Delhi Public School, Vijayawada

Term II Examinations – October 2023

CLASS - XII SUBJECT -
ACCOUNTANCY
TIME: 3 HOURS Maximum
Marks.80
GENERAL INSTRUCTIONS:
1. This question paper contains 34 questions. All questions are
compulsory.
2. This question paper is divided into two parts, Part A and B.
3. Part - A consist of Accounting for Partnership Firms and Companies
4. Part - B consist of Analysis of Financial Statements
5. Question 1 to 16 and 27 to 30 carries 1 mark each.
6. Questions 17 to 20, 31and 32 carries 3 marks each.
7. Questions from 21 ,22 and 33 carries 4 marks each
8.Questions from 23 to 26 and 34 carries 6 marks each
Part A: - Accounting for Partnership Firms and Companies
Sn Mark
Questions
o s
Ram and Shyam are partners sharing profits and losses equally.
Financial Statements are prepared for the year ended 31 st
March, 2021, which show a profit of ₹ 1,50,000 before allowing
interest on a loan of ₹ 50,000 from Shyam @ 10% p.a. Each
1 1
partner is entitled to salary as follows: Ram ₹ 15,000 per annum
Shyam ₹ 10,000 per annum What is Ram’s total appropriation of
profit for the year ended 31st March, 2021
a) ₹ 77,500 b) ₹ 70,000 c) ₹ 75,000 d) ₹ 80,000
A and B are sharing profits and losses in the ratio of 3:2. They
admit C as partner for 1/3rd share in the profits. He takes his
2 share 3/5th from A and 2/5th from B. New profit-sharing ratio will 1
be:
a) 5 : 6 : 3 b)2 : 4 : 6 c) 6 : 4 : 5 d) 18 : 24 : 38
 At the time of retirement of a partner, Workmen Compensation
Reserve after meeting the legal requirement, is transferred to: -
3 a) Revaluation A/C b) All Partners Capital A/C 1
c) Sacrificing Partners’ capital A/C d) Old Partners Capital
A/C.
Realization account is opened when:
a) All the assets of the firm are realised b) All the liabilities are
4 1
paid
c) Both (a) & (b) d) None of these
A manager gets 5% commission on net profit after charging
such commission. Gross profit ₹ 5,80,000 and expenses of
indirect nature other than manager’s commission are ₹
5 1
1,60,000. Commission amount will be
a) ₹ 21,000 b) ₹ 20,000 c) ₹ 15,000 d) ₹
22,000
Match List-I with List-II and select the correct answer using the codes
given below the lists (at the time of admission of partner situation):
List-I (Item/ Transaction) List-II\(Entry)
(a) Increase in liabilities 1. Credit- Revaluation a/c
(b) Bad Debts Recovered 2. Credit- Partner's Capital
a/c
6 (c) Accumulated losses 3. Debit- Revaluation a/c 1
(d) Profit & Loss a/c (Cr.) 4. Debit- Partner's Capital
a/c
a) (a)-3, (b)-1, (c)-2, (d)-4 b) (a)-1, (b)-3, (c)-4,
(d)-2
c) (a)-1, (b)-3, (c)-2, (d)-4 d) (a)-3, (b)-1, (c)-4,
(d)-2
P, Q and R were partners sharing profits in the ratio 2:2:1. Q
retires and the new profit-sharing ratio of P and R will be 3:1.
7 1
Gaining ratio will be:
a) 1:7 b) 2:1 c) 1:2 d) 7:1
8 A and B are partners sharing profits equally. The firm is going to 1
 be dissolved. At that time Mrs A has given loan of ₹ 50,000 to
the firm @6% interest and simultaneously A has also given loan
of ₹ 1,00,000. The assets realized ₹ 10,00,000. Who will be paid
first.
a) Partner A b) Partner B c) Mrs. A
d) Partner A and Partner b in their profit-sharing ratio
Given below are two statements, one labelled as Assertion (A)
and other labelled as Reason (R):
Assertion (A): Partners distribute profits and losses in their
profit-sharing ratio and not in the ratio of their capitals.
Reason (R): The number of appropriations, as per Partnership
Deed are more than the amount of profit available for
distribution, profit is distributed in the ratio of appropriations.
9 In the context of above two statements, which of the following is 1
correct
a) Assertion (A) and Reason (R) are correct but the Reason (R) is
not the correct explanation of Assertion (A).
b) Both Assertion (A) and Reason (R) are correct and Reason (R)
is the correct explanation of Assertion (A).
c) Assertion (A) is correct but the Reason (R) is not correct.
d) Both Assertion (A) and Reason (R) are not correct.
Assertion (A): Employees provident fund is not distributed to the
Partners’ Capital Accounts.
Reason (R): Employees provident fund is a liability towards the
employees; thus, partners have no claim over it.
a) Both Assertion and Reason are correct and Reason is the
10 1
correct explanation for Assertion
b) Both Assertion and Reason are correct but Reason is not the
correct explanation for Assertion
c) Assertion is correct but Reason is incorrect
d) Both Assertion and Reason are incorrect
11 The term Number of years purchase means: 1
 a) The number of years during which the purchaser of Goodwill
expects that the profit due to goodwill are likely to arise in the
future.
b) Number of years in which goodwill is purchased
c) Number of years for which goodwill purchased will not help
the firm in earning similar profits.
d) None of these
On the basis of the following data, how much final payment will
be made to a partner on firm’s dissolution. Credit balance of
capital account of a partner was ₹ 1,00,000; share of loss of
12 realization amounted to ₹ 20,000 firm’s liability taken over by 1
him was for ₹ 16,000
a) ₹ 64,000 b) ₹ 96,000 c) ₹ 80,000 d) ₹
1,04,000
A, B and C are partners with profit sharing ratio of 4:3:2. B
retired and goodwill was valued ₹ 1,08,000. If A & C share
profits in 5:3, find out the goodwill shared by A and C in favour
of B
13 1
a) ₹ 22,500 and ₹ 13,500 b) ₹ 16,500 and ₹
19,500
c) ₹ 67,500 and ₹ 40,500 d) ₹ 19,500 and ₹
16,500
If the date of drawing is not given, interest on Total Drawings is
14 calculated for 1
a) 4 Months b) 5 Months c) 6 Months d) 1 Year
At the time of admission of a Partner, Gain (Profits) or Losses arising on the revaluation of assets and
reassessment of liabilities is transferred to ____ in their ____.
a) old partners capital a/c, old ratio
15 1
b) Sacrificing partners capital, a/c, sacrificing ratio
c) Gaining partners capital, a/c, gaining ratio
d) Old partners capital a/c, sacrificing ratio

16 Assertion (A): At the time of death of a partner the deceased 1

 partner will get his share in General Reserve and credit balance
in Profit & Loss Account
Reason (R): Deceased partner will get his share of Workmen
Compensation Reserve remaining after claim if any in the
context of above two statements, which of the following a
correct?
(a) Assertion (A) and Reason (R) are correct and Reason (R) is
the correct explanation
(b) Assertion (A) and Reason (R) are correct but Reason (R) is
not the correct
(c) Assertion (A) is correct but Reason (R) is not correct
(d) Assertion (A) is not correct but Reason (R) is correct.
Manoj and Billu are equal partners. Manoj is a sleeping partner
and Billu is an Active working partner. Their capitals on 1 st April
2021 were: Manoj ₹ 6,000 Credit and Billu (₹ 20,000) Debit. Mr
Manoj has given a loan to the firm ₹ 10,000 on 1st April 2021 @
10% p.a.
17 Partnership deed allows 10% p.a. interest on capital. Salary to 3
every Active working partner @ 3,000 p.a. but partnership deed
is silent on interest on loan payable to any partner, in case any
partner provides loan to the firm. Profit for the year ending 31 st
March 2022 was ₹ 7,000 before providing above. Prepare Profit
and Loss Appropriation Account.
V and N are partners in a firm sharing profits and losses in the
ratio of 3: 2. A new partner K is admitted. V gives 1/5 th of his
share and N gives 2/5th of his share in favour of K. For the
18 purpose of K's admission, goodwill of the firm is valued at ₹ 3
75,000 and K brings his share of goodwill in cash which is
retained in the business. Journalise the above
transactions
19 Amita, Babli and Charmi are partners sharing profits in the ratio 3
of 5:3:2. Babli retires and new profit-sharing ratio between
 Amita and Charmi is agreed at 2:3. They also decided to record
the effect of the following without affecting their book values:
General reserve ₹ 1,20,000; Contingency reserve ₹ 70,000
Profit & Loss A/c (Dr.) ₹ 30,000; Advertisement suspense A/c ₹
10,000
You are required to give single necessary adjusting entry.
A, B & C are partners sharing in the ratio of 4:3:2. A dies on 31 st
May 2023. The sales & profit during 2022 were ₹ 1,20,000 & ₹
20 15,000 respectively. The sale up to 31 st May 2023 amounted to 3
₹ 72,000. Calculate A’s Share of Profit & write the journal entry
for share of profit.
A and B are partners sharing profits equally. They admit C into
partnership for equal share. Goodwill was agreed to be valued at two
years” purchase of average profit of last four years Profits for the last
four years were:
31-03- 31-03- 31-03-2021 31-03-
2019 2020 2022
21 ₹ 70,000 ₹ ₹ 55,000 ₹ 1,44,000 4
1,00,000 (loss)
The books of account of the firm revealed as follows
The firm had abnormal gain of ₹ 20,000 during the year ended on
31st March 2019 and abnormal loss of ₹ 40,000 during the year
ended 31st March 2020
Calculate the value of goodwill.
22 A and B are partners sharing profits and losses equally. They 4
decided to dissolve their firm. Assets and Liabilities have been
transferred to Realisation Account. Pass necessary Journal
entries for the following.
 A was to bear all the expenses of Realisation for which he
was given a commission of ₹ 4000.
 Advertisement suspense account appeared on the asset side
of the Balance sheet amounting ₹ 28000
  Creditors of ₹ 40,000 agreed to take over the stock of ₹
30,000 at a discount of 10% and the balance in cash.
 B agreed to take over Investments of ₹ 5000 at ₹ 4900
 Loan of ₹ 15000 advanced by A to the firm was paid off.
 Bank loan of ₹ 12000 was paid off.
 There was an Unrecorded Bike of ₹ 40,000 which was taken
over by B at ₹ 30,000.
 Profit on Realisation of ₹ 42,000 was to be distributed
between A and B in the ratio of 4:3.
Jay, Vijay and Karan were partners of an architect firm sharing
profits in the ratio of 2: 2: 1. Their partnership deed provided
the following:
 A monthly salary of ₹ 15,000 each to Jay and Vijay.
 Karan was guaranteed a profit of ₹ 5,00,000 and Jay
guaranteed that he will earn an annual fee of ₹ 2,00,000. Any
23 deficiency arising because of guarantee to Karan will be 6
borne by Jay and Vijay in the ratio of 3: 2.
 During the year ended 31st March, 2022 Jay earned fee of ₹
1,75,000 and the profits of the firm amounted to ₹15,00,000.
Showing your workings clearly prepare Profit and Loss
Appropriation Account and the Capital Account of Jay, Vijay and
Karan for the year ended 31st March, 2022.
24 The following is the balance sheet of Virat and Yogi as on 31 st 6
March, 2022
Liabilities Amount Assets Amount
Creditors 3,60,00 Bank 80,000
0
Mrs. Virat’s loan 60,000 Stock 70,000
Yogi’s loan 1,00,00 Investments 1,00,00
0 0
Investment fluctuation 30,000 Debtors
fund 2,00,000 1,80,00
 (-) P.D.D 0
20,000
Virat Capitals 2,00,00 Fixed assets 3,80,00
0 0
Yogi Capitals 1,00,00 Profit and loss 40,000
0 A/c
8,50,00 8,50,0
0 00
The firm was dissolved on 31 st March 2022. The assets were
realized and the liabilities were paid as under:
 Virat promised to pay off Mrs. Virat’s loan and took away
stock at 20% discount
 Yogi took away 90% of the investments at 10% discount
 Sunil, a debtor of ₹ 50,000 had to pay the amount due 3
months after the date of dissolution. He was allowed a
discount of 5% for making payment immediately.
 The remaining debtors were collected in full.
 Creditors were paid ₹ 3,50,000 in full settlement of their
claim.
 Fixed assets realized ₹ 2,82,000 and remaining investment
realized ₹ 7,500
 There was an old furniture which has been written off
completely from the books. Yogi took away the same for ₹
4,000
 Realization expenses ₹ 2,000 were paid by Virat.
 Pass Necessary Journal entries & Prepare Realisation account.

Shikhar and Rohit were partners in a firm sharing profits in the

ratio of 7: 3. On 1st April, 2023, they admitted Kavi as a new
25 6
partner for 1/4th share in profits of the firm. Kavi brought ₹
4,30,000 as his capital and ₹ 25,000 for his share of goodwill
premium. The Balance Sheet of Shikhar and Rohit as on 1 st April,
 2023 was as follows:

Balance Sheet Shikar & Rohit

Liabilities Amount Assets Amount
Shikar’s Capital 8,00,000 Land and 3,50,000
Building
Rohit’s Capital 3,50,000 Machinery 4,50,000
General Reserve 1,00,000 Stock 3,50,000
Workmen's Compensation Debtors
Fund 1,00,000 2,20,000 2,00,000
(-) Provision
20,000
Creditors 1,50,000 Cash 1,50,000
15,00,0 15,00,0
00 00

It was agreed that:

 The value of Land and Building will be appreciated by 20%.

 The value of Machinery will be depreciated by 10%.

 The liabilities of Workmen's Compensation Fund were

determined at ₹ 50,000.

 Capitals of Shikhar and Rohit will be adjusted on the basis of

Kavi's capital and actual cash to be brought in or to be paid
off as the case may be.

 Prepare Revaluation Account, Partners' Capital Accounts and

Balance Sheet of the new firm.
26 Iqbal and Kapoor are in partnership sharing profits and losses in 6
3: 2. Kapoor died three months after the date of the last
Balance Sheet. According to the Partnership Deed, the legal
personal representatives of Kapoor are entitled to the following
payments:
  His capital as per the last Balance Sheet.
 Interest on above capital @ 3% p.a. till the date of death.
 His share of profits till the date of death calculated on the
basis of last year’s profits.
 His drawings are to bear interest at an average rate of 2%
on the amount irrespective of the period.
 The net profits for the last three years, after charging
insurance premium, were ₹ 20,000; ₹ 25,000 and ₹ 30,000
respectively.
 Kapoor’s capital as per Balance Sheet was ₹ 40,000 and his
drawings till the date of death were ₹ 5,000.
 Draw the Journal Entries & Kapoor’s Capital Account to be
rendered to his representatives.
Part B: - Analysis of Financial Statements
Equity ₹ 90,000 Liabilities ₹ 60,000 Profit of the year ₹ 20,000.
Then total assets will be:
27 1
a) ₹ 1,70,000 b) ₹ 1,50,000 c) ₹ 1,10,000 d) ₹
80,000
Banana Republic Ltd. had balance in provision for tax ₹ 2,80,000
on 31st March 2023 and ₹ 1,50,000 on 31st March 2022.
Provision for tax made during the year is ₹ 10% of net profits,
28 which is ₹ 20,00,000 for the year ending on 31st March 2023. 1
Tax paid during the year is
a) ₹ 1,20,000 b) ₹ 70,000 c) ₹ 18,50,000 d) ₹
17,20,000
Contingent Liabilities are exhibited under the heading:
29 a) Fixed Liabilities b) Current Liabilities c) As a footnote d) 1
None
30 Assertion (A): Depreciation is added back to net profit while 1
calculating cash flows from operating activities
Reason (R): Depreciation is a noncash expense. It had reduced
the net profit while there is no cash flow
 a) Both assertion and reason are true. Reason is a correct
explanation of assertion.
b) Both assertion and reason are true but reason is not the
correct explanation of assertion
c) Both assertion and reason are false
d) Assertion is true but Reason is false
Under what heads the following items on the equity & Liabilities
of the balance sheet of a company will be presented.
31 3
Proposed Dividend Sinking Fund Public Deposits
Unclaimed Dividend Debentures Bills Payables
State which of the following would result in inflow, outflow or no
flow of cash & cash equivalents.
a) Sale of fixed assets book value ₹ 5,00,000 at 10% profit.
b) Sale of goods against cash.
32 c) Purchase of machinery by cheque. 3
d) Purchased building of ₹ 10,00,000 by issuing debentures.
e) Issued fully paid bonus share.
f) Cash with drawn from bank.
g) Payment of interim dividend.
33 X Ltd, made a profit of ₹ 1,00,000 after considering the 4
following items
 Depreciation on fixed assets ₹ 20,000
 Writing off preliminary expenses ₹ 10,000.
 Loss on sale of furniture ₹ 1,000.
 Provision for taxation ₹ 1,60,000.
 Transfer to General Reserve ₹ 14,000.
 Profit on sale of machinery ₹ 6,000.
Items 31-03- 31-03-
22 23
(₹) (₹)
Debtors 24,000 30,000
Creditors 20,000 30,000
 Bills Receivable 20,000 17,000
Bills Payable 16,000 12,000
Prepaid Expenses 400 600
Calculate Cash flow from Operating
Activities
From the following Balance Sheet of Gopal Ltd. and the
additional information as at 31 st March, 2023, prepare a Cash
Flow statement when cash flows from financing activities is ₹
2,32,000.

Balance Sheet of Gopal Ltd.

31-3-
31.03.20
Particulars 2023
22 ₹
₹
I. Equity and Liabilities
Shareholder’s Funds:
Share Capital 10,00,000 8,00,000
(1,00,000
Reserves and Surplus 4,00,000
)
34 Non-Current Liabilities 6
Long-term Borrowings 9,00,000 9,00,000
Current Liabilities
Short term Borrowings 2,40,000 1,00,000
Short term Provisions 2,00,000 1,75,000
27,40,00 18,75,00
Total
0 0
II Assets
Non-Current Assets
Tangible Assets 20,00,000 14,42,000
Intangible Assets 46,000 58,000
Non-current Investments 1,00,000 45,000
Current Assets
Current Investments 2,00,000 1,20,000
 Inventories 2,14,000
Notes to Accounts 90,000
31.03.202
Cash and Cash Equivalents 1,80,000
31-3-20231,20,000
Particulars 2
₹
27,40,00 18,75,00
₹
Total and Surplus:
Reserves
0 0
Surplus
4,00,000 (1,00,000)
(i.e., Balance in Statement of P & L)
Long-term Borrowings
9% Debentures 9,00,000 9,00,000
Short term Borrowings
Bank overdraft 2,40,000 1,00,000
Short term provisions
Provision for tax 2,00,000 1,75,000
Tangible Assets
Machinery 24,00,000 16,42,000
(-) Accumulated Depreciation (4,00,000) (2,00,000)
20,00,000 14,42,000
Intangible Assets
Goodwill 46,000 58,000
Additional Information:
Tax ₹1,50,000 was paid during the year

Subject Teacher

Academic Director
Principal