Book Recommended ------ Ultimate Book of Accountancy Class 12th

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Sample paper – 3
Book Recommended
TARGET TERM 1 ULTIMATE ACCOUNTANCY

BEST ACCOUNTANCY BOOK

FOR

TERM – 1
AVAILABLE ON AMAZON

As per CBSE Guidelines

Students should attempt 45 Questions; each question carry equal marks i.e. 0.88

Part -1 (Section – A)
From Question Number 1 to 18, attempt any 15 Questions
1. SK and PK were partners in a firm sharing profits in the ratio of 3:2. From 1 st April 2021 they
decided to change their profit-sharing ratio to 3:1. Goodwill of the firm was valued and following
entry was recorded:
Date Particulars L.F. Debit Credit
SK’s Capital A/c Dr. 18,000
To PK’s Capital A/c 18,000
(Being goodwill adjusted)
Total Goodwill of the firm valued Rs______________
(A) 36,000 (B) 72,000
(C) 90,000 (D) 1,20,000
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2. X Ltd. invited application for 20,000 shares of Rs. 10 each payable as follow
On Application………………. Minimum application money called as per SEBI guidelines
On Allotment………………… Two times of the application money
Balance…………………………. on first & Final call
What amount is called on Application, allotment and First and Final call _____________
(a) Application 3; Allotment 6 and First and Final call 1
(b) Application 2; Allotment 4 and First and Final call 4
(c) Application 2.50; Allotment 5 and First and Final call 2.50
(d) Application 1.50; Allotment 3 and First and Final call 5.50

3. P Ltd. purchased a running business from Q Ltd. for a sum of 16,00,000 payable ______ by a
cheque and the balance by issuing 10,000 equity shares of Rs. 100 each at a premium of 10%.
Amount to be Paid in cheque will be _________
(A) 5,50,000
(B) 4,00,000
(C) 6,00,000
(D) 5,00,000

4. Vinod Ltd. invited application for issuing 60,000 shares of Rs.10 each at par. The amount was
payable as follows:
On Application…………………………………… Rs.3 per share
On Allotment……………………………………… Rs.4 per share
On First and Final Call…………………………. Rs.3 per share
Applications were received for 80,000 shares and company issued all the shares on Pro-rata
basis. Calculate the net allotment money received by the company.
(A) 3,20,000
(B) 2,40,000
(C) 1,80,000
(D) 2,00,000

5. Rishi Ltd. is registered with Authorized Capital of 20,00,000 divided into 2,00,000 Equity
share of 10 each. Out of which 70,000 shares are offered to the public. The face value of shares
is Rs.10 each but only Rs.6 called by the company. Company passed a resolution that Rs.3 will
not be called except in case of winding up.
The amount of reserve Capital will be ______________
(A) 2,10,000
(B) 6,00,000
(C) 2,80,000
(D) 4,20,000

6. Divyanka and Arjun are partners in a firm sharing profits and losses in the ratio of 3:2.
Balance sheet (Extract)
Liabilities Amount Asset Amount
Machinery 1,00,000
There were two machines, one is having book value (as per the above Balance Sheet) Rs.40,000
is found overvalued by 25% and Second machine undervalued by 25%.
The value of machine to be shown in new Balance sheet ________
(A) 1,05,000
(B) 1,20,000
(C) 92,000
(D) 1,12,000
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7. Which of the following statement is false?
(A) Profits will be shared in the ratio of appropriations when appropriations are more than
the profits
(B) In case of Partnership, the act of any Partner is binding on all partners.
(C) Each Partner is an agent and Principal as per mutual agency relationship
(D) Maximum number of Partners as per Partnership Act 1932 is 50

8. At the time of change in profit sharing ratio, General reserve is given in the balance sheet, but
partners do not want to distribute the reserve this would result in _______
(A) Decrease the Capital of sacrificing Partner
(B) Increase the Capital of Gaining Partner
(C) Increase the Capital of sacrificing Partner
(D) No Change in the Capital of any Partner

9. Rishi, Gaurav and Shiwang are partners sharing profits in the ratio of 3:2:1. According to the
partnership agreement, Shiwang is to get a minimum amount of Rs.89,000 as his share of
profits every year and any deficiency on this account is to be borne in the following manner
• 1/3rd of the deficiency is to be borne by Rishi AND
• Balance amount of deficiency is to be borne by Rishi and Gaurav in the ratio of 1:4.
The net profit for the year ended 31st March 2021 amounted to ₹3,00,000.
The amount of deficiency to be borne by Gaurav__________
(A) 15,600
(B) 20,800
(C) 31,200
(D) 18,200

10. Neeti and Saakshi are partners in a firm sharing profits and losses in the ratio of 3:2. They
Decided to admit Gaurav as a new Partner for 1/6th share.
Balance sheet (Extract)
Liabilities Amount Asset Amount
Investment Fluctuation reserve 15,000 Investment 2,00,000

At the time of admission of a Gaurav, Realisable value of investment was Rs.1,80,000.

what will be the effect of the above information?
(A) Rs. 15,000 Debited to Partner’s Capital Account
(B) Rs. 15,000 Credited to Partners Capital Account
(C) Rs. 5,000 Debited to Partner’s Capital Account
(D) Rs. 5,000 Credited to Partner’s Capital Account

11. X and Y entered into partnership on 1st April 2021 without any partnership deed. They
introduced capitals of Rs.5,00,000 and Rs.3,00,000 respectively. On 1st October 2021, Mrs. X
advanced Rs. 2,00,000 by way of loan to the firm without any agreement as to interest.
How much interest on loan is to be paid to Mrs. X?
(A) 12,000
(B) 6,000
(C) 20,000
(D) Nil
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12. X and Y are Partners sharing Profits in the ratio of 3:2. From the following Balance Sheet of X
and Y, it was found that interest on capital was not provided, calculate interest on capital @
12% p.a. for the year ended 31st March, 2021:
Balance sheet
As at 31.03.2021
Liabilities Amount Asset Amount
Capital Sundry Asset 2,70,000
X 1,00,000
Y 1,50,000
General Reserve 20,000
2,70,000 2,70,000
During the year, X withdrew Rs.10,000 and Y withdrew Rs. 20,000 for personal use. Profit for
the year was Rs. 50,000 out of which Rs. 20,000 was transferred to General Reserve.
Interest on Capital will be ___________
(A) X = 12,000; Y = 18,000
(B) X = 9,840; Y = 18,960
(C) X = 11,040; Y = 18,960
(D) X = 12,960; Y = 17,040

13. The net profits for the last 3 years were: 2018-19 = 80,000; 2019-20 = 1,00,000 and 2020-21 =
80,000. On 1st July 2019, a Minor Repair to Machinery amounting to 20,000 was wrongly
debited to Machinery Account. Depreciation on Machinery was charged @ 20% p.a. on written
down value method excluding repairs. Goodwill of the firm was to be valued at 2 years purchase
of the average profits of last three years. The goodwill of the firm will be:
(A) 1,64,267
(B) 1,62,000
(C) 1,64,667
(D) 1,60,000

14. Which of the following situation is not applicable for issue of shares?
(A) A company can issue the shares at discount in case of sweat equity shares
(B) A company can reissue its forfeited shares at a maximum discount of amount previously
received on these shares.
(C) A company can issue its shares to promoters at Discount
(D) A company can issue its share to vendor at premium.

15. From the following Information calculate the amount to be transferred to Capital Reserve:
• Share forfeiture A/c credited on the forfeiture of 500 shares of Neeti = 3000
• Share Forfeiture A/c Credited on the forfeiture of 400 shares of Shiwang = 3200
• Share forfeiture A/c credited on the forfeiture of 300 Shares of Saakshi = 1200
• Out of the Forfeited share 800 were reissued which includes 400 shares of Neeti, 300
shares of Shiwang and 100 Shares of Saakshi at Rs. 8 per share fully Paid up.
Capital Reserve will be _________
(A) 3300
(B) 3800
(C) 2600
(D) 3600
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16. Which of the following statement is correct regarding one-person Company?

(A) Its Paid up capital should be more than Rs. 50 Lakhs
(B) Any Citizen of any country can be a member of one-person company in India
(C) Its Average annual turnover of three years should not exceed Rs. 2 Crores.
(D) One-person company can be formed for a charitable purpose.

17. Rishi, Gaurav and Neeti were sharing profits in the ratio of 3:3:2. From 1st April 2021, they
decided to share the profits in ratio 1:1:2. Goodwill of the firm was valued at Rs.1,60,000.
Capital Account of Neeti will be _______
(A) Debit by Rs.20,000
(B) Credit by Rs.20,000
(C) Debit by Rs.40,000
(D) Credit by Rs.40,000

18. X, Y and Z are partners sharing profit as follows:

• First 1,00,000 in the ratio of __________ (X’s Share in First 1,00,000 is Rs.50,000)
• Next 60,000 in the ratio of 3:2:1
• Balance in Equal Ratio
If the total profit of X is 96,000; Y is 66,000 and Z is 46,000.
Find out the ratio of X, Y and Z in First 1,00,000
(A) 4:3:1
(B) 5:2:3
(C) 2:1:1
(D) 5:3:2

Part -1 (Section – B)
From question number 19-36, attempt any 15 Questions

19. A debtor who was declared insolvent by the court and whose dues of Rs. 10,000 were written
off as bad debts last year, now promised to pay 10% of the amount. How would you treat this
item at the time of admission of a new partner?
(A) Debit Bank Account by Rs. 1,000 and Credit Revaluation Account by Rs. 1,000
(B) Debit Bank Account by Rs. 1,000 and Credit Debtor Account by Rs. 1,000
(C) Debit Revaluation Account by Rs.1,000 and Credit Debtors Account by Rs. 1,000
(D) No Entry

20. X, Y and Z are partners sharing profits in the ratio of 3:2:1. M admitted as a new partner for
2/9th share. The following situation was found at the time of admission of M:
Balance Sheet (Extract)
Machinery 1,60,000
Stock 35,700
Stock was undervalued by 15%. Machinery was also revalued. Revaluation profit was credited
to Z’s Capital Account Rs.5,000.
Value of Machinery to be shown in New Balance Sheet of the firm ___________
(a) 1,60,700 (b) 1,75,700
(c) 1,83,700 (d) 1,66,300
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21. Gaurav and Neeti are partners sharing profits in the ratio of 3:2. Business is being carried from
the property owned by Neeti on a monthly Rent of Rs. 10,000. On 01.10.2021 Mrs. Gaurav
Advanced Rs.1,00,000 by way of loan to the firm without any agreement as to interest. Interest
on capital of Gaurav is 50,000 and Neeti is 30,000. Commission to Gaurav is Rs. 10,000 and
Salary to Neeti 2,500 per month for eight months. Pass journal entry for distribution to profit to
partners if Profit during the year is 1,53,000 before above items and Capital account is to be
prepared on Fluctuating method.
Choose the correct entry from the following:
(A) Profit & Loss A/c Dr 33,000
To Gaurav Capital A/c 18,000
To Neeti Capital A/c 15,000

(B) Profit & Loss Appropriation A/c Dr 33,000

To Gaurav Capital A/c 18,000
To Neeti Capital A/c 15,000

(C) Gaurav Capital A/c Dr 46,200

Neeti Capital A/c Dr 30,800
To Profit & Loss Appropriation A/c 77,000

(D) Gaurav Capital A/c Dr 46,200

Neeti Capital A/c Dr 30,800
To Profit & Loss A/c 77,000

22. Given below are two statements, one labelled as Assertion (A) and the other labelled as
Reason (R).

Assertion (A) :
Payment to manager for his salary is more important than salary of a partner.
Reason (R) :
Salary to Manager is treated as a charge item against the profit whereas partner will get
salary only if there is profit after the payment of Manager’s salary.

In the context of the above statements, which one of the following is correct?
(a) Assertion is correct, but Reason is wrong
(b) Both Assertion and Reason are correct and Reason is the correct explanation of Assertion
(c) Both Assertion and Reason are correct but Reason is not the correct explanation of
Assertion
(d) Assertion is wrong but Reason is correct

23. Rishi and Gaurav are partners in a firm. They decided to admit Katyayani as a new Partner for
1/5th share and the new profit sharing ratio between Rishi, Gaurav and Katyayani is 5 : 3 : 2.
On the date of admission of Katyayani, following entry is passed by the firm:
Rishi Capital A/c Dr 18,000
Gaurav Capital A/c Dr 12,000
To Goodwill A/c 30,000
Calculate Sacrificing/ Gaining Ratio of Rishi and Gaurav.
(A) Rishi Sacrifice 3/10 and Gaurav Gain 1/10
(B) Rishi Gain 1/10 and Gaurav Gain 1/10
(C) Rishi Sacrifice 1/10 and Gaurav Sacrifice 1/10
(D) Rishi Gain 1/10 and Gaurav Sacrifice 1/10
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24. Calculate Interest on drawings of Dharmendra @ 12% P.a. from the following information as on
31.03.2021.
• Drawing on 15.07.2020 = Rs.10,000
• From 01.09.2020 Dharmendra has withdrawn Rs. 10,000 at the beginning of every
month for 6 months.
Interest on his drawings will be _________
(A) 3,550
(B) 3,250
(C) 3,850
(D) 2,650

25. X and Y are partners. Following information is available on the admission of a new partner Z.
Goodwill (on the basis of Super Profit) = 30,000
The Profit of last 3 years were:
2018-19 = 30,000 (Including Abnormal Gain of 10,000)
2019-20 = 20,000 (Excluding Abnormal loss of 14,000)
2020-21 = 20,000
Number of years Purchased = 2 years
Normal rate of return = 10% P.a.
Calculate the amount of Capital Invested
(A) 90,000
(B) 50,000
(C) 1,30,000
(D) 60,000

26. Given below are two statements, one labelled as Assertion (A) and the other labelled as
Reason (R).
Assertion (A)
There is one situation when partners do not distribute profits in their profit-sharing ratio
mentioned in Partnership Deed.
Reason (R)
When Appropriations are more than the profits, in such a case, Ratio of appropriation is
used to distribute the profits and no use of Profit-Sharing Ratio given in Partnership Deed.

Choose the correct option:

(a) Both Assertion and Reason are correct and Reason is the correct explanation of the Assertion
(b) Both Assertion and Reason are correct but Reason is not correct explanation of the Assertion
(c) Only Assertion is correct
(d) Only Reason is correct

27. Rishi Ltd forfeited 1000 shares on which Rs. 51,500 credited in share forfeiture account. Out of
the forfeited shares 800 shares were reissued as fully paid up and the amount transfer to
capital reserve was Rs. 17,200. Face value of a share was Rs.100.
The reissue price of shares (per share) _______
(A) 70
(B) 30
(C) 60
(D) 80
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28. Which of the following statement is true?
(A) Minimum number of members in a Public Company is 20
(B) One Person can form only 1 one-person company
(C) As per SEBI Guidelines, minimum subscription shall be fixed at 90% of the authorized
capital
(D) The portion of subscribed capital which can be called up only on the winding of the
company is called Capital reserve

29. Rishi and Katyayani are partners sharing profits in the ratio of 4:3. They admit Neeti as a new
partner. New profit sharing ratio among the partners was decided 3:2:2. Katyayani
surrendered 1/3rd of her share in favour of Neeti.
How much total share is sacrificed by Rishi from his own share?
(A) 1/3rd (B) 1/4th
(C) 1/5th (D) 1/7th

30. Shubhangi Ltd. Forfeited 300 shares of Katyayani of Rs. 10 each Rs. 8 called up for non-payment
of first call of Rs. 2 Per share.
Journal entry for forfeiture of share will be
(A) Share Capital A/c Dr 3000
To Share Forfeiture A/c 1800
To Equity Share 1st Call A/c 600
To Equity Share Final call A/c 600

(B) Share Capital A/c Dr 2400

To Share Forfeiture A/c 600
To Equity Share first Call A/c 1800

(C) Share Capital A/c Dr 2400

To Share Forfeiture A/c 1800
To Equity Share first Call A/c 600

(D) Share Capital A/c Dr 3000

To Share Forfeiture A/c 1800
To Calls in arrear A/c 1200

31. Given below are two statements, one labelled as Assertion (A) and the other labelled as
Reason (R).
Assertion (A)
As per the Guidelines of SEBI, minimum application money should not be fixed less than
25% of the issue price of shares for the listed companies.
Reason (R)
Listed companies are required to follow the guidelines of SEBI and application money
cannot be fixed less than 25% of the issue price but in case of unlisted companies
application money should not be less than 5% of the face value of share.

Choose the correct option:

(a) Both Assertion and Reason are correct and Reason is the correct explanation of the Assertion
(b) Both Assertion and Reason are correct but Reason is not correct explanation of the Assertion
(c) Only Assertion is correct
(d) Only Reason is correct
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32. Rishi and Saakshi were partners in a firm. On 1-4-2020 their capitals were: Rishi Rs.1,00,000
and Saakshi Rs.80,000. Interest on capital to be provided @10% p.a.
Their partnership deed provided that the profits shall be divided as follows:
First Rs.50,000 equally and the balance in the ratio of 3 : 2. The profit for the year ended 31st
March, 2021 was Rs.65,000 which had been distributed among the partners and interest on
capital was omitted.
Effect of adjustment entry on Partner’s Capital Account will be:
(A) Rishi A/c Credited with 500 and Saakshi A/c debited with 500
(B) Rishi A/c Debited with 500 and Saakshi A/c Credited with 500
(C) Rishi A/c Credited with 800 and Saakshi A/c Debited with 800
(D) Rishi A/c Debited with 800 and Saakshi A/c Credited with 800

33. Tanya Ltd. invited application for 50,000 shares @ 10 each payable as 3 on application, 4 on
allotment and balance on call. Amount received on Applications Rs.1,32,000.
Amount to be transferred to Share Capital Account _____
(A) 1,32,000 (B) 1,50,000
(C) 4,40,000 (D) NIL

34. Rishi Ltd. was registered with a capital of Rs. 3,00,000 in Equity Shares of Rs 50 each. It issued
4,000 of such shares payable Rs. 15 per share on application; Rs. 20 on allotment; Rs. 5 on first
call; and the balance as and when required. All amounts payable on application and allotments
were duly received except on 300 shares on which allotment money not received. Company
could not call the first call money till 31.03.2021.
Subscribed and Fully Paid up capital as on 31.03.2021 will be:
(A) 1,40,000 (B) 1,34,000
(C) 2,10,000 (D) NIL

35. Pallavi and Neeti are partners sharing profits in the ratio of 3:2. Raj joins the firm. Pallavi
surrenders 1/3rd of her share and Neeti surrender 1/5th of her share in favour of Raj.
New profit-sharing ratio will be:
(A) 10 : 8 : 7
(B) 10 : 7 : 8
(C) 2 : 1 : 2
(D) 4 : 3 : 8

36. Rishi Ltd. purchased a running business from Shubhangi Ltd. for a sum of Rs.50,00,000 payable
50% by a cheque and the balance by the issue of fully paid equity shares of Rs. 100 each at a
premium of 25%. The assets and liabilities consisted of the following:
• Building = 20,00,000
• Plant and Machinery = 18,00,000
• Trade receivable = 7,00,000
• Investment = 6,00,000
• Sundry Liabilities = 5,00,000
The amount of Goodwill/ Capital reserve and Amount of securities premium will be ____
(A) Goodwill 4,00,000 and Securities Premium 5,00,000
(B) Goodwill 5,00,000 and Securities Premium 4,00,000
(C) Capital Reserve 4,00,000 and Securities Premium 10,00,000
(D) Capital Reserve 5,00,000 and Securities Premium 10,00,000

Part -1 (Section – C)
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Attempt any 4 Questions
Instructions:
From Question number 37 to 41, attempt any 4 Questions. Question numbers 37 and 38 are based
on the hypothetical situation given below:

Saakshi Ltd. invited applications of 50,000 Equity Shares of Rs. 10 each at a premium of Rs. 4.
Company received applications of 20,000 in excess and pro-rata allotment was made to all.
Amount payable as follows: on Application Rs.5 along with 50% premium; on Allotment Rs. 3
(including premium of 1), Balance on first and final call. One shareholder Ankita who applied
for 700 shares failed to pay allotment and first and final call money. Her shares were forfeited
after first and final call.

37. Net allotment money not paid by Ankita?

(A) 1500
(B) 1000
(C) 500
(D) 100

38. At the time of forfeiture of shares Securities premium reserve is to be debited with
(A) 600
(B) 1000
(C) 2000
(D) 500

Question Numbers 39, 40 and 41 are based on the hypothetical situation given below:

Rishi and Dharmendra are partners sharing profits and losses in the ratio of 4 : 1. They agree
to take Tanya into partnership for 1/3rd share and new profit sharing ratio will be 5 : 3 : 4. For
this purpose, goodwill is to be valued at three year's purchase of the average profit of last five
years which were as follows:
• Year ending on 31st March 2017 = 3,88,480
• Year ending on 31st March 2018 = 2,99,995
• Year ending on 31st March 2019 = 50,000 (Loss)
• Year ending on 31st March 2020 = 5,00,000
• Year ending on 31st March 2021 = 6,00,000
On a scrutiny of the accounts the following matters are revealed:
(i) An abnormal loss of Rs.3,00,000 was incurred during the year ended 31st March, 2019.
(iii) Closing Stock as on 31st March 2020 was undervalued by Rs.50,000.
(iii) Repairs to Car amounting to Rs.50,000 was wrongly debited to Car Account on 1st Oct.
2018. Depreciation was charged on Vehicles (Cars) @ 10% p.a. on Written down value
Method. New partner’s Current Account is to be opened for the premium for goodwill.

39. Adjusted Profit for the year ended 31.03.2021 will be

(A) 6,04,725 (B) 5,45,725
(C) 5,50,000 (D) 5,54,275

40. Average Adjusted Profit will be __________

(A) 4,00,000 (B) 4,50,000
(C) 5,50,000 (D) 5,00,000
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41. Tanya does not bring her share of goodwill in cash. Capital/ Current account of Partners will be
debited or credited with:
(A) Rishi’s Capital A/c Debited with 4,60,000; Dharmendra’s capital A/c Credited with 60,000;
Tanya’s Capital A/c Credited with 4,00,000
(B) Rishi’s Capital A/c credited with 4,60,000; Dharmendra’s capital A/c Debited with 60,000;
Tanya’s Capital A/c Debited with 4,00,000
(C) Rishi’s Capital A/c credited with 4,60,000; Dharmendra’s capital A/c Debited with 60,000;
Tanya’s Current A/c Debited with 4,00,000
(D) Rishi’s Capital A/c Debited with 4,60,000; Dharmendra’s capital A/c Credited with 60,000;
Tanya’s Current A/c Credited with 4,00,000

PART – II (SECTION – A)
Instructions:
From Question number 42 to 48 attempt any 5 questions.

42. Given below are two statements, one labelled as Assertion (A) and the other labelled as
Reason (R).
Assertion (A)
Issue of Debentures are treated as Non-current Liabilities under the sub-head Long-term
Borrowings but when these debentures are due for Redemption, they are treated as Current
Liabilities under the sub-head Other Current Liabilities.

Reason (R)
Debentures are always shown as Non-current Liabilities whether they are issued or
redeemed.

Choose the correct option:

(a) Both Assertion and Reason are correct and Reason is the correct explanation of the Assertion
(b) Both Assertion and Reason are correct but Reason is not correct explanation of the Assertion
(c) Only Assertion is correct
(d) Only Reason is correct

43. Pick out the odd one out from the followings:
(A) Patents
(B) Computer Software
(C) Designs
(D) Loose tools

44. Which of the following is not representing capital Employed?

(A) Total Asset – Current Liabilities
(B) Non-current Asset + Working Capital
(C) Shareholder’s Fund + Non-current Liabilities
(D) Shareholder’s Fund + Current Liabilities
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45. Read the following statements carefully:
(i) Ignore Price level changes is a limitation of Accounting Ratio
(ii) Working Capital = Total Asset – Non-current asset – Current Liabilities
(iii) Non-current liabilities = Total Asset – Capital employed
(iv) Ideal current ratio is 0.5: 1
In the context of above statement, which of the following options is correct?
(A) Only (i) and (ii) are correct
(B) Only (iii) and (iv) are correct
(C) Only (ii) and (iii) are correct
(D) Only (i) and (iv) are correct

46. Analysis Conducted by the investors and creditors is known as:

(A) Horizontal Analysis
(B) Cross Sectional Analysis
(C) Time series analysis
(D) External Analysis

47. Match the items given in Column I with the headings/subheading (Balance Sheet) as defined in
Schedule III of the Companies Act, 2013 Match the followings
Column I Column II
(I) Expense Paid in Advance (a) Current Liability – Other Current Liabilities
(II) Calls in Advance (b) Non-Current liabilities – Long term borrowings
(III) Public Deposit (c) Non-current Asset – Intangible asset
(IV) Mining Rights (d) Current Asset – Other Current Asset
Choose the correct option:
(A) (I) – (c); (II) – (b); (III) – (a); (IV) – (d)
(B) (I) – (d); (II) – (a); (III) – (b); (IV) – (c)
(C) (I) – (c); (II) – (a); (III) – (b); (IV) – (d)
(D) (I) – (d); (II) – (b); (III) – (a); (IV) – (c)

48. Which of the following statement is incorrect about cost of revenue from operation?
(A) Opening inventory + Purchases + Direct expense – Closing Inventory
(B) Revenue from operation – Gross Profit
(C) Revenue from operation – (Net Profit + Indirect Expenses – Indirect Incomes)
(D) Revenue from operation – Gross Loss

PART – II (SECTION – B)
Instructions:
From Question number 49 to 55 attempt any 6 questions.

49. Total Debt 15,00,000; Working Capital 2,50,000; Current Assets 4,40,000; Non-current asset is
1.5 times of long-term debt. Proprietary Ratio will be_______
(A) 0.32 : 1
(B) 0.30 : 1
(C) 0.45 : 1
(D) 0.38 : 1
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50. Revenue from Operations 8,00,000; Gross Profit 25% on Cost; Closing Inventory is 4 times of
Opening Inventory; Opening Inventory: 10% of Revenue from Operations.
Inventory turnover ratio will be ___________
(A) 3 times
(B) 4 times
(C) 3.20 times
(D) 3.50 times

51. Which of the following statement is false?

(A) Financial Statement Analysis is a post mortem of the business transactions.
(B) Window dressing means manipulation in the books of accounts.
(C) Financial Statement Analysis is not free from Bias.
(D) Tax Authorities do not require Financial Statement of a company.
52. Given below are two statements, one labelled as Assertion (A) and the other labelled as
Reason (R).
Assertion (A)
Debentures are Non-current Liabilities, but in the year of redemption of redemption of
debentures, there will be no effect on Debt Equity Ratio.
Reason (R)
Redemption of Debentures will affect only Current Ratio because Current maturities of long
term debts are current liabilities.

Choose the correct option:

(a) Both Assertion and Reason are correct and Reason is the correct explanation of the Assertion
(b) Both Assertion and Reason are correct but Reason is not correct explanation of the Assertion
(c) Only Assertion is correct
(d) Only Reason is correct

53. Given below are two statements, one labelled as Assertion (A) and the other labelled as
Reason (R).
Assertion (A)
To measure the Operating Efficiency of a company, Profitability Ratios are helpful.

Reason (R)
Operating Efficiency of a company can be measured by all types of Ratios.

Choose the correct option:

(a) Both Assertion and Reason are correct and Reason is the correct explanation of the Assertion
(b) Both Assertion and Reason are correct but Reason is not correct explanation of the Assertion
(c) Only Assertion is correct
(d) Only Reason is correct

54. Current Ratio of the Company is 2 :1 . Which of the following transaction will improve the
current Ratio?
(i) Payment to creditor
(ii) Purchase goods on Credit
(iii) Sale of motor vehicle at a loss of 15%
Choose the correct option
(A) All options are correct
(B) (i) and (ii) are correct
(C) (ii) and (iii) are correct
(D) (i) and (iii) are correct
Book Recommended ------ Ultimate Book of Accountancy Class 12th
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55. Which of the following is not an external user of Financial statement?
(i) Management Source: Ultimate Book of Accountancy
(ii) Government
(iii) Competitor
(iv) Creditors
Choose the correct options
(A) only (i) and (iv)
(B) Only (ii) and (iii)
(C) Only (i)
(D) All options i.e. (i); (ii); (iii) and (iv)

Answers
1. (d) 1,20,000

2. (C) Application 2.50; Allotment 5 and First and Final call 2.50

3. (D) 5,00,000

4. (C) 1,80,000

5. (A) 2,10,000
6. (D) 1,12,000
7. (D) Maximum number of Partners as per Partnership Act 1932 is 50
8. (C) Increase the Capital of sacrificing Partner
9. (B) 20,800
10. (C) Rs. 5,000 Debited to Partner’s Capital Account
11. (D) Nil
12. (C) X = 11,040; Y = 18,960
13. (D) 1,60,000
14. (C) A company can issue its shares to promoters at Discount.
15. (D) 3600
16. (C) Its Average annual turnover of three years should not exceed Rs. 2 Crores.
17. (C) Debit by Rs.40,000
18. (D) 5:3:2
19. (D) No Entry
Note: Promise made by insolvent person is not valid.
20. (c) 1,83,700
21. (B) Profit & Loss Appropriation A/c Dr 33,000
To Gaurav Capital A/c 18,000
To Neeti Capital A/c 15,000
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22. (b) Both Assertion and Reason are correct and Reason is the correct explanation of Assertion
23. (C) Rishi Sacrifice 1/10 and Gaurav Sacrifice 1/10
24. (A) 3,550
25. (B) 50,000
26. (a) Both Assertion and Reason are correct and Reason is the correct explanation of the
Assertion
27. (A) 70
28. (B) One Person can form only 1 one-person company
29. (B) 1/4th
30. (C) Share Capital A/c Dr 2400
To Share Forfeiture A/c 1800
To Equity Share First Call A/c 600
31. (a) Both Assertion and Reason are correct and Reason is the correct explanation of the
Assertion
32. (B) Rishi A/c Debited with 500 and Saakshi A/c Credited with 500
33. (D) NIL
34. (D) NIL
35. (A) 10 : 8 : 7
36. (A) Goodwill 4,00,000 and Securities Premium 5,00,000
37. (D) 100
38. (A) 600
39. (D) 5,54,275
40. (A) 4,00,000
41. (C) Rishi’s Capital A/c credited with 4,60,000; Dharmendra’s capital A/c Debited with 60,000;
Tanya’s Current A/c Debited with 4,00,000
42. (c) Only Assertion is correct
43. (D) Loose tools
44. (D) Shareholder’s Fund + Current Liabilities
45. (A) Only (i) and (ii) are correct
46. (D) External Analysis
47. (B) (I) – (d); (II) – (a); (III) – (b); (IV) – (c)
48. (D) Revenue from operation – Gross Loss
49. (D) 0.38 : 1
50. (C) 3.20 times
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51. (D) Tax Authorities do not require Financial Statement of a company.
52. (a) Both Assertion and Reason are correct and Reason is the correct explanation of the
Assertion
53. (c) Only Assertion is correct
54. (D) (i) and (iii) are correct
55. (C) Only (i)