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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Get complete step-by-step solutions for T.S. Grewal Double Entry Book Keeping Class 11 - 2025-2026 - Chapter 2 - Basic Accounting Terms. Study double-entry system details, practice timed problems, and verify answers directly.
Gopal started business for buying and selling of readymade garments with ₹8,00,000 as an initial investment. Out of this he paid ₹4,00,000 for the purchase of garments and ₹50,000 for furniture and ₹50,000 for computer and the remaining amount was deposited into the bank. He sold some of the ladies and kids garments for ₹3,00,000 for cash and some garments for ₹1,50,000 on credit to Rajesh.
Subsequently, he bought men's garments of ₹2,00,000 from Satish. In the first week of the next month, a fire broke out in his office and stock of garments worth ₹1,00,000 was destroyed. Later on, some garments which cost ₹1,20,000 were sold for ₹1,30,000. Expenses paid during the same period were ₹15,000. Gopal withdrew ₹20,000 from business for his domestic use.
From the above, answer the following:
(i) What is the amount of capital with which Gopal started the business?
(ii) What fixed assets did he buy?
(iii) What is the value of the goods purchased?
(iv) Who is the creditor and state the amount payable to him?
(v) Who is the debtor and what is the amount receivable from him?
(vi) What is the total amount of expenses?
(vii) What is the amount of drawings of Gopal?
| Part | Item | Answer |
|---|---|---|
| (i) | Capital | Gopal started the business with an initial investment of ₹8,00,000. |
| (ii) | Fixed assets | He bought two fixed assets — Furniture ₹50,000 and Computer ₹50,000. Total fixed assets = ₹50,000 + ₹50,000 = ₹1,00,000. |
| (iii) | Goods purchased | Goods purchased = garments ₹4,00,000 + men's garments from Satish ₹2,00,000 = ₹6,00,000. |
| (iv) | Creditor | Satish is the creditor — the business owes him ₹2,00,000 for goods bought on credit. |
| (v) | Debtor | Rajesh is the debtor — he owes the business ₹1,50,000 for goods sold on credit. |
| (vi) | Expenses | Total expenses = ₹15,000. (The ₹1,00,000 of stock destroyed by fire is a loss, not an expense paid, so it is not included.) |
| (vii) | Drawings | Gopal withdrew ₹20,000 from the business for domestic use — these are his drawings. |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.