Entry

Question 8.
Debit what comes in and credit what goes out is the rule of _______________ account.
Answer:
Real

Question 9.
Travelling expenses account is _______________ type of Account.
Answer:
Nominal

Question 10.
Every transaction has _______________ effect.
Answer:
Two Fold

Question 11.
_______________ accounts are accounts of properties and assets.
Answer:
Real

Question 12.
Laptop account is a _______________ account.
Answer:
Real

6. Classify the following accounts under the types of Personal, Real, and Nominal accounts.

Question 1.
Mr. Rohit’s capital A/c
Answer:
Personal Account

Question 2.
Loose Tools A/c
Answer:
Real Account

Question 3.
Drawing A/c
Answer:
Personal Account

Question 4.
Cartage A/c
Answer:
Nominal Account

Question 5.
Prepaid Rent A/c
Answer:
Personal Account

Question 6.
Copyright A/c
Answer:
Real Account

Question 7.
Patent A/c
Answer:
Real Account

Question 8.
Outstanding Income A/c
Answer:
Personal Account

Question 9.
Prepaid Expenses A/c
Answer:
Personal Account

Question 10.
Commission Received A/c
Answer:
Nominal Account

Question 11.
Freight A/c
Answer:
Nominal Account

Question 12.
Plant and Machinery A/c
Answer:
Real Account

Question 13.
Sundry Income A/c
Answer:
Nominal Account

Question 14.
Live Stock A/c
Answer:
Real Account

Question 15.
Goods distributed as free sample A/c
Answer:
Nominal Account

Question 16.
Radhika’s A/c
Answer:
Personal Account

Question 17.
Outstanding Wages A/c
Answer:
Personal Account

Question 18.
Loss on Sale of Furniture A/c
Answer:
Nominal Account

Question 19.
Bank of Maharashtra A/c
Answer:
Personal Account

Question 20.
Loan A/c
Answer:
Personal Account

Question 21.
Computer A/c
Answer:
Real Account

Question 22.
Legal Expenses A/c
Answer:
Nominal Account

Question 23.
Fixed Deposit A/c
Answer:
Real Account

Question 24.
Income Receivable A/c
Answer:
Personal Account

Question 25.
Audit Fees A/c
Answer:
Nominal Account

Question 26.
Trademark A/c
Answer:
Real Account

Question 27.
Loss by fire A/c
Answer:
Nominal Account

Question 28.
Motor Car A/c
Answer:
Real Account

Question 29.
Income tax A/c
Answer:
Personal Account

Question 30.
GST A/c (Goods and Service Tax)
Answer:
Nominal Account

Question 31.
Siddhivinayak Trust A/c
Answer:
Personal Account

Question 32.
Office Equipment A/c
Answer:
Real Account

Question 33.
The stock of Stationery A/c
Answer:
Real Account

Question 34.
Indian Railways A/c
Answer:
Personal Account

Question 35.
Income Received in Advance A/c
Answer:
Personal Account

Question 36.
Dividend on Investment Advance A/c
Answer:
Nominal Account

Question 37.
Discount A/c
Answer:
Nominal Account

Question 38.
Raj & company A/c
Answer:
Personal Account

Question 39.
Repairs A/c
Answer:
Nominal Account

Question 40.
Royalty A/c
Answer:
Nominal Account

7. Complete the following Accounting equation table.

Question 1.

Answer:

Transactions	Assets (₹)	=	Liabilities (₹)	+	Capital (₹)
1. Started business with Cash ₹ 50,000	50,000	=	00	+	50,000
2. Purchased goods of ₹ 10,000	50,000 (+) 10,000 (-) 10,000	=	00	+	50,000
3. Goods stolen ₹ 1,000	50,000 (-) 1,000	=	00	+	50,000 (-) 1,000
4. Sold goods for Cash ₹ 5,000	49,000 (+) 5,000 (-) 5,000	=	00	+	49,000
5. Loan taken from Bank ₹ 7,000	49,000 (+) 7,000	=	00 7,000	+	49,000
Total	56,000	=	7,000	+	49,000

8. Give necessary transactions for the following effect of increase and decrease in Assets, Capital, and Liabilities.

Question 1.

Answer:

1.	Sold goods for Cash ₹ 10,000	Increase in Assets Decrease in Assets
2.	Goods costing ₹ 12,000 Sold for ₹ 15,000	Increase in Capital Decrease in Assets
3.	Paid cash ₹ 8,500 to our creditor Mr. Kishor	Decrease in Liabilities Decrease in Assets
4.	Goods worth ₹ 7,000 stolen from Godown	Decrease in Assets Decrease in Capital

Practical Problems

Question 1.
Prepare a chart showing Analysis of the following transactions in a Tabular form according to the Traditional Approach:
1. Rajasaheb started the business with cash of ₹ 85,000.
2. Goods Purchased for cash ₹ 5,000.
3. Sold goods on credit worth ₹ 6,000 to Ramesh.
4. Cash deposited into Bank of Maharashtra ₹ 12,000.
5. Interest received ₹ 700 from Radhika.
6. Paid Rent ₹ 2,000 to the landlord.
7. Bought goods on credit from Birajmohan ₹ 7,000.
8. Withdrew cash from bank ₹ 1,000 for office use.
9. Purchased computer ₹ 9,000 for cash.
10. Paid Mobile bill (office) ₹ 500.
11. Sold old Mobile ₹ 2,000.
12. Received Rent ₹ 1,000 from the tenant.
Solution:
Table showing analysis of the transactions is given below (Traditional Approach)

Question 2.
Prepare Chart showing Analysis of the following transaction in a Tabular form according to Modern Approach.
1. Mr. Meghraj started the business with cash of ₹ 30,000.
2. Deposited cash into Bank of India ₹ 2,000.
3. Withdrew cash ₹ 1,000 for personal use.
4. Purchased goods on credit from Nilesh ₹ 2,000.
5. Cash purchases ₹ 3,000.
6. Paid Wages ₹ 400.
7. Purchased a chair for office use ₹ 3,200.
8. Sold goods to Mohan worth ₹ 1,200.
9. Withdrew Cash for Office use ₹ 3,000.
10. Sold old furniture ₹ 9,000.
11. Received Dividend of ₹ 1,000.
12. Paid for Printing bill book ₹ 200.
Solution:
Analysis of transactions by applying rules of Debit and Credit (Modern Approach)

Question 3.
Give the accounting equation for the following transactions:
1. Mr. Vaibhav started the business with Cash of ₹ 1,00,000.
2. Purchased goods on credit from Rita Stores ₹ 9,000.
3. Purchased Laptop for office use ₹ 10,000.
4. Sold goods to Rina on credit ₹ 12,000.
5. Received Interest ₹ 2,500.
6. Paid Telephone bill ₹ 1,300.
Solution:
Table showing Accounting equations for the transactions.

Question 4.
Give the accounting equation for the following transactions.
1. Mr. Swaraj commenced business with a Bank balance of ₹ 1,10,000.
2. Purchased Furniture on credit from S.M Furniture Mart ₹ 25,000.
3. Bought goods on credit from Yuvraj ₹ 15,000.
4. Purchased Machinery ₹ 10,000.
5. Paid Electricity bill ₹ 3,500.
6. Goods destroyed by fire ₹ 1,500.
Solution:
Table showing equation for the transactions.

Question 5.
Show accounting equation for the following transactions:
1. Rohit started the business with cash of ₹ 50,000.
2. Bought goods on credit from Manoj ₹ 6,000.
3. Cash purchases ₹ 5,000.
4. Paid wages ₹ 3,000 to Casual labour.
5. Sold goods to Santosh ₹ 7,000 on credit.
6. Received Commission ₹ 1,000 from Vaishali.
Solution:

Balbharti Maharashtra State Board Class 11 Political Science Solutions Chapter 3 Equality and Justice Textbook Exercise Questions and Answers.

Maharashtra State Board Class 11 Political Science Solutions Chapter 3 Equality and Justice

1A. Choose the correct alternative and complete the following statements.

Question 1.
The base of political equality is __________ (democracy, dictatorship, military rule, monarchy)
Answer:
democracy

Question 2.
John Rawls was an advocate of __________ justice. (distributive, political, economic, gender-based)
Answer:
distributive

1B. State the appropriate concept for the given statement.

Question 1.
The principle of equality states that each one should get an opportunity for the development of their individual personality.
Answer:
Equality of opportunity

Question 2.
Type of equality which says that every citizen has an equal right to participate in affairs of the State.
Answer:
Political equality

Question 3.
Absence of economic exploitation.
Answer:
Economic equality

1C. Complete the following sentence using appropriate reason.

Question 1.
In India, laws were made regarding the abolition of untouchability. Because
(a) untouchability is a political concept
(b) untouchability is a legal concept
(c) social inequality can be controlled by State legislation
Answer:
(c) social inequality can be controlled by State legislation

2. Complete the concept map/maps.

Question 1.

Answer:

3. State whether the following statements are true or false with reasons.

Question 1.
Democracy denies equality.
Answer:
This statement is False.

• A democratic government is based on the pillars of liberty, equality, justice, and fraternity.
• Equality signifies equality of opportunity, political participation, and equal protection of the law which can be ensured only in a democracy.

Question 2.
Equality is a political goal.
Answer:
This statement is True.

• Equality signifies that all human beings have an equal worth irrespective of their race, religion, caste, etc. It, however, does not mean uniformity.
• In modern times, equality includes aspects like tolerance and empathy i.e., a moral and collective dimension. It is also the basis of liberty and justice and is thus considered a political goal.

Question 3.
Social democracy is the foundation of political democracy.
Answer:
This statement is True.

• Social democracy means that there is equality i.e., no distinction among individuals merely on basis of ethnicity, creed, gender, etc. It ensures the dignity of the individual.
• Political democracy is expressed in political rights such as the right to vote, to criticize the government, etc. In the absence of social democratic political democracy will be less worthwhile.

4. Explain the co-relation between the following.

Question 1.
Equality and justice.
Answer:
Equality refers to equal rights and opportunities for all persons irrespective of their race, creed, gender, etc. It means no person or group will be discriminated against socially, economically, or politically. Similarly, no person or group will have special privileges that are denied to the vast majority in society.

Justice refers to that state of affairs in which every individual gets exactly those burdens and benefits that are due to him. It refers to the absence of socio-economic, political, and legal injustices.

In the absence of equality, there will be a denial of justice and the progress of society will be hindered. Justice aims at the reconciliation of individual rights and larger social interests.

Question 2.
Legal Justice and Social Justice
Answer:
Legal justice is the application of the abstract concept of justice through the implementation of the law. Justice is a precondition to the law as, without it, the law may become an instrument of tyranny and suppression. Austin considers law as a means to suppress injustice as well as to establish justice. Legal justice signifies an independent and impartial judiciary that observes specific rules for judicial proceedings. Any accused should be charged keeping in mind his/her human rights.

Social justice is both reformative and distributive. It aims at a revision of the social order by doing away with socio-economic evils for e.g. to eradicate untouchability, there is Article 17 of the constitution as well as laws passed by Parliament.

Procedural justice demands equality before the law as well as correct interpretation and application of the law. Social justice is also reformative i.e., equitable distribution of goods and services so that underprivileged sections can get an adequate share in this distribution.

5. Express your opinion of the following.

Question 1.
Casteism is a barrier to social equality.
Answer:
The caste system is one of the basic features of Indian society. It implies divisions in society based merely on one’s birth into a particular section of society. There was a caste hierarchy in which the upper castes enjoyed privileges that were denied to the lower castes. Even, within the four main Chaturvaranas, hierarchies began to develop.

Casteism began to become a social evil, as it resulted in untouchability as well as the exploitation and segregation of lower castes. They were denied equal opportunities to have socio-economic and political rights. Casteism did not permit upward mobility in the caste hierarchy due to marriage or achievement. The intermingling of castes was prohibited. Lower castes were often discriminated against in educational, political, and employment facilities. In some cases, they were denied access to public places like water bodies, hospitals, etc.

Social equality means that there has to be no favouring of or discrimination against any person/group on irrelevant aspects like caste and creed. It means that the dignity and intrinsic worth of every person must be recognized. Thus, the rigid hierarchies and discrimination perpetuated by casteism hinder social equality.

6. Answer the following.

Question 1.
Explain the Indian concept of Justice.
Answer:
There exist different kinds of inequalities in India, such as those created through the caste system, through the patriarchal system, etc. Dr. Babasaheb Ambedkar argued that justice would be achieved when the structure and values associated with these systems undergo a change. He also related the concept of justice to the concept of the distribution of resources. The Constitution of India ensures justice through both, procedural justice and social justice. This can be achieved through the educational and economic development of the backward classes.

Justice is implemented through the following policies:

• The policy of reservation.
• Granting of scholarships, grants, loans, health services, etc. for weaker sections of the society.
• Eradication of unjust social and economic practices which exploit the backward classes.

Balbharti Maharashtra State Board Class 11 Political Science Solutions Chapter 2 Liberty and Rights Textbook Exercise Questions and Answers.

Maharashtra State Board Class 11 Political Science Solutions Chapter 2 Liberty and Rights

1A. Choose the correct alternative and complete the following statements.

Question 1.
The book, ‘On Liberty’ was written by ___________ (Robert Nozick, Thomas Hobbes, J. S. Mill, Isaiah Berlin)
Answer:
J. S. Mill

Question 2.
The concept of Swaraj was spelled out by ___________ (Mahatma Gandhi, Mahatma Phule, Dr. Ambedkar, Dr. Rajendra Prasad)
Answer:
Mahatma Gandhi

1B. Complete the following sentence by using appropriate reason.

Question 1.
According to Jeremy Bentham, the State should not bring any obstruction, in liberty because –
(a) State does not give liberty.
(b) the individual knows how to protect his own interests.
(c) liberty is a hurdle-less situation.
Answer:
(b) the individual knows how to protect his own interests.

1C. State the appropriate concept for the given statement.

Question 1.
Fundamental right introduced in Constitution of India by 86th Amendment.
Answer:
Right to education

Question 2.
Rights-based on the conscience of the individual and the community.
Answer:
Moral rights

2. Complete the concept map.

Question 1.

Answer:

3. State whether the following statements are true or false with reasons.

Question 1.
Legal rights are not universal.
Answer:
This statement is True.

• Legal rights include political and civil rights which are granted by the State to the people. Legal rights are codified in law.
• Different countries grant different rights to their people. Hence, unlike natural rights, legal rights are not universal.

4. Explain the co-relation between the following.

Question 1.
Concept of Liberty by Thomas Hobbes and John Locke (Positive liberty and Negative liberty).
Answer:
Positive liberty and Negative liberty are two aspects of liberty that have their origin in liberalism. Negative liberty emerged from classical and neoclassical liberalism and finds expression in the views of thinkers like Jeremy Bentham, John Stuart Mill, Robert Nozick, Friedrich Hayek, and Isaiah Berlin.

Negative liberty opposes all restraints on liberty i.e., the State should not interfere in the social, economic life of the individual. It opposes any coercion, interference, or force on part of the State. The base negative aspect of liberty is the freedom of thought. Bentham argues that every person knows how to protect their own interest and hence no obstruction should be brought by the State.

John Stuart Mill suggests that negative liberty should be rejected only if it adversely impacts society. Hayek described liberty as a hurdle-less situation while Nozick suggested that the individual should be free from social, economic, and State restrictions. Berlin explains that negative liberty is opposition to restraints on the choice of alternatives.

The positive aspect of liberty as advocated by Jean-Jacques Rousseau and Herbert Marcuse emerged from modern liberalism. It states that liberty affects equality and justice. The law guides the individual towards the enrichment of their personality. Rousseau advocated the idea of State control over the individual since the State is a sovereign power that represents the ‘General Will’. Similarly, Marcuse advocates State interference and collective control as essential in community life.
We can conclude in the two statements of Isaiah Berlin.

• The negative aspect of liberty – ‘I am a slave to no man’.
• The positive aspect of liberty – ‘I am my own master’.

Question 2.
Natural rights and Legal rights.
Answer:
According to Harold Laski, ‘Rights are those conditions of social life without which no man can seek, in general, to be himself at his best.

Rights may be classified as natural rights, moral rights or legal (civil-political) rights.
Natural Rights e.g., the right to life, are parts of human nature and reason. They are not dependent on the laws of any government or the customs of any culture. They are universal and inalienable. They are considered beyond the authority of any government or international body to dismiss. The idea of human rights is closely related to that of natural rights. In the United States Declaration of Independence, natural rights mentioned are ‘Life, Liberty, and pursuit of Happiness. Our natural rights as human beings include being treated justly regardless of race, religion, gender, region, etc.

John Locke and Thomas Hobbes strongly advocated natural rights. Natural rights are important because without them we would have no claim to freedom. Legal rights refer to rights according to law. These rights are granted by the State to the people and exist differently in different countries. They are justiciable and codified in law. Such rights are neither universal nor inalienable. Legal rights include civil rights and political rights.

5. Answer the following questions.

Question 1.
Explain Mahatma Gandhi’s idea of liberty
Answer:
Mahatma Gandhi accepted the concept of Swaraj as liberty. He spelled this out in his work, ‘Hind Swaraj’. The term Swaraj implies a combination of two ideas: Self (Swa) and Rule (Raj). Thus Swaraj means Self-Rule. Gandhiji’s concept of Swaraj was comprehensive. He did not accept Swaraj only as freedom from British rule but also as freedom from western cultural domination. Swaraj would mean freedom from the trampling of humanitarian values. This concept gives more importance to self-governance, self-discipline, and human values.

Question 2.
Discuss the concept of Human Rights.
Answer:
Human Rights are those rights that we are entitled to simply because we are human beings. Henry Thoreau first described natural rights as human rights. These are basic rights of people anywhere in the world to be free from exploitation, injustice, and want, to lead a dignified existence, and to develop to the fullest extent. The U.N.O adopted the Universal Declaration of Human Rights (U.D.H.R) on 10th December 1948. These rights are dynamic i.e., they develop with changing times. U.D.H.R expresses belief in the liberty and equality of human beings and promotes the culture of peace and cooperation.

Human rights can be classified as

• Civil and Political rights – These are liberty-oriented rights like the right to freedom of thought, right to vote, etc
• Social, Cultural, and Economic rights – These include the right to social justice, the right to work, etc.
• Developmental rights – These are linked to the concept of fraternity e.g., the right to a healthy environment, right to information.

The implementation of human rights requires favorable political, socio-economic conditions in the state. In the absence of such, these rights may be violated or denied as happens in the case of women, children, displaced persons, minorities, etc.

Question 3.
Explain Isaiah Berlin’s concept of Liberty.
Answer:
Isaiah Berlin in his famous essay, ‘Two Concepts of Liberty’, discussed Negative and Positive Liberty. He believed that liberty is unrestrained. According to Isaiah Berlin, freedom of action is negative liberty. As per this principle, the opportunity to act is important while the action itself is secondary.

According to him, the impact of the action is not considered important and hence it is not measured. Therefore, this principle does not give importance to quality. For example, this concept does not make a qualitative difference between choosing one’s education, profession, or suffer deprivation. He would rather give importance to give an opportunity to do these actions than the outcome of the action itself.

Isaiah Berlin has mentioned the following features of negative liberty.

• Individuals should have complete freedom of choice. He should not have restraints on the choice of alternatives. Opposition to such restraints is a feature of negative liberty.
• Negative Liberty is based on Neoliberalism.

6. Answer the following in detail with reference to the given points.

Question 1.
Elaborate the concept of Rights –
(a) Meaning and Classification of Rights
(b) Legal Rights
(c) Human Rights
Answer:
(i) Meaning and Classification of Rights: Rights are those social conditions that are necessary for the development of our personality. Laski defines rights as ‘those conditions of social life without which no man can seek, in general, to be himself at his best.

• Natural Rights – These rights are universal in character e.g. the right to life and liberty.
• Moral Rights – These rights are based on the conscience of the person and the community e.g. respect for elders.
• Legal Rights – These rights are granted by the state and are codified in law. These rights are not universal. Legal rights may be:
  • Civil rights: related to the person and property of the individual’s right to liberty, equality, property.
  • Political rights: are available only to citizens in a democratic State and aim to encourage active political participation e.g. the right to vote, to contest elections.

(ii) Legal Rights: These rights refer to rights according to law. These rights are granted by the State to the people and exist differently in different countries. They are justiciable and codified in law. Such rights are neither universal nor inalienable. Legal rights include civil rights and political rights.

(iii) Human Rights: These rights are those rights that we are entitled to simply because we are human beings. Henry Thoreau first described natural rights as human rights. These are basic rights of people anywhere in the world to be free from exploitation, injustice, and want, to lead a dignified existence, and to develop to the fullest extent. The UNO adopted the Universal Declaration of Human Rights on 10th December 1948. These rights are dynamic i.e. they develop with changing times. UDHR expresses belief in the liberty and equality of human beings and promotes a culture of peace and cooperation.

Human rights can be classified as

• Civil and Political rights – These are liberty-oriented rights like the right to freedom of thought, right to vote, etc.
• Social, Cultural, and Economic rights – These include the right to social justice, the right to work, etc.
• Developmental rights – These are linked to the concept of fraternity e.g. right to a healthy environment, right to information.

The implementation of human rights requires favorable political, socio-economic conditions. In the absence of such, these rights may be violated or denied as in the case of women, children, displaced persons, minorities, etc.

Activity 1 (Text Book Page No. 17)

Make a list of Civil Rights in India.
Answer:
Civil rights in India include

• Right to life
• Right to personal freedom
• Right to Family life
• Right to freedom of religion
• Right to freedom of thought and expression including freedom of the press
• Right to freedom of movement association and assembly
• Right to Education
• Right to freedom of occupation and vocation
• Right to freedom from arbitrary arrest
• Right to justice.

Activity 2 (Text Book Page No. 15)

Discuss and make a note of examples of human rights violations.
Answer:
Human rights violations are noticed in many countries of the world.

• Violation of rights of women: In many countries exhibiting a patriarchal mindset, women are considered as having an inferior status. They become victims of social evils like dowry, female foeticide, F.G.M., and of crimes like sexual assaults, domestic violence, etc.
• Violation of rights of children: The world over and especially in poorer countries or in areas of conflict, violation of child rights occurs by physical neglect, abandonment, abuse, sexual crimes, child labour, etc.
• Violation of rights of underprivileged sections: Such persons face exploitation, deprivation, discrimination, and poverty. This section includes tribals, handicapped persons, ethnic/religious/linguistic minorities.
• Violation of rights of displaced persons: Displacement of persons may be due to hostile government, civil war, and conflicts, natural disasters, developmental projects, etc. Such persons are often unwanted everywhere e.g., Syrian refugees.

Balbharti Maharashtra State Board Class 11 Political Science Solutions Chapter 1 The State Textbook Exercise Questions and Answers.

Maharashtra State Board Class 11 Political Science Solutions Chapter 1 The State

1A. Choose the appropriate alternative and complete the following statements.

Question 1.
The term Nation is derived from the Latin word ___________ (Nasci, Natio, Natalis, Nauto)
Answer:
Nasci

Question 2.
The origin of Liberal Nationalism is in the ___________ Revolution. (American, Russian, French, British)
Answer:
French

1B. Identify the incorrect pair in every set, correct it and rewrite.

Question 1.
(a) Aristotle – German Thinker
(b) Jean Bodin – French Thinker
(c) Woodrow Wilson – American Thinker
(d) Harold Laski – British Thinker
Answer:
(a) Aristotle – Greek Thinker

1C. State the appropriate concept for the given statements.

Question 1.
The force which holds the people to a sense of political loyalty to the country –
Answer:
Nationalism

Question 2.
The area of the State within which it has the authority to govern –
Answer:
Jurisdiction

2. State whether the following statements are true or false with reasons.

Question 1.
Progressive Nationalism can create differences amongst people.
Answer:
This statement is False.

• Progressive nationalism is integral nationalism that can help people of a society to unite and to promote development towards the objective of national integration.
• Aggressive nationalism is destructive and can create differences amongst people.

Question 2.
Sovereignty means State has the freedom to take its own decision.
Answer:
This statement is True.

• Sovereignty refers to the supreme power of the state internally as well as externally.
• The State is free from external control and also legally sovereign with its own independent constitution.

Question 3.
Palestine is a State.
Answer:
This statement is False.

• The state has four essential elements i.e. population, territory, government, and sovereignty. Palestine does not have a sovereign government. Its territory is under Israeli jurisdiction.
• Hence, Palestine is a nation, not a State although more than 100 members of the UNO have given recognition to Palestine as a State.

Question 4.
Expansionist Nationalism is a type of Aggressive Nationalism.
Answer:
This statement is True.

• In the expansionist form of nationalism, countries become aggressive, imperialist, and colonialist, and create empires for national glory.
• This has been noticed in Nazi Germany Fascist Italy.

3. Express your opinion of the following.

Question 1.
India is a State.
Answer:
I agree with the above statement.
In Political Science, the term ‘State’ is used to describe a sovereign country. Anti-colonial nationalism led to the freedom struggle in India and subsequent independence from British Rule in 1947.

Any state has the following elements:

• Sovereignty: India achieved the status of a Sovereign Republic on 26th January 1950 when its constitution came into effect.
• Government: As a British colony, there was a government but it was not a sovereign government However, after political independence, a Sovereign, Parliamentary, Federal government was constituted in India.
• Territory: India is defined by its geographical boundaries. Its jurisdiction extends all over its compact territory, now comprising of 29 states and 7 union territories.
• Population: India has a vast population, exhibiting great diversity in terms of ethnicity/race, region and language, culture, religion, and so on. Thus, we can conclude that India is a nation-state.

4. Answer the following questions.

Question 1.
What are the features of a Nation?
Answer:
The word ‘nation’ is derived from the Latin word ‘Nasci’ meaning ‘to be born’. Thus, the literal meaning of a nation is a people having a common race/ethnicity or cultural linkages. Earnest Barker defines a nation as a body of men, inhabiting a definite territory, who normally are drawn from different races but possess a common stock of thoughts and feelings acquired and transmitted during the course of common history.

A nation refers to a large group of people, united in common bonds of geography, race, history, religion, language, sharing common objectives.

Features of a Nation:

• Population: A nation must have a population that has a sense of ethnic, historical, and cultural oneness.
• Feeling of community: The emotional dimension of a nation is a perception held by the population of psychological oneness i.e., they are a community.
• Desire to be politically separate: A feeling of unity and of being a nation is a product of the urge for ‘self-determination’. This can lead to a demand for self-governance. This signifies that people who feel united should have the right to decide the type of government that they prefer.

Question 2.
What is Nationalism? Explain its types.
Answer:
Nationalism is a force that binds the people to a sense of integrity and loyalty to their country. It is a spirit of oneness or common consciousness that binds a community together. Nationalism is a sense of political identity and emotional attachment to one’s ‘homeland’.

The forms of Nationalism from a political perspective are:

• Liberal Nationalism: Its origins are in the ideals of the French Revolution. President Woodrow Wilson linked the concept of a nation to the right to self-determination and sovereignty.
• Conservative Nationalism: It views a nation as a closely linked society with great importance to patriotism and the concept of ‘motherland’.
• Expansionist Nationalism: It is aggressive nationalism, which leads to imperialism, conquest, and colonialism. It has been seen in European imperialism by countries like England, Italy, Spain, France, etc.
• Anticolonial Nationalism: It refers to liberation struggles for independence from colonial rule, e.g., Indonesian freedom struggle from Dutch colonial rule.

5. Answer the following question in detail with reference to the given points.

Question 1.
Explain the following elements of the State.
(a) Sovereignty
(b) Government
(c) Population
(d) Territory
Answer:
(a) Sovereignty: It signifies the supreme power of the State internally as well as externally. It means an independent nation with its own constitution.

(b) Government: This refers to the agency through which the will of the state is expressed. Modern governments have three organs viz. legislature, executive, and judiciary. Government must be independent. Institutions of the State are ‘public’ institutions and have the legitimacy to act on behalf of the State. These institutions are responsible for making and implementing laws to promote the general welfare of the people. There are various kinds of government based on their creation or style of function for e.g., democracy or dictatorship, republic or monarchy, presidential or parliamentary system, etc.

(c) Population: A State is an association of human beings. The progress of a State depends on the quality of the population. Some states viz. China, India, etc., have a large population while some States have a small population viz. Monaco, Belgium, etc. The population may be homogeneous e.g., Israel or diverse e.g. erstwhile USSR comprised of many nationalities like Russians, Ukrainians, Latvians, etc. Thus a ‘State’ may comprise of many ‘nations’.

(d) Territory: A State is recognized by its territory. This includes the land area within its boundaries, the airspace above the area, and surrounding territorial waters (up to 12 nautical miles). The area within which the State has the authority to govern is called its jurisdiction. Some states have a small territory e.g., Sri Lanka, Bhutan, Maldives, etc., while other States e.g., Brazil, Russia, India, and Australia have a large territory. Most States have compact territory e.g., India, while some states which exist as islands have scattered territory e.g., Indonesia.

Activity (Text Book Page No.8)

Identify the States with the smallest territory and largest territory on the world map.
Answer:
States having the largest territory: Russia, Canada, USA, China, Brazil, Australia, India, Argentina, Kazakhstan, Algeria, etc.
States with the smallest territory: Vatican City, Monaco, Nauru, San Marino, Maldives, Singapore, Mauritius, Fiji, etc.

Balbharti Maharashtra State Board Class 11 Economics Solutions Chapter 9 Economic Policy of India Since 1991 Textbook Exercise Questions and Answers.

Maharashtra State Board Class 11 Economics Solutions Chapter 9 Economic Policy of India Since 1991

1. Complete the following statements by choosing the correct alternative:

Question 1.
After Independence, India had adopted ____________
(a) Socialism
(b) Capitalism
(c) Mixed Economy
(d) Communism
Answer:
(c) Mixed economy

Question 2.
The new economic policy approved foreign technology in ____________
(a) Cottage industries
(b) Small scale industries
(c) Micro enterprises
(d) High priority industries
Answer:
(d) High priority industries

Question 3.
At present, the number of industries reserved for public sector has been reduced to ____________
(a) 3
(b) 5
(c) 7
(d) 2
Answer:
(d) 2

2. Assertion and Reasoning questions:

Question 1.
Assertion (A): Delicensing of industries was an important step taken under liberalization.
Reasoning (R): Unwanted controls and restrictions led to economic stagnation prior to 1991.
(a) (A) is TRUE but (R) is FALSE
(b) (A) is FALSE but (R) is TRUE
(c) (A) and (R) both are TRUE and (R) is the correct explanation of (A)
(d) (A) and (R) both are TRUE but (R) is not the correct explanation of (A)
Answer:
(c) (A) and (R) both are TRUE and (R) is the correct explanation of (A)

Question 2.
Assertion (A): In 1990-91, India faced an acute shortage of foreign exchange reserves.
Reasoning (R): Import quotas and tariffs led to an increase in imports.
(a) (A) is TRUE but (R) is FALSE
(b) (A) is FALSE but (R) is TRUE
(c) (A) and (R) both are TRUE and (R) is the correct explanation of (A)
(d) (A) and (R) both are TRUE but (R) is not the correct explanation of (A)
Answer:
(a) (A) is TRUE but (R) is FALSE

Question 3.
Assertion (A): Post liberalization, the sale of domestic goods has increased.
Reasoning (R): The demand for imported goods had increased due to liberal policy.
(a) (A) is TRUE but (R) is FALSE
(b) (A) is FALSE but (R) is TRUE
(c) (A) and (R) both are TRUE and (R) is the correct explanation of (A)
(d) (A) and (R) both are TRUE but (R) is not the correct explanation of (A)
Answer:
(b) (A) is FALSE but (R) is TRUE

Question 4.
Assertion (A): Due to Globalisation, a country cannot achieve self-sufficiency in food production.
Reasoning (R): Globalisation has created a revolution in the IT sector.
(a) (A) is TRUE but (R) is FALSE
(b) (A) is FALSE but (R) is TRUE
(c) (A) and (R) both are TRUE and (R) is the correct explanation of (A)
(d) (A) and (R) both are TRUE but (R) is not the correct explanation of (A)
Answer:
(d) (A) and (R) both are TRUE but (R) is not the correct explanation of (A)

3. Find the odd word out:

Question 1.
New Economic Policy – Liberalization, Privatization, Demonetization, Globalisation
Answer:
Demonetization

Question 2.
Industries requiring compulsory licensing – defense equipment, agro-based industries, cigarettes, industrial explosives
Answer:
agro-based industries

Question 3.
Navratna status companies – SPCL, IOC, ONGC, HPCL
Answer:
SPCL

Question 4.
Liberalization dealt with the following – MRTP, FERA, SEBI, NTPC
Answer:
NTPC

4. Identify and explain the concepts from the given illustrations:

Question 1.
Vehicles manufactured by various automobile companies are now available in India.
Answer:
Globalization.
Globalization means the interaction of the domestic economy with the rest of the world with regard to foreign investment, trade, production, and financial matters.

Question 2.
Government equity in some public sector enterprises is sold to the private sector.
Answer:
Disinvestment.
A disinvestment is an act of selling shares of sick public sector units to the private sector.
Eg. Disinvestment of Maruti, ITDC hotels, VSNL, etc.

Question 3.
Foreign investments are encouraged on a large scale in the industrial sector of India.
Answer:
Foreign Direct Investment (FDI).
FDI was approved under the Industrial Policy of 1991, to encourage investment in high-priority industries which require high investment and technology.

5. State with reasons whether you agree or disagree with the following statements:

Question 1.
Liberalization has permitted the use of foreign technology.
Answer:

• Yes, I do agree with the statement.
• Liberalization has encouraged foreign technology.
• Foreign technology is allowed in high-priority industries.
• Foreign technology helps to reduce the cost and make the industries competitive.

Question 2.
The government has given private enterprises free access to the public sector.
Answer:
Yes, I do agree with the statement.

• 17 industries were reserved for the public sector under the Industrial Policy of 1956.
• But in NEP – 1991, the number of public sector industries reduced from 17 to 2.
• Railway transport and atomic energy are reserved for the public sector.
• The involvement of the private sector in economic activities has increased after NEP.

Question 3.
Government has a monopoly in the insurance sector.
Answer:
No, I do not agree with the statement.

• The insurance sector was a monopoly of the Government till 1991.
• In 1991IRDA (Insurance Regulatory and Development Authority Act) was introduced.
• The IRDA has given licenses to many private companies to start insurance businesses in India.
• Due to the entry of private companies, the monopoly of government has come to an end.

Question 4.
The creation of the National Renewal Board (NRB) was done to remove poverty.
Answer:
Yes, I do agree with the statement.

• Under the public sector, some units were closed due to loss.
• The workers of these units had to face the problem of unemployment and poverty.
• To solve this problem, the government has been formed. National Renewal Board (NRB).
• NRB provides compensation to retrenched workers which help to reduce poverty in the country.

Question 5.
Indian Oil Corporation is one of the public sector units among ‘Navratnas’.
Answer:
Yes, I do agree with the statement.

• Navratnas are the Public Sector Units (PSUs).
• In 1997-98, Nine PSUs were selected for Navratna status.
• These PSUs were selected on the basis of their performance.
• These Navratnas were given full financial and managerial autonomy.

6. Answer in detail:

Question 1.
Explain the features of the New Economic Policy of 1991.
Answer:
The process of the new economic policy started in 1985 and got momentum in 1991.

Features of Economic Policy, 1991:

• Delicensing: The new industrial policy abolished all industrial licensing, except 18 specified industries related to security and strategic concerns and social reasons.
• Abolition of MRTP Act: No prior approval of the MRTP commission is now required for setting up industrial units by the large business houses.
• Encouragement to Small Scale Industries (SSI): The investment limit of the SSI has been increased up to 5 crores which will help to upgrade their machinery.
• Encouraging Foreign Investment: Many industrial units were open to foreign investment under the 1991 policy. The limit was raised to 51% and 100% in some industries and 100% in mining, pollution control equipment, electricity generation projects, ports, etc.
• Reducing the role of the Public Sector: The number of industries reserved for the public sector was reduced from 17 to 2, it includes railways and atomic energy.
• Trade Liberalisation: Relaxation is given to importers by abolishing import licensing controls. The permission for external credit and set up of Special Economic Zones (SEZ) to promote export. To promote agricultural export Agro Export Zones (AEZ) were introduced.
• Reforms in Insurance Sectors: The Insurance Regulatory and Development Authority Act (IRDA) has given licenses to many private companies to start insurance businesses which ended the monopoly of government e.g. Max Life, Bajaj, Allianz, Aegon, etc.
• Reforms in Financial Sector: The NEP has allowed private banks and foreign banks to do hanking business in the financial sector.

Question 2.
Explain the measures undertaken for Globalisation.
Answer:
Globalization means the interaction of the domestic economy with the rest of the world with regard to foreign investment, trade, production, and financial matters.

Measures were taken for Globalisation:

• Removal of quantitative restrictions: To make the Indian economy attractive to foreign investors, the government has reduced custom duties and tariffs imposed on imports and exports.
• Encouragement to foreign capital: To India, foreign investment has wider scope since 1991. Foreign capital is allowed in India without any restrictions.
• Convertibility of Rupee: It means Indian currency can be converted into the currency of other countries.
• Foreign collaboration: To take the benefit of advanced technology, Indian companies are allowed to enter into foreign collaboration e.g. Maruti-Suzuki, Hero-Honda, etc.
• Long-term trade policy: The trade policy was introduced for a longer duration to promote foreign trade.
• Encouragement to export: Many incentives have been given to industries through EXIM policy. SEZ and AEZ are created to encourage export.

7. Read the following passage carefully and answer the questions:

The Indian ice cream industry is one of the fastest-growing segments of the dairy and food processing sector. India has a low per capita consumption of ice cream of 400 ml whereas in the USA it is 22,000 ml and in China, it is 3000ml.

The per capita consumption of ice cream is low in India because it is a country filled with traditional sweets of more than 100 varieties. In developed countries, people have either pastries or ice-creams for dessert. In the era of globalization, the mindset of the people is fast changing. This is because multi-national companies have set up a number of ice-cream parlors, with a lot more varieties and flavours that attract the younger lot. Besides this, there are better delivery systems.

The ice-cream sector has great potential for growth in the country due to improvement in the cold chain infrastructure, increasing disposable income, and changing the lifestyle of the people. However, it is taxed higher with 18 percent GST while other dairy products in the same basket such as butter and cheese are taxed at 12 percent.

The ice-cream industry has generated revenue of more than $1.5 billion in 2016-17. With the employment of 15 lakh people directly or indirectly, it is also considered one of the largest employers of the dairy and food processing industry.

Question 1.
Identify the reason for the low per capita consumption of ice cream in India.
Answer:
In India, traditional sweets are available, which are having more than 100 varieties.

Question 2.
Explain the impact of globalisation on the Indian ice-cream industry.
Answer:
Due to globalisation, multinational companies have set up a number of ice-cream parlours with a lot of varieties and flavours. It helps to attract the younger generation of today.

Question 3.
Find out the factors that could lead to the growth of the ice-cream industry in India.
Answer:
In India Ice-cream industry has wider scope because there is an improvement in cold chain infrastructure, increase in disposable income, and changing lifestyle of the people.

Question 4.
Express your views about the implications of higher GST on the ice-cream industry in India.
Answer:
The ice-cream sector is indirectly dependent on the primary sector. If the demand for ice cream increased then the income of cattle owners will grow. 18% GST on ice cream is high because ice cream is made from milk which is good for health as compared to tobacco, pan masala. Same GST (18%) is imposed on tobacco and pan masala but it is injurious to health and finally, the burden of GST will transfer to customers.

11th Economics Digest Chapter 9 Economic Policy of India Since 1991 Intext Questions and Answers

Find out: (Textbook Page No. 58)

Names of five Private Banks and Foreign Banks.
Answer:

• Private Banks – ICICI Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank, HDFC Bank.
• Foreign Banks – Standard Chartered Bank, DBS Bank, Doha Bank, Bank of America, Royal Bank of Scotland.

Find out: (Textbook Page No. 60)

Names of companies coming under Maharatna and Miniratna status.
Answer:
Maharatna

• Coal India Ltd.
• Gas Authority of India (GAIL)
• Indian Oil Corporation Ltd (IOCL)
• Mahanagar Telephone Nigam Ltd. (MTNL)

Miniratna

• Airports Authority of India
• Bharat Earth Movers Ltd.
• Bharat Dynamics Ltd.
• Mazagon Dock Ltd.
• State Trading Corporation of India

Stimulate your memory: (Textbook Page No. 61)

What is Corporate Social Responsibility (CSR)? How does it help society?
Answer:

• CSR means whatever a company does to give back to the community in which it has a presence.
• It is the company’s effort to improve society and the environment in some way.
• It helps society by providing education, healthcare, disaster relief measures, economic empowerment, planting trees, maintaining parks, etc.
• E.g. Mahindra & Mahindra constructed 4340 toilets in 104 districts of India, especially for girls in Government schools in 2013-14.

Activity-Based Questions

Observe the chart and answer the following question.

Question 1.
What is globalisation?
Answer:
Globalisation is a process of integrating the domestic economy with the rest of the world with regard to foreign investment, trade, production, and financial matters.

Question 2.
Explain the concept of disinvestment.
Answer:
Disinvestment is a process of selling shares of sick Public Sector Units (PSUs) to the private sector, so as to increase the production activities of that units and to achieve efficiency in the allocation of resources, improvement in management, etc.
E.g. Disinvestment of Maruti, ITDC hotels. IPCL. VSNL, etc.

Question 3.
Write the full form of FERA, SEZ, AEZ.
Answer:

• FERA – Foreign Exchange Regulation Act
• SEZ – Special Economic Zones
• AEZ – Agro Export Zones

Question 4.
Why NRB is created?
Answer:
National Renewal Board was created to look after the retrenched workers who become unemployed due to the closure of loss-making Public Sector Units (PSUs). Through this Board, the government took the responsibility of providing compensations to the retrenched workers and also to take care of those seeking voluntary retirement

Question 5.
By what was FERA replaced and why?
Answer:
FERA was replaced by FEMA to encourage international trade and to bring flexibility in the laws relating to foreign exchange.

Balbharti Maharashtra State Board Class 11 Economics Solutions Chapter 8 Poverty in India Textbook Exercise Questions and Answers.

Maharashtra State Board Class 11 Economics Solutions Chapter 8 Poverty in India

1. Assertion and Reasoning questions:

Question 1.
Assertion (A): Poverty level declines with a rise in agricultural output.
Reasoning (R): Agricultural incomes have declined due to wide fluctuations in climatic conditions.
(i) (A) is true, but (R) is False.
(ii) (A) is false, but (R) is True.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
Answer:
(iv) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Question 2.
Assertion (A): Urban poverty is attributed mainly to spillover effects of migration among the rural poor.
Reasoning (R): Poor rural infrastructure, lack of alternative jobs results in forced migration.
(i) (A) is true, but (R) is False.
(ii) (A) is false, but (R) is True.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
Answer:
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).

Question 3.
Assertion (A): Relative poverty is found in all the countries of the world.
Reasoning (R): Differences in the levels of income is the only criteria for judging relative poverty,
(i) (A) is true, but (R) is False.
(ii) (A) is false, but (R) is True.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
Answer:
(i) (A) is true, but (R) is False.

Question 4.
Assertion (A): Poverty is not just a lack of money but also a lack of capabilities.
Reasoning (R): Lack of freedom to satisfy hunger, lack of health care facilities, denial of political freedom leads to poverty.
(i) (A) is true, but (R) is False.
(ii) (A) is false, but (R) is True.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
Answer:
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).

Question 5.
Assertion (A): Food security, credit facilities guarantee social protection to the poor.
Reasoning (R): Leakages in the administrative system perpetuate poverty.
(i) (A) is true, but (R) is False.
(ii) (A) is false, but (R) is True.
(iii) Both (A) and (R) are true and (R) is the correct explanation of (A).
(iv) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
Answer:
(iv) Both (A) and (R) are true, but (R) is not the correct explanation of (A)

2. Find the odd word out:

Question 1.
Colours of Ration card – White, Green, Saffron, Yellow
Answer:
Green

Question 2.
High Poverty ratio – Chhatisgarh, Jharkhand, Bihar, Kerala
Answer:
Kerala

Question 3.
Calories – 2400, 1800, 2100, 2250
Answer:
1800

3. Give economic terms:

Question 1.
Denial of opportunities to certain sections of the people in the society.
Answer:
Social exclusion

Question 2.
Concept of poverty that covers material and non-material dimensions.
Answer:
Multidimensional poverty

Question 3.
Poverty is judged on the basis of relative standards of livings of the people.
Answer:
Relative poverty

Question 4.
Poverty can be completely eradicated.
Answer:
Absolute poverty

Question 5.
Threshold expenditure is needed to satisfy basic human needs at socially acceptable levels.
Answer:
Task Force on Eliminating Poverty

4. Identify and explain the concepts from the given illustration:

Question 1.
Baban’s daughter had to be hospitalized due to weakness caused by undernourishment or lack of minimum calorie requirement in the intake of food.
Answer:
Absolute poverty.
The absence of minimum income to satisfy the desired level of the calorie intake of food is called absolute poverty. Absolute poverty is generally found in developing countries like India. The situation of undernourishment can be overcome by taking the minimum required calorie food intake as per the standard set by the planning commission.

Question 2.
Dhanajirao is a wealthy landlord, but his annual income is relatively less in comparison to entrepreneur Raobahadur.
Answer:
Relative poverty.
Relative poverty can be judged by comparing the standards of living of different sections of the people. Relative poverty is found in all the countries of the world. It cannot be completely eradicated.

Question 3.
Urmi’s family live in a situation whereby they are not able to fulfill even the basic needs of life such as food, clothing, and shelter.
Answer:
Absolute poverty.
This is the case of absolute poverty where people have less income in which they cannot buy basic needs for living. Such poverty is generally found in developing countries like India. It can be eradicated by applying effective measures by the Government.

Question 4.
Sanjay’s family receives food grains on the basis of yellow ration cards through the public distribution system.
Answer:
Absolute poverty.
In absolute poverty, people are very poor and have very little income. Ration card is one of the measures to eradicate poverty by giving food-grains through ration shop at a subsidized rate.

Question 5.
In certain parts of the state, starvation-related death has been observed whereas in certain areas gross wastage of food has been reported.
Answer:
Relative poverty.
This is an example of differences between two different sections of people in terms of consumption and level of income. Such differences create relative poverty. It is found in all the countries of the world. It cannot be eradicated completely.

5. State with reasons whether you agree or disagree with the following statement:

Question 1.
Population control is the only measure to eradicate poverty.
Answer:
No, I do not agree with the statement.
Policy measures undertaken for the eradication of poverty are as follows:

• Agriculture: Providing minimum support prices for selected crops and providing cheaper credit facilities to farmers are the measures taken to ensure stable agricultural income to farmers.
• Rural works: New employment is created for labours of rural areas by way of construction of roads, irrigation projects, etc.
• Rural industrialization: To increase the income of people living in rural areas, employment is created by promoting small-scale and cottage industries.
• Minimum wages: In 1948, the Minimum Wages Act was passed to provide fair wages to laborers and workers of industrial and agricultural areas.

Besides these, there are many other causes like:

• Public distribution system
• Nationalization of banks
• Progressive tax measures
• Free Education
• Affordable housing
• Health Facilities
• Skill development and self-employment.

Question 2.
Relative poverty is universal by nature.
OR
Relative poverty is found in all countries.
OR
Relative poverty is found in the richest of the rich countries.
Answer:
Yes, I agree with the statement.

• Differences in income earned by people in relative poverty.
• If one person earns less than the other, he is said to be poorer than the other.
• So, this difference in the earnings of people will be found in all the countries of the world.
• This is found because of differences in talents, education, abilities, skills, etc. of different people, and this cannot be removed from any country.
• So, relative poverty is a universal phenomenon.

Question 3.
Regional imbalance is the only cause of poverty.
Answer:
No, I do not agree with the statement.
The causes of poverty besides regional imbalance are as follows:

• Population explosion: Due to the increase in population, poverty is growing rapidly.
• Slow economic growth: There is slow industrial and agricultural growth due to which the economy is growing slowly.
• Unemployment and Underemployment: Unemployment is the major factor of increased poverty.
• Economic inequalities: There are inequalities in the distribution of income, assets, consumption expenditure, which in fact have increased poverty.

Besides these, there are many other causes like:

• Inaccessibility to infrastructural facility
• Inflation in the country
• The vicious circle of poverty
• Other factors – like gender discrimination, corruption, natural disasters, etc.

6. Answer in detail:

Question 1.
Assess the various measures undertaken to eradicate poverty.
Answer:
Policy measures undertaken for the eradication of poverty are as follows:

• Control of population: There are various population policies and family welfare programmes introduced to control the growth of the population.
• Agriculture: Providing minimum support prices for selected crops and providing cheaper credit facilities to farmers are the measures taken to ensure stable agricultural income to farmers.
• Rural works: New employment is created for labours of the rural areas by way of construction of roads, irrigation projects, etc.
• Rural industrialization: To increase the income of people living in rural areas, employment is created by promoting small-scale and cottage industries.
• Minimum wages: In 1948, the Minimum Wages Act was passed to provide fair wages to labourers and workers of industrial and agricultural areas.
• Public distribution system: Under the public distribution system food grains are made available to poor people at highly subsidized rates through ration shops.
• Nationalization of banks: Nationalization of banks was undertaken to provide loans to poor people at lower interest rates.
• Progressive tax measures: Progressive income tax system has been introduced to reduce inequalities in the distribution of income.
• Education: Primary education is made free as well as education for girls is provided at no cost to increase the enrollment ratio.
• Affordable housing: Affordable housing facilities are provided to the rural and urban poor through the Slum Rehabilitation programme.
• Health Facilities: Government hospitals, primary health centers have been established to provide medical facilities to poor people.
• Skill development and self-employment: Skill-based training is provided for skill development which inspires people towards self-employment.

11th Economics Digest Chapter 8 Poverty in India Intext Questions and Answers

Can you tell: (Textbook Page No. 51)

Express your opinion on the following:

Questions 1.
There is a thick line of rural-urban economic divide in India.
Answer:
Yes, there is a thick line of rural-urban economic divide in India because of around 65% population lives in a rural area but do not have proper road access for vehicles, lack of health facilities, lack of employment opportunities, lack of technology, a rural economy based on subsistence strategies, the population is spread thinly, due to slow economic growth people migrating from rural to the urban area, etc.

In an urban economy around 35% population lives with good road access, many health facilities, employment opportunities, advanced technology, the thick density of population, high economic growth rate, etc.

Question 2.
There is an equitable distribution of income and wealth in the country.
Answer:
No, there is an unequal distribution of income and wealth in the country, that’s why India has adopted a progressive taxation policy. The government formulated many welfare policies to raise the income of poor income groups.

Question 3.
All the citizens have equal access to education, health, energy, and drinking water.
Answer:
No, there is unequal access to education, healthy drinking water.
In urban areas, people can afford all the amenities. There are many educational institutions 24 hours availability of electricity, many health centers with modern equipment and technology, clean drinking water, etc.

Question 4.
There is no hunger, starvation, or malnutrition in the country.
Answer:
No, I don’t agree with the statement.
In India a large number of people especially women and children are not able to get food.
14.8% (195.9 million people are undernourished, 51.4% of women age between 15 to 49 years) are anemic, 38.4% of the children aged under five are too short for their age, 21% children have weight too low for their height and there is high child mortality rate prevailing in India.

Question 5.
There is a lack of sanitation facilities in the country.
Answer:
Yes, I agree with the statement.
In rural areas, most of the people (300 to 522 million) still practice open defecation.
In addition to considerable Indian homes having no toilets, access to water supply and drainage facilities is also another serious problem.

Question 6.
The poverty ratio is uniform across all the states.
Answer:
In India poverty is different from state to state.
In India first ten poorest states or high poverty ratio is in Chhatisgarh (93%), Jharkhand (36.96%), Manipur (36.89%), Arunachal Pradesh (34.67%), Bihar (33.74%), Odisha (32.59%), Assam (31.98%), Madhya Pradesh (31.65%), Uttar Pradesh (29.43%), Karnataka (20.91%) and poverty ratio is lowest in Maharashtra, Gujarat, Kerala, Tamil Nadu, etc.

Note: The above data is according to the 2016 report.

Find out: (Textbook Page No. 51)

Prepare a list of 5 countries in the world having absolute poverty with reference to the latest World Bank Report.
Answer:
All the developing countries will face absolute poverty for e.g. India, China, Pakistan, Nepal, Bhutan, etc.

Can you tell: (Textbook Page No. 52)

Place the following individuals as per their income into the High-income group, Upper Middle-income group, Middle-income group, Low-income group.

1. Contract labourer
2. Salesman in a shop
3. CEO of a Multinational Company
4. Executive in a Company

Answer:

Income groups	Individuals
(i) High Income	CEO of a Multinational Company
(ii) Upper Middle Income	Executive in a company
(iii) Middle Income	Salesman in a shop
(iv) Low Income	Contract labour

Find out: (Textbook Pg. No. 52)

Information about the informal sector and list a few activities related to it as per your observation.
Answer:
Informal Sector:
The informal sector is called as ‘unorganized sector’. It consists of unlicensed establishments that do not pay taxes to the government and does not obey the law prescribed by the law.

Activities of the informal sector are not counted in the country’s GNP as they are not disclosed by the owners of such organizations.

Examples:

• Selling things from home or offices or garage, etc.
• Paying a person for removing grass or snow from your garden or doorsteps.
• Paying labourer for removing the upgrowth of trees outside the building wall.
• Paying your office boy for the watering plant in your absence.
• Black marketing, hoarding, smuggling, etc.
• Paying under the table for getting some work done.
• Farmers, beggars, daily wage earners, etc.

Try this: (Textbook Page No. 52)

Question 1.
Given the number of members in your family prepare a list of food items and non-food items purchased monthly.
Answer:

Food Items	Non Food Items
(a) Cereals	(a) Petrol or fuel
(b) Pulses	(b) Medicines
(c) Milk and Milk products	(c) Entertainment
(d) Vegetables	(d) Footwears
(e) Fruits	(e) Clothing
(f) Spices	(f) Bedding
(g) Meat/Mutton	(g) Electric material
(h) Edible oil	(h) Electronic Gadgets
(i) Sweet Dish	(i) Scooter
(j) Processed food	(j) Toiletries

Question 2.
Calculate the total monthly consumption expenditure of your family’s consumption basket as per the current prevailing prices.
Answer:
Note: Students should do this activity by themselves with the help of their family head.

Question 3.
What is the per capita monthly expenditure?
Answer:
Per capita income is the average income per head of population in one year.
Per capita monthly expenditure of an individual family can be calculated by using the following formula.
Per Capita monthly expenditure = \(\frac{\text { Total Income of a family }}{\text { No. of members in a family }}\)
Note: Students can do further calculations with the help of their family head.

Find out: (Textbook Page No. 53)

From the above data on poverty ratios, find out Q₃ and P₁₀ and name the states as per the derived partition values.

Answer:
Arranging the data in ascending order;
7.1, 8.1, 8.3, 9.2, 10.4, 11.2, 11.3, 11.3, 14.7, 16.6, 17.4, 19.9, 20.9, 29.4, 31.7, 31.9, 32.6, 33.7, 36.9, 39.9
Here, n = 20
Q₃ = 3 \(\left(\frac{n+1}{4}\right)^{\text {th }}\) observation
= 3 \(\left(\frac{20+1}{4}\right)^{\text {th }}\)
= 3(5.25)th observation
= 15.75th observation + 0.75 (16th observation – 15th observation)
= 31.7 + 0.75 (31.9 – 31.7)
= 31.7 + 0.75(0.2)
= 31.7 + 0.15
∴ Q₃ = 31.85

P₁₀ = \(10\left(\frac{n+1}{100}\right)^{t h}\) observation
= \(10\left(\frac{20+1}{100}\right)^{t h}\) observation
= 2.1th observation
= 2nd observation + 0.1(3rd observation – 2nd observation)
= 8.1 + 0.1 (8.3 – 8.1)
= 8.1+ 0.1 (0.2)
= 8.1 + 0.02
∴ P₁₀ = 8.12
Q₃ lies between 31.7 and 31.9 (i.e.) Madhya Pradesh and Assam
P₁₀ lies between 8.1 and 8.3 (i.e.) Himachal Pradesh and Uttarakhand.

You should know: (Textbook Page No. 54)

What are the effects of Poverty?
Answer:
Economic effects of poverty:

• Low national income: As a substantial number of people are poor, their income, saving, and investment are inadequate. This results in low capital formation.
• Adverse effect on production: Since the capital for modernization is not available, the farmers continue with the outdated methods. Similarly, the industry does not have funds for modernization.
• Misallocation of resources: To help the poor, the government spends a huge amount on welfare activities. This restricts the allocation of resources for productive activities.
• Low standard of living: Due to low per capita income and low per capita consumption, people are forced to live in slums. This is reflected in the low standard of living.
• Malnutrition and starvation: Poor people can not afford a balanced diet due to low income. They do not get the minimum calories from their diet.

You should know: (Textbook Page No. 54)

The UN Sustainable Development Goals (SDGs) were adopted by the international community in September 2015 to comprehensively cover social, economic, and environmental dimensions. The SDGs constitute a universal agreement to end poverty in all its forms and dimensions. There are 17 SDGs that have 169 targets to be achieved by 2030. India played an important role in shaping SDGs.

India is one of the signatories of the United Nations Sustainable Development Goals, is committed to the eradication of poverty by 2030 (SDGl).

Read the above passage and answer the following questions:

Question 1.
What do SDGs stand for?
Answer:
SDGs stands for Sustainable Development Goals.

Question 2.
What are the objectives of SDGs?
Answer:
SDGs were adopted by the international community to cover social economic and environmental dimensions. It makes an attempt to end poverty throughout the world.

Question 3.
What is India’s goal to eradicate poverty in relation to SDG?
Answer:
India’s goal is to eradicate poverty from the country by the year 2030.

Question 4.
How many SDGs are prevailing at present?
Answer:
There are 17 SDGs prevailing having 169 targets that are to be achieved by 2030.

Try this: (Textbook Page No. 55)

To ensure food security, the Government of Maharashtra has introduced Tri Colour Family Ration Card. Find out the income criteria of each ration card on the basis of information provided by the Food, Civil Supplies, and Consumer Protection Dept., GoM.

Answer:

Type of Ration Card	Income Criteria
White	Rs. 1,00,000 and above
Saffron	Rs. 15,000 to Rs. 1,00,000
Yellow	People Below the poverty line

Try this: (Textbook Page No. 55)

Correlate the following Poverty Alleviation Programmes with the given points:

Food security, wage employment, self-employment, education, health, sanitation, financial inclusion, housing.

Answer:

• Employment Guarantee Scheme (EGS): Wage employment
• Swarnajayanti Gram Swarozgaar Yojana (SGSY): Self-employment
• Jan Dhan Yojana (JDY): Financial inclusion
• Swachch Bharat Mission (SBM): Sanitation
• Sarva Shiksha Abhiyaan (SSA): Education
• Antyodaya Anna Yojana (AAY): Food security
• Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS): Wage employment
• Pradhan Mantri Awaas Yojana (PMAY): Housing
• National Health Mission (NHM): Health

Balbharti Maharashtra State Board Class 11 Economics Solutions Chapter 7 Unemployment in India Textbook Exercise Questions and Answers.

Maharashtra State Board Class 11 Economics Solutions Chapter 7 Unemployment in India

1. Find the odd word out:

Question 1.
Urban unemployment – Educated unemployment, Industrial unemployment, Disguised unemployment, Technological unemployment.
Answer:
Disguised unemployment

Question 2.
States with high rates of unemployment – Goa, Punjab, Maharashtra, Tripura.
Answer:
Maharashtra

Question 3.
Employment Guarantee Scheme 1972, Jawahar Rozgar Yojana 1989, Swarnajayanti Gram Swarozgar Yojana 1999, Development of Tourism.
Answer:
Development of tourism

2. Identify and explain the concepts from the given illustrations:

Question 1.
Hussain Shaikh employed seven workers less than the usual number of workers on his farm, in spite of this, output remained the same.
Answer:
Disguised unemployment.
Disguised unemployment is a situation in which more people are doing work than actually required. Thus, even after employing fewer workers than the usual number, the output of Hussain Shaikh remained the same.

Question 2.
The use of new technology in the printing industry has led to unemployment among several workers.
Answer:
Technological unemployment.
Technological unemployment arises due to changes in technology. Modern technology is capital intensive requiring less labour. Thus, the use of new technology displaces few workers from their jobs.

Question 3.
Satish has completed his post-graduation and is desperately expecting a job.
Answer:
Educated unemployment.
Educated unemployment is due to an imbalance between job opportunities and the number of educated youth, preference for white-collar jobs, lack of available skills, etc. Due to the above imbalances, Satish could not get a job easily.

Question 4.
In certain agricultural areas of Maharashtra, only Kharif crops are grown, therefore, employment is available till the month of October.
Answer:
Seasonal unemployment.
Seasonal unemployment is due to slack season or off-season. Kharif crops have a particular season. Thus, for the rest of the period, farmers remain unemployed leading to seasonal unemployment. Such kind of unemployment is also found in the case of tourism, marriage bands, sugar factories, etc.

3. Complete the correlation:

Question 1.
Seasonal unemployment : Tourist guides : : __________ : Graduates
Answer:
Educated unemployment

Question 2.
__________ : Disguised unemployment : : Urban unemployment : Industrial unemployment
Answer:
Rural unemployment

Question 3.
Frictional unemployment : Shortage of raw materials : : __________ : Fluctuations in business activity
Answer:
Cyclical unemployment

Question 4.
MGNREGS : Guaranteed wage employment : : TRYSEM : __________
Answer:
self-employed

Question 5.
__________ : Waste of resources : : Social effect : Loss of human dignity
Answer:
Economic effect

4. Observe the following charts and answer the questions.

Question 1.
Production does not increase if an additional worker is employed and production does not decrease if a worker is reduced from the work. Mention the type of unemployment.
Answer:
Disguised unemployment

Question 2.
A worker is thrown out of a job because of computerization. Name this type of unemployment?
Answer:
Technological unemployment

Question 3.
Sharad was forced to return back to India from the USA due to depression in the IT sector.
Answer:
Cyclical unemployment

Question 4.
In spite of being a graduate, Vasant is sitting idle at home.
Answer:
Educated unemployment

Question 5.
Give examples of structural unemployment.
Answer:
Examples: horse cart replaced by auto-rickshaw; computerized typing replaced manual typists; small traders replaced by malls and online shopping.

5. Find out Q₁ and Q₃ using unemployment rates as numerical data:

Answer:

6. Answer the following in detail:

Question 1.
Explain the types of Industrial unemployment in India.
Answer:
Types of Industrial unemployment:
(i) Technological unemployment:
Due to the introduction of new machines or new technology, when some workers are removed from their jobs due to lack of proper training. E.g. computerization, the introduction of robotic technology, etc.

(ii) Frictional unemployment:
When due to the breakdown of machines, shortage of raw materials, strikes, power failure, etc. some workers are removed from the jobs, there is said to be frictional unemployment. This is temporary in nature.

(iii) Cyclical unemployment:
During an economic recession, there is a slowdown of economic activities due to a fall in overall demand. Therefore, factory owners remove some workers from their jobs to cut down the cost such unemployment caused due to depression (trade cycle) is called cyclical unemployment.

(iv) Structural unemployment:
It takes place due to structural changes in the economy i.e when due to change in the complete business set up, some workers are removed from their jobs, there is said to be structural unemployment. E.g. introduction of power looms instead of handlooms. It is long-term in nature.

Question 2.
Explain the causes of unemployment in India.
Answer:
Causes of Unemployment:
(i) Jobless growth:
Since independence, the rate of economic growth is less than the growth rate of the population. This leads to widespread unemployment in India.

(ii) Increase in labour force:
Due to the increase in medical facilities since independence, there is a considerable fall in the death rate without a corresponding fall in the birth rate. This led to an increase in the labour force which in turn led to unemployment in India.

(iii) Excessive use of machinery:
Industries as well as agricultural producers are undergoing modernization and have started using more machines and less labour. This means the Indian economy is moving towards capital intensive technique leaving behind labour intensive technique, which led to large scale unemployment.

(iv) Lack of skill development programmes:
Though educational institutions are increasing, no proper training is given to youngsters to work. Development of vocational skill courses is comparatively less in number in India. Hence, there is a lack of skilled manpower required by the industry in India.

(v) Expectations towards employment:
Educated people have high expectations about the salary and they want ‘white-collar jobs’ which are not available in plenty. They prefer to remain unemployed rather than accepting a lower salary. This also causes unemployment.

(vi) Seasonal nature of agriculture:
Due to the seasonal nature of agriculture in India, labourers are employed only for a few months a year and for the rest of the year, they remain jobless. This leads to seasonal unemployment in the country.

(vii) Migration of rural population:
Agriculture being seasonal, there are no alternative jobs available in the off-season or slack season. So the labour migrates to urban areas leading to urban unemployment in the country.

Question 3.
Explain the measures taken by the government to reduce unemployment.
Answer:
The measures taken by the government of India to reduce unemployment are as follows:
General measures to reduce unemployment:

• Development of agricultural sector
• Provision for an alternative occupation
• Development of infrastructure
• Reforms in the educational system
• Development of tourism
• Use of labor-intensive techniques
• Development of information technology and communication
• Provision for vocational training and skill development facilities
• Rural industrialization
• Motivation for self-employment.

Specific measures are undertaken by the government to generate employment opportunities:
Employment Guarantee Scheme (EGS): This Scheme was introduced on 28th March 1972. This scheme was introduced by Maharashtra Government in 1972-73. Under this scheme, work is provided to the registered job-seekers in rural areas within 15 days from the date of registration. This scheme was for unskilled manual labors above 18 years.

Swarnjayanti Gram Swarozgar Yojana (SGSY): This scheme was launched in April 1999 after restructuring the Integrated Rural Developmental Programmer (IRDP) and allied schemes. It’s the only self-employment scheme for the rural poor in India.

Swarna Jayanti Shahari Rozgar Yojana (SJSRY): This scheme was launched in December 1997, It provides gainful employment to the urban unemployed and underemployed. It includes self-employment, women self-employment programme, skill training for employment programme, for this scheme Central Government shares 75% of the cost and State Government shares 25% of the cost.

Pradhan Mantri Rozgar Yojana (PMRY): This scheme is being implemented since 1993 to create and provide sustainable self-employment opportunities to more than one million educated unemployed youth.

Training Rural Youth for Self-employment (TRYSEM): It was initiated in 1979 with the objective of tackling the unemployment problem among rural youth. It aimed at training about 2 lakh rural youth every year to enable them to become self-employed.

Besides the above measures, there are many other specific measures undertaken by the government. They can be named as:

• Jawahar Rozgar Yojana (JRY)
• Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)
• Deen Dayal Upadhyaya Grameen Kaushalya Yojana 2014
• National Policy for Skill Development and Entrepreneurship – 2015
• Startup India Initiative
• Pradhan Mantri Kaushal Vikas Yojana – (2016-20)

11th Economics Digest Chapter 7 Unemployment in India Intext Questions and Answers

Do you know? (Textbook Page No. 46)

State-wise unemployment rates in India (2015-16)

Answer:

Ranks	State	No. of people	Cumulative Frequency (Less than)
1.	Tripura	197	197
2.	Sikkim	181	378
3.	Kerala	125	503
4.	Himachal Pradesh	106	609
5.	Assam	96	705
6.	Arunachal Pradesh	89	794
7.	Nagaland	85	879
8.	Jharkhand	77	956
9.	Uttar Pradesh	74	1030
10.	Jammu and Kashmir	72	1102
11.	Rajasthan	71	1173
12	Uttarakhand	70	1243
13.	Goa	61	1304
14.	Punjab	60	1364
15.	Bihar	60	1424
16.	Manipur	57	1481
17.	Odisha	50	1531
18.	West Bengal	49	1580
19.	Meghalaya	48	1628
20.	Haryana	47	1675
21.	Madhya Pradesh	43	1718
22.	Tamilnadu	42	1760
23.	Andhra Pradesh	39	1799
24.	Mizoram	30	1829
25.	Telangana	28	1857
26.	Maharashtra	21	1878
27.	Chhattisgarh	19	1897
28.	Karnataka	15	1912
29.	Gujarat	09	1921
		n = 1921

Here, n = 1921
for Q₂ = \(2\left(\frac{n+1}{4}\right)^{t h}\) observation
= \(2\left(\frac{1921+1}{4}\right)^{\text {th }}\) observation
= 2(480.5)
= 961st observation, 961st observation lies in cf 1030.
∴ Q₂ = 9
Hence, Rank 9 is represented by Uttar Pradesh.