Accountancy · Sample Paper 1

General instructions

Section A · Part A — Partnership and Company Accounts

1. Question 11 mark

   In the absence of a partnership deed, interest on a partner's loan is allowed at

   1. A.5% p.a.
   2. B.6% p.a.
   3. C.8% p.a.
   4. D.nil
2. Question 21 mark

   Interest on capital is

   1. A.a charge against profit
   2. B.an appropriation of profit
   3. C.a liability
   4. D.an expense
3. Question 31 mark

   A partner withdrew ₹2 000 at the beginning of every month for a year. Interest on drawings at 6% p.a. is

   1. A.₹720
   2. B.₹780
   3. C.₹660
   4. D.₹1 440
4. Question 41 mark

   Goodwill brought in by a new partner is shared by old partners in their

   1. A.old ratio
   2. B.new ratio
   3. C.sacrificing ratio
   4. D.gaining ratio
5. Question 51 mark

   A and B share 3 : 2. C is admitted for 1/5 share, taken equally from A and B. The new ratio is

   1. A.5 : 3 : 2
   2. B.2 : 1 : 1
   3. C.1 : 1 : 1
   4. D.1 : 1 : 2
6. Question 61 mark

   Revaluation profit on admission is shared by

   1. A.all partners in new ratio
   2. B.old partners in old ratio
   3. C.new partner only
   4. D.old partners in sacrificing ratio
7. Question 71 mark

   On retirement, the continuing partners compensate the retiring partner for goodwill in their

   1. A.old ratio
   2. B.new ratio
   3. C.gaining ratio
   4. D.sacrificing ratio
8. Question 81 mark

   The deceased partner's share of profit till the date of death is debited to

   1. A.P&L Suspense A/c
   2. B.Revaluation A/c
   3. C.Realisation A/c
   4. D.Capital Reserve
9. Question 91 mark

   On dissolution, a partner's loan is paid

   1. A.before outside liabilities
   2. B.after outside liabilities
   3. C.with capitals
   4. D.never
10. Question 101 mark

    An unrecorded asset taken over by a partner on dissolution is

    1. A.debited to Realisation A/c
    2. B.credited to Realisation A/c
    3. C.credited to the partner's capital
    4. D.ignored
11. Question 111 mark

    The amount of share capital the company is allowed to issue as per its memorandum is

    1. A.issued capital
    2. B.authorised capital
    3. C.paid-up capital
    4. D.called-up capital
12. Question 121 mark

    Securities premium can be used to

    1. A.pay dividends
    2. B.issue fully paid bonus shares
    3. C.pay salaries
    4. D.buy stock
13. Question 131 mark

    Shares forfeited by a company are those on which

    1. A.dividend is unpaid
    2. B.calls are unpaid
    3. C.premium is paid
    4. D.bonus is issued
14. Question 141 mark

    Debentures issued as collateral security are

    1. A.recorded as a liability
    2. B.shown as a note below loans
    3. C.credited to capital
    4. D.treated as income
15. Question 151 mark

    Interest on debentures is

    1. A.an appropriation
    2. B.a charge against profit
    3. C.paid only in profit years
    4. D.a capital receipt
16. Question 161 mark

    Under Schedule III, ‘Calls in arrears’ are

    1. A.shown as current assets
    2. B.deducted from subscribed capital in notes
    3. C.shown as reserves
    4. D.income
17. Question 173 marks

    A and B are partners with capitals ₹2 00 000 and ₹1 00 000. The deed allows interest on capital at 10% p.a. and a salary of ₹2 000 per month to B. Net profit is ₹90 000. Prepare the P&L Appropriation Account (profit shared equally).

18. Question 183 marks

    Calculate goodwill by the super profit method: average profit ₹50 000; capital employed ₹3 00 000; normal rate of return 10%; goodwill = 3 years' purchase of super profit.

19. OR

    Question 183 marks

    X and Y share profits 3 : 1. Z is admitted for 1/4 share and brings ₹40 000 as premium for goodwill in cash. Pass journal entries.

20. Question 193 marks

    A company forfeited 100 shares of ₹10 each (called up ₹8) held by Ravi, who had paid ₹5 per share. Pass the forfeiture entry. These shares were reissued at ₹7 per share as ₹8 paid up. Pass the reissue entry and transfer the capital reserve.

21. Question 203 marks

    A company issued 1 000, 9% debentures of ₹100 each at a discount of 5%, redeemable at a premium of 10%. Pass the journal entry for issue.

22. Question 214 marks

    A, B and C share profits 3 : 2 : 1. B retires. Goodwill of the firm is ₹60 000. A and C share future profits 3 : 2. Calculate the gaining ratio and pass the entry for goodwill.

23. Question 224 marks

    On dissolution: creditors ₹40 000 accepted machinery worth ₹35 000 and ₹3 000 cash in full settlement. Realisation expenses ₹2 000 were paid by partner P. Pass journal entries.

24. OR

    Question 224 marks

    X and Y guaranteed Z a minimum profit of ₹30 000 per year, the deficiency to be borne by X and Y equally. Profits are shared 2 : 2 : 1. Net profit is ₹1 00 000. Show the distribution.

25. Question 236 marks

    A and B share profits 3 : 2 with capitals ₹1 00 000 each. C is admitted for 1/5 share, bringing ₹60 000 capital and ₹20 000 premium. Machinery is revalued up by ₹10 000 and a provision of ₹5 000 is made for doubtful debts. Prepare the Revaluation Account and Partners' Capital Accounts.

26. Question 246 marks

    R, S and T share 2 : 2 : 1. T dies on 30 June 2024; accounts close 31 March. T's capital ₹50 000; goodwill ₹50 000; last year's profit ₹60 000 (share till death on time basis). Prepare T's Capital Account showing the amount due to his executors.

27. Question 256 marks

    A company invited applications for 10 000 shares of ₹10 each at a premium of ₹2, payable: application ₹3, allotment ₹5 (including premium), call ₹4. All money was received. Pass journal entries.

28. OR

    Question 256 marks

    A company issued 20 000 shares of ₹10 each. Applications were received for 30 000 shares; allotment was made pro rata. Application money ₹3, allotment ₹4. Show how the excess application money is adjusted and the amount received on allotment.

29. Question 266 marks

    Show under the proper headings of a company's balance sheet: share capital ₹5 00 000; general reserve ₹50 000; 9% debentures ₹2 00 000; trade payables ₹40 000; machinery ₹4 00 000; inventories ₹1 00 000; trade receivables ₹80 000; cash ₹2 10 000.

Section B · Part B — Analysis of Financial Statements

1. Question 271 mark

   Common-size statements express items as a percentage of

   1. A.previous year
   2. B.a common base total
   3. C.net profit
   4. D.capital
2. Question 281 mark

   The ideal current ratio is generally

   1. A.1 : 1
   2. B.2 : 1
   3. C.3 : 1
   4. D.1 : 2
3. Question 291 mark

   Purchase of machinery is a cash flow from

   1. A.operating activities
   2. B.investing activities
   3. C.financing activities
   4. D.none
4. Question 301 mark

   Payment of dividend is a cash flow from

   1. A.operating
   2. B.investing
   3. C.financing
   4. D.non-cash
5. Question 313 marks

   Current assets ₹3 00 000, inventory ₹1 00 000, prepaid expenses ₹20 000, current liabilities ₹1 50 000. Find the current ratio and quick ratio.

6. Question 323 marks

   Give three objectives and any two limitations of financial statement analysis.

7. Question 334 marks

   Revenue from operations ₹5 00 000; gross profit 25% on revenue; opening inventory ₹40 000; closing inventory ₹60 000. Find the inventory turnover ratio.

8. Question 346 marks

   Calculate cash flow from operating activities: net profit before tax ₹1 00 000; depreciation ₹20 000; profit on sale of machinery ₹5 000; increase in trade receivables ₹15 000; increase in trade payables ₹10 000; decrease in inventory ₹8 000; tax paid ₹25 000.

9. OR

   Question 346 marks

   Prepare a comparative statement of profit and loss: revenue 2023–24 ₹5 00 000, 2024–25 ₹6 00 000; expenses ₹3 00 000 and ₹3 30 000; tax 30%.