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IMP THEORY QUESTIONS

Class 12 - Accountancy

1. Ravi, a partner, withdraws ₹ 20,000 on 1st April, 2022 and ₹ 40,000 on 1st October, 2022. Interest on Drawings [1]

@ 6% p.a. on 31st March, 2023 will be

a) ₹ 1,200 b) ₹ 3,600

c) ₹ 2,400 d) ₹ 1,800
2. If rent payable to a partner is Rs. 10,000 and there is a loss in the firm of Rs. 15,000. How much rent will be [1]
paid to the partners?

a) 15,000 b) 25,000

c) 5,000 d) 10,000
3. Match the followings: [1]
A, B and C are partners in a firm sharing Profits and loss in the ratio of 5 : 3 : 2, they decided to share profits and
losses in the ratio of 1 : 1 : 1 w.e.f. 01.04.2021. Investment fluctuation reserve as on that date was ₹ 30,000 and
the current investment is ₹ 2,00,000

(a) No other information is given (Cost and market value are (i) A = 5,000 (Cr.); B = 3,000 (Cr.); C = 2,000
same) (Cr.)

(ii) A = 10,000 (Dr.); B = 6,000 (Dr.); C = 4,000

(b) Investment revalued at ₹ 1,80,000
(Dr.)

(iii) A = 5,000 (Dr.); B = 3,000 (Dr.); C = 2,000

(c) Investment revalued at ₹ 1,60,000
(Dr.)

(iv) A = 15,000 (Cr.); B = 9,000 (Cr.); C = 6,000

(d) Investment revalued at ₹ 1,50,000
(Cr.)

a) (a) - (ii); (b) - (iii); (c) - (iv); (d) - (i) b) (a) - (iv); (b) - (i); (c) - (iii); (d) - (ii)

c) (a) - (iii); (b) - (i); (c) - (ii); (d) - (iv) d) (a) - (iii); (b) - (i); (c) - (iv); (d) - (ii)
4. Hari and Mohan are partners in the ratio 3:2. On 1st April 2015, they admitted John as a new partner with 1

6
[1]
share in the profit of the firm. Find out the sacrifice or gain of Mohan.

a) Mohan’s Sacrifice 1

5
b) Mohan’s Sacrifice 2

30

c) Mohan’s Gain 1

5
d) Mohan’s Gain 2

5. A debtor who was declared insolvent by the court and whose dues of ₹ 80,000 were written off as bad debts, [1]
now promised to pay 50% of the amount. How would you record this item at the time of admission of a new
partner?
i. Cr. Side of Revaluation A/c ₹ 40,000 and add same in cash/bank account

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 ii. 80,000 Dr. Side of Revaluation A/c and 40,000 Cr. Side
iii. 80,000 Dr. Side of Revaluation A/c and 40,000 in cash account
iv. No Entry for Promise (no effect at all)

a) Option (ii) b) Option (iii)

c) Option (i) d) Option (iv)

6. M and N are partners in a firm sharing profits in the ratio of 3 : 2. They admitted R as a new partner for
1 th [1]
4

Share. The new profit sharing ratio between M and N will be 2 : 1.

Sacrificing Ratio of M and N:

a) 2 : 3 b) 1 : 1

c) 3 : 2 d) 2 : 1
7. What journal entry will be recorded for deceased partner’s share in profit from the closure of last balance sheet [1]
till the date of his death?

a) Profit and Loss Suspense A/c Dr. b) Deceased Partner's Capital A/c Dr.

To Deceased Partner's Capital A/c To Profit and Loss Suspense A/c

c) Deceased Partner's Capital A/c Dr. d) Profit and Loss A/c Dr.

To Profit and Loss A/c To Deceased Partner's Capital A/c

8. P, Q and R are partners sharing profits in the ratio of 5 : 4 : 3. Q retires and P and R decide to share future profits [1]
equally. Gaining Ratio will be:

a) 3 : 1 b) 1 : 1

c) 1 : 3 d) 5 : 3
9. At the time of dissolution of a firm, Debtors were ₹ 17,000 out of which ₹ 500 became bad and the rest realised [1]
60%. Which account will be debited and by how much amount?

a) Debtors Account by ₹ 7,100 b) Realisation Account by ₹ 16,500

c) Profit and Loss Account by ₹ 500 d) Cash Account by ₹ 9,900

10. Realisation Account differs from Revaluation Account as [1]

a) Prepared only once during the life of a firm b) Prepared at three times during the life of a
firm

c) Prepared at a number of times during the d) Prepared only twice during the life of a firm
life of a firm
11. The directors of Erito Ltd. forfeited 20,000 equity shares of ₹ 10 each, ₹ 8 per share called up for non-payment [1]
of first call of ₹ 2 per share. Final call of ₹ 2 per share has not been yet called. Half of the forfeited shares were
reissued as fully paid up for ₹ 15 per share. The amount transferred to Capital Reserve will be:

a) ₹ 2,00,000 b) ₹ 60,000

c) ₹ 1,20,000 d) ₹ 40,000
12. Ankit Limited purchased Furniture for ₹ 4,05,000 from Girish Limited. The payment was made by issue of [1]
Equity Shares of ₹ 10 each. How many shares are to be issued?

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 a) 40,000 Shares b) 40,500 Shares

c) 50,000 Shares d) 35,000 Shares

13. Which of the following is not a characteristic of Bearer Debentures? [1]

a) Their transfer requires a deed of transfer. b) They are transferable by mere delivery.

c) The interest on it is paid to the holder d) They are treated as negotiable instruments.
irrespective of identity.
14. Rohit Limited issued 2,000, 9% Debentures of ₹ 100 each at ₹ 95 per debenture. 9% Debentures account will be [1]
credited by:

a) ₹ 1,90,000 b) ₹ 1,10,000

c) ₹ 2,00,000 d) ₹ 10,000
15. Electricity and telephone expenses paid by the company are shown in statement of profit and loss as: [1]

a) Cost of Materials Consumed b) Employees Benefit Expenses

c) Finance Cost d) Other Expenses

16. Rent received, Profit on sale of fixed assets, Compensation for acquisition of land are an example of [1]

a) Non-operating expenses b) Non-operating Incomes

c) operating Incomes d) operating expenses

17. While preparing Common-size Balance Sheet, each item of Balance Sheet is expressed as % of [1]

a) Current Assets b) Non-current Liabilities

c) Total Assets d) Non-current Assets

18. Mention the net amount of source of cash when a fixed asset (having a book value of Rs. 15,000) is sold at a loss [1]
of Rs. 5,000.

a) 5,000 b) 10,000

c) 15,000 d) 20,000
19. Which of the following is not an investing cash flow? [1]

a) Sales of land for ₹ 28,000 cash b) Purchase of marketable securities for ₹

25,000 cash

c) Purchase of equipment for ₹ 500 cash d) Sale of 2,500 shares (held as investment) for
₹ 15 each
20. Which software means modify the readymade softwares to suit the specific requirements of the user [1]

a) Readymade software b) Tailor made software

c) Customized Software d) None

21. Which Date and Time function returns value of today's date with time? [1]

a) Now( ) b) Day( )

c) Today( ) d) Day time( )

22. The average profit earned by a firm is ₹ 75,000 which includes undervaluation of stock of ₹ 5,000 on an [1]
average basis. The capital invested in the business is ₹ 7,00,000 and the normal rate of return is 7%. Goodwill

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 of the firm on the basis of 3 times the super profit will be:

a) 78,000 b) 93,000

c) 63,000 d) 49,000
23. Types of goodwill are [1]

a) Average Goodwill and Super Goodwill b) Purchase Goodwill and Self Generated
Goodwill.

c) Purchase Goodwill and Super Goodwill d) Average Goodwill and Generated Goodwill
24. If Total Assets are ₹1,25,000, Total Debts, i.e., external debts are ₹1,00,000 and Current Liabilities are ₹50,000, [1]
Debt-Equity Ratio will be:

a) 1 : 2 b) 2 : 1

c) 1:3 d) 1 : 1
25. Current Assets ₹ 40,000; Inventory ₹ 12,000; Prepaid Expenses ₹ 2,000 and Working Capital ₹ 30,000. Liquid [1]
ratio will be:

a) 1.4 : 1 b) 2.6 : 1

c) 4 : 1 d) 2.8 : 1
26. The financial statements of a business enterprise include: [1]

a) All of these b) Profit & Loss Account

c) Cash Flow Statement d) Balance Sheet

27. Analysis conducted by the Investors and Creditors is known as: [1]

a) External Analysis b) Cross Sectional Analysis

c) Time Series Analysis d) Horizontal Analysis

28. Which of the following functions automatically totals a column or row of values? [1]

a) TOTAL b) AVG

c) SUM d) ADD
29. Which of these purposes does not pertain to charts? [1]

a) Identifying trends b) Selecting values

c) Recognising patterns d) Making comparisons

30. What share of profit would a sleeping partner who has contributed 75% of the total capital get in the absence of [1]
a deed?
31. Write two items of the debit side of Current Accounts. [1]
32. Calculate interest on A's drawings: [1]

i. If he has withdrawn ₹ 60,000 on 1st October, 2022 and rate of interest on drawings is 8% per annum.
ii. If he has withdrawn ₹ 60,000 on 1st October, 2022 and rate of interest on drawings is 8%.

Books are closed on 31st March, 2023.

33. What is meant by Reconstitution of a Partnership Firm? [1]
34. Sanjay, Rahul and Manish are partners in a firm sharing profits in the ratio of 5 : 3 : 2. They decided to share [1]

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 profits, w.e.f, 1st April, 2023 in the ratio of 2 : 3 : 5. On the date of change in profit-sharing ratio, the firm had
balance in General Reserve of ₹ 1,00,000. Pass the Journal entry for distributing General Reserve on change in
profit-sharing ratio.
35. A and B were partners in a firm sharing profits and losses in the ratio of 4 : 3. They admitted C as a new partner. [1]
The new profit sharing ratio between A, B and C was 3 : 2 : 2. A surrendered 1

4
of his share in favour of C.
Calculate B’s sacrifice.
36. Sanjay, Rajesh and Tanuj were partners of a firm sharing profits in the ratio of 6 : 5 : 4. Rajesh retired and his [1]
capital after making adjustments on account of reserves, revaluation of assets and reassessment of liabilities
stood at ₹ 2,50,400. Sanjay and Tanuj agreed to pay him ₹ 2,90,000 in full settlement of his claim.
Pass necessary journal entry for the treatment of goodwill. Show workings clearly.
37. How is the account of retiring partner settled? [1]
38. If a loan from a partner appears on the liabilities side of the Balance Sheet of the firm and the Capital Account of [1]
such partner shows a debit balance, how is loan dealt with?
39. How is the gain (profit) on the reissue of forfeited shares dealt with? [1]
40. At the time of forfeiture Shares, with what amount the Share Capital Account is debited? [1]
41. Write any four types of debentures. [1]
42. Give any two points of distinction between a Share and a Debenture. [1]
43. In case Operating Cycle cannot be determined, what is the time period of the operating cycle assumed? [1]
44. Under which major head of the Statement of Profit and Loss of a Company following items will appear: [1]
i. Bonus
ii. Revenue from Services rendered
iii. Internet Expenses
iv. Materials Purchased
v. Discount on Issue of Debentures written off
vi. Goodwill Amortized
45. What is meant by a Comparative Financial Statement? [1]
46. Under which type of activity will you classify ‘Issuing 9% debentures in cash’ while preparing cash flow [1]
statement?
47. Which accounting reports are prepared upon matters happening as per instructions, conditions or exceptions? [1]
48. Distinguish Between Average Profit Method and Super Profit Method. [1]
49. What is meant by Long-term Debts? [1]
50. What is Intra-firm Analysis? [1]

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