BRAINWARE UNIVERSITY

MODEL QUESTION FOR HIGHER SECONDARY (WBCHSE)

SUBJECT: ACCOUNTANCY

FULL MARKS: 80 TIME: 3 HOURS 15 minutes

Group – A
1. Choose the correct alternative 1 x 24 = 24

(i) Interest on capital of a partnership firm is –

a) Income
b) Asset
c) Expense
d) None of these

(ii) When Capital of partners are maintained under fixed capital method, share of profit of partners will
be credited to-

a) Current Account
b) Capital Account
c) Suspense Account
d) Drawings Account

(iii) Which of the following is a feature of partnership?

a) Unlimited Liability
b) Mutual Agency
c) Sharing of risk
d) All of these

(iv) Indian Partnership Act was introduced in the year –

a) 1931
b) 1932
c) 1933
d) 1934

(v) Goodwill is to be valued at two years’ purchase of average profit for the last three years. If the
profits for the last three years were Rs.40,000, Rs.10,000 (loss) and Rs.30,000, then the value of
Goodwill is—

1
 a) Rs. 40,000
b) Rs. 42,000
c) Rs. 30,000
d) Rs. 10,000

(vi) M, N, and O are partners in a firm sharing profits in the ratio of 5:3:2. N retires and her share of
goodwill is agreed at Rs. 21,000. The amount to be debited to M’s Capital account will be—

a) 7,000
b) 8,000
c) 14,000
d) 15,000

(vii) The amount of General Reserve of a partnership firm is Rs. 1,00,000. The profit sharing ratio
among the partners X, Y and Z is 3:2:1. The share of reserve of Y and Z will be –

a) Twice of X
b) Equal to X
c) Half of X
d) None of these

(viii) The profit-sharing ratio between A and B is 2:1, and that of B and C is 3:2, Then the profit-sharing
ratio between A, B and C is_________________

a) 2:1:1
b) 2:3:4
c) 6:3:2
d) None of these

(ix) The ratio in which the old partners agree to surrender their share in profit in favor of new partner
is called_____

a) Profit Sharing Ratio

b) Sacrificing Ratio
c) Gaining Ratio
d) Capital Ratio

(x) A and B agree to change their profit-sharing ration 2:1 to 3:2. Who gained?

a) Only A
b) Both A and B
c) Only B
d) None of them

(xi) As per section 37 of the Partnership Act., interest is payable on the amount due to deceased
partner at________

2
 a) 6% p.a.
b) 10% p.a.
c) 12% p.a.
d) 15% p.a.

(xii) The minimum number of members in a public limited company is __________

a) 2
b) 3
c) 5
d) 7

(xiii) If 5000 equity shares of Rs.100 each are issued at a premium of 5% then the total amount of
money received will be____

a) 4,50,000
b) 4,75,000
c) 5,00,000
d) 5,52,000

(xiv) Discount on re-issue of forfeited shares cannot be_____

a) Less than the balance of forfeited shares account

b) More than the balance of forfeited shares account
c) Equal to the balance of forfeited shares account
d) None of these

(xv) If a share of face value of Rs. 10 on which Rs. 7 has been called up and Rs. 5 paid up; is forfeited,
then the share capital account will be debited by_______

a) Rs. 3
b) Rs. 5
c) Rs. 7
d) Rs. 10

(xvi) After final call, a company credited Rs. 7,000 to forfeited shares account for forfeiting 500 shares
of Rs. 20 each. These shares were re-issued for Rs. 5,000. The amount transferred to capital reserve is-

a) 2,000/-
b) 3,000/-
c) 5,000/-
d) 10,000/-

(xvii) For purchase of net assets Rs. 30,00,000, the purchase consideration is satisfied by the issue of
equity shares of Rs. 25,00,000 and by bank draft Rs. 4,00,000. The difference is treated as-

3
 a) Securities Premium
b) Goodwill
c) Capital Reserve
d) Capital Redemption reserve

(xviii) Forfeited shares originally issued at a premium can be re-issued –

a) At Par
b) At Premium
c) At Discount
d) Any of these

(xix) Which of the following is not a financial statement?

a) Balance Sheet
b) Profit & Loss Account
c) Profit & Loss Appropriation Account
d) Funds Flow Statement

(xx) The working capital of a company is Rs. 6,00,000; current liabilities are Rs.8,00,000; total assets are
Rs.60,00,000 then the value of the fixed assets will be –

a) 60,00,000/-
b) 52,00,000/-
c) 46.00,000/-
d) 14,00,000/-

(xxi) Average stock is Rs. 75,000 and stock turnover ratio is 12. If Gross profit ratio is 20% then the
amount of profit will be –

a) 1,80,000/-
b) 2,50,000/-
c) 3,75,000/-
d) None of these

(xxii) Cash sales is 40% of credit sales if total sales. If total sales is Rs. 5,60,000 the amount of cash sales
will be –

a) 1,60,000/-
b) 4,00,000/-
c) 2.40,000/-
d) None of these

(xxiii) If sales is Rs. 20,00,000 and the operation profit ratio is 25% what will be the amount of
operating cost?

4
 a) 5,00,000/-
b) 10,00,000/-
c) 15,00,000/-
d) 25,00,000/-

(xxiv) An example of cash inflow from financing activity is –

a) Sale of Machinery
b) Issue of debentures
c) Purchase of furniture
d) Transfer to General Reserve

2. Answer the following questions in brief: 1 x 12 = 12

(i) What is Partnership Deed? Or, What is meant by appropriation of profit?

(ii) What is goodwill?
(iii) What is meant by Gaining Ratio?
(iv) In which account this amount payable to decreased partner is transferred?
(v) What do you mean by minimum subscription? Or, What is nominal capital?
(vi) What is private placement of shares?
(vii) What is issue of shares at a premium? Or, What do you mean by re-issue of shares?
(viii) What are redeemable debentures?
(ix) What is meant by financial statement analysis? Or, State one limitation of financial statement
analysis.
(x) What is common-size financial statement? Or, State one advantage of Comparative Financial
Statement.
(xi) Write the formula for Average Collection period?
(xii) Cash dividend received comes under which activity in Cash Flow Statement?

Group – B
3. X and Y are partners in a firm sharing profits and losses are 3:1 net profit of the firm during the year
ended on 31st December 2022 amounted to Rs. 1,50,000/- From the following information prepare a
profit and loss appropriation account of the firm for the year ended 31st December 2022: (4)

a) On 1st January 2022, the capitals of the partners were –X Rs.80,000 and Y Rs.60,000
b) Interest on capital @ 5% p.a.
c) X advanced on a loan of Rs. 2,00,000 to the firm on 01.07.2022
d) Interest on partners drawings to be charged @5%p.a. Drawings during the year were –X
Rs.20,000 and Y Rs.15,000

Or

Distinguish between Fixed Capital Method and Fluctuating Capital Method (4)

5
4. The directors of Gamma Ltd. Forfeited 1,000 shares of Rs. 10 each, Rs. 8 called up, for non-payment
of allotment money of Rs. 7 (including premium of Rs. 5) and first call money of Rs. 2. These shares
were later re-issued to Manish at Rs. 6 per share.

Pass necessary Journal entries in the books of the company relating to forfeiture and re-issue only. (4)

Or
Explain: (2 + 2)
a) Subscribed Capital
b) Convertible Preference Shares

5. Patton India Ltd. Issued 5,000 9% debentures of Rs. 100 each, at a premium of 10% on 1st April,
2022. Interest on debentures is payable half yearly on 30th September on 31st March. Pass necessary
journal entries for the issue of debentures and interest on debentures for the year 2022-23 in the
books of the company. (4)

6. Akash and Bikash were partners in a firm sharing profit and losses in the ration 3:2; on 31.03.2023,
their Balance Sheet was as follows

Liabilities Rs. Assets Rs.

Capital Accounts: Fixed Assets 4,40,000
Akash 4,00,000
Bikash 2,00,000
Reserve 80,000 Investments 1,20,000
Creditors 2,00,000 Stock 1,00,000
Outstanding Expenses 40,000 Debtors 2,00,000
Less: Provisions 20,000
1,80,000
9,20,000 9,20,000

On 01.04.2023, Chandra is admitted as a partner for 1/5th share on the following points:-

(i) Fixed Assets to be appreciated by 10%

(ii) Investments are valued at Rs. 1,00,000
(iii) Provision to be maintained at 5% on debtors.
(iv) Outstanding expenses to be increased by Rs. 8,000
(v) Value of Goodwill of the firm is Rs.2,00,000 and Chandra pays the required premium to the
partners privately.
(vi) Chandra beings in Rs. 1,00,000 as capital and the capital of the old partners to be adjusted
accordingly.

Prepare Partners Capital Accounts in the books of the firm, giving effect to the above adjustments. (6)

6
7. A limited company issued 60,000 equity shares of Rs. 10 each, at a premium of Rs.2 per share,
payable as – on application Rs. 3; on allotment Rs. 5 (including premium) and on first and final call
Rs.4.

Applications were received for 75,000 shares and the excess application money due. All money was
duly received except one shareholder holding 1,500 shares when failed to pay the allotment and call
money. Those shares were forfeited and later on re-issued at Rs. 7 per share as fully paid.

Pass necessary Journal entries in the books of the company (narration not required). (6)

Or

Write the difference between shares and debentures. (6)

9. The following information had been obtained from the books of Angel Ltd. On 31st March, 2023:

Liabilities Rs. Assets Rs.

Equity Share Capital 10,00,000 Goodwill 3,50,000
Capital Reserve 2,50,000 Fixed Assets 1,50,000
General Reserve 4,00,000 Stock-in-trade 6,35,000
Profit & Loss Account 3,25,000 Accounts Receivable 7,00,000
9% Debentures 6,00,000 Bank 1,65,000
Public Deposits 4,50,000 Preliminary Expenses 1,50,000
Account Payable 3,75,000
Other Provisions 1,00,000
35,00,000 35,00,000

Calculate –

a) Long term Debt-equity Ratio

b) Liquid Ratio (2 + 2)

Or
State the limitations of Ratio Analysis.

10. From the following particulars of the Eras Ltd. Prepare a Cash Flow Statement for the year ended
31st March 2023: (6)

31.03.22 31.03.23 31.03.22 31.03.23

Liabilities Assets
(Rs.) (Rs.) (Rs.) (Rs.)
Equity Share Capital 8,00,000 12,00,00 Goodwill 1,60,000 1,20,000

8% preference share 4,00,000 3,20,000 Land 5,00,000 6,50,000

General Reserve 70,000 1,00,00 Other fixed assets 8,30,000 11,20,000

Investments
Profit & Loss Account 2,00,000 3,00,000 1,50,000 2,00,000
(Long-term)

7
 12% Debentures 2,00,000 3,00,000 Stock-in-trade 2,40,000 3,00,000

Proposed Dividend 80,000 1,05,000 Debtors 1,40,000 1,60,000

Provision for
1,50,000 2,00,000 Bill receivable 20,000 40,000
Depreciation
Creditors 1,60,000 1,75,000 Cash & Bank 60,000 1,10,000

Bank Overdraft 40,000 −

21,000,000 27,00,000 21,00,0000 27,00,000

Or
Distinguish between Cash Flow Statement and Cash Book. (6)