Q1
mcq
1 mark
Identify the incorrect pair.
- A. Goodwill under Annuity Method - Average Profit×Present value annuity factor
- B. Goodwill under Average Profit Method - Average Profit×Number of years of purchase
- C. Goodwill under Weighted Average Profit Method - Weighted Average Profit×Number of years of purchase
- D. Goodwill under Super Profit Method - Super Profit×Number of years of purchase
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Q2
mcq
1 mark
Balaji and Kamalesh are partners sharing profit and losses in the ratio of 2 : 1. They admit Yogesh into partnership. The new profit sharing ratio between Balaji, Kamalesh and Yogesh is agreed to 3 : 1 : 1. Find the sacrificing ratio between Balaji and Kamalesh.
- A. 2 : 1
- B. 1 : 3
- C. 1 : 2
- D. 3 : 1
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Q3
mcq
1 mark
A preference share is one :
(i)Which carries preferential right with respect to payment of dividend at fixed rate.
(ii)Which carries preferential right with respect to repayment of capital on winding up.
- A. Both (i) and (ii) are correct
- B. Only (i) is correct
- C. Both (i) and (ii) are incorrect
- D. Only (ii) is correct
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Q3
short answer
1 mark
Balaji and Kamalesh are partners sharing profit and losses in the ratio of 2 : 1. They admit Yogesh into partnership. The new profit sharing ratio between Balaji, Kamalesh
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Q4
mcq
1 mark
Which one of the following is incorrect regarding the limitations of incomplete records ?
- A. Lack of proper maintenance of records.
- B. Difficulty in preparing trial balance.
- C. Errors and frauds can be detected easily.
- D. Difficulty in ascertaining financial position.
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Q4
short answer
Goods purchased on credit from Mohaideen for ` 20,000.
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Q5
mcq
1 mark
Accounting report prepared according to the requirements of the user is :
- A. Trial Balance
- B. Routine accounting report
- C. Balance Sheet
- D. Special purpose report
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Q6
mcq
1 mark
As per the Indian Partnership Act, 1932 the rate of interest allowed on loans advanced by partners is :
- A. 5% per annum
- B. 8% per annum
- C. 6% per annum
- D. 12% per annum
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Q7
mcq
1 mark
Debt equity ratio is a measure of :
- A. Profitability
- B. Short-term Solvency
- C. Efficiency
- D. Long-term Solvency
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Q8
mcq
1 mark
To test the liquidity of a concern, which of the following ratios are useful ?
(i)Quick ratio (ii)Net profit ratio
(iii)Debt equity ratio (iv)Current ratio
- A. (i) & (iii)
- B. (i) & (ii)
- C. (ii) & (iv)
- D. (i) & (iv)
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Q9
mcq
1 mark
On retirement of a partner from a partnership firm, accumulated profits and losses are distributed to the partners in the :
- A. Gaining ratio
- B. New profit sharing ratio
- C. Sacrificing ratio
- D. Old profit sharing ratio
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Q10
mcq
1 mark
Which of the following statements is not true ?
- A. Trend analysis refers to the study of movement of figures for one year.
- B. Notes and schedules also form part of financial statements.
- C. The common-size statements show the relationship of various items with some common base, expressed as percentage of the common base.
- D. The tools of financial statement analysis include common-size statement.
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Q11
mcq
1 mark
Profit after interest on drawings, interest on capital and remuneration is ` 10,500. Sangeetha, a partner is entitled to receive commission at 5% on profits after charging such commission. Find out the commission.
- A. ` 550
- B. ` 50
- C. ` 500
- D. ` 150
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Q12
mcq
1 mark
At the time of retirement of a partner, determination of gaining ratio is required :
- A. To distribute accumulated profits and losses
- B. To adjust goodwill
- C. To transfer revaluation profit or loss
- D. None of these
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Q13
mcq
1 mark
The term ‘fund’ refers to :
- A. Fixed assets
- B. Current liabilities
- C. Non-current assets
- D. Working capital
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Q14
mcq
1 mark
Current assets excluding inventory and prepaid expenses is called __________.
- A. Funds
- B. Reserves
- C. Quick/Liquid assets
- D. Tangible assets
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Q15
mcq
1 mark
Incomplete records are generally maintained by :
- A. Small sized sole trader business
- B. A company
- C. Multinational enterprises
- D. Government
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Q16
mcq
1 mark
Receipts and payments account is a :
- A. Personal Account
- B. Nominal Account
- C. Representative Personal Account
- D. Real Account
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Q17
mcq
1 mark
In a common size balance sheet, if the percentage of non-current assets is 75, what would be the percentage of current assets ?
- A. 25
- B. 175
- C. 100
- D. 125
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Q18
mcq
1 mark
Contra voucher is used for :
- A. Reports
- B. Master entry
- C. Credit purchase of assets
- D. Withdrawal of cash from bank for office use
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Q19
mcq
1 mark
Super profit is the difference between :
- A. Average profit and normal profit
- B. Capital employed and average profit
- C. Current year’s profit and average profit
- D. Assets and liabilities
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Q20
mcq
1 mark
Income and Expenditure Account is prepared to find out :
- A. Surplus or deficit
- B. Profit or Loss
- C. Financial position
- D. Cash and bank balance
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Q21
short answer
State the meaning of not-for-profit organisation.
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Q22
short answer
What is the Journal entry to be passed for providing interest on capital to a partner ?
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Q23
short answer
Kumar is a partner who withdrew ` 20,000 on 1st April 2018. Interest on drawing is charged at 10% per annum. Calculate interest on drawings on 31st December 2018.
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Q24
short answer
State the four circumstances under which goodwill of a partnership firm is valued.
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Q25
short answer
Anu and Arul were partners sharing profits and losses in the ratio of 3 : 2. On 31.03.2017 Malathi was admitted as a partner. On the date of admission, the book of the firm showed a reserve fund of ` 50,000. Pass Journal entry to distribute the reserve fund.
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Q27
short answer
Current Asset ` 8,00,000; Current Liabilities ` 4,00,000. Calculate current ratio.
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Q30
short answer
The following particulars are available in respect of a business carried on by a partnership firm. (a) Profits earned : 2016 - ` 30,000. (b) Profit of 2016 includes a non-recurring income of ` 3,000. Calculate profit after adjustment.
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Q31
short answer
Differentiate between statement of affairs and balance sheet. (Any 3 points)
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Q32
short answer
What are the predefined ledgers available in Tally.ERP 9 ?
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Receipts and Payments Account for the year ended 31st March 2019 Dr. Cr. Receipts ` ` Payments ` To Subscription 2017 - 2018 5,000 2018 - 2019 48,000 2019 - 2020 3,000 56,000 There are 300 members in the club each paying an annu al subscription of ` 200 per annum. Subscription still outstanding for the year 2017-2018 is ` 1,000.
Q33
long answer
How the following items will appear in the Income and Expenditure Account of a club for the year ending 31st March 2019 ? Receipts and Payments Account for the year ended 31st March 2019. Receipts: To Subscription 2017-2018 5,000; 2018-2019 48,000; 2019-2020 3,000. Total: 56,000. There are 300 members in the club each paying an annual subscription of ` 200 per annum. Subscription still outstanding for the year 2017-2018 is ` 1,000.
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Q34
long answer
Mannan and Ramesh share profits and losses in the ratio 3 : 1. The capital on 1st April 2017 was ` 80,000 for Mannan and ` 60,000 for Ramesh and their current accounts show a credit balance of ` 10,000 and ` 5,000 respectively. Calculate interest on capital at 5% p.a. for the year ending 31st March 2018 and show the journal entries.
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Q35
short answer
State any three factors determining goodwill.
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For the purpose of admitting a new partner, a firm has decided to value its goodwill at 3 years purchase of the average profit of the last 4 years using weighted average method. Profits of the past 4 years and the respective weights are as follows : Particulars 2015 2016 2017 2018 Profit (` ) 20,000 22,000 24,000 28,000 Weight 1 2 3 4
Q36
long answer
For the purpose of admitting a new partner, a firm has decided to value its goodwill at 3 years purchase of the average profit of the last 4 years using weighted average method. Profits of the past 4 years and the respective weights are as follows: Particulars 2015 2016 2017 2018; Profit (`): 20,000, 22,000, 24,000, 28,000; Weight: 1, 2, 3, 4. Compute the value of goodwill.
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Q37
long answer
Govind and Gopal are partners in a firm sharing profit and loss in the ratio 5 : 4. They admit Rahim as a partner. Govind surrenders 2/9 of his share in favour of Rahim. Gopal surrenders 1/9 of his share in favour of Rahim. Calculate the new profit sharing ratio and sacrificing ratio.
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Following are the balances of Ganesh as on 31.12.2018. Particulars ` Particulars ` Cash 5,000 Debtors 16,000 Stock of goods 18,000 Creditors 9,000 Bills receivable 7,000 Cash at bank 24,000 Furniture 3,000 Bills payable 6,000 Land and Buildings 30,000
Q38
long answer
Following are the balances of Ganesh as on 31.12.2018. Prepare statement of affairs as on 31st December 2018 and calculate Capital as on that date.
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Q39
short answer
Explain how to view profit and loss statement in Tally.ERP 9.
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Vetri and Ranjit are partners, sharing profits in the ratio 3 : 2. Their balance sheet as on 31st December 2017 is as under. Liabilities ` ` Assets ` Capital accounts Stock 30,000 Vetri 30,000 Debtors 10,000 Ranjit 20,000 50,000 Cash in hand 35,000 Reserve fund 5,000 Sundry creditors 20,000 75,000 75,000 On 01.01.2018 they admit Suriya into their firm. (i)Suriya brings ` 10,000 as capital for 1 4 share of profit. (ii)After adjustment, Revaluation profit ` 6,000.
Q40
long answer
Vetri and Ranjit are partners, sharing profits in the ratio 3 : 2. Their balance sheet as on 31st December 2017 is as under. On 01.01.2018 they admit Suriya into their firm. (i) Suriya brings ` 10,000 as capital for 1/4 share of profit. (ii) After adjustment, Revaluation profit ` 6,000. Prepare Partner’s Capital account.
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Q41
long answer
Following are the balances of Ganesh as on 31.12.2018.
Particulars ` Particulars `
Cash 5,000 Debtors 16,000
Stock of goods 18,000 Creditors 9,000
Bills receivable 7,000 Cash at bank 24,000
Furniture 3,000 Bills payable 6,000
Land and Buildings 30,000
Prepare statement of affairs as on 31st December 2018 and calculate Capital as on that date.
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Q42
long answer
Vetri and Ranjit are partners, sharing profits in the ratio 3 : 2. Their balance sheet as on 31st December 2017 is as under.
Liabilities ` ` Assets `
Capital accounts Stock 30,000
Vetri 30,000 Debtors 10,000
Ranjit 20,000 50,000 Cash in hand 35,000
Reserve fund 5,000
Sundry creditors 20,000
75,000 75,000
On 01.01.2018 they admit Suriya into their firm.
(i) Suriya brings ` 10,000 as capital for 1/4 share of profit.
(ii) After adjustment, Revaluation profit ` 6,000.
Prepare Partner’s Capital account after admission.
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Q43
short answer
State the differences between double entry system and incomplete records.
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Q44
long answer
From the following information, compute the value of goodwill by capitalising super profit.
(i) Capital employed is ` 4,00,000.
(ii) Normal rate of return is 10%.
(iii) Profit for 2016 : ` 62,000; 2017 : ` 61,000 and 2018 : ` 63,000.
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Q45
long answer
From the following particulars of Poompuhar Literary Association, prepare Receipts and Payments account for the year ended 31st March, 2019.
Particulars ` Particulars `
Opening Cash in hand as on 01.04.2018 5,000 Subscription received 20,000
Bank overdraft as on 01.04.2018 4,000 Repairs and renewals 2,500
Printing & Stationery 1,500 Conveyance Paid 2,750
Interest Paid 3,250 Books Purchased 10,000
Sale of Investments 1,000 Insurance Premium Paid 4,000
Purchase of refreshment 1,500 Sundry receipts 750
Outstanding salary 2,000 Government grants received 6,000
Endowment fund receipts 2,000 Sale of refreshments 1,500
Lighting charges 1,300 Depreciation on buildings 2,000
Cash at bank on 31.03.2019 2,000
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Q46
long answer
From the following Balance Sheet of Arunan Ltd. as on 31.03.2019, calculate (i) Proprietary Ratio (ii) Capital Gearing Ratio.
Balance Sheet of Arunan Ltd. as on 31.03.2019
I. 1. Shareholder's Funds (a) Share Capital: Equity Share Capital 1,50,000; 8% Preference Share Capital 2,00,000; (b) Reserves and surplus 1,50,000
2. Non-current liabilities: Long-term borrowings (9% Debentures) 4,00,000
3. Current liabilities: (a) Short-term borrowings from banks 25,000; (b) Trade payables 75,000; Total 10,00,000
II. 1. Non-current assets: Fixed assets 7,50,000
2. Current assets: (a) Inventories 1,20,000; (b) Trade receivables 1,00,000; (c) Cash & Cash equivalents 27,500; (d) Other current assets Expenses paid in advance 2,500; Total 10,00,000
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Q47
long answer
From the following particulars, prepare comparative income statement of Abdul Co. Ltd.
Particulars 2015-16 (`) 2016-17 (`)
Revenue From Operations 3,00,000 3,60,000
Other income 1,00,000 60,000
Expenses 2,00,000 1,80,000
Income Tax 30% 30%
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Q48
long answer
Murali and Sethu are partners in a firm. Murali is to get a commission of 10% of net profit before charging any commission. Sethu is to get a commission of 10% on net profit after charging all commission. Net profit for the year ended 31st March 2019 before charging any commission was ` 1,10,000. Find the amount of commission due to Murali and Sethu.
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Q49
long answer
Sundar and Suresh are partners sharing profits in the ratio of 3 : 2. Their balance sheet as on 1st January, 2017 was as follows:
Liabilities ` ` Assets `
Capital accounts: Sundar 30,000; Suresh 20,000; 50,000; Creditors 50,000; General Reserve 10,000
Buildings 25,000; Furniture 13,000; Stock 25,000; Debtors 15,000; Bills Receivable 14,000; Bank 18,000
Total 1,10,000 1,10,000
They decide to admit Sugumar into partnership for 1/4 share in the profits on the following terms:
(i) Sugumar has to bring in ` 30,000 as Capital.
(ii) Revaluation loss ` 15,000.
(iii) That the stock be valued at ` 20,000.
(iv) That the Furniture be depreciated by ` 2,000.
(v) That the value of building be depreciated by 20%.
Prepare Capital A/c’s & Balance Sheet after admission.
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Q50
long answer
From the following particulars calculate Total Purchases.
Particulars `
Sundry creditors on 01.04.2017 75,000
Bills Payable on 01.04.2017 60,000
Paid cash to creditors 3,70,000
Paid for Bills Payable 1,00,000
Purchases Returns 15,000
Cash Purchases 3,20,000
Creditors on 31st March 2018 50,000
Bills Payable on 31st March 2018 80,000
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Q51
long answer
From the following Receipts and Payment Account of Trichy Recreation Club, prepare Income and Expenditure Account for the year ended 31.03.2018. Receipts: Opening balance Cash in hand 11,000; Dividend received 27,600; Sale of old Newspaper 3,000; members Subscription 31,000; Locker rent 8,000; Interest on investments 1,250; Sale of Furniture 5,000 (Book value ` 4,400). Payments: Furniture purchased 10,000; Rent 2,800; Secretary's honorarium 15,000; Postage 1,700; General Expenses 4,350; Printing & Stationery 45,000; Audit Fees 5,000; Closing balance Cash in hand 3,000.
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Q52
long answer
Chandru, Vishal and Ramanan are partners in a firm sharing profits and losses equally. Their balance sheet as on 31st March, 2018 is as follows: Liabilities: Capital accounts (Chandru 60,000, Vishal 70,000, Ramanan 70,000) 2,00,000; Bills Payable 80,000. Assets: Furniture 60,000; Machinery 1,20,000; Sundry debtors 33,000 (-) Provision for doubtful debts 3,000 = 30,000; Bills Receivable 50,000; Cash at Bank 20,000. Ramanan retired on 31st March 2019 subject to the following conditions: (i) Machinery is valued at ` 1,50,000. (ii) Value of Furniture brought down by ` 10,000. (iii) Provision for doubtful debts should be increased to ` 5,000. (iv) Investment of ` 30,000 not recorded in the books is to be recorded now. Prepare Revaluation Account and Pass Journal entries.
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Q53
long answer
From the following particulars of Mani Ltd. and Kani Ltd., prepare a common size Income Statement for the year ended 31st March 2019. Particulars: Revenue from operation (Mani Ltd: 2,00,000, Kani Ltd: 2,50,000); Other Income (Mani Ltd: 30,000, Kani Ltd: 25,000); Expenses (Mani Ltd: 1,10,000, Kani Ltd: 1,25,000).
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Q54
short answer
Distinguish between sacrificing ratio and gaining ratio.
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Q55
long answer
Following is the extract of the balance sheet of Babu Ltd., as on 31st March, 2018: 1. Shareholder’s Funds (a) Share Capital 35,000 (b) Reserve and surplus 12,500; 2. Non-current liabilities Long-term borrowings 15,000; 3. Current liabilities (a) Trade payables 10,000 (b) Other current liabilities 7,500 (c) Short-term provisions 21,000. Net profit before Interest and Tax for the year was ` 25,000. Calculate the return on Capital employed for the year.
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Q56
long answer
Record the following transactions in Tally. (1) Robert commenced a transport business with a Capital of ` 1,00,000. (2) An account was opened with a State Bank of India and deposited ` 30,000. (3) Purchased Furniture by paying cash ` 10,000. (4) Goods purchased on credit from Mohaideen for ` 20,000. (5) Cash sales made for ` 8,000.
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Q58
long answer
Following are the balances of Ganesh as on 31.12.2018. Cash: 5,000; Stock of goods: 18,000; Bills receivable: 7,000; Furniture: 3,000; Land and Buildings: 30,000; Debtors: 16,000; Creditors: 9,000; Cash at bank: 24,000; Bills payable: 6,000. Prepare statement of affairs as on 31st December 2018 and calculate Capital as on that date.
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Q59
long answer
Vetri and Ranjit are partners, sharing profits in the ratio 3 : 2. Their balance sheet as on 31st December 2017 is as under: Liabilities: Capital accounts (Vetri 30,000, Ranjit 20,000), Reserve fund 5,000, Sundry creditors 20,000. Assets: Stock 30,000, Debtors 10,000, Cash in hand 35,000. On 01.01.2018 they admit Suriya into their firm. (i) Suriya brings ` 10,000 as capital for 1/4 share of profit. (ii) After ad
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Q61
long answer
From the following Balance Sheet of Arunan Ltd. as on 31.03.2019, calculate (i) Proprietary Ratio (ii) Capital Gearing Ratio. Balance Sheet Items: Share Capital (Equity 1,50,000; 8% Preference 2,00,000); Reserves and surplus 1,50,000; Long-term borrowings (9% Debentures) 4,00,000; Current liabilities (Bank 25,000; Trade payables 75,000). Assets: Fixed assets 7,50,000; Inventories 1,20,000; Trade receivables 1,00,000; Cash & Equivalents 27,500; Expenses paid in advance 2,500.
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Q62
long answer
Sundar and Suresh are partners sharing profits in the ratio of 3 : 2. Balance sheet as on 1st January, 2017: Liabilities (Capital 30,000/20,000; Creditors 50,000; General Reserve 10,000); Assets (Buildings 25,000; Furniture 13,000; Stock 25,000; Debtors 15,000; Bills Receivable 14,000; Bank 18,000). They admit Sugumar for 1/4 share: (i) Sugumar brings 30,000 capital. (ii) Revaluation loss 15,000. (iii) Stock value 20,000. (iv) Furniture depreciated by 2,000. (v) Building depreciated by 20%. Prepare Capital A/c’s & Balance Sheet after admission.
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Q63
long answer
From the following Receipts and Payment Account of Trichy Recreation Club, prepare Income and Expenditure Account for the year ended 31.03.2018.
Receipts ` Payments `
To Opening balance
Cash in hand 11,000 By Furniture purchased 10,000
To Dividend received 27,600 By Rent 2,800
To Sale of old Newspaper 3,000 By Secretary's honorarium 15,000
To members Subscription 31,000 By Postage 1,700
To Locker rent 8,000 By General Expenses 4,350
To Interest on investments 1,250 By Printing & Stationery 45,000
To Sale of Furniture 5,000 By Audit Fees 5,000
(Book value ` 4,400) By Closing balance
Cash in hand 3,000
86,850 86,850
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Q64
long answer
From the following particulars of Mani Ltd. and Kani Ltd., prepare a common size Income Statement for the year ended 31st March 2019.
Particulars Mani Ltd. ` Kani Ltd. `
Revenue from operation 2,00,000 2,50,000
Other Income 30,000 25,000
Expenses 1,10,000 1,25,000
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Q65
short answer
Purchased Furniture by paying cash ` 10,000.
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Q68
long answer
How the following items will appear in the Income and Expenditure Account of a club for the year ending 31st March 2019 ? Receipts and Payments Account for the year ended 31st March 2019. (Table details provided)
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Q69
long answer
For the purpose of admitting a new partner, a firm has decided to value its goodwill at 3 years purchase of the average profit of the last 4 years using weighted average method. (Weights/Profits provided). Compute the value of goodwill.
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Q70
short answer
Compute the value of goodwill based on the following data:
Profit: 20,000, 22,000, 24,000, 28,000
Weight: 1, 2, 3, 4
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Q71
short answer
for the year ended 31st March 2019 before charging any commission was ` 1,10,000. Find the amount of commission due to Murali and Sethu.
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