S.M.

S PUBLIC SCHOOL, BARARA(AMBALA)

TERM-I SESSION – 2023-24
ACCOUNTANCY SET – A
CLASS: XII COMMERCE MM:80
SUBJECT: ACCOUNT TIME: 3 HOUR
GENERAL INSTRUCTIONS:
1. This question paper contains 34 questions. All questions are compulsory
2. questions 1 to 20 carries 1 Mark each
3. question 21 to 26 carries 3 Mark each
4. Question 27 to 29 carries 4 Mark each
5. Question 30 t0 34 carries 6 Mark each
1. For the following situation, the old profit sharing ratio of partners is used at the time of admission of a
new partner:-
(a) When new partner brings only a part of his share of goodwill.
(b) When new partner is not able to bring his share of goodwill.
(c) When, at the time of admission,goodwill already appears in the balance sheet.
(d) When new partner bring his share of goodwill in cash.
2. Which of the following items is not dealt through Profit and Loss Approciation Account?
(a) Systematic records
(b) Comparative Study
(c) Based on accounting concepts
(d) Helpful in decision making
3. The goodwill of the firm is not affected by:-
(a) Location of the firm
(b) Reputation of the firm
(c) Better customer service
(d) None of the above
4. Tangible Assets of the firm are Rs. 14,00,000 and outside liabilities are Rs. 4,00,000. Profit of the firm
is Rs. 1,50,000 and normal rate of return is 10%. The amount of capital employed will be
(a) Rs. 10,00,000
(b) Rs. 1,00,000
(c) Rs. 50,000
(d) Rs. 20,000
5. A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner C is
admitted. A surrenders 1/5th share of his profit in favour of C and B surrenders 2/15th of his shares in
favour of C. The new ratio will be:
a) 8 : 4 : 3
b) 42 : 26 : 7
c) 4 : 8 : 3
d) 26 : 42 : 7
6. P and S are partner sharing profits in the ratio of 3 : 2. R is admitted with 1/5th shares and he brings in
Rs. 84,000 as his share of goodwill which is Credited to the Capital Accounts of P and S respectively with
Rs. 63,000 and Rs. 21,000. New profit sharing ratio will be :
a) 3 : 1 : 5
b) 9 : 7 : 4
c) 3 : 2 : 5
d) 7 : 9 : 4
Q7. L, P and G are three partner sharing profit in the ratio 15 : 9 : 8. G retires. L and P decided to share
profits in equal ratio. Gaining ratio will be:
(A) 15 : 9 (B)9 : 15 (C) 7 : 1 (D) 1 : 7

Q9.Give below are two statements, one labelled as Assertion (A) and other labelled as as Reason (R):
Codes:
a) Both (A) and (R) are true and (R) is wrong
b) Both (A) and (R) are true but (R) is not the correct explanation of (A).
c) is true,but (R) is false.
d) is false, but (R) is true.
Assertions (A) When the deed is absent,interest on loan provide by a firm to a partner is computed at
6% p.a
Reason (R) Intereston loan provided by a partner to a firm is treated as charge against the profits in the
books of the firm.
Q10.At time of a dissolution of a firm, Creditors are 70,000; Partner’s Capital is 1,20,000; Cash Balance is
10,000. Other assets realized 1,50,000. Profit/Loss in the realization account will be:
a) 60,000 loss b) 80,000 c) 40,000 Loss d) 30,000 Loss

QAnu, Bina and Charn are Partners. The firm had givan a loan of 20,000 to Bina. On the event of
dissolution, the Loan will be settled by :
a) Transfering it to be debit side of Realization Account
b) Transfering it to be credit side of Realzation Account
c) Transferfing it to be debit of Bina’s Capital Account
d) Bina paying Anu and Charan privetely
Q12 Assertion (A) Loan from a partner is not transferred to Realization Account
Reason (R) Loan from a partner is not out side Liabilitity. It is repaid prior to repayment of Capitals
of partners
In the two context of the above statement, which of the following is correct:
a) Both (a) and (R) are true, but (R) isnot the correct Explanation of (A).
b) Both (a) and (R) are true, but (R) is the correct Explanation of (A).
c) Both (A) and (R) are false
d) Both (A) and (R) are true

Q13 Which of the following statement is ture?

a) A minor cannot be admitted as a partner
b) A minor can be admitted as a partner, only into the benefits of the partnership.
c) A minor can be admitted as a partner, but his right and liabilities are same of adult
partner.
d) None of above.
Q14. Outensible partners are those who
a) Do not cortribut any Capital but get some share of profit for lending their name of the
business.
b) Contribute very less Capital but get equal profit.
c) Do not contribute any Capital and without having any interest in the business, Lend their
name of the business.
d) Contribution maximum Capital of the Business
Q15. Net Assets minus Capital Reserve is :
a)Goodwill b) Total Assets c) Purchase Consideration d) Liquid Assets
Q16.On April 1,2023 an Exiting firm had asset of 5,00,000 and Liabilities of !,00,000. If the normal rate of
return is 10% and goodwill of the firm is valued at 1,20,000nat 4 year’s purchase of super profit ,
average profit of the firm will be;
a) 70,000 b) 80,000 c)90,000 d) 10,000
Q17. A and B are partner sharing profit/ loss in the ratio 4:3 . They admitted into partnership who get
1/5th share in the profit . If C get is wholly from A, The new profit sharing ratio will be:
a) 20:8:7 b) 13:15:15 c) 13:15:7 b) 15:13:5
Q18. -------- is opened to the credit the share of profit of the deceased partner, till the time of his death
to his capitalaccount.
a) Profit and Loss Appropriation Account
b) Profit and Loss Supense Account
c) Profit and Loss Account
d) Profit and Loss Adjustment Account

Q19 A,B and C are partners sharing profit 7:3:2. C retires and his share was purchased vt A and B by
giving him C 10,000in each from their capital a/cs . What will be the new profit-sharing ratio.
a) 2:1 b) 7:3 c) 1:1 d) 3:1.
Q20. Investments valued 2,00,000 were not shown in the books. One of the creditors took over these
investments in full satificiation of his debt of 2,20,000. Howmuch amount will be deducted from
creditors. :
a) 20,000 b) 2,20,000 c)4,20,000 d) 2,00,000
Q21 . Raj,Pooja and Parveenare partnes in a firm. Their Capital account on 1st April ,2023,stood at
2,00,000; 1,20,000 and 1,60,000 respectively.Each partner withdrew rs 15,000 during the
financial
year 2022-24. As per the provisions of their partnership deed:
Interest on Capital was to be allowed @5% per annum.
Interest on drawing was to be charged @4%per annum.
Profits and losses was to be shared in the ratio 5:4:1.
The Net profit of Rs 72,000 for the year ended 31st March 2023, was divided equally amongst the
partners without providing for the terms of the deed.
You are required to pass a single adjustment entry to rectify the error (show work clearly).
Q22.S,P and J are partners sharing profit and losses in the ratio of 3:2:1.with effect on 1 st April, 2023
they agree to share profit equally. For this purpose, goodwill is to valued at two years purchased of
the average profit of last 2 years which were as follows:
2021-22 rs 90,000 profit; 2022-23 rs 70,000(loss).
On 1st April,2022 a Laptop costingrs 50,000 was purchased and debited to internet expenses
account, on which depreciation is to be charged @20% p.n. by Straight line Method.
Pass journal the transaction along with the working notes

Q23.Z Ltd has a current ratio of 3:1 and quick ratio of 2:1. If the excess of current assets over quick as
represented by inventory is Rs 40,000, calculate current aassets.
Q24 Classify the following items under major head and sub head in the balance Sheet of a Company as
per Schedule III of the Company Act, 2013:
1) Bank drafts in hand 2) Calls –in- advance 3) Share forfeiture account
4) Provision for warranties 5) Loose Tools 6) Securities premium.
Q25. A,B and C are sharing profit and losses in the ratio 3 : 2 : 1 decide to admit D for 1/5th share with
effect from 1st April, 2021. An extract of their Balance Sheet as at 31st March, 2021 is :
Liabilities Rs. Assets Rs.
Investment Fluctuation Reserve 30,000 Investment(At cost) 5,00,000
Show the treatment under the following alternatives cases:
Case 1. If the market value of investment is Rs. 4,82,000
Case 2. If the market value of investment is Rs. 5,24,000
Q26. An existing firm had assets of Rs.4,00,000 including cash Rs. 15,000. Its creditor amounted to Rs.
20,000 on that date. The partner’s capital accounts showed a balance of Rs. 3,00,000 and reserves
amounted to Rs. 80,000. If the normal rate of interest is 10% and the goodwill of the of the firm is
valued at Rs. 75,000 at 3 year’s purchase of super profits, find the average profits of the firm.
Q27. Q2 Pass necessary journal entries in the following cases on the dissolution of a partnership firm of
partners X,Y,A and B.
1)Realization expenses of rs 5,000 were to born by X, a partner. However, it was paid by Y.
2) Investment costing rs 25,000 (Comprising 1,000 shares), had been written off from the books
completely.These shares are valued at 20 each and were divided amongst the partners
3) Y,Loan of 50,000 settled at rs 48,000
4) Machinery (book value rs 6,00,000) was given to creditor at a discount of 20%.
Q28. X,Y and Z are partners in a firm sharing profits in the ratio 3 : 2 : 1. On April 1st 2022, Y retires from
the firm. X and Z agree that the capital of the new firm shall be fixed at Rs. 2,10,000 in the profit
sharing ratio. The capital accounts of X and Z after all adjustments on the dates of retirement
showed balance of Rs. 1,45,000 and Rs. 63,000 respectively. State the amount of actual cash to be
brought in or to be paid off to the partners.
Q29. Calculate the value of goodwill on the basis of 3 years purchase of the weighted average profit of
the last five years. Profits to be weighted 1,2,3,4 and 5, the greatest weightage to be given to last
year. Profits of the last five years were:
Year ended
31st March, 2019 : Profit 80,000
“ 2020 : Profit 1,50,000 (after considering abnormal loss of Rs. 41,500)
“ 2021 : Loss 20,000 (after considering abnormal gain of Rs. 40,000)
“ 2022 : Profit 1,80,000
“ 2023 : Profit 2,00,000
Books of account of the firm revealed that :
(i) Closing stock as on 31st March, 2019 was overvalued by Rs. 40,000.
(ii) Repairs to Machinery Rs. 60,000 were wrongly debited to Machinery account on 1 st July, 2021.
Depreciation was charged on Machinery @ 20% p.a. on diminishing balance method.
Q30. A and R were partners sharing profit and losses in the ratio of 5:3.Their Balance Sheet as on 31 st
March, 2023 was as under.
Liabilities Amount Assets Amount
Bill Payable 22,000 Cash in Hand 12,000
Creditors 45,000 Cash at Bank 83,000
Workmen Compensation 40,000 Debtors 82,000
Fund 70,000 Stock 66,000
General Reserve 20,000 Invest,ents 60,000
Profit and loss A/c Furniture 75,000
Capital Account; Machinery 2,25,000
A 3,20,000 Goodwill 1,04,000
 R 1,90,000
7,07,000 7,07,000
st th
1 April 2023 they admitted S into partnership firm 1/4 share which S acquired from A and R in the
ratio of 2:1. Respectively. Other adjustments were as follow:
1) The goodwill of the firm is valued at 96,000 and S was unable to contribute her share of goodwill
in cash.
2) One customer who owed the firm 2,000 became insolvent and nothing could berealized from
him.
3) Create a provision of 5% for doubtful debt.
4) 50% of the investment were taken over by the old partners in their profit sharing ratio.
Remaining Investments were valued at 35,000.
5) Claim on workmen compensation was estimated at 16,000
6) One month salary of 16,000 was outstanding
7) S is to contribute 1,20,000 as Capital.
8) Capital account s of the partners are to be re-adjusted on the basis of their profit sharing
arrangement and any excess or deficiency is to be transferred to their current account
Parpare Revaluation A/c, Partner’s Capital Account and Balance Sheet of the newly consititued firm.

Q 31.L,M and N were partners sharing profit as 50%,30% and 20% respectively. On March 31 st 2023
their Balance Sheet was a follows:
Liabilities Amount Assets Amount
Trade creditors 28,000 Cash 34,000
Employee Provident fund 10,000 Debtors 47,000
Investment.fluctuation fund 10,000 Less: provision (3,000) 44,000
Capital Account: Stock 15,000
L 50,000 Investment 40,000
M 40,000 Goodill 20,000
N 25,000 1,15,000 Profit &Loss A/c 10,000
1,63,000 1,63,000

On this date, M retired and L and N agreed to continue on the following terms.
1) The goodwill of the firm was valued at 51,000.
2) There was a claim for workmens’ compensation to the extent of 6,000.
3) Investment were brought down to 51,000.
4) Provision for doubtful debts was redused by 1,000.
5) M was paid 10,300 in cash and the balance was transferred to his loan account payable intwo
equal instalments together with interest @12% p.a.
Prepare Revaluation A/c ; Partner Capital A/c and Balance Sheet..

Q32. Following is the balance sheet of X and Y, who share profits and losses in the ratio of 4 : 1, as at 31 st
March, 2023:
Liabilities Rs. Assets Rs.
Sundry Creditors 8,000 Bank 20,000
Bank Overdraft 6,000 Debtors 17,000
X’s Brothers Loan 8,000 Less:Provision 2,000 15,000
Y’s Loan 3,000 Stock 15,000
 Investment Fluctuation Fund 5,000 Investment 25,000
Capital: Furniture 6,000
X 50,000 Building 19,000
Y 40,000 Goodwill 10,000
Profit/loss 10,000
1,20,000 1,20,000
The firm was dissolved on the above date and the following arrangements were decided upon :
(i) X agreed to pay off his brother’s Loan
(ii) Debtors of Rs. 5,000 proved bad
(iii) Other assets realized – Investments 20% less; and Goodwill at 60%.
(iv) One of the Creditors of Rs. 5,000 was paid only Rs. 3,000.
(v) Building was auctioned for Rs. 30,000 and the auctioneer’s commission amounted to Rs. 1,000.
(vi) Y took over part of stock at Rs. 4,000 (being 20% less than the book value)
(vii) Realisation expenses amounted to Rs. 2,000.
Q33. A and B are partners with capital of Rs. 5,00,000 and Rs. 3,00,000 respectively sharing profits in the
ratio of 2 : 1. The terms of partnership are as follow :
(i) Interest on Capital is to be allow @ 9% p.a.
(ii) A is to get a salary of Rs. 4,000 per month.
(iii) Interest on B’s Loan Account of Rs. 2,00,000 for the whole year.
(iv) Interest on drawings of partners at 12% p.a. Drawings being A Rs. 60,000 and B Rs. 72,000.
(v) 5% of the distributable profit should be transferred to General Reserve.
Fill in the missing figures in the following accounts:
Profit and Loss Account
Dr. for the year ended 31st March, 2022 Cr.
Particulars Rs. Particulars Rs.
To Interest on B’s Loan ---------- By Profit before Interest -----------------
To Profit transferred to Profit
and Loss Appropriation A/c -----------
----------- -----------------

Profit and Loss Appropriation Account

Dr. for the year ended 31st March, 2022 Cr.
Particulars Rs. Particulars Rs.
To Interest on Capital By Profit and Loss A/c----
A ------ Net Profit -------
B ------ ------- By Interest on Drawings :
To Salary(A) ------- A -------
To General Reserve A/c ------- B ------- -------
To Profit Transferred to :
A’s Capital A/c 1,14,000
B’s Capital A/c ------- -------
------- -------

Q34. From the following information , calculate Interest Coverage Ratio.

(1) Profit after interest and tax and Dividend Rs 7,50,000; Rate of Income Tax 25%; 10% Preference
Shares. Rs 4,00,000; 9% Debentures Rs 8,00,000; Equity Share Rs 10,00,000.
Dividend allowed at the rate of 20% on equity shares.
(2) from the following information determine Opening Inventory and Closing Inventory.
Inventories Turnover Ratio = 5times, Revenue from operation = 29,25,000; Gross Profit on
Cost= 30%; Closing Inventory =40,000 more than the Opening Inventory..