Subject : Account (GSEB)

Standard : 12 (EM)
SEC A

SECTION - A

Choose the correct option from those given below each question (Each question
(Marks - 00)
carries 1 Marks)
1. At the time of reconstruction of a partnership firm ………… is prepared.
A. profit-loss appropriation account B. revaluation account C. realisation account D.
trading account
2. Where are the effects given when the value of assets increase at the time of the
reconstruction of a partnership firm?
A. Subtract from assets value and the revaluation account will be debited.
B. Subtract from assets value and the revaluation account will be credited.
C. Addition in assets value and the revaluation account will be debited.
D. Addition in assets value and the revaluation account will be credited.
3. Where are the effects given when the value of liabilities decrease at the time of the
reconstruction of a partnership firm?
A. Addition in such liabilities and revaluation account will be debited.
B. Addition in such liabilities and revaluation account will be credited.
C. Subtract from such liabilities and revaluation account will be credited.
D. Subtract from such liabilities and revaluation account will be debited.
4. Revaluation account Is also known as ………….
A. Profit-loss account B. Profit-loss adjustment account C. Profit-loss appropriation
account D. Capital reserve account
5. In which ratio profit or loss of revaluation account is distributed between the partners?
A. New profit-loss ratio B. Old profit-loss ratio C. Gain ratio D. Sacrifice ratio
6. Where is the accumulated profit as per the balance sheet shown at the time of the
reconstruction of a partnership firm?
A. Debit side of partners’ capital accounts B. Credit side of partners’ capital accounts
C. Credit side of profit-loss appropriation account D. Credit side of revaluation account
7. In the reconstruction of partnership firm, sacrifice = ………….
A. Old capital share - New capital share B. New profit-loss share - Old profit-loss
share C. Old profit-loss share - New profit-loss share D. New profit-loss share x Old
profit-loss share
8. In the reconstruction of a partnership firm, gain ratio = …………
A. Old capital ratio - New capital ratio B. New capital ratio - Old capital ratio C. Old
profit-loss share - New profit-loss share D. New profit-loss share - Old profit-loss
share
9. At the time of the reconstruction of partnership firm, investments are shown at …………
in the balance sheet after the revaluation.
A. Face value B. Market value C. Cost value D. Book value - market value
10. Where is the worker profit sharing fund shown in balance sheet at the time of the
reconstruction of a partnership firm?
A. Debit side of partners’ capital accounts
B. Credit side of partners’ capital accounts
C. Capital-liabilities side of balance sheet after reconstruction
D. Credit side of revaluation account
11. Changes in partnership due to several reasons means…….
A. reconstruction of partnership B. dissolution of partnership C. combination of
partnership D. None of these given
12. To whom does the accumulated profit or reserve fund belong?
A. To the new partners B. To the existing partners C. To the employees D. None of
these given
13. How can the profit and loss sharing ratio between the partners in an existing
partnership firm be changed?
A. It can be changed with the consent of creditors.
B. It can be changed with the consent of all existing partners.
C. It can be changed with the consent of majority of partners.
D. It can be changed with the consent of Government.
14. To which account will the amount of reserve fund be credited at the time of
reconstruction of partnership?
A. To Partner’ Capital / Current A / cs B. To Profit-loss Appropriation A / c C. To
Revaluation A/c D. To Profit-loss A/c
15. In which ratio should the amount (balance) of reserve fund be distributed at the time of
reconstruction?
A. In capital ratio B. In sacrificing ratio C. In new profit-loss sharing ratio D. In old
profit-loss sharing ratio
16. What is worker’s profit sharing fund for the partnership firm?
A. Payables B. Assets C. Reserve D. Receivables
17. While calculating sacrificing ratio, if answer comes to negative- ( —), then what is it
called?
A. Partner has sacrificed.
B. Old profit sharing ratio of partner is equivalent to new ratio.
C. Partner has not sacrificed.
D. Partner has not gained.
18. How should the new share of profit received by the partner in comparison to the old
share be, so that it can be said that he has made a gain?
A. higher B. half C. equal D. less
19. Dolly and Tosha decided to change their profit and loss sharing ratio from 3 : 2 to 1:4,
then…..
A. Dolly has to be sacrificed and Tosha has gained. B. Dolly has gained and Tosha
has sacrificed. C. both have gained. D. both have sacrificed.
20. At the time of revaluation of assets and liabilities, if there is a provision for doubtful
debts on debtors, so It will…….
A. be debited to Revaluation A / c B. be credited to Revaluation A/c C. be debited
to Debtors A / c D. be debited to Profit and Loss A/c
21. Credit balance of revaluation account suggests
A. Debt B. Asset C. Profit D. Loss
22. Generally, reconstruction of partnership firm is
A. Gain for existing partners B. No profit/no loss for partners C. Loss for existing
partners D. None of the given
23. While calculating partner’s sacrifice, if answer comes to negative(—), then it is
A. partners gain B. no gain, no loss for partner C. partner’s sacrifice D. None of the
above
24. Balance of general reserve and credit balance of profit and loss account is transferred
to ………… at the time of the admission of a new partner.
A. capital account of newly admitted partner account
B. all partners’ capital accounts including new partner account
C. old partners’ capital accounts
D. revaluation account
25. Goodwill appearing in the books of the firm at the time of admission of the new partner
is recorded as …………
A. debited to old partners’ capital accounts in their old profit-loss sharing ratio and
goodwill account is credited
B. credited to all partners’ capital accounts including new partner in their new profit-
loss sharing ratio
C. admitted partners’ capital A/c Cr, Goodwill A/c Dr
D. credited to old partners capital accounts in their old profit-loss sharing ratio and
goodwill account debited
26. Premium for goodwill brought by the partner is recorded on ………… side.
A. debit side of old partners’ capital accounts in old profit-loss sharing ratio
B. credit side of old partners’ capital accounts in their old profit-loss sharing ratio
C. debit side of old partners’ capital accounts in their sacrificing ratio
D. credit side of old partners’ capital accounts in their sacrificing ratio
27. Revaluation account is ………….. type of account.
A. personal B. nominal C. real D. temporary
28. When new partner brings his share of goodwill in cash ………….. account is credited.
A. cash B. premium for goodwill C. goodwill D. his capital account
29. As per Accounting Standard 26, ……….. goodwill cannot be shown in the books.
A. goodwill for which some amount is paid for consideration
B. internally generated
C. both (a) and (b)
D. neither of (a) and (b)
30. Revaluation account is also known as …………
A. profit-loss account B. profit and loss adjustment account C. profit and loss
appropriation account D. profit and loss suspense account
31. When only old profit-loss sharing ratio is given; sacrificing ratio of partners = …….
A. equal B. old ratio C. old share — rev share D. cannot be calculated
32. Old partner is also required to give his share in goodwill to other old partner, when
…………
A. his capital is less
B. his new share in new profit-loss ratio is more than his old share
C. his new share in new profit-loss ratio is less than his old share
D. his new share in new profit-loss ratio is equal to old share
33. Profit or Loss of revaluation account is transferred to ……… accounts in ……… ratio.
A. old partners’, equal B. all partners’, new profit-loss sharing ratio C. old partners’,
sacrificing ratio D. old partners’, old ratio
34. On admission of a new partner, to which account is the amount of general reserve
credited?
A. To Profit and Loss account B. To Capital account of new partners C. To Capital
account of old partners D. To Revaluation account
35. After admission of the new partner, which ratio is used to distribute the future profit or
loss of the firm between all partners?
A. In capital ratio B. In equal ratio C. In new ratio D. In old ratio
36. Maitri and Mitali are partners sharing profit- loss In the ratio of 3: 1. They admitted
Jaimini as a new partner in the firm. New profit-loss sharing ratio is determined at 2 :
1: 2. Find out the sacrificed ratio of Maitri and Mitall.
A. 2: 1 B. 7: 1 C. 1: 7 D. 3: 1
37. Which account is opened to pass the effect related to the revaluation of assets and
liabilities admission of new partner?
A. Revaluation account B. None of these given C. Goodwill account D. Capital
account of a new partner
38. Where do we record determined amount discount reserve on debtors at the time
admission of a new partner?
A. On debit side of Revaluation A/c
B. On credit side of Revaluation A/c
C. On Capital-Liabilities side of Balance Sheet
D. On debit side of partners’ capital / current accounts
39. To which account is balance (profit or loss) of Revaluation account transferred?
A. To profit-loss appropriation account B. To partner’s current accounts C. To Profit-
loss account D. To Trading account
40. Ramesh and Sanat are the partners sharing profits and losses in the ratio 5 : 3. Narvat
is admitted as a new partner. If the new profit-loss ratio is 3 : 2 : 1, calculate the
sacrifice ratio.
A. 7:1 B. 1:7 C. 2:5 D. 3:1
41. P and Q are the partners sharing profit—loss in the ratio 2:1.Theyadmitted R giving th
share in profit. Find the new profit—loss ratio of all the partners.
A. 4:3:8 B. 3:4:8 C. 4:8:3 D. 8:4:3
42. Debit balance of profit and loss account shown in the balance sheet at the time of
retirement of a partner is ……………
A. recorded on the debit side of all partners’ capital accounts including the retiring
partner in their old profit-loss sharing ratio
B. recorded on the credit side of all partners’ capital accounts including the retiring
partner in their old profit-loss sharing ratio
C. credit side of the retiring partner’s capital account only
D. debit side of the remaining partners’ capital accounts in their gaining ratio
43. Goodwill shown in the balance sheet at the time of the retirement of a partner is
recorded as ……………
A. shown in new balance sheet, if decided by partners
B. debit side of all partners’ capital accounts in their old profit-loss sharing ratio
C. credit side of all partners’ capital accounts in their old profit-loss sharing ratio
D. debit side of retiring partner’s capital account only
44. Goodwill payable to the retiring partner is recorded as …………….
A. credit side of all partners’ capital accounts, in their old profit-loss sharing ratio
B. credit side of all partners’ capital accounts. in their gaining ratio
C. debit side of continuing partners’ capital accounts, in their gaining ratio
D. debit side of continuing partners’ capital accounts, in their new profit-loss sharing
ratio
45. When only old profit-loss sharing ratio is given, gaining ratio of remaining partners will
be …………….
A. 1: 1 B. old ratio C. capital ratio D. cannot he calculated
46. A partner, except the retiring partner also receives goodwill when …………….
A. his capital is more
B. new share in new profit-loss sharing ratio is more than his old share
C. new share in new profit-loss sharing is less than his old share
D. new share and old share are equal
47. Loss of revaluation account at the retirement or death is recorded in account in
……………. ratio on ………… side capital accounts.
A. remaining partners, new profit-loss debit B. all partners, old profit-loss sharing,
debit C. all partners. old profit-loss sharing, debit D. all partners, equal proportion,
debit
48. If partnership deed is silent, interest is payable at ……………. on unpaid amount
payable retiring partner.
A. 10 % p.a. B. 12 % p.a. C. 6 % p.a. D. zero %
49. Accounting year ends on 31 -3-’16. A partner dies on 30-6-’16. Deceased partners
share in profit is . Profit share payable to partner is to be calculated on the basis last
year’s profit Rs.24,000. ……………amount be paid as share in profit at the time of
death.
A. Rs. 8,000 B. Rs.24,000 C. Rs.1,333 D. Rs.2,000
50. Sweta, Geeta and Jyoti are equal partners, Gita retires. Gita’s share is gained by Sweta
and Jyoti equally. New profit and loss sharing ratio of Sweta and Jyoti will be ………….
A. 3: 1 B. 2 :1 C. 1:2 D. 1:1
51. Workmen profit sharing fund is recorded as ……………….. at the time of the retirement
of a partner.
A. a liability in new balance sheet
B. credited to all partners’ capital accounts in their old profit-loss sharing ratio
C. debited to all partners’ capital accounts in their old profit-loss sharing ratio
D. credited to the retiring partner’s capital account
52. Mention the formula for the new profit-loss share of continuing partners at the time of
retirement of a partner.
A. Old share + Gain B. New share — Gain C. New share — Sacrifice D. Old share
+ Sacrifice
53. ‘X’, ‘Y’ and ‘Z’ are partners sharing profit and loss in thc ratio of 2 : 2: 1. ‘Z’ retires.
Find out new profit-loss sharing ratio of ‘X’ and ‘Y’.
A. 3 :2 B. 2: 1 C. 1:1 D. 1:2
54. A, ‘B’ and ‘C’ are the partners sharing profit and loss in the ratio of 6 : 3 : 1. C retires.
Share of C is taken up by A and B in the ratio of 3 : 2. Mention the new profit-loss
sharing ratio.
A. 17: 33 B. 33: 17 C. 1:2 D. 2: 1
55. Palak. Priti and Paval are partner sharing profit and loss in the ratio of 2:2:1. Payal
retires . The new profit –loss sharing ratio is decided at 3:2 then determine the gaining
ratio of continuing parteners.
A. Priti takes all gain B. Palak takes all gain C. 2 : 2 D. 3 : 2
56. Heta, Herna and Heli are partners sharing profit and loss in the ratio of 1: 3 : 6 . Heta
retires. Determine the gaining ratio.
A. 2:1 B. 1:2 C. 1:3 D. 1:6
57. Where is bad debt reserve, discount reserve on debtors shown at the time of retirement
of a partner ?
A. Assets-Receivable side of balance sheet B. Capital-Liabilities side of balance sheet
C. Credit side of profit-loss adjustment account D. Debit side of profit-loss adjustment
account
58. How long does a retired partner claim for profit in the partnership firm?
A. Till majority of partner’s wish B. Till retirement from final account C. Till final
account D. Lifetime
59. To which account is the amount due to a retiring partner transferred with his consent ?
A. To Bank A/c B. To Profit-loss A/c C. To Current A/c D. To Loan A/c
60. Under which circumstances is Memorandum Revaluation Account prepared?
A. When Assets and Liabilities are to be shown a their original value.
B. When Assets and Liabilities are to be shown a their market value. .
C. When Assets and Liabilities are to be shown a their old value
D. All of the above
61. In which ratio shall the current partners give tretiring partner his share of goodwill ?
A. Gaining Ratio B. Sacrifice Ratio C. Old profit—loss ratio D. New profit—loss ratio
62. Stock in Balance Sheet at the time of retirement shown at 8,800. If this value is 10%
more than t book value, how much reduction shall be there the value of stock?
A. Rs.800 B. Rs. 880 C. Rs.808 D. Rs. 78
63. If the current partner also gets a share in goodwill along with the retiring partner, then it
indicates
A. that he has sacrificed his own share B. he has a gain C. his old and new ratio is
same D. All of the above
64. Upto what period does the retiring partner has a right to have share in the profits of the
firm ?
A. Up to last accounting year
B. From last accounting year to the date of retirement
C. Till the current partners wish
D. For lifetime –
65. What amount is not deductible from the last dues payable to the retiring / deceased
partner?
A. Debit balance of Current Account B. Credit balance of Current Account C. Share in
revaluation loss D. Drawings and interest on drawings
66. How many methods are there for dissolution of a partnership firm ?
A. One B. Three C. Two D. Four
67. Which of the following account is opened to incorporate the accounting cIted of assets
and liabilities of the partnership firm at the time of dissolution?
A. Profit and Loss Account B. Profit and Loss Appropriation Account C. Revaluation
Account D. Realisation Account
68. What is the type of Realisation Account?
A. Balance sheet B. Personal C. Real D. Nominal
69. Winch is the first payment made from the realisation of assets at the time of the
dissolution of a firm?
A. Dissolution expense B. Loan of partner’s wife C. Liabilities towards third parties D.
Partners’ loan
70. Which of the following amount will be written at the credit side of realisation account,
when there is balance of debtors Rs. 24,500 and bad debt reserve of Rs.2,500 in the
balance sheet at the time of the dissolution of a firm?
A. Rs. 24,500 B. Rs. 2,500 C. Rs. 22,000 D. Rs. 27,000
71. To which account credit balance of general reserve, workmen accident compensation
fund, credit balance of profit and loss account is transferred at the time of the
dissolution of a firm?
A. Realisation A/c B. Cash A/c C. Profit and Loss A/c D. Partners’ Capital A/c’s
72. What is called the process to close down the existing firm and its business ?
A. None of these given B. Dissolution C. Renovation D. Reconstruction
73. By what other name is Realisation Account known?
A. Trial Revaluation Account B. Revaluation Account C. Accomplishment Account D.
Profit and Loss Adjustment Account
74. At the time of dissolution, which payment is to be paid lastly from the realization of the
firms assets?
A. Dissolution expense B. Loan of partner C. Excess of capital account D. Loan of
partners wife
75. Which balance of account is not transferred to Realisation A/c on date of dissolution?
A. Debtor A/c B. Investment A/c C. Bank A/c D. Furniture A/c
76. When an asset is given to creditor for his due, then which journal entry will be
recorded?
A. No entry will be recorded B. Debited to Realisation A/c C. Credited to Realisation
A/c D. Credited to cash A/c
77. At the time of dissolution, given unrecorded investments of 20,000 to the creditors of
22,000 to settle his account, which effect is to be made?
A. No entry will be recorded B. Credited to partners’ capital accounts C. Debited to
Realisation A/c D. Credited to Realisation A/c
78. At the time of dissolution of firm, given unrecorded asset of Rs.30,000 to the creditors
of Rs.‘50,000 for his due, then by which amount will cash account be credited ?
A. Rs.20,000 B. Rs.30,000 C. Rs.50,000 D. Rs.80,000
79. At the time of dissolution ‘Rs. 50,000 realised for unrecorded patent, what will be the
effect ?
A. Credited to Realisation A/c B. No entry will be recorded C. Credited to Patent
A/c D. Credited to Cash / Bank A/c
80. When the whole partnership firm is sold out, then what is it called ?
A. Dissolution of partnership B. Renovation of partnership C. Reconstruction of
partnership D. None of the these given
81. is required to be prepared on dissolution of firm to clear assets and liabilities.
A. Revaluation Account B. Realisation Account C. Profit and Loss Adjustment Account
D. Profit and Loss Appropriation Account
82. When there is no information about realisation of unrecorded assets, their value is
assumed to be
A. Zero B. Book Value C. Market Value D. None of these
83. is disposed off at last, out of assets realized on dissolution.
A. Dissolution expenses B. Balance of Current Accounts C. Excess of Capital Balance
D. Loss on realization
84. If at the time of dissolution of the firm, Debtors in Balance Sheet are 27,000 and Bad
Debt Reserve is 2,000, what amount shall be credited to Realisation Account?
A. Rs.27,000 B. Rs.25,000 C. Rs.2,000 D. Rs.29,000
85. When all the partners voluntarily agree to dissolve the firm, such dissolution is known
as
A. Compulsory dissolution B. Normal dissolution C. Voluntary dissolution D.
Dissolution by contract
86. Goodwill in Balance Sheet at the time of dissolution was Rs.10,000. If there is no
information about realisation, then it is assumed that
A. Book value might have been realised B. Market value might have been realised C.
No value might have been realised D. Both A and B
87. At what minimum price per share company can issue shares according to current
provisions of Companies Act?
A. Rs. 100 B. Rs. 1,000 C. Rs. 1 D. Rs. 0.50
88. For public issue of shares company has to take a permission from whom?
A. Central government B. SEBI C. State government D. Reserve Bank
89. As per SEBI guidelines, the minimum amount on each share called by company on
application must be at least ………… % of the issue price.
A. 25 B. 30 C. 40 D. 20
90. If the company does not receive subscription for at least ……….. of the public issue,
then share issue would be cancelled.
A. 50% B. 75% C. 90% D. 100%
91. At what maximum rate of percentage for premium on the face value of shares can be
declared by the company on their issue shares?
A. 10 % B. 100 % C. 25 % D. No limit
92. When shares are forfeited then amount called up on forfeited shares is…………….
A. debited to Share forfeiture A / c B. credited to Share forfeiture A / c C. credited
to Share capital A / c D. debited to Share capital A/c
93. What is the maximum rate of interest charged by company on calls-in-arrears as per
schedule I of Table F?
A. at 15% p.a. B. at 10% p.a. C. at 2% p.m. D. at 1% p.m.
94. When all the forfeited shares are reissued then balance of share forfeiture account is
transferred to ………… account.
A. share capital B. profit-loss C. capital reserve D. general reserve
95. If premium amount has not been received on forfeited shares then proportionate amount
of premium is ………….
A. debited to securities premium account B. credited to securities premium account C.
credited to capital reserve account D. debited to share capital account
96. Which of the following is not shown under the heading ‘Share Capital’ in a balance
sheet?
A. Authorised capital B. Issued capital C. Reserve capital D. Subscribed capital
97. How many minimum members must be there in a public company?
A. Fifty B. Ten C. Seven D. Two
98. What is the maximum discount that a company can give to the new shareholder on
reissue of forfeited shares?
A. 10% B. Amount less than forfeited share amount C. Amount more than forfeited
share amount D. Amount equal to forfeited share amount
99. Minimum what percentage of share applications must be received in public issues, to
ensure that share subscription do not get cancelled?
A. 90 % or more than 90 % B. 85% C. 80% D. 60%
100 Where is balance of calls-in-arrears shown by way of deduction, at the time of
. preparing Balance Sheet?
A. Creditors B. Debtors C. Bank balance D. Subscribed share capital
101. At the time of purchase of business, when company Issues shares of a value higher
than the net assets of business, then the amount of difference is transferred to which
account?
A. None of the given above B. Share discount A / c C. Capital reserve A/c D.
Goodwill A/c
102 How many minimum members must be there in a private company?
. A. Fifty B. Twenty C. Seven D. Two
103 In which year was SEBI established in India?
. A. 1991 B. 1956 C. 1932 D. 1947
104 In which type of bank, can a company deposit amount, which Is received along with
. share application from public?
A. None of the given above B. Reserve Bank of India C. Scheduled bank D. Co-
operative bank
105 If applications are received for more number of shares than the shares issued for public
. subscription, then what is this subscription called?
A. Over-subscription B. None of the given above C. Under-subscription D. Minimum
subscription
106 If shareholder has sent future payable amount with called amount, then what is called
. it?
A. Discount B. Premium C. Calls-in-advance D. Calls-in-arrears
107 What Is the minimum face value of an Equity share, according to the Companies Act?
. A. Rs.100 B. Rs.50 C. Rs.10 D. Rs.1
108 Uncalled capital which is resolved not to be called-up in future by passing a special
. resolution in the meeting of shareholders, then what is this capital called?
A. Issued capital B. Reserve capital C. Paid up capital D. Authorised capital
109 What is the maximum annual rate of interest payable by the company on calls in
. advance as per Schedule I of Table F?
A. 10% B. 12% C. 15% D. 18%
110. For which of the following, Securities Premium Reserve Account cannot be utilized?
A. In writing off preliminary expenses B. For issue of bonus shares C. For writing off
shares/debentures discount D. For issuing dividend to shareholders
111. Which amount is forfeited by the company when it forfeits the shares?
A. Called up amount on shares B. Amount received on shares C. Calls-in-arrears D.
Calls-in-advance
112. When company issues shares in lieu of remuneration payable to promoters, they are
known as ……….
A. remuneration B. pro-rata allotment of shares C. issue of shares for consideration
other than cash D. promoters’ shares
113. When company purchases some other business and issues shares of value more than
its net assets, then the difference is known as ………..
A. goodwill B. capital reserve C. capital loss D. capital profit
114. When company purchases some other business and issues shares of value less than its
net assets, then the difference is known as ……….
A. goodwill B. capital reserve C. capital loss D. capital profit
115. From which reserve can the company issue bonus shares?
A. Capital Reserve B. Revenue Reserve C. Capital Profit D. General Reserve
116. Applications for what percentage of shares must be received from the public to call it a
minimum subscription ?
A. 90% B. 80% C. 85% D. 95%
117. When any company first time offers the shares/stock to the public for subscription, it is
known as ………..
A. F.P.O. B. I.P.O. C. F and O D. E.P.O.
118. The shares issued by the company to its employees and directors for their services
towards the company are called ………
A. right shares B. bonus shares C. sweat equity shares D. preference shares
119. Maximum in how many persons’ joint names can share application be made ?
A. Two B. Three C. Four D. Five
120 What is the minimum limit of members in the public limited company?
. A. Two B. Seven C. Fifty D. Ten
121. What amount is to be debited to Share Capital account at the time of forfeiture of the
shares ?
A. Called up amount B. Face value C. Uncalled amount D. Received amount
122 Debenture is …………for a company.
. A. capital B. receivable C. liability D. asset
123 Company gives ………. on their debentures to debenture holders.
. A. dividend B. interest C. share in profit D. both interest and dividend
124 At what rate debentures would be issued at discount?
. A. 10 % B. 5% C. 20 % D. Rates as decided by board of directors
125 The issued debentures by the company are shown under which head in the balance
. sheet?
A. Non-current liabilities B. Share capital and reserves C. Current liabilities D.
Investments
126 The amount of premium received on issuing debentures at premium is transferred to
. which account?
A. Capital reserve A / c B. General reserve A/c C. Securities premium reserve A /
c D. Statement of profit and loss A / c
127 The amount of premium received on issuing debentures at premium is………
. A. revenue profit B. capital loss C. revenue loss D. capital profit
128 When full amount of the debenture is called on application by the company then, that
. amount is credited to which account?
A. Debenture application A / c B. Debenture application and allotment A / c C.
Debenture allotment A / c D. Debenture holders A / c
129 Before the company decides to redeem the debentures out of capital, the company has
. to transfer…….. % of total face value of issued debentures to debenture redemption
reserve A/c.
A. 10 B. 25 C. 100 D. 15
130 Before the company decides to redeem the debentures out of profit, the company has
. to transfer…….. % of total face value of issued debentures to debenture redemption
reserve A/c.
A. 10 B. 25 C. 100 D. 15
131. As per companies rules 2014, the amount that is at least…… % of face value of the
debentures to be redeemed by the end of financial year. I.e., 31st March, should be
invested at the beginning of the year I.e. upto 30th April.
A. 25 B. 15 C. 100 D. 10
132 What is ‘Premium on redemption of debenture Account’ for a company?
. A. Loss B. Liability C. Receivable D. Asset
133 Debentures, on which the company promise to return the amount on the date of
. maturity are….
A. Redeemable debentures B. Irredeemable debentures C. Simple debentures D.
Mortgage debentures
134 Which detail is shown by the debenture of the company?
. A. Payment B. Asset C. Debt D. Receivables
135 Which debenture is similar to currency notes?
. A. Mortgage debenture B. Redeemable debenture C. Bearer debenture D. Registered
debenture
136 What is debenture discount on issue of debenture for the company?
. A. Loss B. Debt C. Asset D. Income
137 What is the amount of premium on redemption of debentures for the company?
. A. Capital profit B. Receivables C. Income D. Loss
138 Which account wil be debited, when debentures are Issued for consideration other than
. cash?
A. Vendor’s A/c B. Debentures A / c C. Sundry debt’s A / c D. Sundry asset’s
A/c
139 In case a company has earned profit or not earned, to pay interest on debenture
. is……….
A. compulsory B. not compulsory C. advisable D. optional
140 In the event of the liquidation of a company, the debenture holders are repaid their
. money the payment to equity shareholders.
A. between B. after C. before D. with
141. A debenture holder company……….. is a/an of the company.
A. liquidator B. director C. creditor D. owner
142 At what rate maximum discount can be given on the issue of the debentures?
. A. No restriction B. 15 % C. 10% D. 5%
143 As per voting right, how many votes can be given by debenture holder in the election of
. board of directors?
A. No voting right B. Per person C. 100 Debentures = 1 vote D. 1 Debenture = 1
vote
144 In which type of debenture, the interest coupons are to be attached with debentures
. certificate?
A. Perpetual debentures B. Convertible debentures C. Bearer debentures D.
Registered debentures
145 When will the amount of irredeemable debenture by the company be repaid?
. A. After 7 years B. After a certain period C. Any time D. At the time of liquidation of
the company
146 According to Companies Act, 2013, for what maximum duration can a company issue
. debentures?
A. 10 years B. 7 years C. 5 years D. 3 years
147 According to Companies Act, 2013, a company engaged In infrastructure project can
. issue debentures for more than…………..
A. 50 years B. 40 years C. 30 years D. 10 years
148 For what maximum duration can a infrastructure company issue debentures?
. A. 40 years B. 30 years C. 20 years D. 10 years
149 For how many maximum years, can the infrastructure company issue debentures?
. A. 5 B. 10 C. 20 D. 30
150 Which debentures are like currency notes?
. A. Bearer B. Registered C. Simple D. Convertible
151. What does discount on issue of debentures mean for the company?
A. Loss B. Profit C. Asset D. Liability
152 What does premium on redemption of debentures mean for the company?
. A. Profit B. Loss C. Capital Profit D. Asset
153 Which debentures are risky from investors’ point of view?
. A. Simple B. Registered C. Bearer D. Convertible
154 Which of the following analysis shows stakeholder-based classification?
. A. External analysis B. Horizontal analysis C. Short-term analysis D. Vertical analysis
155 How many assets are analysed in the financial statement analysis?
. A. 1 B. 2 C. 3 D. 4
156 The information regarding the use of assets gives the analysis of ……….
. A. profitability B. liquidity C. solvency D. efficiency
157 The analysis of the financial statements …………
. A. presents only results B. provides historical information C. makes interpretation D.
none of the above
158 The expenses of the current year of a company is Rs. 6,00,000; and if it is increased
. by 20 % compared to the previous year, what would be the expenses of the previous
year?
A. Rs.1,20,000 B. Rs.5,00,000 C. Rs.7,20,000 D. None of these
159 Trading Account and Profit and loss account are also known as………….
. A. Fund flow statement B. Cash flow statement C. Payment statement D. Income
statement
160 What is the first objective of the financial statement?
. A. To know the financial position of the business entity.
B. To know the profit or loss of the business entity.
C. To know the cash flow position of the business entity.
D. None of these given
161. Which statement is prepared to know the profit or loss of any specific period of the
business entity?
A. Income statement B. Balance sheet C. Cash flow statement D. Fund flow
statement
162 From the following which analysis is classified on the basis of duration?
. A. Vertical analysis B. Long-term analysis C. Horizontal analysis D. External analysis
163 On which basis mostly all stakeholders take their investment decisions?
. A. On solvency B. On budget C. On earning capacity D. On efficiency
164 Efficiency analysis shows……………
. A. the information about uses of assets B. the earning capacity of the business C. the
long-term solvency of the business D. the short-term solvency of the business
165 On which basis is Profit and loss account prepared?
. A. On total of profit-loss B. On dues C. On purchase D. On sales
166 In a company, amount of sales revenue of previous year is Rs. 8,00,000; in which
. current year’s increase / decrease rate is 12.5 %, then how much is the amount of
sales revenue of current year?
A. Rs.9,25,000 B. Rs.6,40,000 C. Rs.1,00,000 D. Rs.9,00,000
167 In a company, trade payables of current year is Rs. 62,500 and in which 25 %
. increase with the comparision of previous year, then how much is the amount of trade
payables in previous year?
A. Rs.50,000 B. Rs.15,625 C. Rs.12,500 D. Rs.78,125
168 Which statement is prepared to know the financial position of a business unit at a
. particular time?
A. Income Statement B. Balance Sheet C. Cash Flow Statement D. Funds Flow
Statement
169 By which other names are the Trading Account and Profit and Loss Account known?
. A. Income Statement B. Expenditure Statement C. Cash Flow Statement D. Funds
Flow Statement
170 Which of the following analysis indicates the classification on the basis of time period ?
. A. External Analysis B. Internal Analysis C. Vertical Analysis D. Long-Term Analysis
171. Total of Balance Sheet of a Company is Rs.50,00,000 and the Tangible Assets are
Rs.15,00,000. Find the percentage of Tangible Assets to the total of the Balance
Sheet.
A. 30% B. 20% C. 25% D. 15%
172 which of the following is correct for accounting ratios?
. A. Comparison with ratios developed by the firm B. Comparison with ratios of Industry
C. Comparison with ratios of competitors D. All of the given
173 In which terms ratios are presented?
. A. Proportion B. Percentage C. Time D. All of the given
174 For which of the following Items the ratio is computed In days?
. A. For total purchase B. For credit sales C. For credit purchase D. Both (b) and (c)
175 Which of the following ratios are included in traditional classification?
. A. Composite ratios B. Liquidity ratios C. Profitability ratios D. Solvency ratios
176 Which of the following ratios is revenue based profitability ratio?
. A. Gross profit ratio B. Net profit ratio C. Operating ratio D. Both (a) and (b)
177 A company has the purchase of Rs. 90,000, the purchase expenses of Rs. 15,000,
. the changes in stock (Rs. 15,000) and sales of Rs. 1,50,000. Determine the gross
profit ratio.
A. 40 % B. 13.33 % C. 20 % D. None of the given
178 Which of the following is not included in operating expense?
. A. Loss on sale of asset B. Loss due to fire C. Interest paid D. All of the given
179 The cost of goods sold of a company is Rs. 10,00,000. Operating expenses are Rs.
. 2,00,000. Non-operating expenses are Rs. 3,00,000. Financial expenses are
Rs.1,00,000. If total sales is Rs.20,00,000, determine operating profit ratio.
A. 20 % B. 40 % C. 30 % D. 28 %
180 Liquidity ratio is ………..
. A. measurement of solvency B. measurement of short-term profitability C.
measurement of profitability D. measurement of liquidity
181. Which of the following Is not included to compute current ratio?
A. Debtors B. Stock C. Bills receivables D. Furniture
182 Working capital means ………
. A. difference between current assets and non- current assets
B. difference between current liabilities and non-current assets
C. difference between current assets and non- current liabilities
D. difference between current assets and current liabilities
183 To arrive at liquid assets which of the following is deducted from current assets?
. A. Stock B. Cash and cash equivalent C. Debtors D. Bills receivables
184 Ratios express the financial data In……………. form.
. A. absolute B. qualitative C. concise D. large
185 Ratios help to make…………….judgement about firm’s financial performance.
. A. primary B. political C. social D. qualitative
186 Which of the following ratio is expressed in proportion form?
. A. Current ratio B. Operating ratio C. Gross profit ratio D. Stock turnover
187 Which of the following ratio is not expressed In percentage form?
. A. Operating ratio B. Net profit ratio C. Operating profit ratio D. Stock turnover
188 Which of the following ratio is profitability ratio?
. A. Working capital turnover B. Liquid ratio C. Operating ratio D. Stock turnover
189 In how many categories can the classification of ratios be done?
. A. Five B. Four C. Three D. Two
190 Gross profit =………………..
. A. Sales ÷ Cost of goods sold B. Sales — Cost of goods sold C. Sales + Cost of
goods sold D. Cost of goods sold — Sales
191. Which of the following is not included in operating expenses?
A. Interest paid B. Sales expenses C. Employees’ benefit expenses D. Depreciation
192 Which of the following ratio is liquid ratio ?
. A. Operating ratio B. Current ratio C. Interest coverage ratio D. Proprietary ratio
193 Operating profit =………………
. A. Sales — Operating cost B. Sales + Operating cost C. Operating cost— Sales D.
Sales ÷ Operating cost
194 Generally, in what proportion Is current ratio is desirable?
. A. 1:1 B. 1:3 C. 1:2 D. 2:1
195 Working capital =…………….
. A. Sales — Current assets B. Current liabilities — Current assets C. Current assets
— Current liabilities D. Total assets — Total liabilities
196 Generally, In what proportion is liquid ratio desirable?
. A. 2:1 B. 1:2 C. 1:3 D. 1:1
197 Which of the following expenses are not treated as operating expenses?
. A. Office Expenses B. Selling and Distribution Expenses C. Financial Expenses D.
Employees Related Expenses
198 Which of the following activities are always treated as operating activities?
. A. Interest paid on loan B. Dividend received C. Dividend paid D. Salary expenses
199 Which of the following ratios is expressed in proportion?
. A. Gross Profit Ratio B. Stock Turnover C. Operating Ratio D. Current Ratio
20 Which of the following ratios is the Profitability Ratio?
0. A. Rate of Stock Turnover B. Liquidity Ratio C. Working Capital Turnover D.
Operating Ratio
201 Operating Profit = …………………
. A. Sales + Operating Costs B. Sales - Operating Costs C. Operating Costs - Sales
D. Sales ÷ Operating Costs
202 Which ratio indicates the efficiency of the business unit?
. A. Debt-Equity Ratio B. Current Ratio C. Debtors’ Turnover D. Equity Ratio
203 In how many ways can the ratios be classified?
. A. Two B. Three C. Four D. Five
204 Ratios are useful to take the decisions of the business.
. A. qualitative B. political C. social D. primary
205 How many activities are there in cash flow statement?
. A. Five B. Four C. Three D. Two
206 Cash equivalent has …………….
. A. higher liquidity. B. higher solvency. C. higher profitability. D. all of the given
207 Decrease in current assets and increase in current liabilities ……
. A. are cash inflow and cash outflow respectively. B. are cash outflow and cash inflow
respectively. C. both are cash inflows. D. both are cash outflows.
208 Increase in current assets and decrease in current liabilities ………
. A. both are cash outflows. B. both are cash inflows. C. are cash outflow and cash
inflow respectively. D. are cash inflow and cash outflow respectively.
209 Collection of debtors and bills receivable is …………
. A. cash inflow of operating activity. B. cash outflow of operating activity. C. cash
inflow of financing activity D. cash inflow of investing activity.
210 Which of the following transaction is always transaction of operating activity?
. A. Interest paid on loan B. Dividend received C. Dividend paid D. Salary expense
211. Dividend or interest received on investment is ………….
A. added to cash flow of operating activity. B. deducted from cash flow of financing
activity C. added to cash flow of investing activity. D. deducted from cash flow of
investing activity.
212 Bank overdraft ………..
. A. is current liability but considered as financing activity.
B. is current liability but considered as operating activity.
C. is current liability but considered as investing activity
D. is not an activity of cash flow statement.
213 Rent received ……………
. A. is added to operating activity and deducted from financing activity.
B. is added to operating activity and added to fmancing activity.
C. is added to operating activity and added to investing activity
D. is deducted from operating activity and added to investing activity.
214 Reduction in goodwill in current year as compared to previous year is called ………..
. A. sale of goodwill. B. purchase of goodwill. C. written off goodwill. D. all of the
given
215 Cash deposited in bank is ………….
. A. cash outflow of operating activity. B. cash outflow of financing activity. C. cash
outflow of investing activity. D. not cash flow.
216 Which of the following is included in financial expense?
. A. Factory expenses B. Administrative expenses C. Sales expenses D. Interest
expenses
217 Payment of interim dividend is ……………..
. A. deducted from operating statement and added to financing activity.
B. deducted from operating statement and added to investing activity.
C. Added to operating statement and deducted from financing activity.Added to
operating statement and deducted from financing activity.
D. None of the given
218 Amongst all assets of the business…………….. is the most liquid asset.
. A. Investment B. stock C. cash D. bills receivable
219 Current assets and current liabilities are result of which activity?
. A. Investing B. Financing C. Operating D. Non of the given
220 Which of the following transaction is not an operating transaction?
. A. Proposed dividend B. Written off fictitious assets C. Written off intangible assets
D. Written off depreciation
221 Sale of machine Is a …………………..
. A. cash inflow of an Investing activity B. cash inflow of an operating activity C. cash
inflow of a financing activity D. cash oufflow of an operating activity
222 Payment of interest on debenture is…………….
. A. operating activity of cash outflow B. Investing activity of cash outflow C. financing
activity of cash outflow D. financing activity of cash inflow
223 In instalment of hire purchase-payment towards principal amount is…………….
. A. investing activity of cash outflow B. investing activity of cash inflow C. financing
activity of cash oufflow D. financing activity of cash inflow
224 Profit and Loss Statement and Balance Sheet are Included in…………………….
. accounts.
A. financial B. non-monetary C. monetary D. non-financial
225 Under which section of Companies Act, 2013,the cash flow statement Is included in the
. definition of financial statements?
A. 3(40) B. 2(40) C. 1(40) D. 40
226 Under how many categories are the companies classified while calculating cash flows
. from operating activities ?
A. 3 B. 2 C. 4 D. Only one
227 Assets constructed in factory Is which type of activity?
. A. Social B. Investing C. Operating D. Financing
228 Bonus to workmen is classified under ……… activities.
. A. Financial B. Investing C. Operating D. None of these
229 Which of the following is included under Operating Expenses?
. A. Dividend paid B. Paid towards Goodwill C. Interest paid on Loan D. Paid towards
Bills Payable
230 Refund of Income Tax indicates ………..
. A. cash inflow under Financing Activity B. cash outflow under Financing Activity C.
cash inflow under Operating Actrty D. cash outflow under Operating Activity
231 If Patents at the beginning of the year were Rs.1,20,000, while at the end of the year,
. they were Rs. 70,000. What does it indicate?
A. Patents written off 50,000 B. Patents sold 50,000 C. Purchase of Patents D. All
of the above
232 The transactions related to capital are always included in ………….
. A. Investing activity B. Financing activity C. Operating activity D. It is a special
transaction
233 Which of the following transaction is an operating activity?
. A. Brokerage received B. Sale of machine on cash C. Debentures redeemed D. Loan
borrowed
234 Redemption of preference share is a……………
. A. cash outflow of financing activity B. cash outflow of investing activity C. cash
outflow of operating activity D. cash inflow of financing activity
235 Cash equivalent means……………..
. A. Government securities,
B. such Investments which cannot be quickly converted Into cash.
C. long-term Investments.
D. short-term investments.

All The Best

Subject : Account
(GSEB) ANSWERS
Standard : 12 (EM)

SECTION - A

Choose the correct option from those given below each question (Each question
(Marks - 00)
carries 1 Marks)
1. revaluation account
2. Addition in assets value and the revaluation account will be credited.
3. Subtract from such liabilities and revaluation account will be credited.
4. Profit-loss adjustment account
5. Old profit-loss ratio
6. Credit side of partners’ capital accounts
7. Old profit-loss share - New profit-loss share
8. New profit-loss share - Old profit-loss share
9. Market value
10. Capital-liabilities side of balance sheet after reconstruction
11. reconstruction of partnership
12. To the existing partners
13. It can be changed with the consent of all existing partners.
14. To Partner’ Capital / Current A / cs
15. In old profit-loss sharing ratio
16. Payables
17. Partner has not sacrificed.
18. higher
19. Dolly has to be sacrificed and Tosha has gained.
20. be debited to Revaluation A / c
21. Profit
22. Loss for existing partners
23. partners gain
24. old partners’ capital accounts
25. debited to old partners’ capital accounts in their old profit-loss sharing ratio and goodwill
account is credited
26. credit side of old partners’ capital accounts in their sacrificing ratio
27. nominal
28. premium for goodwill
29. internally generated
30. profit and loss adjustment account
31. old ratio
32. his new share in new profit-loss ratio is more than his old share
33. old partners’, old ratio
34. To Capital account of old partners
35. In new ratio
36. 7: 1
37. Revaluation account
38. On debit side of Revaluation A/c
39. To partner’s current accounts
40. 3:1
41. 8:4:3
42. recorded on the debit side of all partners’ capital accounts including the retiring partner
in their old profit-loss sharing ratio
43. debit side of all partners’ capital accounts in their old profit-loss sharing ratio
44. debit side of continuing partners’ capital accounts, in their gaining ratio
45. old ratio
46. new share in new profit-loss sharing is less than his old share
47. all partners. old profit-loss sharing, debit
48. 6 % p.a.
49. Rs.2,000
50. 1:1
51. a liability in new balance sheet
52. Old share + Gain
53. 1:1
54. 33: 17
55. Priti takes all gain
56. 1:2
57. Assets-Receivable side of balance sheet
58. Till retirement from final account
59. To Loan A/c
60. When Assets and Liabilities are to be shown a their old value
61. Gaining Ratio
62. Rs.800
63. that he has sacrificed his own share
64. From last accounting year to the date of retirement
65. Credit balance of Current Account
66. Two
67. Realisation Account
68. Real
69. Dissolution expense
70. Rs. 2,500
71. Partners’ Capital A/c’s
72. Dissolution
73. Accomplishment Account
74. Excess of capital account
75. Bank A/c
76. No entry will be recorded
77. No entry will be recorded
78. Rs.20,000
79. Credited to Realisation A/c
80. Dissolution of partnership
81. Realisation Account
82. Zero
83. Excess of Capital Balance
84. Rs.2,000
85. Normal dissolution
86. No value might have been realised
87. Rs. 1
88. SEBI
89. 25
90. 90%
91. No limit
92. debited to Share capital A/c
93. at 10% p.a.
94. capital reserve
95. debited to securities premium account
96. Reserve capital
97. Seven
98. Amount equal to forfeited share amount
99. 90 % or more than 90 %
100 Subscribed share capital
.
101. Goodwill A/c
102 Two
.
103 1991
.
104 Scheduled bank
.
105 Over-subscription
.
106 Calls-in-advance
.
107 Rs.1
.
108 Reserve capital
.
109 12%
.
110. For issuing dividend to shareholders
111. Amount received on shares
112. issue of shares for consideration other than cash
113. goodwill
114. capital reserve
115. General Reserve
116. 90%
117. F.P.O.
118. sweat equity shares
119. Three
120 Seven
.
121. Called up amount
122 liability
.
123 interest
.
124 Rates as decided by board of directors
.
125 Non-current liabilities
.
126 Securities premium reserve A / c
.
127 capital profit
.
128 Debenture application and allotment A / c
.
129 25
.
130 100
.
131. 15
132 Liability
.
133 Redeemable debentures
.
134 Debt
.
135 Bearer debenture
.
136 Loss
.
137 Loss
.
138 Vendor’s A/c
.
139 compulsory
.
140 before
.
141. creditor
142 No restriction
.
143 No voting right
.
144 Bearer debentures
.
145 At the time of liquidation of the company
.
146 10 years
.
147 10 years
.
148 30 years
.
149 30
.
150 Bearer
.
151. Loss
152 Loss
.
153 Simple
.
154 External analysis
.
155 4
.
156 efficiency
.
157 makes interpretation
.
158 Rs.5,00,000
.
159 Income statement
.
160 To know the profit or loss of the business entity.
.
161. Income statement
162 Long-term analysis
.
163 On earning capacity
.
164 the information about uses of assets
.
165 On sales
.
166 Rs.9,00,000
.
167 Rs.50,000
.
168 Cash Flow Statement
.
169 Income Statement
.
170 Long-Term Analysis
.
171. 30%
172 All of the given
.
173 All of the given
.
174 Both (b) and (c)
.
175 Composite ratios
.
176 Both (a) and (b)
.
177 40 %
.
178 All of the given
.
179 40 %
.
180 measurement of liquidity
.
181. Furniture
182 difference between current assets and current liabilities
.
183 Stock
.
184 concise
.
185 qualitative
.
186 Current ratio
.
187 Stock turnover
.
188 Operating ratio
.
189 Two
.
190 Sales — Cost of goods sold
.
191. Interest paid
192 Current ratio
.
193 Sales — Operating cost
.
194 2:1
.
195 Current assets — Current liabilities
.
196 1:1
.
197 Financial Expenses
.
198 Salary expenses
.
199 Current Ratio
.
20 Operating Ratio
0.
201 Sales - Operating Costs
.
202 Debtors’ Turnover
.
203 Two
.
204 qualitative
.
205 Three
.
206 higher liquidity.
.
207 both are cash inflows.
.
208 both are cash outflows.
.
209 cash inflow of operating activity.
.
210 Salary expense
.
211. added to cash flow of investing activity.
212 is current liability but considered as financing activity.
.
213 is deducted from operating activity and added to investing activity.
.
214 written off goodwill.
.
215 not cash flow.
.
216 Interest expenses
.
217 Added to operating statement and deducted from financing activity.Added to operating
.
statement and deducted from financing activity.
218 cash
.
219 Operating
.
220 Proposed dividend
.
221 cash inflow of an Investing activity
.
222 financing activity of cash outflow
.
223 investing activity of cash outflow
.
224 financial
.
225 2(40)
.
226 2
.
227 Investing
.
228 Operating
.
229 Paid towards Bills Payable
.
230 cash inflow under Operating Actrty
.
231 Patents sold 50,000
.
232 Financing activity
.
233 Brokerage received
.
234 cash outflow of financing activity
.
235 Government securities,
.
Subject : Account (GSEB)
Standard : 12 (EM)
SEC B

SECTION - A

Answer the following questions in one sentence (Each question carries 1 Marks) (Marks - 00)
1. What is partnership?
2. What is maximum and minimum limit of partners to constitute a partnership firm?
3. What Is a partnership deed for a firm?
4. Describe the objectives to prepare a partnership deed.
5. How are the administrative problems solved, when no written agreement is signed
between the partners?
6. Describe partner’s capital account methods of a partnership firm.
7. Profit of a partner is credited to which account under fixed capital account method?
8. Write a journal entry to transfer drawings account to the capital account, at the end of
the year.
9. Profit and Loss Appropriation Account is a part of which account?
10. The debit balance of current account of partners’ is shown on which side of Balance
Sheet?
11. Additional capital introduced by partner on permanent basis is credited to which
account in the Fixed Capital Account Method?
12. What is Goodwill?
13. What is revaluation of goodwill?
14. Which type of asset is ‘goodwill’?
15. Under which head goodwill is shown In the Balance Sheet?
16. What is capitalised profit?
17. What is super profit?
18. What is average profit?
19. What is weighted average profit?
20. Write the formula for capitalisation of profit method for the valuation of goodwill.
21. Which kind of business have goodwill value?
22. For monopolistic type of business, will the goodwill value realized be more or less?
23. State factor on which mainly value of goodwill depends.
24. Write the limitations/defects of simple average method.
25. Capital employed in the business is also known as ………
26. What is expected rate of return?
27. In which account revaluation account’s profit-loss is transferred?
28. At which value assets-liabilities are shown in the balance sheet after revaluation?
29. Which is the other name known for the revaluation account?
30. What is reconstruction of a partnership firm?
31. What is revaluation account?
32. What is sacrificing ratio?
33. What is gaining ratio?
34. For a partner when answer of sacrifice ratio or gain ratio comes to negative (-) what it
suggest?
35. What is revaluation of assets and liabilities of a partnership firm?
36. At the time of finding out sacrifice ratio or gain ratio if negative answer is there what
does it suggest?
37. If there is decrease in the value of any debt where should it be recorded in
Revaluation Account?
38. For what purpose a new partner is admitted in a firm?
39. State rights of a new partner.
40. Why a new partner is required to give his share in goodwill?
41. What is sacrificing ratio? How it is calculated?
42. State provision for the goodwill as per Accounting Standard 26.
43. At the time of admission of a new partner, where would you record changes takes
place in the values of assets and liabilities of the firm?
44. When the goodwill premium is paid privately by the new partner to the old partner, how
it will be recorded in the books of accounts?
45. Give the other name of Revaluation Account.
46. How revaluation of assets and reassessment of liabilities are to be recorded in the
books ?
47. Due to admission of a new partner, what change is observed in the old partner
earnings?
48. How new partner can brings capital in the firm?
49. In which method, new partner brought goodwill amount in cash?
50. State the effects on investment fluctuation reserve due to changes in the market value
of investments.
51. Which matters/adjustments are required to be made at the time of admission of a new
partner?
52. Who gives the share in goodwill to the retiring or deceased partner? Why?
53. State the circumstances of the retirement of a partner.
54. Which are credited to all partners accounts in their old profit- loss sharing ratio?
55. Which balances are debited to all partners capital accounts in their old profit- loss
ratio?
56. When and why the profit and lo adjustment account is prepared?
57. What is surrender value of policy?
58. When goodwill is to be recorded without finding out the gain ratio?
59. Why revaluation account is prepared at the time of death or ret irement of a partner?
60. An active partner’s retirement declared by public notice is compulsory. Why?
61. What is the period of right on profit for the retiring partner?
62. In which circumstances memorandum revaluation account is prepared?
63. At the time of retirement of a partner, accumulated profit amount will be distributed
among which partners and in which ratio?
64. In which ratio share of goodwill of a retiring partner, will be debited to continuing
partners capita! account?
65. As per Indian partnership act clause 32, in which circumstances a partner can retire
from the firm?
66. Why joint life insurance policy is taken in the business?
67. What is the dissolution of a partnership firm?
68. What is voluntary dissolution?
69. Who has to bear dissolution expenses, at the time of dissolution of a firm?
70. How would you deal with bad debts return, which is written off earlier?
71. Explain the meaning of Realisation Account.
72. Describe the methods of dissolution of a partnership firm.
73. Where will you record the payment of bills payable under the second method of
realisatlon account?
74. How would you deal with the provident fund balance shown in the balance sheet at the
time of dissolution?
75. Dissolution expense of the firm is Rs.20,000. Pass journal entries.
76. Bad debt of Rs.12,000 was written off, out of which Rs.10,000 is received. Pass
necessary journal entries.
77. There is no value of goodwill in the books of a firm. But at the time of dissolution
Rs.35,000 realised for it. Pass necessary journal entries.
78. Income tax liability of the partnership firm is determined for Rs.35,000. It is not
recorded in the books. Pass necessary journal entries.
79. At the time of liquidation, after making payment of all liabilities and partners loan,
surplus of asset is Rs.60,000. The profit loss sharing ratio of S. B and I are 4:3:3.
Pass necessary journal entries.
80. Realised Rs.25,000 for unrecorded machine, at the time of dissolution. Pass necessary
journal entries.
81. On due payment of Rs.35,000, unrecorded furniture of Rs.20,000 given to Mahesh.
The remaining amount is paid in cash.Pass necessary journal entries.
82. What you can say about the liability of partners ?
83. Why Realisation A/c is prepared?
84. Dissolution of partnership firm takes place as per Partnership Act…….
85. When partners paid dissolution expense from his own funds, where it would be
recorded?
86. What Is dissolution as per contract?
87. What is voluntary dissolution?
88. Write the order of the payment from the realisation of the firm’s assets.
89. How the loan from the wife of any partner given to the firm from the woman’s personal
wealth of possession is be repaid?
90. State how the balance of Depredation Fund shown in Balance Sheet is disposed off on
dissolution of partnership firm.
91. At the time of dissoluuon or rirm wnicn amount is disposed off first out of the amount
realised from sale of assets?
92. What do you mean by loan out of “Stridhan” — partner’s wife’s loan ?
93. What is share and share capital?
94. What is securities premium?
95. What Is meant by share forfeiture?
96. Under which type of preference shares undistributed dividend is accumulated?
97. What is meant by convertible preference shares?
98. When did Companies Act come into existence the first time?
99. Under which type of preference shares, shareholders get additional proportionate share
in net profit over and above their fixed rate of dividend?
100. What is meant by a company?
101. Which Companies Act is applicable currently?
102. What is the minimum number of members in a public limited company?
103. What is meant by authorized capital?
104. Which type of company is not seen in India?
105. What is meant by issued capital?
106. What is meant by subscribed capital?
107. What is meant by Reserve Capital?
108. What is meant by Capital Reserve?
109. When was SEBI established?
110. I.P.O. means what?
111. What is meant by F.P.O.?
112. Demat account is similar to which type of account?
113. What do you mean by sweat equity shares?
114. Under which head is the Share Forfeiture Account shown in Balance Sheet?
115. To which account surplus balance of Share Forfeiture Account is transferred?
116. Which type of company is Board of Control for Cricket in India (BCCI)?
117. What is preference shares?
118. What is bonus shares?
119. What is the other name of authorised capitals?
120. Which type of asset ‘share’ is?
121. What is issue of shares at discount?
122. What is issue of share at premium?
123. What is debenture?
124. Who is called debenture holder?
125. According to Companies Act, 2013, for what duration can a company issue
debentures?
126. Under which head ‘Securities premium reserve account’ appears in the balance sheet?
127. What is meant by Debenture discount?
128. Give the provision for writing off the amount of discount on debentures.
129. What is meant by ‘Issue of debentures for consideration other than cash’?
130. What is meant by ‘Loss on Issue of debentures’?
131. Currently under which form debentures are given to the debentureholders?
132. What do you mean by floating charge on debentures?
133. What do you mean by redeemable debentures?
134. Write the full form of F.C.D. and P. C.D.
135. How is debenture premium regarded for the company?
136. State the uses of debenture premium amount.
137. What is debenture discount?
138. Can debentures be forfeited?
139. What is debenture premium?
140. What is convertible debentures?
141. What is second mortgage debentures?
142. To which account, interest received on debenture redemption fund investment is to be
credited?
143. What is financial analysis?
144. Describe the types of financial analysis on the basis of parties.
145. Describe the types of financial analysis on the basis of time.
146. What Is horizontal analysis?
147. What is vertical analysis?
148. To which type of users of Financial Statements, is the short term analysis useful?
149. By which analysis can we know the earning capacity?
150. What does the liquidity analysis indicate?
151. Through which analysis can we get the information as to efficient use of assets?
152. State the qualitative aspects of a business unit.
153. What is meant by inventoty?
154. What is meant by inter—firm comparison?
155. What is meant by analysis?
156. What is meant by internal analysis?
157. What is meant by external analysis?
158. Which information is provided by financial statements?
159. What is the primary/first objective of preparing financial statement?
160. What is horizontal analysis?
161. What is vertical analysis?
162. What is ratio?
163. When is ratio useful?
164. In which forms ratios can be presented?
165. What is the cost of goods sold?
166. The gross profit ratio and the net profit ratios are revenue based ratios or expense
based ratios?
167. When the changes in stock is positive, whether it will be added to cost of goods sold
or deducted?
168. Give one illustration of financial expense?
169. Are financial expenses included to determine operating ratio?
170. What is indicated by liquidity ratios?
171. Will the current ratio increase or decrease when the current assets increase and the
current liabilities remain unchanged?
172. What is the shareholders’ funds?
173. What is indicated by interest coverage ratio?
174. Which is better out of high interest coverage ratio and low interest coverage ratio?
175. By which ratios is efficiency measured?
176. In order to arrive at trade receivables Is bad debts reserve deducted from debtors?
177. Where accounting treatments of taxation provision and tax payment are given in cash
flow statement?
178. What is cash flow?
179. What is investing activities?
180. What is financing activities?
181. Which transactions are always operating activities?
182. Which transactions are always investing activities?
183. Which transactions are always financing activities?
184. Give illustration of such transaction from where two activities are taking place.
185. Give illustration of such transaction which is cash transaction but not cash flow.
186. Where are the self-constructed asset recorded?
187. To which activity increase / decrease bank overdraft is recorded?
188. For which activity underwriting commission paid is considered?
189. As which activity income tax payment and income tax refund are considered? Why?
190. Give illustration of any two operating incomes.
191. Where is addition in general reserve recorded?
192. In which activity are the received dividend and interest recorded?
193. In which activity are the paid dividend and interest recorded?

All The Best

Subject : Account
(GSEB) ANSWERS
Standard : 12 (EM)

SECTION - A

Answer the following questions in one sentence (Each question carries 1 Marks) (Marks - 00)
1. Partnership is the relation between the persons who have agreed to share the profit of
a business carried on by all or any one of them acting for all.
2. The minimum limit of partners is 2 while the maximum limit of partners is to 50 to
constitute a partnership firm.
3. The partnership deed is a administrative constitution of partnership firm.
4. A partnership deed is an important and useful for solving disputes or any
misunderstanding among the partners. A written partnership deed is desirable and
advisable, so that the solution of any misunderstanding or dispute in future can be
obtained on the basis of the provisions of the partnership deed.
5. When there is no written agreement between the partners, then the administrative
problems are solved according to the provision of the Indian Partnership Act 1932.
6. There are two methods of maintaining partners capital accounts: (i) Fixed Capital
Account Method and (2) fluctuating Capital Account Method.
7. Profit of a partner is credited to partner’s current account under Fixed Capital Account
Method.
8. Partner’s Capital / Current A / c Dr ….......
To Partner’s Drawings A/ c ….........
(being balance of partner’s drawings A/c is transferred to capital/current A/c.)
9. Profit and Loss Appropriation Account is a part of the Profit and Loss Account.
10. The debit balance of current account of partners’ is shown on Assets-Debts side of
Balance Sheet.
11. Additional capital introduced by partner on permanent basis is credited to partner’s
capital account in the Fixed Capital Account Method.
12. Goodwill is the value of the reputation of a firm in respect to the profit earning over
and above the expected profit.
13. Issue of valuation of goodwill takes place with revaluation of assets and liabilities, at
the time of reconstruction of a firm, that means revaluation of goodwill.
14. Goodwill is an Intangible asset representing the prestige of the firm.
15. Goodwill is shown in the Balance Sheet on the Assets-Debts side under the head of
non-current assets as intangible assets.
16. Capitalised profit means capitalised value of average profit on the basis of the expected
rate of return.
17. The excess of average profit over the expected profit is called super profit’.
18. The average of profit of the past certain years means average profit.
19. Average workout after giving weightage to different year’s profit, it is called weighted
average profit.
20.
OR

Goodwill = Capitalized profit - Capital employed

21. A business unit having its own reputation in the market, having special kind of contacts
or having specific stable customers or having more profit earning capacity than other
business units have good goodwill value.
22. For monopolistic type of business, value of goodwill be more.
23. Profit earning capacity of the firm is the main factor for the value of goodwill.
24. Following are the main limitations/defects of the simple average profit method.
(i) This method does not consider the increasing or decreasing trend of profit.
(ii) Capital employed in the business is not considered.
(iii) No change in the overall situation of profit is expected in future.
25. Capital employed in the business is also known as net assets of business.
26. Rate of return on investments expected by investors of business is known as expected
rate of return.
27. Profit or loss of revaluation account is transferred to existing partners’ capitals /
currents accounts in their old profit-loss sharing ratio.
28. Assets-Liabilities are shown at market value in the balance sheet after revaluation.
29. Revaluation Account is also known ‘Profit and Loss Adjustment Account’.
30. Reconstruction of a partnership firm means changes made in partnership due to several
reasons.
31. A special account is opened in the books of a partnership firm to record the accounting
effects of the revaluation of assets and liabilities. This account is called the
‘Revaluation Account’.
32. When there is a change in profit and loss sharing ratio of existing partners, at that time
certain partners get less share as compared to what they used to get before. This
reduced share of profit of a partner is called ‘Sacrificing ratio’.
33. When there is a change in profit and loss sharing ratio of existing partners, at that time
certain partners get higher share as compared to what they used to get before. This
higher share of profit of a partner is called ‘Gaining ratio’.
34. For a partner, for sacrifice ratio or gain ratio, if answer comes to negative (-), it
suggest respectively gain and sacrifice for partner.
35. The book value of assets and liabilities recorded in the books of a partnership firm
when brought at present value, it is called revaluation of assets and liabilities of a
partnership firm.
36. Negative answer of sacrifice ratio suggests gain for partner and negative answer of
gain ratio suggests sacrifice for partner.
37. If there is decrease in the value of any debt, it should be recorded on credit side of
Revaluation Account.
38. Existing partnership firm needs additional capital or needs additional working capacity
or if any partner retires or dies or to take up a skilled employee into firm, etc. are the
purpose for admitting a new partner in a firm.
39. A new partner is entitled to have a share in the future assets and profits of the firm.
40. As new partner gets certain share in future profit of the firm from old partners who
sacrifice their profit sharing ratio in favour of him, for which old partners must be
compensated for such a loss. Therefore, a new partner is required to give his share in
goodwill.
41. A ratio which is surrendered or given up by the old partner in favour of a newly
admitted partner is called sacrificing ratio. Sacrificing ratio is calculated by the following
formula:
Sacrifice by old partner = Old share - New share
42. As per Accounting Standard 26, goodwill should be shown as an asset in the books
only when some consideration is paid for goodwill Internally generated goodwill should
not be shown in the books of accounts.
43. Revaluation account is prepared to record changes takes place in the values of assets
and liabilities at the time of admission of a new partner.
44. No accounting entry is required to pass in the books of accounts when the goodwill
premium is paid privately by the new partner to the old partner.
45. Profit and Loss Adjustment Account is the other name of Revaluation Account.
46. Revaluation of assets and reassessment of liabilities are to be recorded in the books in
the following two ways:
(1) When assets and liabilities are shown in the books of new firm at new values
(revalued) (Revaluation A/c).
(2) When assets and liabilities are shown in the books of new firm at old values
(Memorandum Revaluation A/c).
47. Due to admission of a new partner, earning of old partner decreases.
48. New partner can bring capital in the following ways:
(1) Fixed capital amount brought in by new partner.
(2) Brings amount proportionate to profit-loss ratio
(3) Brings amount as a part for net assets
(4) Brings other assets or debts
(5) Loan of new partner. in the firm is considered as capital.
49. In premium method, new partner brought goodwill amount in cash.
50. If market value of investments decreases, then loss amount is subtracted from the
investment fluctuation reserve and. remaining amount of reserve is to be distributed
among old partners in their old profit-loss ratio.
If decrease in the market value is more than the reserve amount then difference
amount will be recorded on debit side of revaluation account as loss.
51. Following adjustments are required to be made at the time of admission of a new
partner.
(1) Calculation of new profit and loss ratio and old partners’ sacrificing ratio.
(2) Accounting effects relating to goodwill.
(3) Adjustments of change in capital.
(4) Accounting effects of profit/loss arising from revaluation of assets and liabilities.
(5) Accounting effect of accumulated profit, losses and reserves.
52. On the retiring or death of a partner the continuing partners receive profit and loss
share of the retiring or deceased partner. To compensate this gain in profit, continuing
partners give the share in goodwill to the retiring or deceased partner.
53. Circumstances of retirement of a partner cart be classified two categories; (1)
According to the Indian Partnership Act and (2) Voluntary retirement due to personal
reasons of partner.
54. Balances of reserves and undistributed profit are credited to all partners capital
accounts in their old profit-loss sharing ratio.
55. Undistributed loss and balances of defferred revenue expenditure are debited to all
partners’ capital accounts in their old profit-loss sharing ratio.
56. For the purpose of revaluation of assets and liabilities of the firm, the profit and loss,
adjustment account is opened at the time of the retirement or death of a partner.
In order that no injustice is done either to the continuing partners or to the retiring
partner the profit and loss adjustment account is opened.
57. Before maturity date of policy, when policy is given (surrender) to the insurance
company for encashment of policy amount (to receive cash) and cheque is received,
amount thus received is known as surrender value of policy.
58. When total amount of goodwill of the firm is recorded in the books and it is to be
written off after retirement, then it is not necessary to find out gain ratio to record
goodwill amount.
59. To avoid undue advantage or loss to any partner, assets and liabilities are revalued at
the time of retirement or death of a partner and net increase or decrease is transferred
to an account known as revaluation account.
60. An active partner’s retirement is required to give public notice regarding his retirement
because otherwise he is responsible for the liabilities towards third parties arising from
the activities after his retirement.
61. From the balance sheet date to the date of retirement is generally the period of right
on profit for the retiring partner.
62. When firm decides to show the old values of assets and liabilities in the new balance
sheet (after revaluation) then it is known as memorandum revaluation account.
63. At the time of retirement of a partner, accumulated profit amount will be distributed
among all partners and in their old profit-loss ratio.
64. In gain ratio, share of goodwill of a retiring partner, will be debited to continuing
partners- capital account.
65. In the following circumstances a partner can retire from the firm.
(A) By consent of all partners
(B) As per condition of the contract between the partners
(C) When any partner declared insolvent
(D) Due to death /age/personal reasons
(E) Voluntary retirement by giving notice
66. In case of accidental death of a partner, firm pays compensation amount. Due to this
sometimes working capital may disturbed. To avoid this situation joint life insurance
policy is taken.
67. When partnership firm loses its legal existence forever is known as dissolution of a
partnership firm In brief, the process to close down the firm and its business is called
dissolution of a partnership firm.
68. When all partners agree to dissolve the firm, partnership firm can be dissolved at any
point of lime. It is called voluntary dissolution.
69. Generally the dissolution expenses has to be borne by the firm, at the time of
dissolution of a firm.
70. At the time of dissolution of a partnership firm, bad debts recovery (return), which is
written off earlier, is to be credited to Realisation A/c.
71. On dissolution of the partnership firm, the account which is prepared to incorporate
accounting treatments, to dispose of assets and liabilities of the firm, is known as
Realisation Account.
72. There are two methods of dissolution of partnership firm:
(1) Simple dissolution and (2) Dissolution under court orders.
73. Under the second method of realisation account, the payment of bills payable is
credited to Cash / Bank A/c, while Its amount of difference is recorded to realisation
account.
74. Provident fund a liability. Therefore, the balance of the fund 15 credited to Realisation
A / c and Provider fund account is closed.
Provident fund A/c Dr………….
To Realisation A/c ……….
75. Std = 12 A/c, Part – 1, ch – 7, Illustration 1
76. Std = 12 A/c, Part – 1, ch – 7, Illustration 1
77. Std = 12 A/c, Part – 1, ch – 7, Illustration 1
78. Std = 12 A/c, Part – 1, ch – 7, Illustration 1
79. Std = 12 A/c, Part – 1, ch – 7, Illustration 1
80. Std = 12 A/c, Part – 1, ch – 7, Illustration 1
81. Std = 12 A/c, Part – 1, ch – 7, Illustration 1
82. Partners liability is unlimited in the partnership firm.
83. To pass accounting effects for realised values of assets and liabilities of the business
at the time of dissolution of firm, realisation A/c is prepared.
84. Dissolution of partnership firm take place per Partnership Act 1932.
85. When partner paid dissolution expense from his own funds, it would be recorded on
credit side of partners capital account.
86. Dissolution of partnership can take place as per predetermined terms of the contract.
87. When partnership firm is dissolved at any point of time, with the consent of all
partners, it is known as voluntary dissolution.
88. Following is the order of the payment from the realisation of the firm’s assets.
(1) First of all dissolution expense are paid.
(2) Next liabilities towards third party’s are paid.
(3) Next loan of partner are paid. (4) Finally, capital and balance of current account of
partners are redeemed. (5) Even if any surplus remains after the payment shown in
(4), surplus will be distributed among all partners in their profit loss sharing ratio.
89. Just like the payment to the third party in normal cases, the loan from the wife of any
partner given to the firm from the woman’s personal wealth of possession is repayable.
90. Disposal of Depreciation Fund Account is done by debiting the Depreciation Fund
Account and crediting Realisation Account.
91. At the time of dissolution of firm, first of all, dissolution expenses are paid off.
92. When any partner’s wife gives a loan to the firm out of her personal funds or funds
received at the time of her marriage, such funds are called her “Stridhan” and the loan
is called given out of “Stridhan” i.e. loan from partner’s wife.
93. Share : The total capital of the company is divided into transferable small
denominations. Each such unit of denomination is known as Share.
Share capital : Capital of company is called Share capital.
94. When company issues shares at a price higher than the face value, then the shares
are said to be issued at premium. As per companies act, such amount of premium Is
carried to ‘Securities Premium’.
95. Due to any reason, if any shareholder falls to pay the amount due on allotment or on
any call within the informed specified period by company, then the provision of Articles
of Association, company can forfeit his share. This process is called ‘Forfeiture of
Shares’.
96. Undistributed dividend is accumulated in Cumulative Preference Shares.
97. The preference shares which may be converted into equity shares after a certain fixed
period, are called convertible preference shares.
98. First time, the Companies Act came into existence in the year 1956.
99. Under participating preference shares, shareholders get additional proportionate share
in net prof it over and above their fixed rate of dividend.
100. Company is an invisible, artificial, juridical person having a separate legal existence
and is formed and can lose its existence only by the act of law.
101. Currently, Companies Act, 2013 is applicable in India.
102. Minimum number of members in a public limited company is 7.
103. The maximum amount of capital which the company can raise in its life-time is known
as Authorized or Nominal Capital of the company.
104. Companies by Unlimited Liability are not seen in India, though they are permitted by
the Companies Act.
105. The capital which the company offers to the public for subscription out of Authorized
Capital as per its current requirement, is called Issued Capital.
106. Out of Issued Capital, the capital for which the company receives subscription or
applications from the public for purchase of shares, is called Subscribed Capital of the
company.
107. When the management of the company feels that the called up capital is sufficient
enough for the business requirements of the company and it will not need any
additional capital in future, it may by passing a Special Resolution in a General
Meeting decide to keep the Uncalled Capital as a Reserve in the company to be used
only in case of winding up of the company, such capital is known as Reserve Capital.
108. Capital Reserves are those reserves which are created out of capital profits and not
out of normal earnings. These reserves cannot be utilized for the distribution of
dividends. e.g. Profit on revaluation of fixed assets.
109. SEBI was established in the year 1991.
110. I.P.O. : Initial Public Offering means first time offering of shares / stock of a private
company for purchase to the public.
111. _Follow on Public Offer means increasing the capital fund issued through I.P.O.
process_
112. Demat account is similar to the savings or current account with the bank.
113. Sweat equity shares are the shares issued by the company as per provisions of
Section 54 of Companies Act, 2013, to its employees or directors at a discount or for
consideration other than cash for the know-how or intellectual property rights provided
by them.
114. Share Forfeiture Account is shown in Balance Sheet under the head “Share Capital” by
adding it to the Subscribed Capital.
115. Surplus balance of Share Forfeiture Account is transferred to Capital Reserve Account.
116. BCCI is a company limited by guarantee.
117. Preference share is one which gives preferential right to its holder for receiving the
dividend at a specified rate before any dividend paid to equity shareholder and also in
case of liquidation, preference shareholder has the preferential right for repayment of
capital before the equity shareholder.
118. Shares issued without any consideration by a company to its present shareholders out
of accumulated profit are known as bonus shares.
119. Authorised capital is also known as Nominal or Registered Capital.
120. Share is an asset which can be divided into transferrable small denominations.
121. If the total amount payable by share subscribers to a company is less than the total
face value of shares, the shares are said to be issued at discount.
122. If the total amount payable by share subscribers to company is more than the total
face value of shares, the shares are said to be issued at premium.
123. Sometimes company borrows long- term funds from the public. Against the money so
borrowed, the company issues a document acknowledging its debt to the investor.
Such a document is known as a ‘Debenture’.
124. Those who get the debentures by giving money to the company or have purchased
from the Market are known as holder of the debenture or debenture holder.
125. As per Companies Act, 2013, no company is allowed to issue debentures having a
maturity date of more than 10 years from the date of issue. However, a company
engaged in infrastructure projects can issue debentures for more than 10 years but not
exceeding 30 years.
126. Securities premium reserve account’ is shown on the Equity and Liabilities side of the
Balance Sheet under the head ‘Reserve and Surplus’.
127. When debentures are issued at a price less than the face value of the debentures, the
reduced amount of the face value is known as ‘Debenture discount’.
128. Discount on debentures is considered as a capital loss. It should be written off as early
as possible but within the lifetime of the debentures. Usually this amount is written off
against securities premium reserve account or statement of profit or loss.
129. When the company issue of debentures to vendor against the purchase of assets or
purchase of any business, then it is called ‘Issue of debentures for consideration other
than cash’.
130. Premium payable at the time of redemption of debentures is a loss for the company.
This amount of payable premium Is called ‘Loss on issue of debentures’.
131. Under the current laws, debenture certificate is issued to the debenture holder in
dematerialised form instead of physically issuing the same i.e. amount of debenture
purchase is directly credited to the demat account of the debenture holder.
132. When company issues debentures by creating a charge on assets in general and not
on a particular asset, then it is called a floating charge.
133. Redeemable debentures are those the amount over which is returnable after a certain
fixed period either in lump-sum or in instalments.
134. F.C.D. - Fully Convertible Debentures; P.C.D. - Partly Convertible Debentures.
135. Debenture premium is regarded as a capital profit for the company.
136. Debenture premium amount. can be used for writing off capital expenses or loss like -
discount on issue of debentures, premium on redemption of debentures, preliminary
expense, goodwill, patent etc.
137. When the company issues debentures at a price which is less than their face value or
nominal value, the debentures are said to have been issued at discount.
138. Debentures can not be forfeited.
139. When the debentures issued at more than their face value, they are said to have been
issued at premium.
140. Convertible debentures are those debentures which are convertible into equity shares
or other securities at a stated rate of exchange either at the option of debenture
holders’ or at the option of the company after a specified period.
141. Debentures having second claim (after first mortgage debentures) on the assets
charged are known as second mortgage debentures.
142. Interest received on debenture redemption fund investment is to be credited to
debenture redemption fund account.
143. Interpretation of information and result which are given in financial statements means
financial analysis.
144. There are two types of financial analysis on the basis of parties (stakeholders) : (1)
External analysis and (2) Internal analysis.
145. There are two types of financial analysis on the basis of time (duration): (1) Long-term
analysis and (2) Short-term analysis.
146. When the comparison of financial statements of different years is done, then this type
of analysis is called horizontal analysis.
147. The comparative analysis for one year among different units of different financial
statements can be called as vertical analysis.
148. Short term financial analysis is generally useful to the short term lenders and creditors
of goods.
149. The earning capacity of the business entity can be judged through profitability analysis.
150. Liquidity analysis indicates the short term solvency of the business entity.
151. The information as to efficient use of assets can be judged through analysis of the
efficiency of the business entity.
152. The qualitative aspects of the business entity may be classified as contribution of
employees towards development of business, loyalty, honesty, expertise, etc.
153. Inventory means stock of goods.
154. When a business unit compares its own Financial Statements of the previous year with
the Financial Statements of different units or departments engaged in the same kind of
business of the current year, it is known as inter—firm comparison
155. Interpretation of the information or result given in Financial Statements is known as
analysis.
156. Internal Analysis of Financial Statements refers to the detailed analysis of the financial
information by the management so as to make the policy decisions with utmost care
and accuracy.
157. External Analysis of published Financial Statements of the company is done by the
external parties like potential investors, financial institutions, government agencies,
researchers, credit rating agencies etc. aiming at investment and other decisions.
158. Financial statements represent results of financial transactions concerning accounting
period.
159. To ascertain the profit or loss of the business entity is the primary objective of
preparing financial statements.
160. The comparison of financial statements of different years is known as horizontal
analysis.
161. The comparative analysis for one year among different units of different financial
statements can be called as vertical analysis.
162. The relationship between two accounting figures, expressed mathematically, is known
as financial ratio.
163. When ratios are compared with any standards, then they are useful.
164. The presentation of ratios can be done (presented) In terms of proportion, in terms of
percentage, in terms of times, in terms of fraction and in terms of days I weeks /
months.
165. When wages and factory expenses are added in cost of goods consumed, then the
arrived cost is called cost of goods sold. In short, Cost of goods sold = Cost of goods
consumed + Wages + Factory expenses
166. The gross profit ratio and the net profit ratios are revenue based ratios.
167. When the changes in stock Is positive, then it will be added to cost of goods sold.
168. Expense of Interest is the financial expense.
169. Financial expenses are not included to determine operating ratio.
170. Liquidity ratios indicates the capacity of the business unit to pay short-term liabilities.
171. The current ratio will increase when the current assets increase and the current
liabilities remain unchanged.
172. Shareholders’ funds = Equity share capital + Preference share capital + Reserves and
surplus — Debit balance of Profit and Loss account (if given).
173. Interest coverage ratio indicates the interest payment capacity of the business.
174. High interest coverage ratio is better as higher the ratio, higher is the interest payment
capacity of the business unit.
175. Efficiency is measured by the Efficiency (Activity) ratios.
176. During determination of trade receivables, bad debts reserve should not be deducted
from the debtors.
177. Taxation provision will be added to operating activities statements while tax payment
will be deducted from operating activities.
178. Cash flow means receipt-payment of cash and cash equivalent.
179. Investing activities means purchase-sale of long-term investment and other
investments. Cash and cash equivalent are not included.
180. Financing activities are such activities due to which size and / or composition of
owners’ capital (including preference share capital) and borrowed capital of business
get changed.
181. Salary, Wages, Bonus to workers, Employees welfare expenses, etc. transactions are
always operating activities.
182. Purchase of fixed assets like Purchase of furniture, Purchase of patent, etc.
transactions are always investing activities.
183. Dividend paid on share capital, Interest paid on debt, etc. transactions are always
financing activities.
184. Two activities from one transaction: e. Payment towards principal is considered as
investing activity and Payment of interest is considered a financing activity in payment
of installment of hire purchase.
185. Cash deposited with bank or cash withdrawn from bank is illustration of cash
transaction but not cash flow.
186. Transaction of self-constructed asset is recorded in investing activity as cash outflow
187. Increase I Decrease of bank overdraft recorded to financing activity.
188. Payment of underwriting commission considered as financing activity.
189. Income tax payment and Income t refund are considered as operating activities
Operating activities are activities that emerge from profit and loss statement, therefore
both the activities are included in operating activity.
190. Following are the two illustrations of operating incomes:
(1) Incomes from sale of goods / services and (2) Collection from debtors and bills
receivables
191. Addition in general reserve is record under the heading of ‘Non-cash expenses and
provisions’ in the cash flow statement of operating activities.
192. Received dividend and interest are recorded in investing activity.
193. Paid divided and interest are recorded in financing activity
Subject : Account (GSEB) BOARD
Standard : 12 (EM) (Section C)

SECTION - A

Answer the following question in brief (Each question carries 3 Marks) (Marks - 00)
1. Vismay, Abhijit and Kunal are partners sharing profit-loss in the proportion of 3: 2 : 4.
Manager is to be paid 10 % commission on profit but after the deduction of his such
share. The share of profit of Abhijit is 30,000. Determine the commission of manager.
2. Ram, Rahim and Ishu are partners of a partnership firm. Their capital as on 1 – 4 -
‘23 was Rs.60,000,Rs. 40,000 and Rs.50,000 repectively. After the distribution of
the profit of the year, it was realised that charging of 6 % interest on partners’ capital
accounts was missed out. Write an entry for the rectification of error.
3. Lata, Geeta and Pravina are partners of a partnership firm. After distribution of the
profit of the year it was realised that charging of interest on partner’s drawings account
respectively Rs.2700, Rs.1,200 and ? 1,500 was missed out. Write an entry for the
rectification of error.
4. The closing capital of Raghuvir is Rs.80,000. In which Rs. 12,500 drawings of current
year and profit of Rs. 17,800 are recorded. What will be the interest at 6 % p.a. on
the opening capital?
5. Mehta receives his share four times of Pandya. While Bajpai receives half of share of
Mehta. Profit of firm at the end of the year is Rs.87,500. Determine the share in profit
of each partner.
6. Amar and Akbar are the partners of a firm distributing profits-losses of the firm in equal
proportion. They decided to change their profit-loss sharing proportion to 3 : 2 for
future. Under this circumstances, calculate what sacrifice has been made by which
partner.
7. Komal, Krupa and Karishma are the partners of a partnership firm. They distribute
profit-loss in the ratio of 3 : 2: 1. All the partners have decided to change the profit-
loss sharing ratio to 5 : 3 : 2 for future. From this information, calculate the sacrifice
ratio.
8. Raju, Hasu and Sanju are the partners of a partnership firm. Their profit-loss sharing
ratio is 5 : 4: 3. All the partners have decided to change their profit-loss sharing ratio
to 2 : 2: 1. From this Information find out gaining ratio.
9. Sagar, Santa and Palak are the partners in a firm sharing profits and losses in the
ratio of 3:3:2. All partners have decided to change their profit and loss ratio to 1:1:1.
Calculate gain and sacrifice by the partners.

BOARD 1/10
10. Bhavesh, Vipul and Hiral are the partners in a firm sharing profit and loss in the ratio
of 2:2:1. They decided to share profits and losses in the ratio of 3:2:1 in future. From
this information, calculate the sacrificing ratio.
11. Write journal for the following assets-liabilities revaluation:
Assets and Book Revaluation
Liabilities value(Rs.) Value(Rs.)
Machinery
1,00,000 80,000
Land
3,00,000 5,00,000
Creditors
1,00,000 95,000
Outstanding
- 3,000
expenses
- 2,000
Income receivables

12. Difference between sacrifice ratio and gain ratio.

13. Explain the normal procedure of partnership firm dissolution.
14. Explain in brief, legal provisions of accounting settlement for partnership firm
dissolution.
15. Write short note: Realisation Account
16. Explain methods of dissolution without the interference of court.
17. Total assets are Rs. 1,50,000 of firm A and B where cash of Rs.10,000 is included.
Net assets of the firm are Rs.1,00,000. The ratio of capital and reserve is 4: 1. The
capital of A is more than that of B by Rs.20,000. Loss of realisation account is Rs.
20,000. Firm is dissolved. Prepare opening balance sheet and ascertain opening
capital of A and B.
18. Which accounts are prepared to close the books at the time of dissolution of a
partnership firm? Describe It.
19. Total assets of the firm at the time of dissolution is Rs.2,00,000. Out of which 40 %
are current assets (including cash Rs.10,000). 120 % realised for fixed assets. While
80 % are realised of current asset. Pass journal entries.
20. Explain the procedure for issue of debentures.
21. Explain the types of debentures.
22. Distinguish between share and debenture.

All The Best

BOARD 2/10
Subject : Account
(GSEB) ANSWERS
Standard : 12 (EM)

SECTION - A

Answer the following question in brief (Each question carries 3 Marks) (Marks - 00)
1. Divisible profit of the firm Rs. 1,35,000 (45,000 + 30,000 + 60,000), Commission of
manager Rs. 13,500
2. Rectification of error
Rahim's capital/current A/c...Dr 600
To Ram's capital/current A/c 600
3. Rectification of error
Lata’s capital/current A/c. ..Dr 900
To Gita’s capital/current A/c 600
To Pravina’s capital/current A/c 300

4. Opening capital Rs. 74,700, Interest on capital Rs. 4482

5. New profit and loss sharing ratio 4:1:2,Divisible profit - Mehta Rs. 50,000; Pandya Rs.
12,500 and Bajpai Rs. 25,000
6. Sacrifice of Akbar , Gain of Amar
7. Sacrifice of Krupa ; Gain of Karishma
8. Gain of Hasu , Sacrifice of Raju , Sacrifice of Sanju
9. Sacrifice of Sagar: ;
Sacrifice of Sarita: ;
Gain to Palak:
10. Sacrifice of vipul ; Sacrifice of Hiral ; Gain of Bhavesh
11.

BOARD 3/10
12. Point of
Sacrifice ratio Gain ratio
difference
When there Is a change in
When there is a change in
the profit sharing ratio of
the profit sharing ratio of
existing partners in
existing partners in
partnership firm, there is
partnership firm there is
Meaning reduction in share of profit of
increase in share of profit of
certain partner. This
certain partner. This higher
reduction share of profit of
share of profit of partners is
partners is called ‘Sacrifice
called ‘Gain Ratio.’
Ratio’,
When Is it At the time of admission of a At the time of the retirement
computed new partner, sacrifice ratio isdeath of a partner gaining
(found)? computed. ratio is found.
Sacrifice by partner Old Gain received by partner =
Formula
share — New share New share — Old share
Gaining ratio Is found for the
Sacrifice ratio is found to
share of goodwill to the
distribute the goodwill which
retiring partner by the
is brought in a new partner
Why it is existing partners in their gain
for his share and to give by
found? ratio and to give adjustment
adjustments of goodwill at
of goodwill due to the
the time of the reconstruction
reconstruction of a
of a partnership firm.
partnership firm
13. Ans. When a partnership firm is dissolved, the payment is to be made from the sale of
assets of the firm in the following order:
(1) First of all, dissolution expense is to be paid.
(2) At the second stage, the liabilities towards the third parties are to be paid.
(3) At the third stage, the loan of the partner is to be redeemed.
(4) Finally the payments towards partners’ capital accounts and current accounts are
to be undertaken.
(5) In case of any surplus, it will be distributed among the partners in their profit-loss
sharing ratio.

BOARD 4/10
14. Following are the legal provisions with regards to dissolution of firm:
1. For accumulated loss : Occurrence of loss at the time of the dissolution means
capital deficit.
(1) First this loss (deficit) be written off against the profit of the firm.
(2) In case of insufficient profit, this loss is to be written off against the capital of the
partners.
(3) In case of insufficient capital, this loss will be borne by all partners In their profit
and loss ratio and the loss will be paid by the partners to the firm from their personal
assets.
2. The liabilities of the firm and the personal liabilities of the partners:
(1) Due to unlimited liabilities of the partners towards the firm, any surplus realisation
from the personal assets over payment to personal liabilities can be utilized for the
remaining liabilities of the firm, if any.
(2) And in the same way, any surplus realisation from the assets of the firm over
payment of liabilities to the extent of his share of the firm can be utilized for the
payment of personal liabilities.
3. Loan to firm by partners:
(1) After paying the external liabilities of the firm, loan of partners will be paid.
(2) If the available surplus is not sufficient to pay loan of partners moreover if the
partners are not in a position to make up deficit, then the loan of partners will be paid
proportionately.
4. Loan from the partner’s wife:
(1) If loan from the wife of any partner is given to the firm from the woman’s personal
wealth of possession, then it will be paid like payment to a third party.
(2 ) But if wife of a partner has given a loan from the estate of her husband, then it
will be treated as loan of that partner.
5. Unlimited liability of the partners : The liability of the partners is unlimited, thus if
any partner or partners are declared insolvent in such an event solvent partners are
liable to pay the liabilities of the firm from their personal assets.
6. Distribution of the realisation of the firm’s assets : The payment from the realisation
of the assets will be made in the following order:
(1) First of all, dissolution expense is to be paid.
(2) At the second stage, the liabilities towards the third parties are to be paid.
(3) At the third stage, the loan of the partner is to be redeemed.
(4) Finally the payments towards partners’ capital accounts and current accounts are
to be undertaken.
(5) In case of any surplus, it will be distributed among the partners in their profit- loss
sharing ratio.

BOARD 5/10
15. On dissolution of the partnership firm, the account which is prepared to incorporate
accounting treatments for disposal of assets and liabilities of the firm is known as
Realisation Account.
Realisation Account is also known as ‘Accomplishment Account.’
After closing all assets (except cash and bank) accounts they are transferred to debit
side of Realisation Account at their book value.
After closing all liabilities accounts they are transferred to credit side of Realisation
Account at their book value.
The realisation of all the assets are credited to the Realisation Account.
All the payments of the liabilities are debited to the Realisation Account.
The dissolution expense is debited to the Realisation Account.
The balancing figure in Realisation Account will be either profit or loss of the
Realisation Account as the case may be. This profit or loss is to be transferred to the
partners’ capital accounts in their profit-loss sharing ratio.
16. Through any one of the following methods partnership firm can be dissolved without
the interference of court (Normal dissolution)
1. Unanimously : At any point of time the partnership can be dissolved with unanimous
consent of all the, partners. This is a voluntary dissolution.
2. Under agreement: The dissolution of a firm can be undertaken on the basis of the
pre-decided conditions of the agreement.
3. Under Act : The compulsory dissolution of a firm take place by Act under the
following circumstances:
(1) When all the partners of a firm or all partners except one partner are declared
insolvent.
(2) In case of death of a partner or a partner becomes insane / loses mental balance.
(3) When the business of a firm becomes illegal or the running of the business is
legally not allowed.
4. on occurrence of specific event : A firm is dissolved under the following occurrence:
(1) As and when any firm is formed for a specific period of time and on the completion
of the specific time period.
(2) As and when any firm is formed for a specific object and on the completion of the
specific object.
5. By Notice : In case of a voluntary dissolution, any partner would inform through a
notice about his intention to the other partners to dissolve the partnership firm. Thus,
on the date mentioned in the notice, the partnership comes to an end and is therefore
dissolved.
17. A’s capital Rs.50,000; B’s capital Rs.30,000

BOARD 6/10
18. At the time of dissolution of a firm, all assets of firm are sold and liabilities are paid
from the realised income. Then if surplus remains, capital of partners is redeemed and
books of accounts are closed.
The following mentioned accounts are to be opened to close books of accounts when
partnership firm is dissolved:
1. Realisation Account, 2. Partner’s Loan Account, 3. Partners’ Capital / Current
Accounts and 4. Cash/Bank Account.
1. Realisation Account: When a partnership firm gets dissolved, books of accounts, the
accounts of all assets (except cash and bank) and liabilities are to be closed and
transferred to the Realisation Account at their book value. Only then the realisation of
all the assets are credited to the realisation account and all payments of the liabilities
are debited to the realisation account. The dissolution expense is debited to the
realisation account. The profit or loss of realisation account is to be credited or debited
to the partners’ capital accounts.
2. Partner’s Loan Account : After the third party liability have been paid, the surplus
should be applied in repayment of partner’s loan.
3. Partners’ Capital / Current Accounts : All the accumulated reserves and balance of
profit and loss account are to be transferred to the partners’ capital accounts in their
profit and loss sharing ratio. In the same way, the profit or loss of the realisation
account is to be transferred to the partners’ capital accounts and then deficit / excess
Is adjusted wIth Cash / Bank account and capital accounts are closed.
4. Cash / Bank Account : Effect of sale of assets and payment of liabilities should be
given to Cash / Bank Account. Moreover, repayment of partner’s loan is also recorded
in this account. At last, partners bring necessary cash or withdraw cash and finally the
Cash / Bank account will be closed.
19. (1) Realisation A/c 1,90,000
To fixed assets A/c 1,20,000
To Current assets A/c 70,000
(2) Cash/Bank A/c 2,00,000
To Realisation A/c 2,00,000

BOARD 7/10
20. The formalities for the issue of debentures and related provisions of the Companies Act
are as under:
1. A Resolution in Board of Directors meeting : When it is decided to issue debentures,
a resolution is passed in the meeting of Board of Directors of the company. The
resolution should state the amount of the debentures, the number of debentures, rate
of interest thereon and other terms related to the issue of the debentures.
2. Prospectus: For the issue of the debentures. a company should issue a prospectus
inviting the public to subscribe for debentures giving full information as required.
3. Complying of Companies Act and Provisions of SEBI: Companies Act and Provisions
of SEBI should be considered at the time of issue of debenture.
4. Application form: Company has to prepare a separate application form for the public
to subscribe for debentures.
5. Bank account in a scheduled bank : When debentures are issued to the public, the
money received on the application has to be kept credited in a scheduled bank in a
separate account. The company secretary prepares a list of applications received and
the statement of allotment after the closure of public subscription.
6. Minimum subscription : As per rule of Companies Act, 2013, minimum subscription
should be 90 % of the issued amount.
7. Amount of debenture : Full amount of debentures or In instalments may be called by
the company on application.
8. Methods of issuing debentures : Debentures may be issued either at par, at a
premium or at a discount.

BOARD 8/10
21. Types of Debentures : Types of debentures is made as under:
1. Based on Security:
(i) Secured or Mortgage Debentures : When this type of debentures are issued by the
company, some or all of the assets of the company are given as security. In other
words, a charge is created on the assets of the company. Such a charge could be of
two types : Fixed charge or Floating charge. The company cannot dispose off such
charged or mortgaged assets without the consent of the debenture holders. The
debentures have first charge on the secured assets, are known as First Mortgage
Debentures. While, the debentures have second charge on the secured assets, are
known as Second Mortgage Debentures.
(ii) Simple or Unsecured or Naked Debentures : When the company issues the
debentures without giving any security or creating any charge on the assets of the
company, then such debentures are known as Simple or Unsecured or Naked
Debentures. On such debentures, the company only gives a promise to pay the interest
on the due dates and the repayment of the principal amount on the date of maturity.
Such debentures are risky for the investors.
2. Based on Conditions of Redemption:
(i) Redeemable Debentures : The debentures which are issued with a condition that
the amount of debentures can be repaid after a certain period are known as
Redeemable Debentures. The period of redemption is stated by the company in the
debenture or Trust deed.
(ii) Irredeemable Debentures : When nothing is mentioned about the specific time at
which the amount of debenture will be repaid are known as Irredeemable Debentures.
Generally, money borrowed against such debentures is repaid at the time of liquidation
of the company.
3. Based on Negotiability and Record view point:
(i) Registered Debentures : For the transfer of such debentures, it is essential to get
the transfer registered with the company and the company makes an entry of the
transfer in register maintained by it. The register contains the name, address and other
particulars related to debenture holders.
(ii) Bearer Debentures : There Is no need to register the transfer of such debentures
with the company. Such debentures are like currency notes. The interest coupons are
attached with such debentures for periodic interest payments.
4. Based on Convertibility:
(i ) Convertible Debentures : The debentures which can be converted into equity
shares or is automatically converted into shares for full or part of the amount of the
debentures after a specified period are known as Convertible Debentures.
(ii) Non-convertible Debentures: The debentures which cannot be converted into equity
shares or preference shares are known as Non- convertible Debentures.

BOARD 9/10
22. Share Debenture
Share is a ownership capital of the Debenture is a borrowed capital of the
1.
company. company.
Issue of shares will be compulsory by Issue of debentures will not be
2.
the company. compulsory by the company.
Shareholders receive part of the profit Debenture holders receive interest as per
3.
(Dividend) of the company. the terms.
There is no surety of the return in the Surety of interest is there as per the
4. form of dividend on share, irrespective of terms and conditions of the issue of
profit or loss. debentures, irrespective of profit or loss.
A shareholder is an owner of the A debenture holder is a creditor of the
5.
company. company.
As per Companies Act, 2013, shares
6. Debentures can be issued at a discount.
cannot be issued at a discount.
No mortgage or charge is created in Generally a charge is credited on the
7. favour of shareholders when shares are assets of the company when debentures
issued. are issued.
8. Rate of dividend on shares is not fixed. Rate of interest on debentures is fixed.
Share capital is considered as risky Debenture is considered as secured
9.
securities. securities.
Generally, share capital are repayable
Amount of debentures can be repaid after
10. only at the time of liquidation of the
a certain decided period.
company.
Shares cannot be converted into Debentures which can be converted into
11.
debentures. shares can be issued.
The shareholders have a right to take Debenture holders do not have voting
12. part in the administration of the company rights or the right to take part in the
and have voting right. administration of the company.
Shares are Issued by the company for Debentures are issued by the company
13.
getting share capital. for getting borrowed long-term funds.

BOARD 10/10
Subject : Account (GSEB) BOARD
Standard : 12 (EM) (Section D)

SECTION - A

Answer the following question in Details(Each question carries 4 Marks) (Marks - 00)
1. Give the meaning of goodwill and explain the factors affecting to its valuation.
2. From the following Information of bhavesh Vipul’s firm, compute the value of goodwill
on the basis of four years purchase five years average profit. Information of five years
profit is as under:
Year 2017-18 2018-19 2019-20 2020-22 2022-23
Profit
1,00,000 1,10,000 1,80,000 2,00,000 1,50,000
(Rs)
3. From the following information compute the value of goodwill of Mina and Bhadresh’s
firm at three years’ purchase of weighted average profit on the basis of last five years.
Year 2018-19 2019-20 2020-21 2021-22 2022-23
Profit 80,000 1,20,000 1,40,000 1,60,000 1,70,000
4. Determine the value of goodwill of Prabha and Prabhu’s firm on the basis of
Capitalised Super Profit Method. (1 ) Capital employed: 9,00,000 (2) Expected rate
of return: 12 % (3 ) Last five years profit:
Year 2017-18 2018-19 2019-20 2020-21 2021-22
Profit(Rs) 1,00,000 1,40,000 1,30,000 1,50,000 1,80,000
5. Pratibha and Pushpa are the partners of a firm. They want to change the profit and
loss sharing ratio from 3:2 to 1:1. They decided to determine the valuation of goodwill.
On the basis of the firm’s profit and other information, determine the valuation of
goodwill on the basis of three years purchase of super profit.
Assets Rs.12,00,000 ; Liabilities Rs.4,00,000 ;
Expected rate of return 10 %
Actual profit
Year 2020-21 2021-22 2022-23
Profit (Rs.) 1,30,000 1,10,000 1,20,000
6. Capital of Meena and Manju’s firm is Rs. 4,00,000 and expected rate of return is 10
%. Last three years’ profits are Rs. 1,20,000; Rs. 1,10,000 and Rs. 1,00,000
respectively. Compute the value of goodwill two times of super profit on the basis of
Weighted Average Method.
7. From the following information prepare comparative profit-loss statement:

8. The abridged profit and loss statement ending on 31-3 - ‘16 and 31-3 - ‘17 of Srushti
Company Limited are given as follows. Prepare comparative statement of profit and
loss.

9. Prepare comparative profit and loss statements from the given details.

10. Profit and loss statement for the year ending on 31 -3 —‘16 and 31-3 -‘17 of Shankar
Limited are given as follows. Prepare comparative statement of profit and loss.
11. Find out balancing figures of comparative statement of Kalpana Company Limited.

12. Prepare comparative profit-loss statements from the following profit-loss statements of
Phillips Limited for the year ending on 31 - 3 - ‘17 and 31 - 3 - ‘18:
Summarised Profit-Loss Statements for the year ending on 31-3-’17 and 31-3-’18

Income tax rate is 30 %.

13. From the following information calculate Current ratio and Liquid ratio:
Particulars (Rs.) Particulars (Rs.)
Stock 3,00,000 Bills receivables 75,000
Debtors 2,50,000 Bad debts reserve 20,000
Cash and cash Expenses paid in
1,20,000 60,000
equivalent advance
Furniture 1,60,000 Creditors 2,00,000
Bills payable 60,000 Outstanding expenses 50,000
Short-term loan 40,000
14. From the following information of ‘T’ Company Limited, calculate proprietary ratio:
Particulars (Rs.) Particulars (Rs.)
Equity share capital
12,00,000 Current liabilities 4,00,000
Preference share
8,00,000 Non-current assets 12,00,000
capital
4,00,000 Current assets 24,00,000
Reserves and surplus
8,00,000
Non-current liabilities
15. Calculate Stock turnover ratio, from the following information of ‘L’ Company Limit
Particulars (Rs.) Particulars (Rs.)
Sales 30,00,000 Opening stock 3,50,000
Closing stock 2,50,000 Purchases 12,00,000
Gross profit rate 30%

16. Determine Gross profit ratio :

Sales Rs.20,00,000 Sales-return Rs.2,00,000
Opening stock Rs.2,50,000 Closing stock Rs.3,50,000
Purchase Rs.12,00,000 Purchase expenses Rs.50,000
17. From the following information of ‘B’ Company Limited, calculate Debtors turnover and
Collection period in days. What will be answer if collection period is calculated in terms
of weeks and months? (Assume 360 days of the year.)
Particulars (Rs.) Particulars (Rs.)
Total sales Credit sales
4,50,000 3,65,000
Opening debtors Closing debtors
70,000 50,000
Opening bills Closing bills receivables
20,000 6,000
receivables
45,000 48,000
Opening creditors Closing creditors

18. From the following information of Rajyash Co. Ltd., calculate debt equity ratio:

19. From the following transactions of Khushbu Company Ltd., calculate cash flow from
operating activities.
Particulars Rs.
Profit of current year Rs.3,20,000
Taxation provision Rs.30,000
Proposed dividend Rs.60,000
Goodwill written off Rs.35,000
Depreciation charged Rs.47,000
Loss on sale of asset Rs.43,000
Rent received Rs.45,000
Dividend received Rs.65,000
Increase in current assets Rs.1,00,000
Decrease in current liabilities Rs.90,000
20. From the following Information, calculate cash flow from financing activities:
31 - 3 - ’17 31 - 3 - ’16
Particulars
(Rs) (Rs)
10% debentures
Equity share 2,45,000 1,95,000
capital 3,45,000 2,50,000
12% debentures 1,00,000 1,50,000
Preference share 80,000 1,00,000
capital 45,000 68.000
Bank overdraft
Additional Information:
(1) Debenture Interest paid Rs.12,000. (2) Paid Rs.22,000 for equity share
dividend and preference share dividend. (3) Paid interest on bank overdraft
Rs.4,000.
21. From the following information of Nirali Company Ltd. determine cash flow from
investing activities.
Particulars Rs.
Opening balance of machines
Closing balance of machines Rs. 4,50,000
Book value of machine sold Rs. 4,00,000
during the year Rs. 25,000
Depreciation provided on Rs. 50,000
machines Rs. 15,000
Selling price of machine

22. From the following transactions of Khushbu Company Ltd., calculate cash flow from
operating activities.
Particulars (Rs)
Profit before taxes Rs.1,32,000
Goodwill written off Rs.28,000
Patent amortized Rs.17,000
Depreciation written off Rs.29,000
Transfer to general reserve Rs.23,000
Interest received Rs.12,000
Dividend received Rs.9000
Interest paid Rs.11,000
Dividend paid Rs.25,000
Profit on sale of investments Rs.13,000
Loss on sale of furniture Rs.18,000
23. From the following given information, calculate cash flow from investing activities:
Particulars Amount (Rs)
Sale of non-current investments 88,000
Purchase of land 1,48.000
Purchase of machine 98,000
Sale of furniture 45.000
Dividend received on investments 40,000
Paid for goodwill 32,000
Issue of shares 1,20,000
Redemption of debentures 45,000
Loan borrowed 28,000

All The Best

Subject : Account
(GSEB) ANSWERS
Standard : 12 (EM)

SECTION - A

Answer the following question in Details(Each question carries 4 Marks) (Marks - 00)
1. Meaning: Goodwill is an intangible asset representing the value of prestige of the
business.
Explanation : Those firms which has capacity to earn more profit as compared to other
firms due to its own image, due to special relations or due to some other reasons that
particular firm holds goodwill.
Goodwill is a real and non-current asset.
Goodwill is an intangible asset.
Goodwill is the value of prestige of the business. Goodwill suggests special relation of
business, stable customers group and the capacity to receive high profit.
The valuation of Goodwill is based on earning capacity of the firm.
Factors : Factors affecting the valuation of goodwill are as under:
1. Location of business : We know that the earning capacity of the business depends upon
the business location. Business location plays a vital role to determine the value of
goodwill.
2. Nature of business: The value of goodwill depends upon the profit stability of the
business and business risk. Generally a business with higher profit stability and lower risk
factors would lead to a higher value of its goodwill.
3. Period of business : The value of goodwill also depends upon the period of business.
The business which is old may have more business prestige because many old customers
know about the business and naturally such business have more goodwill.
4. Competition: The limited competition or the monopoly condition enables the concerned
firm to earn high profit. Therefore, the value of goodwill is high in such business.
5. Speciality of the business: If the company enjoys special benefits like acquisition of
licence, trademark or patent, it results into higher value of goodwill.
6. Skill and proficiency of an individual : In certain business, the generation of handsome
profit and success of business depends upon proficiency, skill or ability of the business
owner or owners. In such cases, the value of goodwill of the business Is very low as the
successful person cannot transfer his own proficiency or skill along with the sale of
business.
In addition to the above mentioned factors, there are some other factors that influence the
valuation of goodwill, like class of customer, government restrictions, economic and political
circumstances, inflation and its impact, etc.
7. Efficiency of managers : The efficient management of a business increases the
productivity and decreases the cost of a firm. Due to it, profit, Increases, which increases
the value of goodwill.
8. Other special benefits: Goodwill exists when a company enjoys special benefits and the
overall profitability increases. For e.g., if a company can acquire license, patent or
trademark.
Apart from the above given factors, services after sales, past achievements of a firm, good
labour relations, etc. also become the reasons to earn more profit. Due to which the
goodwill comes into existence.
2. Average profit Rs. 1,48,000; Goodwill Rs. 5,92,000
3. Weighted average profit = Rs. 1,48,667; Goodwill Rs.4,46,001
4. Average profit RS. 1,40,000; Super profit RS. 32,000; Goodwill RS. 2,66,667
5. capital employed = Rs.8,00,000; Expected profit = Rs.80,000; Average profit =
Rs.1,20,000; Super profit = Rs.40,000; Goodwill = Rs.1,20,000
6. Expected profit RS. 40,000; Weighted average profit RS. 1,06,667; Super profit RS.
66,667, Goodwill RS.1,33,333
7.

8.

3
9.

10.

11.
12.

13. Current Assets Rs.7,85,000; Current liabilities Rs.3,50,000; Current ratio 2.24:1; Liquid
assets Rs.4,25,000; Liquid ratio 1.21 :1
14. Proprietary funds Rs. 24,00,000, Total assets Rs. 36,00,000, Proprietary ratio = 0.66:1
15. Cost of goods sold Rs.21,00,000, Average stock Rs.3,00,000, Stock turnover 7 times
16. Cost of goods sold Rs. 11,50,000, 36.11 %
17. Debtors turnover 5 times, Collection period 72 days, 10,4 weeks, 2.4 months
18. debt = Rs. 13,00,000 and equity = Rs. 30,00,000; debt equity ratio = 0.43 : 1
19. Non-cash expenses and provisions = Rs.2,15,000; Operating profit before changes in
working capital = Rs.4,25,000; Cash flow from operating activities = Rs.2,35,000
20. Cash how financing activities Rs.14,000
21.

22. Non-cash expenses, appropriation and provisions = Rs.1,51,000; Non-operating incomes

= Rs.34,000; Profit (cash flow) before changes in working capital = Rs.2,49,000
23. Cash flow from investing activities (Rs. 1,05,000) (Cash outflow)
Subject : Account (GSEB) BOARD
Standard : 12 (EM) (Section E)

SECTION - A

Answer the following question in Details(Each question carries 8 Marks) (Marks - 00)
1. Aashtha and Aahna are partners in a firm. The balance sheet of the firm as on
31 -3- ‘17 was as under :

They admitted Sonu as a new partner as on 1 -4- ‘17 on the following condition :
(1) Sonu will bring Rs.80,000 as her capital and Rs.7,200 as her share of goodwill in
cash.
(2) New profit and loss sharing ratio will be 4 : 3 : 3.
(3) Goodwill is to be valued at Rs.40,000.
(4) The claim of workmen compensation is accepted at Rs.3,200.
(5 ) Aahna will take over investments at Rs.19,200.
(6) Accrued interest on investment Rs.2,400 is not recorded.
(7) Accepted bills payable of Rs.2,000 which was drawn by creditors is not recorded.
(8) Book value of land-building is 20 % less than its market value.
(9) Out of insurance premium paid, Rs.4,800 is for next year.
Prepare necessary accounts and Balance Sheet after admission.
2. Prerna and Piyush are partners in a firm sharing profit and loss in the ratio of their
capital. Balance sheet of their firm was as under :

They admitted Poyani as a new partner for share of profit on 31 - 3 - ‘16 on

following terms :
(1 ) Poyani brought Rs.62,500 as capital and Rs.24,000 as her share of goodwill in
cash. 60 % amount of goodwill is withdrawn by the old partners.
(2 ) Market value of stock and machinery is Rs.20,000 and Rs.1,20,000 respectively.
(3) Provision for bad debt at 10 % and 2 % discount reserve on debtors is to be
made.
(4) Creditors are to be paid Rs.30,000.
(5 ) Value of building is to be increased by 15 % and value of furniture is to be
increased by 20%.
(6) Outstanding wages of Rs.460 is not recorded in the books.
From the above information prepare necessary accounts and new Balance Sheet of the
firm.
3. Rutvi and Princy are partners sharing profit and loss in the ratio of 5 : 3. The
balance sheet of their firm as on 31 - 3 - ‘17 was as under :

They admitted Manan as a partner on 1 -4 -‘17 on the following terms :

(1) Manan will bring his personal furniture of 75,000 as capital.
(2) Out of creditors Rs.60,000 are payable to Manan which is to be transferred to his
capital account.
(3) Manan will be given share in future.
(4) Manan will bring Rs.45,000 as goodwill in cash.
(5) Goodwill of firm is valued at Rs.3,00,000.
(6) Credit purchase of Rs.15,000 which was not recorded in creditors account and
purchase account bat it is included in closing stock.
(7 ) Market value of stock of Rs.45,000 is Rs.36,000.
(8 ) Liability of workmen compensation is Rs.28,000.
(9 ) Accrued interest on investments Rs.24,000 is not recorded.
Prepare new Balance Sheet after admission.
4. Parshvi and Aneri are the partners sharing profit and loss in the ratio of 2 : 1.
Balance Sheet of their firm as on 31 -3 - ‘16 was as under :

On 1 -4- ‘16 they admitted Henshi as a new partner on the following conditions :
(1) New profit and loss sharing ratio is to be kept at 3 : 4 : 2.
(2) Henshi brings Rs.40,000 as capital.
(3) Interest on bank loan is outstanding for one year.
(4)Personal expense of Parshvi paid by the firm is debited to the profit and loss
account Rs.5,600.
(5) Reconstruction expense is paid by Aneri Rs.8,400.
(6) Goodwill is valued at Rs.90,000.
(7 ) Parshvi and Aneri will maintain their capital in the new firm in their new profit and
loss sharing ratio by taking Henshi’s capital as base. For this purpose necessary
adjustments should be made in partners’ current accounts.
Prepare necessary accounts and Balance Sheet after admission.
5. Ankita and Esha are the partners sharing profit and loss in the ratio of 2 : 1. Balance
sheet of their firm as on 31 -3- ‘16 was as under :

They admitted Arpita as a new partner on 1 -4- ‘16 on the following conditions :
(1) Ankita sacrificed from her share and Esha sacrificed from her share in favour
of Arpita.
(2) Arpita is to bring proportionate capital.
(3) Arpita is to bring her share of goodwill in cash. Goodwill of the firm is valued at
Rs. 90,000.
(4) Fixed assets are to be depreciated by 10 %.
(5) All debtors are good.
(6) Insurance premium of Rs.2,400 out of Rs.12,000 is to be carried forward to next
year.
Prepare necessary accounts and Balance Sheet.
6. Jaini and Aanya are the partners sharing profit and loss in the ratio of 3 : 2. The
balance sheet of their firm as on 31 - 3 - ‘16 was as under :

They admitted Priyanka as a partner on 1 -4- ‘16 on the following terms :

(1) Priyanka will bring Rs.14,000 as goodwill in cash.
(2) Priyanka will bring her capital equal to 20 % of new total capital of Jaini and
Aanya.
(3) New profit and loss sharing ratio is to be kept at 2 : 2 : 1.
(4) Provision for bad debt is not required.
(5) Machinery is to be reduced by 10 %.
(6) Market value of building is Rs.70,000.
(7) Market value of investments is Rs.68,950.
(8) Total capital of the old partners Jaini and Aanya after all adjustments will be
maintained in their relative new ratio. For this purpose necessary adjustments will be
made through bank.
Prepare necessary accounts and Balance Sheet after admission.
7. Deep, Jyoti and Geeta are the partners sharing profit and loss in the ratio of their
capitals. Balance sheet of their firm as on 31 -3- ‘17 was as under :

Jyoti retired on the above date. Partners decided that,

(1) New profit and loss sharing ratio of Deep and Geeta is to be kept at 1 : 1.
Goodwill of the firm is valued at 70,000.
(2) Bad debt reserve on debtors is to be reduced upto 10 %.
(3) Stock is shown in the books at 25 % more than its cost, stock is to be recorded at
cost.
(4) Rs.60,000 is paid for trademark during current year, which is for total 6 years.
(5) Liability of provident fund is decided at Rs.35,000.
(6) Total capital of the new firm is to be kept as the total capital of the old firm. Deep
and Geeta will maintain this capital in their new profit-loss sharing ratio. For this
purpose the difference is to be transferred to their current accounts.
Prepare necessary accounts and Balance Sheet after retirement.
8. E, M and I are partners sharing profit and loss in the ratio of 5 : 3 : 2. Balance
sheet of their firm as on 31 - 3 - ‘17 was as under :

‘I’ retired on 31-3-17. Conditions of retirement we as under

(1 ) I’s profit share will be gained by E and M in ratio of 2 : 3.
(2) Goodwill of the firm is valued at Rs.1,00,000.
(3) Bad debt reserve on debtors is to be increased by 10 %
(4) Building is valued at 110 %.
(5) Value of machinery is to be reduced by 10 %..
(6) Annual insurance premium of Rs.24,000 is paid for the year ended on 30-6- ‘17.
(7) E and M will maintain total capital of the firm Rs.1,00.000 in their new profit and
loss sharing ratio after retirement of I.
Prepare necessary accounts and Balance Sheet after retirement.
9. L, B and W are the partners of a firm sharing profit and loss in the ratio of 2 : 2 :
1. Balance sheet of their firm as on 31 -3 - ‘16 was as under :

W retired on 1 - 4- ‘16. Terms of retirement were decided as under :

(1 ) Market value of building is Rs.50,000.
(2 ) Book value of stock is 10 % more than its cost. Stock is to be recorded at its
cost.
(3 ) Personal expenses of W Rs.500 was debited to profit and loss account.
(4) Goodwill of the firm is valued at Rs.80,000.
(5) L will gain and B will gain from W’s share of profit.
(6 ) Amount due to W is to be paid in cash and the same amount will be brought in
cash by U and B in such a manner that their capital may remain in their new profit-
loss sharing ratio in the new firm.
Prepare necessary accounts and Balance Sheet of the new firm.
10. Chirag, Jigar and Keshav are the partners sharing profit and loss in ratio of 3 : 2 : 1.
Balance sheet of their firm on 31 - 3 - ‘16 was as under :

Keshav retired on 31 -3- ‘16. Following conditions were decided at the time of
retirement :
(1 ) Value of land-building is to be increased by 20 %.
(2 ) Machinery is valued at 90 % of its book value.
(3 ) Market value of investment is 150 % of its book value.
(4 ) Bad debt reserve on debtors is to be reduced by 5 %.
(5) Goodwill of the firm is valued at Rs.36,000.
(6) Rs.2,000 is outstanding for salary payable to an employee.
(7) Chirag and Jigar will bring necessary amount in cash in such a manner that
amount due to Keshav is to be paid in cash and balance of cash may remain in the
firm as working capital Rs.14,000 and their capital in the new firm become
proportionate to their new profit-loss sharing ratio.
Prepare necessary accounts and Balance Sheet of new firm.
11. E, F and G are the partners sharing profit and loss in the ratio of 4 : 3 : 3. E
retires on 31 -3 -‘17. Balance sheet of the firm on that date was as under :

Following terms of retirement were decided in partnership agreement and among the
partners :
(1) Goodwill of the firm is valued at Rs.7,000.
(2) Value of land-building Rs.7,000 and furniture Rs.2,000 is decided.
(3) Stock is over valued by 10 %. Rs.5,000 is to be paid to E immediately and
balance to transferred to his loan account.
(4) F and G will bring necessary cash in equal proportion in such a manner that E is
to id his dues fully and Rs.2,000 remain as working capital (cash).
Prepare Profit and Loss Adjustment Account, Cash Account, Partners’ Capital Accounts
and Balance Sheet.
12. Vijay, Laxmi and Siddhi are the partners sharing profit and loss in the ratio of 5 : 3 :
2. Siddhi retired on 1 -4- ‘16. Terms of retirement are as under :
(1) New profit-loss sharing ratio of Vijay and Laxmi is 2 : 3.
(2) Goodwill of the firm is valued at Rs.60,000.
(3) Market value of investments is Rs.40,000. Siddhi will take over investments at this
value.
(4) Rs.3000 to be written off from debtors and 5 % bad debt reserve is to be
maintained.
(5) Value of stock shown in the book is Rs.1000 more than its cost. It is to be
recorded at cost.
(6) Claim of Rs.7000 is accepted for workmen compensation.
(7) Rs.12,000 to be paid to Siddhi immediately.
Balance sheet of the firm on 31 - 3 - ‘16 was as under:

Prepare necessary accounts and Balance Sheet after retirement.

13. Moon, Star and Sun are the partners of a firm. Sun retires on 31 -3- ‘17. Moon and
Star will distribute future profit and loss in the ratio of 5 : 1. Balance sheet of their
firm as 31 - 3- ‘17 was as under :

Conditions of retirement were as under :

(1) Goodwill of the firm is valued at Rs.60,000.
(2) Creditors are payable after one month, which are to be paid immediately at 12 %
discount per annum.
(3) Computer, written off from the books is now valued at Rs.12,000. Moon will take
over the computer at this value.
(4) After retirement of Sun, Moon and Star will maintain their capital in the new profit
and loss sharing ratio and difference is to be transferred to bank account.
Prepare necessary accounts and Balance Sheet after retirement.
14. Rustom Limited of Valsad issued 2,40,000 equity shares of Rs.10 each at a premium
of Rs.70 per share. Amount called up per share was as under:
Rs. 38 on application (including premium of Rs.35)
Rs.28 on allotment (including premium of Rs.25)
Rs.14 on final call (including premium of Rs.10)
All the sums due were duly received except money due on allotment and final call on
2,000 shares held by Jahangir. After carrying out necessary formalities, company
forfeited Jahangir’s shares.
These shares were reissued to Joshef at 40 % premium as fully paid up. Pass journal
entries for above transactions in the books of company.
15. Dharam Metals Limited of Jamnagar issued 8,00,000 equity shares of 10 each at a
premium of Rs.30 per share. The amount was payable as under: Rs.13 (including
premium of Rs.10) per share on application Rs.23 (including premium of Rs.20) per
share on allotment Rs. 4 per share on final call Company received share application
for 8,00,000 shares and all the applications were allotted shares. Vipul, who was
allotted 1,500 shares, did not pay money due on allotment and hence his shares were
forfeited by company after allotment. Company reissued all these 1500 shares before
final call at Rs. 5 per share. Hema, who was allotted 500 shares, did not pay money
due on final call and therefore her shares were forfeited by company. Company
reissued these 500 shares at maximum permissible discount. Pass journal entries for
above transactions in the books of company.
16. Siddhapur Isabgul Limited issued 6,00,000 equity shares of Rs.10 each at a premium
of Rs.7 per share. The amount was payable as under: Rs.10 per share on application
(including premium) Rs.4 per share on allotment Rs.3 per share on final call
Applications were received for 9,00,000 shares. Excess applications were rejected and
money paid thereon was refunded. Siddharaj, who was allotted 6,000 shares, did not
pay money due on allotment and hence his shares were forfeited after allotment.
Jaysinh, who was allotted 4,000 shares, did not pay money due on final call and
hence his shares were forfeited after final call. Allotment and final call amount was
received on remaining shares. Company reissued 6,000 shares of Siddharaj at Rs.7
per share to Minal and 4000 shares of Jaysinh at Rs.6 per share to Rudra. Pass
necessary journal entries in the books of company to record above transactions and
also prepare shares forfeiture account.
17. Kapoor Media Limited issued 1,20,000 equity shares of Rs.10 each at a premium of
Rs.80 per share for public subscription. Company called up the amount including share
premium In four equal installments It means on application, on allotment, on first call
and on final call.
Company received application for 1,60,000 equity shares. Excess applications were
rejected and money paid thereon was refunded.
Shahid, who was holding 4000 shares, failed to pay first call and final call on shares
held by him. His shares were forfeited after due formalities.
These forfeited shares were Issued to Ranbir at a premium of Rs.70 per share and the
amount on this was received by the company.
Write necessary journal entries In the books of company to record above transaction
and also prepare securities premium account.
18. Sheetal Electronics Limited issued 1,20,000 equity shares to the public at Rs.10 per
share. Company called up the amount as under:
On application Rs.3 per share
On allotment Rs.3 per share and on final call Rs.4 per share
Applications were received from public for 1,80,000 shares, in this reference allocation
was made by company as under:
Full allotment was made to applicants of 48,000 shares.
Not a single share was allotted to applicants of 36,000 shares.
72,000 shares were allotted to applicants of 96,000 shares.
All amounts were received in time. From the above information, pass necessary journal
entries in the books of the company.
19. Raj Machine Limited Issues 12,00,000 equity shares of Rs.10 each on which amount
was payable as under:
Rs.3 per share on application Rs.4 per share on allotment
Rs.3 per share on first and final call
Company received application for 14,70,000 shares from public. Excess applications
were rejected and money paid on them was refunded.
Aakash, who was allotted 2,000 shares, did not pay allotment and final call money.
Sunny, who was allotted 1,200 shares, did not pay final call money.
Company forfeited all the shares on which calls were unpaid and reissued all forfeited
shares at Rs.7 per share as fully paid up.
Pass necessary journal entries in the books of company for above transactions.
20. Vala Manufacturing Limited of Dhandhuka issued 4,00,000 equity shares of Rs.10
each at a premium of Rs.60 per share. Amount was called up per share as under:
On application Rs.23 (including premium Rs.20)
On allotment Rs.34 (including premium Rs.30)
On final call Rs.13 (includIng premium Rs.10)
Company received applications for 6,00,000 shares. Excess applications were rejected
and money paid thereon was refunded. Amount due on allotment and final call were
called up In time. Mi amounts due on allotment and call were received except allotment
and final call money on 500 shares held by Himmatbhai and final call money on 300
share held by Hima.
Pass necessary journal entries in books of company for above transactions.
21. Dhyani Ceramic Limited issued 3,00,000 equity shares of Rs.10 each at a premium of
Rs.150 per share. Amount called up per share was as under
On application Rs. 74 (Including Rs. 70 for premium)
On allotment Rs. 44 and (Including Rs. 40 for premium)
On final call Rs.42 (Including Rs. 40 for premium)
Company received application for 3,00,000 shares. All accounts due were received
except final call on 2000 shares held by Vishal. Company forfeited Vishal’s shares
after carrying out necessary formalities and reissued those shares to Avani as full paid
up at Rs. 80 per share.
Pass necessary journal entries for above transaction in the books of company and also
prepare securities premium account.
22. Naznin Textiles Limited issued 12,00,000 equity shares of Rs.10 each. On which
amount was payable as under
On application Rs.4 per share
On allotment Rs.4 per share and
On final call Rs.2 per share
Company received application for 15,50,000 equity shares from public. Excess
applications were rejected and amount paid on application thereon was refunded.
Harun, who was allotted 8000 shares, had not paid allotment and final call amount.
Salim, who was allotted 2000 shares, had not paid amount on final call. Company
forfeited shares of Harun and Salim and all the forfeited shares were reissued at
Rs.7.50 per share as fully paid up. All these shares were purchased by Shahrukh.
Pass necessary journal entries in the books of company to record above transactions
and a prepare share forfeiture account.
23. Nisarg Pharma Ltd. of Gandhmagar issued 80,000 equity shares of Rs.10 each at a
premium of Rs.40 per share. The amount was called up as under:
With application Rs.14 per share (Including premium of Rs.10)
With allotment of Rs.33 per share (Including premium Rs.30)
With final call Rs.3 per share
Company received applications for 85,000 equity shares. Excess applications received
were rejected and amount received with applications on this was refunded.
Amount due on allotment and final call were duly called up. All the amount due on all
the shares were duly received except allotment money and final call money on 2000
shares held by Devami.
Pass necessary journal entries in the books of company for above transactions.

All The Best

Subject : Account
(GSEB) ANSWERS
Standard : 12 (EM)

SECTION - A

Answer the following question in Details(Each question carries 8 Marks) (Marks - 00)
1. Profit of revaluation A/c Rs.17,200
Sacrificing ratio of Aastha and Aahna 1 : 2.
Entry for goodwill :
(1) Cash A/c ...Dr 7200
To premium for goodwill A/c 7200
(ii) Premium for goodwill A/c ...Dr 7200
To Aastha’s capital A/c 2400
To Aahna’s capital A/c 4800
(iii) Sonu’s capital A/c ...Dr 4800
To Aastha’s capital A/c 1600
To Aahna’s capital A/c 3200
Closing capital : Aastha Rs.82,000; Aahna Rs.39,200; Sonu Rs.75,200
Closing cash balance Rs.1,03,200; Total of balance sheet Rs.2,32,000
2. Profit of revaluation A/c Rs.38,000
Closing capital : Prerna Rs.69,400; Piyush Rs.2,08,200; Poyani Rs.62,500
Closing cash and bank balance Rs.80,350; Total of balance sheet Rs.3,72,060
3. Profit or loss of revaluation A/c : Zero
Balance of capital A/c Rutvi : Rs.1,20,000; Princy : Rs.90,000; Manan :
Rs.1,35,000
Balance of current A/c : Rutvi : Rs.2,07,500; Princy : Rs.2,29,500; Manan :
Rs.15,000 (Debit)
Closing bank balance : Rs.1,05,000; Total of balance sheet : Rs.9,15,000
4. Loss of revaluation A/c : Rs.6300
Partners’ capital : Parshvi : Rs.60,000; Aneri : Rs.80,000; Hency : Rs.40,000
Sacrifice of Parshvi = , Gain of Aneri =
Hency does not bring goodwill in cash. Journal entry for goodwill.
Ancri’s capital A/c ...Dr 10,000
Hency’s current A/c ...Dr 20,000
To Parshvi’s capital A/c 30,000
Old goodwill debited to Parshvi and Aneri in their old profit-loss sharing ratio.
Balance of current A/c : Parshvi Rs.47,000 (Credit); Aneri Rs.1800 (Debit) Hency
20,000 (Debit) Debit balance of current accounts will be shown on assets side of
balance sheet and credit balance on liabilities side.
Hency does not bring her share of goodwill in cash which will be debited to her current
account and therefore her capital will not reduce and capital of Parshvi and Aneri will
be decided on the basis of Henci’s capital Rs.40,000 in new profit-loss sharing ratio.
Total of balance sheet Rs.3,19,000
5. Loss of revaluation A/c Rs.4800
Balance of capital A/c : Esha : Rs.51,000; Ankita : Rs. 79,500; Arpita
Rs.43,500
Sacrificing ratio of Ankita and Esha = 1 : 2
Closing cash and bank balance Rs.92,400; Total of balance sheet Rs.2,42,000
6. Profit of revaluation A/c Rs.35,000
Closing capital : Jaini Rs.93,800; Anva : Rs.93,800; Priyanka :
Rs.37,520
Premium for goodwill will be credited to Jaini’s capital account only. Jaini will withdraw
Rs.18,760.
Anya will bring Rs.18,760. Total of balance sheet Rs.3,01,420
7. Loss of revaluation A/c Rs.21,000; Jyoti’s loan : Rs.1,77,000
Balance of capital A/c : Deep Rs.1,75,000; Gita : Rs.1,75,000
Balance of current account of l)eep = Rs.92,000 (Debit)
Balance of current accounts of Gita Rs.92,000 (Debit)
Sacrificing ratio of Deep and Gita = 3 : 1; Total of balance sheet Rs.6,22,000
8. Profit of revaluation A/c Rs.6000; l’s loan : Rs.81,200
Balance of capital A/c : E : Rs.58,000; M : Rs.42,000
E will withdraw Rs.22,000, M will bring Rs.7200.
Cash balance = Rs.7200; Total of balance sheet Rs. 2,8 1,200
New profit-loss sharing ratio of E and M = 29 : 21
 9. Profit of revaluation A/c Rs.13,000
New profit-loss sharing ratio of L and B = 21 : 19
Closing capital : L : Rs.24,675; B : Rs.22,325
Cash paid to W Rs.22,500; Cash brought by L Rs.10,675; Cash brought B Rs.11,825
Total of balance sheet Rs.70,000
10. Profit of revaluation Rs.12,000; Paid to Keshav Rs.19,000
Closing capital Chirag : Rs. 54,000; .Jigar Rs.36,000
Cash brought Chirag Rs.18,600; Jigar Rs.12,400
Total of balance sheet Rs.1,36,000
11. Loss of revaluation A/c Rs.600; E’s loan Rs.5960
F and G each will bring Rs.3300,
Closing balance of capital : F : Rs.7020; G Rs.4020
Total of balance sheet Rs.27,000
12. Loss of revaluation A/c Rs.6000; Siddhi’s loan Rs.31,800
Balance of capital A/c : Vijay Rs. 93,000; Laxmi Rs.47,200
Cash balance Rs. 24,000; Total of balance sheet Rs. 2,77,000
Journal entry for goodwill
Laxrni’s capital A/c ...Dr 18,000
To Vijay’s capital Ale 6000
To Siddhi’s capital A/c 12,000
13. Profit of revaluation A/c Rs.12,600; Sun’s loan : Rs.2,34,200
Balance of capital A/c Moon Rs.3,30,333; Star Rs.66,067
Moon will bring Rs. 1,78,133. Star will withdraw Rs.1,78,133.
Closing balance of bank = Rs.1,15,600
Journal entry of goodwill
Moon’s capital A/c ...Dr 30,000
To Star’s capital A/c 10,000
To Sun’s capital A/c 20,000
Total of balance sheet Rs.6,40,600
14. Amount received with application Rs 91,20,000; Allotment amount received Rs
66,64,000; Amount received for final call Rs 33,32,000; Securities premium debit Rs
70,000 and Rs 6000 credit to share forfeiture A/c, when shares are forfeited; Amount
received along with premium on reissue of forfeited shares Rs 28,000; Balance of
share forfeiture account Rs 6000 transfered to capital reserve account.
15. Total amount received with application Rs 1,04,00,000; Amount received for allotment
Rs 1,83,65,500 (Rs 1,84,00,000 - Rs 34,500 of Vipul); When 1500 shares of Vipul
are forfeited - securities premium A/c Dr Rs 30,000, Share capital A/c Dr. Rs 9000
while share forfeiture credit Rs 4500 and share allotment A/c credit Rs 34,500; When
forfeited shares are reissued share forfeiture A/c Dr Rs 1500; Balance of share
forfeiture Rs 3000 transferred to capital reserve; Amount received for final call Rs
31,98,000 (Rs 32,00,000 deduct Rs 2000 of Hema); 500 Shares of Hema forfeited
so share forfeiture A/c credit Rs 3000 and share forfeited A/c debit by Rs 3000
when forfeited shares arc reissued. There will be no balance in share forfeiture A/c
16. Amount received with share applications Rs 90,00,000; Amount returned to applicants
for rejected applications Rs 30,00,000; Amount received for share allotment Rs
23,76,000 (Rs 24,00,000 deduct Rs 24,000 of Sidharaj); When 6000 shares of
Sidhraj are forfeited — share forfeiture A/c credited by Rs 18,000; Amount received
for final call Rs 17,70,000 (Rs 17,82,000 deduct Rs 12,000 of Jaysinh); when 4000
shares of Jaysinh forfeited — shares forfeiture A/c credited by Rs Rs 28,000; when
6000 forfeited shares are reissued — shares forfeiture A/c Dr Rs 18,000; when 4000
forfeited shares are reissued — share forfeiture A/c Dr. Rs 16,000; the credit balance
of share forfeiture 12,000 transferred to capital reserve
17. Total amount received with applications Rs 36,00,000; Total amount received for
allotment Rs 27,00,000; Total amount received for first call Rs 26,10,000; Total
amount received for final call Rs 26,10,000; when 4000 shares forfeited securities
premium A/c debited by Rs 1,60,000 and share forfeiture credited by Rs 20,000.
When forfeited shares are reissued total amount received Rs 3,20,000, Balance of
share forfeiture Rs 20,000 transferred to capital reserve.
18. Total amount received with applications Rs 5,40,000; Amount transferred to share
capital from share application Rs 3,60,000; Additional amount Rs 72,000 transfer to
share allotment and amount for rejected 36,000 shares Rs 1,08,000 returned; Amount
received for allotment Rs 2,88,000 (Rs 3,60,000 deduct Rs 72,000); Total amount
received with share final call Rs 4,80,000.
19. Amount received for share application Rs 44,10,000; Amount returned to applicants Rs
8,10,000; Share allotment amount received Rs 47,92,000 (Rs 48,00,000 — Rs
8000 of Akash); Share first and final call amount received Rs 35,90,400 (Rs
36,00,000 — Rs 6000 of Akash and Rs 3600 of Sunny); When shares are forfeited,
share forfeiture A/c credit by Rs 14,400; At the time of reissue of forfeited shares,
share forfeiture A/c debite by Rs 9600; the credit balance of share forfeiture Rs 4800
transferred to capital reserve.
20. Share application amount received Rs 1,38,00,000; Amount returned to applicants Rs
46,00,000; Amount received for allotment Rs 1,35,83,000 (Rs 1,36,00,000 deduct
Rs 17,000 of Himmatbhai); Share final call amount received Rs 51,89,600 (Rs
52,00,000 deduct Rs 6500 Hemantbhai and Rs 3900 of hima).
21. Std = 12 A/c, Part – 2, ch – 1, Illustration 12
22. Std = 12 A/c, Part – 2, ch – 1, Illustration 11
23. Equity share application = 11,90,000; Equity share allotment = 25,74,000; Equity
share final call = 2,34,000