When a partner withdraws regularly a fixed sum of money at the end of every month, period for which interest is to be calculated on the drawings on an average is __________.
a.
12 months
b.
5.5 months
Correct Answer
c.
6.5 months
d.
6 months
Step-by-Step AI Explanation
Verified Method
The period for interest on drawings when a fixed sum is withdrawn at the end of every month is calculated using the formula: $\frac{\text{Time left after first drawing} + \text{Time left after last drawing}}{2}$. Here, it is $\frac{11 + 0}{2} = 5.5$ months. Option A (12) is incorrect, C (6.5) is for beginning of the month, and D (6) is for middle of the month.
Q2mcq
The mathematical expression that provides a measure of the relationship between two figures is called __________.
a.
Model
b.
Conclusion
c.
Decision
d.
Ratio
Correct Answer
Step-by-Step AI Explanation
Verified Method
A ratio is a mathematical expression that represents the relationship between two figures, useful for financial analysis. Options A, B, and C do not define the specific relationship between two figures in this accounting context.
Q3mcq
Income and Expenditure Account is prepared to find out :
a.
surplus or deficit
Correct Answer
b.
profit or loss
c.
financial position
d.
cash and bank balance
Step-by-Step AI Explanation
Verified Method
Income and Expenditure Account is a nominal account prepared by Not-for-Profit organizations to determine the surplus (excess of income over expenditure) or deficit (excess of expenditure over income). Profit or loss is for profit-making entities, and financial position is shown by a Balance Sheet.
Q4mcq
Which of the following statements is not true in relation to admission of a partner ?
a.
The firm is reconstituted under a new agreement
b.
Generally mutual rights of the partners change
c.
The existing agreement does not come to an end
Correct Answer
d.
The profits and losses of the previous years are distributed to the old partners
Step-by-Step AI Explanation
Verified Method
When a new partner is admitted, the old partnership agreement is terminated, and a new agreement comes into force. Therefore, the statement that the existing agreement does not come to an end is false. The other statements (A, B, and D) are true consequences of admission.
Q5mcq
Accounting report prepared according to the requirements of the user is __________.
a.
Trial balance
b.
Routine accounting report
c.
Balance sheet
d.
Special purpose report
Correct Answer
Step-by-Step AI Explanation
Verified Method
A special purpose report is designed to meet the specific requirements or needs of a particular user or stakeholder, whereas Trial balance and Balance sheet are standard periodic reports.
Q6mcq
Which of the following statement is false ?
a.
Reserve capital can be called at the time of winding up.
b.
Issued capital can never be more than the authorised capital.
c.
Paid up capital is part of called up capital.
d.
In case of under subscription, issued capital will be less than the subscribed capital.
Correct Answer
Step-by-Step AI Explanation
Verified Method
In case of under-subscription, the subscribed capital is always less than or equal to the issued capital; the issued capital cannot be less than the subscribed capital. Therefore, statement D is false. All other statements (A, B, and C) are correct definitions in company accounting.
Q7mcq
That part of share capital which can be called up only on the winding up of a company is called :
a.
Capital reserve
b.
Authorised capital
c.
Reserve capital
Correct Answer
d.
Called up capital
Step-by-Step AI Explanation
Verified Method
Reserve capital is that portion of the uncalled-up capital which a company has resolved, by special resolution, not to call up except in the event of its winding up.
Q8mcq
Statement of affairs is a __________.
a.
summary of cash transactions
b.
statement of income and expenditure
c.
summary of credit transactions
d.
statement of assets and liabilities
Correct Answer
Step-by-Step AI Explanation
Verified Method
A statement of affairs is a statement showing assets and liabilities, prepared under the single-entry system to determine the capital of a business at a specific point in time. It is not an account of cash or income.
Q9mcq
Donation received for a specific purpose is __________.
a.
Revenue expenditure
b.
Revenue receipt
c.
Capital expenditure
d.
Capital receipt
Correct Answer
Step-by-Step AI Explanation
Verified Method
Donation received for a specific purpose (e.g., Building Fund) is a capital receipt because it is not for general use but must be utilized for a specific capital objective. It is recorded in the Balance Sheet as a liability, not as revenue in the Income and Expenditure Account.
Q10mcq
In the absence of a partnership deed, profits of the firm will be shared by the partners in :
a.
Equal ratio
Correct Answer
b.
Capital ratio
c.
Both (a) and (b)
d.
None of these
Step-by-Step AI Explanation
Verified Method
According to the Indian Partnership Act, 1932, in the absence of a partnership deed, all profits and losses are shared equally among partners, regardless of their capital contributions.
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The following are the profits of a firm in the last five years : 2014 : ` 4,000 ; 2015 : ` 3,000 ; 2016 : ` 5,000 ; 2017 : ` 4,500 and 2018 : ` 3,500. The average profits of five years is __________.
a.
` 6,000
b.
` 12,000
c.
` 4,000
d.
` 5,000
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Kavitha is a partner in a firm. She withdraws ` 2,500 p.m. regularly. Interest on drawings is charged @ 4% p.a., calculate the interest on drawings using average period, if she draws at the beginning of every month.
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Calculate quick ratio from the following details : Total current liabilities ` 2,40,000; Total current assets ` 4,50,000; inventories ` 70,000; prepaid expenses ` 20,000.
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From the following particulars, prepare comparative income statement of Tharun Co. Ltd. Particulars: Revenue from operations (2016-17: 1,00,000; 2017-18: 1,25,000), Other income (2016-17: 25,000; 2017-18: 20,000), Expenses (2016-17: 75,000; 2017-18: 60,000)
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From the following details find out total sales made during the year. Particulars: Debtors on 1st January 2018 1,30,000; Cash received from debtors during the year 4,20,000; Sales returns 35,000; Bad debts 15,000; Debtors on 31st December 2018 2,00,000; Cash sales 4,60,000
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Akash, Bala, Chandru and Daniel are partners in a firm. There is no partnership deed. How will you deal with the following? (i) Akash has contributed maximum capital. He demands interest on capital at 10% per annum. (ii) Akash demands the profit to be shared in the capital ratio. But, others do not agree. (iii) Loan advanced by Chandru to the firm is ` 50,000. He demands interest on loan @ 12% per annum.
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The profits and losses of a firm for the last four years were as follows : 2015 : ` 15,000 ; 2016 : ` 17,000; 2017 : ` 6,000 (Loss) ; 2018 : ` 14,000. You are required to calculate the amount of goodwill on the basis of 5 years purchase of average profits of the last 4 years.
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Rajan Ltd. purchased machinery of ` 6,00,000 from Jagan Traders. It issued equity shares of ` 10 each fully paid in satisfaction of their claim. What entries will be made if such issue is made ? (i) shares issued at par. (ii) at a premium of 50%.
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From the following particulars of Maria Ltd. and Kala Ltd., prepare common-size income statement for the year ended 31st March 2019. Particulars: Revenue from operations (Maria: 1,00,000; Kala: 2,00,000), Other income (Maria: 10,000; Kala: 30,000), Expenses (Maria: 70,000; Kala: 1,20,000)
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From the following information calculate debt equity ratio. Particulars: Equity and Liabilities: 1. Shareholder's Funds: (a) Share capital (Equity share capital 1,00,000), (b) Reserves and surplus 60,000; 2. Non-Current liabilities: Long-term borrowings (Debentures) 80,000; 3. Current liabilities: (a) Trade payables 50,000, (b) Other current liabilities: Outstanding expenses 30,000.
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How will the following appear in the final accounts of Marthandam Women Cultural Association? Stock of sports materials on 1.4.2018 : 32,000; Sports materials purchased during the year : 1,68,000; Sale of old sports materials during the year : 1,000; Stock of sports materials on 31.3.2019 : 20,000
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From the following particulars calculate total purchases. Particulars: Sundry creditors on 1st April, 2017 75,000; Bills payable on 1st April, 2017 60,000; Paid cash to creditors 3,70,000; Paid for bills payable 1,00,000; Purchases returns 15,000; Cash purchases 3,20,000; Creditors on 31st March, 2018 50,000; Bills payable on 31st March, 2018 80,000
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From the following Balance Sheet of Arunan Ltd. as on 31.03.2019. Calculate (i) Debt-equity ratio (ii) Proprietary ratio and (iii) Capital gearing ratio. Particulars: 1. Shareholder's funds: (a) Share capital (Equity: 1,50,000; 8% Pref: 2,00,000), (b) Reserves and surplus 1,50,000; 2. Non-current liabilities: Long-term borrowings (9% Debentures)
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From the following Balance Sheet of Arunan Ltd. as on 31.03.2019. Calculate
(i) Debt-equity ratio
(ii) Proprietary ratio and
(iii) Capital gearing ratio
Particulars `
I. Equity and Liabilities
1. Shareholder's funds
(a) Share capital
Equity share capital 1,50,000
8% preference share capital 2,00,000
(b) Reserves and surplus 1,50,000
2. Non-current liabilities
Long-term borrowings (9% Debentures) 4,00,000
3. Current liabilities
(a) Short-term borrowings from banks 25,000
(b) Trade payables 75,000
Total 10,00,000
II. Assets
1. Non-current assets
Fixed Assets 7,50,000
2. Current assets
(a) Inventories 1,20,000
(b) Trade receivables 1,00,000
(c) Cash and cash equivalents 27,500
(d) Other current assets
Expenses paid in advance 2,500
Total 10,00,000
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From the following particulars of Tamil Educational Society, prepare Receipts and Payments accounts for the year ended 31st March, 2019.
Particulars ` Particulars `
Opening cash balance as on 1.4.2018 18,000
Building purchased 2,10,000
Rent paid 6,000
Staff salary 55,000
Scholarship given 15,200
Subscription received 2,65,000
Entrance fees received 18,500
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Akash, Mugesh and Sanjay are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Their balance sheet as on 31st March, 2017 is as follows :
Liabilities ` ` Assets `
Capital accounts : Buildings 1,10,000
Akash 40,000 Vehicle 30,000
Mugesh 60,000 Stock in trade 26,000
Sanjay 30,000 1,30,000 Debtors 25,000
Profit and Loss appropriation A/c 12,000 Cash in hand 15,000
General reserve 24,000
Workmen compensation fund 18,000
Bills payable 22,000
2,06,000 2,06,000
Pass journal entry to transfer accumulated profit general reserve and workmen compensation fund and prepare the capital account of the partners.
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From the following information, calculate the value of goodwill based on 3 years purchase of super profit.
(i) Capital employed : ` 2,00,000
(ii) Normal rate of return : 15%
(iii) Average profit of the business: ` 42,000
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Joy company issued 10,000 equity shares at ` 10 per share payable ` 5 on application, ` 3 on allotment and ` 2 on first and final call. The public subscribed for 9,000 shares. The directors allotted all the 9,000 shares and duly received the money. Pass the necessary journal entries.
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From the following Receipts and Payment Account of Ooty Recreation Club, prepare income and expenditure account for the year ended 31.03.2018.
Receipts ` Payments `
To opening balance Cash in hand 5,000
By sports materials purchased 10,000
To rent received 10,000
By stationery paid 7,000
To sale of investments 8,000
By computer purchased 25,000
To subscription received 54,000
By salaries 20,000
By closing balance Cash in hand 15,000
77,000 77,000
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Sriram and Raj are partners sharing profits and losses in the ratio of 2 : 1. Nelson joins as a partner on 1st April, 2017.
The following adjustments are to be made :
(i) Increase the value of stock by ` 5,000.
(ii) Bring into record investment of ` 7,000 which had not been recorded in the books of the firm.
(iii) Reduce the value of office equipment by ` 10,000.
(iv) A provision would also be made for outstanding wages for ` 9,500.
Give journal entries and prepare revaluation account.
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From the following particulars, calculate total sales.
Particulars ` Particulars `
Debtors on 1st April 2018 2,50,000
Bills receivable dishonoured 15,000
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From the following Receipts and Payment Account of Ooty Recreation Club, prepare income and expenditure account for the year ended 31.03.2018.
Receipts: Cash in hand 5,000; Rent received 10,000; Sale of investments 8,000; Subscription received 54,000.
Payments: Sports materials purchased 10,000; Stationery paid 7,000; Computer purchased 25,000; Salaries 20,000; Closing balance (Cash in hand) 15,000.
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From the following particulars, calculate total sales: Debtors on 1st April 2018 2,50,000; Bills receivable on 1st April 2018 60,000; Cash received from debtors 7,25,000; Cash received for bills receivable 1,60,000; Bad debts 30,000; Bills receivable dishonoured 15,000; Returns inward 50,000; Bills receivable on 31st March 2019 90,000; Sundry debtors on 31st March 2019 2,40,000; Cash sales 3,15,000.
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Kayal, Mala and Neela are partners sharing profits in the ratio of 2 : 2 : 1. Kayal retires and the new profit sharing ratio between Mala and Neela is 3 : 2. Calculate the gaining ratio.
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Sunil, Sumathi and Sundari are partners sharing profits in the ratio of 3 : 3 : 4. Sundari retires and her share is taken up entirely by Sunil. Calculate the new profit sharing ratio and gaining ratio.
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From the following statement of profit and loss of Mukesh Ltd. Calculate: (i) Gross profit ratio (ii) Net profit ratio.
Statement of Profit and Loss:
Revenue from operations 2,50,000; Income from investment 20,000; Total revenues 2,70,000; Purchase of stock in trade 90,000; Changes in inventories 10,000; Expenses on Employee benefits 15,000; Other expenses 55,000; Provision for Tax 25,000; Total Expenses 1,95,000; Profit for the year 75,000.
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From the following particulars, prepare comparative income statement of Tharun Co. Ltd. Particulars 2016-17 ` 2017-18 ` Revenue from operations 1,00,000 1,25,000 Other income 25,000 20,000 Expenses 75,000 60,000
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Akash, Bala, Chandru and Daniel are partners in a firm. There is no partnership deed. How will you deal with the following? (i) Akash has contributed maximum capital. He demands interest on capital at 10% per annum.
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Akash, Bala, Chandru and Daniel are partners in a firm. There is no partnership deed. How will you deal with the following? (ii) Akash demands the profit to be shared in the capital ratio. But, others do not agree.
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Akash, Bala, Chandru and Daniel are partners in a firm. There is no partnership deed. How will you deal with the following? (iii) Loan advanced by Chandru to the firm is ` 50,000. He demands interest on loan @ 12% per annum.
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From the following information calculate debt equity ratio. Particulars: Share capital (Equity) 1,00,000; Reserves and surplus 60,000; Long-term borrowings (Debentures) 80,000; Trade payables 50,000; Outstanding expenses 30,000.
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(b) From the following Balance Sheet of Arunan Ltd. as on 31.03.2019. Calculate (i) Debt-equity ratio (ii) Proprietary ratio and (iii) Capital gearing ratio. Balance Sheet Data provided.
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From the following particulars of Tamil Educational Society, prepare Receipts and Payments accounts for the year ended 31st March, 2019.
Particulars: Opening cash balance as on 1.4.2018 18,000; Rent paid 6,000; Scholarship given 15,200; Entrance fees received 18,500; Building purchased 2,10,000; Staff salary 55,000; Subscription received 2,65,000.
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Akash, Mugesh and Sanjay are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Their balance sheet as on 31st March, 2017 is as follows:
Liabilities: Capital accounts (Akash 40,000; Mugesh 60,000; Sanjay 30,000) = 1,30,000; Profit and Loss appropriation A/c 12,000; General reserve 24,000; Workmen compensation fund 18,000; Bills payable 22,000. Total = 2,06,000
Assets: Buildings 1,10,000; Vehicle 30,000; Stock in trade 26,000; Debtors 25,000; Cash in hand 15,000. Total = 2,06,000
Pass journal entry to transfer accumulated profit general reserve and workmen compensation fund and prepare the capital account of the partners.
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From the following statement of profit and loss of Mukesh Ltd. Calculate (i) Gross profit ratio (ii) Net profit ratio. (Revenue from operations 2,50,000; Income from investment 20,000; Purchase 90,000; Change in inventories 10,000; Employee benefits 15,000; Other expenses 55,000; Tax 25,000).
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From the following particulars, prepare comparative income statement of Tharun Co. Ltd. Particulars 2016-17 ` 1,00,000 25,000 75,000 2017-18 ` 1,25,000 20,000 60,000
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From the following particulars of Maria Ltd. and Kala Ltd., prepare common-size income statement for the year ended 31st March 2019.
Particulars | Maria Ltd. ` | Kala Ltd. `
Revenue from operations | 1,00,000 | 2,00,000
Other income | 10,000 | 30,000
Expenses | 70,000 | 1,20,000
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From the following Balance Sheet of Arunan Ltd. as on 31.03.2019. Calculate (i) Debt-equity ratio (ii) Proprietary ratio and (iii) Capital gearing ratio.
[Table provided in source containing Shareholder's funds, Non-current liabilities, Current liabilities, and Assets]
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Akash, Mugesh and Sanjay are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Their balance sheet as on 31st March, 2017 is as follows: [Balance Sheet data with Capital accounts, P&L Appropriation, General reserve, Workmen compensation fund, and Assets like Buildings, Vehicle, Stock, Debtors, Cash]
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From the following particulars, prepare comparative balance sheet of Malar Ltd. as on 31st March, 2016 and 31st March, 2017.
[Balance sheet table provided with Share capital, Reserves, Long-term borrowings, Trade payables, Fixed assets, Investments, Inventories, and Cash]
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