NAVODAYA VIDYALAYA SAMITI

MID TERM EXAMINATION 2019-20

SUBJECT: ACCOUNTANCY (055)

TIME: 3 hours Class: XII Max. Marks: 80

General Instructions:
a) Questions from 1-20 carries one mark
b) Questions from 21-22 carries three mark
c) Questions from 23-27 carries four mark
d) Questions from 28-30 carries six marks
e) Questions from 31-32 carries eight mark

Choose the Correct answer:

1. The difference of assets and liabilities side of balance sheet of a non-profit 1

Organisation is known as:
a) Reserve Fund c) Capital Fund
b) Capital d) General Reserve

2. Sale of grass in case of a sports club is:

a) Capital Receipt c) Revenue Receipt
b) An Asset d) Profit 1
3. Match fund exists in the books at ,100000. Match expenses of the year were 40000.
What will the amount of fund?
a) 60000 c) 50000
b) 70000 d) 40000 1

4. X, Y & Z are equal partners. Y retires. The gaining ratio of X & Z is

a) 1:1 c) 2:1
b) 3:2 d) None of the above 1
5. Revaluation Account is a ------------------
a) Personal Account c) Nominal Account
b) Real Account d) None of the above 1
6. On retirement of a partner, reserves should be transferred to the Capital Account of : 1
a) Retiring partner c) All Partners
b) Remaining partners d) None of these

7. According to Table ‘F’ of the Companies Act 2013, at what rate a company is required
to pay calls-in-advance?
a) 6% c) 10%
b) 12% d) 5% 1
8. On an Equity share of 10, the company has called – up 9 but a shareholder paid only
7 and his shares were forfeited. On forfeiture of his shares, share forfeited amount would be:
a) Credited by 10 c) Debited by 9
b) Credited by 7 d) Debited by 5 1
9. The amount set aside out of surplus for redeeming the debentures is known as:
a) General Reserve c) Debenture Redemption Reserve
b) Securities Premium Reserve d) None of the above 1
10. Diljith Ltd decides to redeem its outstanding 5000, 6% Debentures of 100. The company
should at least transfer to Debenture Redemption Reserve:
a) 250000 c) 125000
b) 300000 d) 500000 1
11. Identify the circumstance in which the fixed capital of a partner may change.
a) Additional capital introduced c) Interest on Drawings
b) Interest on Capital d) None of the above 1
12. The account prepared to share profit between partners is …………
a) Profit & Loss a/c c) Profit & Loss Appropriation a/c
b) Revaluation a/c d) No Account Needed 1
13. When realisation expenses are borne and paid by the firm, then such payment
is debited to:
a) Partners Capital Account c) Realisation Account 1
b) All Partners Capital Account d) None of the above
14. Rakhita , Dhanyasree and Gopika are partners sharing profits in the ratio of 4:3:2. D is
admitted for 1/3rd share in future profits. What is the sacrificing ratio? 1
a) 4:3:2 c) 1:1:1
b) 2:3:4 d) 5:4:3
15. The balance amount of Workmen Compensation Reserve, after meeting actual liability,
at the time of admission of a new partner, will be transferred to:
a) Old Partner’s Capital Account c) Revaluation Account
b) New Partner’s Capital Account d) General Reserve

16. The gain of remaining partners is equal to:

a) Their new share c) New share – Old share
b) Their old share d) Old share – New share
17. Which of the following statement is correct? 1
a) Goodwill at the time of retirement of a partner is credited to Continuing Partners’ Capital
Accounts in Sacrificing Ratio.
b) Goodwill at the time of retirement of a partner is credited to Continuing Partners’ Capital
Accounts in Gaining Ratio.
c) Goodwill at the time of retirement of a partner is debited to Continuing Partners’ Capital
Accounts in Sacrificing Ratio.
d) Goodwill at the time of retirement of a partner to the extent of retiring Partner’s Share is
debited to Continuing Partners’ Capital accounts in Gaining Ratio, if Goodwill is not raised
and written
18. William Ltd. issued 10,000, 7% Debentures of 100 each at a discount of Rs. 4. It has
balance in Securities Premium Reserve of 25,000. It will write off Discount on Issue of
Debentures.
(a) 40,000 from Securities Premium Reserve
(b) 40,000 from Statement of Profit and Loss
(c) 25,000 from Securities Premium Reserve and 15,000 from Statement of Profit
and Loss (Finance Cost)
(d) 15,000 from Securities Premium Reserve and 25,000 from Statement of Profit
and Loss (Finance Cost) 1
19. The portion of capital which can be called -up only on the winding up of the company is
called: 1
a) Authorised capital c) Uncalled capital
b) Reserve capital d) Issued Capital
20. On dissolution goodwill account is transferred to:
a) Revaluation Account c) Realisation Account

b) Partner’s Capital Account d) Profit and Loss Account 1

21. A and B are partners sharing profits and losses in the ratio of 3:2.
They admitted C as a new partner and their new profit ratio would be 5:3:2.
Find out sacrificing ratio. 3
22. Sitara Limited had 10,000, 9% debentures of 100 each which is due for
redemption on March 31, 2008. The Company has a Debenture Redemption Reserve
a balance of 4,00,000 on that date. Record the necessary journal entries
at the time of redemption debentures. 3
OR
Explain any three types of debentures.

23. Differentiate between Income and Expenditure Account and Profit and Loss Account. 4
24. Following is the balance sheet of Midhuna and Sarika 28th Feb. 2018:
Liabilities Amount( ) Assets Amount( )

Sundry creditors 20000 Land and building 40000

Furniture and fittings 28000
Bills payable 40000
Truck Stock 20000
Capital a/c: stock 10000
Debtors 12000
Ramesh 30,000
Cash 10000
Suresh 30,000 60,000

120000 120000

Prepare Realization a/c of the partners with the following additional information.
1) On the above date Ramesh took over the creditors and Suresh took over the bills payable.
2) Assets realized as debtors 9,000; furniture 21,000; truck 32,000; stock 6,000
and land and building 60,000
3) Expenses of realization paid by Ramesh were 1,200. 4
OR
Distinguish between dissolution of partnership and partnership firm.
25. Vipin Limited was registered with an authorised capital of 1,00,00,000 divided into
1,00,000 Equity Shares of 100 each. The company offered for public subscription 60,000 Equity
Shares. Applications for 56,000 shares were received and allotment was made to all the applicants.
All the calls were made and were duly received except the second and final call of .20 per share
on 700 shares. Prepare Balance Sheet of the company as the Revised Schedule VI Part 1 of the
Companies Act, 1956. 4
26. Sujitha, Benitta and Vinaya are partners in a firm sharing profits and losses in the ratio of
5:3:2. From 1stApril, 2018 they decided to share future profits and losses in the ratio of 2:5:3.
Their Balance Sheet showed a balance of 75,000 in the Profit and Loss Account and a balance
of 15,000 in Investment Fluctuation Fund. For this purpose, it was agreed that : 4
(i)Goodwill of the firm was valued at 3, 00,000.
(ii)That investments (having a book value of 50,000) were valued at 35,000.
(iii)That stock having a book value of 50,000 be depreciated by 10%.
Pass the necessary journal entries for the above in the books of the firm.
27. Compute the value of goodwill on the basis of four years purchases of the average profits
based on the last five years. 4
Year Amount( )
2014 90,000
2015 (40,000) Loss
2016 80,000
2017 70,000
2018 60,000
28. Vimal ltd. Purchased Machinery of 9,90,000 from Kamal Ltd. .The payment to Kamal Ltd.
Was made by issuing equity shares of 100 each.Pass necessary journal entries in the books of
Vimal Ltd. For purchase of machinery and issue of shares when:
a) Issue of share are at par.
b) Issue of shares were issued at 25% prem. 6
29. MK, NK and OK were partners in a firm sharing profits and losses equally. On 31.12.2009
their Balance Sheet was as follows:

Liabilities Amount( ) Assets Amount( )

Creditors 80,000 Plant and Machinery 2,40,000

General Reserve Capitals : 1,20,000 Stock 1,20,000
MK 2,80,000 Sunday Debtors 3,80,000
NK 2,80,000
Cash at Bank 1,60,000
OK 2,80,000
8,40,000 Cash in Hand 1,40,000

10,40,000 10,40,000
NK died on 14th March 2010. According to the Partnership Deed, executors of the deceased
partner are entitled to:
(x) Balance of partner’s capital account.
(xi) Interest on capital @5% p.a.
(xii) Share of goodwill calculated on the basis of twice the average of past three year’s profits and
(xiii) Share of profits from the closure of the last accounting year till the date
of death on the basis of twice the average of three completed year’s profits before death. Profits
for 2007, 2008 and 2009 were .3,20,000; 3,60,000 and 4,00,000 respectively. Show the
working for deceased partner’s share of goodwill and profits till the date of his death.
Prepare NK’s Capital Account to be rendered to his executor. 6
30. From the following Receipts and Payments Account of Adi National Club and from the
information supplied, prepare Income and Expenditure Account for the year ended 31st March,
2018.
RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st March, 2018
Dr. Cr

Particulars Amount( ) Particulars Amount( )

To Balance b/d 190000 By Salaries 440000

To Subscriptions 670000 By Sports 400000
To Interest on 40000 Equipments
investments@8% By Balance c/d 160000
Additional information:
i. The club had received 30,000 for subscription in 2017 for 2018.
ii. Salaries had been paid only for 11 months
iii. Stock of sports equipment on 31st December 2017 was 3,50,000 and on 31st
December 2018 was 7,00,000.
Prepare Income & Expenditure Account. 6
OR
From the following Receipts and Payment Account of Baba Deep Singh Society, prepare Income
and Expenditure Account as at 31st March 2018 (6)
Receipt and Payment Account
Receipt Amount Payment Amount
To Balance b/d 45,000 By Expenses on Charity 1000
Cash in hand 30,000 Show
Cash at Bank 15,000 By Investments 12000
To Subscriptions By Insurance 2500
2016–2017 700 By Sundry Expenses 500
2017–2018 1,000 By Office Expenses 900
2018–2019 500 2,200 By Fax Machine (On 3000
To Charity Show Realization 3,000 1.10.17)
To Donations 2,500 By Salaries 11000
To Miscellaneous Receipts 1000 By Balance c/d
Cash in hand 6,000
53,700
Cash in Bank 16,700 22,700
53,700
Other Information: On 31.3.2018, Subscriptions of ₹ 2,800 (including ₹ 500 for 2017–18) were in
arrear and Insurance charges of ₹ 500 were prepaid. On 1.4.2017 the club had the following assets and
liabilities Fax Machine ₹ 5,000; Investments ₹ 3,500; Salary Outstanding ₹ 1,000 and Insurance prepaid ₹
300. Depreciation is to be charged on Fax Machine @ 10%. Donations are to be capitalized.
31. A & B are partners sharing in the ratio 3:2 and their Balance Sheet is as follows: 8

Liabilities Amount( ) Assets Amount( )

Creditors 3600 Cash 1000

Bills Payable 2000 Debtors 3400
General Reserve 2400 Stock 2400
Capital Machinery 4200
A 15000 Building 20000
B 8000 31000 31000
The other terms of agreement on C’s admission were as follows:
C will bring 10000 as Goodwill and 15000 as Capital.
a) Building will be valued at 18500 and Machinery at 5000.
b) A provision of 5% will be credited on Debtors for Bad Debts.
Capital Accounts of A and B will be adjusted as per C’s Capital his profit sharing ratio is ¼ in
the new firm. Prepare Revaluation Account, Partner’s Capital Account and the Balance
Sheet of A,B & C.
OR
X, Y and Z are partners in a firm sharing profits in proportion of 1/2, 1/6 and 1/3 respectively. The
Balance Sheet as on April 1, 2018 was as follows:

Liabilities Amount Assets Amount

( ) ( )

Employees Provident Fund 12000 Freehold Premises 40000

Sundry Creditors 18000 Machinery 30000
General Reserve 12000 Furniture 12000
Capitals Stock 22000
X 30000 Debtors 20,000
Y 30000 Less provision for doubtful
Z 28000 debts 1,000 19000
Cash 7000
130000 130000

Z retires from the business and the partners agree that:

(a) Machinery is to be depreciated by 10%.
(b) Provision for bad debts is to be increased to 1,500.
(c) Furniture was taken over by Z for 14,000.
(d) Goodwill is valued at 21,000 on Z’s retirement.
(e) The continuing partners’ have decided to adjust their capitals in their new profit sharing
ratio after retirement of Z. Surplus or deficit if any, in their capital accounts will be adjusted
through their current accounts. Prepare Revaluation A/c and Partners’ Capital A/c’s.
32. Amrit Ltd. issued 50,000 shares of 10 each at a premium of 2 per share payable as
3 on application, 4 on allotment (including premium), 2 on first call and the remaining on
second call. Applications were received for 75,000 shares and a pro-rata allotment was made to all
the applicants. All moneys due were received except allotment and first call from Sonu who
applied for 1,200 shares. All his shares were forfeited. The forfeited shares were reissued for
9,600. Final call was not made. Pass necessary journal entries.
OR 8
Gautam Limited invited applications for issuing 20,000 Equity shares of Rs.10 each. The amount
was payable as follows:
On Application Rs.1; On Allotment Rs.2; On First Call Rs.3; and Balance on Second call.
The issue was fully subscribed. Bheem to whom 200 shares were allotted, failed to pay the
allotment money and his shares were forfeited immediately after allotment. Nakul to whom 300
shares were allotted, failed to pay the first call. His shares were also forfeited after the first call.
Afterwards the second call was made. Vishnu to whom 100 shares were allotted failed to pay the
second and final call. His shares were also forfeited. All the forfeited shares were reissued at Rs.9
per share fully paid up. Pass necessary journal entries.