ISC (Commerce) Class 12 - CISCE Important Questions for Accounts

How is index hunting helpful?

Give any two measures to achieve index hunting.

Give the difference between data and information along with an example.

Give any two basic commands of SQL.

Answer briefly of the following question :

Give the adjusting entry and closing entry for interest on loan taken by a partner from the firm, when the firm
follows the Fluctuating Capital Method.

The fixed capital accounts of Shiv, Azeem and Angad, sharing profits and losses in the ratio of 2 : 2 : 1, stood at ₹ 4,00,000, ₹ 6,00,000 and ₹ 2,00,000 respectively.

The accounts for the year ended 31^st March, 2022, were drawn up and closed and the Current Account balances of the partners were determined to be:

Shiv ₹ 35,000, Azeem ₹ 40,000 and Angad ₹ 25,000.

Subsequently, the following errors were discovered on 1^st April, 2022:

1. Interest on capital @ 10% per annum had been allowed to the partners, although there was no provision for it in the partnership deed.
2. Salary of ₹ 16,000 per annum to Shiv and ₹ 20,000 per annum to Azeem was not allowed to them, despite a provision for salary in the partnership deed.
3. Commission of ₹ 24,000 was not allowed to Angad, despite a provision for commission in the partnership deed.

You are required to prepare the adjusted Current Accounts of the partners on 1^st April, 2022, to rectify the lapse in accounting.

Ruma and Neha started business on 1^st April, 2021, with fixed capitals of ₹ 4,00,000 and ₹ 3,50,000 respectively. On 1^st October, 2021, they decided that their total capital (fixed) should be ₹ 8,00,000, in their profit-sharing ratio of 3 : 2.

Accordingly, they introduced extra capital or withdrew excess capital.

Their partnership deed provided for the following:

1. Interest on capital to be allowed @ 10% per annum.
2. A monthly salary of ₹ 1,000 each to be allowed to both Ruma and Neha.
3. Interest on drawings to be charged @ 18% per annum.

Ruma had withdrawn ₹ 12,000, during the year. As per the deed, the interest on her drawings amounting to ₹ 1,080 to be charged from her.

During the year ending 31^st March, 2022, the firm earned a net profit of ₹ 2,04,000 before charging manager's commission of ₹ 20,400 and interest on bank loan of ₹ 4,000.

You are required to:

1. Give the journal entry to close Ruma's Drawings Account.
2. Prepare Profit and Loss Appropriation Account for the year ending 31^st March, 2022.

Tanuj and Ravi are partners in a business with capital balances of ₹ 1,50,000 and ₹ 1,00,000 respectively on 1^st April, 2022.

Their partnership deed contains the following clauses:

1. Interest on capital to be allowed @ 10% per annum.
2. Interest on drawings to be charged @ 4% per annum.
3. Tanuj to be allowed a commission @ 5% of the trading profit after charging his commission.
4. Ravi to be allowed an annual commission of ₹ 10,000.

Additional information:

During the year 2022-23:

• Tanuj withdrew ₹ 6,000 at the end of every quarter.
• The trading profit of the firm was ₹ 84,000.
• The firm's divisible profit was ₹ 46,360.
• On 1st October, 2022, Ravi permanently withdrew ₹ 20,000 from his capital.

You are required to do the following:

1. Pass the journal entries to record:
   
   1. The permanent withdrawal made by Ravi.
   2. The distribution of the divisible profits between the partners.
   3. The adjusting entry for commission due to Ravi.
2. Calculate the interest on capital allowed to:
   1. Tanuj
   2. Ravi
3. Calculate the commission allowed to Tanuj.
4. Calculate the interest on drawings charged from Tanuj.

Amit and Iqbal are partners in a business. Their partnership deed contained the following clauses:

1. Interest on drawings to be charged @ 6% per annum.
2. Amit to get a salary of ₹ 1,000 per month.
3. Iqbal to get an annual commission of ₹ 10,000.
4. Any partner taking a loan from the firm to be charged interest on it @ 8% per annum.

You are required to:

1. Give the closing journal entry for interest on loan due from Amit.
2. Find the opening capital balance of the partners on 1^st April, 2022, by preparing the Partners' Capital Accounts for the year 2022-23.

The commission due to a partner is closed by:

Deb, Riza and Ved entered into a partnership on 1st July, 2023, without any agreement as to profit sharing, except that Deb guaranteed that Ved’s share of profit, after considering interest into account, would not be less than ₹ 8,500 per annum. The initial capital provided by the partners was as follows:

In addition to the above capital, Deb and Riza gave temporary loans to the partnership firm as follows:

• Deb advanced ₹ 18,000 on 1st October, 2023, and was repaid on 1st April following.
• Riza advanced ₹ 40,000 on 1st September, 2023, and was repaid along with interest, on 1st December, 2023.

The profit of the firm for the year ended 31st March, 2024, before providing for any interest was ₹ 21,000.

You are required to prepare for the year 2023-24:

1. Profit and Loss Appropriation Account.
2. Riza’s Loan Account.
3. Ved’s Capital Account.

Krish and Tarun are partners in a firm with capitals of ₹ 40,000 and ₹ 60,000. As per their partnership deed:

1. Interest on capital is to be allowed to them @ 5% per annum.
2. Profits are to be shared in the ratio of 3 : 2.

The trading profits for the year 2023-24 was ₹ 3,600. You are required to calculate the interest on capital allowed to the partners in the year 2023-24.

Deepa, Ridhi and Adit are partners in a firm. Following are the particulars of their Capital and Drawings Accounts for the year 2023-24:

According to their partnership deed:

• Profits were to be shared in the ratio of 2 : 2 : 1
• Interest on capital to be allowed @ 5% per annum
• Interest on drawings to be charged @ 8% per annum

The trading profits of the firm for the financial year 2023-24 were ₹ 50,000, before considering the discrepancy of having recorded the inventory at ₹ 10,000 when its realisable value was ₹ 4,000.

1. You are required to give:
   1. The adjusting entry and closing entry for Drawings made by Ridhi
   2. The adjusting entry and closing entry for Interest on Drawings
   3. The adjusting entry and closing entry for Interest on Capital
   4. The entry to close the Adit’s Loan A/c
2. The accountant of the firm distributed the divisible profit among the partners in the ratio 2 : 1 : 2 instead of in the ratio mentioned in the deed.

You are required to rectify the lapse in accounting by passing a single adjusting entry.

Answer briefly of the following question :

Give the formula for valuation of goodwill by the Capitalisation of Average Profit Method.

Give the formula used for calculating goodwill of a partnership firm by the Weighted Average Profit Method.

On 1^st April, 2020, Anish started a business with a capital of ₹ 3,00,000.
During the three years ending 31^st March, 2023, the results of his business were:

From the year 2020-21 to the year 2022-23, Anish withdrew ₹ 30,000 from the firm for his personal use.
On 1st April, 2023, he admitted Danish into partnership on the following terms:

1. Goodwill of the firm to be valued at two years' purchase of the average profits of the last three years.
2. Danish to have 1/4 share in the future profits.
3. Danish's capital to be equal to 1/4 of Anish's capital determined on 1^st April, 2023, after the goodwill compensation has been taken into account.

You are required to give:

1. The formula to calculate goodwill by the Average Profit Method.
2. The value of self-generated goodwill of the firm.
3. Danish's capital contribution.

Choose the components required to calculate goodwill of a firm by Capitalisation of Average Profits Method.

P: The normal profits of a similar firm in the industry

Q: The average profits of the firm

R: The number of years purchase

S: The actual capital employed in the business

Aman and Vinod are partners in a firm. Their Balance Sheet showed:

Gross Debtors: ₹ 1,52,000

Provision for doubtful debts: ₹ 1,000

On Milin’s admission as a new partner, the assets and liabilities are to be revalued as:

1. Unaccounted accrued income of ₹ 10,000 to be provided for.
2. Bills Payable of ₹ 10,000 which were recorded, to be discharged at a rebate of 10%.
3. Debtors of ₹ 2,000 to be irrecoverable.
4. Provision for doubtful debts to be provided @ 2% of the debtors.

What is the net effect of revaluation of assets and liabilities?

Answer briefly of the following question:

Give any two differences between Revaluation Account and Realisation Account.

Asif and Ravi are partners in a firm, sharing profits and losses in the ratio of 3:2. Their fixed capitals as on 1^st
April, 2016, were Rs. 6,00,000 and ` 4,00,000 respectively.
Their partnership deed provides for the following:.
(a) Partners are to be allowed interest on their capital @ 10% per annum.
(b) They are to be charged interest on drawings @ 4% per annum.
(c) Asif is entitled to a salary of Rs. 2,000 per month.
(d) Ravi is entitled to a commission of 5% of the correct net profit of the firm before charging such commission.
(e) Asif is entitled to a rent of Rs. 3,000 per month for the use of his premises by the firm.
The net profit of the firm for the year ended 31st March, 2017, before providing for any of the above clauses
was Rs. 4,00,000.
Both partners withdrew Rs. 5,000 at the beginning of every month for the entire year.
You are required to prepare a Profit and Loss Appropriation Account for the year ended 31^st March, 2017.