Accountancy Term 1 2021-2022 Commerce (English Medium) Class 12 Question Paper Solution

The document which contains the terms of the agreement of partnership is called ______.

Partnership Deed

Agreement among partners

Both Partnership Deed and Agreement among partners.

Partnership Agreement

Partnership Contract

Partnership Rules

None of these 

A, B, C and D are partners in a firm. They want to expand their business for which additional capital and more managerial experts are required. For this they want to admit more members in their firm. What is the maximum number of additional members that can be admitted by them in the firm:

02

50

20

46

Vijay and Rattan are partners in a firm. The partnership agreement provides for interest on drawings @ 12% per annum. Which of the following accounts will be debited to transfer interest on drawings to Profit and Loss Appropriation Account:

Interest on Drawings account

Bank account

Partners Current accounts

Partners Capital accounts

A and B were partners in a firm. Their capitals at the end of the year ending on 31.3.2021 were ₹ 3,00,000 and ₹ 1,50,000 respectively. During the year B withdrew ₹ 10,000, which was debited to his capital account. Profit for the year ended 31st March, 2021 was ₹ 32,000 which was credited to their capital accounts. During the year B introduced additional capital ₹ 32,000. What was B's capital on 1.4.2020?

₹ 1,50,000

₹ 1,60,000

₹ 1,12,000

₹ 1,52,000

P, Q and R were partners in a firm sharing profits and losses in the ratio 2 : 2 : 1. They admitted L as a new partner for 1/5 share in the profits. L was given a guarantee that - his share of the profit would be 1,00,000. Any deficiency arising on account of guarantee to L will be borne by Q. The profit of the firm during the year ended 31.3.2021 was ₹ 4,00.000. The amount of deficiency borne by Q was:

₹ 80,000

₹ 20,000

₹ 10,000

₹ 6,667

X and Y were partners in a firm sharing profits and losses equally. Their capitals were ₹ 2,00,000 and ₹ 3,00,000 respectively. Z was admitted as a new partner for 1/4^th share in the profits of the firm. Z brought ₹ 2,00,000 as his capital. The goodwill of the firm was:

₹ 1,00,000

₹ 25,000

₹ 2,00,000

₹ 7,00,000

R and M were partners in a firm, sharing profits and losses in the ratio of 5 : 3. L was admitted as a new partner for 1/5th share in the profits of the firm. The new profit ratio was 2 : 2 : 1. L brought ₹ 1,54,000 for his capital and did not bring his share of goodwill premium. Goodwill of the firm on L's admission was estimated at ₹ 4,50,000. It was decided not to raise goodwill account on L's admission.

Out of the following what will be the correct treatment of goodwill on L's admission?

Debit L's current A/c by ₹ 90,000 and credit R's and M's capital A/cs by ₹ 45,000 each.

Debit L's current A/c by ₹ 90,000, Debit M's capital A/c by ₹ 11,250, credit R's capital A/c by ₹ 1,01,250.

Debit L's current A/c by ₹ 90,000 and credit R's capital A/c by ₹ 56,250 and credit M's capital A/c ₹ 33,750.

Debit L's current A/c by ₹ 4,50,000 and credit R's and M's capital A/c by ₹ 2,25,000 each.

Sharma and Verma were partners in a firm. The partnership deed provided that interest on partners' drawings will be charged @ 12% per annum. During the year, Sharma withdrew ₹ 6,000. Interest on his drawings will be:

₹ 600

₹ 330

₹ 360

₹ 720

When a combined "Share Application and Allotment Account" is opened in the books of the company, which of the following accounts will be debited for money refunded on rejected application:

Share Application Account

Share Application and Allotment Account

Share Allotment Account

Bank Account

Shubham Ltd. purchased a machinery of ₹ 3,80,000 from Ganpati Ltd. The payment was made by issue of 3,000 equity shares of ₹ 100 each at a premium of 10% and the balance by issuing a cheque. The amount of cheque issued in favour of Ganpati Ltd. was:

₹ 80,000

₹ 3,80,000

₹ 30,000

₹ 50,000

Pooja Lid. issued 50,00,000 equity share of ₹ 100 each at a premium of ₹ 30 per share. Half of the premium amount was payable on allotment and the remaining half was payable on first call. Raja to whom 500 shares were allotted failed to pay the first call and second and final call. His shares were forfeited. On forfeiture of shares the amount debited to 'securities premium reserve account' was:

₹ 7,500

₹ 15,000

Nil 

₹ 50,000

Y Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each at a premium of ₹ 8 per share. The amount per share was payable as follows:

• On Application - ₹ 8 per share (including ₹ 5 premium)
• On Allotment - ₹ 8 per share (including ₹ 3 premium)
• On first and final call - Balance.

Applications for 1,50,000 shares were received. Mohan who had applied for 4,000 shares paid the entire share money, on shares applied, with application. The application money received was:

₹ 12,00,000

₹ 8,00,000

₹ 12,40,000

₹ 10,00,000

Which of the following accounts will be debited for transferring loss on revaluation of assets and reassessment of liabilities at the time of admission of a new partner into the partnership firm:

Old partner's capital accounts in old profit sharing ratio

Old partners capital accounts in sacrificing ratio

All partners capital accounts (including incoming partner) in new profit sharing

Revaluation account

A business earned average profits of ₹ 60,000 during the last three years. The normal rate of return on similar business is 12%. The value of net assets of the business is ₹ 4,00,000. Its goodwill by capitalisation of Average Profits Method will be ______.

₹ 1,00,000

₹ 2,00,000

₹ 4,00,000

₹ 50,000

Due to change in the profit sharing ratio, Anisha's gain is 1/5^th while Harit's sacrifice is 1/5^th. They decided to adjust the following without affecting their book values, by passing a single adjustment entry:

The necessary adjustment entry will be:

Debit Anisha's capital account by ₹ 2,000 and credit Harit's capital account by ₹ 2,000

Debit Anisha's capital account by ₹ 10,000 and credit Harit's capital account by ₹ 10,000.

Debit Harit's capital account by ₹ 2,000 and credit Anisha's capital account by ₹ 2,000.

Debit Harit's capital account by ₹ 10,000 and credit Anisha's capital account by ₹ 10,000.

Leela and Meeta were partners in a firm sharing profits and losses in the ratio of 7 : 3. Geeta was admitted as a new partner for a 3/13^th share in the profits of the firm. The new profit sharing ratio will be: 

7 : 3 : 7

7 : 3 : 3

3 : 7 : 7

1 : 1 : 1

Assertion (A): Co-ownership of property amounts to partnership.

Reason (R): The element of business is present in co-ownership.

In the context of the above two statements which of the following is correct.

Both (A) and (R) are correct and (R) is correct reason for (A).

Both (A) and (R) are incorrect.

(A) is correct but (R) is incorrect.

Both (A) and (R) are correct but (R) is not the correct reason for (A).

Z Ltd. forfeited 800 shares of ₹ 10 each on which ₹ 8 per share was called and ₹ 6 per share was paid. The amount with which share capital account debited on the forfeiture of these shares was:

₹ 8,000

₹ 6,400

₹ 4,800

₹ 3,200

A situation where number of shares offered to the public for subscription are less than the number of shares for which applications have been received is called ______.

Under subscription

Fully subscribed

Over subscription

Both Fully subscribed and Over subscription

Which of the following statements are correct:

1. The liability of a partner for acts of the firm is unlimited.
2. Private assets of a partner can also be used for paying the debts of the firm.
3. Each partner is liable jointly with all other partners and also severally to the third parties for all the acts of the firm done, while he is a partner.
4. The liability of a partner is limited to the extent of his capital contribution.

Only (iii)

(i) and (ii)

(i), (ii) and (iii)

(i), (ii), (iii) and (iv)

Which of the following statement is not true for fixed capital account?

The capital account balance remains unchanged unless there is addition to or withdrawal of capital.

The capital accounts always show a credit balance.

Each partner has only one account. i.e. capital account, under this method.

All adjustments for drawings, salary, interest on capital etc. are made in the current accounts.

Amar and Samar were partners in a firm sharing profits and losses in the ratio of 1 : 5. On 1.4.2021, Ganesh was admitted for 1/5^th share in the profits. On the date of Ganesh's admission, the balance sheet of Amar and Samar showed a debit balance of ₹ 60,000 in the profit and loss account. The accounting treatment for the same in the books of accounts of the furn on Ganesh's admission will be:

Amar's and Samar's Capital Accounts will be debited by ₹ 10,000 and ₹ 50,000 respectively and Profit and Loss Account will be credited by ₹ 60,000.

Profit and Loss Account will be debited by ₹ 60,000 and Amar's and Samar's Capital Accounts will be credited by ₹ 10,000 and ₹ 50,000 respectively.

Revaluation Account will be debited by ₹ 60,000 and Profit and Loss Account will be credited by ₹ 60,000.

Profit and Loss Appropriation Account will be debited by ₹ 60,000 and Profit and Loss Account will be credited by ₹ 60,000.

On the reconstitution of a firm, the value of land was to be appreciated by ₹ 2,00,000 and plant and machinery was to be reduced to ₹ 7,00,000 from ₹ 10,00,000. Gain or Loss on revaluation will be:

Gain ₹ 1,00,000

Loss ₹ 1,00,000

Loss ₹ 5,00,000

Gain ₹ 5,00,000

Assertion (A): Goodwill is an intangible asset.

Reason (R): It is the value of the reputation of a firm in respect of the profits expected in future over and above the normal profits.

In the context of the above statements which of the following is correct?

Both (A) and (R) are correct.

(A) is wrong, but (R) is correct.

(A) is correct but (R) is wrong.

Both (A) and (R) are wrong.

When a new partner is admitted, the balance of 'General Reserve' appearing in the Balance Sheet is credited to ______.

Profit and Loss Appropriation Account

Capital Accounts of all partners

Revaluation Account

Capital Accounts of old partners

Kavita and Karan are partners in a firm sharing profits and losses in the ratio 4 : 1. On 1st April, 2021, they admitted Mohit for 1/4th share in the profits of the firm. The balance sheet of Kaviti and Karan showed stock at ₹ 45,000. On admission of new partner, the stock was found undervalued by 10%. The journal entry to give effect to the above adjustment on Mohit's admission will be:

Sangeet and Suman were partners in a firm sharing profits and losses in the ratio of 7 : 3. During the year ended 31.3.2021, the firm earned a profit of ₹ 1,00,000. After preparation of the financial statements, it was discovered that salary to Suman @ ₹ 3,000 per month had been omitted. The necessary adjustment entry for the same will be:

Roopa and Daya were partners in a firm. They admitted Navin as a new partner for 1/3rd share in the profits. On Navin's admission, it was found that there was a claim against the firm for damages for which a liability for damages should be created, Which of the following accounts will be debited for creating the liability:

Profit and Loss Appropriation Account

Profit and Loss Account

Revaluation Account

Profit and Loss Adjustment Account

Assertion (A): In case the company fails to receive minimum subscription, it cannot proceed for the allotment of shares.

Reason (R): When the company fails to receive minimum subscription it has to return the application money within 120 days from the date of issue of prospectus.

In the context of the above two statements which of the following is correct:

Both (A) and (R) are correct.

(A) is correct but (R) is incorrect.

Both (A) and (R) are incorrect.

(A) is incorrect but (R) is correct.

X Ltd. invited applications for issuing 10,00,000 equity shares of ₹ 10 each at a premium of ₹ 9 per share. The amount was payable as follows:

• On Application - ₹ 6 per share (including premium ₹ 3)
• On Allotment - ₹ 8 per share (including premium ₹ 4)
• On first and final call - Balance

Applications for 15,00,000 shares were received. Shares were allotted on pro-rata basis to all applicants. Excess application money received with applications was adjusted towards sums due on allotment. Dharam to whom 600 shares were allotted failed to pay the allotment money. Allotment amount that was not paid by Dharam was:

₹ 4,800

₹ 600

₹ 3,000

₹ 2,400

PP Ltd. invited applications for issuing 10,000 equity shares of ₹ 10 each. Applications for 9,500 shares were received and allotment was made to all the applicants. Ravi, a shareholder holding 200 shares failed to pay allotment money and his shares were forfeited. Mohan to whom 100 shares were allotted failed to pay the first call and his shares were forfeited immediately after the first call was made. Afterwards, the second and final call was made. The second and final call will be due on how many shares?

9,500

9,300

9,200

10,000

Raman Ltd. was registered with an authorised capital of ₹ 5,00,00,000 divided into shares of 10 each. The company offered for subscription 4,00,000 shares. Applications were received for 4,50,000 shares. Applications for 50,000 shares were rejected. A shareholder holding 10,000 shares failed to pay the first and final call of ₹ 2 per share. The subscribed capital of the company is:

₹ 5,00,00,000

₹ 40,00,000

₹ 45,00,000

₹ 39,80,000

How many shares were offered to the public for subscription?

₹ 12,00,000

₹ 24,00,000

₹ 14,00,000

₹ 30,00,000

What was the amount of money received on allotment?

₹ 60,00,000

₹ 12,00,000

₹ 6,00,00,000

₹ 48,00,000

The profit sharing ratio of A, B and C was ______.

9 : 20 : 7

8 : 21 : 7

10 : 19 : 7

7 : 22 : 7

The profit sharing ratio of A, B, C and D was ______.

45 : 105 : 30 : 36

45 : 100 : 35 : 36

45 : 105 : 30 : 36

40 : 100 : 40 : 36

The ratios that analyse profits in relation to revenue from operations or funds employed in the business are called ______.

Profitability Ratios

Turnover Ratios

Solvency Ratios

Liquidity Ratios

Because of exclusion of non-liquid current assets which of the following ratio is considered better than current ratio as a measure of liquidity position of the business?

Debt-Equity Ratio

Acid Test Ratio

Proprietary Ratio

Interest Coverage Ratio

Which of the following ratio establishes relationship of 'Shareholders funds' to 'Net assets'?

Return on Investment

Interest Coverage Ratio

Proprietary Ratio

Debt-Equity Ratio

Which of the following ratio establishes the relationship between 'Credit revenue from operations' and "Trade receivables"?

Inventory Turnover Ratio

Interest Coverage Ratio

Trade Payables Turnover Ratio

Trade Receivables Turnover Ratio

Assertion (A): Profitability ratios are calculated to analyse the combining capacity of the business.

Reason (R): Profitability ratios are calculated to determine the ability of the business to service its debt in the long run.

In the light of the above two statements, which of the following is correct:

Both (A) and (R) are correct.

Both (A) and (R) are wrong.

(A) is correct but (R) is wrong.

(A) is wrong but (R) is correct.

Match the items given in Column I with the headings/sub-headings of Column II under which these are shown according to Schedule III Part 1 of the Companies Act, 2013:

(i) - (e), (ii) - (d), (iii) - (c), (iv) - (b), (v) - (a)

(i) - (a), (ii) - (b), (iii) - (c), (iv) - (d), (v) - (e)

(i) - (b), (ii) - (c), (iii) - (a), (iv) - (d), (v) - (e)

(i) - (a), (ii) - (b), (iii) - (e), (iv) - (d), (v) - (c)

Current ratio of a company is 3 : 1. The value of its current liabilities is ₹ 4,00,000. Its current assets will be ______.

₹ 3,00,000

₹ 12,00,000

₹ 2,00,000

₹ 9,00,000

Gross Profit Ratio of a Company is 25%. Cost of revenue from operations are 3/4^th of revenue from operations. If revenue from operations is ₹ 60,00,000, the Gross Profit of the Company will be:

₹ 25,00,000

₹ 45,00,000

₹ 15,00,000

₹ 11,25,000

Following information has been obtained from the statement of Profit and Loss of a Company:

Revenue from Operations - ₹ 20,00,000, cost of materials consumed - ₹ 8,00,000, Employees benefit expenses - ₹ 20,000, Finance cost - ₹ 5,000, Depreciation - ₹ 25,000.

Its Profit before tax will be:

₹ 12,00,000

₹ 11,80,000

₹ 11,75,000

₹ 11,50,000

Assertion (a): 'Sale of goods for cash' does not effect Debt-Equity ratio.

Reason (R): 'Sale of goods on cash basis' neither affect 'Debt' nor 'Equity'.

In the context of the above two statements which of the following is correct:

Both (A) and (R) are correct and (R) is the correct reason of (A).

Only (A) is correct.

Only (R) is correct.

Both (A) and (R) are incorrect.

Assertion (A): Operating ratio is = 100 - operating profit ratio.

Reason (R): Operating ratio is computed to reveal the operating margin on products sold.

In the context of the above two statements which of the following is correct:

Both statements are incorrect.

(A) is correct but (R) is incorrect.

(A) is incorrect but (R) is correct.

Both (A) and (R) are correct and (R) is the correct reason of (A).

During the year ended 31.3.2021, Soma Ltd. earned net profit after tax ₹ 6,00,000. The company has a long term 10% debt of ₹ 50,00,000. The tax rate is 40%. The interest coverage ratio of the company will be:

2 times

3 times

1.2 times

1.5 times