CBSE practice Questions

Accountancy class 12 Questions

questions for class 12 accountancy

Accountancy class 12 Important Questions:

1 mark questions:

Question: What do you mean by sweat equity?

Question: Name the debentures that are repaid at the end of specified time during the lifetime of the company.

Question: Kohli and Dohni are partners. Raidu is is admitted for 1/5 share. What is the ratio in which Kohli and Dohni will sacrifice their share in favour of Raidu?

Question: What is authorized capital?

Question: What do you mean by preferential allotment of shares?

Question: What is the nature of interest on debentures?

Question: State the two main rights that a minor partner acquires in the firm.

Question: List two items that may appear on the credit side of a partner’s fixed capital a/c.

Question: Unless given otherwise, what will be the ratio of sacrifice of the old partners in the case of admission of a new partner.

Question: At what rate the remuneration is provided to a partner if nothing is mentioned in the partnership deed regarding the same?

Question: What do you mean by collateral security?

Question: State the circumstances when debentures are issued for consideration other than cash.(any two)

Question: Enumerate two main steps involved in the valuing goodwill according to the super profit method.

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Question: At what rate Interest on capital is provided to a partner if partnership deed is silent?

Question: State the two main rights that a newly admitted partner acquires in the firm.

Question: State the causes when a court may pass order for the dissolution of the firm.

Question: In the absence of any provision in the partnership deed, at what rate is a working partner entitled for remuneration.

Question: Which account is debited when the assets are sold for cash at the time of dissolution of firm?

Question: Kotak and Mahindra are partners. Adani is admitted for 1/10 share. What is the ratio in which Kotak and Mahindra will sacrifice their share in favour of Adani?

Question: Name any two methods of redemption of debentures.

Question: Identify the purpose of utilizing the security premium that would maximize the return to shareholders.

3 mark questions:

Question: Linkedin Ltd. has the following balances appearing in the balance sheet:

Security premium

9% debentures

Underwriting Commission

Discount on issue of shares

Rs. 22,00,000

Rs.1,20,00,000

Rs. 4,00,000

Rs.6,00,000

The company decided to redeem its 9% debentures at a premium of 10%. You are required to suggest the ways in which the company can utilise the security premium amount.

Question: Amazon Ltd. issued 10,000 equity shares of Rs. 100 each payable as follows:

application – Rs. 25 on Jan 1, 2021
allotment – Rs. 25 on Apr 1, 2021
First call – Rs.25 on June 1, 2021
Final call the balance amount on Aug 1, 2021.
9,000 shares were applied for and full allotment was made to all of them.

Question: One shareholder holding 300 shares failed to pay allotment and First call money but he paid the arrear amount along with final call money. Calculate the interest on calls in arrears on the basis of provisions of table A of the companies act, 1956 also record the necessary entry for interest due on calls in arrears and received the same from shareholders.

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Question: 50,000 shares of Rs. 100 each were issued for public subscription at a premium of 10%. Full amount was payable on application. Application was received for 70,000 shares and the board of directors decided to allot the shares on pro-rata basis. Pass necessary journal entries.

Question: Hans Ltd. forfeited 3000 shares of Rs. 10 each issued at a premium of Rs. 2 each held by Mr. Siddarth who had applied for 3,750 shares but allotted to him 3000 shares for non payment of allotment money of Rs. 2.5(including premium) per share, first call money Rs. 3 per share and final call money of Rs. 2.5 per share. Out of these shares only 1200 shares were reissued @ Rs. 7 per share fully paid up. Journalise.

Question: 40,000 shares of Rs. 100 each were issued for public subscription at a premium of 20%. Full amount was payable on application. Application was received for 55,000 shares and the board decided to allot the shares on pro-rata basis. Pass necessary journal entries.

Question: Write any three conditions to be fulfilled regarding the issue of shares at discount as per section 79 of the companies act, 1956.

Question: Tiranga Ltd. issued 20,000 equity shares of Rs. 10 each payable as follows:  application – Rs. 2.5 on Jan 1, 2021

allotment – Rs. 2.5 on Apr 1,2021
First call – Rs.2.5 on June 1, 2021
Final call the balance amount on Aug 1, 2021
18,000 shares were applied for and the full allotment was made to all of them.

One shareholder holding 600 shares paid the entire balance with allotment money. Calculate the interest on calls in advance on the basis of provisions of table A of the companies act, 1956 also record necessary entries for the interest due and paid to shareholders on calls in advance.

Question: Y Ltd. forfeited 2000 shares of Rs. 50 each issued at a premium of Rs. 5 each held by Mr. Gopal who had applied for 2,750 shares but allotted to him 2000 shares for non payment of allotment money of Rs. 15(including premium) per share, first call money Rs. 15 per share and final call money of Rs. 10 per share. Out of these shares only 1,600 shares were reissued @ Rs. 45 per share fully paid up. Journalise.

4 mark questions:

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Question: Gordy Ltd. decided to redeem 2,000; 7% debentures of Rs. 100 each on 31st March 2020 at 5% premium. The board of directors decided to transfer required amount to DRR a/c. Pass necessary journal entries for the redemption of Debentures.

Question: Phil, Plato and Padma are partners sharing Profits and losses in 4:2:3. They decided to share future profits in 4:3:2 with effect from 1/04/2021. They decided to record the effect of the following without affecting the book values:

General reserve  – Rs. 54,000
Deferred revenue expenditure – Rs. 18,000
Pass the necessary adjusting entry.

Question: Brenden, Sid and Zeus are partners their fixed capitals stood in the books Rs. 1,60,000; Rs. 80,000 and Rs. 2,00,000 respectively. It was noticed that interest on capital is provided to them @ 6% p.a. instead of 10% p.a. Now they decided to record a single entry to rectify the mistake. Give entry and show working clearly.

Question: Kalu decided to redeem 5,000; 10% debentures of Rs. 100 each on 31st March 2021 at 10% premium. The board of directors decided to transfer required amount to DRR a/c. Pass necessary journal entries for the redemption of Debentures.

Question: Abharam, Rico and Jeremy are partners sharing Profits and losses in 2:2:1. They decided to share future profits in 5:3:2 with effect from 1/04/2019. They decided to record the effect of the following without affecting the book values:

Profit and loss account ( cr. Balance) – Rs. 24,000
Advertisement suspense a/c – Rs. 12,000
Pass the necessary adjusting entry.

Question: Sylvia Ltd. Purchased a machinery of Rs. 3,00,000 and building of Rs. 7,00,000 at purchase consideration of Rs. 9,90,000 payable by fully paid up equity shares of Rs.100 each. Pass journal entries if the shares were issued

  1. At par
  2. At premium 10%.
  3. At discount 10%.

4 mark questions

Question: Pulkit Ltd. decided to redeem 2,000; 7% debentures of Rs. 100 each on 31st March 2021 at 5% premium. The board of directors decided to transfer required amount to DRR a/c. Pass necessary journal entries for the redemption of Debentures.

Question: Amit, Trivedi and Tapsi are partners sharing Profits and losses in 2:2:1. They decided to share future profits in 5:3:2 with effect from 1/04/2021. They decided to record the effect of the following without affecting the book values:

Profit and loss account ( cr. Balance) – Rs. 24,000
Advertisement suspense a/c – Rs. 12,000
Pass the necessary adjusting entry.

Question: Vickey and Kaushal are partners with capital contribution of Rs. 2,00,000 and 4,00,000 respectively. Vickey is entitled to a salary of Rs. 15,000 per month with a commission of 10% on the net profit before charging any commission but after charging salary. Kaushal is entitled to get a salary of Rs. 60,000 per month together with commission of 10% on net profit after charging all commissions. Net profit for the year before complying with any of the provisions of partnership deed is Rs. 12,00,000. Show the distribution of profits among partners by preparing profit and loss appropriation a/c.

6 mark questions

(a) On January 1, 2019 karwaan Ltd. Issued 20,000 12% debentures of Rs. 100 each at par redeemable after 7 years. However the company gave an option to debenture holders to get their debentures converted into equity shares of Rs. 50 each at a premium of 25% any time after expiry of one year. Irfan Khan the holder of 400 debentures informed on January 1 2021 that he wanted to exercise the option of conversion of debentures into equity shares.

The company accepted his request and converted debentures into equity shares. Pass necessary journal entries to record issue and conversion of debentures.

(b) As per SEBI guidelines which type of companies are exempted to create Debenture Redemption Reserve? ( any two)

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Question: Vikram and Vedha are partners sharing profits and losses in 5:3. Their position as on 31 March 2021 was as follows:

BALANCE SHEET

As on 31 March 2021

Liabilities Amount Assets Amount
Creditors

Bank loan

Reserve fund

A’s Capital

B’s Capital

 

2,000

12,000

4,000

30,000

20,000

68,000

Cash balance

Debtors

Stock

Furniture

Machinery

6,000

8,000

10,000

18,000

26,000

68,000

They admitted Lahari for one fourth share in the profits to be contributed equally by Vikram and Vedha. Terms on Lahari’s admission were as follows:

  • Lahari will bring Rs. 25,000 as his capital.
  • Goodwill of the firm is valued at 4 years purchase of the average super profits of the last 3 years. Average profits of the last three years are Rs. 20,000 where as the normal profits that can be earned on the capital employed is Rs. 12,000.
  • Furniture is appreciated to Rs.24,000 and the value of stock is reduced by 20%.
  • There is an unrecorded loose tool costing Rs. 1,200 now to be recorded.

Prepare necessary ledger accounts and opening balance sheet of Vikram, Vedha and Lahari.

Question: (a) Brodha and Jodindian are partners sharing profits and losses in 3:2. They admitted Dhanush for 20 paisa in a rupee. He brings into the business Rs. 30,000 as capital and Rs. 8,000 as his share of goodwill in cash out of his share Rs. 18,000. Goodwill already appears in the books Rs. 6,000. Pass necessary journal entries.

(b) P, Q and R were partners sharing profits and losses in 2:3:5. R retired and her share is taken by P and Q in 1:2. Goodwill of the firm is valued Rs. 1,20,000. Calculate new ratio and record necessary entry for goodwill.

Question: Arthur, John and Tommy were partners sharing profits and losses in 3:2:1. On December 31, 2020 their Balance sheet was as under:

BALANCE SHEET

As on 31st December 2020

Liabilities Amount Assets Amount
Creditors

General reserve

A’s Capital

B’s Capital

C’s Capital

10,000

7,500

10,000

15,000

15,000

 

 

57,500

Cash balance

Debtors

Stock

Patents

Machinery

Building

 

 

8,000

12,000

3,000

500

15,000

19,000

 

57,500

Arthur died on July 1, 2021. It was agreed between his executors and the remaining partners that:

  1. Goodwill to be valued at two years purchase of the average profits of the previous four years which were year 2007- Rs. 1,800; 2018- Rs. 5,200; 2019 -Rs.6,000; 2011- Rs. 8,000.
  2. Patents be valued Rs. 300; Machinery overvalued by 20%.
  3. Interest on capital to be provided @ 8% p.a.
  4. Profit for the year 2021 is taken at the same rate as that of previous year.
  5. Half of the amount due to A is paid immediately to the executor. Prepare Arthur’s Capital a/c and Arthur’s executor a/c.

Question: (a) Lalita and Monita are partners sharing profits and losses in 2:3. They admitted Namita for 10 paisa in a rupee. She brings into the business Rs. 80,000 as capital and Rs. 48,000 as his share of goodwill in cash out of his share Rs. 60,000. Goodwill already appears in the books Rs. 16,000. Pass necessary journal entries and show working clearly.

(b) lalita, Monita and Namita were partners sharing profits and losses in 5:3:2. Monita retired and her share is taken by Lalita and Namita in 3:1. Goodwill of the firm is valued Rs. 9,00,000. Calculate new ratio and record necessary entry for goodwill.

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8 mark questions.

Question: Starplus Ltd. Issued 20,000 equity shares of Rs. 20 each at 10% premium payable as follows:

On application – Rs. 5
On allotment   – Rs. 10
On first call      –  Rs. 5

On second and final call- balance.

Applications were oversubscribed by 23,000 shares. 13,000 shares were rejected and sent letter of regret. Remaining shares were issued on prorata basis. Excess application money was adjusted towards subsequent calls.

All the amounts were duly received except from Karan Johar who failed to pay allotment and first call money on 800 shares. His shares were forfeited immediately and final call was made later. Only 250 forfeited shares were reissued @ Rs. 22 per share fully paid up.

Record necessary entries.

Question: Following is the Balance sheet of Yash and Raj as on 31st March 2020:

BALANCE SHEET

As on 31st March 2020

Liabilities Amount Assets Amount
Creditors

Bank overdraft

Mrs. X Loan

Y’s loan

Investment fluctuation fund

X’s Capital

Y’s Capital

 

8,000

6,000

8,000

3,000

5,000

 

50,000

40,000

 

1,20,000

Cash balance

Debtors                17,000

Less: Provision      2,000

Stock

Building

Investment

Goodwill

Profit and Loss a/c

20,000

 

15,000

15,000

25,000

25,000

10,000

10,000

 

1,20,000

The firm was dissolved on the above date and the following arrangements were decided upon:

  1. Yash agreed to pay off his wife’s loan.
  2. Debtors of Rs. 5,000 proved bad.
  3. Investments realised 20% less and Goodwill realised at 60%.
  4. One of the creditors for Rs. 5,000 paid only Rs. 3,000 as final payment.
  5. Building was auctioned for Rs. 30,000 and the auctioneer’s commission was Rs. 1,000.
  6. Raj took over part of stock at Rs. 4,000(being 20% less than the book value). Balance stock realised 50%.
  7. Realisation expenses paid by the firm Rs. 2,000.

Prepare Realisation a/c, Partner’s capital accounts and Cash a/c.

Question: Following is the Balance sheet of A and B as on 31st March 2019:

BALANCE SHEET

As on 31st March 2019

Liabilities Amount Assets Amount
Creditors

Bills payable

Mrs. A’s Loan

B’s loan

JLP Reserve

A’s Capital

B’s Capital

 

   20,000

16,000

8,000

3,000

5,000

50,000

40,000

 

 

1,42,000

Cash balance

Debtors                17,000

Less: Provision      2,000

Stock

Building

JLP

Goodwill

Advertisement expenditure

30,000

 

15,000

20,000

25,000

25,000

15,000

12,000

 

1,42,000

The firm was dissolved on the above date and the following arrangements were decided upon:

  1. A agreed to pay off his wife’s loan.
  2. Debtors of Rs. 2,000 proved bad.
  3. JLP is surrendered and Goodwill realized nothing.
  4. One of the creditors for Rs. 8,000 paid only Rs. 5,000 as final payment.
  5. Building was auctioned for Rs. 36,000 and the auctioneer’s commission was Rs. 2,000.
  6. B took over part of stock at Rs. 4,000(being 20% less than the book value). Balance stock realised 60%.
  7. Realisation expenses paid by the firm Rs. 7,000.

Prepare Realisation a/c, Partner’s capital accounts and Cash a/c.

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Question: Tarak Mehata Ltd. Issued 10,000 equity shares of Rs. 50 each at 20% premium payable as follows:

On application – Rs. 10
On allotment   – Rs. 25
On first call      –  Rs. 15

On second and final call- balance

Applications were oversubscribed by 13,000 shares. 3,000 shares were rejected and sent letter of regret. Remaining shares were issued on prorata basis. Excess application money was adjusted towards subsequent calls.

All the amounts were duly received except from Mr. Amrit who failed to pay allotment and first call money on 500 shares. His shares were forfeited immediately and final call was made later. Only 100 forfeited shares were reissued @ Rs. 45 per share fully paid up.

Record necessary entries.

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Vishal Arora

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