First Term Exam – 2022-2023

Class – XII
Subject – ACCOUNTANCY
Time : 3 Hour Max. Marks : 80

General Instructions:
1. There are 32 Questions in the Question Paper. All Questions are Compulsory.
2. Question nos. 1 to 21 are very short answer type questions carrying 1 mark each.
3. Question nos. 21 to 26 are short answer type Questions carrying 3/4 marks each.
4. Question nos. 27 to 30 are long answer type- 1 Questions carrying 6 marks each.
5. Question nos. 31 and 32 are long answer type- 2 Questions carrying 8 marks each.
6. There is no overall choice. However, an internal choice has been provided in 2
Questions of four marks and 1 Question of eight marks.
________________________________________________________________

Q-1. Interest on Drawings charged from Amit is ₹3,750 on the drawings made at the
beginning of each quarter. If the rate of Interest on Drawings is 10% p.a., the
amount of drawings of Mr. Amit for each Quarter will be _______________. (1)

Q-2. X, Y and Z are Partners in the ratio of 6:4:2. In the firm X was guaranteed a
minimum profit of ₹10,000. The loss of the year was ₹12,000. The amount to be
borne towards X by Z will be: (1)
(a) ₹11,000 (b) ₹18,000
(c) ₹20,000 (d) None of the above

Q-3. (Assertion) Balance sheet of the reconstituted firm should always show the assets
and liabilities at new values.
(Reason) No, it depends upon the mutual consent of all the partners to show the
revised values in the New Balance sheet or to adjust the revaluation profit in
gaining and sacrificing ratio. (1)
(a) (A) is correct but R is not correct.
(b) (A) and (R) both are correct.
(c) (R) is correct but (A) is not correct
(d) (A) and (R) both are incorrect.

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Q-4. Weighted Average Profit method of calculating Goodwill is used when: (1)
(a) Profits are not equal (b) Profits show a trend
(c) Profits are fluctuating (d) None of the above.

Q-5. M, N and O are Partners in a firm sharing profits in the ratio of 4:3:2. Their
Balance Sheet as at 31.3.2022 showed a debit balance of Profit & Loss A/c at
₹3,60,000. From 1.4.2022 they will share profits equally. In the necessary Journal
entry to give effect to the above arrangement when M, N and O decided not to
close the profit & loss account. (1)
(a) Dr. M by ₹40,000; Cr. O by ₹40,000
(b) Cr. M by ₹40,000; Dr. O by ₹40,000
(c) Dr. M by ₹80,000; Cr. O by ₹80,000
(d) Cr. M by ₹80,000; Dr. O by ₹80,000

Q-6. X and Y are Partners in a firm. They admit Z as a partner with 1/5 th share in the
profits of the firm. Z brings ₹4,00,000 as his share of Capital. Their Balance Sheet
shows that A’s capital is ₹5,00,000 and B’s Capital is ₹3,50,000. General Reserve
appearing in the books is ₹2,00,000 and loss on Revaluation is ₹50,000. Z’s share
of hidden goodwill will be………………….. (1)

Q-7. A, B and C are Partners in a firm sharing profit/loss in the ratio of 3:2:1. On March
31st, 2022 C died. Accounts are closed on December 31st every year. The sales for
the year ended 31st December 2021 were ₹10,00,000 and the profits were
₹2,00,000. The sales for the period from January 1, 2022 to March 31st 2022 were
₹3,00,000. The share of deceased Partner in the current year’s profits on the basis
of sales is: (1)
(a) ₹2,500 (b) ₹10,000
(c) ₹15,000 (d) ₹60,000

Q-8. At what rate is interest payable on the amount remaining unpaid to the executer of
deceased partner, In the absence of any agreement among partners, when he opts
for interest and not share of profit:
(a) 6% (b) 12%
(c) 7.5% (d) 8% (1)

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Q-9. A, B and C are Partners sharing profits and losses in the ratio of 2:3:1. B retires
and sells his share of profit to A and C for ₹8,100; being purchased by A for
₹3,600 and by C for ₹4,500. The profit for the year after B’s retirement was
₹18,000.
The share in the profit of new firm of A will be ₹………………….. and B will be
₹…………………... (1)

Q-10. Which of the following has a priority in case of payment at the time of Dissolution
of a Partnership firm? (1)
(a) Partner with greater share of profit (b) Partner who bears realisation expenses
(c) Partner’s loan (d) Partner with lower share of profit

Q-11. A, a Partner is to bear realisation expenses for which he is paid a commission of

₹2,000. A had to pay realisation expenses of ₹2,500. How much amount will be
debited to Realisation Account? (1)
(a) ₹500 (b) ₹2,500
(c) ₹4,500 (d) ₹2,000

Based on the Following information answer Q-12 and Q-13

U, V and W are partners sharing profits in the ratio of 2:2:1. They decided to share future
profits in the ratio 5:3:2. On that date the profit and loss account showed the credit
balance of ₹ 90,000. Instead of closing the profit and loss account, it was decided to
record an adjustment entry reflecting the change in profit sharing ratio They also decide
to record the effect of the following revaluations and reassessments without affecting the
book values of assets and liabilities by passing a single adjustment entry:

Book Value (₹) Revised Value (₹)

Land and Building 2,50,000 3,00,000

Furniture 2,00,000 1,75,000

Sundry Creditors 90,000 75,000

Outstanding Salaries 15,000 25,000

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Q-12. The single adjustment entry on revaluations and reassessments without affecting
the book values of assets and will be: (1)
(a) Dr. W capital a/c ₹3,000 and Cr. U capital a/c ₹3,000
(b) Dr. U capital a/c ₹3,000 and Cr. V capital a/c ₹3,000
(c) Dr. V capital a/c ₹ 30,000 and Cr. U capital a/c ₹30,000
(d) Dr. W capital a/c ₹ 30,000 and Cr. V capital a/c ₹30,000

Q-13. An adjustment entry reflecting the change in profit sharing ratio when the profit
and loss account is not closed will be: (1)
(a) Dr. W capital a/c ₹9,000 and Cr. U capital a/c ₹9,000
(b) Dr. U capital a/c ₹9,000 and Cr. V capital a/c ₹9,000
(c) Dr. V capital a/c ₹ 90,000 and Cr. U capital a/c ₹90,000
(d) Dr. W capital a/c ₹ 90,000 and Cr. V capital a/c ₹90,000

Q-14. Ritika and Mahima are partners sharing profits and losses in the ratio of 2 : 1. Their
Capital Accounts have balances of ₹1,02,000 and ₹73,000 respectively. They
admit Swati on 1st April, 2021 for 1/5th share in profits. Swati brings ₹25,000 as
her share of goodwill. She agrees to contribute capital in new profit-sharing ratio.

Thus, amount towards her capital would be: (1)

(a) ₹ 40,000 (b) ₹ 32,000
(c) ₹ 50,000 (d) ₹ 1,25,000.

Q-15. What is the correct order in which, Capital Accounts of old partners are adjusted
on the basis of new Partner’s Capital? (1)
A. Find Surplus or Deficit Capital by comparing Present Capital and
Proportionate Capital.
B. Ascertain Present Capital (after all adjustments) of old partners.
C. Pass necessary Journal entries for adjusting Surplus or Deficit Capital.
D. Compute Total Capital of the firm on the basis of Capital of New Partner.
E. Determine Capital (i.e., Proportionate) of each partner in reconstituted firm.

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Choose the correct option:

(a) D, E, B, C and A. (b) D, E, C, B and A.
(c) D, E, C, A and B. (d) D, E, B, A and C.

Q-16. Arun and Vijay are partners in a firm sharing profits and losses in the ratio of 5:1.
Balance Sheet (Extract) Assets showed Machinery ₹60,000. If the value of
machinery reflected in the balance sheet is overvalued by 20%, find out the value
of machinery to be shown in the new Balance Sheet: (1)
(a) ₹ 44,000 (b) ₹50,000
(c) ₹ 32,000 (d) None of these

Q-17. A, B and C were partners sharing profit and losses in the ratio of 2:2:1. Books are
closed on 31st March every year. C dies on 23rd October, 2018. Under
the partnership deed, the executors of the deceased partner are entitled to his
share of profit to the date of death, calculate on the basis of last year’s profit.
Profit for the year ended 31st March, 2018 was ₹2,40,000. C’s share of profit
will be: (1)
(a) ₹24,000 (b) ₹48,000
(c) ₹28,800 (d) None of these

Q-18. What journal entry will be recorded for deceased Partner’s share in Loss from the
closure of last balance sheet till date of his death if the profit-sharing ratio of the
remaining partners change? (1)
(a) Remaining Partner’s Capital A/c Dr.
To Deceased Partner’s Capital A/c
(b) Deceased Partner’s Capital A/c Dr.
To Remaining Partner’s Capital A/c
(c) Deceased Partner’s Capital A/c Dr.
To Profit and Loss Suspense A/c
(d) Sacrificing Partner’s Capital A/c Dr.
To Gaining Partner’s Capital A/c

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Q-19. In the Balance Sheet of A and B, a partnership firm, Debtors were ₹5,00,000 and
Provision for Doubtful Debts ₹20,000. On dissolution of the firm, if Bad Debts are
₹1,00,000 and remaining Debtors were realised at a discount of 8% calculate total
cash received from Debtors will be __________. (1)

Q20. On dissolution of a firm, on the basis of following information, calculate the final
payment that will be made to the partner, ‘G’ with 1/4th share in the profits of the
firm.
Capital Account Credit Balance ₹79,000, Realisation profit of the firm ₹16,000.
‘G’ was also appointed to look after the dissolution process on a remuneration of
₹10,000, G was supposed to bear all expenses on dissolution. Actual expenses
amounted to ₹6,000 which were paid by the firm. ‘G’ had also paid creditors of
₹9,000 and settled unpaid rent of ₹3,000.
(a) ₹1,11,000 (b) ₹75,000
(c) ₹87,000 (d) ₹99,000 (1)

Q-21. Assertion (A): A loan from a partner is not transferred to Realisation Account.
Reason (R): A loan from a partner is not an external liability but is discharged
before repayment of capital.
Options:
a) Assertion (A) and Reason (R) are correct but the reason (R) is not the correct
explanation of Assertion (A)
b) Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct
explanation of Assertion (A).
c) Only Assertion (A) is correct.
d) Both Assertion (A) and Reason (R) are not correct. (1)

Q-22. Sterling enterprises is a partnership business with Ryan, Williams and Sania as
partners engaged in 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 the sharing ratio of 5:5:8. As they are now looking forward to
expanding their business, it was decided that they would bring in sufficient 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
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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. Based on the above
information you are required to answer the following questions. (3)

A. What will be the new profit-sharing ratio of Ryan, Williams, Sania and
Ejaz?
(a) 1:1:1:1 (b) 5:5:8:8
(c) 5:5:4:4 (d) None of the these

B. What is the amount of capital brought in by the new partner Ejaz?

(a) ₹50,00,000 (b) ₹80,00,000
(c) ₹40,00,000 (d) ₹30,00,000

C. What is the value of the goodwill of the firm?

(a) ₹1,35,00,000 (b) ₹30,00,000
(c) ₹1,50,00,000 (d) Cannot be determined from the given data.

Q-23. Namit & Samit were Partners in a firm sharing profits in the ratio of 5:3. Their
fixed capitals on 1.4.2019 were Namit ₹60,000 and Amit ₹80,000. They agreed to
allow interest on capital @ 12% p.a. and to charge on drawings @ 15% p.a. The
profit of the firm for the year ended 31.3.2022 before all other adjustments was
₹12,600. The drawings made by Namit were ₹2,000 and by Samit ₹4,000 during
the year. Prepare Profit & Loss Appropriation Account. (4)

OR
P and Q were Partners in a firm sharing profits in the ratio of 5:3. On 1st April,
2022 they admitted R as a new Partner for 1/8th share in the profits with a
guarantee profit of ₹75,000. The new profit sharing ratio between P and Q will
remain the same but they agreed to bear any deficiency on account of guarantee to
R in the ratio of 3:2. The profit of the firm for the year ended 31 st March, 2022 was
₹4,00,000.
Pass necessary Journal entries to record the distribution of Profit among the
Partners.

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Q-24 (a) A business earned an average profit of ₹45,000 during the last few years. the
average capital employed by the firm is ₹3,12,500. If the goodwill of the
firm is valued at ₹40,000 at two years’ purchase of super profit, find out the
normal rate of return.
(b) List any two circumstances in which goodwill of a firm is to be valued.
(c) What is meant by number of years of purchase? (4)

Q-25. Pass the necessary Journal entries in each of the following alternative cases:
a. Realisation expenses were to be borne by A, a partner for which he was
allowed a commission of 2% of net cash realized from dissolution. The net
cash realized from dissolution was ₹1,00,000 and actual realization expenses
paid by the firm were ₹7,400.
b. Partner’s loan of ₹50,000 was settled by giving stock worth ₹40,000 and
balance by cash.
c. An old typewriter which was not recorded in the books was sold for ₹4,000,
whereas its expected value was ₹5,000
d. C a partner agreed to pay ₹80,000 to use ‘Firm’s name’ after dissolution. (4)
OR
Pass Journal entries to record the following at the time of dissolution of Partnership
firm assuming all assets & Liabilities have already been transferred to Realisation
Account.
(i) A, a Partner was appointed to look after the proceedings of dissolution for
which he was allowed a remuneration of ₹10,000. Realisation expenses
amounting to ₹12,000 were paid by A.
(ii) Creditors amounting to ₹20,000 accepted Machinery worth ₹15,000 in full
settlement of their account.
(iii) Partner A’s Loan of ₹8,000 was settled by paying him ₹7,500.
(iv) 1000 shares in Amrita Ltd. (@ 20 per share) were taken over by Partner A
and B in profit sharing ratio of 3:2.

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Q26. (4)
[a] R, N and S were partners in a firm sharing profits and losses in the ratio of
5:3:2. N retired and the new profit ratio between R and S is 2:3. On N's
retirement the goodwill of the firm was valued at ₹1,20,000. Pass the
necessary journal entry.
[b] A, B and C are partners sharing profits in the ratio of 1/3:1/9:5/9. C retires
and surrenders 3/4th of his share in favour of A and remaining in favour of
B. Calculate the new ratio.

Q-27. X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. Their
position on 31st March, 2022 was as follows : (6)
₹ ₹
Sundry Creditors 44,000 Cash in Hand 8,000
Outstanding Expenses 10,000 Cash at Bank 22,000
Capital : Debtors 56,000
X 2,80,000 Less:: Provision 6,000 50,000
Y 2,80,000 Stock 2,80,000
Z 1,00,000 6,60,000 Machinery 3,54,000
7,14,000 7,14,000

It was decided that with effect from 1st April, 2022, profit and loss sharing ratio
will be 3 : 3 : 4. They agreed on the following terms :
(i) Goodwill of the firm be valued at two year’s purchase of the average super
profits of last three years. Average profits of the last three years are
₹1,18,000, while the normal profits may be taken at ₹66,000.
(ii) Provision on debtors be reduced by ₹2,000.
(iii) Value of stock be increased by 10% and machinery be valued at ₹1,00,000.
(iv) An item of ₹3,000 included in sundry creditors is not likely to be claimed.
Partners do not want to record the altered values of assets and liabilities in
the books and also do not want to record the goodwill. Pass an entry to give
effect to the above.

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Q-28. X, Y and Z are in partnership sharing profits in the ratio of 3:2:1. On 31st October,
2021. Z retires from the firm. Their Balance Sheet on this date was as follows: (6)
Liabilities ₹ Assets ₹
Sundry Creditors 1,20,000 Bank 25,000
Outstanding Expenses 10,000 Debtors 1,65,000
Profit and Loss Account 1,50,000 Stock 2,50,000
Capital Accounts : Investments 3,00,000
X 5,00,000 Fixed assets 5,40,000
Y 3,00,000
Z 2,00,000 10,00,000
12,80,000 12,80,000
The following was agreed upon:
(i) Goodwill of the firm is valued at ₹1,50,000. Z sells his share of goodwill to
X and Y in the ratio of 4:1.
(ii) Stock is revalued at ₹3,00,000 and debtors are revalued at ₹1,50,000.
(iii) Outstanding expenses be brought down to ₹3,000.
(iv) Investments are sold at a loss of 10%.
(v) Z is paid off in full.
Pass necessary journal entries.

Q-29. A and B are partners in a firm sharing profits and losses in the ratio of 5:3. On 31st
March, 2022, their Balance Sheet was as under:
Liabilities ₹ Assets ₹
Creditors 50,000 Bank 29,000
Provident Fund 15,000 Debtors 1,80,000
Workmen’s Compensation Stock 1,25,000
Reserve 40,000 Premises 1,50,000
Advertisement
Capitals A/cs : 16,000
Expenses
A 2, 60,000
B 1, 35,000 3,95,000
5,00,000 5,00,000

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On 1st April, 2022, C is admitted as a partner. A surrenders 1/4th of his share and B
1/3rd of his share in favour of C. Goodwill is valued at ₹1,60,000. C brings his
share of goodwill in cash and ₹1,50,000 as his capital. Following terms are agreed
upon:
i. Premises is to be increased to ₹2, 00,000 and stock by ₹45,000.
ii. Outstanding rent amounted to ₹12,000 and prepaid salaries ₹2,000.
iii. Liabilities on account of provident fund was only ₹10,000.
iv. Liabilities for Workmen’s Compensation Claim was ₹16,000.
Pass necessary Journal entries. (6)

Q-30. X, Y and Z were partners sharing profits and losses equally. Z dies on 1st April
2017. After all the necessary adjustments, his capital accounts show a net credit
balance of ₹55,400. Z’s executor was paid ₹15,400 on 1st April 2017 and the
balance in two equal annual instalments starting from 30th September 2017 with
interest @ 10% p.a. on the unpaid amount. The firm closes its books on 31 st March
of every year. Prepare Z’s Executor account until it is finally paid. (6)

Q31. R and S were partners sharing profits and losses equally. On 31st March 2018 their
Balance Sheet was as follows:
Liabilities ₹ Assets ₹
Creditors 1,00,000 Investments 90,000
Bank loan 50,000 Stock 60,000
Employees provident fund 30,000 Machinery 1,10,000
Investment fluctuation fund 10,000 Land and Buildings 40,000
Capitals Debtors 80,000
R 1,10,000 Less prov. For bad debts 2,000 78,000
S 90,000 Bank 12,000
3,90,000 3,90,000

The firm was dissolved on the above date and the following settled:
1. Stock was sold at 25% less than the book value and machinery realised 20%
more than the book value.
2. Debtors of ₹10,000 proved bad and rest paid the amount due.

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3. A typewriter which was fully depreciated is now valued at ₹3,000 and it is

taken over by R at this value.
4. S took over 40% of investments at 15% discount and remaining investments
were handed over to a creditor of ₹60,000. The balance payment to creditor
was made in cash.
5. R was appointed to realise the assets and pay off liabilities for which he was
to be paid a commission of ₹2,500.
6. Land and Buildings were valued at ₹70,000. Bank took it to settle off the
loan of ₹50,000 and paid the balance amount of ₹20,000 to the firm.
Prepare realisation account only. (8)

Q-32. Abha and Bala are partners sharing profits and losses in the ratio 1:2. They decided
to have Daya for half a share in the partnership firm. At the time of Daya's
admission the Balance Sheet of Abha and Bala stood as under: (8)

Balance Sheet
As at 31st March, 2019
Liabilities ₹ Assets ₹
Capitals: Land and Building 65,000
Abha 20,000 Plant and Machinery 20,000
Bala 25,000 45,000 Goodwill 6,000
General Reserve 12,000 Debtors 12,000
Less: Provision for DD 2,000 10,000
Workmen's Compensation 15,000 Stock 8,000
Reserve Investment 3,000
Sundry Creditors 25,000 Prepaid Insurance 2,000
Bank 2,000
Bills Payable 13,000
Outstanding Electricity 1,800
charges
Outstanding Repair 1,200
Charges
Outstanding Salary 3,000
1,16,000 1,16,000
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Admission will be on the following terms:

(a) Daya brings ₹12,000 as her share of goodwill and proportionate amount of
capital.
(b) Land and building are to be valued at ₹70,000.
(c) Plant and machinery are to be appreciated by15%.
(d) The provision on debtors must be increased by ₹2,000 and a creditor has
offered a discount worth ₹3,000.
(e) Liability towards Workmen's Compensation Reserve has been estimated to
be ₹20,000.

Prepare Revaluation accounts, Partners' Capital Accounts and Balance Sheet at the
time of admission of Daya.
OR

Q-33. X, Y and Z were partners in a firm sharing profits in the ratio of 4:3:2. On 1st April
2022 their Balance Sheet was as follows:

Liabilities ₹ Assets ₹
Creditors 41,400 Cash at Bank 33,000
Capital Accounts: Debtors 30,450
X 1,20,000 Less: Prov. For B.D 1,050 29,400
Y 90,000 Stock 48,000
Z 60,000 2,70,000 Plant and Machinery 51,000
Land and Building 1,50,000

3,11,400 3,11,400
Y had been suffering from ill health and thus, gave notice of retirement
from the firm. An agreement was, therefore, entered as on 1.04.2022, the
terms of which were as follows:
(a) The land and building will be appreciated by 10%.
(b) The provision for bad debts is no longer necessary.

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(c) The stock be appreciated by 20%.

(d) That goodwill of the firm be fixed at 54,000. Y's share of the same be
adjusted into X and Z capital accounts, who are going to share future profits
in the ratio of 2:1.
(e) The entire capital of the newly constituted firm be readjusted by bringing in
or paying necessary cash so that the future capitals of X and Z will be in
their profit-sharing ratio.
Prepare Revaluation accounts, Partners’ Capital Accounts and Balance Sheet at the
time of retirement of Y.

Q. Paper :
Exam Code # FTEE/2005/22/K8-14