Ultimate Sample Paper 2

Book Recommended ------ Ultimate Book of Accountancy Class 12th
Contact Author 9459514442
Sample paper – 2
Designed by Dr. Vinod Kumar
Author of Ultimate Book of Accountancy
BEST ACCOUNTANCY BOOK

FOR
TERM – 1
AVAILABLE ON AMAZON
As per CBSE Guidelines

Students should attempt 45 Questions; each question carry equal marks i.e. 0.88
Part -1 (Section – A)
Attempt any 15 Questions from question number 1 to 18
QUESTION 1
X, Y and Z are sharing profits as X 50%; Y 30% and Z 20%. They decided to change their profit
sharing ratio and finally decided that X will get 20%; Y 30% and Z 50%. They also decided to
record the effect of the following revaluations without affecting the book values of the assets and
liabilities by passing an adjustment entry: Source: Ultimate Book of Accountancy
Balance Sheet (Extract)
Liabilities Amount Assets Amount

Land and Building 5,85,000
Machinery 3,00,000
Land and Building found undervalued by 10% and Machinery was overvalued by 20,000.
Impact on Y and Z’s Capital Account __________________
(a) Z’s Capital A/c Debit 13,500 and Y’s Capital A/c Credit 13,500
(b) Y’s Capital A/c Debit 13,500 and Z’s Capital A/c Credit 13,500
(c) Z’s Capital A/c Debit 13,500 and Y’s Capital A/c No effect at all
(d) Z’s Capital A/c No Effect at all and Y’s Capital A/c Credit 13,500
QUESTION 2
Vinod Ltd. has received application money @ Rs.3 (including premium of Re. 1 per share). Out of
which Rs.6,40,000 transferred to Share Capital A/c, Rs.3,20,000 transferred to Securities
Premium Reserve, Rs.1,20,000 adjusted towards allotment and Rs.1,20,000 refunded for rejected
applications. Source: Ultimate Book of Accountancy
Mukesh holding 800 shares did not pay allotment of Rs.5 (including premium Rs.3) and his shares
were forfeited.
Shares Applied by Mukesh ___________________
(a) 800 (b) 900
(c) 1,000 (d) 1,100
QUESTION 3
Vinod Ltd. received an amount on application Rs.28,00,000, out of which Rs.21,00,000 was
transferred to the Share Capital Account, Rs. 4,20,000 adjusted towards allotment and
Rs.2,80,000 refunded. Allotment was due Rs.9,00,000 and received Rs.4,80,000, all shareholders
paid the allotment. Source: Ultimate Book of Accountancy
Face value of share is Rs.10 each, full amount was called on Application and Allotment.
What was the rate of Application ___________
(a) Rs.4 per share (b) Rs.5 per share
(c) Rs.6 per share (d) Rs.7 per share
QUESTION 4
Vinod Ltd. invited application for issuing 1,60,000 Equity Shares of Rs.10 each at a premium of
Rs.6 per share. Source: Ultimate Book of Accountancy
On Application ------------------ Rs.4 per share (including premium of Re.1 per share)
On Allotment ---------------------Rs.6 per share (including premium Rs.3 per share)
Applications were received in double, out of the excess applications 50% were rejected. Pro-
rata allotment was made to all the remaining applicants. Devgan (one shareholder) holding 800
shares did not pay the allotment.
Amount received on Allotment ____________________
(a) 6,36,800 (b) 6,50,000
(b) 6,48,000 (d) 6,40,800
QUESTION 5
What will be the correct sequence of events?
(i) Forfeiture of Shares (ii) Allotment not received
(iii) Calculation of Capital Reserve (iv) Reissue of Shares at Discount
Choose the correct option: Source: Ultimate Book of Accountancy
(a) (i) (iv) (iii) (ii)
(b) (ii) (i) (iii) (iv)
(c) (ii) (i) (iv) (iii)
(d) (ii) (iii) (iv) (i)
QUESTION 6
Vinod and Mohit are partners, at the time of reconstitution of partnership firm, following
situation was found:
Balance Sheet

Machinery 3,50,000
Stock 60,000
Stock was revalued at Rs.70,000 and Market value of Machinery was Rs.4,00,000 (not to be
considered). Source: Ultimate Book of Accountancy
Gain/Loss on Revaluation to be transferred to Vinod’s Capital Account __________
(a) Vinod’s Capital A/c Dr. 5,000 (b) Vinod’s Capital A/c Cr. 5,000
(c) Vinod’s Capital A/c Dr. 30,000 (d) Vinod’s Capital A/c Cr. 30,000
QUESTION 7
Identify the wrong statement from the following?
(a) When a firm provides loan to a partner, rate of interest on such loan is 6% p.a. if partnership
deed is silent on interest rate. Source: Ultimate Book of Accountancy
(b) Partnership firm does not have a separate legal entity from its partners as par law.
(c) The Liability of a partner is unlimited jointly and severally.
(d) Rent paid to a partner is not shown in his Capital/Current Account.
QUESTION 8
Meera, Myra and Neeraj were partners sharing profits in the ratio of 2:2:1. They decided to
share future profits in the ratio of 7:5:3 with effect from 1st April 2021. Their Balance Sheet as
on that date showed a balance of Rs.90,000 in Advertisement Suspense Account. The amount to
be shown to the capital accounts of the partners for writing off the amount in Advertisement
suspense Account. Source: Ultimate Book of Accountancy
Impact of Myra’s Capital Account will be _____________
(a) 36,000 Debit Side
(b) 18,000 Credit Side
(c) 30,000 Debit Side
(d) 18,000 Debit Side
QUESTION 9
X, Y, Z and M are partners sharing profits in the ratio of 4:3:1:2. As per the new partnership
agreement Z is to get a minimum amount of Rs.40,000 p.a. Deficiency on this account will be
borne by X and Y personally in the ratio of 5:2. The net profit for the year ending 31st March
2021 was Rs.8,000. Source: Ultimate Book of Accountancy
The amount of Deficiency to be borne by Y:
(a) 28,000 (b) 11,200
(c) 12,000 (d) 12,800
QUESTION 10
M and K were partners sharing profits in the ratio of 4:3. They admit N as a new partner for 3/7th
share in the profits of the firm. N was unable to bring his share of premium for goodwill. Following
entry was recorded for the same: Source: Ultimate Book of Accountancy
Date Particulars L.F. Debit Credit

N’s Current A/c Dr. 5,625
To M’s Capital A/c 3,750
To K’s Capital A/c 1,875
(Being premium for goodwill adjusted)
The new profit-sharing ratio of M, K and N will be:
(a) 3:2:1 (b) 2:2:1
(c) 1:1:1 (d) 2:2:3
QUESTION 11
X, Y and Z are partners sharing profits in the ratio of 3:2:1. Interest on capital to be provided to
the partners Rs.24,000 but net profit shown by the Profit & Loss Account Rs.18,000 only.
Interest on drawings to be charged from the partners Rs.2,600 each.
Profit/Loss to be transferred to Y’s Capital Account ____ Source: Ultimate Book of Accountancy
(a) 900 Profit (b) 600 Profit
(c) 300 Profit (d) 2,000 Loss
QUESTION 12
A, B and C sharing profits and losses as: A 20%; B 40% and C 40%. They decided to share future
profits equally with effect from 1st April 2021. On that date, General Reserve appears in the
Balance Sheet and partners do not want to distribute the same but prefer to record an
adjustment entry for the same, which is as follows: Source: Ultimate Book of Accountancy
Date Particulars L.F. Debit Credit

A’s Capital A/c Dr. 4,000
To B’s Capital A/c 2,000
To C’s Capital A/c 2,000
(Being adjustment made for General Reserve)
What amount of General Reserve is to be shown in the new Balance Sheet of the firm?
(a) 50,000 (b) 40,000
(c) 30,000 (d) 20,000
QUESTION 13
Goodwill of the firm is Rs.48,000 on the basis of 3 years purchase of average profits of the last 5
years. Source: Ultimate Book of Accountancy
Profit in first year ………………… 20,000
Profit in second year ……………...16,000
Profit in third year ………………….24,000
Profit in fifth year …………………..28,000
What was the profit/loss in the fourth year?
(a) Profit 8,000 (b) Loss 8,000
(c) Profit 18,000 (d) Loss 10,000
QUESTION 14
Vinod Ltd. forfeited a share of Rs.10 issued at a premium of 40% premium, for non-payment of
allotment and calls. Only Rs.8 were received on application on the share including premium.
What will be the minimum price at which share can be reissued?
(a) Rs.2 (b) Rs.4 Source: Ultimate Book of Accountancy
(c) Rs.6 (d) Rs.8
QUESTION 15
Which of the following statements does not relate to ‘Reserve Capital’?
(a) It is part of uncalled capital of a company.
(b) It cannot be used during the lifetime of a company.
(c) It can be used for writing off capital losses.
(d) It is part of subscribed capital. Source: Ultimate Book of Accountancy
QUESTION 16
Vinod Ltd. issued a prospectus inviting applications for 50,000 shares. Applications were received
60% in excess. Out of the total applications were received, 25% were rejected, 10,000 shares
allotted in full and pro-rata allotment made to the remaining applicants.
If Mukherjee (shareholder) has been allotted 1100 shares find out the Number of Shares applied
by Mukherjee _____________________ Source: Ultimate Book of Accountancy
(a) 1200 (b) 1350
(c) 1375 (d) 1450
QUESTION 17
Sun and Star were partners in a firm sharing profits in the ratio of 2:1. Moon was admitted as a new
partner in the firm. New profit sharing ratio was 3:3:2. Moon brought the following assets towards
his share of goodwill and his capital: Source: Ultimate Book of Accountancy
Machinery ………………………………2,00,000
Furniture…………………………………1,20,000
Stock …………………………………………80,000
Cash ………………………………………….50,000
If his capital is considered as Rs.3,80,000 the goodwill of the firm will be:
(a) 70,000 (b) 2,80,000
(c) 4,50,000 (d) 1,40,000
QUESTION 18
A, B and C are sharing profits in the ratio of 5:3:2. Net loss shown by Profit and Loss Account at the
end of the year 31st March 2021 Rs.8,000. Interest on drawings to be charged from the partners
Rs.2,000 each. Source: Ultimate Book of Accountancy
Profit/Loss to be transferred to C’s Capital Account ____________
(a) Profit Rs.400 (b) Loss Rs.1,600
(c) Loss Rs.400 (d) Loss Rs.2,000
QUESTION 19
X and Y are partners sharing profits in the ratio of 7:3. They admit K as a new partner for 1/6th
share. At the time of admission of K the following situation was found:

Debtors 60,000
Additional information: Source: Ultimate Book of Accountancy
(i) 5,000 should be written off as bad debts and a provision for doubtful debts is be created @
10%
(ii) A customer whose account was written off as bad debts last year has paid Rs.2,000.
What value of Debtors to be shown in the new Balance Sheet of the firm?
(a) 49,500 (b) 51,500
(b) 49,000 (d) 50,500
QUESTION 20
Yuvraj and Vinod are partners, sharing profits in the ratio of 3:2. Their capitals were Rs.1,60,000
and Rs.1,00,000 respectively. Mayank is admitted as a new partner for 1/5th share of profit.
Source: Ultimate Book of Accountancy
Mayank brings his share of premium for goodwill in cash out of which Vinod’s Capital Account
was credited with Rs.17,600 for his sacrifice.
With what amount Yuvraj’s Capital Account is to be credited?
(a) 26,400 (b) 17,600
(c) 44,000 (d) 15,400
QUESTION 21
X and Y are partners sharing profits in the ratio of 3:2. Z is admitted as a new partner for 1/6th
share. Following situation was found at the time of admission of Z:
Balance Sheet (Extract)
Creditors 59,500
Creditors were found undervalued by 15%. Source: Ultimate Book of Accountancy
Identify the correct entry, for the above transaction:
(a) Creditors A/c Dr. 8,925
To Revaluation A/c 8,925
(b) Creditors A/c Dr. 10,500

To Revaluation A/c 10,500
(c) Revaluation A/c Dr. 10,500

To Creditors A/c 10,500
(d) Revaluation A/c Dr. 8,925

QUESTION 22
Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason
(R).
Assertion (A) :
Commission paid to manager is shown in the Profit and Loss Account whereas Commission
Paid to Partner is shown in Profit and Loss Appropriation Account.
Reason (R) : Source: Ultimate Book of Accountancy

Commission paid to manager is an appropriation of profit and Commission paid to partner
is a charge against the profit.
In the context of the above statements, which one of the following is correct?
(a) Assertion is correct, but Reason is wrong
(b) Both Assertion and Reason are correct and Reason is the correct explanation of Assertion
(c) Both Assertion and Reason are correct but Reason is not the correct explanation of Assertion
(d) Assertion is wrong but Reason is correct
QUESTION 23
Vinod and Rakesh are partners. There is no partnership deed. Firm has taken the following
loans on 1st April 2020:
Loan from Vinod (a partner) Rs.1,00,000 and he claims 10% p.a. interest
Loan from Vinod’s wife Rs.2,00,000 @ 10% p.a.
Loan from Bank Rs.4,00,000 @ 10% p.a. Source: Ultimate Book of Accountancy
How much total amount of Interest on loan is to be paid by the partnership firm?
(a) 66,000 (b) 42,000
(c) 58,000 (d) 70,000
QUESTION 24
X and Y are partners sharing profits in the ratio of 3:2. They admit Z as a new partner for 1/5th
share in the firm. Z was guaranteed a minimum amount and deficiency if any to be borne by X and
Y in the ratio of 4:1. Loss for the year was Rs.1,00,000 and deficiency borne by Y Rs.44,000.
Z was guaranteed for an amount of Rs._______________ Source: Ultimate Book of Accountancy
(a) 1,50,000 (b) 1,00,000
(c) 1,75,000 (d) 2,00,000
QUESTION 25
A and B are partners sharing profits in the ratio of 2:1. Their capital at the end of the year 31st
March 2021 were Rs.4,00,000 and Rs.5,00,000.
Their Drawings during the year Rs.5,000 each.
B Introduced additional capital Rs.1,00,000 on 1st October 2020.
Net Profit for the year was Rs.51,000 Source: Ultimate Book of Accountancy
interest on capital @8% p.a. was not calculated. Calculate interest on capital assuming that
partners capitals are fixed.
B’s Current Account will be credited for interest on capital by_____________
(a) 27,000 (b) 36,000
(c) 47,040 (d) 35,040
QUESTION 26
(R).
Assertion (A)
Interest on capital payable to partners cannot be more than the profits.
Reason (R) Source: Ultimate Book of Accountancy

Interest on capital can be provided even if there is loss, it will be shown in Profit and Loss
Account as a charge item.
Choose the correct option:

(a) Both Assertion and Reason are correct and Reason is the correct explanation of the Assertion
(b) Both Assertion and Reason are correct but Reason is not correct explanation of the Assertion
(c) Only Assertion is correct
(d) Only Reason is correct
QUESTION 27
The directors of Axim Ltd. forfeited 20,000 equity shares of Rs.10 each, Rs. 8 per share called up
for non-payment of first call of Rs. 2 per share. Source: Ultimate Book of Accountancy
Final call of Rs. 2 per share has not been yet called. Half of the forfeited shares were reissued as
fully paid up for Rs.15 per share. The amount transferred to Capital Reserve will be:
(a) 2,00,000
(b) 1,20,000
(c) 60,000
(d) 40,000
QUESTION 28
Which of the following statement is/are true?
(i) Private Placement of shares is not for public in general through public issue.
(ii) Nominal capital is equal to or more than the issued share capital.
(iii) Capital Reserve can be used to write off capital losses.
(iv) Shares issued to promoters for their services are not part of share capital
Choose the correct option: Source: Ultimate Book of Accountancy
(a) (i) and (iii) are True
(b) (i) and (ii) are True
(c) (i) (ii) and (iii) are True
(d) (i) (ii) (iii) (iv) all are True
QUESTION 29
Vinod and Mayank are partners sharing profits in the ratio of 3:2. Mayank is entitled to get a
commission of 5% of net profit after charging such commission. Net profit before charging such
commission is Rs.21,000. Source: Ultimate Book of Accountancy
Mayank’s Capital Account is to be credited with his share of profit of Rs.___________
(a) 1,000 (b) 12,000
(c) 8,000 (d) 7,980
QUESTION 30
On Forfeiture of 100 shares of Rs.50 each, Rs.2500 were credited to the Share Forfeiture Account.
These shares were reissued at Rs.25 per share fully paid up.
The amount credited to Capital Reserve ___________ Source: Ultimate Book of Accountancy
(a) 2,500
(b) 5,000
(c) 3,000
(d) Nil
QUESTION 31
(R).
Assertion (A)
Securities Premium can not be used as working capital.

Securities premium can be used for any purpose other than purposes which are specified in
Section 52 (2) of the Companies Act, 2013.
QUESTION 32
Vinod, Mohan and Krish are partners sharing profits in the ratio of 2:2:1. Krish is guaranteed a
minimum amount of Rs.10,000 p.a. Deficiency on that account (if any) shall be borne by Vinod
and Mohan in 5:3.
The profit for the year was Rs.40,000 which was distributed without considering the guaranteed
amount. Now They decided to pass an adjustment entry for the same. Source: Ultimate Book of
Accountancy
Effect of adjustment entry on Vinod’s capital account will be ____________
(a) No effect on Vinod’s Capital Account
(b) Vinod’s Capital A/c Credit with Rs.1,250
(c) Vinod’s Capital A/c Debit with 1,250
(d) Vinod’s Capital A/c Debit with 750
QUESTION 33
A company forfeited 4,000 shares of Rs.10 each on which application money of Rs.3 has been paid.
Out of these 2,000 shares were reissued as fully paid up and Rs.4,000 has been transferred to
capital reserve. Calculate the rate at which these shares were reissued.
(a) 10 Per share Source: Ultimate Book of Accountancy
(b) 9 Per share
(c) 11 Per share
(d) 8 Per share
QUESTION 34
Kiran Limited purchased machinery for Rs.12,00,000 from Rohan Limited. The company
paid the amount by issue of equity shares of Rs. 10 each at a premium of 20%. The
number of shares to be issued to Rohan Limited will be : Source: Ultimate Book of Accountancy
(a) 1,80,000 shares
(b) 1,50,000 shares
(c) 1,20,000 shares
(d) 1,00,000 shares
QUESTION 35
A, B, and C are partners sharing profits in the ratio of 32:25:8. They admit D as a new partner. It
was decided that ratio between C and D will be same as existing between A and C.
New profit sharing ratio ____________ Source: Ultimate Book of Accountancy
(a) 32:25:8:2 (b) 32:25:8:8
(c) 5:4:3:2 (d) 20:15:8:4
QUESTION 36
Vinod Ltd. issued 15,000 shares of Rs.150 each at a premium of Rs.10 per share payable as Rs.50
on application; Rs.40 on allotment (including premium); Rs.30 per share on first call and balance
on final call. Applications were received for 14,000 shares. All the money duly received.
Share Capital amount to be shown in the Balance Sheet of the Company:
(a) 20,00,000 Source: Ultimate Book of Accountancy (b) 21,00,000
(c) 14,00,000 (d) 22,50,000
Part 1 (Section C)
Attempt any 4 Questions
Instructions:
From Question number 37 to 41, attempt any 4 Questions. Question numbers 37 and 38 are based
on the hypothetical situation given below:
Vinod Ltd. purchased a running business of Kumar Ltd. with assets of Rs.3,90,000 and Liabilities
of Rs.40,000 for a consideration of Rs.4,00,000. 20% was paid by a cheque and the balance by
issue of fully paid equity shares of Rs.100 each at a premium of 60%.
QUESTION 37
Amount of Goodwill or Capital Reserve will be ____________________
(a) No Goodwill and No Capital Reserve Source: Ultimate Book of Accountancy
(b) Capital Reserve 50,000
(c) Goodwill 50,000
(d) Goodwill 40,000
QUESTION 38
Number of Equity Shares issued in favor of Kumar Ltd. _______________
(a) 2,000 (b) 1500 Source: Ultimate Book of Accountancy
(c) 2500 (d) 3200
Question Numbers 39, 40 and 41 are based on the hypothetical situation given below:
LK, MK and NK were partners in a firm sharing profits in the ratio of 3:4:5. Their fixed capitals
were Rs.4,00,000; Rs.5,00,000 and Rs.6,00,000. As per the partnership deed interest on capital
is to be calculated @6% p.a. and interest on drawings @ 12% p.a. Salary of Rs.2500 per month
to NK. Source: Ultimate Book of Accountancy
During the year ending 31st March 2021, the firm earned a profit of Rs.2,70,000. LK withdrew
Rs.10,000 on 1st April 2020; MK withdrew Rs.12,000 on 30th September 2020 and NK withdrew
Rs.15,000 on 31st December 2020.
QUESTION 39
Total interest on capital paid by the firm ______________
(a) 60,000 (b) 70,000 Source: Ultimate Book of Accountancy
(c) 80,000 (d) 90,000
QUESTION 40
Total Interest on drawings charged by the firm ______________
(a) 2,070 (b) 2,170 Source: Ultimate Book of Accountancy
(c) 2,270 (d) 2,370
QUESTION 41
Share of profit credited to NK’s Current Account ______________
(a) Nil (b) 50,790 Source: Ultimate Book of Accountancy
(c) 38,093 (d) 63,487
PART – II (SECTION – A)
Instructions:
From Question number 42 to 48 attempt any 5 questions.
QUESTION 42
(R).
Assertion (A)
Loose Tools are not included in the current assets while calculating Current Ratio.

Loose Tools are not held for sale or conversion into cash.

QUESTION 43
Pick the odd one out from the following:
(a) Vertical Analysis Source: Ultimate Book of Accountancy
(b) Static Analysis
(c) Time Series Analysis
(d) Cross Sectional Analysis
QUESTION 44
Which of the following is not correct?
(a) Provision for doubtful debts is deducted from the Trade Receivables for calculating current
ratio
(b) Redemption of debentures on the due date in the current year will affect both current assets
and current liabilities. Source: Ultimate Book of Accountancy
(c) Current Ratio is more suitable when goods are fast moving
(d) Debt to Equity Ratio is computed to assess short-term financial soundness of the firm
QUESTION 45
Read the following statements carefully:
(i) Ideal Current Ratio is 1:2
(ii) Ideal Quick Ratio is 2:1 Source: Ultimate Book of Accountancy
(iii) Activity Ratios are also termed as Performance or Turnover Ratios
(iv) A low inventory ratio means inefficient use of investment in inventory
(a) Only (i) is wrong
(b) Only (i) and (ii) is wrong
(c) Only (iv) is correct
(d) Only (iii) is correct
QUESTION 46
Which of the following Tool of Financial Statement Analysis is helpful in assessing the
profitability, solvency, liquidity and efficiency of an enterprise?
(a) Horizontal Analysis Source: Ultimate Book of Accountancy
(b) Vertical Analysis
(c) Ratio Analysis
(d) All of the above
QUESTION 47
Match the items given in Column I with the headings/subheading (Balance Sheet) as defined in
Schedule III of the Companies Act, 2013.
Column I Column II
(i) Public Deposits (a) Other Current Liabilities
(ii) Debentures due for Redemption (b) Other Current Assets
(iii) Cheques in hand (c) Inventories

(iv) Rent paid in Advance (d) Long-term Borrowings
(v) Raw Materials (e) Cash and Cash Equivalents

(a) (i) d; (ii) a; (iii) c (iv) b; (v) e
(b) (i) d; (ii) a; (iii) b (iv) c; (v) e
(c) (i) d; (ii) a; (iii) e; (iv) b; (v) c
(d) (i) d; (ii) a; (iii) e; (iv) c; (v) b
QUESTION 48
A high Ratio means higher safety cover for lenders to the business.
The above statement is correct due to ___________________
(a) Debt Equity Ratio Source: Ultimate Book of Accountancy
(b) Interest Coverage Ratio
(c) Current Ratio
(d) Total Assets to Debt Ratio
PART – II (SECTION – B)
Instructions:
From Question number 49 to 55 attempt any 6 questions.
QUESTION 49
Find out Current Ratio from the following information:
Sundry Debtors (Gross) ………………………………………………………44,000
Inventories (Total) ……………………………………………………………..37,000
Prepaid Expenses ……………………………………………………………….12,000
Provision for Doubtful Debts ………………………………………...……….4,000
Loose Tools …………………………………………………………………..………2,000
Accrued Commission …………………………………………………………….3,000
Long-term Borrowings : 12% Debentures ………………….…….1,00,000
Other Current Liabilities : 12% Debentures …………………….……20,000
Bank overdraft ………………………………………………………………………4,000
Creditors ………………………………………………………………….…….……12,000
The Current Ratio will be _________ Source: Ultimate Book of Accountancy
(a) 2:1 (b) 1:1
(c) 2.25:1 (d) 2.5:1
QUESTION 50
Net Profit after interest and Tax Rs.6,00,000; 6% Debentures Rs.10,00,000; Capital Employed
Rs.20,00,000 and Tax Rate 40%. Source: Ultimate Book of Accountancy
Return on Investment (Ratio) will be ____________
(a) 50% (b) 51%
(c) 52% (d) 53%
QUESTION 51
Which of the following statements are false?
(i) Horizontal Analysis is also known as Cross Sectional Analysis
(ii) Comparative Financial Statements are examples of Horizontal analysis
(iii) Dynamic Analysis is also known as Times Series Analysis
(iv) Horizontal Analysis is also known as Dynamic Analysis
Choose the correct answer from the following options:
(a) Both (iii) and (iv) Source: Ultimate Book of Accountancy
(b) Both (i) and (ii)
(c) (i) (ii) (iv) are false
(d) Only (i)
QUESTION 52
(R).
Assertion (A)
If net working capital of a firm is Zero, its current ratio will be 1:1.

Net working capital will be zero only when current assets and current liabilities are same.

QUESTION 53
(R).
Assertion (A)
Inventories and Prepaid Expenses should not be considered while calculating Liquid Assets
for the purpose of calculation of Quick Ratio.

Inventories and Prepaid Expenses can be converted into cash within 3 months.

QUESTION 54
Debt to Equity Ratio of Vinod Ltd. is 2:1. Accountant wants to maintain it at 1:1. Following options
are available: Source: Ultimate Book of Accountancy
(i) Issue of new shares for cash
(ii) Purchase of fixed assets by taking long term loan
(iii) Issue of Bonus Shares
(a) Only (i) is Correct
(b) Only (ii) is Correct
(c) Only (i) and (ii) is correct
are available: Source: Ultimate Book of Accountancy
(i) Issue of new shares for cash
Book
(ii) Recommended
Purchase of fixed assets by------
takingUltimate Book of Accountancy
long term loan Class 12th
(iii) Issue of Bonus Shares Contact Author 9459514442

(a) Only (i) is Correct
(b) Only (ii) is Correct
(c) Only (i) and (ii) is correct
(d) Only (i) and (iii) is correct
QUESTION 55
A company has an operating cycle of 11 months. It has Trade Receivables amounting to
Rs.4,00,000 and Expected Realisation period of 15 months. How would this information be
presented in the Balance Sheet? Source: Ultimate Book of Accountancy
(a) Other Current Assets
(b) Non-Current Assets
(c) Current Investments
(d) Current Liabilities
Answers
1. (c) Z’s Capital A/c Debit 13,500 and Y’s Capital A/c No effect at all
2. (b) 900
3. (d) Rs.7 per share
4. (a) 6,36,800
5. (c) (ii) (i) (iv) (iii)
6. (b) Vinod’s Capital A/c Cr. 5,000
Note: Market value of Fixed assets is not considered at the time of Revaluation.
7. (a) When a firm provides loan to a partner, rate of interest on such loan is 6% p.a. if
partnership deed is silent on interest rate.
8. (a) 36,000 Debit Side
9. (b) 11,200
10. (d) 2:2:3
11. (b) 600 Profit
12. (c) 30,000
13. (b) Loss 8,000
14. (c) Rs.6
15. (c) It can be used for writing off capital losses.
16. (c) 1375
17. (b) 2,80,000
18. (c) Loss Rs.400
19. (a) 49,500
20. (a) 26,400
21. (c) Revaluation A/c Dr. 10,500

22. (a) Assertion is correct, but Reason is wrong
23. (a) 66,000
24. (d) 2,00,000
25. (a) 27,000
26. (b) Both Assertion and Reason are correct but Reason is not correct explanation of the
Assertion
27. (c) 60,000
28. (c) (i) (ii) and (iii) are True
29. (c) 8,000
30. (d) Nil
31. (c) Only Assertion is correct
32. (c) Vinod’s Capital A/c Debit with 1,250
33. (b) 9 Per share
34. (d) 1,00,000 shares
35. (a) 32:25:8:2
36. (b) 21,00,000
37. (c) Goodwill 50,000
38. (a) 2,000
39. (d) 90,000
40. (d) 2,370
41. (d) 63,487
42. (a) Both Assertion and Reason are correct and Reason is the correct explanation of the
Assertion
43. (c) Time Series Analysis
44. (d) Debt to Equity Ratio is computed to assess short-term financial soundness of the firm
45. (b) Only (i) and (ii) is wrong
46. (c) Ratio Analysis
47. (c) (i) d; (ii) a; (iii) e; (iv) b; (v) c
48. (d) Total Assets to Debt Ratio
49. (d) 2.5:1
50. (d) 53%
51. (d) Only (i)
52. (a) Both Assertion and Reason are correct and Reason is the correct explanation of the
Assertion
53. (c) Only Assertion is correct
54. (a) Only (i) is Correct
55. (b) Non-Current Assets
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Book Recommended ------ Ultimate Book of Accountancy Class 12th

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BEST ACCOUNTANCY BOOK

As per CBSE Guidelines

Attempt any 15 Questions from question number 1 to 18

Liabilities Amount Assets Amount

Liabilities Amount Assets Amount

Date Particulars L.F. Debit Credit

Date Particulars L.F. Debit Credit

(a) 70,000 (b) 2,80,000

(c) 4,50,000 (d) 1,40,000

Profit/Loss to be transferred to C’s Capital Account ____________

(a) Profit Rs.400 (b) Loss Rs.1,600

(c) Loss Rs.400 (d) Loss Rs.2,000

Liabilities Amount Assets Amount

(b) Creditors A/c Dr. 10,500

(c) Revaluation A/c Dr. 10,500

(d) Revaluation A/c Dr. 8,925

Reason (R) : Source: Ultimate Book of Accountancy

Reason (R) Source: Ultimate Book of Accountancy

Choose the correct option:

Reason (R) Source: Ultimate Book of Accountancy

Reason (R) Source: Ultimate Book of Accountancy

Choose the correct option:

(ii) Debentures due for Redemption (b) Other Current Assets

(iii) Cheques in hand (c) Inventories

(v) Raw Materials (e) Cash and Cash Equivalents

Choose the correct option:

Reason (R) Source: Ultimate Book of Accountancy

Choose the correct option:

Reason (R) Source: Ultimate Book of Accountancy

Choose the correct option:

Choose the correct option:

19. (a) 49,500

20. (a) 26,400

21. (c) Revaluation A/c Dr. 10,500

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