NBSE Bookkeeping Class 10 – Practical and theory

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Here, you will get the theoretical answers and practical solutions to the questions of all the chapters of NBSE class 10 bookkeeping subject. However, the given notes/solutions should only be used for references and should be modified/changed according to needs.

Chapter 1: Final Accounts, NBSE Bookkeeping class 10

Every business wants to make a profit. So every year the business calculates its profits and losses at the end of the year as well as takes records of the assets and liabilities it has acquired. To calculate a business’ profits or losses and to assess the position of the assets and liabilities, the business prepares the trading account, the profit and loss account, and the balance sheet. These are prepared at the end of a financial year taking into consideration all other books of accounts. In class 9 you have learnt how to pass journal entries and how to prepare ledgers. The trial balance is prepared using the balances of the ledger accounts and once we have the trial balance, we can prepare the final accounts. They are called final accounts because they are prepared at the end of other books of accounts and they show the profit or loss and the standing of the company after the end of a particular financial year.

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Chapter 2: Banking, NBSE Bookkeeping class 10

Banking, in the simplest sense, is the process of accepting deposits from customers and paying them back on demand. But it is not always about accepting money and paying them back. It is also about lending money and doing investment. The banks are able to pay you interests because the money that you put in the banks do not stay there. The banks use the money to give others loans and charge interests from them. The banks also invest in other opportunities and this way the banks are able to make some income. This income is used to pay the salaries of the staff and to pay interest to the depositors. Now, not all banks are the same. A salaried person and a business cannot have the same kind of bank account. For instance, a salaried person would have very limited transactions in a month. Therefore, he or she would preferably open a savings account. A business house, on the other hand, would have a number of transactions in a particular day and therefore they cannot operate on a savings account. The business houses thus have to operate through current accounts. In this chapter of NBSE class 10 bookkeeping, you will learn about the different kinds of accounts, and the different types of banks that exist and the functions perform.

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Chapter 3: Bank Reconciliation Statement, NBSE Bookkeeping class 10

Generally, the accountant of a business house keeps records of all the incomes and expenditures of the business and how much money the business is keeping in the bank and how much is being withdrawn daily. The book in which the accountant keeps all the records related to the bank is called a cash book. The bank on the hand also keeps records of what is being deposited by the business and what is being withdrawn on a daily basis. The book in which the bank records all the details of all the transactions is called a passbook. Theoretically, both the accountant and the bank are maintaining the same transactions, so the balance according to the accountant and the balance according to the bank should be the same. But most often, the passbook and the cashbook show different balances because there might be an interest that the bank deposited in the business’ bank account which the accountant is not aware of. So while the bank records the interest in the passbook, the accountant does not record the interest. This causes an imbalance between the two books. To rectify these imbalances and to balance the two books again, a statement is prepared which is known as ‘bank reconciliation statement’.

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Chapter 4: Bills of Exchange, NBSE Bookkeeping class 10

If you are running a business, there will always be a time when you will have to sell someone something on credit. But it is a bit risky to sell anyone anything on credit as they might never pay you back and the credit might turn into bad debt. But if you have to sell something to someone on credit, you can always ask the person when he is going to pay you back the money. If the person says that he would pay you back the money after 2 months, you can ask him to give his insurance in writing in a prescribed format. The advantage of a writing assurance over a vocal assurance is that he will not be able to change his words in the future and if he says that he will pay you back the money after 2 months, he will have to pay the money after 2 months because you have his assurance in writing and you can take legal action against him. Search assurances in writing in the prescribed format are known as bills of exchange. In this chapter, you will learn about bills of exchange, what you can do with the bills and other details related to it.

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Chapter 5: Errors and their Rectification, NBSE Bookkeeping class 10

To err is human. As human beings we are are bound to make mistakes. In accounting also we will make mistakes, but if we make mistakes, then we will not be able to balance the books of accounts and therefore the whole process will be futile. In accountancy, there cannot be any mistake but if we do commit any mistake, there is always a way to correct them. Suppose if you write something on exercise book and later find that you made a mistake there, you can simply correct the mistake using a correction pen or strike out the part that is incorrect. In accountancy, however, correcting mistakes like this is not acceptable. In accountancy, if you make any mistake, the wrong accounting entry will stay, but you can also make another entry showing that a particular entry was wrong and thereby you are able to balance the books of accounts. In this chapter, you will learn how to correct or rectify mistakes in the books of accounts.

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Chapter 6: Depreciation, NBSE Bookkeeping class 10

Suppose in the month of January you bought a mobile phone for Rs 10,000 but in the month of March, you want to sell it. When you try to sell it you’ll find that no one is ready to pay you Rs 10,000 for the mobile even though it’s just three months old. Eventually, you have to sell it at a lesser price. This gradual reduction of price of an asset is known as depreciation. The more you use an asset the less valuable it will become. In business houses, the same thing happens with the machines. Once a machine is bought and installed, its value continues to reduce year after year, but unlike the mobile phone, in case of the machine, depreciation account is maintained by the accountant and a fixed amount or fixed percentage of the value of the machine is deducted every year until its value becomes zero or reaches the scrap value. Scrap value is basically the value reaching which the business stops using that machine anymore.

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