FIRST TERM EXAM 2021-22

ACCOUNTANCY

Class : XII Mark : 40

Time : 90 Minutes

General Instructions:

Read the following instructions very carefully and strictly follow them:

1. This question paper comprises three PARTS – I, II and III. There are 55
questions in the question paper.

2. Part - I -is compulsory for all candidates.

3. Part - II Analysis of Financial Statement

4. There is an internal choice provided in each Sections.

I. Part-I, contains three Sections -A, B and C. Section A has questions from 1 to
18 and Section B has questions from 19 to 36, you have to attempt any 15
questions each in both the sections.

II. Part I, Section C has questions from 37 to 41. You have to attempt any four
questions.

III. Part II, contains two Sections – A and B. Section A has questions from 42 to
48, you have to attempt any five questions and Section B has questions from 49
to 55, you have to attempt any six questions.

5. All questions carry equal marks. There is no negative marking.

6. Specific Instructions related to each Part and subdivisions (Section) is

mentioned clearly before the questions. Candidates should read them thoroughly
and attempt accordingly.
 Part – I
Section – A
1. In case of change in profit-sharing ratio, the accumulated profits are
distributed to the partners in
(a) new ratio (b) old ratio (c) sacrificing ratio (d) equal ratio
2. The part of un-called capital, to be called only in the liquidation of a
company is called:
(a) Un-reserved Capital (b) Reserve Capital
(c) Capital Reserve (d) Calls-in Arrears
3. A shareholder allotted to whom 9,000 shares of ₹ 10 per share failed to
pay first & final of ₹ 2 per share. ₹ 18,000 to be recorded in the books of
company with _____

(a) Dr. to Calls-in Arrears A/c (b) Dr. to Share Forfeiture A/c

(c) Cr. to Calls-in Arrears A/c (d) Cr. to Share Forfeiture A/c

4. Company can utilise securities premium for :

(a) Writing off loss incurred on revaluation of asset

(b) Issuing fully paid bonus shares

(c) Paying divided

(d) Writing off trading loss

5. If a share of ₹ 10 on which ₹ 8 has been called and ₹ 6 is paid is

forfeited, the Share Capital Account should be debited with :

(a) ₹ 8 (c) ₹ 6

(b) ₹ 10 (d) ₹ 2
6. X, Y and Z are partners sharing profits and losses in the ratio of 5:3:2.
They decide to share the future profits in the ratio of 3:2:1. Workmen
compensation reserve appearing in the balance sheet on the date if no
information is available for the same will be:

(a) Distributed among the partners in old profit-sharing ratio

(b) Distributed among the partners in new profit-sharing ratio

(c) Distributed among the partners in capital ratio

(d)Carried forward to new balance sheet without any adjustment

7. Oustensible partners are those who

(A) do not contribute any capital but get some share of profit for lending
their name to the business

(B) contribute very less capital but get equal profit

(C) do not contribute any capital and without having any interest in the
business, lend their name to the business

(D) contribute maximum capital of the business

8. A, Band C are three partners sharing profits and losses in the ratio of
4:3:2. D is admitted for 1/10 share, the new ratio will be :

(a) 10 : 7 : 7 :4

(b) 5 : 3 : 2 : 1

(c) 4 : 3 : 2 : 1

(d) None of these

9. Anuradha is a partner in a firm. She withdrew ₹6,000 in the beginning of

each quarter during the year ended 31st March, 2019. Interest on her
drawings @ 10% p.a. will be :
 (A) ₹900

(B) ₹1,200

(C) ₹1,500

(D) ₹600

10. At the time of admission of a new partner general reserve appearing in

the old Balance Sheet is transferred to:

(a) All Partner’s Capital Accounts

(b) New Partner’s Capital Account

(c) Old Partners’. Capital Accounts

(d) None of these

11. P, Q and R are partners in a firm in 3 : 2 : 1. R is guaranteed that he will

get minimum of ₹20,000 as his share of profit every year. Firm’s profit
was ₹90,000. Partners will get:

(A) P ₹40,000; Q ₹30,000; R ₹20,000;

(B) P ₹42,500; Q ₹27,500; R ₹20,000;

(C) P ₹45,000; Q ₹30,000; R ₹15,000;

(D) P ₹42,000; Q ₹28,000; R ₹20,000;

12. A and B are partners in a firm sharing profits in the ratio of 3 : 2. They
decided to share future profits equally. Calculate A’s gain or sacrifice
(a) 2/10 (sacrifice) (b) 5/10 (gain) (c) 1/10 (Gain) (d) 1/10 (sacrifice)
13. X and Y are partners sharing profits in the ratio of 1:1. They admit Z for
1/5 th share who contributed ₹25,000 for his share of goodwill. The total
value of goodwill of the firm will be :

(a) ₹ 2,50,000
 (b) ₹ 50,000

(c) ₹ 1,00,000

(d) ₹ 1,25,000

14. When shares are forfeited, the Share Capital Account is debited with:

(a) Nominal value of Shares

(b) Market value of Shares

(c) Called-up value of Shares

(d) Paid-up value of Shares

15. An issue of shares which is not a public issue but offered to a selected
group of persons is called :

(a) Public offer

(b) Private placement of shares

(c) Initial public offer

(d) None of these

16. Capital included in the liabilities of a company is called :

(a) Authorised Capital

(b) Issued Capital

(c) Subscribed Capital

(d) Paid-up Capital

17. When there is no Goodwill Account in the books and goodwill is raised,
…………….account will be debited :

(a) Partner’s Capital

 (b) Goodwill

(c) Cash

(d) Reserve

18. In the absence of express agreement, interest @ 6% p.a. is provided :

(A) On opening balance of partner’s capital accounts

(B) On closing balance of partner’s capital accounts

(C) On loan given by partners to the firm

(D) On opening balance of partner’s current accounts

PART – I

SECTION – B

19. Arun and Vijay are partners in a firm sharing profits and losses in the
ratio of 5:1.

Balance Sheet (Extract)

If value of machinery in the balance sheet is undervalued by 20%, then at

what value will machinery be shown in new balance sheet:

(a) 44,000 (b) 48,000 (c) 32,000 (d) 50,000

20. Profits of the last three years were ₹ 6,000, ₹ 13,000 and ₹ 8,000
respectively. Goodwill at two years purchase of the average net profit
will be :

(a) ₹ 81,000
 (b) ₹ 27,0000

(c) ₹ 9,000

(d) ₹ 18,000

21. X and Y share profits in the ratio of 3:2. Z was admitted as a partner who
sets 1/5 share. New profit-sharing ratio, if Z acquires 3/20 from X and
1/20 from Y would be
(a) 9 : 7 : 4 (b) 8 : 8 : 4 (c) 6 : 10 : 4 (d) 10 : 6 : 4
22. Assertion (A): In the absence of Partnership deed profits and losses are
divided equally among the partners.

Reason(R): This rule is applicable according to Indian partnership Act,

1932.

a) Both (A) and (R) are true and (R) is the correct explanation of (A)

b) Both (A) and (R) are true and (R) is not the correct explanation of (A)

c) (A) is true, bur (R) is false

d) (A) is false, but (R) is true.

23. A, B and C were are partners in a firm sharing profits in the ratio of
3:4:1. They decided to share profits equally w.e.f from 1 .4.2019. On that
date the profit and loss account showed the credit balance of 96,000.
instead of closing the profit and loss account, it was decided to record an
adjustment entry reflecting the change in profit sharing ratio. In the
journal entry:

(a) Dr. A by 4,000; Dr. B by 16,000; Cr C by 20,000

(b) Cr. A by 4,000; Cr. B by 16,000; Dr C by 20,000

(c) Cr. A by 16,000; Cr. B by 4,000; Dr C by 20,000

 (d) Dr. A by 16,000; Dr. B by 4,000; Cr C by 20,000

24. According to Profit and Loss Account, the net profit for the year is
₹1,40,000. The total interest on partner’s capital is? 8,000 and a partner
is to be allowed commission of ₹5,000. The total interest on partner’s
drawings is ₹1,200. The net profit as per Profit and Loss Appropriation
Account will be :

(A) ₹1,28,200

(B) ₹1,44,200

(C) ₹1,25,800

(D) ₹1,41,800

25. Bipasa is a partner in a firm. She withdrew ₹6,000 at the end of each
quarter during the year ended 31st March, 2019. Interest on her drawings
@ 10% p.a. will be :

(A) ₹900

(B) ₹600

(C) ₹1,500

(D) ₹1,200

26. Assertion (A): Increase in the value of assets is debited to Revaluation

Account

Reason ( R ) : Revaluation account is credited on increase in the value of

Plant and Machinery:

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is
the correct explanation of Assertion (A)
 (b) Both Assertion (A) and Reason (R) are true, but Reason (R) is
not the correct explanation of Assertion (A)
(c) Assertion (A) is false, but Reason (R) is true
(d) Assertion (A) is true, but Reason (R) is false
27. 12,000 shares of ₹ 100 each forfeited due to nonpayment of allotment of
₹ 40 per share and first & final call of ₹ 30 per share. Out of the
forfeited shares, 9,000 shares were reissued at ₹ 80 per share fully paid.

Which of the following amount of share forfeiture account will be

transferred to Capital Reserve Account? 1,80,000

(a) 90,000 (b) 1,80,000

(c) 3,60,000 (d) 2,70,000

28. Premium on issue of shares is shown on which side of the Balance sheet.

(a) Assets

(b) Liabilities

(c) Both

(d) None of these

29. Seeta and Geeta are partners sharing profits and losses in the ratio 4 : 1.
Meeta was manager who received the salary of ₹4,000 p.m. in addition
to a commission of 5% on net profits after charging such commission.
Profit for the year is ₹6,78,000 before charging salary. Find the total
remuneration of Meeta.

(A) ₹78,000

(B) ₹88,000

(C) ₹87,000
 (D) ₹76,000

30. Once, forfeited shares reissued, balance of share forfeiture money will be
transferred to ___

(a) General Reserve (b) Capital Reserve

(c) Reserve Capital (d) Securities Premium Reserve

31. Assertion: (A) Received amount of securities premium will not debited to
securities premium reserve account, on forfeiture of shares.
Reason (R) Received amount of securities premium will be debited while
writing off of certain type of capital loss or expenditure.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the
correct explanation of Assertion (A)

(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the
correct explanation of Assertion (A)

(c) Assertion (A) is false, but Reason (R) is true

(d) Assertion (A) is true, but Reason (R) is false

32. X, Y and Z are equal partners with fixed capitals of ₹2,00,000,

₹3,00,000 and ?4,00,000 respectively. After closing the accounts for the
year ending 31st March 2019 it was discovered that interest on capitals
@ 8% p.a. was omitted to be provided. In the adjusting entry :

(A) Dr. X and Cr. Y by ₹8,000

(B) Cr. X and Dr. Z by ₹8,000

(C) Dr. X and Cr. Z by ₹8.000

(D) Cr. X and Dr. Y by ₹8,000

33. 12,000 shares of ₹ 100 each forfeited due to nonpayment of ₹ 40 per
share. First & final call of ₹ 30 per share not yet made. These shares
were reissued at ₹ 80 per share for ₹ 70 per share. Which of the
following forfeited amount will be transferred to Capital Reserve A/c?

(a) 4,80,000 (b) 3,60,000

(c) 1,20,000 (d) None of these

34. A Ltd. purchased a machinery for 1,80,000 Rs. for which it is paying by
issue of shares of 100 Rs. each at 20% premium. How many shares will
be issued as consideration. ?

(a) 2,500

(b) 2,000

(c) 1,500

(d) 3,000

35. A, B, C and D are partners sharing their profits and losses equally. They
change their profit sharing ratio to 2:2:1:1. How much will C sacrifice ?

(a) 1/6

(b) 1/12

(c) 1/24

(d) None of these

36. According to Section 52 of the Compaines Act, the amount in the

Securities Premium Account cannot be used for the purpose of:

(a) Issue of fully Paid Bonus Shares

(b) Writing Off Losses of the Company

 (c) Writing off Preliminary Expenses

(d) Writing Off Commission or Discount on Issue of Shares

Part – A

SECTION - C

I. READ THE FOLLOWING TEXT AND ANSWER THE QUESTIONS:

Based on the information given , you are required to answer Q.No.37 and Q
No 38

Soon after incorporation of Arvind Ltd. decided to issue 80,000 equity

shares of ₹10 each at a premium of ₹5 per share. Instead of collecting all
the capital in the form of cash/bank they have decided to go for the purchase
of assets in return pay them in the form of issue of shares. They approached
a businessman who sells machinery which is very must useful in production
of that material. The company purchased Machinery worth ₹5,50,000 and in
return they issued equity shares of ₹10 each at a premium of 10%. Further
they issued shares to the public for subscription. The issue is oversubscribed
to the extent of 10%. To the surprise one shareholder who got 1000 shares
paid all the money due on allotment ₹3 and call money ₹2 along with
allotment money.

37. Select the type of allotment of shares made to the company against the
purchase of Machinery.

a. Issue against consideration other than cash

b. Initial public offer

c. Issue for cash

d. Preferential allotment.
 38. If the shares are issued at premium of 10% against the purchase of an
asset, then how many shares are issued?

a. 45,000 shares

b. 55,000 shares

c. 45,000 shares

d. 50,000 shares

II. Read the hypothetical text and answer the following questions.

Amar, Saleem and John are partners without a Partnership Deed. On 1st
April, 2020, their capitals were ₹ 3,00,000, ₹ 2,00,000 and ₹ 1,00,000
respectively. During the year, they withdrew ₹ 30,000, ₹ 20,000 and ₹
10,000 respectively.

On 1st October, 2020, Saleem gave a loan of ₹ 50,000 to the firm and
demands interest on loan @ 10% p.a. for the year ended 31st March, 2021.

John wants to admit a new partner, Vinod but Amar and Saleem do not agree
for it. Amar demands a salary of ₹ 1,000 p.m. for the year for taking part in
business of the firm. For the year ended 31st March, 2021, the firm earned a
profit of ₹ 60,000.

39. Interest on Saleem’s loan is ………………………

a) ₹ 5,000 b) ₹ 2,500 c) ₹ 3,000 d) ₹ 1,500

40. Find the amount to be given to Amar as salary.

a) ₹ 10,000 b) ₹ 12,000 c) ₹ 9,000 d) No salary will be given

41. Vinod can be admitted as a new partner in the firm

when…………………….

a) John agrees to admit him as a new partner.

 b) John and Saleem agree to admit him as a new partner.

c) All the existing partners agree to admit him as a new partner.

d) There is no need of other partners’ consent.

PART – II

SECTION – A

42. Current maturities of long-term debt are shown under:

(a) Long term Provisions (b) Long term Borrowings

(c) Short term Borrowings (d) Other Current liabilities

43. Proportion of shareholder's funds to total assets is called

(a) Proprietary ratio

(b) Capital gearing ratio

(c) Debt equity ratio

(d) Current ratio

44. The ratios are primarily measures of earning capacity of the business.

(a) Liquidity

(b) Activity

(c) Debt

(d) Profitability

45. The following groups of ratios primarily measure risk

(a) Liquidity, activity and profitability

(b) Liquidity, activity and common stock

(c) Liquidity, activity and debt

 (d) Activity, debt and profitability

46. Comparative Statements are also known as :

(a) Dynamic Analysis

(b) Horizontal Analysis

(c) Vertical Analysis

(d) External Analysis

47. Match the following:

1. Short term loan (i) Other current liabilities

2. Short term loans and advances (ii) Short term borrowing

3. Debentures (iii) Long term

borrowings

4. Debentures redeemable during current year (iv) Current investments

Select the correct code:

(a) 1 – iii, 2 – ii, 3 – iv, 4 – i (b) 1 – iii, 2 – iv, 3 – ii, 4 - i

(c) 1 – ii, 2 – iv, 3 – iii, 4 – i (d) 1 – i, 2 – ii, 3 – iii, 4 – iv

48. To know the return on investment, by capital employed we mean:

(a) Net Fixed Assets

(b) Current Asset-Current Liabilities

(c) Gross Block

(d) Fixed Assets + Current Assets-Current Liabilities

PART – II
SECTION – B
49. If Profit before Interest and Tax is ₹5,00,000 and interest on Long-term Funds
is ₹1,00,000, find Interest Coverage Ratio
a) 5 Times
b) 4 Times
c) 5.5 Times
d) 4.5 Times
50. Total Sales ₹5,00,000; Sales Return ₹50,000; Gross Profit ₹90,000;
Closing Inventory ₹1,00,000; Excess of Closing Inventory over Opening
Inventory ₹20,000. The Inventory Turnover Ratio is
a) 5 Times
b) 4 Times
c) 5.5 Times
d) 4.5 Times
51. Which of the following statements are True?
a) The statement that compares items of profitability of a firm of
different periods of time is Common Size Balance Sheet.
b) Comparative Statements are also known as Horizontal Analysis
c) The statement that shows percentage of items of profitability of a firm
of the same period to a common base is called Comparative Balance
Sheet
d) Common-size Statement are also known as Vertical Analysis
Choose from the following options:
(A) Both (a) and (b)
(B) Both (a) and (c)
(C) Both (b) and (c)
(D) All three (a), (b), (c)
52. Assertion (A): Higher proportion of shareholders’ funds in financing the
assets is a positive feature as it provides security to creditors
 Reason (R): Proprietary ratio expresses relationship of proprietor’s
(shareholders) funds to net assets

(a) Both (A) and (R) are true and (R) is the correct explanation of (A)

(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)

(c) (A) is true, but (R) is false

(d) (A) is false, but (R) is true

53. Assertion (A): Total long-term debt includes Debentures, long term loans
from banks and financial institutions.
Reason (R): Shareholders funds includes Equity share capital, Preference
share capital, Reserves and surplus.

(a) Both (A) and (R) are true and (R) is the correct explanation of (A)

(b) Both (A) and (R) are true and (R) is not the correct explanation of A

(c) (A) is true, but (R) is false

(d) (A) is false, but (R) is true

54. Current ratio of PRASU P.Ltd. is 3:1. Accountant wants to maintain it at

2:1. Following options are available.

(i) He can repay Bills Payable

(ii) He can purchase goods on credit

(iii) He can take short term loan

Choose the correct option.

(A) Only (i) is correct

(B) Only (ii) is correct

(C) Only (i) and (iii) are correct

 (D) Only (ii) and (iii) are correct

55. According to prescribed order of assets in a Company's Balance Sheet

which asset should be shown first of all:

(a) Non-Current Assets (b) Current Assets

(c) Current Investments (d) Loans and Advances