Accountancy · Sample Paper 2

General instructions

Section A · Part A — Partnership and Company Accounts

1. Question 11 mark

   In the absence of a partnership deed, profits are shared

   1. A.in the capital ratio
   2. B.equally
   3. C.in the ratio of experience
   4. D.as decided by the senior partner
2. Question 21 mark

   Under the fixed capital method, interest on capital is credited to the partner's

   1. A.capital account
   2. B.current account
   3. C.loan account
   4. D.drawings account
3. Question 31 mark

   X's capital is ₹1 50 000 and interest on capital is 6% p.a. If X joined on 1 July and accounts close on 31 March, the interest is

   1. A.₹9 000
   2. B.₹6 750
   3. C.₹4 500
   4. D.₹7 500
4. Question 41 mark

   When a new partner brings goodwill in cash, it is credited to the 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 5 : 3. C is admitted for 1/4 share, and A and B keep their mutual ratio. The new ratio is

   1. A.5 : 3 : 2
   2. B.15 : 9 : 8
   3. C.5 : 3 : 4
   4. D.3 : 2 : 1
6. Question 61 mark

   An increase in the value of an asset on revaluation is

   1. A.debited to Revaluation A/c
   2. B.credited to Revaluation A/c
   3. C.credited to the asset's capital
   4. D.ignored
7. Question 71 mark

   The ratio in which continuing partners acquire the share of a retiring partner is the

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

   On retirement, accumulated profits (general reserve) are transferred to all partners' capital accounts in the

   1. A.new ratio
   2. B.old ratio
   3. C.gaining ratio
   4. D.equal ratio
9. Question 91 mark

   Realisation expenses paid by the firm are debited to

   1. A.partner's capital A/c
   2. B.Realisation A/c
   3. C.cash A/c
   4. D.P&L A/c
10. Question 101 mark

    On dissolution, a partner takes over stock worth ₹10 000 at ₹9 000. The entry is

    1. A.Partner's Capital Dr, To Realisation
    2. B.Realisation Dr, To Partner's Capital
    3. C.Stock Dr, To Partner's Capital
    4. D.Cash Dr, To Realisation
11. Question 111 mark

    The part of subscribed capital not yet called up by the company is

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

    The maximum discount at which forfeited shares can be reissued is

    1. A.10% of face value
    2. B.the amount forfeited on those shares
    3. C.the premium received
    4. D.any amount
13. Question 131 mark

    Calls in advance are shown in the balance sheet under

    1. A.share capital
    2. B.other current liabilities
    3. C.reserves and surplus
    4. D.current assets
14. Question 141 mark

    Debentures that are redeemable on the expiry of a fixed period are

    1. A.perpetual debentures
    2. B.redeemable debentures
    3. C.bearer debentures
    4. D.convertible debentures
15. Question 151 mark

    Loss on issue of debentures is written off from

    1. A.share capital
    2. B.securities premium first, then P&L
    3. C.general reserve only
    4. D.debenture account
16. Question 161 mark

    Under Schedule III, 'Loose tools' are shown under

    1. A.property, plant and equipment
    2. B.inventories
    3. C.trade receivables
    4. D.other current assets
17. Question 173 marks

    A withdrew ₹5 000 at the end of every quarter during the year ended 31 March 2025. Calculate interest on drawings at 8% p.a., and pass the journal entry.

18. Question 183 marks

    Calculate goodwill by the capitalisation of average profits method: average profits ₹60 000; normal rate of return 12%; capital employed ₹4 00 000.

19. OR

    Question 183 marks

    A and B share profits 3 : 2. C is admitted and the new ratio is 5 : 3 : 2. Calculate the sacrificing ratio of A and B.

20. Question 193 marks

    200 shares of ₹10 each (₹8 called up) were forfeited for non-payment of the first call of ₹3; ₹5 per share had been paid. 150 of these shares were reissued as fully paid for ₹7 per share. Pass the journal entries for reissue and transfer to capital reserve.

21. Question 203 marks

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

22. Question 214 marks

    A and B share profits 3 : 2. C is admitted for 1/4 share. On admission, buildings are appreciated by ₹20 000, stock is reduced by ₹5 000, a provision for doubtful debts of ₹2 000 is created, and an unrecorded creditor of ₹3 000 is to be recorded. Prepare the Revaluation Account.

23. Question 224 marks

    X, Y and Z share profits 2 : 2 : 1. Z died on 31 July 2024; accounts close on 31 March. Profit for the previous year was ₹1 20 000. The firm's goodwill is valued at ₹60 000. Calculate Z's share of profit till death and pass the entries for profit and goodwill.

24. OR

    Question 224 marks

    A and B, with capitals of ₹60 000 and ₹40 000, share profits equally. After the accounts were closed, it was found that interest on capital at 10% p.a. was omitted. Pass a single adjusting entry with a working table.

25. Question 236 marks

    P and Q are partners with capitals of ₹3 00 000 and ₹2 00 000 sharing profits 3 : 2. The deed provides: interest on capital 10% p.a.; Q's salary ₹3 000 per month; P's commission 5% of net profit after charging such commission; interest on drawings P ₹2 000, Q ₹1 500. Net profit before these adjustments was ₹2 10 000. Prepare the Profit and Loss Appropriation Account.

26. Question 246 marks

    A, B and C share profits 3 : 2 : 1. C retires on 31 March 2025. On that date: C's capital ₹50 000; general reserve ₹30 000; revaluation profit ₹12 000; the firm's goodwill is valued at ₹36 000; C's drawings ₹4 000; C's share of current year's profit ₹5 000. C is paid ₹24 000 in cash and the balance is transferred to his loan account. Prepare C's Capital Account and pass the entry for goodwill.

27. Question 256 marks

    A company issued 10 000 shares of ₹10 each at par, payable ₹3 on application, ₹4 on allotment and ₹3 on first and final call. All money was received except the call on 500 shares held by Mohan. His shares were forfeited. Pass the journal entries.

28. OR

    Question 256 marks

    A company issued 8 000 shares of ₹10 each at a premium of ₹2, payable ₹3 on application, ₹5 on allotment (including premium) and ₹4 on first and final call. Applications were received for 12 000 shares and allotment was made pro rata. Excess application money was adjusted towards allotment. All money was duly received. Pass the journal entries.

29. Question 266 marks

    Under which major heads and sub-heads will the following be shown in the balance sheet of a company as per Schedule III? (i) Bank overdraft (ii) Securities premium (iii) Goodwill (iv) 8% debentures repayable after 5 years (v) Trade payables (vi) Investments in shares of another company held for 3 years.

Section B · Part B — Analysis of Financial Statements

1. Question 271 mark

   Quick ratio is current assets minus inventory and prepaid expenses, divided by

   1. A.current liabilities
   2. B.total liabilities
   3. C.shareholders' funds
   4. D.revenue
2. Question 281 mark

   If cost of revenue from operations is ₹4 80 000 and average inventory is ₹60 000, the inventory turnover ratio is

   1. A.6 times
   2. B.8 times
   3. C.10 times
   4. D.12 times
3. Question 291 mark

   For a non-financial company, interest received on investments is a cash flow from

   1. A.operating activities
   2. B.investing activities
   3. C.financing activities
   4. D.not shown
4. Question 301 mark

   Comparing financial data of a firm over several years with a base year is

   1. A.common-size analysis
   2. B.trend analysis
   3. C.ratio analysis
   4. D.cash flow analysis
5. Question 313 marks

   From the following, calculate the debt-equity ratio: equity share capital ₹5 00 000; reserves and surplus ₹2 00 000; 10% debentures ₹3 50 000; current liabilities ₹1 00 000.

6. Question 323 marks

   Prepare a common-size statement of profit and loss: revenue from operations ₹4 00 000; cost of materials consumed ₹2 40 000; other expenses ₹40 000; tax rate 30%.

7. Question 334 marks

   Revenue from operations is ₹6 00 000; gross profit is 25% on cost; opening inventory ₹50 000; closing inventory ₹70 000. Calculate the inventory turnover ratio.

8. Question 346 marks

   Calculate cash flows from investing and financing activities: Machinery (gross book value less depreciation) opening ₹3 00 000, closing ₹4 20 000; depreciation charged ₹40 000; a machine with book value ₹20 000 was sold for ₹25 000. During the year, equity shares of ₹1 00 000 were issued, debentures of ₹50 000 were redeemed, dividend of ₹20 000 and interest on debentures of ₹6 000 were paid.

9. OR

   Question 346 marks

   Classify the following into operating, investing and financing activities for a manufacturing company, with reasons: (i) cash sales (ii) purchase of a patent (iii) issue of debentures (iv) payment of income tax (v) dividend received (vi) buy-back of equity shares.