Kendriya Vidyalaya Sangathan,

Bhopal Region
Pre Term 1 Examination 2021-22 SET -B
Class - XII
Max. Marks-40 Subject: Accountancy Duration: 90 minutes
General Instructions :
Read the following instructions very carefully and strictly follow them:
1. This question paper comprises two Parts - I and II. There are 55 questions in the questionpaper.
2. Part-I & II are compulsory for all candidates.
3. There is an internal choice provided in each sections.
I. Part-I contains three Sections-A, B and C. Section-A has questions from 1 to 18 and Section-B
has questions from 19 to 36. You have to attempt any 15 questions each in both the sections.
II. Part-I, Section-Chas questions from 37 to 41. You have to attempt any 4 questions.
Ill Part-II, contains two Sections-A and B. Section-A has questions from 42 to 48, you have to
attempt any five questions and Section-B has questions from 49 to 55, youhave to attempt
any six questions.
4. All questions carry equal marks. There is no negative marking.
5. Specific instructions related to each Part and Sub-divisions (Section) is mentioned clearly before the
questions. Candidates should read them thoroughly and attempt accordingly.
Part-I Section-A

Instructions :
From question number 1 to 18, attempt any 15 questions.

1. Any change in the relation of existing partners which results at an end of the existing
agreement and enforces making of a new agreement is called _
(a) Revaluation n of Partnership
(b) Re constitutions of Partnership
(c) Realization of Partnership
(d) None of these

2. A firm earns profit of Rs.1,10,000. The normal rate of return is 10%. Assets of the firm are
Rs. 11,00,000 and liabilities Rs. 1,00,000. Value of goodwill by capitalization of average
profitwill be :
(a) Rs. 2,00,000
(b) Rs. 10,000
(c) Rs. 5,000
(d) Rs. 1,00,000
3. A Ltd. Forfeited a share of Rs. 100 issued at a premium of 20% for non-payment of First
Call of Rs. 30 per share and final call of Rs. 10 per share. State the minimum price at which
this share can be re-issued.
(a) Rs. 60
(b) Rs. 80
(c) Rs. 40
(d) None of the above

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4. X, Y and Z are partners in a firm sharing profits and losses in the ratio of 6:4:1. X guaranteed
a profit of Rs. 15,000 to Z. The net profit for the year ending March 31, 2021 was Rs.
99,000. Share of X in the profit of the firm will be :
(a) Rs. 30,000
(b) Rs. 15,000
(c) Rs. 48,000
(d) Rs. 45,000

5. capital is that portion of uncalled Share Capital which cannot be called-up

except in the event of winding up.
(a) Nominal
(b) Called-up
(c) Paid-up
(d) Reserve

6. At the time of admission of a partner, Employees Provident Fund is :

(a) Distributed among the old partners in the old ratio.
(b) Distributed among all partners in new ratio.
(c) Not distributed among the partners.
(d) None of the above options.

7. Given below are two statements, one labeled as Assertion (A) and the other labeled as
Reason (R).
Assertion (A) : Fixed Capital Account of partners show credit balance even when the firm
suffers losses year after year.
Reason (R) : In Fixed Capital Account Method, the losses are adjusted through Partners’
Current Accounts.
In the context of the above statements, which one of the following is correct?
(a) Both (A) and (R) are correct and (R) is the correct reason of (A).
(b) Both (A) and (R) are correct but (R) is not the correct reason of (A)
(c) Only (R) is correct
(d) Both (A) and (R) are wrong.

8. Pollar Ltd. Forfeited 160 shares of Rs. 10 each on which the holder had paid only application
money of Rs. 2 per share. Out of these, 40 shares were re-issued as fully paid for Rs. 9 per
share. The Gain on re-issue is :
(a) Rs. 320
(b) Rs. 160
(c) Rs. 40
(d) None of these

9. What will be the correct sequence of Events?

(i) Forfeiture of Shares
(ii) Default on Calls
(iii)Re-issue of Shares
(iv) Amount transferred to Capital Reserve
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 (a) (i), (iv), (ii), (iii)
(b) (ii), (iv), (i), (iii)
(c) (ii), (i), (iii), (iv)
(d) (iii), (iv), (i), (ii)

10. Shyam and Sunder are partners in a firm sharing profits and losses in the ratio of 5:1.

Balance Sheet (Extract)

Liabilities Rs. Assets Rs.

Machinery 40,000

If the value of machinery reflected in the Balance Sheet is over valued by 33⅓ %. Find out
the value of machinery to be shown in the new Balance Sheet :
(a) Rs. 44,000
(b) Rs. 48,000
(c) Rs. 32,000
(d) Rs. 30,000

11. At the time of admission of a partner, what will be the effect of the following information?
Balance in Workmen Compensation Reserve Rs. 40,000. Claim for Workmen Compensation
Rs.45,000.
(a) Rs. 45,000 Debited to the Partners’ Capital Accounts
(b) Rs. 40,000 Debited to Revaluation Account
(c) Rs. 5,000 Debited to Revaluation Account
(d) Rs. 5,000 Credited to Revaluation Account.

12. Swaraj Ltd. has received a lump-sum amount of Rs. 3,30,000 on Application and allotted
20,000 Equity Shares of Rs. 10 each at a premium of 10%. How much amount is to be
refunded to the applicants?
(a) Nil
(b) Rs. 1,30,000
(c) Rs. 1,00,000
(d) Rs. 1,10,000
13. Arjun Ltd. invited Applications for 50,000 Equity Shares of Rs. 10 each, of these 48,000
shares were subscribed. The amount was payable as Rs. 3 on Application, Rs. 4 on
Allotment along with premium of Rs. 2 and Balance of First & Final Call.
Tanya one share holder did not pay allotment on 2000 shares and her shares were forfeited
immediately after the allotment.
Navya another shareholder holding 1,500 shares did not pay the first and final call.
How much amount is received on first and final call by Arjun Ltd.?
(a) Rs. 1,33,500
(b) Rs. 1,39,500
(c) Rs. 1,45,500
(d) Rs. 2,22,500
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14. Which of the following is true regarding salary to a partner when the firm maintains
fluctuating capital accounts?
(a) Debit Partner’s Loan A/c. and Credit P&L Appropriation A/c.
(b) Debit P&L A/c. and Credit Partner’s Capital A/c.
(c) Debit P&L Appropriation A/c. and Credit Partner’s Current A/c.
(d) Debit P&L Appropriation A/c. and Credit Partner’s Capital A/c.

15. As per Section 52 of Companies Act 2013, Securities Premium Reserve cannot be utilized
for :
(a) Writing off Capital losses
(b) Issue of fully paid bonus shares
(c) Writing off discount on issue of Securities
(d) Writing off Preliminary Expenses

16. Parul and Mohini were partners sharing profits and losses in the ratio of 5:3. On 1st April,
2021 they admitted Nisha as a new partner and new ratio was decided as 3:2:1.
Goodwill of the firm was valued as Rs. 3,60,000. Nisha couldn’t bring any amount for
goodwill. Amount of goodwill share to be credited to Parul and Mohini Accounts will be :
(a) Rs. 37,500 and Rs. 22,500 respectively
(b) Rs. 30,000 and Rs. 30,000 respectively
(c) Rs. 36,000 and Rs. 24,000 respectively
(d) Rs. 45,000 and Rs. 15,000 respectively.

17. Vikas and Naresh are partners, at the time of reconstitution of partnership firm, following
situation was found :

Balance Sheet (Extract)

Liabilities Rs. Assets Rs.

Debtors 18,000
Less : Provision for
Doubtful Debts 2,000 16,000

Debtors Rs. 1,500 will be written off as bad debts and a provision of 5% will be created for bad
and doubtful debts.
What amount of Debtors will be shown in the new Balance Sheet of the firm?

(a) Rs. 16,600

(b) Rs. 15,574
(c) Rs. 16,700
(d) Rs. 13,775

18. Sapna and Ritu were partners in a firm sharing profits and losses in the ratio of 3:2. Their
Capital were Rs. 1,20,000 and Rs. 2,40,000 respectively. They were entitled to interest on
Capital @ 10% p.a. The firm earned a profit of Rs. 18,000 during the year. The interest on
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 Samna’s Capital will be :
(a) Rs. 12,000
(b) Rs. 10,000
(c) Rs. 7,200
(d) Rs. 6,000
Part-I
Section-B
Instructions :
From question number 19 to 36, attempt any 15 questions.
19.Summer and Winter were partners in a firm. Their Balance Sheet showed Furniture at Rs.
2,00,000, Stock at Rs. 1,40,000, Debtors at Rs. 1,62,000 and Creditors at Rs. 60,000. Spring
was admitted and new profit sharing ratio was agreed at 2:3:5. Stock was re-valued at Rs.
1,00,000,Creditors of Rs. 15,000 are not likely to be claimed, Debtors for Rs. 2,000 have become
irrecoverable and provision for doubtful debts to be provided @ 10%.
Summer’s share in loss on Revaluation amounted to Rs. 30,000. Revalued value of Furniture
will be :
(a) Rs. 2,17,000
(b) Rs. 1,03,000
(c) Rs. 3,03,000
(d) Rs. 1,83,000
19. Amol and Madhur are partner’s sharing profits in the ratio of 2:1. Tanish was admitted for ¼
share of which 1/8 was gifted by Amol. The remaining was contributed by Madhur.
Goodwill of the firm is valued at Rs. 40,000. How much amount for Goodwill will be
credited to Masher’s Capital account?
(a) Rs. 2,500
(b) Rs. 5,000
(c) Rs. 20,000
(d) Rs. 40,000
20. At the time of admission of new partner Shruti old partners Nikhil and Vijay had debtors of
Rs. 6,20,000 and a provision for doubtful debts of Rs. 20,000 in their books. As per terms of
admission, assets were revalued, and it was found that debtors worth Rs. 15,000 had turned
bad and hence should be written-off. Which journal entry reflects the correct accounting
treatment of the above situation?

(A) Bad Debts A/c. Dr. 15,000

To Sundry Debtors 15,000
Provision for Doubtful Debts A/c. Dr. 15,000
To Bad Debts A/c. 15,000
(B) Bad Debts A/c. Dr. 15,000
To Sundry Debtors 15,000
Revaluation A/c. Dr. 15,000
To Provision for Doubtful Debts A/c. 15,000
(C) Revaluation A/c. Dr. 15,000
To Sundry Debtors A/c. 15,000
(D) Bad Debts A/c. Dr. 15,000
To Revaluation A/c. 15,000

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21. Given below are two statements, one labeled as Assertion (A) and the other labeled as
Reason (R)
Assertion (A) : The liability of each partner in a partnership firm is unlimited.
Reason (R) : The loss of partnership firm will be met first of all by partners out of their
capital and thereafter, out of their personal assets.
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.

22. Diksha (a partner) withdrew Rs. 6,000 at the end of every month for last 6 months ending on
31st March, 2021. Interest was calculated on her drawings Rs. 375. Interest on drawings was
charged at the rate of .
(a) 5% p.a.
(b) 6% p.a.
(c) 7% p.a.
(d) 8% p.a.

23. Madhav and Raghav are equal partners as per the partnership deed :
(i) Madhav is to get commission of 10% of net profit before charging any commission.
(ii) Raghav is to get a commission of 10% on net profit after charging all commission.
Madhav’s commission was Rs. 16,500. What was the commission of Raghav?
(a) Rs. 16,500
(b) Rs. 14,850
(c) Rs. 14,500
(d) Rs. 13,500

24. Mehak, Mehar and Sehar are partners in a firm sharing profits and losses in the ratio of 2:2:1.
On 1st April 2021, they decided to change their profit sharing ratio to 5:3:2. On that date,
debit balance of Profit & Loss A/c. Rs. 30,000 appeared in the Balance Sheet and partners
decided to pass an adjusting entry for it.
Which of the under-mentioned options reflects correct treatment for the above treatment?
(a) Mehar’s Capital account will be debited by Rs. 3,000 and Mehak’s Capital account
creditby Rs. 3,000
(b) Sehar’s Capital account will be credited by Rs. 3,000 and Mehar’s Capital will be
creditedby Rs. 3,000
(c) Mehar’s Capital account will be debited by Rs. 30,000 and Mehak’s Capital account
credited by Rs. 30,000
(d) Mehar’s Capital account will be debited by Rs. 3,000 and Mehak’s Capital account
credited by Rs. 2,000 & Sehar’s Capital account credited by Rs. 1,000.

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25. Given below are two statements, one labeled as Assertion (A) and the other labeled as
Reason (R)
Assertion (A) : At the time of admission of a new partner, he brings premium for goodwill,
which is distributed among the sacrificing partners.
Reason (R) : By bringing premium for goodwill, a new partner compensates all old partners.
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
Asseration.
(c) Only Assertion is correct.
(d) Only Reason is correct.

26. Shaktibhog Ltd. Forfeited 4,000 shares of Rs. 20 each, fully called-up, on which only
application money of Rs. 6 has been paid. Out of these 2,000 shares were re-issued and Rs.
8,000 has been transferred to Capital Reserve. Calculate the rate at which these shares were
re- issued.
(a) Rs. 20 per share.
(b) Rs. 18 per share.
(c) Rs. 22 per share.
(d) Rs. 8 per share.
27. Given below are two statements, one labeled as Assertion (A) and the other labeled as
Reason (R) :
Assertion (A) : A company can forfeited the shares due to non-payment of allotment or on
calls.
Reason (R) : Company can forfeit shares as per terms of Articles of Association or as per
rules given in Table-F Schedule-I of Companies Act, 2013 by giving 14 days notice to
defaulting shareholders.
In the context of the above two statements, which of the following is correct?
(a) Both (A) and (R) are correct and (R) is the correct reason of (A).
(b) Both (A) and (R) are correct but ® is not the correct reason of (A).
(c) Only (R) is correct.
(d) Both (A) and (R) are wrong.

28. Which of the following statement is / are true?

(i) Authorised Capital < Issued Capital
(ii) Authorised Capital ≥ Issued Capital
(iii)Subscribed Capital ≤ Issued Capital
(iv)Subscribed Capital > Issued Capital

(a) (i) only

(b) (i) and (iv) Both
(c) (ii) and (iii) Both
(d) (ii) only

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29. Mohit and Piyush are equal partners with fixed capital of Rs. 3,00,000 and Rs. 2,00,000
respectively. After closing the accounts for the year 2021, they found that interest on capital
was provided at 10% p.a. instead of 6% p.a.
Now, the adjustment entry will be :
(a) Dr. Mohit’s Current A/c. and Cr. Piyush’s Current A/c. by Rs. 2,000
(b) Dr. Piyush’s Current A/c. and Cr. Mohit’s Current A/c. by Rs. 2,000
(c) Dr. Mohit’s Current A/c. Rs. 12,000 and Piyush’s Current A/c. Rs. 8,000
(d) Cr. Mohit’s Current A/c. and Piyush’s Current A/c. by Rs. 10,000 each.

30. X, Y and Z are partners sharing profits in the ratio of 10:8:5. They admit M as a new partner.
It was decided that Ratio Z and M will be same as existing between X and Y.
New Profit Sharing Ratio .

(a) 5:4:3:2
(b) 10 : 8 : 5 : 3
(c) 10 : 8 : 5 : 4
(d) 5:4:5:4

31. Sunrise Ltd. Took over business of Moonlight Ltd. and paid for it by issue of 30,000 equity
shares of Rs. 100 each at a par along with 6% Preference Shares of 1,00,00,000 at a
premium of 5% and a cheque of Rs. 8,00,000. What was the total agreed purchase
consideration payable to Moonlight Ltd.
(a) Rs. 1,05,00,000
(b) Rs. 1,43,00,000
(c) Rs. 1,40,00,000
(d) Rs. 1,35,00,000

32. Bawa Ltd. Has issued capital of 20,00,000. Equity Shares of Rs. 10 each. Till date Rs. 8 per
share have been called-up and the entire amount received except calls of Rs. 4 per share on
800 shares and Rs. 3 per share from another holder who held 500 shares. What will be
amount appearing as ‘Subscribed’ but not fully paid capital in the Balance Sheet of the
company?
(a) Rs. 2,00,00,000
(b) Rs. 1,95,99,000
(c) Rs. 1,59,95,300
(d) Rs. 1,99,95,300

33. Rattan Ltd. Forfeited 40 shares of Rs. 10 each, Rs. 8 called-up, on which Khushi had paid
application and allotment money of Rs. 5 per share, of these 30 shares were re-issued to
Shreya as fully paid up for Rs. 6 per share. What is the balance in the Share Forfeiture
Account after the relevant amount has been transferred to Capital Reserve Account?

(a) Rs. 0
(b) Rs. 10
(c) Rs. 50
(d) Rs. 100
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34. Sanya had been allotted for 800 shares by Fortune Ltd. On pro-rata basis which had issued
two shares for every three applied. She had paid application money of Rs. 3 per share and
could not pay allotment money of Rs. 5 per share. First and final call of Rs. 2 per share was
not yet made by the company. Her shares were forfeited, the following entry will be passed :

Share Capital A/c. Dr. Rs.X

To Share forfeited A/c. Rs. Y
To Share Allotment A/c. Rs. Z

Here, X, Y and Z are:

(a) Rs. 8,000; Rs. 3,600, Rs. 4,000
respectively.
(b) Rs. 12,000; Rs. 3,600, Rs. 6,000
respectively.
(c) Rs. 6,400; Rs. 3,600, Rs. 2,800 respectively.
(d) Rs. 9,600; Rs. 3,600, Rs. 6,000 respectively.

35. Manu and Tanu are partners entered into partnership on 01.02.2020 without any partnership
deed with a capital of Rs. 5,00,000 each. On 01.12.2020 Mrs. Manu advance Rs. 2,00,000
by way of loan to the firm @ 9% p.a. Interest on Mrs. Manu’s loan on 31st March, 2021 will
be :(a) Rs. 12,000
(b) Rs. 6,000
(c) No Interest on Loan
(d) Rs. 18,000

Part-I
Section-C
Instructions :

From question number 37 to 41, attempt any 4 questions:

Question No’s 37 & 38 are based on the hypothetical situation given below:

Jindal Steel Ltd. was incorporated on 1st April, 2019 with registered office in Mumbai. The
Capital clause of Memorandum of Association reflected a registered capital of 8,00, 000 Equity
Shares of Rs. 10 each and 1,00,000 preference shares of Rs. 50 each. Since some large
investments were requires for Building and Machinery the company in consultation with
vendors, Ms. Gopichand Enterprises, issued 1,00,000 Equity Shares and 20,000 Preference
Shares at par to them in full consideration of Assets acquired. Besides this the company issued
2,00,000 Equity Shares for cash at par payable as Rs. 3 on application, Rs. 2 on allotment, Rs. 3
on first call and Rs. 2 on second call.
Till date second call has not yet been made and all the shareholders have paid except Mr. Dina
Nath who did not pay allotment and calls on his 300 shares and Mr. Kuki who did not pay first
call on his 200 shares. Shares of Dina Nath were then forfeited and out of them 100 shares were
re-issued at Rs. 12 per share.
Based on above information you are required to answer the following questions.

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36. How many Equity Shares of the company have been subscribed?

(a) 3,00,000
(b) 2,99,500
(c) 2,99,800
(d) None of the above

37. What amount of share forfeiture would be reflected in the Balance Sheet?
(a) Rs. 600
(b) Rs. 900
(c) Rs. 200
(d) Rs. 300

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

Tony, Tillu and Titu are doing paper business in Ludhiana. They used to share profits in the
ratio of 3:2:1. They decided to provide note books to students of rural area at free of cost.
Tillu wants to admit his friend Billu in firm. All others are agreed with Tinu and Tony
surrenders 1/4th of his share, Tillu surrenders 1/3rd of his share and Titu 1/5th of his share in
favour of Billu. Billu brought Rs. 50,000 as Capital and Rs. 20,000 as goodwill. In the old
partners’ balance sheet there was an investment fluctuation reserve of Rs. 15,000 and
Investment (book value) Rs. 30,000. At the time of admission of Billu all assets are re-valued
and liabilities are re-assessed and found that market value of investment Rs. 25,000.

38. What will be the new ratio?

(a) 45 : 40 : 12 : 6
(b) 135 : 80 : 48 : 97
(c) 6 : 4 : 2 : 1
(d) 24 : 18 : 30 : 45

39. What will be the treatment of Investment Fluctuation Reserve?

(a) Investment Fluctuation Reserve A/c. Dr. 15,000

To Tony’s Capital A/c. 7,500
To Tillu’s Capital A/c. 5,000
To Titu’s Capital A/c. 2,500
(b) Investment Fluctuation Reserve A/c. Dr. 15,000
To Investment A/c. 5,000
To Tony’s Capital A/c. 5,000
To Tillu’s Capital A/c. 3,333
To Titu’s Capital A/c. 1,667
(c) Revaluation A/c. Dr. 5,000
To Investment A/c. 5,000
(d) Investment A/c. Dr. 25,000
To Revaluation A/c. 25,000

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40. What will be the journal entry for existing Goodwill?

(a) Goodwill A/c. Dr. 25,000

To Tony’s Capital A/c. 6,250
To Tillu’s Capital A/c. 6,250
To Titu’s Capital A/c. 6,250
To Billu’s Capital A/c. 6,250
(b) Goodwill A/c. Dr. 25,000
To Tony’s Capital A/c. 12,500
To Tillu’s Capital A/c. 8,333
To Titu’s Capital A/c. 4,167
(c) Tony’s Capital A/c. 6,250
Tillu’s Capital A/c. 6,250
Titu’s Capital A/c. 6,250
Billu’s Capital A/c. 6,250
To Goodwill A/c. 25,000
(d) Tony’s Capital A/c. 12,500
Tillu’s Capital A/c. 8,333
Titu’s Capital A/c. 4,167
To Goodwill A/c. 25,000

Part-II

Section-A

Instructions :

From question number 42 to 48, attempt any 5 questions :

41. Given below are two statements, one labeled as Assertion (A) and the other labeled as
Reason (R).
Assertion (A) : While calculating the Current Ratio, Loose Tools and Stores & Spares are not
included in the current assets.
Reason (R) : Loose Tools and Stores and Spares are not held for sale or conversion into cash.

Choose the correct option :

(a) (A) and (R) both are correct and (R) is the correct explanation of (A)
(b) (A) and (R) both are correct but (R) is not the correct explanation of (A)
(c) Only (A) is correct.
(d) (R) is correct but (A) is not correct.

42. Pick the odd one out from the following :

(a) Horizontal Analysis
(b) Dynamic Analysis
(c) Time Series Analysis
(d) Cross Sectional Analysis

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43. Which of the following group shows that high ratio is better for the company?
(a) Interest coverage Ratio, Gross Profit Ratio, Debt-Equity Ratio.
(b) Current Ratio, Debt Equity Ratio, Net Profit Ratio
(c) Debt Equity Ratio, Quick Ratio, Interest Coverage Ratio
(d) Current Ratio, Quick Ratio, Interest Coverage Ratio.

44. Which one of the following is correct ?

(i) A ratio is an arithmetical relationship of one number to another number.
(ii) Liquid ratio is also known as acid test ratio.
(iii)Ideally accepted current ratio is 1:1
(iv)Debt Equity Ratio is the relationship between outsiders funds and shareholder’s funds.
In the context of the above statements, which of the following option is correct?
(a) All (i), (ii), (iii) and (iv) are correct.
(b) Only (i), (ii) and (iv) are correct.
(c) Only (ii), (iii) and (iv) are correct.
(d) Only (ii) and (iv) are correct.

45. Which of the following are the tools of Vertical Analysis

(i) Ratio Analysis
(ii) Comparative Statements
(iii)Common Size Statements
(a) Only (iii)
(b) Both (i) and (iii)
(c) Both (i) and (ii)
(d) Only (i)

46. Match the items given in Column I with the headings / sub-headings (Balance Sheet) as
define in Schedule III of Companies Act, 2013.
Column I Column II
(I) Accured Income (a) Other Current Liabilities
(II) Calls in Advance (b) Capital Work in progress
(III) Computer Software (c) Inventories
(IV) Building under Construction (d) Other Current Assets
(V) Raw Materials (e) Fixed Intangible Assets
Choose the correct option :
(a) (i) d; (ii) a; (iii) c; (iv) b; (v) e
(b) (i) d; (ii) a; (iii) b; (iv) c; (v) e
(c) (i) d; (ii) a; (iii) e; (iv) b; (v) e
(d) (i) d; (ii) a; (iii) e; (iv) c; (v) b

47. If Ratio is higher, it is consider better. This ratio is important for and
meaningful to Debenture holders and lenders (who provide long-term funds)
(a) Debt-Equity Ratio
(b) Interest Coverage Ratio
(c) Current Ratio
(d) Quick Ratio
48. Sodhi Ltd. Has provided the following information on 31st March 2021
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 :Total Assets Rs. 8,50,000
Working Capital Rs. 60,000
Non-Current Assets Rs. 7,50,000
12% Debentures Rs.
2,00,000Current Ratio of the company will
be :
(a) 1 : 1
(b) 2 : 1
(c) 2.25 : 1
(d) 2.5 : 1

Part-II
Section-B

Instructions :
From question number 49 to 55, attempt any 6 questions :

49. What will be the amount of gross profit of a firm if its average inventory is Rs.
80,000,Inventory Turnover ratio is 6 times, and the selling price is 25% above cost?
(a) Rs. 1,20,000
(b) Rs. 1,60,000
(c) Rs. 2,00,000
(d) None of the above.

50. Which of the following statements are false?

(i) When all the comparative figures in a Balance Sheet are stated as percentage of the total,
it is termed as horizontal analysis.
(ii) When financial statements of several years are analysed, it is termed as vertical analysis.
(iii) Vertical analysis is also termed as time series analysis.
Choose from the following options :
(a) Both (a) and (b)
(b) Both (a) and (c)
(c) Both (b) and (c)
(d) All three (a), (b) and (c)

51. Given below are two statements, one labeled as Assertion (A) and the other labeled as
Reason (R) ?
Assertion (A) : Payment made to creditors in cash will improve the current ratio.
Reason (R) : Both current assets and current liabilities have decreased by same amount.
Choose the correct option :
(a) Both Assertion (A) and Reason (R) are correct and Reason ® is the correct explanation of
the Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct but Reason (R) is not correct explanation
of the Assertion (A)
(c) Only Assertion (A) is correct.
(d) Only Reason (R) is correct.
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 52. Given below are two statements, one labeled as Assertion (A) and the other labeled as
Reason (R) ?
Assertion (A) : A high operating ratio indicates a favourable position.
Reason (R) : A high operating ratio leaves a high margin to meet non-operating expenses.
In the context of the above two statements, which of the following is correct?
(a) (A) and (R) both are correct and (R) correctly explains (A)
(b) Both (A) and (R) are correct but (R) does not explain (A)
(c) Both (A) and (R) are incorrect.
(d) (A) is correct but (R) is incorrect.

53. Current Ratio of Bansiwala Ltd. Is 1.5: 1. Accountant wants to maintain it at 2:1. Following
options are available :
(i) Creditors can be paid.
(ii) Sale of goods at a good profit.
(iii)Purchase of goods for cash.
Choose the correct option.
(a) Only (i) is correct.
(b) Only (ii) is correct.
(c) Only (i) and (ii) is correct.
(d) Only (i) and (iii) is correct.

54. A company has an operating cycle of eight months. It has accounts receivables amounting to
Rs. 1,00,000 out of which Rs. 60,000 have a maturity period of 11 months. How would
thisinformation be presented in the Balance Sheet?
(a) Rs. 40,000 as current assets and Rs. 60,000 as non-current assets.
(b) Rs. 60,000 as current assets and Rs. 40,000 as non-current assets.
(c) Rs. 1,00,000 as non-current assets.
(d) Rs. 1,00,000 as current assets.

55. A company has an operating cycle of eight months. It has accounts receivables amounting to Rs. 1,00,000
out of which Rs. 60,000 have a maturity period of 11 months. How would this information be presented
in the Balance Sheet?
(a) Rs. 40,000 as current assets and Rs. 60,000 as non-current assets.
(b) Rs. 60,000 as current assets and Rs. 40,000 as non-current assets.
(c) Rs. 1,00,000 as non-current assets.
(d) Rs. 1,00,000 as current assets.

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