Royal Singh

Royal academy Auraiya

ACCOUNTANCY PRACTICE
Class 12 - Accountancy
Time Allowed: 1 hour and 30 minutes Maximum Marks: 50

1. Vijay and Ajay are partners in a firm. The partnership agreement provides for interest on drawings @ 12% per [1]
annum. Which of the following accounts will be debited to transfer interest on drawings to Profit and Loss
Appropriation A/c?

a) Partners’ Current accounts b) Interest on Drawings account

c) Bank Account d) Partners’ Capital accounts

2. B and A are partners in a firm and sharing the profit & loss in the ratio of 3 : 2 with a capital of ₹ 1,00,000 and ₹ [1]
60,000 respectively. Calculate the amount of profit or loss to be distributed among the partner if partnership deed
is silent on interest on capital. Profit for the year is ₹ 50,000.
Profit distribution will be:
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a) Profit is to be shared in the ratio of their b) Profit to B = 25,000 and A = 25,000
capital i.e. 5 : 3

c) Profit to B = 20,000 and A = 30,000 d) Profit to B = 30,000 and A = 20,000

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3. Partner's Drawing Account is closed [1]

a) by transfer to credit of Current Account b) by transfer to debit side of Capital or

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Current Account

c) by transfer to credit side of Capital or d) by transfer to credit side of the Capital

Current Account Account
4. When partnership deed is silent regarding interest on capital and drawings, it will be given as follows [1]

a) 12% p.a. on capital and drawings b) 6% p.a. on capital and drawings

c) No interest on capital and drawings d) 10 % p.a. on capital and 6% on drawings

5. A, B and C were partners in a firm. On 1-4-2022 their capitals stood at ₹ 5,00,000, ₹ 2,50,000 and ₹ 2,50,000 [1]
respectively. As per the provisions of the partnership deed:
a. Partners were entitled to interest on capital at 6% p.a.
b. Profits were to be shared in the ratios of capitals.
The net profit for the year ended 31.3.2023 of ₹ 3,00,000 was divided equally without providing for the above
items.
In the adjustment entry to rectify the error:

a) Cr. A ₹ 10,000; Dr. B ₹ 5,000 and Dr. C ₹ b) Dr. A ₹ 50,000; Cr. B ₹ 25,000 and Cr. C ₹
5,000 25,000

c) Cr. A ₹ 50,000; Dr. B ₹ 25,000 and Dr. C ₹ d) Cr. A ₹ 40,000; Dr. B ₹ 20,000 and Dr. C ₹

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 25,000 20,000
6. A and B are partners in a firm and sharing the profit & loss in the ratio of 3 : 2. Their capitals on 1st April 2020 [1]
were ₹ 2,00,000 and ₹ 1,00,000 respectively. Calculate the amount of profit or loss to be distributed among the
partner if partnership deed provides interest on capital (charge) @ 10% p.a. and profit for the year is ₹ 10,000.
Distribution of Profit/loss as:

a) Loss: A = 12000 and B = 8000 b) A = Nil and B = Nil

c) Profit: A = 6000 and B = 4000 d) Profit: A = 12000 and B = 8000

7. Rights of a partner consists which of the following? [1]

a) Right of conducts affairs of business b) Right to not allow the admission of new
partner

c) Right to inspect book of accounts d) All of these

8. Calculate interest on drawings of Mr. B @ 9% p.a. on 31st March 2021. if A & B has started a business on 1st [1]
July 2020 and During the Last 7 months Mr. B withdrew ₹ 1000 at the Beginning of each month.

a) 263 b) 210

c) 158 d) 265
9. Every partner is bound to attend diligently to his ________ in the conduct of the business. [1]

a) duties
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b) rights
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c) capital d) meetings
10. X and Y are partners in the ratio of 3 : 2. Their capitals are ₹ 2,00,000 and ₹ 1,00,000 respectively. Interest on [1]
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capitals is allowed @ 8% p.a. Firm incurred a loss of ₹ 60,000 for the year ended 31st March 2023. Interest on
Capital will be
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a) X ₹ 8,000; Y ₹ 4,000 b) No Interest will be allowed

c) X ₹ 16,000; Y ₹ 8,000 d) X ₹ 14,400; Y ₹ 9,600

11. Assertion (A): When the items are omitted it is necessary to prepare Profit and Loss Adjustment Account only. [1]
Reason (R): For the purpose of correcting these omissions or mistakes, adjustment entries are passed through
Profit and Loss Adjustment Account in which adjustments in respect of each and every omission are to be made.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

12. Assertion (A): Partnership is a business entity which is not separate from its partners in any circumstances. [1]
Reason (R): Partners are mutual agents of each other so far as the business of the firm is concerned.

a) Both A and R are true and R is the correct b) Both A and R are true but R is not the
explanation of A. correct explanation of A.

c) A is true but R is false. d) A is false but R is true.

13. Ram, Amit and Sumit are partners in a firm. Sumit had been given loan by the firm on 1st October, 2022 of ₹ [3]

6,00,000. Interest was agreed to be charged @ 10% p.a. Interest was paid by cheque up to February, 2023 by

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 Sumit on 10th March, 2023 and balance was yet to be paid by him.
Pass the Journal entries for interest on loan by partner for the year ended 31st March, 2023.
14. A, B and C are partners in a firm. After the accounts of partnership have been drawn up and the books closed [3]
off, it is discovered that for the years ended 31st March 2022 and 2023, interest has been allowed to the partners
upon their Capitals @ 6% p.a. although there is no provision for interest in the partnership deed. Their fixed
capitals on which interest was calculated were ₹ 1,00,000; ₹ 80,000 and ₹ 60,000 respectively.
During the last two years, they have shared the profits as follows:

2022 3:2:1

2023 5:3:2

You are required to give necessary adjusting entry on 1st April, 2023.
15. Satnam and Qureshi after doing their MBA decided to start a partnership firm to manufacture ISI marked [4]
electronic goods for economically weaker section of the society. Satnam also expressed his willingness to admit
Julie as a partner without capital who is specially-abled but a very creative and intelligent friend of his. Qureshi
agreed to this. They formed a partnership on 1st April 2012 on the following terms
a. Satnam will contribute Rs 4,00,000 and Qureshi will contribute Rs 2,00,000 as capitals.
b. Satnam, Qureshi and Julie will share profits in the ratio of 2: 2: 1.
c. Interest on capital will be allowed @ 6% per annum.
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Due to a shortage of capital, Satnam contributed Rs 50,000 on 30th September 2012 and Qureshi contributed Rs
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20,000 on 1st January 2013 as additional capitals. The profit of the firm for the year ended 31st March 2013 was
Rs 3,37,800.
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i. Identify any two values which the firm wants to communicate to the society.
ii. Prepare profit and loss appropriation account for the year ending 31st March, 2013.

Arun, Shobha and Yuvraj were partners in a firm. On 1st April 2018 their Fixed Capitals Stood at ₹ 1,00,000, ₹ [4]
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50,000 and ₹ 50,000 respectively. As per the provisions of partnership deed,
i. Partners were entitled to an annual salary of ₹ 20,000 each.
ii. Interest on Capital @ 10% p.a. was to be provided.
iii. Profits were to be shared in the ratio 3 : 1 : 1. Net profit for the year ended 31st March 2019 was ₹ 90,000.
Pass Journal Entries for the above in the books of the firm.

17. Mohit, Ram and Manish are partners sharing profits equally. Mohit Had given loan to firm on 1st September, [6]

2022 of ₹ 2,00,000. It was agreed that interest will be paid @ 12% p.a. Interest was paid by cheque up to
February, 2023 on 1st March, 2023 and balance was paid on 5th April, 2023.

Pass the Journal entries for interest on loan by partner for the year ended 31st March, 2023.
18. Discuss the main provisions of the Indian Partnership Act 1932 that are relevant to partnership accounts if there [6]
is no partnership deed.
19. The partners of a firm distributed the profits for the year ended 31st March, 2011, Rs 1,20,000 in the ratio of 2 : [6]
2 : 1 without providing for the following adjustments :
a. A and B were entitled to a salary of Rs 1,500 per quarter.
b. C was entitled to a commission of Rs 6,000.
c. A and C had guaranteed a minimum profit of Rs 48,000 p.a. to B.
d. Profits were to be shared in the ratio of 4 : 3 : 2.

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 Pass necessary journal entry for the above adjustments in the books of the firms .
20. L, M, and N were partners in firm sharing profit in the ratio of 3 : 4 : 5. Their fixed capitals were L Rs 4,00,000 , [6]
M Rs 5,00,000 and N Rs 6,00,000 respectively. The partnership deed provided for the following:
i. Interest on capital @ 6% p.a.
ii. Salary of Rs 30,000 p.a. to N.
iii. Interest on partner’s drawings will be charged @ 12% p.a.
During the year ended 31.3.2009, the firm earned a profit of Rs 2,70,000. L withdrew Rs 10,000 on 1.4.2008. M
withdrew Rs 12,000 on 30.09.2008. and N withdrew Rs 15,000 on 31.12.2008. Prepare profit and loss
appropriation account for the year ended 31.3.2009.

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