PLUS Two ACCOUNTANCY QUESTION PAPER
PART - I
(ACCOUNTANCY)
I. Answer any 5 questions from 1 to 6. Each carries 1 score. (5 × 1 = 5)
1. A partnership firm incurs a loss of ₹ 25,000 during 2022-23. Which of the following is admissible to partners at the end of the accounting year?
- (a) Interest on partners loan
- (b) Interest on partners capital
- (c) Commission to partners
- (d) Salary to partners
2. The excess of actual average profit over normal profit is called:
- (a) Capitalised profit
- (b) Notional Profit
- (c) Super Profit
- (d) Gross Profit
3. Retiring or outgoing partner:
- (a) is liable for firm’s liabilities incurred after his retirement.
- (b) is not liable for any liabilities of the firm.
- (c) is liable for obligations incurred before his retirement.
- (d) is liable for obligations incurred before and after his retirement.
4. Which one of the following is not a situation that the Court can make an order to dissolve the firm?
- (a) A partner has become insane.
- (b) When a partner commits breach of agreement.
- (c) The business of the firm cannot be carried on except at a loss.
- (d) On the expiry of the term.
5. Complete the following series with given hint:
Hint: Increase in the value of asset: Debit Asset and Credit Revaluation.
Decrease in the value of liabilities: Debit ............ and Credit ............
6. There are two statements Assertion (A) and Reason (R):
Assertion (A): On dissolution, reserves and surplus balances are transferred to the realization account.
Reason (R): Reserves and surplus are part of undistributed profits.
Choose the correct option from the following:
- (a) Both Assertion (A) and Reason (R) are correct.
- (b) Both Assertion (A) and Reason (R) are incorrect.
- (c) Assertion (A) is correct but Reason (R) is incorrect.
- (d) Assertion (A) is incorrect but Reason (R) is correct.
II. Answer any 4 questions from 7 to 11. Each carries 2 scores. (4 × 2 = 8)
7. Anil and Sunil are friends. They bought a building for ₹ 3,00,000 by contributing equal amounts. After two years, they sold it for ₹ 5,00,000 and shared the profit equally.
(a) Are they doing business in partnership?
(b) Give a reason to support your answer.
8. List out any four items appearing on the credit side of a partner’s current account.
9. Write the changes affected on assets from the following journal entries:
(a) Furniture A/c ............ Dr ₹12,000
To Revaluation A/c ₹12,000
(b) Revaluation A/c .......... Dr ₹10,000
To Machinery ₹12,000
10. Aji, Biji, and Saji are equal partners. On the date of retirement of Saji, the balance sheet of the firm showed a general reserve of ₹ 60,000. Give journal entries to adjust the above.
11. With reference to dissolution of a firm, complete the table given below:
| Description |
Journal Entry |
| Transfer of Assets to Realisation A/c |
Realisation A/c Dr
To Assets |
| Transfer of Liabilities |
.............................. |
| .............................. |
Bank A/c Dr
To Realisation |
III. Answer any 5 questions from 12 to 17. Each carries 3 scores. (5 × 3 = 15)
12. Complete the following table with regard to the provisions applicable in the absence of a partnership deed:
| Hint: Remuneration to partner |
No |
| (a) Sharing of profit or loss |
.............................. |
| (b) Interest on Capital |
.............................. |
| (c) Interest on Loan |
.............................. |
13. Adjustment for Deficiency of Profit
Raju and Rahim are partners. They admit Thomas and guarantee that his share of profit will not be less than ₹ 28,000. Profits are to be shared 4:3:2 respectively. Total profits were ₹ 99,000. It was agreed that excess payable to Thomas over his share will be borne by Raju and Rahim in the ratio of 3:1.
Write the journal entry for adjustment for deficiency of profit.
14. Goodwill Calculation
A firm has earned ₹ 3,00,000 as average profit for the last few years. The normal rate of return in the class of business is 10%. Find out goodwill according to the Capitalisation of Super Profit method if the value of net assets amounted to ₹ 12,00,000.
15. Match the following:
| A |
B |
C |
| 1. Sacrificing Ratio |
Old Ratio × Rest of share |
At the time of retirement or death |
| 2. Gaining Ratio |
Old Ratio - New Ratio |
At the time of admission |
| 3. New Ratio |
New Ratio - Old Ratio |
At the time of capital adjustment |
16. Calculation of C's Share of Profit
A, B, and C are partners sharing profit and losses equally. C decided to retire from the firm on 30th June, 2023. His share of profit up to the date of retirement has to be calculated on the basis of average profit of the last four years. The profit for the last four years were:
- 2019-20: ₹ 40,000
- 2020-21: ₹ 14,000
- 2021-22: ₹ 50,000
- 2022-23: ₹ 40,000
Calculate C's share of profit up to the date of retirement. Books of accounts are closed on 31st March every year.
17. Differences Between Dissolution of Partnership and Dissolution of Firm
Write any three differences between Dissolution of partnership and Dissolution of firm.
IV. Answer any 2 questions from 18 to 20. Each carries 6 scores. (2 × 6 = 12)
18. Balance Sheet of Gokul and Gopika
Gokul and Gopika are partners sharing profits and losses in the ratio of 3:2 respectively. On March 31, 2023, their Balance Sheet was as under:
| Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
| Creditors |
80,000 |
Cash |
10,000 |
| Bank Overdraft |
20,000 |
Bills Receivables |
20,000 |
| Reserve Fund |
10,000 |
Debtors |
70,000 |
| Employees PF |
30,000 |
Stock |
40,000 |
| Capital |
|
Machinery |
1,80,000 |
| Gokul |
1,80,000 |
Buildings |
1,00,000 |
| Gopika |
1,20,000 |
Patent |
20,000 |
| Total |
4,40,000 |
Total |
4,40,000 |
They agreed to admit Geetha into partnership on the following terms:
- Geetha brings ₹ 1,00,000 as her Capital and ₹ 80,000 as her share of goodwill for 1/4 share of profit in the business.
- Building and machinery to be depreciated by 10%.
- The firm has an unrecorded motor vehicle of ₹ 40,000, which was brought into record.
- Provide ₹ 1,300 for provision for bad and doubtful debts.
- Stock is valued at ₹ 50,000.
Prepare Revaluation Account and Partners’ Capital Account.
19. A’s Retirement and Executors Account
A, B, and C are partners sharing profits in a 3:2:1 ratio. A died on October 1, 2023. It was agreed between his executors and the remaining partners that:
- (a) Goodwill to be valued at 2 years' purchase of the last 5 years’ average profit.
(Average profit of the past 5 years was ₹ 20,000)
- (b) Machinery to be depreciated by ₹ 12,000, and Buildings to be appreciated by ₹ 24,000.
- (c) Profit for the year 2023 to be taken as having accrued at the same rate as that of the previous year.
(The profit of 2022-23 was ₹ 36,000)
- (d) Interest on capital @ 12% p.a. (The capital account balance of A as on 01-04-2023 was ₹ 60,000)
- (e) Accumulated profits and losses are to be shared among partners.
(Balance sheet of the firm as on 31-03-2023 shows a credit balance of ₹ 12,000 in the Profit & Loss A/c)
Books of accounts are closed on 31st March every year.
Prepare A’s Executors Account.
20.Realisation Account - Ravi and Rahim
Balance Sheet of Ravi and Rahim as on 31st March, 2023
| Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
| Creditors |
40,000 |
Cash |
8,000 |
| Reserves |
13,000 |
Stock |
12,000 |
| Mrs. Ravi’s Loan |
12,000 |
Debtors |
25,000 |
| Rahim’s Loan |
6,000 |
Furniture |
30,000 |
| Capital |
|
Machinery |
50,000 |
| Ravi |
40,000 |
Investments |
15,000 |
| Rahim |
30,000 |
Profit and Loss A/c |
1,000 |
| Total |
1,41,000 |
Total |
1,41,000 |
Dissolution Details
- Ravi agreed to take over investment and to pay Mrs. Ravi’s Loan.
- Other assets are realised as follows:
- Stock: ₹ 14,000
- Debtors: ₹ 28,000
- Furniture: ₹ 37,000
- Machinery: ₹ 47,000
- Expenses on realisation amounted to ₹ 2,000.
- Creditors agreed to accept ₹ 37,000 as final settlement.
PART - II (ANALYSIS OF FINANCIAL STATEMENTS)
I. Answer any 5 questions from 21 to 26. Each carries 1 score. (5 x 1 = 5)
21. What does over subscription of shares means?
- Issue of more shares than initially planned.
- Demand for the shares exceeds than the number of shares issued.
- Issue of fewer shares than initially planned.
- When the issue price is set above the face value.
22. There are two statements Assertion (A) and Reason (R):
Assertion (A): Forfeited shares can be re-issued at a discount.
Reason (R): Re-issuing forfeited shares at discount is often attract new investors and ensure that the shares are sold.
Choose the correct option from the following:
- Both Assertion (A) and Reason (R) are correct.
- Both Assertion (A) and Reason (R) are incorrect.
- Assertion (A) is correct but Reason (R) is incorrect.
- Assertion (A) is incorrect but Reason (R) is correct.
23. Debentures which are secured by a charge on the assets of the company are called:
- Secured debentures
- Unsecured debentures
- Convertible debentures
- Bearer debentures
24. Moon Ltd. issued 10,000, 9% debentures of ₹ 100 each at a premium of 5%, redeemable at a premium of 10%. Loss on issue of debenture account will be debited by:
- ₹ 10,00,000
- ₹ 1,00,000
- ₹ 1,50,000
- ₹ 1,05,000
25. Which of the following transactions will result flow of cash?
- Issue of 9% debentures of ₹ 1,00,000 to the vendor of machinery.
- Cash received from Debtors amounted to ₹ 60,000.
- Redeemed 10% debentures by converting to equity shares.
- Cash proceedings from issuing shares ₹ 70,000.
Choose the right answer:
- B only
- B, C and D
- B and D
- A and B
26. Complete the following series with given hint:
Hint: Current Ratio - A type of Liquidity Ratio
Gross profit Ratio - ........................................
II. Answer any 4 questions from 27 to 31. Each carries 2 scores. (4 x 2 = 8)
27. Write a short note on "One Person Company".
28. Aiswarya Ltd. purchased a machinery from Raj Ltd. for ₹ 2,00,000 and agreed to make the payment by issuing 2,000, 10% debentures of ₹ 100 each.
Record necessary journal entries.
29. For a new investor investing in debentures of a company is more attractive than investing in shares. Justify your answer.
30. Write any two objectives of Financial Statement Analysis.
31. Classify the following items as investing activity and financing activity:
- Dividend received
- Interest paid
- Purchase of machinery
- Redemption of debentures
III. Answer any 5 questions from 32 to 37. Each carries 3 scores. (5 x 3 = 15)
32. The Board of Directors of Galaxy Ltd. resolved that 2,000 equity shares of ₹ 10 each be forfeited for non-payment of second and final call of ₹ 3 per share. Out of these shares 1,500 shares were re-issued at ₹ 6 per share. Give necessary journal entries.
33. Match the followings:
| A |
B |
| 1. Call |
A. Asset |
| 2. Calls in advance |
B. Demand by the company |
| 3. Calls in arrears |
C. Liability |
34. Aravind Ltd. purchased land and building worth of ₹ 10,00,000 from Megha Ltd. by issuing shares of ₹ 100 each. Write the journal entries for the same if the issue is as follows:
- at par
- at a premium of 25%
35. Briefly explain any three objectives of preparing financial statements of a Company.
36. Current Ratio is 3.5. Working Capital is ₹ 90,000. Calculate the amount of Current Assets and Current Liabilities.
37. From the following, compute cash flow from operating activity:
Net Profit during the year ₹ 5,00,000
Depreciation for the year ₹ 2,00,000
Profit on Sale of assets ₹ 50,000 (Transferred to Profit & Loss A/c)
Increase in trade receivables ₹ 40,000
Increase in trade payable ₹ 60,000
IV. Answer any 2 questions from 38 to 40. Each carries 6 scores. (2 x 6 = 12)
38. Bocca Juniors Ltd. issued 2,500 equity shares of ₹ 10 each at a premium of ₹ 1 per share, payable as ₹ 3 on application, ₹ 5 (Including premium) on allotment and balance on first and final call. Company received application for 3,000 shares. Excess application money was refunded. All sums due on calls and allotments are received.
Record the transactions on the journal of Bocca Juniors.
39. Calculate following ratios from the following information:
- Current Ratio
- Acid-Test Ratio
- Gross Profit Ratio
Current Assets ₹ 35,000
Current Liabilities ₹ 17,500
Inventory ₹ 15,000
Revenue from Operations ₹ 60,000
Cost of Revenue from Operations ₹ 30,000
40. Prepare a common size balance sheet of Alpha Ltd. from the following information :
| Particulars |
March 31, 2020 |
March 31, 2021 |
| I. Equity and Liabilities |
|
|
| (a) Equity share capital |
20,00,000 |
22,00,000 |
| (b) Reserves and surplus |
8,00,000 |
10,00,000 |
| (c) Current liabilities |
12,00,000 |
18,00,000 |
| Total |
40,00,000 |
50,00,000 |
| II. Assets |
|
|
| (a) Fixed assets |
28,00,000 |
31,00,000 |
| (b) Current assets |
12,00,000 |
19,00,000 |
| Total |
40,00,000 |
50,00,000 |