# Financial Statements - II, Class 11 Accountancy | SwaVid Financial Statements - II, NCERT Class 11 Accountancy: notes with key ideas, formats, common mistakes and 3 quick checks with worked answers. Canonical: https://www.swavid.com/cbse/class-11/accountancy/chapter/financial-statements-ii Source: https://www.swavid.com/cbse/class-11/accountancy/chapter/financial-statements-ii # Financial Statements - II ## Definitions, formats and formulas ## Key ideas ## Common mistakes ## Quick checks ## Keep going ## Questions parents ask ## Class 11 Accountancy on SwaVid ### Need for adjustments ### Outstanding and prepaid expenses ### Accrued and unearned income ### Bad debts and provision for doubtful debts ### Depreciation and interest on capital ### Manager's commission ### Related chapter ### Related chapter ### Related chapter ### All chapters SwaVid › CBSE › Class 11 › Accountancy › Financial Statements - II Notes written by SwaVid from the NCERT textbook. Class 11 Accountancy, Chapter 9. Key ideas, definitions and common mistakes. CBSE does not print marks for a single chapter. Short answer. This chapter explains adjustments needed at the end of an accounting year to prepare true and fair financial statements. It shows how to account for accrued, prepaid, unearned, and outstanding items, as well as depreciation, provisions, and closing stock. Source: NCERT Accountancy II (Reprint 2026-27) , Chapter 9, Financial Statements - II Trial balance figures reflect cash received or paid, which may not match revenues earned or expenses incurred for the current accounting period. Adjustments apply the accrual basis of accounting to match revenues with related costs accurately. Outstanding expenses are unpaid costs relating to the current year, added to the relevant expense in the trading or profit and loss account and shown as a current liability. Prepaid expenses are costs paid in advance for the next year, deducted from the expense and shown as a current asset. Accrued income is revenue earned during the year but not yet received, added to income and shown as an asset. Income received in advance is revenue collected for future periods, deducted from income and shown as a liability. Irrecoverable debts written off as further bad debts are added to the bad debts debit in the profit and loss account and deducted from debtors. A provision for doubtful debts is estimated on remaining good debtors and debited to the profit and loss account. Depreciation is a non-cash expense debited to the profit and loss account and deducted from fixed assets. Interest on capital is an expense to the business debited to the profit and loss account and added to capital in the balance sheet. Commission may be calculated on net profit before charging such commission, or on net profit after charging such commission. It is debited to the profit and loss account and shown as an outstanding liability in the balance sheet. Try each question first. Then tap it to see the answer. Outstanding rent = 2 × 2,000 = ₹ 4,000 Amount debited to Profit and Loss A/c = 22,000 + 4,000 = ₹ 26,000 Liability in Balance Sheet = ₹ 4,000 ₹ 26,000 in Profit and Loss A/c, ₹ 4,000 in Balance Sheet Remaining debtors = 52,000 - 2,000 = ₹ 50,000 Provision for doubtful debts = 50,000 × (5 / 100) = ₹ 2,500 ₹ 2,500 Commission = 66,000 × [10 / (100 + 10)] Commission = 66,000 × (10 / 110) = ₹ 6,000 ₹ 6,000 Financial Statements - I . Trial Balance and Rectification of Errors . Depreciation, Provisions and Reserves . The 9 chapters of Class 11 Accountancy . CBSE does not give marks to one chapter. It prints marks for units or parts, and the chapter list page shows them all. No. They are written by SwaVid from the NCERT textbook. The CBSE curriculum is the reference for what is assessed. This is the last chapter in the NCERT books for Class 11 Accountancy. SwaVid is an AI tutor for Indian students in Classes 6 to 12. It finds the earlier ideas a child missed, then teaches today’s chapter. Start free to see how it works. - Ch 9 NCERT book - 80 marks, theory paper - 3 quick checks - Giving dual effect to an adjustment that already appears inside the trial balance . Items listed inside the trial balance have already undergone double entry, so they are posted to only one place: either the trading and profit and loss account, or the balance sheet. - Calculating provision for doubtful debts on gross debtors before deducting further bad debts . First deduct further bad debts given in adjustments from sundry debtors, then apply the provision percentage on the remaining debtors. - Confusing manager's commission before charging with commission after charging . Check the phrasing carefully. If it says after charging, divide by (100 + Rate) instead of 100. ## Key Links - [CBSE](https://www.swavid.com/cbse) - [Class 11](https://www.swavid.com/cbse/class-11) - [Accountancy](https://www.swavid.com/cbse/class-11/accountancy/chapters) - [Start free →](https://www.swavid.com/signup) - [All 9 chapters](https://www.swavid.com/cbse/class-11/accountancy/chapters) - [NCERT Accountancy II (Reprint 2026-27)](https://ncert.nic.in/textbook.php) - [Open notes](https://www.swavid.com/cbse/class-11/accountancy/chapter/financial-statements-i) - [Open notes](https://www.swavid.com/cbse/class-11/accountancy/chapter/trial-balance-and-rectification-of-errors) - [Open notes](https://www.swavid.com/cbse/class-11/accountancy/chapter/depreciation-provisions-and-reserves) - [Class 11 Accountancy](https://www.swavid.com/cbse/class-11/accountancy/chapters) - [Start free →](https://www.swavid.com/signup)