Goodwill brought by a new partner is the odd one out because it is a gain arising on admission, whereas Revaluation Profit, Investment Fluctuation Fund, and Accumulated Loss are all items related to past profits/losses or reserves of the firm.
Q2mcq1 mark
As per the Indian Partnership Act, 1932, the rate of interest allowed on loans advanced by Partners is :
a.
6% per annum
Correct Answer
b.
12% per annum
c.
8% per annum
d.
5% per annum
Step-by-Step AI Explanation
Verified Method
The correct rate is 6% per annum. Under the Indian Partnership Act, 1932, interest on loans advanced by partners to the firm is allowed at 6% p.a. if no separate agreement exists. The other rates are not the statutory rate.
Q3mcq1 mark
Closing balance of debtors $20,000$, Cash received $1,40,000$, Credit sales $1,20,000$. Opening balance of debtors :
a.
$20,000$
b.
$30,000$
Correct Answer
c.
$40,000$
d.
$1,30,000$
Step-by-Step AI Explanation
Verified Method
Debtors account: Opening debtors + Credit sales - Cash received = Closing debtors.
So, Opening debtors = Closing debtors + Cash received - Credit sales
= $20,000 + 1,40,000 - 1,20,000 = 40,000$.
Hence the opening balance of debtors is $40,000$.
Q4mcq1 mark
A, B and C are partners sharing profits in the ratio of $4 : 2 : 3$. C retires. The new profit sharing ratio between A and B will be :
a.
3 : 4
b.
2 : 1
c.
4 : 3
Correct Answer
d.
1 : 2
Step-by-Step AI Explanation
Verified Method
C retires, so A and B will share the remaining profits in the ratio of their original shares, i.e. $4 : 2$. This simplifies to $2 : 1$.
So the correct answer is $2 : 1$.
Q5mcq1 mark
Revenue from operations $4,00,000$, Cost of revenue from operations $1,50,000$, Administration expenses $50,000$ and Selling expenses $8,500$. The Net Profit is :
a.
$1,91,500$
Correct Answer
b.
$4,00,000$
c.
$2,00,000$
d.
$1,50,000$
Step-by-Step AI Explanation
Verified Method
Net Profit = Revenue from operations - Cost of revenue from operations - Administration expenses - Selling expenses
= $4,00,000 - 1,50,000 - 50,000 - 8,500$
= $1,91,500$.
Therefore, the net profit is $1,91,500$.
Q6mcq1 mark
Contra Voucher is used for :
a.
Credit purchase of assets
b.
Master entry
c.
Withdrawal of cash from bank for office use
Correct Answer
d.
Reports
Step-by-Step AI Explanation
Verified Method
A Contra Voucher is used for entries affecting both cash and bank accounts, such as withdrawal of cash from bank for office use. The other options are not the purpose of a contra voucher.
Q7mcq1 mark
When shares are issued for purchase of assets, the amount should be credited to :
a.
Vendor’s A/c
Correct Answer
b.
Sundry Assets A/c
c.
Share Capital A/c
d.
Bank A/c
Step-by-Step AI Explanation
Verified Method
When shares are issued for the purchase of assets, the asset account is debited and the vendor’s account is credited initially, because the liability to the supplier arises first. Thus, the amount should be credited to Vendor’s A/c.
Q8mcq1 mark
If the final amount due to a retiring partner is not paid immediately, it is transferred to :
a.
Retiring Partner’s Loan A/c
b.
Bank A/c
c.
Other Partner’s Capital A/c
d.
Retiring Partner’s Capital A/c
Correct Answer
Step-by-Step AI Explanation
Verified Method
If the final amount due to a retiring partner is not paid immediately, it is transferred to the Retiring Partner’s Capital A/c and shown as a liability until payment is made. Hence the correct answer is Retiring Partner’s Capital A/c.
Q9mcq1 mark
The average Rate of Return of similar concern is considered as :
a.
Normal Rate of Return
Correct Answer
b.
Expected Rate of Return
c.
Average Profit
d.
None of these
Step-by-Step AI Explanation
Verified Method
The average rate of return of a similar concern is taken as the **normal rate of return**. It represents the usual return expected in that type of business and is used as a benchmark for comparison. The other options are not correct because expected rate of return is a projected return, average profit is only a profit figure, and none of these is incorrect since the correct term is normal rate of return.
Q10mcq1 mark
Which is not the default group in Tally ?
a.
Sales Account
b.
Suspense Account
c.
Investments Account
Correct Answer
d.
Outstanding Expenses Account
Step-by-Step AI Explanation
Verified Method
The **Investments Account** is not a default group in Tally. Sales Account, Suspense Account, and Outstanding Expenses Account are default groups/accounts available in Tally. Investments has to be created separately if needed.
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Match List-I with List-II and select the correct answer using the codes given below.
List-I List-II
(1)Current Ratio (i)Liquidity
(2)Net Profit Ratio (ii)Efficiency
(3)Debt-Equity Ratio (iii)Long-term Solvency
(4)Inventory Turnover Ratio (iv)Profitability
a.
(1)-(iv), (2)-(iii), (3)-(ii), (4)-(i)
b.
(1)-(i), (2)-(iv), (3)-(iii), (4)-(ii)
c.
(1)-(i), (2)-(ii), (3)-(iii), (4)-(iv)
d.
(1)-(iii), (2)-(ii), (3)-(iv), (4)-(i)
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There are 500 members in a Club each paying ` 100 as Annual Subscription. Subscription due but not received for the Current year is ` 200; Subscription received in advance is ` 300. Find out the amount of Subscription to be shown in the Income and Expenditure account.
a.
` 49,900
b.
` 50,000
c.
` 49,800
d.
` 50,200
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From the following details, calculate the missing figure.
Particulars `
Capital as on 1st April 2023 40,000
Capital as on 31st March 2024 50,000
Additional Capital introduced during the year 7,000
Profit for the year 8,000
Drawings during the year ?
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Ananth and Suman are partners sharing profits and losses in the ratio of 3 : 2. They admit Saran for 1/5 share, which he acquires entirely from Ananth. Find out the new Profit Sharing ratio and Sacrificing ratio.
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How will the following appear in the Final accounts of Karaikudi Sports Club for the year ending 31st March 2024 ?
Particulars `
Tournament fund on 1st April 2023 90,000
Tournament fund investment on 1st April 2023 90,000
Interest received on tournament fund investment 9,000
Donation to tournament fund 10,000
Tournament expenses 60,000
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John is a partner in a Partnership firm. As per the Partnership Deed, interest on drawings is charged @ 12% p.a. During the year ended 31st Dec. 2023, he drew as follows.
Date `
March 1 6,000
June 1 4,000
September 1 5,000
December 1 2,000
Calculate the amount of interest on drawings by using Product method.
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From the following information, calculate the value of Goodwill on the basis of 3 years purchase of average profits of last four years.
Year Result Amount
2020 Profit 5,000
2021 Profit 8,000
2022 Profit 6,000
2023 Loss 3,000
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Kayalvizhi, Maanvizhi and Kuzhali are partners, sharing profits and losses in the ratio of 5 : 3 : 2. As from 1st April 2023, Vanmathi is admitted into the Partnership and the new profit sharing ratio is decided as 4 : 3 : 2 : 1. The following adjustments are to be made.
(a)Increase the value of Premises by ` 60,000.
(b)Depreciate stock by ` 5,000, furniture by ` 2,000 and machinery by ` 2,500.
(c)Create a provision for doubtful debts of ` 1,000.
Pass necessary journal entries.
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Nivetha Ltd., forfeited 100 shares of ` 10 each, ` 8 called up, on which Mayuri had paid application and allotment money of ` 6 per share. Of these, 75 shares were re-issued to Sowmiya by receiving ` 7 per share paid up as ` 8 per share.
Pass Journal entries for Forfeiture and Re-issue.
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From the following particulars, prepare comparative Income Statement of Barani Ltd.
2022 - 23 2023 - 24
` `
Revenue from Operations 30,000 45,000
Other Income 4,000 6,000
Expenses 10,000 15,000
Income Tax 30% 30%
Particulars
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David does not keep proper books of accounts. Following details are given from his records.
Particulars
1.4.2023 31.3.2024
Cash 43,000 29,000
Stock of Goods 1,20,000 1,30,000
Sundry Debtors 84,000 1,10,000
Sundry Creditors 1,05,000 1,02,000
Loan 25,000 20,000
Business Premises 2,50,000 2,50,000
Furniture 33,000 45,000
During the year he introduced further Capital of ` 45,000 and withdrew ` 2,500 per month from the business for his personal use. Prepare statement of Profit or Loss with the above information.
OR
Mary does not keep her books under double entry system. From the following details prepare Trading and Profit and Loss account for the year ending 31st March 2023 and a Balance Sheet as on that date.
Dr Cr
Particulars ` Particulars `
To Balance b/d 1,20,000 By Purchases 1,50,000
To Sales 3,60,000 By Creditors 2,50,000
To Debtors 3,40,000 By Wages 70,000
By Sundry Expenses 1,27,000
By Balance c/d 2,23,000
8,20,000 8,20,000
Cash Book
Other information :
Particulars 1st April 2022 31st March 2023
Stock of Goods 1,10,000 1,80,000
Sundry Debtors 1,30,000 ?
Sundry Creditors 1,60,000 90,000
Furniture and Fittings 80,000 80,000
Additional Information :
Credit Purchases 1,80,000
Credit Sales 2,90,000
Opening Capital 2,80,000
Depreciate Furniture and Fittings by 10% p.a.
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From the following Receipts and Payments account of Tenkasi Thiruvalluvar Manram, prepare Income and Expenditure account for the year ended 31st March 2022.
Receipts `
To Balance b/d
Cash in hand 14,000
To Interest received 5,000
To Subscription 55,000
To Legacies 48,000
To Entrance Fees 7,000
To Sale of Furniture 16,000
(Book Value ` 17,000)
Payments `
By Salaries 20,000
By Rent 24,000
By Travelling Expenses 2,000
By Printing and Stationery 6,000
By Investments made 50,000
By Sports equipments purchased 33,000
By Balance c/d
Cash in hand 10,000
1,45,000 1,45,000
OR
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From the following particulars, prepare Comparative Balance Sheet of Malar Ltd. as on 31st March 2021 and 31st March 2022.
31st March 2021 31st March 2022
I. ` `
1. Shareholder's fund
(a) Share Capital 2,00,000 2,50,000
(b) Reserve and Surplus 50,000 50,000
2. Non-Current liabilities
Long-term borrowings 30,000 60,000
3. Current liabilities
Trade Payables 20,000 60,000
Total 3,00,000 4,20,000
II.
1. Non-Current Assets
(a) Fixed Assets 1,00,000 1,50,000
(b) Non-Current Investments 50,000 75,000
2. Current Assets
Inventories 75,000 1,50,000
Cash and Cash equivalents 75,000 45,000
Total 3,00,000 4,20,000
Particulars
EQUITY AND LIABILITIES
ASSETS
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Salma and Lydia started business on 1st April, 2018 with capitals of ` 4,00,000 and ` 3,00,000 respectively. According to partnership deed, Salma is to be allowed a salary of ` 90,000 per annum. Interest on capital is to be allowed at 5% p.a. and after allowing Salma's salary and interest on capital, the remaining profit/loss is to be divided between the two partners in the ratio 1 : 1. The firm earned a net profit of ` 3,65,000 during the year. Prepare Profit and Loss Appropriation Account.
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Salma and Lydia started a business on 1st April 2018 with Capital of ` 4,00,000 and ` 3,00,000 respectively. According to the Partnership Deed, Salma is to get salary of ` 90,000 per annum, Lydia is to get 25% commission on Profit after allowing salary to Salma and interest on capital @ 5% p.a. and after charging such commission. Profit sharing ratio between the two partners is 1 : 1. During the year, the firm earned a profit of ` 3,65,000. Prepare Profit and Loss Appropriation account. The firm closes its accounts on 31st March every year.
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Find out the value of Goodwill by capitalising Super profits.
(i) Normal Rate of Return 10%.
(ii) Profits for the last four years are ` 30,000, ` 40,000, ` 50,000 and ` 45,000.
(iii) A non-recurring income of ` 3,000 is included in the above mentioned profit of ` 30,000.
(iv) Average capital employed is ` 3,00,000.
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Veena and Pearl are partners in a firm sharing profits and losses in the ratio of 2 : 1. Their Balance Sheet as on 31st March 2018 is as follows.
Liabilities ` ` Assets `
Capital accounts : Buildings 60,000
Veena 60,000 Machinery
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(a) Veena and Pearl are partners in a firm sharing profits and losses in the ratio of 2 : 1. Their Balance Sheet as on 31st March 2018 is as follows. Liabilities ` ` Assets ` Capital accounts : Buildings 60,000 Veena 60,000 Machinery 30,000 Pearl 40,000 1,00,000 Debtors 20,000 General Reserve 30,000 Stock 10,000 Workmen Cash at bank 30,000 Compensation Fund 10,000 Sundry Creditors 10,000 1,50,000 1,50,000 Deri is admitted on 1.4.2018 subject to the following conditions : (i)The new Profit sharing ratio among Veena, Pearl and Deri is 5 : 3 : 2. (ii)Deri has to bring a capital of ` 30,000. (iii)Stock to be depreciated by 20%. (iv)Anticipated claim on Workmen Compensation Fund is ` 1,000. (v)Unrecorded investment of ` 11,000 has to be brought into books. (vi)The Goodwill of the firm is valued at ` 30,000 and Deri brought cash for his share of Goodwill. The existing partners withdraw the entire amount brought by Deri towards Goodwill. Prepare the necessary ledger accounts and Balance Sheet after admission. OR
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(b) Saritha and Subha are partners, sharing profits and losses in the ratio of 5 : 3. The firm’s Balance Sheet as on 31st Dec. 2022 was as follows. Liabilities ` ` Assets ` ` Capital accounts : Buildings 34,000 Saritha 48,000 Furniture 6,000 Subha 40,000 88,000 Investments 20,000 Creditors 37,000 Debtors 40,000 Outstanding Wages 8,000 Less : Provision for bad debts 3,00037,000 Bills receivable 12,000 Stock 16,000 Bank 8,000 1,33,000 1,33,000 On 31st December 2022 Arivumathi was admitted into the Partnership for 1/4 share of profit with ` 12,000 as Capital subject to the following adjustments. (i)Furniture is to be re-valued at ` 5,000 and building is to be re-valued at ` 50,000. (ii)Provision for doubtful debts is to be increased to ` 5,500. (iii)An unrecorded investment of ` 6,000 is to be brought into account. (iv)An unrecorded liability ` 2,500 has to be recorded now. Prepare Revaluation Account and Capital Account of Partners after admission.
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(a) Vijaya, Kavitha and Roseline are partners who share profits and losses in their Capital ratio. Their Balance Sheet as on 31.12.2017 is as follows. Liabilities ` ` Assets ` Capital account Plant and Machinery 45,000 Vijaya 30,000 Stock 22,000 Kavitha 30,000 Debtors 15,000 Roseline 20,000 80,000 Cash at bank 10,000 General Reserve 8,000 Cash in hand 4,000 Creditors 8,000 96,000 96,000 Balance Sheet as on 31st December 2017
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(iv)Share of profit of Roseline is to be calculated from the closing of the last Financial year to the date of death on the basis of the average of the three completed years’ profits before death.
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Vairam Ltd. purchased furniture worth of ` 5,50,000 from Ravi Furniture Ltd. It issued equity shares of ` 10 each fully paid in satisfaction of their claim. What entries will be made if such issue is :
(i)at par
(ii)at premium of 10%
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Saranya Ltd. issued 20,000 equity shares of ` 10 each to the public at par. The details of the amount payable on the shares are as follows.
On Application ` 3 per share
On Allotment ` 4 per share
On First and Final call ` 3 per share
Application money was received on 30,000 shares. Excess application money was refunded immediately.
Pass Journal entries to record the above.
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