Solution
IMP THEORY QUESTIONS
Class 12 - Accountancy
1.
(c) ₹ 2,400
Explanation:
interest on drawing (1st April, 2022) = 20,000× 6
100
= 1,200
Interest on drawing (1st October, 2022) = 40,000× 6
100
×
6
12
= 1,200
total interest on drawing (31st march, 2023) = 1,200 + 1,200 = 2,400
2.
(d) 10,000
Explanation:
Rent paid to a partner is a charge against the profit. It means it will be paid whether there is profit or loss in the business. In this
case rent payable to the partners is Rs.10,000. This rent is a charge against profit. Hence should be paid to Partner.
3.
(b) (a) - (iv); (b) - (i); (c) - (iii); (d) - (ii)
Explanation:
investment fluctuation reserve is applied first for investment then rest will distributed in partners in old ratio. if amount of
investment fluctuation is less than the amount of decrease in investment then partners capital amount will be debited.
4.
(b) Mohan’s Sacrifice 30
2
Explanation:
Calculation of Mohan’s Sacrifice/gain will be:
Old Ratio = 3:2
New Ratio = 3:2:1
Sacrificing Ratio = 3:2
Sacrifice ratio = Old ratio - New ratio
3 3 3
Sacrifice of Hari = - =
5 6 30
Sacrifice of Mohan = 2
5
- 2
6
= 2
30
5.
(d) Option (iv)
Explanation:
No Entry for Promise (no effect at all)
Note: We never record promise to pay in the books. Reason: Person disqualified by law cannot make any promise (legally not
valid).
6. (a) 2 : 3
Explanation:
Incoming Partner's share = 1/4
remaining share = 1 - 1/4 = 3/4
New Ratio = M = 3/4 x 2/3 = 6/12
N = 3/4 x 1/3 = 3/12
R = 1/4 X 3/3 = 3/12
New Ratio = 6:3:3 = 2:1:1
Sacrificing ratio = Old share - New Share
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M= 3/5 - 2/4 = 2/20
N = 2/5 - 1/4 = 3/20
7. (a)
Profit and Loss Suspense A/c Dr.
To Deceased Partner's Capital A/c
Explanation:
Profit and Loss Suspense A/c Dr.
To Deceased Partner's Capital A/c
8.
(c) 1 : 3
Explanation:
Gaining ratio = New ratio - old ratio
6−5
P= − 1
2
=
5
12
=
12
1
12
6−3
R= 1
2
−
3
12
=
12
=
3
12
9.
(d) Cash Account by ₹ 9,900
Explanation:
Cash Account by ₹ 9,900
10. (a) Prepared only once during the life of a firm
Explanation:
Realisation Account is prepared only once in the life time of the partnership firm i.e. at the time of dissolution of partnership of
firm. Revaluation account is prepared at the time of reconstitution of partnership firm i.e. change in existing profit sharing
ratio, admission of a partner, retirement of a partner, death of a partner etc.
11.
(b) ₹ 60,000
Explanation:
Amount of forfeiture = 20,000 × 6 = ₹ 1,20,000
1,20,000
Amount of forfeiture on 10,000 reissued shares = 20,000
× 10,000 = ₹ 60,000
amount transferred to capital reserve = 60,000 - 0 = ₹ 60,000
12.
(b) 40,500 Shares
Explanation:
Shared issued
= 405000 ÷10
=40500
13. (a) Their transfer requires a deed of transfer.
Explanation:
Their transfer requires a deed of transfer.
14.
(c) ₹ 2,00,000
Explanation:
₹ 2,00,000 (2000x100)
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15.
(d) Other Expenses
Explanation:
other expense as it is not covered under any other heading
16.
(b) Non-operating Incomes
Explanation:
Rent received, Profit on sale of fixed assets, Compensation for acquisition of land are an example of Non-operating incomes.
Non-operating income is the portion of an organization's income that is derived from activities not related to its core operations
i.e. normal operating activity.
17.
(c) Total Assets
Explanation:
Total Assets should be taken as base i.e 100
18.
(b) 10,000
Explanation:
Source of cash is Rs.10,000 only i.e. Book value of asset is 15,000 and sold at a loss of Rs.5,000. Sale price = Rs. 15,000 - Rs.
5,000 = Rs. 10,000. Sale of assets is inflow of cash.
19.
(b) Purchase of marketable securities for ₹ 25,000 cash
Explanation:
Purchase of marketable securities is considered as cash and cash equivalents and so does not form the part of investing cash
flow.
20.
(c) Customized Software
Explanation:
Custom software development is the designing of software applications for a specific user or group of users within an
organization. Such software is designed to address their needs precisely as opposed to the more traditional and widespread off-
the-shelf software.
21. (a) Now( )
Explanation:
Now( )
22.
(b) 93,000
Explanation:
average profit = 75,000 +5,000 =80,000
normal profit = 7,00,000 x 7/100 = 49,000
super profit = average - normal
80,000 - 49,000 = 31,000
goodwill = 31,000 x 3 = 93,000
23.
(b) Purchase Goodwill and Self Generated Goodwill.
Explanation:
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There are two types of goodwill (1) Purchased Goodwill (2) Self Generated Goodwill.
Only purchased goodwill is shown in the books of accounts. Purchased goodwill is the excess amount paid on the purchase of a
running business. Self generated goodwill is that which is build over the year by hard work and dedication.
24.
(b) 2 : 1
Explanation:
Total Debts = 1,00,000
Current Liabilities = 50,000
Equity = Total Assets - Total Liabilites
= 1,25,000 - 1,00,000 = 25,000
Long-term Debts = Total Debts - Current Liabilities
= 1,00,000 - 50,000 = 50,000
Long-term Debts 50,000
Debt-Equity Ratio = = =2:1
Equity 25,000
25.
(b) 2.6 : 1
Explanation:
Liquid Assets = Current Assets – Inventory – Prepaid Expenses = 40,000 – 12,000 – 2,000 = 26,000
Current Liabilities = Current Assets – Working Capital = 40,000 – 30,000 = 10,000
Liquid Ratio = Liquid Assets / Current Liabilities = 26,000/10,000 = 2.6:1
26. (a) All of these
Explanation:
Financial statements of an enterprise include a balance sheet, profit & loss a/c and cash flow statement.
27. (a) External Analysis
Explanation:
Analysis conducted by the Investors and Creditors is known as External Analysis because they both are treated as outsiders.
28.
(c) SUM
Explanation:
SUM
29.
(b) Selecting values
Explanation:
Selecting values
30. Equal share of profits.
31. i. Drawings,
ii. Interest on Drawings
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32. i. Interest on Drawings = ₹ 60,000 × 100
×
12
= ₹ 2,400 (October to March 6 months)
ii. Since rate of interest is 8% and not 8 % p.a. interest will be calculated for 12 months:
8
Interest on Drawings = ₹ 60,000 × = ₹ 4,800
100
33. Reconstitution of a partnership firm means a change in relationships among partners. For example, a change in profit sharing ratio
on the retirement or admission of a partner.
34. JOURNAL
Date Particulars L.F. Dr.(₹) Cr.(₹)
2023
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April 1 General Reserve A/c Dr. 1,00,000
To Sanjay's Capital A/c 50,000
To Rahul's Capital A/c 30,000
To Manish's Capital A/c 20,000
(General Reserve distributed among partners in their old profit-sharing ratio)
35. Old ratio of A and B is 4 : 3
New ratio of A, B and C is 3 : 2 : 2
Sacrificing ratio = old ratio - new ratio
So, B's sacrifice = − = 3
7
2
7
1
36. JOURNAL ENTRY
Date Particulars L.F. Dr. (₹) Cr. (₹)
Sanjay's Capital A/c Dr. 23,760
Tanuj's Capital A/c Dr. 15,840
To Rajesh's Capital A/c 39,600
(Goodwill adjusted)
37. The retiring partner account is settled either by making payment in cash or by promising the retiring partner to pay in
installments along with interest or by making payment partly in cash and partly transferring to his loan account.
Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)
with adjusted
Retiring Partner‘s Capital A/c Dr.
capital
To Cash/Bank A/c If paid in cash
and/or
If not paid
To Retiring Partner‘s Loan A/c
immediately
(Being final settlement or retiring partners' capital account transferred to
his/her loan account.)
38. A partner's loan is not a part of the partner's capital. It is treated like any other loan from a third party, irrespective of the balance
in the partner's capital. Hence, it is to be discharged off by the amount realised from the sale of assets.
39. If forfeited shares are reissued at par or premium, the total amount forfeited on the shares is a gain of capital nature and is
transferred to Capital Reserved Account.
40. Share Capital Account is debited with the amount called-up to the date of forfeiture on share forfeited.
41. Secured debentures
Convertible debentures
Perpetual Debentures
Redeemable debentures
Basis of
Share Debenture
42. Distinction
1. Capital A share is a part of the Capital of the Company, therefore, A debenture is a part of the loan and as such, the
vs Loan the shareholders are the owners of the Company. debenture holders are the creditors of the Company.
2. Dividend
A shareholder gets dividend from the Company. A debenture holder gets interest from the Company.
vs Interest
43. If Operating Cycle cannot be determined, it is assume to be a time period of 12 months.
44. Item Major Head
(i) Bonus Employee Benefit Expenses
(ii) Revenue from Services rendered Revenue from Operations
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(iii) Internet Expenses Other Expenses
(iv) Materials Purchased Cost of Materials Consumed
(v) Discount on Issue of Debentures written off Finance Costs
(vi) Goodwill Amortized Depreciation and Amortization Expenses
45. Comparative Financial Statement is a tool of financial analysis that shows change in each item of the Financial Statement in both
absolute amount and percentage terms, taking the item in preceding accounting period as base.
46. Cash flow from financing activities is a category in a company’s cash flow statement that accounts for external activities that
allow a firm to raise capital. So issue 9% debentures in cash will be treated as cash flow from financing activity.
47. Exception reports are prepared upon matter happening as per instructions, conditions or exceptions.
48. Basis Average Profit Method Super Profit Method
Meaning It is average of the profits of past agreed years. It is the excess of average profit over normal profits
Normal rate of Normal rate of return is not relevant in the calculation Normal rate of return is considered while calculating
return of average profit. the super profit.
49. Long-term debt is debt that matures in more than one year. In financial statement reporting, companies must record long-term debt
issuance and all of its associated payment obligations on their financial statements. On the flip side, investing in long-term debt
includes putting money into debt investments with maturities of more than one year.
50. Intra-firm Analysis is a comparison of financial variables of a firm over a period of time. It is also known as Time Series Analysis
or Trend Analysis.
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