1.

Liability of partners is
(a) Limited (b) Unlimited (c) As determined by court (d) As determined by the partners

2. On the reconstitution of a firm, the value of the land was appreciated by ₹ 2,00,000 and plant and machinery
reduced to ₹ 7,00,000 from ₹ 10,00,000. Gain or loss on revaluation will be
(a) Gain ₹ 1,00,000 (b) Loss ₹ 5,00,000
(c) Gain ₹ 5,00,000 (d) Loss ₹ 1,00,000

3. X, Y and Z are partners in a firm. Partnership Deed provides that Z will get commission on net profit @ 10%
after charging the commission. Net profit for the year is Rs.5,50,000. Commission of C will be
(a) ₹ 55,000 (b) ₹ 50,000
(c) ₹ 45,000 (d) ₹ 35,000

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) ₹ 10,00,000 (b) ₹ 1,00,000
(c) ₹ 50,000 (d) ₹ 20,000

5. Average capital employed in a firm is Rs.6,00,000. Normal rate of return in the business is 20% and the firm’s
average profits are Rs.1,60,000. Value of goodwill by capitalization of super profit method is
(a) ₹ 8,00,000 (b) ₹ 1,50,000
(c) ₹ 2,00,000 (d) ₹ 6,00,000

6. Sohan and Mohan are partners sharing profits and losses in the ratio of 2:3 with the capitals of ₹ 5,00,000
and ₹ 6,00,000 respectively. On 1st January 2022, Sohan and Mohan granted loans of ₹ 20,000 and ₹ 10,000
respectively to the firm. Determine the amount of loss to be borne by each partner for the year ended 31st
March 2022 if the loss before interest for the year amounted to ₹ 2,500.
(a) Share of Loss Sohan –₹ 1,250 Mohan – ₹ 1,250
(b) Share of Loss Sohan –₹ 1,000 Mohan – ₹ 1,500
(c) Share of Loss Sohan –₹ 820 Mohan – ₹ 1,230
(d) Share of Loss Sohan –₹ 1,180 Mohan – ₹ 1,770

7. A firm earned Rs.60,000 as profit, the normal rate of return being 10%. Assets of the firm are Rs.7,20,000
(excluding goodwill) and Liabilities are Rs.2,40,000. Find the value of Goodwill by Capitalisation of Average
Profit Method.
(a) ₹ 2,40,000 (b) ₹ 1,80,000
(c) ₹ 1,20,000 (d) ₹ 60,000

8. Anthony a partner was being guaranteed that his share of profits will not be less than ₹ 60,000 p.a.
Deficiency, if any was to be borne by other partners Amar and Akbar equally. For the year ended 31st March,
2024 the firm incurred loss of ₹ 1,80,000. What amount will be debited to Amar’s Capital Account in total at the
end of the year?

(a) ₹60,000 (b) ₹ 1,20,000 (c) ₹ 90,000 (d) ₹ 80,000

9. Assertion: Partner’s current accounts are opened when their capital are fluctuating.
Reasoning: In case of Fixed capitals all the transactions other than Capital are done through Current account of the
partner
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true

10. Assertion: Batman, a partner in a firm with four partners has advanced a loan of ₹50,000 to the firm for last six
months of the financial year without any agreement. He claims an interest on loan of ₹3,000 despite the firm being in loss
for the year.
Reasoning: In the absence of any agreement / provision in the partnership deed, provisions of Indian Partnership Act,
1932 would apply.

11. Ram and Shyam were partners sharing profits and losses in the ratio of 3:2. Their balance sheet shows building at ₹
1,60,000. They admitted Mohan as a new partner for 1/4th share. In additional information it is given that building is
undervalued by 20%. The share of loss/gain of revaluation of Shyam is ____________ & current value of building shown in
new balance sheet is _______.
A. Gain ₹ 12,800, Value₹ 1,92,000 B. Loss ₹ 12,800, Value₹ 1,28,000
C. Gain ₹ 16,000, Value₹ 2,00,000 D. Gain ₹ 40,000, Value₹ 2,00,000

12. The profit earned by a firm after retaining ₹ 15,000 to its reserve was ₹ 75,000. The firm had total tangible assets
worth ₹ 10,00,000 and outside liabilities ₹ 3,00,000. The value of the goodwill as per capitalization of average profit
method was valued as ₹ 50,000. Determine the rate of Normal Rate of Return.
A. 10 % B. 5 % C. 12 % D. 8 %

13. String and Kite were partners sharing profits and losses in the ratio 5:3. They admitted spinner as a new partner. String
sacrificed ¼ from his share and Kite sacrificed 1/6 of his share. What will be the new ratio?
A. 6:5:5 B. 9:5:10 C. 15:10:7 D. 35:21:40

Read the following hypothetical situation, answer question no.13 and 14.

Richa and Anmol are partners sharing profits in the ratio of 3:2 with capitals of ₹2,50,000 and ₹1,50,000 respectively.
Interest on capital is agreed @ 6% p.a. Anmol is to be allowed an annual salary of 12,500. During the year ended 31st
March 2023, the profits of the year prior to calculation of interest on capital but after charging Anmol’s salary amounted
to ₹62,000.A provision of 5% of this profit is to be made in respect of manager’s commission.
Following is their Profit & Loss Appropriation Account
Particulars (₹) Particulars (₹)
To Interest on Capital By Profit & loss account (2)
Richa (After manager’s
Anmol commission)

To Anmol’s Salary a/c 12,500

To Profit transferred to: (1)
Richa’s Capital A/C (1)
Anmol’s Capital A/c
13. The amount to bereflected in blank (1) will be:
a) ₹37,200 b) ₹44,700 c) ₹22,800 d) ₹20,940
14. The amount to be reflected in blank (2) will be:
a) ₹62,000. b) ₹74,500. c) ₹71,400. d) ₹70,775.

15. At the time of admission of new partner Vasu, Old partners Paresh and Prabhav had debtors of ₹ 6,20,000 and a
provision for doubtful debts (PDD) of ₹ 20,000 in their books. As per terms of admission, assets were revalued, and it was
found that debtors worth ₹ 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 (b) Bad Debts A/c Dr. 15,000
To Debtors A/c15,000 To Debtors A/c 15,000
Prov for D. debts A/c Dr. 15,000 Revaluation A/c Dr 15,000
To Bad Debts A/c15,000 To Prov for doubt debtsA/c 15,000

(c) Revaluation A/c Dr. 15,000 (d) Bad Debts A/c Dr. 15,000
To Debtors A/c 15,000 To Revaluation A/c15,000

16. Ikka, Dukka and Teeka were partners sharing profits and losses in the ratio of 2:2:1. Their fixed Capital balances were
₹ 5,00,000; ₹ 4,00,000 and ₹ 3,00,000 respectively. For the year ended March 31, 2024 profits of ₹ 84,000 were
distributed without providing for Interest on Capital @ 10% p.a as per the partnership deed.
While passing an adjustment entry, which of the following is correct?
(a) Teeka will be debited by ₹ 4,200
(b) Teeka will be credited by ₹ 4,200
(c) Teeka will be credited by ₹ 6,000
(d) Teeka will be debited by ₹ 6,000

17.Rahul, Samarth and Ayaan were partners sharing profits and losses in the ratio of 5:4:3. Ayaan’s fixed Capital balance
as on March 31, 2024 was ₹ 2,70,000. Which of the following items would have affected this Capital balance?
(a) Profit/Loss for the year
(b) Additional Capital introduced
(c) Deferred Revenue Expenditure ₹ 50,000 and P
18. Joey, Sam and Tex were partners sharing profits and losses in the ratio 5:3:2. W.e.f 01 April, 2024 they decided to
share future profits and losses in the ratio 2:1:1. For which of the following balances Tex will be credited at the time of
reconstitution of firm, if the firm decided to continue with available accumulated profits and losses balances.
(a) General Reserve ₹ 2,00,000 and Profit and Loss (Dr.) ₹ 1,20,000
(b) General Reserve ₹ 2,00,000 and Profit and Loss (Cr.) ₹ 2,50,000
(c) Reduction in Capital due to Capital Adjustment
(d) Both B and C
19. X and y are partner in a firm with capital of Rs.18,000 and Rs.20,000. Z brings Rs.10,000 for his share of goodwill and
he is required to bring proportionate capital for 1/3rd share in profits. The capital contribution of Z will be:
a) ₹24,000 b) ₹19,000 c) ₹12,667 d) ₹14,000
15. Calculate goodwill of a firm on the basis of three years purchases of the Weighted Average Profits of the last four
years. The profits of the last four years were:
Years (ending 31st 2020 2021 2022 2023
march)
Amount 28,000 27,000 46,900 53,810
a) On 1st April, 2020 a major plant repair was undertaken for ₹10,000 which was charged to revenue. The said sum is to
be capitalized for goodwill calculation subject to adjustment of depreciation of 10% on reducing balance method.
b) For the purpose of calculating Goodwill the company decided that the years ending 31.03.2020 and 31.03.2021 be
weighted as 1 each (being COVID affected) and for year ending 31.03.2022 and 31.03.2023 weights be taken as 2 and 3
respectively.

16. Sanjana and Alok were partners in a firm sharing profits and losses in the ratio 3:2.
Balance Sheet as at 31st March,2018
Liabilities Amount Assets Amount
Creditors 60,000 Cash 1,66,000
Workmen’s Compensation Fund 60,000 Stock 1,50,000
Capitals: Debtors 1,46,000
Sanjana 5,00,000 9,00,000 Less: Provision for 2,000 1,44,000
Alok 4,00,000 Doubtful Debts
Investments 2,60,000
Furniture 3,00,000
10,20,000 10,20,000
On 1st April,2018, they admitted Nidhi as a new partner for 1/4th share in the profits on the following terms:
(a) Goodwill of the firm was valued at Rs.4,00,000 and Nidhi brought the necessary amount in cash for her share of
goodwill premium, half of which was withdrawn by the old partners.
(b) Stock was to be increased by 20% and furniture was to be reduced to 90%.
(c) Investments were to be valued at Rs.3,00,000. Alok took over investments at this value.
(d) Nidhi brought Rs.3,00,000 as her capital and the capitals of Sanjana and Alok were adjusted in the new profit-sharing
ratio.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm on Nidhi’s
admission.

17. Seema and Meena were partners in a firm with capitals of Rs.1,00,000 and Rs.80,000 respectively. They admitted
Nisha on 1st April,2022 as a new partner for 1/4 share in the future profits of the firm. Nisha brought Rs.90,000 as her
capital. Nisha acquired her share equally from Seema and Meena . Calculate the value of goodwill of the firm and pass
necessary Journal entries on Nisha’s admission, assuming that Nisha did not bring her share of goodwill premium in cash.
Show the working clearly.

18. A and B are partners sharing profit and losses in the ratio of 3:2. They admit C into partnership for 1/4 th share, which
he takes 1/6th from A and 1/12th from B. Goodwill exists in the books at Rs.20,000. C brings Rs.18,000 as goodwill out of
his share of Rs.30,000. It was decided that shortfall in amount shall be debited to C’s Current Account.
Pass necessary Journal entries for the above.
19. Ajay, Manish and Sachin were partners sharing profits in the ratio 5:3:2. Their Capitals were ₹ 6,00,000; ₹
8,00,000 and ₹ 11,00,000 as on April 01, 2021. As per Partnership deed, Interest on Capitals were to be provided
@ 10% p.a. For the year ended March 31, 2022, Profits of ₹ 2,00,000 were distributed without providing for
Interest on Capitals.
You are required to give necessary rectifying entries using P&L adjustment account.
20. Yuv and Veer were partners in a firm sharing profits and losses in the ratio of 3 : 1. Their Balance Sheet as on
31st March, 2022 was as under :
Balance Sheet of Yuv and Veer as at 31st March, 2022
Liabilities Amount Assets Amount
Creditors 41,000 Plant and Machinery 60,000
General Reserve 80,000 Building 40,000
Outstanding Expenses 12,000 Investments 60,000
Capitals : 1,27,000 Stock 50,000
Yuv 79,000 Debtors 38,000 34,000
Veer 48,000 Less : Provision for
Doubtful Debts 4,000
Cash 16,000
2,60,000 2,60,000
They decided to admit Yash in the firm on 1st April, 2022 for 1/4 share in profits on the following terms :
(i) Yash will bring in proportionate capital and Rs.4,000 as his share of goodwill premium in cash.
(ii) Investments were valued at Rs.68,000.
(iii) Plant and Machinery was to be depreciated by 10%.
Prepare Revaluation Accounts and Partners Capital A/c.

21. From the following information extracted from the Statement of Profit and Loss for the years ended 31st March, 2017
and 2018, prepare a Comparative Statement of Profit & Loss.

Particulars 2017-18 2016-17

Revenue from operations 6,00,000 5,00,000
Other incomes (% of revenue from operations) 20% 20%
Employee benefit expenses (% of Total Revenue) 40% 30%
Tax rate 50% 50%

22. From the information extracted from the statement of Profit & Loss of Zee Ltd for the year ended 31st March 2022
and 31st March 2023,prepare a common size statement of profit & loss:
Particulars 2022-23 2021-22
Revenue from operations 8,00,000 10,00,000
Gross Profit 60% 70%
Other Expenses 2,20,000 2,60,000
Tax rate 50% 50%

23. Find the heads and sub-heads under which the following items will appear in the balance sheet of a company as per
Schedule III, Part I of Companies Act, 2013?
a) Furniture and Fixture; b) Advance paid to contractor for building under construction;

c) Accrued Income; d) Loans repayable on demand to Bank;

e) Employees earned leaves payable on retirement; f) Employees earned leaves encash able;

24. Complete the Comparative Statement of Profit and Loss:

Particulars 2022-23 2023-24 Absolute change % Change

Revenue from Operations 16,00,000 20,00,000 ? ?
Less: Employees Benefit 8,00,000 ? ? 25%
Expenses
Less: Other Expenses 2,00,000 ? (1,00,000) ?
Profit before tax 6,00,000 ? ? 50%
Tax @30% ? ? 90,000 ?
Profit after tax 4,20,000 ? 2,10,000 ?