By DeeCee – Divine Classes

Mock Test – 1

Accountancy

Q 1. Jaipur club has a prize fund of 6,00,000. It incurs expenses on prizes amounting to 5,20,000. The
expenses should be

(A) Debited to income and expenditure account.

(B) Presented on the asset side of the balance sheet.

(C) Debited to income and expenditure account and presented on the asset side of the balance sheet.

(D) Deducted from the prize fund on the liability side of the balance sheet.

Q 2. X and Y are partners. X draws a fixed amount at the beginning of every month. Interest on drawings
is charged @8% p.a. At the end of the year interest on X's drawings amounts to 2,600. Drawings of X
were:

(A) 8,000 p.m.

(B) 7,000 p.m.

(C) 6,000 p.m.

(D) 5,000 p.m.

Q 3. On 1st April 2018, Maitreyi Club had a Prize Fund of 8,00,000. It incurred expenses on prizes
amounting to 8,70,000 during the year. The balance of Prize Fund in the Balance Sheet as at 31st March
2019 will be:

(A) 70,000

(B) 8,00,000

(C) (70,000)

(D) Zero

Q 4. A and B are partners. B draws a fixed amount at the end of every month. Interest on drawings is
charged @15% p.a. At the end of the year interest on B's drawings amounts to 8,250. Drawings of B
were:

(A) 12,000 p.m.

(B) 10,000 p.m.

(C) 9,000 p.m.

(D) 8,000 p.m.

Q 5. The account which shows classified summary of transactions of a Cash Bank in a Not for Profit
organisation is called:

(A) Income and Expenditure Account

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(B) Receipts and Payments Account

(C) Profit and Loss Account

(D) Subscription Account

Q 6. A and B are partners with a profit sharing ratio of 2:1 and capitals of 3,00,000 and 2,00,000
respectively. They are allowed 6% p.a. interest on their capitals and are charged 10% p.a. interest on
their drawings. Their drawings during the year were A 60,000 and B 40,000. B's share of net profit as per
profit and loss appropriation account amounted to 40,000. Net Profit of the firm before any
appropriations was :

(A) 1,22,000

(B) 1,13,000

(C) 1,17,000

(D) 1,45,000

Q 7. Sports Star Charitable club has income of 16,000 and 'deficit' debited to capital fund of 4,300 for
the year 2019-20, then expenditure for the year 2019-20 is:

(A) 11,700

(B) 4,300

(C) 20,300

(D) None of these

Q 8. A and B are partners in a firm. They are entitled to interest on their capitals but the net profit was
not sufficient for this interest, then the net profit will be distributed among partners in:

(A) Agreed Ratio

(B) Profit Sharing Ratio

(C) Capital Ratio

(D) Equally

Q 9. Which of the following is not a 'Capital Receipt' for 'Ayush Charitable Dispensary"?

(A) Life membership fees received

(B) Interest received on Investments (Out of Building Fund)

(C) Interest received on Investments (Out of General Fund)

(D) Endorsement funds receipts

Q 10. A and B are partners in a firm having capitals of 54,000 and ₹ 36,000 respectively. They admitted C
for 1/3rd share in the profits. C brought proportionate amount of capital. The Capital brought in by C
would be:

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(A) 90,000

(B) 45,000

(C) 54,000

(D) 36,000

Q 11. Which of the following items does not appear in the 'Receipts and Payment' A/c of a not for profit
organisation?

(A) Prepaid Salary (at the end of the year)

(B) Advance Subscription (at the end of the year)

(C) Sale of a machine (Book Value 10,000 Sold at a loss of 2,000)

(D) Accrued Interest on Investments (at the end of the year)

Q 12. X, Y and Z are partners in a firm sharing profits in the ratio of 3:2:1. They decided to share future
profits equally. The Profit and Loss Account showed a Credit balance of ₹ 60,000 and a General Reserve
of 30,000. If these are not to be shown in balance sheet, in the journal entry:

(A) Cr. A by 15,000; Dr. Z by 15,000

(B) Dr. X by 15,000; Cr. Z by 15,000

(C) Cr. X by 45,000; Cr. Y by 30,000; Cr. Z by 15,000

(D) Cr. X by 30,000; Cr. Y by 30,000; Cr. Z by 30,000

Q 13. Disha and Abha were partners in a firm. Farad was admitted as a new partner for 1/5th share in
the profits of the firm. Farad brought proportionate capital. Capitals of Disha and Abha after all
adjustments were 64,000 and 46,000 respectively. Capital brought by Farad was:

(A) 22,000

(B) 27,500

(C) 55,000

(D) 28,000

Q 14. X, Y and Z are partners sharing profits and losses in the ratio 5:3: 2. They decide to share the future
profits in the ratio 3:2:1. Workmen compensation reserve appearing in the balance sheet on the date if
no information is available for the same will be:

(A) Distributed to the partners in old profit sharing ratio

(B) Distributed to the partners in new profit sharing ratio

(C) Distributed to the partners in capital ratio

(D) Carried forward to new balance sheet without any adjustment

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Q 15. A and B are in partnership sharing profits in the ratio of 3:2. They take C as a new partner.
Goodwill of the firm is valued at 3,00,000 and C brings 30,000 as his share of goodwill in cash which is
entirely credited to the Capital Account of A. New profit sharing ratio will be:

(A) 3:2:1

(B) 6:3:1

(C) 5:4:1

(D) 4:5:1

Q 16. Any change in the relationship of existing partners which results in an end of the existing
agreement and enforces making of a new agreement is called

(A) Revaluation of partnership.

(B) Reconstitution of partnership.

(C) Realization of partnership.

(D) None of the above.

Q 17. X and Y are partners sharing profits in the ratio of 4: 3. Z is admitted for 1/5th share and he brings
in 1,40,000 as his share of goodwill in cash of which 1,20,000 is credited to X and remaining amount to Y.
New profit sharing ratio will be:

(A) 4:3:5

(B) 2:2:1

(C) 1:2:2

(D) 2:1:2

Q 18. Meera, Myra and Neera were partners sharing profits in the ratio of 2:2:1. They decided to share
future profits in the ratio of 7:5:3 with effect from 1st April, 2019. Their Balance Sheet as on that date
showed a balance of 45,000 in Advertisement Suspense Account. The amount to be debited respectively
to the capital accounts of Meera, Myra and Neera for writing off the amount in Advertisement Suspense
Account will be:

(A) 18,000, 18,000 and 9,000

(B) 15,000, 15,000 and 15,000

(C) 21,000, 15,000 and 9,000

(D) 22,500, 22,500 and Nil

Q 19. Santa and Banta are partners in a firm sharing profits in the ratio of 3:2. Kanta was admitted as a
new partner for 1/5th share of profits. On Kanta's admission it was decided that machinery would be
appreciated by 10% (Book value 80,000) and Building would be depreciated by 20% (Book value

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2,00,000). Unrecorded Debtors of 1,250 would be brought to books. There was a liability of 2,750
included in Sundry Creditors that is not to be paid. What will be the gain/loss on Revaluation?

(A) Loss 28,000

(B) Loss 40,000

(C) Profit 28,000

(D) Profit 40,000

Q 20. A, B and C are partners sharing profits in 3:2:1 B retires, and the balance of his Capital A/c after
adjusting reserves and his share of goodwill was 2,40,000. The remaining partners gave B an unrecorded
vehicle valued at 60,000 and the balance payable to B was discharged by giving a Bank draft. What will
be the amount of the Bank Draft?

(A) 1,80,000

(B) 2,40,000

(C) 2,60,000

(D) 2,00,000

Q 21. At the time of dissolution of a firm, Creditors are 70,000; Partners' capital is 1,20,000; Cash
Balance is 10,000. Other assets realised 1,50,000. Profit/Loss in the realisation account will be:

(A) 60,000 (Loss)

(C) 40,000 (Loss)

(B) 80,000 (Profit)

(D) 30,000 (Loss)

Q 22. A, B, C are partners sharing profits in 7:3: 2. C retires and his share was purchased by A and B by
giving him (C) 10,000 each from their Capital A/cs. What will be the new profit-sharing ratio of A and B?

(A)2:1

(B) 7:3

(C) 1:1

(D) 3:1

Q 23. On dissolution of a firm, debtors 17,000 were shown in the Balance Sheet. Out of this 2,000
became bad. One debtor became insolvent. 70% were recovered from him out of 5,000. Full amount
was recovered from the balance debtors. On account of this item, loss in realisation account will be:

(A) 5,100

(B) 1,500

(C) 3,500

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(D) 2,000

Q 24. A, B and C are partners sharing profits in 4:3:2. B retires and goodwill was valued 1,08,000. If A and
C share profits in 5:3., find out the goodwill shared by A and C in favour of B.

(A) 22,500 and 13,500

(B) 16,500 and 19,500

(C) 67,500 and 40,500

(D) 19,500 and 16,500

Q 25. A, B, C are partners. B retired and on the date of retirement Workmen's compensation fund was
appearing in the books at 50,000. The claim on account of workmen's compensation was 65,000. The
excess claim will be:

(A) Debited to Revaluation A/c

(B) Credited to Revaluation A/c

(C) Debited to Remaining partner's Capital/Current A/cs in new ratio

(D) Credited to Remaining partner's Capital/Current A/cs in new ratio

Q 26. P, Q and R are sharing profits and losses equally. R retires and the goodwill is appearing in the
books at 30,000. Goodwill of the firm is valued at 1,50,000. Calculate the net amount to be credited to
R's Capital A/c.

(A) 60,000

(B) 50,000

(C) 40,000

(D) 10,000

Q 27. X, Y and Z are partners in a firm in the ratio of 4:3: 2. On firm's dissolution, firm's total assets are
70,000, creditors are 15,000. Realisation expenses are 2,100. Assets realised 15% more than the book-
value. Creditors were paid 2% more. For profit/loss on realisation, Y's capital account will be
debited/credited with:

(A) Credit 8,100

(B) Credit 2,700

(C) Debit 2,700

(D) Debit 2,400

Q 28. Ram, Krishna and Ganesh were sharing profits and losses in the ratio of 5:3:2. Ram retires and
Krishna and Ganesh share the future profits and losses equally. Goodwill of the firm is valued at
1,00,000. Calculate the amount of goodwill to be debited to Krishna's and Ganesha's Capital A/c.

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(A) 60,000 & 40,000

(B) 20,000 & 30,000

(C) 40,000 & 60,000

(D) 30,000 & 20,000

Q 29. On dissolution of a firm, firm's Balance Sheet total is 77,000. On the assets side of the Balance
Sheet items were shown preliminary expenses 2,000; Profit & Loss Account (Debit) Balance 4,000 and
Cash Balance 1,800. Loss on realisation was 6,300. Total assets (including cash balance) realised will be:

(A) 69,200

(B) 71,000

(C) 64,700

(D) 62,900

Q 30. A company issued 20,000 equity shares of 10 each at par payable as under: On application 3, on
allotment 2; on first call 4 and on final call 1 per share.

Applications were received for 65,000 shares. Applications for 15,000 were rejected and pro-rata
allotment was made to the applicants for 50,000 shares. How much amount will be received in cash on
first call? Excess application money is adjusted towards amount due on allotment and calls.

(A) 80,000

(B) 50,000

(C) 30,000

(D) Nil

Q 31. Sunrise Ltd. purchased a building for 5,00,000 payable as 15% in cash and balance by allotment of
9% debentures of 100 each at a premium of 25%. Number of debentures issued will be:

(A) 4,250

(B) 4,000

(C) 5,000

(D) 3,400

Q 32. X Ltd. forfeited 1,000 shares of 10 each for non-payment of final call of 3 each. After reissue of 600
of these shares, 3,000 were transferred to Capital Reserve. Shares were reissued for:

(A) 1,200

(B) 4,800

(C) 3,600

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(D) 4,000

Q 33. If Vendors are issued debentures of ₹ 80,000 in consideration of net assets of 1,00,000, the
balance of 20,000 will be credited to:

(A) Statement of Profit & Loss

(B) Goodwill Account

(C) General Reserve Account

(D) Capital Reserve Account

Q 34. X Ltd. invited applications for issuing 1,60,000 shares of 10 each at par. The amount was payable
as follows:

On Application 3

On Allotment 4

On First and Final Call 3

Applications were received for 2,40,000 shares and pro-rata allotment was made to all the applicants.
All calls were made and were duly received except allotment and first and final call from Aditya who was
allotted 800 shares. His shares were forfeited.

Amount Credited to Share Forfeiture Account will be:

(A) 2,400

(B) 3,600

(C) 1,200

(D) 2,000

Q 35. X Ltd. (an unlisted company) wants to redeem 5,000, 5% Debentures of 100 each at 5% premium.
How much amount it must transfer to Debenture Redemption Reserve, if it has already a balance of
20,000 in Debenture Redemption Reserve Account?

(A) 1,05,000

(B) 30,000

(C) 2,30,000

(D) 4,80,000

Q 36. Goodluck Ltd. invited applications for issuing 80,000 shares of 10 each at a premium of 5 per
share. The amount was payable as follows:

On Application 5 (including premium 3)

On Allotment 7 (including premium 2)

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On First and Final Call 3

Applications were received for 1,00,000 shares and pro-rata allotment was made to all the applicants.
All calls were made and were duly received except allotment and first and final call from Vidya who was
allotted 3,200 shares. Her shares were forfeited.

Amount Credited to Share Forfeiture Account will be:

(A) 4,000

(B) 10,400

(C) 20,000

(D) 13,600

Q 37. A Company issuing debentures with a maturity period of not more than …………….. need not create
Debenture Redemption Reserve:

(A) 2 months

(B) 6 months

(C) 12 months

(D) 18 months

Q 38. Gupta Ltd. forfeited 4,000 shares of 10 each for non-payment of Final Call of 3 per share. Out of
these, 3,000 shares were re-issued as fully paid up in such a way that 9,000 were transferred to capital
reserve. Shares were re-issued for.....

(A) 4 per share

(B) 6 per share

(C) 10 per share

(D) 3 per share

Q 39. Security Deposits' are presented in the Balance Sheet of the company under the sub-head:

(A) Other Non-Current Assets

(B) Long-term Loans and Advances

(C) Fixed Assets

(D) Other Current Liabilities

Q 40. Which of the following is not a part of Finance Cost (in statement of profit and loss)?

(A) Bank Charges

(B) Interest Paid on Debentures

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(C) Interest Paid on Public Deposits

(D) Loss on Issue of Debentures

Q 41. A company’s working capital is 10 lakh (negative balance) in the year 2018. It became Rs 15 lakh
(positive balance) in the year 2019. What is the percentage of change?

(A) 150%

(B) 100%

(C) 250%

(D) 50%

Q 42. If net revenue from operations of a firm are 1,20,000; cost of revenue from operations is 66,000
and operating expenses are 21,600, what will be the percentage of operating income on net revenue
from operations?

(A) 55%

(B) 45%

(C) 73%

(D) 27%

Q 43. A firm's current assets are 3,60,000; current ratio is 3: 1. Cost of revenue from operations is
12,00,000. Its working capital turnover ratio will be:

(A) 3 Times

(B) 5 Times

(C) 8 Times

(D) 4 Times

Q 44. Opening Inventory 1,00,000; Closing Inventory 1,20,000; Purchases 20,00,000; Wages 2,40,000;
Carriage Inwards 1,50,000; Selling Exp. 60,000; Revenue from Operations 30,00,000. Gross Profit ratio
will be:

(A) 29%

(B) 26%

(C) 19%

(D) 21%

Q 45. X Ltd. purchased furniture for 20,00,000 paying 60% by issue of equity shares of 10 each and the
balance by a cheque. This transaction will result in:

(A) Cash used in investing activities ₹ 20,00,000.

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(B) Cash generated from financing activities 12,00,000.

(C) Increase in cash and cash equivalents 8,00,000.

(D) Cash used in investing activities ₹8,00,000.

Q 46. Revenue from Operations 6,00,000; Gross Profit 20%; Office Expenses 30,000, Selling Expenses
48,000. Calculate Operating Ratio

(A) 80%

(B) 85%

(C) 96.33%

(D) 93%

Q 47. An Investment normally qualifies as cash-equivalent only when from the date of acquisition it has
a short maturity period of:

(A) One month or less

(B) Three months or less

(C) Three months or more

(D) One year or less

Q 48. On the basis of following data, a Company's Closing Debtors will be:

Credit Revenue from Operations 9,00,000; Average Collection period 2 months; Opening Debtors are
15,000 less as compared to Closing Debtors.

(A) 1,42,500

(B) 1,57,500

(C) 1,80,000

(D) 75,000

Q 49. Cash deposit with the bank with a maturity date after two months belongs to which of the
following in the cash flow statement:

(A) Investing activities

(B) Financing activities

(C) Cash and Cash equivalents

(D) Operating activities

Q 50. Issue of Debentures for consideration other than cash is shown under which activity?

(A) Operating Activity

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(B) Investing Activity

(C) Financing Activity

(D) None of the above

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