Q1
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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Q2
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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Q4
mcq
1 mark
Manmohan Ltd. invited applications for issuing 50,000 equity shares of $10 each at par. The amount payable per share was as follows: On application $3; on allotment $4 and on first and final call $3. Applications were received for 1,45,000 equity shares. Applications for 20,000 equity shares were rejected and remaining applicants were allotted shares on a pro-rata basis. Excess application money received with application was adjusted towards sums due on allotment and first and final call. Amount credited to calls-in-advance account was:
- A. $2,25,000
- B. $25,000
- C. $1,75,000
- D. Nil
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Q5
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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Q5
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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Q7
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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Q8
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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Q9
mcq
1 mark
Chavi Ltd. forfeited 5,000 equity shares of $10 each issued at a premium of $5 per share for non-payment of first and final call of $4:
- A. $20,000
- B. $30,000
- C. $50,000
- D. $55,000
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Q10
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
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Q11
mcq
1 mark
Sujata Ltd. issued 5,000, 7% Debentures of $\langle 100$ each at a premium of 10%. According to the terms of issue, 40% of the amount was payable on application and the balance on allotment. The issue was fully subscribed and all amounts were duly received. The amounts received on application and allotment respectively were:
- A. $\langle 2,50,000$ and $\langle 3,00,000$
- B. $\langle 2,00,000$ and $\langle 3,00,000$
- C. $\langle 2,00,000$ and $\langle 3,50,000$
- D. $\langle 2,00,000$ and $\langle 2,50,000$
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Q11
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 ratio of:
- A. 1 : 1
- B. 3 : 2
- C. 5 : 3
- D. 5 : 2
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Q12
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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Q13
mcq
1 mark
On 1st October 2020, Amit, a partner, advanced a loan of $\langle 1,20,000$ 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. $\langle 3,600$
- B. $\langle 7,200$
- C. $\langle 12,000$
- D. $\langle 6,000$
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Q14
mcq
1 mark
Vijay, Ajay and Sanjay are partners in a firm and share profits and losses in the ratio of 7 : 5 : 8. On 28th August, 2021 Sanjay died. Upto the date of death, his share of profits was calculated as $\langle 75,000$. This will be credited to which account?
- A. Profit and Loss Suspense Account
- B. Profit and Loss Account
- C. Profit and Loss Revaluation Account
- D. Profit and Loss Realisation Account
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Q15
mcq
1 mark
Riya and Surbhi were partners in a firm sharing profits and losses in the ratio of 3 : 2. With effect from April, 2022, they agreed to share profits equally. The value of goodwill of the firm was assessed at $\langle 3,00,000$. The compensation will be made through which transaction?
- A. Debit Surbhi's capital account and credit Riya's capital account with $\langle 30,000$ each.
- B. Debit Riya's capital account and credit Surbhi's capital account with $\langle 30,000$ each.
- C. Debit Surbhi's capital account and credit Riya's capital account with $\langle 3,000$ each.
- D. Debit Riya's capital account and credit Surbhi's capital account with $\langle 3,000$ each.
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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 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
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 16/2
- B. 16/3 16/1 16/2
- C. 16/3 16/2 16/1
- D. 16/3 16/2 16/1
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Q16
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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Q17
long answer
Niti and Aditi were partners in a firm sharing profits and losses in the ratio of 2
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Q17
long answer
3 marks
Niti and Aditi were partners in a firm sharing profits and losses in the ratio of 2 : 3. They admitted John into partnership for $\frac{1}{4}$th share in the profits of the firm, which he acquired equally from Niti and Aditi. John brought $\langle$ 5,00,000 as his capital and $\langle$ 1,00,000 as premium for goodwill. One-fourth of the goodwill was withdrawn by the old partners. Pass necessary journal entries for the above transactions in the books of the firm.
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Q20
long answer
3 marks
Raj, Mehak and Divya were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their respective capitals were: $6,00,000$, $4,00,000$ and $2,00,000$. The partnership deed provided for the following: (a) Interest on capital @ 8% per annum. (b) Interest on drawings @ 6% per annum. (c) Interest on partners loan to the firm @ 5% per annum. During the year, Raj had withdrawn $12,000$ on 1st October, 2021, while Mehak withdrew $60,000$ on 1st December, 2021. On 1st January, 2021, Divya had given a loan of $1,20,000$ to the firm. Pass the necessary journal entries in the books of the firm for the following transactions for the year ended 31st March, 2022: (i) Allowing capital. (ii) Charging. (iii) Providing interest on loan given to the firm by Divya. Also pass 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
3 marks
Disha Ltd. forfeited 500 shares of $\langle$ 100 each issued at 10% premium, $\langle$ 90 called up, on which the shareholders did not pay $\langle$ 30 per share on allotment (including premium) and first call of $\langle$ 20 per share. Out of these, 300 shares were reissued for $\langle$ 80 per share, fully paid up. Pass necessary journal entries for forfeiture and reissue of shares.
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Q21
short 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 Balance Sheet of the Company as per Schedule III.
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Q22
long 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 $\langle$ 3,00,000 as her share in profits. The firm earned a net profit of $\langle$ 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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Q22
long answer
4 marks
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 ($)
Creditors 2,00,000
General Reserve 1,00,000
Capitals:
Prakash 1,20,000
Aakash 2,00,000
Vikas 80,000
Assets Amount ($)
Bank 40,000
Stock 60,000
Debtors 1,60,000
Investments 1,40,000
Furniture 70,000
Building 2,30,000
Vikas died on 30th September, 2022. On the death of a partner the partnership deed provided for the following:
(i) Deceased partner will be entitled to his share of profit up to the date of his death which is to be calculated on the basis of last year’s profit.
(ii) His share in the Goodwill of the firm, calculated on the basis of 3 years purchase of average profits of last four years. Profits for last four years ended 31st March were as follows: 2018-19, $1,60,000$; 2019-20, $1,00,000$; 2020-21, $80,000$ and 2021-22, $60,000$.
(iii) Drawings of the deceased partner up to the date of death were $20,000$.
(iv) Interest on capital was allowed @ 12% per annum.
Prepare Vikas's Capital Account.
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Q23
long answer
6 marks
Pass necessary journal entries for issue of 12% Debentures in the books of Hemant Ltd. in the following cases:
(i) Issued 1,000, 12% Debentures of $100 each at a discount of 10%, redeemable at a premium of 8%.
(ii) Issued 4,000, 12% Debentures of $100 each at a premium of 5%, redeemable at a premium of 10%.
(iii) Issued 5,000, 12% Debentures of $100 each at a premium of 10%, redeemable at par.
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Q24
short answer
6 marks
Kartik and Karan had outside liabilities. After transferring them to the Realisation Account, pass necessary journal entries for the following:
(i) Kartik gave a loan of $12,000$ to the firm which was duly repaid.
(ii) On the date of dissolution, the credit side of Profit and Loss Account showed a balance of $15,000$.
(iii) The creditors, to whom the firm owed $24,000$, accepted stock of $23,000$ in full settlement.
(iv) A machine, which was not recorded in the books of the firm, was taken over by Karan for $31,000$.
(v) Kartik agreed to pay his brother's loan of $16,000$.
(vi) Furniture costing $60,000$ was sold at a profit of 10%.
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Q24
short answer
6 marks
Pass the necessary journal entries for the following transactions on dissolution of the firm of Kartik and Karan after various assets (other than cash) and outside liabilities have been transferred to Realisation Account :
(i) Kartik had given a loan of $12,000 to the firm which was duly paid.
(ii) Profit and Loss Account was showing a debit balance of $15,000 on the date of dissolution.
(iii) Creditors to whom the firm owed $24,000 accepted stock of $23,000 in full settlement.
(iv) A machine which was not recorded in the books of the firm was taken over by Karan at $31,000.
(v) $16,000.
(vi) Furniture of $60,000 was sold at a profit of 10%.
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Q26
long answer
6 marks
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 1/3 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.
(iii) Machinery was revalued at ₹4,60,000.
(iv) The capitals of Bhumi and Chavi were adjusted on the basis current accounts.
Prepare Revaluation Account and Partners Capital Accounts.
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Q27
mcq
1 mark
Which of the following will result in flow of cash ? 1
- A. Cash withdrawn from the bank
- B. $2,00,000$, $9\%$ debentures issued to vendors of machinery
- C. $30,000$ received from debtors
- D. Cheques of $20,000$ deposited in the bank
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Q27
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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Q27
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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Q29
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
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
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Q29
mcq
1 mark
Which of the following is not a Solvency Ratio ? 1
- A. Return on Investment
- B. Interest Coverage Ratio
- C. Proprietary Ratio
- D. Total Assets to Debt Ratio
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Q30
mcq
1 mark
Income from dividend is classified as : 1
- A. Financing activity
- B. Operating activity
- C. Investing activity
- D. Cash and cash equivalents
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Q30
mcq
1 mark
company is classified as :
- A. Financing activity
- B. Operating activity
- C. Investing activity
- D. Cash and cash equivalents
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Q30
mcq
1 mark
Which of the following is not a feature of Computerised Accounting System ?
- A. Simple and Integrated
- B. Accurate and Speed
- C. Data audit not required
- D. Reliability
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Q31
short answer
3 marks
Classify the following items into major heads and sub-heads of Statement of Financial Position as per Schedule III, Part I of the Companies Act, 2013:
(i) Loose Tools
(ii) Capital Reserve
(iii) Mining Rights
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Q32
mcq
1 mark
An investment normally qualifies as cash equivalent only when it has a short maturity, of say, ________ from the date of acquisition. 1
- A. Three months or more
- B. Six months or less
- C. One year or less
- D. Three months or less
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Q32
short answer
3 marks
These ratios are calculated to determine the ability of business to pay off debts in the long run.
(i) Identify the type of ratios discussed above.
(ii) Explain any two ratios of the type of ratios identified in (i) above.
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Q33
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 : 1
- A. $2,50,000$
- B. $12,50,000$
- C. $2,00,000$
- D. $8,50,000$
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Q33
long answer
4 marks
State any three advantages and any one limitation of Computerised Accounting System.
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Q34
mcq
1 mark
If the operating ratio of Aman Ltd. is 60%, its operating profit ratio will be : 1
- A. 100%
- B. 60%
- C. 40%
- D. 160%
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Q34
short answer
1 mark
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
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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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Q40
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 $\langle 48{,}000$, calculate current assets and current liabilities.
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Q41
long answer
4 marks
Calculate Debt to Equity Ratio : Shareholder Funds $\langle 2{,}00{,}000$ Reserves and Surplus $\langle 1{,}00{,}000$ Total Debt $\langle 4{,}00{,}000$ Current Liabilities $\langle 1{,}00{,}000$
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Q42
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 $\langle 60{,}000$ (b) Purchase of fixed assets for cash $\langle 2{,}00{,}000$ (c) Sale of goods costing $\langle 20{,}000$ for $\langle 23{,}000$ on credit (d) Issue of shares $\langle 10{,}00{,}000$
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Q47
mcq
1 mark
Correct #DIV/0! error appears when
- 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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Q48
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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Q49
mcq
1 mark
Where are the amounts owed by customers for credit purchases found in books of accounts ?
- A. Accounts Receivable Journal
- B. General Ledger
- C. Accounts Receivable Subsidiary Ledger
- D. Sales Journal
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Q52
long answer
4 marks
Explain any four heads from the account group
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