Accountancy (055)

Class XII
2023–24
Maximum marks: 80 Time
Allowed: 3 hours General Instructions:
1. This question paper contains 34 questions. All questions are compulsory.
2. This question paper is divided into two parts, Part A and B. Both are Compulsary
3. Question Nos.1 to 16 and 27 to 30 carries 1 mark each.
4. Questions Nos. 17 to 20, 31and 32 carries 3 marks each.
5. Questions Nos. from 21 ,22 and 33 carries 4 marks each
6. Questions Nos. from 23 to 26 and 34 carries 6 marks each 9. There is no overall
choice. However, an internal choice has been provided in 7 questions of one mark, 2
questions of three marks, 1 question of four marks and 2 questions of six marks.
PART A (Accounting for Partnership Firms and Companies)

1. Accounting Standard-26 requires that goodwill is to be recorded in the books of

accounts only when money or money’s worth has been paid for it. At the time of
admission, Vivaan, a new partner was unable to bring in his share of goodwill in cash, so
according to Accounting Standard-26 his: .
(a) Current A/c will be credited (b) Current A/c will be debited (c) Capital A/c will be
debited (d) Capital A/c will be credited
2. . According to Sec 50 of the Companies Act 2013, the amount of Calls in Advance can
be accepted by the Company only when it is authorised by:
(a) Board of Directors (b) Equity Shareholders (c) Articles of Association (d)
Memorandum of Association
Or
Tulip Ltd. took up a loan from a Punjab National Bank and issued its’ Debentures as
Collateral Security. The bank to whom these debentures are issued:
(a) will be entitled to interest on such debentures. (b) will not be entitled to interest
on such debentures. (c) will be entitled to interest on primary security. (d) will not
be entitled to interest on loan taken up from the bank
3. Read the following statements: Assertion (A) and Reason (R). Choose the correct
alternative from those given below. Assertion: Michael, Mike and Stephen were
partners sharing profits and losses in the ratio 3:2:1. Stephen being a partner wants

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 that he should be exempted from sharing the losses in the firm. Reasoning:
According to Partnership Act 1932,”It may be agreed between the partners that one
or more of them shall not be liable for losses.” Alternatives:
(a) Both A and R are correct, and R is the correct explanation of A. (b) Both A and R
are correct, but R is not the correct explanation of A. (c) A is correct but R is
incorrect. (d) A is incorrect but R is correct.
4. X Y and Z were partners in a firm sharing profit in the ratio 1⁄2, 1/3, and 1/6
respectively. Z decided to retire from the firm on the date workman compensation
reserve of Rs 120000 was appearing in the balance sheet of the firm. The claim on
account of workmen compensation was determined at Rs 67500 excess of amount
over the claim will be
a) Debited to revaluation account
b) Credited to revaluation account
c) Debited to partner capital account
d) Credited to partner capital account
or
P, Q and R sharing profit and losses in the ratio of 8:5:3. P retire from the firm, Q takes
3/16 from P and R takes 5/16 from P. New profit-sharing ratio between Q and R will be
(a) 1:1
(b) 10:6
(c) 9:7
(d) 5:3
5.A,B & C are pratners with capital of Rs.50,000,Rs.40,000& Rs.10,000or respectively .
The Firm reported profit of Rs.80,000. As per provision of Indian Partnership Act 1932
find out share of each partner in the above amount after taking into consideration that
no interest has been provided on Advance by A of Rs.20,000 in addition to capital to
capital contribution
(a) Rs.26,267 to B& C and Rs.27,466 to A
(b) Rs.26,267 to each partner
(c ) Rs.40,000 to A, Rs.32,000 to B & Rs.8000 to C
(d) Rs.26,666 to each partner
6. Cadilla Ltd. allotted 2,000 8% Debentures of Rs. 100 each to their underwriters to
pay their commission. Which of the following journal entry is correct, if 8% Debentures
are allotted to underwriters?
(a) 8% Debentures A/c Dr
To Underwriting Commission A/c
(Commission due to them)
(b) 8% Debentures A/c Dr
To Underwriter’s A/c
(Commission due to them)
(c) Underwriter’s A/c Dr
To Underwriting Commission A/c
(Commission due to them)
(d) Underwriter’s A/c Dr
To 8% Debentures A/c

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 (Commission due to them)
Or
Alexa Ltd. purchased building from Siri Ltd for ₹8,00,000. The consideration was
paid by issue of 6%debentures of ₹100 each at a discount of 20%.
The 6% Debentures account is credited with:
a) ₹10,40,000 b) ₹10,00,000 c) ₹9,60,000 d) ₹6,40,000

7. .Assertion(A): Preferential allotment means allotment of shares at a pre

determined price to the identified people who are interested in taking shares in
the company.

Reason(R): Employee Stock Option Plan is a category of sweat Equity In the

context of the above two statements, which of the following is correct?

a) Both Assertion(A) and Reason (R) are true and Reason(R) is the correct
explanation of Assertion(A)

(b) Both Assertion(A) and Reason (R) are true and Reason(R) is not the correct
explanation of Assertion(A)

(c) Assertion(R) is true but the Reason(R) is false

(d) Assertion(R) is false but the Reason(R) is true

8. At the time of retirement of a partner the remaining gaining partners should

compensate the (a) remaining partners only (b) Retiring partner only

(c ) Retiring partner as well as remaining partners who have sacrificed (d) Sacrificing
Only

Or

If a partners retire in middle of the year his / her share profit from the date of last
balance sheet till the date of retirement will be transfer to

(a) Profit & Loss Credit Side

(b) Profit & Loss Debit Side
(c) Retiring partner Capital Account Debit Side
(d) Profit & Loss Suspense Account Credit Side

Read the following hypothetical situation and answer question no. 9 and 10. Ana
and Anne started a partnership business on 1st April, 2022. Their capital
contributions were Rs. 3, 00,000 and Rs. 1, 00,000 respectively. Ana rented her
property to carry on business for Rs.2, 500 p.m. Interest on capitals @12% p.a. Ana,
to get a salary of Rs. 4,000 p.m. Anne to get a commission of 2% of the net profit.

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 Profits are to be shared in the ratio of 3:2. The profits for the year ended 31st March,
2023 before providing for rent was Rs. 2, 00,000..

Dr. Cr

Profit and Loss Appropriation Account.

for the year ended 31st March, 2023

Particulars Rs. Particulars Rs

To Interest on capital: …………. By Profit and Loss A/c ……………(2)

Ana A ……….

To Partner’s Salary: Ananne 48000

To Anne’s commission ………(1)

To Profit transferred to

Ana’s Capital A/c ………

Anne’s Capital A/c ……….

9. The amount to be reflected in blank (1) will be:

(a) Rs.3,720 (b) Rs.3,400 (c) Rs. 2,800 (d) Rs.2,940

10. The amount to be reflected in blank (2) will be:

(a) Rs.1,62,000 (b) Rs. 1,74,500 (c) Rs. 1,71,400 (d) Rs.1,70,000

11.The capital account of partners will always show………balance under fixed capital
account method

(a) Debit (b) Credit (c ) Zero (d) Nagitive

12. Skyline Ltd. took over running business worth Rs. 70,00,000 from Grand Ltd. by
paying 20% through bank draft and balance by issue of shares of Rs.100 each at a
premium of 10%. The entry to be passed by Skyline Ltd for settlement will be :-

(a) Grand Ltd. Dr. 70,00,000

To Share Capital A/C 50,90,909

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 To Securities Premium A/c 509090

To Bank A/c 14,00,000

To Statement of Profit and Loss 01

(Settlement of amount due to vendors)

(b) ) Grand Ltd. Dr. 70,00,000

To Share Capital A/C 50,90,909

To Securities Premium A/c 509090

To Bank A/c 14,00,001

(Settlement of amount due to vendors)

(c) Grand Ltd. Dr. 70,00,000

To Share Capital A/C 50,90,909

To Securities Premium A/c 509090

To Bank A/c 14,00,000

(Settlement of amount due to vendors)

( d ) Grand Ltd. Dr. 70,00,000

To Share Capital A/C 50,00,000

To Securities Premium A/c 509090

To Bank A/c 14,00,000

(Settlement of amount due to vendors)

Q13. A company forfeited 3,000 shares of ₹10 each, on which only ₹5 per share
(including ₹1 premium) has been paid. Out of these few shares were re-issued at a
discount of ₹1 per share were and ₹6,000 were transferred to Capital Reserve. How
much is balance in share forfeiture account ?

a)Rs. 6,000 b) Rs.4,000 c) Rs.2,000 d) Rs.3,000

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Q14. At the time of dissolution, Harry, a creditor of the firm agreed to take over the
furniture of the book value of Rs. 1, 00,000 at Rs. 89,000 and the balance in cash in full
settlement of his account of Rs.1, 10,000. Which journal entry will be passed for the
balance to be paid in cash?

(a) Realisation A/c Dr. 35,000

To Bank A/c 35,000

(b) Realisation A/c Dr. 21,000

To Bank A/c 21,000

(c) Realisation A/c Dr. 11,000

To Bank A/c 11,000

(d) Realisation A/c Dr. 15,000

To Bank A/c 15,000

Q15. Edward and Hayward are partners. Edward draws a fixed amount at the
beginning of every quarter. Interest on drawings is charged @10% p.a. At the end
of the year, interest on Edward’s drawings amounted to Rs.7,500. Drawings of
Edward were:

(a) Rs. 34,000 per quarter. (b) Rs. 44,000 per quarter (c) Rs. 30,000 per quarter

(d) Rs. 60,000 per quarter

OR

Ayan, Azan and Aqib are partners carrying on furniture business. Ayan withdrew
Rs. 5,000 at the end of each month. Azan withdrew Rs.10,000 at end of each
quarter. Aqib withdrew Rs.40,000 at the end of each month for six months. The
partnership deed provides for interest on drawings @ 12% p.a. The interest on
drawing charged from Ayan, Azan and Aqib at the end of the year will be:

(a) Ayan- Rs. 1,800, Azan- Rs.3,300, Aqib- Rs. 6,000

(b) Ayan- Rs. 2,400, Azan- Rs. 1,200, Aqib- Rs. 5,000

(c) Ayan- Rs. 1,400, Azan- Rs. 3,200, Aqib- Rs. 2,000

(d) Ayan- Rs. 3,200, Azan- Rs. 2,300, Aqib- Rs. 8,000

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 Q16. David and Garry are partners in a firm with capitals of Rs. 90,000 and Rs.
80,000 respectively. Zenith brings Rs.70,000 as goodwill for 1/4th share in profits.
Zenith’s is to bring ¼th of combine capital of David & Garry after all adjustment
Zenith will bring:

(a) Rs. 42,500. (b) Rs. 60,000. (c) Rs.80,000. (d) Rs.64,000.

Q17. Mac, Jack and Lac were partners in a firm sharing profits and losses in the
ratio of 2:2:1 Balance Sheet (extract) as at 31st March, 2023

Liabilities (Rs) Assets (Rs)

Workmen’s Compensation Reserve 5,00,000

On Jack’s retirement from the firm on 1st April, 2023, he had a balance of Rs.8,
00,000 (cr.) in his capital account. The liability of Workmen’s Compensation
Reserve was Rs. 5, 75,000. You are required to pass journal entries and show
how much amount is transferred to his loan account?

Q18. P, Q and R were partners with fixed capital of ₹ 40,000, ₹32,000and

₹24,000.After distributing the profit of ₹48,000 for the year ended 31st March
2022 in their agreed ratio of 3 : 1 : 1it was observed that: (1) Interest on capital
was provided at 10% p.a. instead of 8% p.a. (2) Salary of ₹ 12,000 was credited to
P instead of Q. You are required to pass a single journal entry in the beginning of
the next year to rectify the above omissions.

OR

Cheese and Slice are equal partners. Their capitals as on April 01, 2022 were Rs.
50,000 and Rs. 1,00,000 respectively. After the accounts for the financialyear
ending March 31, 2023 have been prepared, it is observed that interest on capital
@ 6% per annum and salary to Cheese @ ₹5,000 per annum, as provided in the
partnership deed has notbeen credited to the partners’ capital accounts before
distribution of profits. You are required to give necessary rectifying entries

Q19. Glen Ltd. took over the running business of Hayward Ltd. having assets of
Rs.22,00,000 and liabilities of Rs.6,00,000 by issuing 20,000, 11% Debentures of
Rs. 100 each at 5% discount & Online payment of Rs.3,00,000. You are required
to pass the journal entries in the books of Glen Ltd. if debentures were redeemed
at 10% premium.

OR

Frank Ltd. issued 1,00,000 Equity shares of Rs. 10 each. The amount was duly
received except on 5,000 Equity shares on which Rs. 4 per share was received.
These shares were forfeited and 2,500 Equity shares were reissued at maximum
discount fully paid-up. You are required to prepare Share Forfeiture Account.

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Q20. Anshul and Parul are partners sharing profits in the ratio of 3 : 2. They admit Payal
as partner for 1/4th share in profits on 1st April, 2019. Payal brings ₹ 5,00,000 as
capital and her share of goodwill by cheque. It was agreed to value goodwill at three
years' purchase of average profit of last four years.
Profits for the last four years
₹
ended 31st March, were
2015-16 4,00,000
2016-17 5,00,000
2017-18 6,00,000
2018-19 7,00,000
Additional Information:
1. Closing Stock for the year ended 31st March, 2018 was overvalued by ₹
50,000.
Rs.1,00,000 should be charged annually to cover management cost.
Pass necessary Journal entries on Payal's admission.

Q21. NK Ltd., a truck manufacturing company, is registered with an authorised

capital of Rs. 1,00,00,000 divided into equity shares of Rs. 100 each. The
subscribed and paid up capital of the company is Rs. 50,00,000. The company
decided to open technical schools in the Jhalawar district of Rajasthan to train
the specially abled children of the area. It is planning to provide them
employment in its various production units and industries in the neighbourhood
area. To meet the capital expenditure requirements of the project, the company
offered 20,000 shares to the public for subscription all the money was duly
received except 1000 shares failed to pay final call of Rs.2 these shares were
forfeited and 60% of them were reissue at discount of 10% . The shares were
fully subscribed and paid. Present the share capital in the Balance Sheet of the
company as per the provisions of Schedule III of the Companies Act, 2013

22. Carol and Lacy were partners. They decided to dissolve their firm. Pass the
journal entries for the following after various assets and external liabilities have
been transferred to Realisation A/c:

1.Carol took over half of the investments worth Rs. 30,000 at 2% discount and
the remaining investments were sold at a profit of 18% of the book value.

2.Lacy is allowed a remuneration of Rs. 13,000 for dissolution work and is to bear
all the expenses of realisation which amounted to Rs. 5,000 were paid by the firm.

3. Carol had given a loan of Rs. 89,000 to the firm which was duly paid.

4. Lacy agreed to pay off her brother’s loan of Rs. 13,000 at a discount of 5%.

23. Royal Fans Ltd. invited applications for 1,00,000 Equity Shares of Rs.100 each
at a premium of 10%. The amount was payable as follows: On Application Rs. 50

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 per share On Allotment Rs. 35 per share (including premium) On First and Final
Call Rs. 25 per share Applications for 1,50,000 shares were received. Applicants
for 25,000 shares did not get any allotment and their money returned. Allotment
was made pro-rata to the remaining applicants. Excess application money was
adjusted towards sum due on allotment. Mr. Hanoz who was allotted 600 shares
failed to pay the amount due on allotment and call money. The company forfeited
his shares and subsequently re-issued at Rs 110 per share fully paid-up. You are
required to pass journal entries to record the above transactions in the books of
the company.

OR

Phizer Ltd. invited applications for 4,000 equity shares of Rs 100 each at a
premium 30 per share. The amount was payable as follows: On Application Rs.
40 (Including premium Rs 10) On Allotment Rs. 60 (Including premium Rs 20) On
First and Final Call Rs. 40 Applications for 5,000 shares were received. Allotment
was made to all the applicants on prorata basis. Excess application money was
adjusted towards sum due on allotment. Rocky, to whom 40 shares were allotted,
failed to pay allotment and call money. Ali, to whom 90 shares were allotted,
failed to pay the call money. These shares were forfeited. The forfeited shares
were re-issued @ Rs 80 per share fully paid-up. You are required to pass journal
entries to record the above transactions in the books of the company

24. N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5.
On 31st March, 2016 their Balance Sheet was as under:
Amount Amount
Liabilities Assets
(₹) (₹)
Creditors 1,65,000 Cash 1,20,000
General Reserve 90,000 Debtors 1,35,000
Capitals: Less: 15,000 1,20,000
Provision
N 2,25,000 Stock 1,50,000
S 3,75,000 Machinery 4,50,000
G 4,50,000 10,50,000 Patents 90,000
Building 3,00,000
Profit and Loss 75,000
Account
13,05,000 13,05,000

G retired on the above date and it was agreed that:

(a) Debtors of ₹ 6,000 will be written off as bad debts and a provision of 5% on
debtors for bad and doubtful debts will be maintained.
(b) Patents will be completely written off and stock, machinery and building will

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 be depreciated by 5%.
(c) An unrecorded creditor of ₹ 30,000 will be taken into account.
(d) N and S will share the future profits in 2 : 3 ratio.
(e) Goodwill of the firm on G's retirement was valued at ₹ 90,000.
Pass necessary Journal entries for the above transactions in the books of the
firm on G's retirement.

Or

A and B are partners in a firm. The net profit of the firm is divided as follows: 1/2 to A,
1/3 to B and 1/6 carried to a Reserve. They admit C as a partner on 1st April, 2019 on
which date, the Balance Sheet of the firm was:

Liabilities ₹ Assets ₹

Capital A/cs: Building 50,000
A 50,000 Plant and Machinery 30,000
B 40,000 90,000 Stock 18,000
Reserve 10,000 Debtors 22,000
Creditors 20,000 Bank 5,000
Outstanding 5,000
Expenses

1,25,000 1,25,000

Following are the required adjustments on admission of C:

(a) C brings in ₹ 25,000 towards his capital.
(b) C also brings in ₹ 5,000 for 1/5th share of goodwill.
(c) Stock is undervalued by 10%.
(d) Creditors include a liability of ₹ 4,000, which has been decided by the court
at ₹ 3,200.
(e) In regard to the Debtors, the following Debts proved Bad or Doubtful−
₹ 2,000 due from X−bad to the full extent;
₹ 4,000 due from Y−insolvent, estate expected to pay only 50%.
You are required to prepare Revaluation Account, Partners' Capital Accounts

25. Akon Ltd issued 12,000, 10% debentures of Rs 100 each on 1st April, 2022 at
discount of 10% repayable at premium of 5% . The issue was fully subscribed.
According to the terms of issue, interest on debentures is payable half- yearly on
30th September and 31st March Securities Premium show balance of Rs.20,000 .
You are required to pass the necessary entries for year ending on 31st March,
2023 and prepare loss on issue account .

26. Sandeep, Maheep and Amandeep were partners in a firm sharing profits in

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 the ratio of 2: 2: 1. The firm closes its books on 31st March every year. On 30th
June, 2020Maheepdied. The partnership deed provided that on the death of a
partner his executors will be entitled to the following:

a) Balance in his capital account which amounted to ₹1,15,000and interest on

capital till date of death which amounted to ₹5,000.

b) His share in the profits of the firm till the date of his death amounted to
₹20,000.

c) His share in the goodwill of the firm. The goodwill of the firm on Maheep’s
death was valued at ₹ 1,50,000.

d) Loan to Maheep amounted ₹ 20,000.

It was agreed that the amount will be paid to his executor in three equal yearly
instalments with interest @10% p.a. The first instalment was to be paid on
30.06.2021. Calculate the amount to be transferred to Maheep’s executors
Account and prepare the executor’s account till it is finally settled.

PART B

(Analysis of Financial Statements)

Q27.Identfy limitations of Financial statements

A Can be biased

B Report on stewardship function

C Aggregate Information

D Only Interim Report

E Basis of Fiscal Policy

Choose the Correct Option

(a) A,C,B only

(b) A,C,D only
(c) E,A,D only
(d) B,A,C only

OR

Outstanding Salary will be shown under which of the following sub-head of the

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 head Current Liabilities on the Equity & Liability side of the Balance Sheet.

(a) Short-term borrowings (b) Trade payables (c) Short-term provision (d) Other
current liabilities

28. Assertion (A): Issue of Bonus Shares will not be affected to Debt-Equity Ratio.
Reason (R): Issue of Bonus Shares increase the amount of Equity.

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct
explanation of Assertion (A)

(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct
explanation of Assertion (A)

(c) Assertion (A) is false, but Reason (R) is true

(d) Assertion (A) is true, but Reason (R) is false

29. Statement I: Increase in provision for doubtful debts should be added back
for calculating cash from operations. Statement II: Dividend received is a
Financing Activity. (a) Statement I is correct and Statement II is incorrect

(b) Statement I and II is correct

(c) Statement I and Statement II is incorrect

(d) Statement I is incorrect, and Statement II is correct

OR

Decrease in Bank Overdraft is shown under which heading in a Cash Flow

Statement? (a) Operating (b) Financing (c) Investing (d) Cash and Cash
Equivalent

30. Prayas Ltd. made a profit of Rs. 1,75,000 after considering the following
items: (i) Goodwill written off Rs. 6,000 (ii) Depreciation on Furniture Rs.3,400 (iii)
Loss on sale of Building Rs. 89,000 (iv) Gain on sale of Land Rs. 4,250 Operating
Profit before Working Capital changes will be

(a) Rs. 2,25,149 (b) Rs. 2,69,150 (c) Rs. 2,35,160 (d) Rs. 2,53,145

31. Classify the following items under major heads and sub-heads (if any) in the
Balance Sheet of a company as per Schedule III, Part I of the Companies Act,
2013 :

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 (a) Licenses and Franchise (b) Loans Repayable on Demand (c) Accrued Income

32. Calculate Gross Profit Ratio from the following information :

Inventory Turnover Ratio : 6 times Average Inventory : Rs. 4,00,000 Goods are
sold at a profit of 25% on cost

33. 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 Note No. 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%

Or

From the following information , prepare comparative statement of Profit & Loss

Particulars Note 2022-23(₹) 2021-22(₹)

No.
Revenue from operations 10,00,000 8,00,000

Other Income 2,20,000 1,50,000

Cost of materials consumed 4,00,000 3,00,000

Change in inventories of finished 2,00,000 1,00,000

goods and work in progress

Other Expenses(% of Revenue

from Operations) 15% 10%

Tax Rate 30% 30%

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34. From the following information, calculation Cash Flow from Operating Activities and
Investing Activities:

31st,
March, 31st, March,
Particular
2018, 2019, (₹)
(₹)
Surplus, i.e., Balance in Statement of 2,50,000 10,00,000
Profit and Loss
Provision for Tax 75,000 75,000
Trade Payables 1,00,000 3,75,000
Current Assets (Trade Receivables 11,50,000 13,00,000
and Inventories)
Fixed Assets (Tangible) 21,25,000 23,30,000
Accumulated Depreciation 10,62,500 11,00,000
Additional Information:
1. A machine having Cost of Rs. 2,62,500 was sold at a loss of ₹ 20,000.
2. Tax paid during the year ₹ 75,000.

3. Depreciation of Fixed Assets Rs.1,25000

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