NEW HORIZON SCHOLARS SCHOOL (AIROLI)

Unit Test II
Subject: Accountancy (055)

Name:_________________________ Roll No. :_________

_
Grade: XII Div.: ____ Date: _________
Marks - 40
Time- 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
question paper.
2. Part - I -is compulsory for all candidates.
3. Part - II Analysis of Financial Statement.
4. 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 C has questions from 37 to 41. You have to attempt any four questions.
III. Part II, contains three Sections – A, B and C. Section A has questions from 42 to 48, you
have to attempt any six questions, Section B has questions from 49 to 55, you have to attempt
any six questions. Section C has questions from 56 to 60, you have to attempt any four
questions.
5. All questions carry equal marks. There is no negative marking.
6. Specific Instructions related to each Part and subdivisions (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. If Drawings are made at the beginning of each month , the interest on drawing is
calculated for _______ months.
a) 6.5 months

b) 6 months

c) 7months

d) 5.5 months

2. Reliable Ltd offered 1,00,000 Equity Shares of ₹10 each, of these 98,000 shares were
subscribed. The amount was payable as ₹3 on application, ₹3 an allotment and
balance on first call. If a shareholder holding 2,000 shares has defaulted on first call,
what is the amount of money received on first call?
a) 392000
b) 384000
c) 390000
d) 386000

3. Balance of Forfeited Shares Account after reissue of forfeited shares is transferred to:
a) Profit & Loss A/c
b) Capital reserve A/c
c) General reserve A/c
d) None of these

4. Amit, Sumit and Pranit are partners sharing profits in the ratio of 2:2:1. According to
the partnership agreement, Pranit is to get a minimum amount of ₹60,000 as his share
of profits every year and any deficiency on this account is to be personally borne by
Amit. The net profit for the year ended 31st March 2021 amounted to ₹2,00,000.
Calculate the amount of deficiency to be borne by Amit?
a) 15000
b) 20000
c) 17000
d) 25000

5. Aman withdraws Rs 1,000 per month on the last day of every month. If the rate of
interest is 5% p.a, then the total interest on drawings will be:
a) Rs 325
b) Rs 275
c) Rs 300
d) Rs 350

6. Capital employed in a business is Rs 1,50,000. Profits are Rs 50,000 and the normal
rate of profits is 20%. The amount of goodwill as per capitalisation method will be:
a) 2,00,000
b) 1,50,000
c) 3,00,000
d) 1,00,000

7. Srishty, Drishti and Mishti are partners in the ratio of 5:2:1. If Drishti’s share of profit
at the end of the year amounted to ₹1,00,000, what will be Mishti’s share of profits?
a) 40000
b) 45000
c) 50000
d) 55000

8. Assertion (A) : Goodwill exists only when the firm earns super profits.
Reason (R) : Goodwill is regarded as an intangible fixed assets.
a) Both A and R are true and R is the Correct explanation of A
b) Both A and R are true and R is not the correct explanation of A
c) A is true but R is false.
d) A is false but R is true.
9. X and Y partners. Y has given guarantee to the firm that he will bring profit of Rs
10,000 (minimum). He brought business profit worth Rs 4,000. Total Profit of firm Rs
10,000. Assuming equal partners, what is the amount of profit earned by X?
a) Rs 8000
b) Rs 7000
c) Rs 6000
d) Rs 5000

10. As per AS- 26, ___________ goodwill is recorded in the books of accounts.
a) Purchased
b) Self – generated
c) Both (a) and (b)
d) None of these

11. Revaluation account is prepared to __________ the assets and liabilities.

a) Distribute
b) Write – off
c) Upscale
d) Revise

12. Extract of balance sheet

Liabilities Amt (Rs) Assets Amt(Rs)
Debtors 4,00,000 3,90,000
(-) provision for (10,000)
doubtful debts

At the time of change in profit sharing ratio, provision for doubtful debts is to be
made equal to 5% of debtors.
a) Provision of Doubtful Debts Dr 20,000
To Revaluation A/c 20,000

b) Provision of Doubtful Debts Dr 10,000

To Revaluation A/c 10,000

c) Revaluation A/c Dr 10,000

To Provision for doubtful debts A/c 10,000

d) Revaluation A/c Dr 20,000

To Provision for doubtful debts A/c 20,000

13. A & B are partners in the ratio 3:1. C was admitted for 1/5 th share and he could not
bring his share of Goodwill. Goodwill of firm is valued at Rs 1,00,000. Journalise.
a) Premium for Goodwill A/c Dr 1,00,000
To A’s Capital A/c 75,000
To B’s Capital A/c 25,000

b) C’s Capital A/c Dr 1,00,000

To A’s Capital A/c 75,000
 To B’s Capital A/c 25,000

c) C’s Capital A/c Dr 20,000

To A’s Capital A/c 10,000
To B’s Capital A/c 10,000

d) C’s Capital A/c Dr 20,000

To A’s Capital A/c 15,000
To B’s Capital A/c 5,000

14. A and B are partners in a firm having a capital of Rs 54,000 and Rs 36,000
respectively. They admitted C for 1/3 rd share in the profits, C brought proportionate
amount of capital. The Capital brought in by C would be :
a) Rs 90,000
b) Rs 45,000
c) Rs 54,000
d) Rs 36,600

15. Assertion (A) : It is necessary to ascertain new profit sharing ratio for old partners
when a new partner is admitted.
Reason (R) : New partner acquires his share from old partners which reduces old
partners share in profit.
a) Both A and R are true and R is the Correct explanation of A
b) Both A and R are true and R is not the correct explanation of A
c) A is true but R is false.
d) A is false but R is true.

16. A and B are in partnership sharing profits and losses in the ratio 3:2. They admit C
into partnership with 1/5 th shares which he acquires equally from A and B.
Accountant has calculated new profit sharing ratio as 5:3:2. Is accountant correct?
a) True
b) False
c) Partially true
d) Can’t Say.

17. Partners are supposed to pay interest on drawings only when it is ____________by
the _____________.
a) Provided, Agreement
b) Permitted, Investors
c) Agreed, Partners
d) ‘A’ and ‘C’ above

18. In case of unlimited liability of a partner, his private assets can also be used for
paying off the firm’s debts.
a) True
b) False
c) Partially True
d) Can’t Say.
 Part – I
Section – B
Instructions:
From question number 19 to 36, attempt any 15 questions.

19. A company forfeited 200 shares of Rs 10 each, called up Rs 9 per share, paid up Rs 7
per share, journal for forfeiture will be
a) Share Capital A/c Dr 2,000
To Share Forfeiture A/c 200
To Calls in arrears A/c 1800

b) Share Capital A/c Dr 2,000

To Share Forfeiture A/c 1800
To Calls in arrears A/c 200

c) Share Capital A/c Dr 1,800

To Share Forfeiture A/c 1400
To Calls in arrears A/c 400

d) Share Capital A/c Dr 1,800

To Share Forfeiture A/c 400
To Calls in arrears A/c 1,400

20. Shareholders receive _________ from the company as a benefit against their
investment.
a) Interest
b) Commission
c) Profit
d) Dividend

21. Following amount were payable on issue of shares by a company: Rs 3 on

application, Rs 3 on allotment, Rs 2 on first call and Rs 2 on final call. X holding 500
shares paid only application and allotment money whereas Y holding 400 shares did
not pay final call. Amount of calls in arrears will be-
a) Rs 3,800
b) Rs 2,800
c) Rs 1,800
d) Rs 6,200

22. How is Goodwill of the firm created?

a) Due to reputation of the firm.
b) Extra earning capacity of the firm.
c) Both A and B
d) Neither A and B

23. Rohit and Mohit are partners in a firm sharing profits in the ratio of 5:3. They admit
Bijoy as a new partner for 1/7 share in the profit. The new profit sharing ratio will be
4:2:1. Calculate the sacrificing ratio of Rohit and Mohit.
 a) 3:5
b) 5:3
c) 5:2
d) 3:2

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

(i) Authorized Capital < Issued Capital
(ii) Authorized 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

25. On 1st October 2020, Zayn extended loan to his partnership firm without any
agreement of Rs 10,000. His interest for the year ending on 31str December 2020.
a) Rs 600
b) Rs 300
c) Rs 150
d) Nil

26. A partner withdraws Rs __________ on 30th September 2021. Deed provides interest
on drawings @10%. The total interest charged was Rs 1,000.
a) Rs 1,000
b) Rs 5,000
c) Rs 10,000
d) Rs 20,000

27. Moin and Azam are partners in a firm with capital Rs 20,000 and Rs 40,000
respectively. Profit for FY 21 are Rs 60,000. Who will get how much share?
a) Moin Rs 30,000, Azam Rs 30,000
b) Moin Rs 20,000, Azam Rs 40,000
c) Moin Rs 40,000, Azam Rs 20,000
d) None of these.

28. Zen Ltd purchased the sundry assets of M/s Surat Industries for Rs 28,60,000 payable
in fully paid shares of Rs 100 each. State the number of shares issued to vendor when
issued at premium of 10%.
a) 28,000
b) 31,778
c) 28,600
d) 26,000

29. Break-even indicates

a) Revenues are more than cost
b) Revenues and cost are equal
 c) Costs are more than revenue
d) None of the above

30. A business has earned average profits of Rs. 1,00,000 during the last few years and
the normal rate of return in a similar business is 10%. Ascertain the value of goodwill
by capitalisation average profits method, given that the value of net assets of the
business is.
a) Rs 1,85,000
b) Rs 1,25,000
c) Rs 1,80,000
d) Rs 1,20,000

31. A, B and C are partners in profit sharing of 2:3:4 with effect from 1st April 2021, they
decided to share profits in 4:3:3. What is B’s Sacrifice?
a) No gain/ Sacrifice
b) Sacrifice 1/30
c) Sacrifice 1/90
d) Sacrifice 3/100

32. Match the following

Column I Column II
A) When shares are issued more than i) At Par
face value
B) Application received from public is ii) At Premium
less than issued share
C) When shares are issued at face value iii) Under Subscription
D) Application received from Public is iv) Over Subscription
more than issued share.
a) A-(ii), B-(i), C-(iv), D-(iii)
b) A-(ii), B-(iii), C-(i), D-(iv)
c) A-(iv), B-(iii), C-(ii), D-(i)
d) A-(iii), B-(iv), C-(i), D-(ii)

33. A company issued 10,000 shares Rs 10 each at par, Rs 3 on application, Rs 3 on

allotment, Rs 4 on first and final call. One shareholder holding 1,000 shares paid the
entire amount of his shares with application. Calculate amount received on
application.
a) Rs 1,00,000
b) Rs 1,17,000
c) Rs 1,10,000
d) Rs 37,000

34. X and Y are sharing profits and losses in the ratio of 3:2. Z is admitted with 1/5th share
in profits of the firm which he gets entirely from X. Find out the new profit sharing
ratio.
a) 12:8:5
b) 8:12:5
c) 2:2:1
d) 2:2:1.
 35. Assertion (A) : Interest on capital to a partner is payable only out of profits.
Reason (R) : Interest on capital is an appropriation of profits which is required to be
provided irrespective of profits and loss.
a) Both A and R are true and R is the Correct explanation of A
b) Both A and R are true and R is not the correct explanation of A
c) A is true but R is false.
d) A is false but R is true.

36. To whom dividend is given at a fixed rate in a company?

a) To Equity shareholders
b) To Preference shareholders
c) To Debenture holders.
d) To Promoters

Section – C
Instructions: From question number 37 to 41, attempt any 4 questions.

Question no.’s 37 and 38 are based on the hypothetical situation given below.

Britannia Limited is engaged in manufacture of fast moving products. Considering the

prospects of high growth in this segment the company has decided to expand and for this
purpose additional investment of ₹50,00,00,000 is required. Directors have decided that 20%
of this requirement would be financed by raising long term debts and balance by issue of
Equity shares.
As per memorandum of association of the company the face value of Equity shares is ₹100
each. Also, considering the market standing of the company these shares would be issued at a
premium of 25%. Directors decided to issue sufficient shares to collect the desired amount
(including premium).
The prospectus was issued to public, and the issue was oversubscribed by 2,00,000 shares
which were issued letters of regret. Answer the below mentioned questions considering that
the entire amount was payable on application.

37. What is the total amount collected on application?

a) ₹42,50,00,000
b) ₹40,00,00,000
c) ₹32,00,00,000
d) None of the above

38. How many Equity shares were offered for issue by Bright Star Ltd?
a) 40,00,000 shares.
b) 50,00,000 shares.
c) 35,00,000 shares.
d) 32,00,000 shares.

Question no.’s 39, 40 and 41 are based on the hypothetical situation given below
Anuja and Vibha are partners in a firm, sharing profits and losses in the ratio 3:2. Their fixed
capitals as on 1st April 2018 were Rs 6,00,000 and Rs 4,00,000 respectively.
Their Partnership deed provides for the following-
(i) Partners to be allowed interest on their capital @10% per annum.
(ii) They are to be charged interest on drawings @4% per annum.
(iii) Anuja is entitled of Salary Rs 2,000 per month.
(iv) Vibha is entitled to a rent of Rs 3,000 per month for the use of his premises for the
firm.
The net profit of the firm for the year ended on 31st March 2019 , before providing for any of
the above clauses was Rs 4,00,000. Both the partners withdrew Rs 5,000 at the beginning of
every month for the entire year.

39) The amount of interest on Anuja’s Capital, shown in Profit and Loss Appropriation A/c is
a) Rs 60,000
b) Rs 40,000
c) Rs 30,000
d) Rs 20,000

40) How much rent is Vibha entitled to the full year?

a) Rs 24,000
b) Rs 36,000
c) Rs 39,000
d) Rs 28,000

41) How will the rent to be paid to Vibha treated?

a) It will be in the debit side of Profit and Loss Appropriation Account.
b) It will be subtracted from the net profit.
c) It will be added to the Capital Account of Vibha.
d) It will be deducted from the Capital Account of Vibha.

Part-II
Section – A
Instructions-
From question number 42 to 48, attempt any 5 questions

42) Quick Assets do not include

a) Cash in hand
b) Prepaid Expenses
c) Marketable Securities.
d) Trade Receivables

43) Assertion (A) :Personal Bias can be reflected in ratio Analysis.

Reason (R) :Different may interpret the same ratio in different ways, which affects its trust
ability.
a) Both A and R are true and R is the Correct explanation of A
b) Both A and R are true and R is not the correct explanation of A
c) A is true but R is false.
d) A is false but R is true.
44) Bank Overdraft and Cash credit are treated as ‘short term borrowings’ in the balance
sheet of a company.
a) True
b) False
c) Partially true
d) Can’t Say

45) Company’s balance sheet should be prepared according to the provision of ______ of the
Companies Act, 2013.
a) Schedule I
b) Schedule II
c) Schedule III
d) Schedule IV

46) Goodwill of the company amounting to Rs 50,000 is shown on the asset side of the
balance sheet under which of the following head?
a) Non- Current Assets
b) Current Assets
c) Non- Current Liabilities
d) None of the above

47) Debt equity ratio of a company is 1 : 2. Which of the following transactions will increase
it:
a) Issue of new shares for cash
b) Redemption of Debentures
c) Issue of Debentures for cash
d) Goods purchased on credit

48) Match the following-

Column I Column II
A) Total Assets to debt ratio i) Profitability ratio
B) Inventory Turnover ii) Solvency Ratio
C) Liquid Ratio iii) Activity Ratio
D) Return on Investment iv) Liquidity ratio

a) A-(ii), B-(iv), C-(i), D-(ii)

b) A-(i), B-(iii), C-(ii), D-(iv)
c) A-(iv), B-(ii), C-(i), D-(iii)
d) A-(ii), B-(iii), C-(iv), D-(i)

Part-II
Section – B
Instructions-
From question number 49 to 55, attempt any 6 questions
49) Which of the following is not presented under ‘current liabilities’ in the balance sheet of a
company?
a) Short term provisions
b) Short term borrowings
c) Deferred tax liability
d) Trade Payables

50) Cost of Revenue from Operations =

(a) Revenue from Operations – Net Profit
(b) Revenue from Operations – Gross Profit
(c) Revenue from Operations – Closing Inventory
(d) Purchases – Closing Inventory

51) Assertion (A) :Bills Receivable are shown as trade receivables in the balance sheet of the
company.
Reason (R) :Debtors and Bills Receivable forms the part of trade receivables.
a) Both A and R are true and R is the Correct explanation of A
b) Both A and R are true and R is not the correct explanation of A
c) A is true but R is false.
d) A is false but R is true.

52) Assertion (A) :Inventories and Prepaid expenses are not considered as quick assets.
Reason (R) :Inventories take some time before converting into cash while prepaid expenses
can be quickly converted into cash.
a) Both A and R are true and R is the Correct explanation of A
b) Both A and R are true and R is not the correct explanation of A
c) A is true but R is false.
d) A is false but R is true.

53) Equity Share Capital ₹20,00,000; Reserve 5,00,000; Debentures ₹10,00,000; Current
Liabilities ₹8,00,000. Debt-equity ratio will be :
a) .5:1
b) .32:1
c) .4:1
d) .72:1

54) Current Assets ₹85,000; Inventory ₹22,000; Prepaid Expenses ₹3,000. Then liquid
assets will be
a) Rs 63,000
b) Rs 60,000
c) Rs 82,000
d) Rs 1,10,000

55) A company has an operating cycle of eight months. It has accounts receivables
amounting to Rs 2,00,000 out of which Rs 1,20,000 have a maturity period of 11 months.
How would this information be presented in the balance sheet?
a) Rs1,20,000 as current assets and Rs80,000 as non-current assets.
b) Rs 80,000 as current assets and Rs 1,20,000 as non-current assets.
c) Rs 2,00,000 as non-current assets.
d) Rs 2,00,000 as Current assets.

Part II
Section C

Instructions: From question number 56 to 60, attempt any 4 questions.

Q56). What will be the current ratio of a company whose net working capital is zero?
a) 1:1
b) 1:1.5
c) Zero
d) Can’t Say

Q57) The current ratio is 2 : 1. What will be the effect of purchase goods on credit on the
current ratio.
a) It will increase
b) It will decrease
c) Either (a) or (b)
d) No change

Explanation - Assume that goods of Rs. 10,000 are purchased on credit. This will
increase the current assets to Rs. 60,000 and current liabilities to Rs. 35,000. The new
ratio will be 1.7:1 (Rs. 60,000/Rs. 35,000). Hence, it has reduced.

Q58) What is the inventory turnover ratio, where the given following is-
COGS – Rs 1,50,000, Closing Inventory – Rs 60,000, Excess of Closing inventory over
opening inventory is Rs 20,000.
a) 3 times
b) 2.14 times
c) 1.5 times
d) 4 times

Q59) ___________ are the liabilities which are due within one year.
a) Current Liabilities
b) Non – Current Liabilities
c) Contingent Liabilities
d) None of the above

Q60) What is the total under equity and liability side of balance sheet when the following
information is given?
Shareholders’ funds = Rs 10,00,000
Non- current liabilities = Rs 5,00,000
Current Liabilities = Rs 3,00,000
a) Rs 10,00,000
b) Rs 15,00,000
c) Rs 18,00,000
d) Rs 13,00,000