Accoun tancy Test 1 (Fundamentals and Change in PSR )

Maximum marks =40

(1) Meera, Myra and Neera were partners sharing profits in the ratio of 2 : 2 : 1. They decided to share
future profits in the ratio of 7 : 5 : 3 with effect from 1st April 2019. Their Balance Sheet as on that date
showed a balance of ₹ 45,000 in the Advertisement Suspense Account. The amount to be debited
respectively to the capital accounts of Meera, Myra and Neera for writing off the amount in
Advertisement Suspense Account will be :

A. ₹ 18,000, ₹ 18,000 and₹ 9,000

B. ₹ 15,000, ₹ 15,000 and₹ 15,000
C. ₹ 21,000, ₹ 15,000 and₹ 9,000
D. ₹ 22,500, ₹ 22,500 and Nil

(2) Srishti, Nitya and Anand were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1.
Srishti retired from the firm selling her share of profits to Nitya and Anand in the ratio of 2 : 1. The
new profit sharing ratio between Nitya and Anand will be:

A. 3 : 2
B. 17 : 11
C. 2 : 1
D. 19 : 11
(3) Assertion: Batman, a partner in a firm with four partners has advanced a loan of ₹50,000 to the firm
for last six months of the financial year without any agreement. He claims an interest on loan of ₹3,000
despite the firm being in loss for the year.
Reasoning: In the absence of any agreement / provision in the partnership deed, provisions of Indian
Partnership Act, 1932 would apply
a) Both A and R are correct, and R is the correct explanation of A.
b) Both A and R are correct, but R is not the correct explanation of A.
c) A is correct but R is incorrect.
d) A is incorrect but R is correct.

(4) A, B and C who were sharing profits and losses in the ratio of 4 : 3 : 2 decided to share the future
profits and losses in the ratio to 2 : 3 : 4 with effect from 1st April 2023. An extract of their Balance
Sheet as at 31st March 2023 is:
Liabilities Amount (₹) Assets Amount (₹)
Workmen Compensation 65,000
Reserve
At the time of reconstitution, a certain amount of Claim on workmen compensation was determined
for which B's share of loss amounted to ₹ 5,000. The Claim for workmen compensation would be:

a. ₹ 15,000
b. ₹ 70,000
c. ₹ 50,000
d. ₹ 80,000

(5) A, B and C are in partnership business. A used ₹ 2,00,000 belonging to the firm without the
information to other partners and made a profit of ₹ 35,000 by using this amount. Which decision
should be taken by the firm to rectify this situation?
 a. A need to return only ₹ 2,00,000 to the firm.
b. A is required to return ₹ 35,000 to the firm.
c. A is required to pay back ₹ 35,000 only equally to B and C.
d. A need to return ₹2,35,000 to the firm.

(6) Interest on Partner's loan is credited to:

a. Partner's Fixed capital account.

b. Partner's Current account.
c. Partner's Loan Account.
d. Partner's Drawings Account.

(7) Vidit and Seema were partners in a firm sharing profits and losses in the ratio of 3 : 2. Their
capitals were ₹1,20,000 and ₹2,40,000, respectively. They were entitled to interest on capitals @
10% p.a. The firm earned a profit of ₹18,000 during the year. The interest on Vidit’s capital will be:

A. ₹12,000
B. ₹10,800
C. ₹7,200
D. ₹6,000

Richa and Anmol are partners sharing profits in the ratio of 3 : 2 with capitals of ₹ 2,50,000 and ₹
1,50,000 respectively. Interest on capital is agreed @ 6% p.a. Anmol is to be allowed an annual salary
of 12,500. During the year ended 31st March 2023, the profits of the year prior to calculation of
interest on capital but after charging Anmol's salary amounted to ₹ 62,000. A provision of 5% of this
profit is to be made in respect of manager's commission.

Following is their Profit & Loss Appropriation Account

Particulars (₹) Particulars (₹)
To Interest on Capital By Profit & loss account (After manager's commission) ____(2)____
Richa ________
Anmol ________
To Anmol's Salary a/c 12,500
To Profit transferred to:
Richa's Capital A/c (1) ____(1)____
Anmol Capital A/c ________
________ ________

(8)The amount to be reflected in blank (1) will be:

a. ₹ 37,200
b. ₹ 44,700
c. ₹ 22,800
d. ₹ 20,940
10. The amount to be reflected in blank (2) will be :

a. ₹ 62,000.
b. ₹ 74,500.
c. ₹ 71,400.
 d. ₹ 70,775.
11. In the absence of an agreement, partners are entitled to :

i. Profit share in capital ratio.

ii. Commission for making additional sale.
iii. Interest on Loan & Advances by them to the firm.
iv. Salary for working extra hours.
v. Interest on Capital.

Choose the correct option :

a. Only i), iv) and v).

b. Only ii) and iii).
c. Only iii).
d. Only i) and iii).
(11) P, Q and R were partners with fixed capital of ₹ 40,000, ₹ 32,000and ₹ 24,000. After distributing
the profit of ₹ 48,000 for the year ended 31st March 2022 in their agreed ratio of 3 : 1 : 1 it was
observed that:

1. Interest on capital was provided at 10% p.a. instead of 8% p.a.

2. Salary of ₹ 12,000 was credited to P instead of Q.
You are required to pass a single journal entry in the beginning of the next year to rectify the
above omissions.

(12) Cheese and Slice are equal partners. Their capitals as on April 01, 2022 were ₹ 50,000 and ₹
1,00,000 respectively. After the accounts for the financial year ending March 31, 2023 have been
prepared, it is observed that interest on capital @ 6% per annum and salary to Cheese @ ₹ 5,000 per
annum, as provided in the partnership deed has not been credited to the partners' capital accounts
before distribution of profits.
You are required to give necessary rectifying entries using P&L adjustment account.

(13) Yash and Karan were partners in an interior designer firm. Their fixed capitals were ₹6,00,000 and
₹4,00,000 respectively. There were credit balances in their current accounts of ₹4,00,000 and
₹5,00,000 respectively. The firm had a balance of ₹1,00,000 in General Reserve. The firm did not have
any liability. They admitted Radhika into partnership for 1/4th share in the profits of the firm. The
average profits of the firm for the last five years were ₹5,00,000. Calculate the value of goodwill of the
firm by capitalization of average profits method. The normal rate of return in the business is 10%.

(14). Samiksha, Ash and Divya were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2.
With effect from 1st April, 2019, they agreed to share future profits and losses in the ratio of 2 : 5 : 3.
Their Balance Sheet showed a debit balance of ₹50,000 in the Profit and Loss Account and a balance of
₹40,000 in the Investment Fluctuation Fund. For this purpose, it was agreed that:

i. goodwill of the firm be valued at ₹3,00,000.

ii. Investments of book value of ₹5,00,000 be valued at ₹4,80,000.

Pass the necessary journal entries to record the above transactions in the books of the firm.
(15) Asha, Rina and Chahat were partners in a firm sharing profits and losses
in the ratio of 2 : 2 : 1. Their Balance Sheet as at 31st March, 2019 was as
follows:
Balance Sheet of Asha, Rina and Chahat as at 31st March, 2019
Amount Amount
Liabilities Assets
₹ ₹
Creditors 12,00,000
Plant and Machinery 14,80,000
General Reserve 2,00,000 Stock 2,20,000
Capitals : Sundry Debtors 2,60,000
Asha 3,00,000 Less Provision
Rina 2,00,000 for doubtful debts 20,000 2,40,000
Chahat 1,00,000 6,00,000 Bank 60,000
20,00,000 20,00,000

Asha, Rina and Chahat decided to share future profits equally with effect
from 1st April, 2019. For this, it was agreed that:

i. Goodwill of the firm be valued at ₹ 1,50,000.

ii. Bad debts amounted to ₹ 40,000. A provision for doubtful debts was to be made @5%
on debtors.
Pass the necessary journal entries to record the above transactions in the books of the
firm.