Q1
mcq
1 mark
Vijay and Ajay are partners in a firm. The partnership agreement provides for interest on drawings @ 12% per annum. Which of the following account will be debited to transfer interest on drawings to Profit and Loss Appropriation A/c?
- A. Interest on Drawings Account
- B. Bank Account
- C. Partners Current Account
- D. Partners Capital Account
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Q2
mcq
1 mark
On dissolution of the firm of Ramesh, Suresh and Naresh, Naresh had agreed to bear all realisation expenses for which he was paid ₹14,500. Actual expenses on realisation amounted to ₹11,000 which were paid by:
- A. ₹11,000
- B. ₹3,500
- C. ₹14,500
- D. ₹25,500
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Q3
mcq
1 mark
Which of the following statement is correct regarding subscribed capital ?
- A. It is the amount of share capital which a company is authorised to issue by its Memorandum of Association.
- B. It is that part of authorised capital which is actually issued to the public for subscription.
- C. It is that part of the issued capital which has been actually subscribed by the public.
- D. It is that part of the called-up capital which has been actually received from shareholders.
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Q4
mcq
1 mark
On 1st October 2020, Amit, a partner, advanced a loan of < 1,20,000 to the firm. In the absence of partnership deed, the amount of interest on loan to be paid on 31st March, 2021 will be :
- A. < 3,600
- B. < 7,200
- C. < 12,000
- D. < 6,000
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Q5
mcq
1 mark
Vijay, Ajay and Sanjay are partners in a firm sharing profits and losses in the ratio of 7 : 5 : 8. Sanjay died on 28th August, 2021. His share in the profits of the firm till the date of his death was determined at < 75,000. It will be debited to which of the following accounts ?
- A. Profit and Loss Suspense Account
- B. Profit and Loss Account
- C. Profit and Loss Appropriation Account
- D. Profit and Loss Adjustment Account
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Q6
mcq
1 mark
Anuradha Ltd. issued 2,00,000, 7% debentures of $100 each at a discount of 5% redeemable at a premium of 5%. On issue of debentures, Loss on Issue of Debentures Account will be:
- A. Credited by $10,00,000
- B. Debited by $10,00,000
- C. Debited by $20,00,000
- D. Credited by $20,00,000
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Q6
mcq
1 mark
Assertion (A): Increase in the value of liabilities on reconstitution of a firm is debited to Revaluation Account.
Reason (R): Increase in the value of liabilities is a loss.
Select the correct alternative from the following:
- A. Assertion (A) is correct, but Reason (R) is wrong.
- B. Assertion (A) is wrong, but Reason (R) is correct.
- C. Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
- D. Both Assertion (A) and Reason (R) are wrong.
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Q7
mcq
1 mark
Diksha Ltd. issued 4,000, 9% debentures of $100 each at a discount. Discount on Issue of Debentures Account was accounted for through Loss on Issue of Debentures Account. If the amount of loss on issue of debentures was $60,000, then the amount of premium on redemption was:
- A. $60,000
- B. $40,000
- C. $20,000
- D. $80,000
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Q7
mcq
1 mark
On dissolution of a partnership firm, furniture appearing in the Balance Sheet was $2,00,000. 50% of the furniture was taken over by a partner at $65,000 and balance 50% was sold at 20% less than the book value. The amount debited to bank account was:
- A. $1,45,000
- B. $80,000
- C. $65,000
- D. $1,85,000
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Q8
mcq
1 mark
Part of the uncalled share capital that can be called up only at the time of winding up of the company is called:
- A. Issued capital
- B. Paid-up capital
- C. Reserve capital
- D. Un-issued capital
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Q11
mcq
1 mark
Ria and Surbhi were partners in a firm sharing profits and losses in the ratio of 3 : 2. With effect from 1st April, 2022, they agreed to share profits equally. The goodwill of the firm was valued at $3,00,000. The adjustment will be made by which of the following journal entries?
- A. Surbhi's Capital A/c Dr. $30,000; To Ria's Capital A/c $30,000
- B. Ria's Capital A/c Dr. $30,000; To Surbhi's Capital A/c $30,000
- C. Surbhi's Capital A/c Dr. $3,000; To Ria's Capital A/c $3,000
- D. Ria's Capital A/c Dr. $3,000; To Surbhi's Capital A/c $3,000
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Q11
mcq
1 mark
The goodwill of a firm was valued on the basis of 3 years purchase of average profits for the last four years. The profits of last four years ending 31st March were as follows :
Year Profit/Loss (<)
2018 19 (14,500)
2019 20 15,400
2020 21 32,900
2021 22 16,800
The value of goodwill of the firm was :
- A. < 8,885
- B. < 37,950
- C. < 58,950
- D. < 20,690
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Q12
mcq
1 mark
Naman, Suman and Mohit were partners in a firm sharing profits in the ratio of 8 : 5 : 3. With effect from 1st April, 2022, they decided to share future profits in the ratio of 5 : 6 : 5. Which of the following correctly identifies the gain/loss due to change in profit-sharing ratio?
- A. Naman's gain $\frac{3}{16}$, Suman's sacrifice $\frac{1}{16}$, Mohit's sacrifice $\frac{2}{16}$
- B. Naman's sacrifice $\frac{3}{16}$, Suman's gain $\frac{1}{16}$, Mohit's gain $\frac{2}{16}$
- C. Naman's sacrifice $\frac{3}{16}$, Suman's gain $\frac{2}{16}$, Mohit's gain $\frac{1}{16}$
- D. Naman's gain $\frac{3}{16}$, Suman's sacrifice $\frac{2}{16}$, Mohit's sacrifice $\frac{1}{16}$
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Q12
mcq
1 mark
Chavi Ltd. forfeited 5,000 equity shares of $\langle 10$ each issued at a premium of $\langle 5$ per share for non-payment of first and final call of $\langle 4$.
- A. $\langle 20,000$
- B. $\langle 30,000$
- C. $\langle 50,000$
- D. $\langle 55,000$
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Q13
mcq
1 mark
Naman, Suman and Mohit were partners in a firm sharing profits in the ratio 8 : 5 : 3. With effect from 1st April, 2022, they decided that in future, they will share the profits in the ratio 5 : 6 : 5. Identify the gain or sacrifice by the partners due to change in profit sharing ratio, from the following :
- A. 16/3 16/1, Mo 16/2
- B. 16/3 16/1 16/2
- C. 16/3 16/2 gain 16/1
- D. 16/3 16/2 16/1
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Keshav, Krishna and Murari were in partnership sharing profits and losses in the ratio of 3 : 2 : 1. Their fixed capitals were: $\langle 12,00,000$, $\langle 10,00,000$ and $\langle 8,00,000$ respectively. It was agreed that interest on capital will be allowed at $10\%$ per annum. Partners were entitled to salaries as follows: Keshav $\langle 5,000$ per month and Krishna $\langle 3,000$ per quarter. Profit of the firm for the year ended 31st March, 2022 was $\langle 6,72,000$.
Q13
mcq
1 mark
Keshav, Krishna and Murari were in partnership sharing profits and losses in the ratio of $3 : 2 : 1$. Their fixed capitals were $\langle 12,00,000$, $\langle 10,00,000$ and $\langle 8,00,000$ respectively. It was agreed that interest on capital will be allowed at $10\%$ per annum. Partners were entitled to salaries as follows: Keshav $\langle 5,000$ per month and Krishna $\langle 3,000$ per quarter. Profit of the firm for the year ended 31st March, 2022 was $\langle 6,72,000$.
- A. Keshav $\langle 1,20,000$, Krishna $\langle 1,00,000$ and Murari $\langle 80,000$
- B. Keshav $\langle 1,80,000$, Krishna $\langle 1,12,000$ and Murari $\langle 80,000$
- C. Keshav $\langle 60,000$, Krishna $\langle 12,000$ and Murari $\langle Nil$
- D. Keshav $\langle 3,30,000$, Krishna $\langle 2,12,000$ and Murari $\langle 1,30,000$
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Q14
mcq
1 mark
Current Accounts was:
- A. Keshav $\langle 1,00,000$, Krishna $\langle 1,50,000$ and Murari $\langle 50,000$
- B. Keshav $\langle 50,000$, Krishna $\langle 1,50,000$ and Murari $\langle 1,00,000$
- C. Keshav $\langle 1,50,000$, Krishna $\langle 1,00,000$ and Murari $\langle 50,000$
- D. Keshav $\langle 1,51,500$, Krishna $\langle 1,01,000$ and Murari $\langle 50,500$
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Q15
mcq
1 mark
Niva, Naman and Nityam were partners sharing profits in the ratio of $4 : 3 : 2$. Niva and Naman each give $\tfrac{1}{9}$ from their share to Nityam on reconstitution of the firm. The new profit sharing ratio among Niva, Naman and Nityam will be:
- A. 3 : 4 : 2
- B. 2 : 3 : 4
- C. 4 : 2 : 3
- D. 3 : 2 : 4
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Q16
mcq
1 mark
Anu, Monu and Sonu were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Monu died on 1st January, 2022. Anu and Sonu decided to share future profits in the ratio:
- A. 1 : 1
- B. 3 : 2
- C. 5 : 3
- D. 5 : 2
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Q16
mcq
1 mark
Vidit, Sumit and Mita were partners in a firm sharing profits in the ratio of 4 : 3 : 1. Mita died and her entire share was taken up by Vidit. The new profit sharing ratio of Vidit and Sumit will be:
- A. 1 : 1
- B. 5 : 3
- C. 3 : 5
- D. 5 : 2
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Q17
short answer
3 marks
Rohit and Mohit were partners in a firm sharing profits and losses in the ratio of 3 : 2. Rahul was admitted into partnership for $\frac{1}{3}$ share in profits. Goodwill of the firm was valued at $\text{₹}30,000$. Rahul brought $\text{₹}40,000$ as capital and $\text{₹}5,000$ out of his share of goodwill premium in cash. At the time of his admission, the firm’s books showed goodwill at $\text{₹}15,000$.
Pass necessary journal entries for the above transactions in the books of the firm.
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Q18
short answer
3 marks
Monika, Bhoomika and Kamolika are partners sharing profits in the ratio of 6 : 4 : 1. Kamolika is guaranteed a minimum amount of $\text{₹}3,00,000$ as her share in profits. The firm earned a net profit of $\text{₹}22,00,000$ for the year ended 31st March 2022.
Prepare Profit and Loss Appropriation Account of the firm for the year ended 31st March, 2022.
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Q19
short answer
3 marks
On 1st April, 2021, Hitesh Ltd. took over assets of $\text{₹}8,00,000$ and liabilities of $\text{₹}40,000$ of Pranjal Ltd. at an agreed value of $\text{₹}8,30,000$. Hitesh Ltd. paid the amount to Pranjal Ltd. as follows:
(i) Gave an acceptance payable after 3 months for $\text{₹}2,00,000$, and
(ii) Issued 10% Debentures of $\text{₹}100$ each at a discount of 10% to Pranjal Ltd. in satisfaction of the balance amount.
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Q19
short answer
3 marks
On 1st April, 2021, Hitesh Ltd. took over assets of $8,00,000 and liabilities of $40,000 of Pranjal Ltd. at an agreed value of $8,30,000. Hitesh Ltd. paid the amount to Pranjal Ltd. as follows: (i) Gave an acceptance payable after 3 months for $2,00,000, and (ii) Issued 10% Debentures of $100 each at a discount of 10% to Pranjal Ltd. in satisfaction of the balance amount of purchase consideration. Pass the necessary journal entries to record the above transaction in the books of Hitesh Ltd.
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Q19
short answer
3 marks
Disha Ltd. forfeited 500 shares of $100 each issued at 10% premium, $90 called up, on which the shareholders did not pay $30 per share on allotment (including premium) and first call of $20 per share. Out of these, 300 shares were reissued for $80 per share, fully paid up. Pass necessary journal entries for forfeiture and reissue of shares.
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Q20
short answer
3 marks
A, B and C were partners in a firm sharing profits and losses equally. Their respective capitals were $10,00,000, $9,00,000 and $8,00,000. The partnership deed provided for the following: (1) Interest on capital @ 9% per annum. (2) Interest on drawings @ 12% per annum. (3) Interest on partners loan to the firm @ 10% per annum. During the year, B had withdrawn $20,000 for his personal use. On 30.9.2021, A had given a loan of $70,000 to the firm. Pass the necessary journal entries in the books of the firm for the following for the year ended 31st March, 2022: (i) Allowing. (ii) Providing (iii) Charging Also give transfer entries in the Profit and Loss Account/Profit and Loss Appropriation Account, as the case may be.
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Q21
long answer
Prakash, Aakash and Vikas were partners in a business sharing profits in the ratio of 2 : 2 : 1. Their Balance Sheet as at 31st March, 2022 was as follows: Balance Sheet of Prakash, Aakash and Vikas as at 31st March, 2022 Liabilities Amount Assets Amount Creditors 2,00,000 Bank 40,000 General Reserve 1,00,000 Stock 60,000 Debtors 1,60,000 Capitals : Investments 1,40,000 Prakash 1,20,000 Furniture 70,000 Aakash 2,00,000 Building 2,30,000 Vikas 80,000 4,00,000 7,00,000 7,00,000
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Q22
long answer
4 marks
Sunstar Ltd. has an authorised capital of $20,00,000 divided into equity shares of $10 each. The company invited applications for issuing 60,000 shares. Applications were received for 58,000 shares. All calls were made and were duly received except the final call of $3 per share on 2,000 shares. These shares were forfeited. Show the Company as per Schedule III, Part I, in the Balance Sheet and also give Notes to Accounts for the same.
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Q23
short answer
6 marks
Pass necessary journal entries for issue of 12% debentures in the books of Ghanshyam Ltd. in the following cases :
(i) Issued 1,000, 12% debentures of $100 each at a premium of 10%, redeemable at a premium of 5%.
(ii) Issued 5,000, 12% debentures of $100 each at a premium of 10%, redeemable at par.
(iii) Issued 2,000, 12% debentures of $100 each at a discount of 10%, redeemable at a premium of 5%.
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Q26
long answer
6 marks
(b) Ajanta Ltd. issued a prospectus inviting applications for issuing 5,00,000 equity shares of $10 each issued at a premium of 10%. The amount was payable as follows: on application $3 per share; on allotment (including premium) $5 per share; on first and final call $3 per share. Applications were received for 6,00,000 shares and pro-rata allotment was made to all applicants. Excess money received on application was adjusted towards sums due on allotment. All amounts were duly received except from Sumit, who was the holder of 1,000 shares, and failed to pay the allotment and first and final call. His shares were forfeited. Pass journal entries for the above transactions in the books of Ajanta Ltd. Open calls-in-arrears account wherever necessary.
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Q28
mcq
1 mark
Pie Charts do not have more than __________ categories.
- A. Three
- B. Twenty
- C. Twelve
- D. Seven
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Q29
mcq
1 mark
Which of the following statement is not a limitation of computerised accounting system ?
- A. Data is not made available to everyone.
- B. Data may be lost or corrupted due to power interruptions.
- C. Data are prone to hacking.
- D. Unprogrammed and unspecified reports cannot be generated.
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Q30
long answer
Bhumi and Chavi were partners in a firm sharing profits and losses in the ratio of 5 : 3. They admitted Aditi in the firm on 1st April, 2022. On that date their Balance Sheet was as follows : Balance Sheet of Bhumi and Chavi as at 1st April, 2022 Liabilities Amount < Assets Amount < Capitals : Machinery 3,80,000 Bhumi 3,20,000 Furniture 50,000 Chavi 3,40,000 6,60,000 Debtors 2,30,000 General Reserve 80,000 Stock 1,50,000 Bank loan 60,000 Cash 50,000 Creditors 60,000 8,60,000 8,60,000 Aditi was admitted in the firm with 3 1 share in profits on the following terms : (i) Aditi will bring < 3,00,000 as her capital. (ii) Aditi will bring her share of goodwill premium in cash. Goodwill of the firm was valued on the basis of two years purchase of average profits of the last three years. Average profits of the last three years were < 60,000.
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Q30
mcq
1 mark
Which of the following is not a Solvency Ratio ?
- A. Return on Investment
- B. Interest Coverage Ratio
- C. Proprietary Ratio
- D. Total Assets to Debt Ratio
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Q31
long answer
Anna, Bina and Teena were partners sharing profits and losses in the ratio of 5 : 3 : 2. Their Balance Sheet
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Q32
long answer
6 marks
Yash Ltd. invited applications for 50,000 equity shares of $10 each at a premium of 10%. The amount was payable as follows: On application $3 per share; on allotment (including premium) $3 per share and on first and final call, the balance amount. Applications were received for 1,20,000 shares and shares were allotted on pro-rata basis to all applicants. The excess money received on application was to be adjusted towards sums due on allotment. Application money in excess of sums due on allotment was refunded. A shareholder who applied for 6,000 shares could not pay the first and final call money and his shares were forfeited. The forfeited shares were reissued for $60,000 fully paid up. Pass necessary journal entries for the above transactions in the books of Yash Ltd.
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Q33
long answer
6 marks
Ajanta Ltd. issued a prospectus inviting applications for issuing 5,00,000 equity shares of $10 each issued at a premium of 10%. The amount was payable as follows: On application $3 per share; on allotment (including premium) $5 per share and on first and final call $3 per share. 6,00,000 shares were applied for and all shares were allotted on pro-rata basis to all applicants. The excess money received on application was to be adjusted towards sums due on allotment. All the sums due were received except from Sumit, a shareholder holding 1,000 shares, who failed to pay the allotment and first and final call money. His shares were forfeited. Pass necessary journal entries for the above transactions in the books of Ajanta Ltd. Wherever necessary, give the opening balance of outstanding call account.
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Q33
long answer
4 marks
(a) How can the format of a selected chart element be changed ? Explain.
OR
(b) List any eight uses of accounting software.
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Q34
mcq
1 mark
If operating income in the current year is $10,00,000$ and gross profit is 25% on cost, then operating income will be:
- A. $2,50,000$
- B. $12,50,000$
- C. $2,00,000$
- D. $8,50,000$
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Q34
long answer
Read the following hypothetical text and answer the given question on this basis : Madhav is a young entrepreneur. On 1st April, 2019, he formed a partnership firm with two of his friends, Mohan and Sohan. They started their business of exporting dry fruits. Their business was a successful business. Now they wanted to expand the business in many other countries. For meeting the financial requirements, they changed the form of business organisation and formed Madhav Ltd. The Balance Sheet of Madhav Ltd. as at 31.3.2022 was as follows : Balance Sheet of Madhav Ltd. as at 31st March, 2022 Particulars Note No. 31.3.2022 < 31.3.2021 < I Equity and Liabilities : 1. (a) Share Capital 35,00,000 25,00,000 (b) Reserves and Surplus (Statement of P & L) 12,50,000 10,00,000 2. Non-Current Liabilities Long-term Borrowings
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Madhav is a young entrepreneur. On 1st April, 2019, he formed a partnership firm with two of his friends, Mohan and Sohan. They started their business of exporting dry fruits. Their business was a successful business. Now they wanted to expand the business in many other countries. For meeting the financial requirements, they changed the form of business organisation and formed Madhav Ltd. The Balance Sheet of Madhav Ltd. as at 31.3.2022 was as follows : Balance Sheet of Madhav Ltd. as at 31st March, 2022 Particulars Note No. 31.3.2022 < 31.3.2021 < I Equity and Liabilities : 1. (a) Share Capital 35,00,000 25,00,000 (b) Reserves and Surplus (Statement of P & L) 12,50,000 10,00,000 2. Non-Current Liabilities Long-term Borrowings (10% Debentures) 12,50,000 3,50,000 3. Current Liabilities (a) Short-term Borrowings (Bank Overdraft) 50,000 75,000 (b) Trade Payables 2,50,000 1,50,000 (c) Short-term Provisions 1 1,50,000 75,000 Total 64,50,000 41,50,000 II Assets : 1. Non-Current Assets Fixed Assets (a) Tangible Assets 2 40,00,000 22,50,000 (b) Intangible Assets (Goodwill) 3,50,000 5,00,000 2. Current Assets (a) Inventories 6,25,000 5,00,000 (b) Trade Receivables 12,50,000 7,50,000 (c) Cash and Cash Equivalents 2,25,000 1,50,000 Total 64,50,000 41,50,000 Notes to Accounts : Note No. Particulars 31.3.2022 Amount < 31.3.2021 Amount < 1 Short term Provisions Provision for Tax 1,50,000 75,000 2 Tangible Assets Plant and Machinery 44,00,000 25,00,000 Less Accumulated Depreciation (4,00,000) (2,50,000) 40,00,000 22,50,000 Additional Information : (i) A part of the machine costing <1,25,000 accumulated depreciation thereon being <50,000 was sold for <45,000 during the year. (ii) Interest of <1,25,000 was paid on Debentures.
Q34
long answer
6 marks
Calculate cash flows from investing and financing activities of Madhav Ltd. from the information provided above.
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Q34
long answer
6 marks
Name and explain the financial function which will be used to verify the total interest on a loan between any two periods.
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Q36
mcq
1 mark
If revenue from operations is $10,00,000 and gross profit is 25% on cost, cost of revenue from operations will be:
- A. $2,50,000
- B. $12,50,000
- C. $2,00,000
- D. $8,50,000
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Q37
mcq
1 mark
An investment normally qualifies as cash equivalent only when it has a short maturity, of say, ________ from the date of acquisition.
- A. Three months or more
- B. Six months or less
- C. One year or less
- D. Three months or less
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Q39
long answer
4 marks
Y Ltd. has a Current Ratio of $3.5:1$ and Quick Ratio of $2:1$. If excess of current assets over quick assets represented by inventory is $48,000$, calculate current assets and current liabilities.
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Q40
short answer
4 marks
Calculate Debt to Equity Ratio : Shareholder Funds $< 2,00,000$ Reserves and Surplus $< 1,00,000$ Total Debt $< 4,00,000$ Current Liabilities $< 1,00,000$
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Q41
long answer
4 marks
The Current Ratio of a company is $2:1$. State giving reasons which of the following transactions would improve, reduce or not change the ratio : (a) Purchase of goods for cash $< 60,000$ (b) Purchase of fixed assets for cash $< 2,00,000$ (c) Sale of goods costing $< 20,000$ for $< 23,000$ on credit (d) Issue of shares $< 10,00,000$
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Q44
mcq
1 mark
The need of codification is for :
- A. Generation of mnemonic codes.
- B. The encryption of data
- C. Securing the accounts, reports, etc.
- D. Easy processing of data and keeping proper records
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Q47
mcq
1 mark
To safeguard assets and optimise the use of resources, a business
- A. Only tries to earn maximum revenue.
- B. Keeps internal controls.
- C. Only ensures accurate accounting records.
- D. Only safeguards assets.
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Q48
mcq
1 mark
Correct ##### error appears :
- A. When a number is divided by zero.
- B. When value is not available.
- C. When column is not wide enough.
- D. When formula is not available.
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