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Accountancy 1
CLASS 12 - ACCOUNTANCY

Time Allowed : 80 mins Maximum Marks : 50

Section A

1 Which of the following cannot be a partner in the firm? [1]

1. A person who is insane (lunatics or unsound mind)

2. A person who is disqualified by law

3. A minor

4. both (a) and (b)

a) Option (iii)

b) Option (ii)

c) Option (iv)

d) Option (i)

2 Interest on drawings will not be charged if: [1]

a) There is loss

b) Partnership deed is silent on interest on drawings

c) Appropriations are more than the profits

d) Date of withdrawn is not given

3 In the absence of Partnership Deed, the interest is allowed on partner’s capital: [1]
a) No interest on capital is allowed

b) @ 10% p.a.

c) @ 6% p.a.

d) @ 12% p.a.

4 Priya and Shahid started a business in partnership on 1st August 2020. They [1]
introduced capital₹ 4,50,000 and ₹ 3,75,000 respectively. On 1st October
 2020 Shahid introduced₹ 25,000 additional capital. Interest on capital
provided as per the partnership deed at the end of the year 31st March 2021,
priya ₹ 27,000 and shahid ₹ 23,625.

What was the rate of interest on capital?

a) 9% p.a.

b) 6% p.a.

c) 12% p.a.

d) 8% p.a.

5 Interest on capital is calculated on [1]

a) Closing capital

b) Profit

c) Both Closing capital and Profit

d) Opening capital

6 A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. Their capitals are [1]
fixed. Profit for the year amounting to₹ 9,000.

B’s share of profit Rs._______ is to be shown in the ________ account.

a) 3,000 / Partners current account Debit Side

b) 9000 / Partners current account Credit Side

c) 3,000 / Partners capital account Credit Side

d) 3,000 / Partners current account Credit Side

7 A, B and C started a business in partnership on 1st October 2020. Their profit - [1]
sharing ratio was decided 3 : 2 : 1. A has given guarantee to C for a minimum
profit of₹ 6,000 yearly. Profit at the end of the year 31st March 2021, was ₹
12,000. A’s share of profit after deficiency will be:

a) 5,000

b) 3,000

c) 4,000

d) 6,000

8 Hari and Mohan are partners in the ratio 3:2. On 1st April 2015, they admitted [1]
 1
John as a new partner with share in the profit of the firm. Find out the
6
sacrifice or gain of Mohan.
1
a) Mohan’s Sacrifice
5
2
b) Mohan’s Sacrifice
30
1
c) Mohan’s Gain
5
2
d) Mohan’s Gain
5

9 Which of the following statement is correct? [1]

1. Increase in the value of an asset is recorded in the debit side of
Revaluation Account.

2. Increase in the value of a liability is recorded in the credit side of

Revaluation Account.

3. Decrease in the value of an asset is recorded in the debit side of

Revaluation Account.

4. Decrease in the value of a liability is recorded in the debit side of

Revaluation Account.

a) Option (iii)

b) Option (iv)

c) Option (ii)

d) Option (i)

10 Match the followings: [2]

A, B and C are partners in a firm sharing Profits and loss in the ratio of 5 : 3 : 2,
they decided to share profits and losses in the ratio of 4 : 3 : 3 w.e.f. 01.04.2021.
 a) (a) - (iv); (b) - (i); (c) - (iii); (d) - (ii)

b) (a) - (iii); (b) - (i); (c) - (ii); (d) - (iv)

c) (a) - (ii); (b) - (iii); (c) - (iv); (d) - (i)

d) (a) - (iii); (b) - (i); (c) - (iv); (d) - (ii)

11 At the time of reconstitution of a partnership firm, recording of an unrecorded [1]

liability will lead to:

a) Neither gain or loss to the existing partners

b) Loss to the existing partners

c) Noneof these

d) Gain to the existing partners

12 Assertion (A): The development of business depends upon the active partners [1]
only.

Reason (R): Active Partner is a person who provides his share in capital and
also takes active part in the management of the business.

a) Both A and R are true and R is the correct explanation of A.

b) Both A and R are true but R is not the correct explanation of A.

c) A is true but R is false.

d) A is false but R is true.

13 Assertion (A): When the items are omitted it is necessary to prepare Profit [1]
and Loss Adjustment Account only.

Reason (R): For the purpose of correcting these omissions or mistakes,

adjustment entries are passed through Profit and Loss Adjustment Account in
which adjustments in respect of each and every omission are to be made.

a) Both A and R are true and R is the correct explanation of A.

b) Both A and R are true but R is not the correct explanation of A.

c) A is true but R is false.

d) A is false but R is true.

14 Assertion (A): Shubham and Vishal sharing profits in the ratio of 3 : 2 decided [1]
to share equally in future. Revaluation of assets and reassessment of liabilities
resulted into a loss of ₹ 50,000 which was debited to their Capital Accounts in
 equal ratio.

Reason (R): Loss or Gain on revaluation is debited or credited to the Partner’s

Capital Accounts in old profit sharing ratio.

a) Both A and R are true and R is the correct explanation of A.

b) Both A and R are true but R is not the correct explanation of A.

c) A is true but R is false.

d) A is false but R is true.

15 State True or False: [1]

1. The partners whose shares have increased as result of change in profit -
sharing ratio are known as gaining partners.

16 Partnership is established by ________. [1]

a) Law

b) Section 4

c) Agreement

d) Lawful Business

17 Disha and Abha were partners in a firm. Farad was admitted as a new partner [1]
1
for th share in the profits of the firm. Faradbrought proportionate capital.
5
Capitals of Disha and Abha after all adjustments were ₹ 64,000 and ₹ 46,000
respectively. Capital brought by Farad was:

a) ₹ 27,500

b) ₹ 55,000

c) ₹ 22,000

d) ₹ 28,000

18 State any four contents of a partnership deed. [1]

Section B

19 Ankit, Vipinand Sureshare partners in a firm sharing profits and losses in the [4]
ratio of 5 : 3 : 2. They decide to share profits and losses in the ratio of 2 : 5 : 3
with effect from 1❑st April, 2023. Land (having book value of ₹ 1,00,000) was
found undervalued by ₹ 2,50,000 and stock (having book value of ₹ 4,00,000)
was found overvalued by ₹ 3,00,000.
 Pass the necessary adjusting entry without affecting the existing book value.

20 Balance Sheet of Nisha and Nandini who are sharing profits in the ratio of 2 : 3 [4]
as at 31❑st March, 2023is given below:

Nisha and Nandini decided to admit Kusum as a new partner from 1❑st April,
2023and their new profit - sharing ratio will be 2 : 3 : 5. Kusum brought ₹
4,00,000 as her capital and her share of goodwill premium in cash.

1. Goodwill of the firm was valued at₹ 3,00,000.

2. Land and Building was found undervalued by₹ 26,000.

3. Provision for doubtful debts was to be made equal to 5% of the debtors.

4. There was a claim of₹ 6,000 on account of workmen compensation.

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet
of the reconstituted firm.

Section C

21 X and Y are partners sharing the profits and losses in the ratio of 2 : 1 with [6]
capitals of₹ 50,000 and ₹ 30,000 respectively. Show the distribution of profits
in each of the following alternative cases:

1. If the partnership deed is silent as to the Interest on Capital and the

profits for the year are₹ 9,000.

2. If the partnership deed provides for Interest on Capital @ 6% p.a. and

the losses for the year are₹ 6,000.

3. If the partnership deed provides for Interest on Capital @ 6% p.a. and

the profits for the year are₹ 9,000.
 4. If the partnership deed provides for Interest on Capital 6% p.a. and the
profits for the year are₹ 3,000.

5. If the partnership deed provides for Interest on Capital @ 6% p.a. even

if it involves the firm in loss and the profits for the year are₹ 3,000.

22 A and B are partners in the ratio of 3 :2. The firm maintains Fluctuating Capital [5]
Accounts and the balance of the same as on 31❑st March, 2023amounted to ₹
1,60,000 and ₹ 1,40,000 for A and B respectively. Their drawings during the
year were ₹ 30,000 each. As per Partnership Deed, interest on capital @ 10%
p.a. on opening capitals had been provided to them. Calculate opening capitals
of partners given that their profit was ₹ 90,000. Show your workings clearly.
23 A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2. From [6]
1st April, 2018, they dedide to share future profits and losses equally. Their
Balance Sheet as at 31st March, 2018 stood as follows:

Partners agreed that:

1. Value of Land and Building be increased to₹ 5,00,000 and stock be

decreased by ₹ 20,000.

2. Provision for doubtful debts to be written back, since all debtors are
good.

3. Out of salaries payable,₹ 15,000 was not payable.

4. Outstanding expenses are to be written back, being not payable.

5. A provision for Workmen Compensation Claim be made for₹ 30,000.

6. Goodwill is valued at₹ 60,000.

 7. B was to carry out the work for reconstitution of the firm at a
remuneration (including expenses) of₹ 10,000. Expenses paid by B
amounted to ₹ 4,000.

Pass journal entries and prepare Revaluation Account.

24 The following is the balance sheet of A, B and C sharing profits and losses in [6]
proportion of 6 : 5 : 3 respectively: -

1
They agreed to take D into partnership and give him th share on the following
8
terms: -

1. That Furniture be depreciated by₹ 2,920.

2. An Old Customer, whose account was written off as bad, has promised
to pay₹ 2,000 in full settlement of his full debt.

3. That a provision of₹ 1,320 be made for outstanding repair bills.

4. That the value of land and building having appreciated be brought upto
₹ 56,910.

5. That D should bring in₹ 14,700 as his capital.

6. That D should bring in₹ 14,070 as his share of goodwill.

7. That after making the above adjustments, the capital accounts of old
partners be adjusted on the basis of the proportion of D’s Capital to his
share in business, i.e., actual cash to be paid off or brought in by the old
partners, as the case may be.

Pass the necessary journal entries and prepare the balance sheet of the
new firm.