Accountancy: CUET Mock Test - 10 - CUET MCQ

The correct answer is option D: Rs. 6,00,000.

- A and B are partners, and C is admitted with a 1/5th share.
- C brings Rs. 1,20,000 as his share towards capital.
- This means the total capital of the firm is 1,20,000 / (1/5) = Rs. 6,00,000.
- Therefore, the total net worth of the firm is Rs. 6,00,000.

The correct answer is Spreadsheets.

Key Points

• A spreadsheet is a file that exists of cells in rows and columns and can help arrange, calculate, and sort data.
• It used for accounting and recording data.
• Data in a spreadsheet can be numeric values, as well as text, formulas, references, and functions.
• Microsoft Excel, a program in which you enter data into columns, is an example of a spreadsheet program.
• Common characteristics of spreadsheet software include built-in support for complex mathematical calculations and formulas, the ability to generate graphs and summary "pivot tables" from data, and the ability to customize what types of data are stored in which rows and columns.

The correct answer is Operating System.

Key Points

• Operating System acts as an interface connecting the computer user to the computer hardware.
• It is system software that manages computer hardware, software resources, and provides common services for computer programs.
• It sits in between the applications you run and the hardware, using the hardware drivers as the interface between the two.
• For example, when an application wants to print something, it hands that task off to the operating system.
• Following are some of the important functions of an operating System: Memory Management, Processor Management, Device Management, File Management, Security, Control over system performance, Job accounting, Error detecting aids, Coordination between other software and users.
• Some of the commonly used Operating Systems-
  • Microsoft Windows
  • Apple macOS
  • Linux
  • Android
  • Apple's iOS
  • UNIX

The correct answer is 11.

Key Points

• Eleven data formats are available in Microsoft Excel for data Storage.
• Some of them are Accounting, Date, Time, Currency, Percentage, Text, etc.
• Data is one of the information types that are accessible in dominate, which we utilize for the most part in our everyday dominant information works.
• A date can be shown in more than one way in dominant according to the prerequisite.
• A date has various quantities of configurations in light of topographical districts.
• Since various topographical locales utilize a date in various ways, Excel accompanies numerous quantities of arrangements to show dates.

Important Points

• Microsoft Excel:
  • MS Excel is a commonly used Microsoft Office application.
  • It is a spreadsheet program that is used to save and analyze numerical data.
  • MS Excel is a spreadsheet program where one can record data in the form of tables.
  • It is easy to analyze data in an Excel spreadsheet.

Concept:

• A database is a systematic collection of data. They support electronic storage and manipulation of data.
• Databases make data management easy.
• Database Management System (DBMS) is a collection of programs which enables its users to access database, manipulate data, reporting and representation of data. It also helps to control access to the database.
• Database Management Systems are not a new concept and as such, had been first implemented in the 1960s.

Advantages of Database Management System (DBMS)

1. Improved data sharing

• An advantage of the database management approach is, the DBMS helps to create an environment in which end users have better access to more and better-managed data.
• Such access makes it possible for end-users to respond quickly to changes in their environment.

2. Improved data security

• The more users access the data, the greater the risks of data security breaches. Corporations invest considerable amounts of time, effort, and money to ensure that corporate data are used properly.
• A DBMS provides a framework for better enforcement of data privacy and security policies.

3. Better data integration

• Wider access to well-managed data promotes an integrated view of the organization’s operations and a clearer view of the big picture.
• It becomes much easier to see how actions in one segment of the company affect other segments.

4. Minimized data inconsistency

• Data inconsistency exists when different versions of the same data appear in different places.
• For example, data inconsistency exists when a company’s sales department stores a sales representative’s name as “Bill Brown” and the company’s personnel department stores that same person’s name as “William G. Brown,” or when the company’s regional sales office shows the price of a product as $45.95 and its national sales office shows the same product’s price as $43.95.
• The probability of data inconsistency is greatly reduced in a properly designed database.

The correct answer is Charles Bachman.

Important Points

• The first database management system, Integrated Data Store, was created by Charles Bachman and his colleagues (IDS).
• A database management system, sometimes known as a DBMS, is nothing more than an electronic data storage system.
• Users of the system are provided with the ability to carry out various types of operations on such a system for either manipulating the database's data or managing the database structure itself.

Key Points

• The database management system was developed in order to store enormous amounts of data, which can take any form, including images, text, audio files, and video files.
• Users of DBMS can store and access data in any format.
• The fundamental tenet of this system is that each image is handled as a data element, much like a number, with "image" being one of the data types.

The correct answer is Redeemable Debentures.

Key Points

Redeemable and Irredeemable (Perpetual) Debentures:

• Redeemable Debentures: These are issued for a specific period. The issuing company is obligated to repay the principal amount on a fixed date or upon demand after the expiry of that period.
• Irredeemable Debentures (Perpetual): There is no fixed date of redemption for these debentures. They are redeemable only on the winding up of the company or on the happening of certain events specified in the terms of the issue.

Additional Information The other types debentures are the following:

Secured and Unsecured Debentures:

• Secured Debentures: These are backed by assets of the company, meaning that if the company fails to repay the debt, the assets pledged as security can be sold to repay debenture holders. The security offered makes these less risky for investors.
• Unsecured Debentures: Also known as naked debentures, these are not secured by any asset. They are issued solely based on the creditworthiness of the issuer. The risk for investors is higher, which generally results in a higher interest rate for these debentures.

Convertible and Non-Convertible Debentures:

• Convertible Debentures: These can be converted into equity shares of the issuing company after a specific period of time, as per the terms of the issue. This feature is attractive to investors who expect the share price to rise in the future.
• Non-Convertible Debentures (NCDs): These cannot be converted into equity shares of the company. They are usually redeemed at the end of their term. Investors prefer NCDs for the regular income they provide through interest payments.

Registered and Bearer Debentures:

• Registered Debentures: These are recorded in the register of debenture holders maintained by the issuing company. The interest and principal are paid only to the registered holder. They are transferable, but the transfer needs to be registered with the company.
• Bearer Debentures: These are not recorded in the company’s register and are transferable by mere delivery. The possessor of the bearer debentures is considered the owner. Interest and principal are paid to the bearer or holder of the instrument.

Fixed and Floating Rate Debentures:

• Fixed Rate Debentures: The interest rate on these debentures remains constant throughout the term of the debenture.
• Floating Rate Debentures: The interest rate on these debentures is linked to a benchmark rate (like the bank rate) and varies with it over the term of the debenture.

Zero-Coupon Debentures: These are issued at a discount to their face value and do not carry any stated rate of interest. The difference between the issue price and the redemption price represents the return to the investor.

The correct answer is Irredeemable Debentures.

Key PointsRedeemable and Irredeemable (Perpetual) Debentures:

• Redeemable Debentures: These are issued for a specific period. The issuing company is obligated to repay the principal amount on a fixed date or upon demand after the expiry of that period.
• Irredeemable Debentures (Perpetual): There is no fixed date of redemption for these debentures. They are redeemable only on the winding up of the company or on the happening of certain events specified in the terms of the issue.

Additional Information The other types debentures are the following:

Secured and Unsecured Debentures:

• Secured Debentures: These are backed by assets of the company, meaning that if the company fails to repay the debt, the assets pledged as security can be sold to repay debenture holders. The security offered makes these less risky for investors.
• Unsecured Debentures: Also known as naked debentures, these are not secured by any asset. They are issued solely based on the creditworthiness of the issuer. The risk for investors is higher, which generally results in a higher interest rate for these debentures.

Convertible and Non-Convertible Debentures:

• Convertible Debentures: These can be converted into equity shares of the issuing company after a specific period of time, as per the terms of the issue. This feature is attractive to investors who expect the share price to rise in the future.
• Non-Convertible Debentures (NCDs): These cannot be converted into equity shares of the company. They are usually redeemed at the end of their term. Investors prefer NCDs for the regular income they provide through interest payments.

Registered and Bearer Debentures:

• Registered Debentures: These are recorded in the register of debenture holders maintained by the issuing company. The interest and principal are paid only to the registered holder. They are transferable, but the transfer needs to be registered with the company.
• Bearer Debentures: These are not recorded in the company’s register and are transferable by mere delivery. The possessor of the bearer debentures is considered the owner. Interest and principal are paid to the bearer or holder of the instrument.

Fixed and Floating Rate Debentures:

• Fixed Rate Debentures: The interest rate on these debentures remains constant throughout the term of the debenture.
• Floating Rate Debentures: The interest rate on these debentures is linked to a benchmark rate (like the bank rate) and varies with it over the term of the debenture.

Zero-Coupon Debentures: These are issued at a discount to their face value and do not carry any stated rate of interest. The difference between the issue price and the redemption price represents the return to the investor.

The correct answer is ₹1,20,000.

Key Points

• The discount on issue of debentures is calculated as 10% of the face value of debentures issued.
• So, for debentures worth ₹12,00,000, the discount is: = 10% of ₹12,00,000 = ₹1,20,000.
• This is the amount by which the received funds are less than the nominal value of the debentures, representing an expense to the company over the life of the debentures. Correct answer: 3) ₹1,20,000

The correct answer is ₹1,20,000.

Key Points

• For debentures issued at a premium, the premium amount is credited to the "Securities Premium Account".
• The premium is 15% of the face value of the debentures issued.
• So, for ₹8,00,000 face value of debentures, the premium would be: = 15% of ₹8,00,000 = ₹1,20,000 Correct answer: 1) ₹1,20,000

The correct answer is ₹8,00,000.

Key Points

Scenario Given:

• Company raises a loan of ₹5,00,000 from PNB using 5% debentures of ₹8,00,000 as collateral.
• Collateral: The debentures valued at ₹8,00,000 are used as security for the loan.
• Debenture Suspense Account: This account is implicated when debentures are involved in transactions not directly affecting their face value but indicating a specific status or earmarking.

Explanation:

• Purpose of Debenture Suspense Account:
  • It is used to indicate the reserved or earmarked status of debentures used as collateral.
  • Does not alter the financial value of debentures in the company’s balance sheet but signifies their encumbrance.
• Debit to Debenture Suspense Account:
  • Reflecting the entire face value (₹8,00,000) of the debentures as being pledged for the loan.
  • Indicates the specific allocation or reservation of these debentures against the obtained loan.
• Accounting Implication:
  • Demonstrates transparency in the company's financial documentation by clearly earmarking assets (debentures in this case) tied to specific liabilities.
  • Ensures accuracy in depicting the company's financial position, specifically the relationship between pledged assets and associated liabilities.

Conclusion:

• Debiting the Debenture Suspense Account with ₹8,00,000 serves as an accounting maneuver to clearly showcase the transaction's nature where debentures are used as collateral for a loan, without altering their value on the balance sheet but earmarking them as committed for the duration of the loan.

Let their investments be Rs. x for 14 months, Rs. y for 8 months and Rs. z for 7 months respectively.
Then, 14x : 8y : 7z = 5 : 7 : 8.

The correct journal entry for an unrecorded investment of Rs. 30,000 at the time of admission of a partner in a firm is:

- Unrecorded Investment A/c Dr. 30,000
- To Revaluation A/c 30,000

This entry recognizes the unrecorded investment made by the new partner and adjusts the value of the investment by crediting the Revaluation Account. This ensures that the new partner's investment is properly accounted for in the books of the firm.

To find the capital balances for each partner, taking C's capital as the base capital, we need to calculate the total capital of C and then adjust the capital balances of A and B accordingly.

Calculating C's Total Capital:

- C's total capital = Capital paid + Goodwill paid
- C's total capital = Rs. 1,20,000 + Rs. 60,000
- C's total capital = Rs. 1,80,000

Adjusting A's and B's Capital Balances:

Since A and B are sharing profits in the ratio of 5:3, we can calculate their respective capital balances as follows:

- A's capital = (C's total capital / 1/5) * 5
- A's capital = (Rs. 1,80,000 / 1/5) * 5
- A's capital = Rs. 3,00,000

- B's capital = (C's total capital / 1/5) * 3
- B's capital = (Rs. 1,80,000 / 1/5) * 3
- B's capital = Rs. 1,20,000