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Class 12 - Accountancy
Sample Paper 10

Maximum Marks: 40
Time Allowed: 90 minutes

General Instructions:
Read the following instructions very carefully and strictly follow them:

1. This question paper comprises three PARTS – I, II and III. There are 69 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 two Sections – A and B. Section A has questions from 42 to 48, you have to attempt any
five questions and Section B has questions from 49 to 55, you have to attempt any six 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)
1. Naman, Manik and Arpit are partners sharing profits and losses in the ratio of 5 : 3 : 2. The partnership
deed provides for charging interest on drawing’s @ 10% p.a. The drawings of Naman, Manik and Arpit
during the year ending December 2004 amounted to Rs. 20,000, Rs. 15,000 and Rs. 10,000 respectively.
After the final accounts have been prepared, it was discovered that interest on drawings has not been
taken into consideration. Give necessary adjusting entry.
a.
Manik A/c ... Dr 150
Arpit A/c ... Dr 100
To Naman A/c 250
b.
Naman A/c ... Dr 150
Arpit A/c ... Dr 100
To Manik A/c 250
c.
Naman A/c ... Dr 150
Manik A/c ... Dr 100
To Arpit A/c 250
d.
Aprit A/c ... Dr 75
Manik A/c ... Dr 50
To Naman A/c 125

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2. X, Y and Z are partners in firm sharing profits in 3 : 2 : 1 ratio. They decided to share profits equally
with effect from April 1, 2003. For this purpose, the goodwill of the firm has been valued at Rs. 3,00,000.
Calculate the amount of gain or sacrifice of each partner.
a. Both X and Y's Gain share of goodwill Rs. 50,000
b. Z’s Gain share of goodwill 50,000
c. X’s Gain share of goodwill 50,000
d. Y’s Gain share of goodwill 50,000
3. Which of the following is not a content of partnership deed?
a. Interest on Bank Loan
b. Interest on Drawings
c. Interest on Partner’s Loan
d. Interest on Capital
4. Goodwill is an ________ asset.
a. Both Intangible asset and Tangible asset
b. None of these
c. Intangible asset
d. Tangible asset
5. When interest on capital is paid whether there is profit or loss it is known as
a. Charge against profit
b. Appropriation of profit
c. Charge against loss
d. None of these
6. What should be the amount of compensation if the partners of the firm decide to change their profit
share ratio:
a. Amount of compensation = value’s of firm goodwill share of profit gained
b. Amount of compensation = value’s of firm goodwill share of profit sacrificed
c. Amount of compensation = Profit of the year share of profit gained
d. Amount of compensation = value’s of firm goodwill share of loss sacrificed
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7. Goodwill given in the old Balance Sheet will be:
a. Credited to old Partners Capital accounts
b. Written off to the old partners
c. Written off by the Sacrificing partners
d. Distributed by Gainer partners
8. Amount brought by a new partner for his share in goodwill is known as ________.
a. Premium
b. Will
c. Profit
d. Discount
9. ________ means good name, a good reputation earned by a firm through the hard work and honesty of
its owners.
a. Negative Super Profit
b. Low Average profit
c. Revaluation Profit
d. Goodwill
10. An account prepared to carry out the scheme of revaluation of assets and reassessment of liabilities:

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a. Profit and Loss Account

b. Revaluation account
c. Memorandum Balance Sheet
d. Realisation Account
11. Fluctuating capital account is credited with:
a. Profit of the year
b. Interest on capital
c. All of these
d. Remuneration of partners
12. If a new partner is admitted during the year the profits for the year should be divided between ________
period on an agreed basis.
a. Equal
b. Pre-admission and post-admission
c. New year basis
d. Old profit sharing
13. According to AS 26, which goodwill is recorded in the books :
a. both (i) and (ii)
b. None of the above
c. purchased goodwill
d. self generated goodwill
14. Z is a new partner and acquires his share of profit from X, an existing partner and present value of a
firm’s goodwill is Rs. 50,000. In this case, Z is required to pay to X.
a. ₹10,000
b. ₹2,000
c. ₹5,000
d. ₹25,000
15. Why do existing partners change their profit sharing ratio:
A. Due to the change in capital contribution
B. Due to the active participation in management by a partner
C. Due to the Tax Policy of Government
a. (C)
b. (B)
c. (A)
d. Both (A) and (B)
16. Balance of forfeiture a/c after the shares have been re-issued is transferred to:
a. securities premium reserve
b. general reserve
c. None of these
d. Capital reserve
17. Anu and Ram were partners in a firm sharing profits and losses in the ratio of 7:3. They admitted
Chander as a new partner. The new profit sharing ratio between Anu, Ram and Chander will be 2:2:1.
Chander brought Rs. 24,000 for his share of his goodwill. Who is the gaining partner in the above
transaction?
a. Both Anu and Chander
b. Both Ram and Anu
c. Ram & Chander
d. Anu & Ram

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18. Other name for registered capital is:

a. nominal capital
b. Issued capital
c. None of the above.
d. reserve capital
Part - I (Section - B)
19. Goodwill is capitalized valued of ________.
a. Normal Profit
b. Super Profit
c. Capital employed
d. Gross Profit
20. When shares issued are 10,000 but applied shares are 8,000 then it is a case of:
a. None of the above
b. pro-rata
c. under subscription
d. Over-subscription
21. The minimum share application money is:
a. none of the above
b. 10% of nominal value of shares
c. 5% of nominal value of shares
d. Rs. 5 per share
22. Assertion (A): A minor can become a partner of a firm.
Reason (R): As Indian Partnership act provides that a minor can be a partner of the benefit of the firm.
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.
23. In case of private placement of shares to raise the amount of capital, a company:
a. Invites the public through prospectus
b. Does not invite the public
c. Invite the public through advertisement
d. None of the above
24. Partners' Current Accounts are opened when their Capital Accounts are
a. None of these
b. fluctuating
c. fixed and fluctuating both
d. fixed
25. Securities Premium Reserve collected by the company can be used for:
a. None of these
b. Payment of dividend
c. Issue of bonus shares
d. Any business purpose
26. Assertion (A): A change in profit sharing ratio amounts to dissolution of partnership firm.
Reason (R): Existing agreement comes to an end and a new agreement comes into existence.
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.

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d. A is false but R is true.

27. Specify the rate of interest to be used on calls in arrear as per the TABLE - F.
a. 20% p.a.
b. 26 % p.a.
c. 10% p.a.
d. 16% p.a.
28. Formula for capitalization of Average Profit is
a.

b.

c.

d.
29. According to Companies Act company cannot issue its share at ________.
a. Par
b. Discount
c. Both Discount and Par
d. Premium
30. Among following which statement is not true about a private company?
a. Restriction on the right to transfer its shares
b. The private company ends with the words ‘Private Limited’.
c. Atleast 2 directors
d. Minimum paid-up capital is 5,00,000
31. Assertion (A): Equity shares are those shares that do not preference shares.
Reason (R): Equity shares are the least issued class of shares and carry the minimum risks and
rewards of the business.
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.
32. Minimum directors a public company can have compulsorily ________.
a. 2
b. 3
c. 7
d. 15
33. Revaluation account is a ________.
a. Nominal Account
b. Asset Account
c. Personal Account
d. Real Account
34. Which of the following statement is incorrect about Preference Shares?
a. Can be converted
b. Return of capital on winding up of company
c. Right to receive Dividend
d. No Dividend
35. Share Forfeiture account is a ________.
a. Nominal Account

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b. Fictitious Account
c. Personal Account
d. Real account
36. Which type of shares cannot be issued as per the Companies Act, 2013?
a. Irredeemable Preference Shares
b. Equity Shares
c. Bonus Shares
d. Preference Shares
Part - I (Section - C)

Question No. 37 to 38 are based on the given text. Read the text carefully and answer the
questions:

A, B, C are partners sharing profits and losses in the ratio of 5 : 3 : 2. They decide to share future profits
and losses equally with effect from 1st April, 2017. The goodwill of the firm has been valued at ₹ 90,000.
Goodwill is already appearing in the books at ₹ 15,000. Show the necessary accounting treatment.

37. What was the gain of C?

a.
b.
c.
d.
38. Who was the sacrificing partner among the three partners?
a. C
b. B
c. A
d. Both B and C

Question No. 39 to 41 are based on the given text. Read the text carefully and answer the
questions:

Sterling enterprises is a partnership business with Ryan, Williams and Sania as partners engaged in the
production and sales of electrical items and equipment. Their capital contributions were ₹ 50,00,000,
₹50,00,000 and ₹80,00,000 respectively with the profit-sharing ratio of 5 : 5 : 8. As they are now looking
forward to expanding their business, it was decided that they would bring insufficient cash to double
their respective capitals. This was duly followed by Ryan and Williams but due to unavoidable reasons
Sania could not do so and ultimately it was agreed that to bridge the shortfall in the required capital a
new partner should be admitted who would bring in the amount that Sania could not bring and that
the new partner would get share of profits equal to half of Sania's share which would be sacrificed by
Sania only.
Consequent to this agreement Ejaz was admitted and he brought in the required capital and ₹ 30,00,000
as premium for goodwill.

39. For which of the following purposes, Ejaz was admitted in the firm?
a. Benefitting from goodwill of person
b. Efficiency of experienced person
c. Acquiring managerial skilts

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d. Procuring additional capital

40. What will be a new profit-sharing ratio of Ryan, Williams, Sania and Ejaz?
a. None of these
b. 5 : 5 : 8 : 8
c. 1 : 1 : 1 : 1
d. 5 : 5 : 4 : 4
41. What is the amount of capital brought in by a new partner Ejaz?
a. ₹40,00,000
b. ₹80,00,000
c. ₹50,00,000
d. ₹30,00,000
Part - II (Section - A)
42. Assertion (A): Certain accounting conventions like conventions of consistency, conservatism, full
disclosure, etc. are followed while preparing financial statements.
Reason (R): Use of accounting conventions makes the financial statements comparable, simple and
realistic.
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.
43. Work in progress is shown under ________.
a. Inventories
b. Current Investments
c. None of these
d. Cash and Cash Equivalents
44. The information available from the Analysis, serves which of the following sections
a. Stock Exchange
b. Potential Investors
c. Economist and Researchers
d. All of these
45. The ________ is useful in evaluating credit and collection policies.
a. average payment period
b. inventory turnover ratio
c. current ratio
d. average collection period
46. Name the items under the Shareholder’s Fund is comprised of the company’s balance sheet.
a. Money received against share warrant
b. All of these
c. Share Capital
d. Reserves and Surplus
47. When analysis is made on the basis of Published statements, reports and information it is known as…..
a. Horizontal analysis
b. Internal Analysis
c. External analysis
d. Vertical Analysis
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48. Which of the following transactions will improve the Current Ratio:
a. Payment to Trade Payables
b. Purchase of goods for cash
c. Cash Collected from Trade Receivables
d. Credit purchase of Goods
Part - II (Section - B)
49. Who is interested in the analysis of financial statement?
a. All of these:
Creditors
Government
Investors
b. Creditors
c. Investors
d. Government
50. Revenue from operations – Cost of Revenue from operations =?
a. Net Profit
b. Net Purchases
c. Net Sales
d. Gross Profit
51. The Real object of Analysis of Financial Statement is …………
a. To assess the total liabilities of the firm
b. To assess the total expenses of the firm
c. To know about historical cost concept
d. To measure the financial strength of the business
52. Assertion (A): If the Current Ratio of a company is 1 : 1. Its Networking capital will be Zero.
Reason (R): When Net Working Capital is Zero, it will reduce the Current Ratio of the Company.
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.
53. Assertion (A): Internal analysis carried out by management is more detailed, extensive, and correct.
Reason (R): Management has access to all the information relating to the organization.
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.
54. Long term solvency is indicated by:
a. Current Ratio
b. Debt/Equity Ratio
c. Quick Ratio
d. Net Profit Ratio
55. Carriage Inwards is shown in the Statement of Profit and Loss under:
a. Cost of Materials Consumed
b. Other Expenses
c. Finance cost
d. Employees Benefit Expenses

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Class 12 - Accountancy
Sample Paper 10

Solution

Part - I (Section - A)
1. (d)
Aprit A/c ... Dr 75
Manik A/c ... Dr 50
To Naman A/c 125

Explanation: Calculation of Interest on drawings during the year.

Naman = 20,000 = 1,000 (Dr.)
Arpit = 15,000 = 750 (Dr.)
Manik = 10,000 = 500 (Dr.)
Profit = 1,000 + 750 + 500 = 2,250 (they should get this profit in 5:3:2 Ratio)
Profit should be credited to partners as below:
Naman = 2,250 = Rs. 1,125 (Cr.)
Arpit = 2,250 = Rs. 675 (Cr.)
Manik = 2,250 = Rs. 450 (Cr.)
Hence Adjustment will be:
Naman 125 (Cr.)
Arpit 75 (Dr.)
Manik 50 (Dr.)
Entry will be:
Aprit A/c ... Dr 75
Manik A/c ... Dr 50
To Naman A/c
125
(Being Adjustment Entry Made)

Note: Since date of drawings is not given, interest is calculated for an average period of six months.
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2. (b) Z’s Gain share of goodwill 50,000
Explanation: Adjustment of goodwill at the time of change in profit sharing ratio:
Old Ratio 3:2:1 and New Ratio 1:1:1
X = - = = Sacrifice
Y = - = = No Sacrifice/No Gain
Z = - = = Gain
Adjustment of goodwill = X’s Share of Goodwill = 3,00,000 = 50,000
3. (a) Interest on Bank Loan
Explanation: Interest on bank loan will be fixed by the bank and not by the partners or partnership
deed. A partnership deed can show only those contents which are concerned with partners or firm.
Interest on a bank loan is a charge against the profit. It means it will be paid in all conditions whether

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there is profit or loss in the business during a financial year. Interest on the bank can not be fixed by
partners in a partnership firm.
4. (c) Intangible asset
Explanation: Goodwill is an intangible asset, which cannot be seen or touched but it plays important
role in earning more and more profits. If a business firm is having a good reputation in the market, it
will enjoy more profits and goodwill in future. Goodwill is an intangible asset which is shown in non-
current assets in the balance sheet.
5. (a) Charge against profit
Explanation:

Anything which will reduce the net profit of the firm is called charge. Normally interest on capital is an
appropriation; it means it will be paid out of profits and up to the profits only. But in some cases it is
paid as a charge, it means whether there is profit or loss, it will be paid. Only in such cases interest on
capital is treated as a charge.

6. (b) Amount of compensation = value’s of firm goodwill share of profit sacrificed

Explanation: Due to change in the profit sharing ratio among the partners, the share of one or more
partner may increase and consequently share of one or more partner may decrease. therefore, gaining
partner should compensate for sacrificing partner by paying goodwill to him. amount of goodwill of
the firm will be paid to the sacrificing partner, which will be called as compensation, to the extent of
share in profit sacrificed by him.
Journal entry
Gaining partner's capital A/c ... Dr.
To Sacrificing partner's capital A/c
7. (b) Written off to the old partners
Explanation: Goodwill existing in the old balance sheet of a partnership firm before admitting a new
partner will be written off to the capital accounts of the old partners in their old profit sharing ratio.
This Goodwill belongs to old partners only.
8. (a) Premium
Explanation: When a new partner is admitted into the partnership he brings some amount in cash as
his capital and some amount for his share of a premium of goodwill. The amount he brings for the
share of goodwill is known as premium for goodwill. Premium of Goodwill is distributed by sacrificing
partners in sacrificing ratio.
9. (d) Goodwill
Explanation: Goodwill means good name, a good reputation earned by a firm through the hard work
and honesty of its owners. It is an intangible asset.
10. (b) Revaluation account
Explanation: Revaluation account is prepared to record any increase/decrease in the value of assets
and liabilities. The value of some assets may increase or decrease with the passage of time. Similarly,
some liabilities may also show an increase/decrease in value. The Revaluation account is credited if
there is an increase in the value of assets or decrease in the value of liabilities. On the other hand, it is
debited if there is any decrease in the value of assets or an increase in the value of liabilities. Profit and
Loss on Revaluation will be transfer to the partner's capital / Current A/c.
11. (c) All of these
Explanation: All the options are credited to Fluctuating capital account.
12. (b) Pre-admission and post-admission
Explanation: When a new partner is admitted in a partnership firm during the year (in between) in

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such a case profit for that year should be divided into two parts i.e. Pre-admission and post-admission
profit. Pre-admission profit belongs to the old partners in the old ratio only and post-admission profit
will be shared by all the partners (including new partner) in the new profit sharing ratio.
13. (c) purchased goodwill
Explanation: purchased goodwill
14. (a) ₹10,000
Explanation: Calculation of the amount to be compensated to X for his sacrifice by Z:
Goodwill of the firm = Rs.50,000
Share acquired by Z =
Share to be compensated to X by Z = Rs.50,000 = Rs.10,000
15. (d) Both (A) and (B)
Explanation: Sometimes old partners may change their existing profit sharing ratio without admitting
a new partner or without retirement or death of a partner. The main reason for the change in the
existing ratio is to make ratio favourable as per the contribution of partners’ capitals and to
compensate a partner who is actively participating in the management of the firm. Effect of the change
is adjusted through capital / current account in sacrificing ratio.
16. (d) Capital reserve
Explanation: Capital reserve
17. (c) Ram & Chander
Explanation: Calculation of a gainer partner:
Old Ratio = 7:3
New Ratio = 2:2:1
Sacrificing ratio = Old ratio - New ratio
Anu’s Sacrifice = - =
Ram’s Gain = - = Gain
Gaining Partner are Ram & Chander
18. (a) nominal capital
Explanation: nominal capital
Part - I (Section - B)
19. (b) Super Profit
Explanation: Goodwill is the capitalized value of super-profits. To find out the super-profits, we
deducted normal profits from the actual average profits (average profits - normal profits). To find out
the value of goodwill of the firm, super profit should be Capitalized i.e. super profits 100/Normal
Rate of Return (NRR).
Value of Goodwill = Super Profit 100/NRR.
20. (c) under subscription
Explanation: under subscription
21. (c) 5% of nominal value of shares
Explanation: 5% of nominal value of shares
22. (d) A is false but R is true.
Explanation: As Indian Partnership act provide that a minor only become a partner of the benefits of
the firm.
23. (b) Does not invite the public
Explanation: Does not invite the public
24. (d) fixed
Explanation: fixed

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25. (b) Payment of dividend

Explanation: Payment of dividend
26. (d) A is false but R is true.
Explanation: A change in profit sharing ratio amounts to dissolution of partnership only, not
partnership firm.
27. (c) 10% p.a.
Explanation: As per the Companies Act, 2013, when Table F is followed by the company, the rate of
interest on calls in arrear should not exceed 10% p.a. When any shareholder fails to pay the amount
due on the allotment or on any of the calls, such amount is known as 'Calls-in-Arrears'/'Unpaid Calls'.
Interest at a rate 10% shall have to be paid on Calls-in-arrears for the period from the day fixed for
payment and the time of actual payment thereon. Table F applies when an article of association is
silent.
28. (c)
Explanation: Step 1. Calculate Average profit (total profits of previous years divided by No. of years)
Step 2. Find out capitalised value of average profit (Average profit × 100/Normal Rate of Return)
Step 3. Find out Goodwill = Capitalised value of average profits - Net Assets
29. (b) Discount
Explanation: As per the Companies Act, 2013, (new guidelines), a company cannot issue its shares at
discount. The company can issue its shares at par and premium only. Either equity or preference no
share can be issued at discount.
30. (d) Minimum paid-up capital is 5,00,000
Explanation: Minimum paid-up capital of a private company is 1,00,000. A private company cannot
transfer its shares and all private companies’ ends with the words ‘Private Limited’. The company can
take min 2 and max 15 directors.
31. (c) A is true but R is false.
Explanation: Equity shares are the most commonly issued class of shares and carry the maximum
risks and rewards of the business.
32. (b) 3
Explanation: According to the Companies Act, a public company should have at least 3 Directors and a
maximum of 15 directors.
33. (a) Nominal Account
Explanation: Nature of revaluation Account is Nominal Account. Any account which is prepared to
calculate the profit or loss is considered as a Nominal Account. Hence, revaluation is nominal Account.
34. (d) No Dividend
Explanation: Preference Shares are those shares on which dividend to be paid as a fixed amount.
Divided into preference shareholders is paid before dividend-paying to equity shareholders. These
shares are convertible and can be redeemed.
35. (a) Nominal Account
Explanation: All accounts which are prepared for the calculation of profit or loss are nominal
accounts. Rule related to the nominal account is Debit all expenses and losses and credit all gains.
36. (a) Irredeemable Preference Shares
Explanation: There are two types of preference shares in context to the redemption i.e. Redeemable
and Non-redeemable preference shares. As per the Companies Act, 2013, companies cannot issue
Irredeemable Preference Shares. Redeemable preference shares are those which can be redeemed by
the company although the company can issue redeemable preference shares, equity shares, bonus
shares.

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Part - I (Section - C)
37. (c)
Explanation:
38. (c) A
Explanation: A
39. (d) Procuring additional capital
Explanation: Procuring additional capital
40. (d) 5 : 5 : 4 : 4
Explanation: 5 : 5 : 4 : 4
41. (b) ₹80,00,000
Explanation: ₹80,00,000
Part - II (Section - A)
42. (a) Both A and R are true and R is the correct explanation of A.
Explanation: Both A and R are true and R is the correct explanation of A.
43. (a) Inventories
Explanation: Work in progress (WIP) is the semi-finished stock of goods held for purpose of trade in
the normal course of business. So they are shown under the inventories of the head of current assets.
44. (d) All of these
Explanation: Information available from the analysis of financial statement will serve the following:
•Potential Investors (to make decisions regarding investment)
•Economist and Researchers(to make policies)
•Stock Exchange(to know about company's worth and market standing)
45. (d) average collection period
Explanation: The average collection period is calculated as: 365 days in a year divided by the accounts
receivable turnover ratio. The average collection period is the average number of days between the
date that a credit sale is made, and the date that the money is received from the customer.
46. (b) All of these
Explanation: Shareholders fund is divided into the following parts:
Share Capital
Reserves and Surplus
Money received against share warrant
All of the above are parts of shareholders fund.
47. (c) External analysis
Explanation: Analysis made by external users on the basis of published financial statements is called
external analysis. Only an external user may have to use published statements; an internal user has
access to all accounting records, he would not have to depend on and wait for the information to be
published and they can do internal analysis throughout the year.
48. (a) Payment to Trade Payables
Explanation: Payment to Trade Payables will increase the Current Ratio.
Part - II (Section - B)
49. (a) All of these:
Creditors
Government
Investors
Explanation: Following parties are interested in the Financial statement analysis:
Creditors(to know if they will get their payment)

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Government( to levy taxes)

Investors(to know how return on their investment)
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50. (d) Gross Profit
Explanation: Gross Profit is calculated by deducting cost of revenue from operations from Revenue
from operations. i.e Net sale – Cost of goods sold
51. (d) To measure the financial strength of the business
Explanation: The main objective of analysis of financial statement is to measure the financial strength
and performance of the firm.
52. (c) A is true but R is false.
Explanation: A is true but R is false.
53. (a) Both A and R are true and R is the correct explanation of A.
Explanation: Both A and R are true and R is the correct explanation of A.
54. (b) Debt/Equity Ratio
Explanation: Long-term solvency is indicated by the Debt/Equity Ratio. Where Debts means Long-term
liabilities and Equity means Share holder's Fund.
55. (b) Other Expenses
Explanation: Carriage Inwards is shown in the Statement of Profit and Loss under Other Expenses.

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