Class 12 ISC term1 Accounts Specimen 2022

SECTION- A

Q.1 Pick the odd one out from the following:

1. Interest allowed on a loan taken by the firm from a partner
2. Rent due to a partner of the firm for using his premises for business purposes
3. Salary due to the manager of the firm
4. Salary due to a partner of the firm

Solution

Q.2 If the operating cycle of a company cannot be identified, it is assumed to be:

1. 18 months
2. 12 months
3. 10 months
4. 15 months

Solution

Q.3 Which of the following is not shown as a Current Liability in the Balance Sheet of a company prepared as per Schedule III of the Companies Act, 2013?

1. Trade Payable
2. Short term Borrowings
3. Deferred Tax Liabilities
4. Short term Provisions

Solution

Q.4 The Interest on Calls-in-arrears Account is closed by:

1. Crediting it to Statement of Profit & Loss
2. Crediting it to Profit & Loss Appropriation Account
3. Debiting it to Profit & Loss Appropriation Account
4. Debiting it to Statement of Profit & Loss

Solution

Q.5 The formula for valuing goodwill under the Capitalisation of Super Profits method is:

1. Super profit made by the firm multiplied by the normal rate of return
2. Capital Employed by the firm multiplied by the normal rate of return
3. Capitalised profit of the firm divided by the rate of return
4. Super profit made by the firm divided by the normal rate of return

Solution

Q.6 Ronaldo Ltd. forfeited 300 equity shares of 10 each, fully called up, on which 5 per share (including premium of 1 per share) was received. It later reissued these shares at a discount. The maximum discount per share, which the company could have given on their reissue would be:

1. 6 per share
2. 5 per share
3. 4 per share
4. 3 per share

Solution

Q.7 Veena and Soma are partners in a firm. They admit Sara on 1st April, 2020, for 1/4 share in the profits of the firm. Sara acquired her share as 1/12 from Veena and the remaining from Soma. The sacrificing ratio of the old partners will be:

1. 11:12
2. 1:1
3. 1:2
4. 1:11

Solution

Q.8 Arif, Ravi and Ben are partners in a firm sharing profits and losses in the ratio of 6:4:1. Arif guaranteed a minimum profit of 16,000 to Ben. The trading profit of the firm for the year ending 31st March, 2021, was 1,32,000. Arifs share in the profits of the firm will be:

1. 72,000
2. 68,000
3. 69,600
4. 16,000

Solution

Q.9 Simi, Manu, and Beena are partners in a firm sharing profits and losses in the ratio of 2:2:1. The balances of their fixed capital accounts on 1st April, 2020, were: Simi 1,00,000, Manu 1,00,000 and Beena 80,000 After the accounts for the year ended 31st March, 2021, were prepared, it was discovered that interest on capital @ 10% per annum had been credited to the partners' current accounts even though it was not provided in the partnership deed. The error in Simi's capital account / current account will be rectified by:

1. Debiting her capital account with 1,200
2. Crediting her current account with 1,200
3. Debiting her current account with 1,200
4. Crediting her capital account with 1,200

Solution

Q.10 Runa and Ria were partners in a firm sharing profits and losses in the ratio of 3:1. On 1st April, 2020, Uday is admitted as a new partner in the firm for 3/8th share in the profits on various terms, one of them being his contribution of 42,000 as capital. The new profit-sharing ratio amongst all the partners to be 3:2:3. The capitals of Runa and Ria, after taking into account all the terms of admission were 61,625 and 25,375. It is decided that the Capital Accounts of Runa and Ria be adjusted in the ratio of their respective share in the profits after admission, any surplus to be adjusted through the Current Account while any deficiency through the Cash Account. The surplus capital adjusted through current account will be:

1. Ria's debit capital balance of 2,625
2. Runa's credit capital balance of 2,625
3. Ria's debit capital balance of 19,625
4. Runa's credit capital balance of 19,625

Solution

Q.11 On 1st April, 2020, Pixie, Nixie and Gypsy entered into a partnership with fixed capitals of 60,000, 50,000 and 30,000 respectively. On 1st October, 2020, Pixie gave a loan of 12,000 to the firm. The partnership deed contained the following clauses: (a) Interest on drawings to be charged @ 4% per annum. (b) Pixie to be entitled to a rent of 12,000 per annum for allowing the firm to carry on the business in his premises. Nixie withdrew 1,000 at the end of the month for the first six months. Net Profit of the firm for the year ending 31st March 2021 (before any interest but after rent on Pixie's premises) was 1,21,000.
(a) The Net Profit of the firm will be:

1. 1,21,000
2. 1,20,640
3. 1,18,640
4. 96,640

Solution

Q.11(b) Interest on Drawings charged from Nixie will be:

1. 340
2. 220
3. 170
4. 18.33

Solution

Q.12 Dev, Gautam and Kamal were three partners sharing profits and losses in the ratio of 2:1:2. On 1st April, 2020, their capital account balances stood at 90,000, 80,000 and 20,000 (Dr) respectively. On this date they admitted Naveen into the partnership with a capital of 50,000. Naveen is to have 14 share of the profits with a guaranteed minimum share of distributable profit of 40,000. The new profit-sharing ratio among the partners being Dev: Gautam: Kamal: Naveen = 6:2:7:5. The profit of the firm for the year 2020-21 was 1,60,000 before the following adjustments were made: • Interest on Capital @ 10% per annum to be allowed to the partners. • Interest on Drawings: Dev: 3,000; Kamal: 6,000. • Salary to Partners: Gautam 7,000; Naveen: 10,000
(a) The sacrificing ratio of Dev, Gautam and Kamal will be:

1. 2:1:2
2. 2:2:1
3. 2: -2: 1
4. 2: -1:2

Solution

Q.12 (b) The total interest on capital allowed by the firm to the partners will be:

1. 22,000
2. 23,000
3. 21,400
4. 23,100

Solution

Q.12 (c) Deficiency in Naveen's profits will be:

1. 8,000
2. 7,500
3. 12,500
4. 12,000

Solution

Q.13 Ritesh and Somesh are partners in a firm sharing profits and losses equally. They admit Satvik on Pt April, 2021 for 1/5 share in the profits of the firm, future profit-sharing ratio between Ritesh and Somesh would be 3:2. At the time of reconstitution of a partnership firm, goodwill was valued at two years' purchase of the average profits of the preceding four years which were as follows:

(a) The average profits of the firm from the year 2017-18 to the year 2020-21 were:

1. 30,000
2. 60,000
3. 37,500
4. 40,000

Solution

Q.13(b) The value of goodwill of the firm on Satvik's admission was:

1. 60,000
2. 80,000
3. 75,000
4. 1,20,000

Solution

Q.13(c) Satvik is unable to bring in cash his share of goodwill. The account to be debited to record his goodwill compensation will be:

1. Satvik's Capital A/c
2. Satvik's Current A/c
3. Premium for Goodwill A/c
4. Old Partners' Capital A/c

Solution

Q.14 Dhruv and Ansh are partners in a firm sharing profits and losses: DHruv 75% and Ansh 25%. Their Balance sheet as at 31st March 2021 is given below:

On 1st April 2021, Kavi is admitted as a new partner on the following terms:
(i) Land and building is found to be valued at 25% above cost. It is decided to bring it to its cost.
(ii) Bad debts amounting to 1,800 are to be written off The remaining debtors are good.
(iii) Creditors include an amount of 5,000 received as commission from Amar. The necessary adjustment is required to be made.
(iv) The liability on Workmen Compensation Reserve is determined at 3,000.
(v) Kavi is to pay 15,000 to the existing partners as premium for Goodwill for 20% of the future profits of the firm. He is also to bring in 25,000 as capital.
(a) At the time of Kavi's admission, the Workmen Compensation Reserve of:

1. 5,000 will be credited to the capital accounts of all the partners
2. 3,000 will be credited to the capital accounts of all the partners.
3. 2,000 will be credited to the capital accounts of the old partners
4. 2,000 will be debited to the capital accounts of the old partners

Solution

Q.14(b) The value of Land & Building in the Balance Sheet of the reconstituted firm will be:

1. 20,000
2. 31,250
3. 5,000
4. 6,250

Solution

Q.14(c) To adjust the creditors in adjustment (iii):

1. Commission A/c will be credited with 5,000
2. Creditors A/c will be credited with 5,000
3. Amar's A/c will be debited with 5,000.
4. Creditors A/c will be debited with 5,000.

Solution

Q.14(d) The provision for doubtful debts in the reconstituted firm will be:

1. 1,500
2. 1,800
3. Nil
4. None of the above

Solution

Q.14(e) The date of the Balance Sheet of the reconstituted firm will be:

1. Balance Sheet for the year ending 31st March, 2022.
2. Balance Sheet as at 31st March, 2021
3. Balance Sheet for the year ending 1st April, 2021
4. Balance Sheet as at 1st April, 2021

Solution

Q.15 ABC Ltd. forfeited 4,000 shares of 10 each, fully called up, on which application money of 3 had been paid. Out of these 2,000 shares were re-issued as fully paid up. Upon their reissue, the company transferred 4,000 to capital reserve. The rate at which these shares were reissued were:

1. 10 per share
2. 4 per share
3. 9 per share
4. 8 per share

Solution

Q.16 Xylo Ltd. was formed on 1st April, 2018, with an authorized capital of Rs 12,00,000 divided into equity shares of Rs 10 each. It invited applications for 30,000 shares to be issued at par, in the year of its formation, all of which were subscribed for and the amount due on them fully received. On 1st April, 2020, the company issued another 60,000 shares at a premium of Rs 2 per share to be received with allotment. It received applications for 55,000 shares which were duly allotted. All amounts due on the allotted shares was received except the final call of Rs 2 per share on 1,000 shares. The company forfeited these shares and later reissued 800 of the forfeited shares Rs 7 per share fully called up. The Balance Sheet of the company was prepared as at 31st March, 2021, as per Schedule III of the Companies Act, 2013.
(a) The issued capital of the company to be shown in Notes to Accounts as at 31st March, 2021, under 'Share Capital' will be:

1. 12,00,000
2. 9,00,000
3. 8,50,000
4. 8,49,600

Solution

Q.16(b) The subscribed shares of the company at the end of the year 2020-21 will be:

1. 1,20,000
2. 90,000
3. 85,000
4. 84,800

Solution

Q.16(c) The amount of Share Capital to be shown in the Balance Sheet of the company as at 31st March, 2021, will be:

1. 12,00,000
2. 9,00,000
3. 8,50,000
4. 8,49,600

Solution

Q.16(d) The net gain made by the company on reissue of the 800 shares will be transferred to:

1. Reserve Capital Account
2. Capital Reserve Account
3. Securities Premium Reserve Account
4. Statement of P/L

Solution

Q.17
(a) The share capital A/C was debited with:

1. 10000
2. 9000
3. 12000
4. 7000

Solution

Q.17(b) The shares were forfeited for non-payment of:

1. 10 per share
2. 9 per share
3. 12 per share
4. 7 per share

Solution

Q.17(c) At the time of reissue of shares, the Share Forfeiture A/c was debited with:

1. 6,300
2. 7,000
3. 2,100
4. 1,400

Solution

Q.17(d) At the time of reissue of shares, the Share Capital A/c was credited with:

1. 6,300
2. 7,000
3. 2,100
4. 1,400

Solution

Q.17(e) At the time of reissue of shares, the account credited with 1,400 was:

1. Calls-in-arrears A/c
2. Capital Reserve A/c
3. Securities Premium Reserve A/c
4. None of the above

Solution

Q.18 The net revenue from operations of Gama Ltd. is 14,00,000. Its Gross profit is 9,00,000; Operating expenses are 75,000; Commission received is 5,000; be: Profit from sale of fixed asset is 10,000. The Operating Profit Ratio of Gama Ltd will

1. 59.29%
2. 59.29%
3. 60%
4. 58.93%

Solution

Q.19 Which of the following four companies is not deriving the benefit of 'trading on equity?

1. Mars Ltd., which has a Debt-Equity Ratio of 0.49:1
2. Venus Ltd., which has a Debt-Equity Ratio of 1.54:1
3. Saturn Ltd., which has a Debt-Equity Ratio of 1.62:1
4. Pluto Ltd., which has a Debt-Equity Ratio of 2.32:1

Solution

Q.20 The particulars of Alpha Ltd are given below:
(a) The Interest Coverage Ratio of the company will be:

1. 1.8 times
2. 2.8 times
3. 3.4 times
4. 2.4 times

Solution

Q.20(b) The Proprietary Ratio of the company will be:

1. 0.47:1
2. 0.75:1
3. 0.61:1
4. 0.38:1

Solution

Q.21 From the given particulars of Zee Ltd., the Trade Receivables Turnover Ratio of the company will be:

1. 3.75 times
2. 4 times
3. 4.17 times
4. 8 times

Solution

Q.22 The correct formula for computing Earning per share is:

Solution

Q.23 The Current Ratio of a company is 1.8:1 and its Quick Ratio is 1.6:1. From the following transactions, pick out the transaction which involves an increase in both the Current Ratio and Quick Ratio:

1. Goods worth Rs 10,000 sold at a loss of Rs 2,000.
2. Insurance premium of Rs 3,000 paid in advance.
3. Plant and Machinery purchased for Rs 9,000
4. Bills Payable of Rs 2,000 honoured on the due date.

Solution