Q1
mcq
1 mark
Sujata Ltd. issued 5,000, 7% Debentures of $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. $2,50,000 and $3,00,000
- B. $2,00,000 and $3,00,000
- C. $2,00,000 and $3,50,000
- D. $2,00,000 and $2,50,000
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Q4
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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Q5
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. Share forfeiture account will be credited by:
- A. $20,000
- B. $30,000
- C. $50,000
- D. $55,000
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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 ₹ 12,00,000, ₹ 10,00,000 and ₹ 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 ₹ 5,000 per month and Krishna ₹ 3,000 per quarter. Profit of the firm for the year ended 31st March, 2022 was ₹ 6,72,000.
Q6
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 ₹ 12,00,000, ₹ 10,00,000 and ₹ 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 ₹ 5,000 per month and Krishna ₹ 3,000 per quarter. Profit of the firm for the year ended 31st March, 2022 was ₹ 6,72,000. Amount credited to the Partners Current Accounts:
- A. Keshav ₹ 1,20,000, Krishna ₹ 1,00,000 and Murari ₹ 80,000
- B. Keshav ₹ 1,80,000, Krishna ₹ 1,12,000 and Murari ₹ 80,000
- C. Keshav ₹ 60,000, Krishna ₹ 12,000 and Murari Nil
- D. Keshav ₹ 3,30,000, Krishna ₹ 2,12,000 and Murari ₹ 1,30,000
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Q7
mcq
1 mark
Amount of profit transferred to P Current Accounts was:
- A. Keshav ₹ 1,00,000, Krishna ₹ 1,50,000 and Murari ₹ 50,000
- B. Keshav ₹ 50,000, Krishna ₹ 1,50,000 and Murari ₹ 1,00,000
- C. Keshav ₹ 1,50,000, Krishna ₹ 1,00,000 and Murari ₹ 50,000
- D. Keshav ₹ 1,51,500, Krishna ₹ 1,01,000 and Murari ₹ 50,500
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Q7
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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Q9
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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Q12
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 Naresh.
- A. $11,000$
- B. $3,500$
- C. $14,500$
- D. $25,500$
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Q13
mcq
1 mark
(i) On $1^{\text{st}}$ 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 $31^{\text{st}}$ March, 2021 will be :
- A. $3,600$
- B. $7,200$
- C. $12,000$
- D. $6,000$
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Q13
mcq
1 mark
(ii) Vijay, Ajay and Sanjay are partners in a firm sharing profits and losses in the ratio of $7 : 5 : 8$. Sanjay died on $28^{\text{th}}$ 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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Q14
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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Q15
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 $31^{\text{st}}$ 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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Q16
mcq
1 mark
Niva, Naman and Nityam were partners sharing profits in the ratio of $4 : 3 : 2$. Niva and Naman each give $\frac{1}{9}$ 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
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Q17
long answer
3 marks
Mahesh and Suresh were partners in a firm sharing profits and losses in the ratio of 2 : 1. They decided to admit Nita into partnership with $\frac{1}{4}$th share in the profits. Nita brought $2,00,000 for her capital and the requisite amount of goodwill premium in cash. The goodwill of the firm is valued at $12,00,000. The new profit sharing ratio of the partners is 2 : 1 : 1. Mahesh and Suresh withdraw their share of goodwill.
Pass necessary journal entries in the books of the firm for the above transactions.
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Q18
long answer
3 marks
(a) 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.
OR
(b) 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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Q19
long answer
3 marks
(a) Monika, Bhoomika and Kamolika are partners sharing profits in the ratio of 6 : 4 : 1. Kamolika is guaranteed a minimum amount of $3,00,000 as her share in profits. The firm earned a net profit of $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.
OR
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Q20
short answer
3 marks
Aditi, Bobby and Krish were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Their capitals were $5,00,000$, $4,00,000$ and $2,00,000$ respectively. The partnership deed provided for the following: (a) Interest on capital @ 10% per annum. (b) Interest on drawings @ 6% per annum. (c) During the year, Aditi had withdrawn $60,000$ and Bobby $50,000$. On 1st September, 2021, Krish had given a loan of $40,000$ to the firm. Pass necessary journal entries in the books of the firm for the following transactions for the year ended 31st March, 2022: (i) Allowing (ii) Charging (iii) Providing 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
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 ₹ Assets Amount ₹
Creditors 2,00,000 Bank 40,000
General Reserve 1,00,000 Stock 60,000
Capitals: Debtors 1,60,000
Prakash 1,20,000 Investments 1,40,000
Aakash 2,00,000 Furniture 70,000
Vikas 80,000 4,00,000 Building 2,30,000
7,00,000 7,00,000
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 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 to show the amount payable to his legal representatives.
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Q22
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.
Schedule III, Part I of the Companies Act, 2013, requires that share capital be shown in the Balance Sheet of the company. Also prepare "Notes to Accounts" for the same.
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Q22
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.
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Q23
short answer
6 marks
Pass necessary journal entries for the following transactions on the dissolution of a firm after various assets (other than cash) and outside liabilities have been transferred to Realisation Account:
(i) Realisation expenses of the firm amounting to ₹2,600 were paid by partner, Aman.
(ii) A creditor of ₹4,500 took over stock valued at ₹5,200 in full settlement.
(iii) An unrecorded asset realised ₹3,500.
(iv) Remaining creditors amounting to ₹20,000 were paid at a discount of 5%.
(v) Remaining stock of ₹30,000 was taken over by a partner, Bimal, at 20% discount.
(vi) Investment having an agreed value of ₹10,000 was sold for 40% gain.
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Q23
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 $\frac{1}{3}$ 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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Q24
short answer
6 marks
Pass necessary journal entries for issue of debentures in the books of Amrit Limited for the following transactions:
(i) Issue of 10,000 9% debentures of ₹100 each at 10% discount, redeemable after three years at 5% premium.
(ii) Issue of 30,000 8% debentures of ₹100 each at par, redeemable at 5% premium.
(iii) Issue of 6,000 9% debentures of ₹100 each at 10% premium, redeemable at 5% premium.
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Q26
long answer
6 marks
26. (a) 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 in the books of Yash Ltd.
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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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Q27
mcq
1 mark
Which of the following will result in flow of cash?
- A. Cash withdrawn from the bank $50,000
- 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
Which type of software package is suitable for an organization where the volume of transactions is very low and adaptability is very high ?
- A. Generic
- B. Specific
- C. Tailored
- D. (b) and (c) both
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Q28
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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Q28
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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Q29
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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Q29
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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Q30
mcq
1 mark
(i) 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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Q30
mcq
1 mark
(ii) If the operating ratio of Aman Ltd. is 60%, its operating profit ratio will be:
- A. 100%
- B. 60%
- C. 40%
- D. 160%
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Q31
short answer
3 marks
Classify the following items under major heads and sub-heads (if any) in the Balance Sheet of a company as per Schedule III, Part I of the Companies Act, 2013:
(i) Prepaid Rent
(ii) Mortgage Loan
(iii) Computer Software
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Q32
short answer
3 marks
Business which is the outcome of utilisation of resources employed in the business.
(i) Identify the types of ratios being discussed above.
(ii) Explain any two ratios of the type of ratios identified in (i) above.
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Q33
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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Q34
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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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 (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. Calculate cash flows from nvesting and inancing activities of Madhav Ltd. from the information provided above.
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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Q35
short 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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Q40
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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