Class 12 Accountancy: CBSE Sample Question Papers- Term I (2021-22)- 1 | Sample Papers for Class 12 Commerce PDF Download

General instructions:
Read the following instructions very carefully and strictly follow them:

1. This question paper comprises two PARTS – I and II. There are 55 questions in the question paper. 
2. There is an internal choice provided in each section.
   I. Part I, contains three Sections -A, B and C. Section A has questions from 1 to 18 and Section B has questions from 19 to 36, you have to attempt any 15 questions each in both the sections.
   II. Part I, Section C has questions from 37 to 41. You have to attempt any four questions.
   III. Part II, contains two Sections – A and B. Section A has questions from 42 to 48, you have to attempt any five questions and Section B has questions from 49 to 55, you have  to attempt any six questions.
3. All questions carry equal marks. There is no negative marking. 
4. Specific instructions related to  each Part and sub-divisions (Section)  is mentioned clearly before the questions. Candidates should read them thoroughly and attempt accordingly.

Correct Answer is Option (c)
A new partner may be admitted when firm wants to expand the existing business and requires fresh capital or the new partner possess such expertise which can be beneficial for the expansion of the business.

Q.2: Abhijit Ltd. forfeited 200 shares of ₹10 each for non-payment of final call of ₹ 4 per share. All the forfeited shares were re-issued at 8 ₹ per share. What amount will be transferred to Capital Reserve A/c?
(a) ₹ 700
(b) ₹ 800
(c) ₹ 900
(d) ₹ 1,000

Correct Answer is Option (b)
Balance in Share Forfeiture Account = 200 × ₹6 = ₹1,200
Loss on re-issue of shares = 200 × ₹2 = ₹400
Amount transferred to Capital Reserve = ₹1,200 – ₹400 = ₹ 800

Q.3: If a share of ₹ 10 on which ₹ 8 has been paid up is forfeited, it can be reissued at the minimum price of _________________.
(a) ₹ 10 per share
(b) ₹ 8 per share
(c) ₹ 5 per share
(d) ₹ 2 per share

Correct Answer is Option (d)
Re-issue price must not be less than the amount unpaid on forfeited shares.

Q.4: A Ltd. took over the assets of ₹ 15,00,000 and liabilities of ₹ 5,00,000 of P Ltd. for a purchase consideration of ₹ 13,68,500. ₹ 25,500 were paid by issuing a promissory note in favour of P Ltd. payable after two months and the balance was paid by issue of equity shares of ₹ 100 each at a premium of 25%. The number of shares to be issued to P Ltd. is:
(a) 8,444
(b) 10,744
(c) 3,548
(d) 12,044

Correct Answer is Option (b)
Purchase consideration = ₹13,68,500
Bills payable issued = ₹25,500
Remaining amount of which shares are to be issued
= 13,68,500 – 25,500 = ₹13,43,000
Face value of each share = ₹100
Premium = 25% of 100 = ₹25
Number of shares issued =   =  ₹10,744 shares

Q.5: What will be the correct sequence of events?
(i) Receipt of Applications
(ii) Allotment of Shares
(iii) Issue of Prospectus
(a) (iii), (ii), (i)
(b) (i), (ii), (iii)
(c) (iii), (i), (ii)
(d) (i), (iii), (ii)

Correct Answer is Option (c)

Issue of Prospectus: The company first issues the prospectus to the public as an invitation to the public that a new company has come into existence and it needs funds for doing business.
Receipt of Applications: When prospectus  is    issued   to   the   public,  prospective investors intending to subscribe the share capital of the company would make an application along with the application money and deposit the same with a scheduled bank as specified in the prospectus.
Allotment of Shares: If minimum subscription has been received, the company may proceed for the allotment of shares after fulfilling certain other legal formalities.

Q.6: A, B, C and D were partners in a firm sharing profits in the ratio of 3 : 2 : 3 : 2. 

On 1st April, 2020, the partners decided to share the future profits in the ratio of 4 : 3 : 2 : 1. The claim against Workmen's Compensation Reserve has been estimated at ₹ 30,000. Find out the value of claim for Workmen's Compensation claim shown in the Revaluation Account.

(a) ₹ 5,000
(b) ₹ 25,000
(c) ₹ 30,000
(d) ₹ 55,000

Correct Answer is Option (a)
Journal Entry
Workmen's Compensation
Reserve - Dr.    25,000
Revaluation A/c - Dr.      5,000
To Workmen's Compensation
Claim A/c -  30,000

Q.7: Which of the following is false regarding right acquired by newly admitted partner?
(a) Right to share the assets of the partnership firm
(b) Right to share the profits of the partnership firm
(c) Right to sale the business or firm
(d) None of the above

Correct Answer is Option (c)
Any single partner cannot dissolve the firm, even cannot sell the property of the firm without the consent of other partners.

Q.8: Goodwill exists only when the firm earns ____________ .
(a) Normal profits
(b) Average profits
(c) Super profits
(d) Loss

Correct Answer is Option (c)
Goodwill can be defined as “the present value of a firm’s anticipated excess earnings” or as “the capitalised value attached to the differential profit capacity of a business”.

Q.9: Pradeep and Deepak are partners sharing profits in the ratio of 3:2. They admit Anil as a new partner for 1/5th share in the future profits of the firm which he gets equally from Pradeep and Deepak. What will be the new profit sharing ratio of Pradeep, Deepak, and Anil?
(a) 5 : 3 : 2
(b) 2 : 3 : 5
(c) 3 : 2 : 1
(d) 3 : 2 : 5

Correct Answer is Option (a)
Anil’s share = 1/5 or 2/10
Pradeep’s share = 3/5 – 1/10 = 5/10
Deepak’s share = 2/5 – 1/10 = 3/10
New profit sharing ratio between Pradeep, Deepak, and Anil will be 5 : 3 : 2.

Q.10: Anupam and Abhishek are partners sharing profits and losses in the ratio of 3 : 2. Their capital accounts showed balances of ₹ 1,50,000 and ₹ 2,00,000 respectively on April 01, 2020. If partnership deed provides for interest on capital @ 8% p.a. and the firm incurred a loss of ₹ 10,000 during the year, what will be the amount paid to them as interest on capital?
(a) ₹ 12,000 and ₹ 16,000 respectively
(b) ₹ 16,000 and ₹ 12,000 respectively
(c) ₹ 15,000 and ₹ 20,000 respectively
(d) Nil

Correct Answer is Option (d)
As the firm has incurred loss during the accounting year, no interest on capital will be allowed to any partner. The firm’s loss will however be shared by the partners in their profit sharing ratio.

Q.11: Which one of the following is not an essential feature of a partnership?
(a) There must be an agreement.
(b) There must be a business.
(c) The business must be carried on for profit.
(d) The business must be carried on by all the partners.

Correct Answer is Option (d)
Partnership is defined as “Relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all”. The essential features of partnership are:
(i) To form a partnership, there must be at least two persons.
(ii) It is created by an agreement.
(iii) The agreement should be for carrying on some legal business.
(iv) Sharing of profits and losses.
(v) Relationship of mutual agency among the partner.

Q.12: Share of goodwill brought in by new partner in cash is called:
(a) Premium
(b) Profit
(c) Assets
(d) Liabilities

Correct Answer is Option (a)
The incoming partner who acquires his share in the profits of the firm from the existing partners brings  in  some  additional  amount  to compensate them for loss of their share in super profits. Thus, share of goodwill brought in by new partner in cash is called premium.

Q.13: Find out the amount of goodwill at the three years’ purchase of the last five years’ average profits. The profits for last five years’ were ₹ 25,000, ₹10,000, ₹17,500, ₹17,500, and ₹30,000.
(a) ₹ 1,00,000
(b) ₹ 30,000
(c) ₹ 60,000
(d) ₹ 55,000

Correct Answer is Option (c)
Total Profits for five years = ₹ 25,000 + ₹ 10,000 + ₹ 17,500 + ₹ 17,500 + ₹ 30,000
= ₹1,00,000
Goodwill =  = ₹60,000

Q.14: The profit on reissue of forfeited shares is transferred to:
(a) General Reserve
(b) Capital Redemption Reserve
(c) Capital Reserve
(d) Revenue Reserve

Correct Answer is Option (c)
Profit on re-issue of forfeited shares is a capital gain for the company.

Q.15: Balance of Share Forfeiture Account is shown in the Balance Sheet under the item:
(a) Current Liabilities and Provisions
(b) Reserve and Surplus
(c) Share Capital
(d) Unsecured Loans

Correct Answer is Option (c)
The balance of shares forfeited account is shown as an addition to the total paid-up capital of the company under the head ‘Share Capital’ under title ‘Equity and Liabilities’ of the Balance Sheet till the forfeited shares are reissued.

Q.16: Share Allotment Account is a:
(a) Nominal Account
(b) Real Account
(c) Personal Account
(d) None of these

Correct Answer is Option (c)
Share Application or Share Allotment or Share capital A/c represents money from the shareholders, thus they all are personal accounts.

Q.17: Rakesh brought ₹3,00,000 and Suresh brought ₹ 1,00,000 for partnership firm. The profit for the year was ₹50,000. Find out the profit of each.
(a) Rakesh: ₹25,000 and Suresh: ₹25,000
(b) Rakesh : ₹37,500 and Suresh : ₹12,500
(c) Rakesh: ₹30,000 and Suresh: ₹20,000
(d) Rakesh: ₹12,500 and Suresh: ₹`37,500

Correct Answer is Option (a)
In the absence of partnership deed profits are distributed equally.

Q.18: Aditya is a partner in a firm. He withdraws ₹ 200 on the first day of each month. The rate of interest on drawings is 5% and the books are closed on 31st March. Find out the amount of interest on drawings.
(a) ₹120
(b) ₹65
(c) ₹112
(d) ₹156

Correct Answer is Option (b)
Interest on Drawings =  = ₹65

Q.19: Average profit earned by a firm is ₹ 80,000 which includes undervaluation of stock of ₹ 8,000 on an average basis. The capital invested in the business is ₹ 8,00,000 and the normal rate of return is 8%. Goodwill of the firm on the basis of 7 times the super profit will be:
(a) ₹ 1,68,000
(b) ₹ 2,00,000
(c) ₹ 88,000
(d) ₹ 24,000

Correct Answer is Option (a)
Actual average Profits of the firm = (Averable Profits + Undervaluation of Stock)
₹ (80,000 + 8,000) =  ₹ 88,000
Normal Profits =
=
= ₹64,000
Super Profit = Average Profit – Normal Profits
= ₹ (88,000 – 64,000) = ₹ 24,000
Goodwill = Super Profits × No. of Years of Purchase
= ₹ 24,000 × 7 = ₹ 1,68,000

Q.20: Roshan, Mahesh, Gopi and Jai are partners sharing profits and losses in the ratio of 3: 5: 2: 2. The balances of their capital accounts on 1st April, 2015 were: Roshan  ₹ 8,00,000, Mahesh ₹ 5,00,000, Gopi ₹ 6,00,000 and Jai ₹ 6,00,000.
After the accounts for the year ended 31st March, 2016 were prepared, it was discovered that interest on capital @ 10% per annum as provided in the partnership deed had not been credited to the partners' capital accounts before the distribution of profits. While rectifying the error, Mahesh's capital Account will be debited by:
(a) ₹ 17,500
(b) ₹ 54,167
(c) ₹ 18,333
(d) ₹ 20,000

Correct Answer is Option (b)

Q.21: Vineet and Pawan are partners sharing profits and losses in the ratio of 3: 2. During the year 2016-17, Vineet had made drawings of ₹ 10,000 on which, as per the partnership deed, interest on drawings @ 5 % p.a. had to be charged but was omitted while distributing the profit. What will be the adjusting journal entry to rectify the lapse in accounting?
(a)
(b)
(c)
(d) 

Correct Answer is Option (a)

Working Notes :
(a) Interest on Drawing for Vineet =
(b) Divisible Profit = Interest on Drawing = ₹ 250 must be distributed in the profit sharing ratio.
Vineet =
Pawan =

Q.22: Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).
Assertion (A): Raj and Shyam are partners in a firm having no partnership deed. Raj has advanced ₹ 10,000 as loan to the firm. He claims interest at the usual rate of interest of 12% p.a. as charged by the banks to which Shyam does not agree.
Reason (R): In the absence of partnership deed, interest on loan cannot be more than 6% p.a.
In the context of the above statements, which one of the following is correct?
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is true, but Reason (R) is false.
(D) Assertion (A) is false, but Reason (R) is true.

Correct Answer is Option (a)

Q.23: The firm with X, Y and Z as partners earned a profit of ₹ 3,00,000 during the year ended 31st March, 2020. 20% of this profit was to be transferred to general reserve. Which of the under mentioned options reflects the correct treatment for the above situation?
(a) Profit & Loss Appropriation A/c will be debited by ₹ 60,000 and General Reserve A/c will be credited by ₹ 60,000.
(b) General Reserve A/c will be debited by ₹ 60,000 and Profit & Loss Appropriation A/c will be credited by ₹ 60,000.
(c) General Reserve A/c will be debited by ₹ 60,000 and X, Y and Z’s Capital A/c A/c will be credited by ₹ 60,000.
(d) X, Y and Z’s Capital A/c will be debited by ₹ 20,000 respectively and General Reserve A/c will be credited by ₹ 60,000.

Correct Answer is Option (a)
Profit & Loss Appropriation  A/c Dr. 60,000
To General Reserve A/c 60,000   (Being 20% of profit transferred to general reserve)

Q.24: According to Profit and Loss Account, the net profit for the year is ₹4,20,000. Salary of a partner is ₹5,000 per month and the commission of another partner is ₹10,000. The interest on drawings of partners is ₹4,000. The net divisible profit as per Profit and Loss Appropriation Account will be:
(a) ₹3,54,000
(b) ₹3,46,000
(c) ₹4,09,000
(d) ₹4,01,000

Correct Answer is Option (a)
Net profit as per Profit and Loss Appropriation A/c
= ₹ 4,20,000 – (₹ 5,000 × 12) – ₹ 10,000 + ₹4,000 = ₹ 3,54,000

Q.25: Ajay is a partner in a firm. He withdrew ₹2,000 per month on the last day of every month during the year ended 31st March, 2019. If interest on drawings is charged @ 9% p.a., the interest charged will be:
(a) ₹990
(b) ₹1,080
(c) ₹1,170
(d) ₹2,160

Correct Answer is Option (a)
Interest on drawings =  = ₹990

Q.26: Menon and Thomas are partners in a firm. They share profits and losses equally. Their monthly drawings are ₹ 2,000 each. Interest on drawings is to be charged @10% p.a. What will be interest on Menon’s drawings for the year 2020 if drawings are made in the beginning of every month.
(a) ₹ 1,300
(b) ₹ 2,400
(c) ₹ 1,200
(d) ₹ 1,100

Correct Answer is Option (a)
Interest on Drawings
=
=
= ₹ 1,300

Q.27: Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).
Assertion (A): Right shares are given to equity shareholders in proportion to their share capital in the company.
Reason (R): Equity shareholders assume the greatest risk in the company.
In the context of the above statements, which one of the following is correct?
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is true, but Reason (R) is false.
(D) Assertion (A) is false, but Reason (R) is true.

Correct Answer is Option (b)
In general, fresh shares offered to existing shareholders in proportion to their existing holding in the share capital of the company are termed as “Rights shares” popularly known as right Issue.

Q.28: The directors of Bhagat and Company Ltd. issued 50,000 equity shares of ₹ 10 each at ₹ 12 per share, payable as ₹ 5 on application including the premium, ₹ 4 on allotment and the balance on final call. Applications were received for 70,000 shares out of which applications for 8,000 shares were rejected and their money was refunded. Money overpaid on application was applied towards sums due on allotment. All the money were duly received except from one shareholder holding 500 shares who failed to pay the final call money. Following will be the journal entry for application money transferred to share capital and adjustment made.
Share Application A/c Dr.   X
To Share Capital A/c                                  1,50,000
To Securities Premium Reserve A/c          Y
To Share Allotment A/c                               Z
To Bank A/c                                                 40,000
Here X, Y and Z are:
(a) ₹ 3,50,000, ₹ 1,00,000, and ₹ 60,000
(b) ₹ 1,00,000, ₹ 40,000, and ₹ 60,000
(c) ₹ 60,000, ₹ 3,50,000, and ₹ 40,000
(d) ₹ 80,000, ₹ 1,00,000, and ₹ 35,000

Correct Answer is Option (a)
Share Application A/c                                           Dr.     3,50,000
To Share Capital A/c (50,000 × ₹ 3)                                             1,50,000
To Securities Premium Reserve A/c (50,000 × ₹ 2)                      1,00,000
To Share Allotment A/c (12,000 × ₹ 5)                                            60,000
To Bank A/c (8,000 × ₹ 5)                                                               40,000

Q.29: Accounting treatment for partnership firm is similar to that of a sole proprietorship business with the exception of the following aspects:
(i) Maintenance of Partners’ Capital Accounts
(ii) Distribution of profit and loss among the partners
(iii) Adjustments for wrong appropriation of profits in the past
(iv) Reconstitution of the partnership firm
Which of the following statements is/are true:
(a) Only (i)
(b) Only (i) and (ii)
(c) Only (ii)
(d) All (i), (ii), (iii), and (iv)

Correct Answer is Option (d)

Q.30: Green Ltd. had allotted 10,000 shares to the applicants of 14,000 shares on pro rata basis. The amount payable on application is ₹ 2 per share. Mohan applied for 420 shares. The number of shares allotted and the amount carried forward for adjustment against allotment money due from Mohan are:
(a) 60 shares, ₹ 120
(b) 320 shares, ₹ 200
(c) 340 shares, ₹ 100
(d) 300 shares, ₹ 240

Correct Answer is Option (d)
Application received = 14,000
No. of shares allotted = 10,000
No. of shares allotted to Mohan = 420 x 10/14 = 300 shares
Application money received from Mohan :
Mohan sent application money for 420 shares × 2 = ₹ 840
Application money adjusted against 300 shares
Application (300 × ₹2)     ₹ 600
Excess Money                 ₹ 240
₹ 240 is to be adjusted against allotment

Q.31: Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).
Assertion (A): Equity shareholders have the right to participate in management.
Reason (R): Equity shareholders are the owners of the company.
In the context of the above statements, which one of the following is correct?
(a) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.

Correct Answer is Option (a)

Equity shareholders are the joint owners of the company. They have ownership rights in the company. They have the right to participate in the management of the company.

Q.32: A, B and C are partners sharing profits in the ratio of 5 :4: 1. C is given a guarantee that his minimum share of profit in any given year would be atleast ₹ 5,000. Deficiency, if any, would be borne by A and B equally. The profit for the year 2017-18 amounted to ₹ 40,000. How much deficiency will be borne by A and B?
(a) ₹ 500 each
(b) ₹ 1,000 each
(c) ₹ 20,000 each
(d) ₹ 8,000 each

Correct Answer is Option (a)
Share of profit



C's share is less by ₹ 1,000. So, the deficiency will be borne by A and B equally, Journal entry for the same will be:
A's capital A/c Dr. 500
B's capital A/c Dr. 500
To C's capital A/c 1,000  (Being deficiency contributed)

Q.33: Vijay and Sanjay are partners in a firm sharing profits and losses in the ratio of 3:2. They admitted Ajay into partnership with 1/4 share in profits. Ajay brings in ₹ 30,000 for capital and the requisite amount of premium in cash. The goodwill of the firm is valued at ₹ 20,000. The new profit sharing ratio is 2:1:1. What will be the sacrificing ratio of the old partners?
(a) 2:1
(b) 1:1
(c) 2:3
(d) 3:2

Correct Answer is Option (c)

Sacrificing Ratio is 2 : 3 as calculated below:
For Vijay, old ratio is 3/5and the new ratio is 2/4.  Hence, his sacrificing ratio is
=
For Sanjay old ratio is 2/5 and the new ratio is 1/4. Hence, his sacrificing ratio is
=

Q.34: Rajeev, a shareholder holding 500 shares of ₹10 each, did not pay the allotment money of ₹ 4 per share (including a premium of ₹2) and the first and final call of ₹ 3. Her shares were forfeited after the first and final call. Find out the amount to be debited in Share Forfeiture Account.
(a) ₹ 5,400
(b) ₹ 2,000
(c) ₹ 1,500
(d) ₹ 2,500

Correct Answer is Option (d)

Q.35: JXS Limited invited applications for 20,000 shares of ₹100 each at par, payable at ₹ 25 on application, ₹ 25 on allotment, ₹ 25 on first call and ₹ 25 on second and final call. Seema who applied for 1,000 shares was allotted 600 shares and the excess application money was adjusted against the allotment money on the shares allotted. Excess application money paid by Seema adjusted against allotment will be:
(a) ₹ 5,000
(b) ₹ 10,000
(c) ₹ 15,000
(d) ₹ 2,000

Correct Answer is Option (b)
Application money paid by Seema on 1,000 Shares = ₹ 25,000
Application money required on 600 shares allotted = ₹ 15,000
Excess application money paid by Seema adjusted = ₹ 25,000 – ₹ 15,000
= ₹ 10,000 against allotment

Q.36: The director of Renovo Ltd. forfeited 200 equity shares of ₹100 each for non-payment of the second and final call of `30 per share. Out of these, 150 shares were re-issued at ₹60 per share to Rohit. Find out the amount to be transferred to Capital Reserve A/c.
(a) ₹ 14,000
(b) ₹ 6,000
(c) ₹ 4,500
(d) ₹ 3,500

Correct Answer is Option (b)
Total amount forfeited on 200 share = 14,000 (200 shares ₹ 70)
Amount forfeited on 150 shares  = 10,500 (150 shares ₹70)
Amount forfeited on 50 shares  = 3,500 (50 shares ₹70)
Amount of loss on reissue of 150 shares =   6,000 (150 shares ₹40)
Amount of profit on reissued shares
transferred to capital reserve =   4,500 (₹10,500- ₹ 6,000)
Balance left in share projected account =   3,500 (₹14,000- ₹ 6,000- ₹ 4,500) (equal to amount forfeited on 50 shares)

Question no.’s 37 and 38 are based on the hypothetical situation given below :
Tanisha and Akash are in partnership sharing profits and losses in the ratio of 3 : 2. Their capital balances on 1st April, 2020 were ₹ 15,000 and ₹` 18,000 respectively. Interest on capital is to be provided at the rate of 5% per annum. Tanisha is entitled to a salary of ₹ 2,000 per quarter and Akash is entitled to a commission of 5% on sales. The sales and profits were ₹ 1,00,000 and ₹ 45,000 respectively.
Q.37:  Interest on capital payable to Tanisha is :

(a) ₹ 900
(b) ₹ 1,800
(d) ₹ 1,500
(d) ₹ 750

Correct Answer is Option (d)
Interest on capital is calculated as follows :
 = ₹ 750

Q.38: Interest on capital payable to Akash is :
(a) ₹ 900
(b) ₹ 1,800
(d) ₹ 1,500
(d) ₹ 750

Correct Answer is Option (a)
Interest on capital is calculated as follows :
=  ₹900

Question no.’s 39 to 41 are based on the hypothetical situation given below :
AB Ltd issued 3,00,000 shares of ₹ 100 each at 20% premium through e-IPO, payable as under: On application : ₹ 40 (including 10% premium) per share, on allotment : ₹ 40 (excluding 10% premium) per share, on first & final call : balance
Applications were received 5,00,000 shares. 50,000 share applications were rejected with letter of regret and pro-rata allotment was made to remaining share applicants. All money was duly received except from Raghav, who was allotted 15,000 shares failed to pay allotment and calls.

These shares were forfeited and out of which 9,000 shares were reissued at ₹ 75 per share fully paid.
Q.39: What was the amount called for first & final call per share?
(a) ₹ 20 per share
(b) ₹ 40 per share
(c) ₹ 30 per share
(d) None of these

Correct Answer is Option (c)

On application ₹ 40 per share including premium i.e. towards face value ₹ 30 per share. On allotment ₹ 40 per share excluding premium i.e. towards face value ₹ 40 per share.

Therefore, out of ₹ 100 towards face value on application and on allotment ₹ 70 per share. Hence, on first & final call ₹ 30 per share to be called.

Q.40: Which of the following amount is received on allotment of shares?
(a) ₹ 1,50,00,000
(b) ₹ 90,00,000
(c) ₹ 45,00,000
(d) ₹ 85,50,000

Correct Answer is Option (d)

Q.41: Which of the following amount will be debited to calls-in arrears account on allotment?
(a) ₹ 6,00,000
(b) ₹ 4,50,000
(c) ₹ 3,00,000
(d) ₹ 7,50,000

Correct Answer is Option (a)

Q.42: Which of the following are the sub headings of Current Liabilities?
(i) Short term borrowings
(ii) Trade payables
(iii) Short term provisions
(iv) Short term Investment
(v) Other current liabilities
(vi) Short term loans and advances
(a) (i), (ii), (iii), (v)
(b) (i), (iv), (v), (vi)
(c) (iii), (iv), (v), (vi)
(d) (ii), (iv), (v), (vi)

Correct Answer is Option (a)

Q.43: Which of the following is not included in sub heading ‘Inventory’?
(a) Stock of finished goods
(b) Work in progress
(c) Stores and spares
(d) Cheques in hand

Correct Answer is Option (d)

Q.44: Operating Ratio = 90%
Operating Expenses = ₹ 80,000
Sales = ₹ 6,00,000

Sales Return = ₹ 60,000
Calculate Cost of Goods Sold.
(a) ₹ 3,06,000
(b) ₹ 4,06,000
(c) ₹ 5,06,000
(d) ₹ 7,06,000

Correct Answer is Option (b)
Operating cost =
= ₹ 4,86,000
COGS = ₹ 4,86,000 – ₹ 80,000  = ₹ 4,06,000

Q.45: Debtors turnover ratio = 5 times. Cash sales are half of credit sales. Opening debtors are ₹ 20,000 and closing debtors are ₹ 10,000. Calculate cash sales and credit sales.
(a) ₹ 55,000 and ₹ 27,500
(b) ₹ 75,000 and ₹ 37,500
(c) Both (A) and (B)
(d) None of these

Correct Answer is Option (b)


=

75,000 = Net credit sales
Cash sales = 1 / 2 × 75,000
= ₹ 37,500

Q.46: Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A): All contingent liabilities are shown in the non-current liabilities section of the balance sheet.
Reason (R): A contingent liability refers to the claim which is uncertain to arise/which may or may not arise/which is dependent on a happening in future.
In the context of the above two statements, which of the following is correct?
(a) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true.

Correct Answer is Option (d)

All contingent liabilities are shown as a footnote to the balance sheet.

Q.47: Interest on Loans given by a financial company is shown in the Statement of Profit and Loss as:
(a) Revenue from Operations
(b) Other Income
(c) Sundry Expenses
(d) None of the above

Correct Answer is Option (a)

As the interest on loan given by a financial company forms the operational revenue so it is shown in the Revenue from operations.

Q.48: Capital Employed = ₹ 24,00,000
Net  Fixed  Assets = ₹ 12,00,000
Cost of Goods Sold or Cost of Revenue from Operations = ₹ 20,00,000
Gross Profit is = 40% on Cost
Calculate Working Capital Turnover Ratio.
(a) 2.33 times
(b) 2 times
(c) 3 times
(d) 1.46 times

Correct Answer is Option (a)
Gross profit =
= ₹ 8,00,000
Sales = Cost of Goods Sold + Gross Profit

= ₹ 20,00,000 + ₹ 8,00,000
= ₹ 28,00,000
Net Fixed Assets + Net Working Capital = Capital Employed
12,00,000 + Net Working Capital = ₹ 24,00,000
Net Working Capital = ₹ 24,00,000 – ₹ 12,00,000
Net Working Capital = ₹ 12,00,000

=
= 2.33 times

Q.49: If total sales is ₹2,50,000 and credit sales is  25% of cash  sales, the amount of credit sales is:
(a) ₹50,000
(b) ₹2,50,000
(c) ₹16,000
(d) ₹3,00,000

Correct Answer is Option (a)
Let cash sales be x
Credit sales = 25% of x
= 25x/100
= x / 4
Total sales = x + x / 4
₹ 2,50,000 = 5x /4
5x = ₹10,00,000

Credit sales = x / 4
=
= ₹ 50,000

Q.50: What will be the amount of gross profit of a firm if its average inventory is ₹80,000, Inventory turnover ratio is 6 times, and the selling price is 25% above cost?
(a) ₹1,20,000.
(b) ₹1,60,000.
(c) ₹2,00,000.
(d) None of the above.

Correct Answer is Option (a)

6 = Cost of  revenue from operations / `80,000
Cost of revenue from operations
= 6 × ₹80,000
= ₹4,80,000
Revenue from operations
= ₹4,80,000 + 25% of ₹4,80,000
= ₹4,80,000 + ₹1,20,000
= ₹6,00,000
Gross profit = Revenue from operations – Cost of revenue from operations
= ₹6,00,000 – ₹4,80,000
= ₹1,20,000

Q.51: Which of the following statements are false?
I. When all the comparative figures in a balance sheet are stated as percentage of the total, it is termed as horizontal analysis.
II. When financial statements of several years are analysed,  it  is  termed as vertical analysis.
III. Vertical Analysis is also termed as time series analysis.
(a) Both I and II
(b) Both I and III
(c) Both II and III
(d) All three I, II, III

Correct Answer is Option (d)

Q.52: Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A): Increasing the value of closing inventory increases profit.
Reason (R): Increasing the value of closing inventory reduces cost of goods sold.
In the context of the above two statements, which of the following is correct?
(a) Both (A) and (R) are correct and (R) is the correct reason of (A).
(b) Both (A) and (R) are correct but (R) is not the correct reason of (A).
(c) Only (R) is correct.
(d) Both (A) and (R) are wrong.

Correct Answer is Option (a)

Q.53: Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A): A high operating ratio indicates a favourable position.
Reasoning (R): A high operating ratio leaves a high  margin  to meet non-operating expenses.
In the context of the above two statements, which of the following is correct?
(a) (A) and (R) both are correct and (R) correctly explains (A).
(b) Both (A) and (R) are correct but (R) does not explain (A).
(c) Both (A) and (R) are incorrect.
(d) (A) is correct but (R) is incorrect.

Correct Answer is Option (c)

A high operating ratio shows the unfavourable condition of the business as it leaves a low margin for the non operating expenses. Hence, both the given statements are incorrect.

Q.54: Current ratio of Adaar Ltd. is 2.5:1. Accountant wants to maintain it  at 2:1. Following options are available.
(i) He can repay bills payable.
(ii) He can purchase goods on credit.
(iii) He can take short term loan.
Choose the correct option.
(a) Only (i) is correct.
(b) Only (ii) is correct.
(c) Only (i) and (iii) are correct.
(d) Only (ii) and (iii) are correct.

Correct Answer is Option (d)

Q.55: A company has an operating cycle of eight months. It has accounts receivables amounting to ₹1,00,000 out of which ₹60,000 have a maturity period of 11 months. How would this information be presented in the balance sheet?
(a) ₹40,000 as current assets and ₹60,000 as non-current assets.
(b) ₹60,000 as current assets and ₹40,000 as non-current assets.
(c) ₹1,00,000 as non-current assets.
(d) ₹1,00,000 as current assets.

Correct Answer is Option (d)
Accounts receivables will be matured within 11 months (means within 12 months). Hence, will be treated as current assets whether operating cycle is less than 12 months or not.