\

NATIONAL PUBLIC SCHOOL

BENGALURU
PREPARATORY EXAMINATION - 2021-22
ACCOUNTANCY
Class: 12 Max Marks: 40
No. of pages: 11 Time: 90 Minutes

General Instructions:
• This Question Paper has II Parts and both Parts are compulsory.
• Shade the correct option/or MCQ type questions on the OMR sheet
• The Internal choice break up is as given below:
o Part I contains 3 Sectio,,s -A, Band C
Section A has questions 1-18 and Section B has questions from 19-36.
Any 15 questions must be attempted from each ofthese sections
o Part I, Section Chas questions from 37-41. Attempt any 4 questions
o Part II contains 2 Sections -A and B.
Section A has questi<j!J.S,.frorn{ii4.8. .Alfe'tnpt.f.!ny 5 questions; .
S~ction B has q;;,esttore, fr f,,I w~k f
{ whicit>6~ estions should be attempted
• All quest,ons carry e_,qu'!.i.n/lli~ !Y)JLno•negat,O!! mat,fijnJ , '-
• Read the instructipng"t'{a'riy.,)fe]ore answering t"!ie·q,~estio'ns 11(, the OMR sheet
, 'v' /' -, ";,, \
·'o '
/zf/
.1 •.......'....
f

/ --2:
( ,,.
PART-I ~'-()\ \
Section .A - Atte: any 15 questions \
, .... l

r
Subscribed bf t not · . · ),~~£..am~ ~ 1

a) Total No4 nal Va .e~~ receir d by the company

b) Total Nomr at Val . .. ,
c) Total Issue ~ '.ce o J~ed /
d) Total Issue Pr~ce oftfi :.!JN,J~j ce1ved /
'

2 Which of the foll~~ ing items, rofit and £ss Appropriation

Account?
' •, ,. . , " _/·
/

a) Salaries to Partners obirlte e~ oll" apital

c) Interest on Drawings ~d) rawings

3 When a new partner does not bring his share of goodwill in cash, the amount is debited to:
a) Outstanding Goodwill Ale b) Goodwill Ale
c) Current Ale of the new partner d) Capital Ale of the old partners

4 Share Application Account is

a) Personal Account b) Real Account
c) Nominal Account d) None of these
 • • Accoun t is prepared t profit
5 Profit and Loss Appropriation
-
b)forne _ -
a) For reserve fund F ; transfer of profits
c) For divisible profit d) 0
..
. the ratio of 2.2.1. They
.
6 A, B and C are partners of a finn sharmg pro fits
1 and losses m
•
. BaJanee
An extract of th eir
th 151
admitted D for I/4 share with effect from Ap i1 r 2 020 ·
st
Sheet as at 31 March 2020 is as follows: (Extract)
51
Balance Sheet as at 31 March 2020
(f) Assets (~
Liabilities
Workmen Compensation Reserve 80,000
If the claim for workmen compensation 1s estimated at U,00, OOO which of the foJJowing
accounts will be debited and by what amount?
a) Workmen Compensation Reserve by f20,000
b) Provision for Workmen Compensation Reserve by f20,000
c) Revaluation Accou n U8 L/ ·
d) Revaluation Acco t.r ·· C&
7 Decrease in th 1es on reconstitution o
a) Gain to b) Loss to the
c) Neithe d) Does not ha
existing p capital account partners
8 The author :.. .
company i each. The
amount of 1,200 shares. The
a) f2,00,0
c) tl,20,00

\
9 In which of the fol.lhwing situ n t·
· ofadm1ss1on
tune · • of~"a"n~w P8'tner? g ra 10 , Partners is used at th e
a) When new partner brin~ A ~ irqof h1s r.B.6e~/ .
b) Wh . t ~•q,,c•o!..8 uw11I
en new p~er 1s not able ing.his..share-ofgoodwiII
c) When goodw1JJ already appears in the Balanc Sh
. his
d) When new partner brmgs . share ofgoodw'JJe . eetk' at the tim e Of adm1ss1on
. .
I in tnd.

IO Securities Premium Reserve can be used for·

a) Paying interest on bonds
c) Paying tax liability b) Meeting the cost of .
d) Paying div'd issue of shares
- • end on shares

2
11 Calculate the value of goodwill at 3 year's purchase when: capital employed -t250,000;
Average Profit - U0,000 and normal rate of return is 10%
a) ,3,000 b) t25,000
c) t30,000 d) ,1s,ooo
12 The discount given on re-issue of shares is debited to:
a) Share Capital Account b) General Reserve Account
c) Share Forfeiture Account d) Capital Reserve Account

13 X and Y .change their profit-sharing ratio from 2:3 ratio to equal ratio. Which partner will
bear loss and in which ratio?
a) 1/10 sacrifice by X b) 1/10 sacrifice by Y
c) 1/5 sacrifice by X d) 1/5 sacrifice by Y

14 X.Y and Z are in partnership shai:mg"J)fofitTif'rthe-.(atlo of 5:4:1. Z is guaranteed a

minimu~ profit of~8.0,~ sh\i"
li!}l~'ffW'~ bome ~y X and Yin the ~tio

be:
a) ~9,600
;I ~ I
/ 1 '-:,-:''
" ·o,. '
of3:2. Firm made a pooii.t{>~0,Q G\lJIIB8 - ~&G-...~ . e1l~c1ency borne by Y will

b) U4,400 \
c) ~24,000 d) U2,000 \ ,,.,..
< ' \ \

15 Mishti and N£h~ :.-Cef partners in a firm sharing profits and loss\ sijnth ratio of 3:2 with
fixed capitatf On 1st April 2021, they ad"iV(Gauri as a new parAter for /6th share in the
profits. Gaur~ rings any ount of goodwill.
The firm's g · dwill 00 J
For the adjust ent of ==- entries iwill be passed:
a) Gauri's
To
ToNis
b) Gauri's C O

To Mishti's S T 1 g 'S g / 30,000

To Nishta's Current J;;e-,-----.. 20,000
c) Gauri's Capital Ale Dr 30,000
To Mishti's Current Ale 30,000
d) Gauri's Capital Ale Dr 30,000
To Nishta's Current A/c 30,000

16 Which of the following documents describes specifically about the terms and conditions
for the issue of shares?
a) Prospectus b) Articles of Association
c) Memorandum of Association d) All of the above
 • ·. J . ~ 000 and B's Capital
. · A's capita 1s' 90' .
17 A and B are partners sharing profits m equal ~att0 · th h . future profits, C brmgs
is ~60,000. They admit C and agree to give him 115 s /r;;:t the time of C's Admission?
~70,000 as his share of capital. What is the hidden goo wi
a) ,10,000 b) tl,30,000
c) ,3,50,000 d) tl,50,000

. securi'fIes Premium reserve wilJ not

18 At the time of forfeiture of shares issued at a premium,
be debited when:
a) Securities Premium reserve is b) Securities Premium Reserve is not received
received
c) Both (a) and (b) d) None of the above

PART II
Section B- Attempt any 15 questions
19 Ashish and Vashisht are partneryn,,afrfflf.""'A"Shish,1$ entitled to get a commission of25%
~f net profit after charging,g~ co1\1m~<fu1~: 1/1t' ~ be~ re charging such commission
is ,60,000. Calculate s\shi$~ mm,issiow.-_ '-' ' "\.._
a) ,12,soo '_,..,,,.. b) {15,00 C
/ ' "-, ··' \ 'I. ' \
20 Due to non pa/ ~ !o/4na1 call on2, a company forfeited J~ ) a¾,, oHIO each.
Later, these sliates:w/ re re-issued at {6 per share fully paid up. \rlle""'ampunt of capital
reserve will ~e: / \ I
a) t2,000 .
c) t8,000 \
.
21 Agni and Shiv \.ere pa roand J2,00,000
respectively. Sh:.iti was a f
. share Profits. Shakti brought
1,20,000 as her sfi'll,(e of goo · r share/ of.capital. Goodwill
premium credited to Agpi wil\1be ,,.
a) t40,000 '"'-.... t...· S r l b~~ ~pff)oo _.,/
c) U2,000 .,.,___,(,.d),J.60,-000"'

22
• Following were the profits of the firm for the last three years:
Year Profit(~)
2019-20 t3,00,000 (including abnormal gain oH90,000)
2020-21 t2,40,000 (after charging an abnormal loss oHJ,20,000) -
2021 -22
t3,60,000 (excluding tl,20,000 payable on insurance of a machinery) -
Goodwill of the firm on the bast·s of 4 y ear's purchase oft
years will be he average profit of the last
3
a) ~12,00,000 b) ~10,80,000
c) ~12,80,000 d) I0,00,000

4
23 Anay and Vinay are partners in a firm sharing profits and losses in the ratio of 5: 1
Balance Sheet as at 31 st March 2020 (Extract)
(f) Assets (f)
Liabilities
Machinery 40,000
If the value of Machinery in the Balance Sheet is undervalued by 20%, then at what value
will Machinery be shown in the new Balance Sheet:
a) ~44,000 b) NS,000
c) ~32,000 d) t50,000

24 A company bought a building worth t20,00,000 which was paid in equity shares of~ 100
each. These shares were made at 25% premium. How many shares were issued to the
vendor?
a) 10,000 shares
c) 12,000 shares

25 Ashish and Rosesh are; aft;~[~ s~af?nJ,,lJaJ..J't €)at~~ 1 Q :2. Krish was the manager
who received the sa\~ry ~ l ' ~O,r.m:Tnaclail'i"t>~tdtpmj~~n of 10% on net profit .
after charging suc}l ccf@;t~,io~. Total remuneration to~ s~•~dunted to t2,04,000.
Profit for the ye?,f ~tbre,chargmg such salary and comm1ssioiv®ts\
a) tS,20,000 , b) t7,80,000 \ ,,.-...._, \
c) ~6,60,000 >I d) tS,04,000 \ ,--

Reason (R):
. re tw •
26 Given below l\

Assertion(A ( Parttt t
. ~-¥'"~ . /
ll!l!!~J!te~ . . ·
,·,.-
.. the l ther labelled as

.. debit t,i/lance.
Reason (R): ! \ Partn ~~·, ·· · vested bf he partner and the
permanent w1thcl(awals ·-. . a /
In the context of fh_e above ·~ · ·- · t., ollowin~ls correct?
a) Both A and R ar~ dividual , , ect explanation of A
b) Both A and R are in'ai~ uaUy~ e but 1s not t oorr~t,[xplanation of A
c) A is true but R is false , ~ T 1 9 5.,-//
d) A is false but R is true _..
27 A and B are partners sharing profits. They admit C as a new partner. C contributes Stock -
~30,000; Furniture - ~40,000; Machinery - ~l,00,000 and Cash - ~20,000 towards capital
and goodwill. Goodwill on the date of admission as valued at ~l,80,000. C's Share of
goodwill and capital will be:
a) t60,000 & ~1,30,000 b) ~60,000 & tl,90,000
c) ~60,000 & ~60,000 d) ~50,000 & n,20,000

28 A company forfeited 100 shares oHl0 each, wherein ~5 was not received. 60 shares out
• of these were re-issued at ~6 per share fully paid up. What amount will be transferred to
capital reserve account?
Ia) ~40 Ib) ~50
c) ~60 d) ~JOO

5
 . and losses in the ratio of3:2. On 151 ApriJ
29 P and Qare partners in a tinn sharing profits. . d 'd d to be equal. Investment
2020, they decided to admit 'R' and their• ratiofR's
is ecdl e. si·on · At that time ' lnvestm ent
a mis
O
Fluctuation Reserve is ti ,80,000 at the ume 1 • t5 70 000 The investm
appeared in the books at t6,30,000 and its market va ue is • • · ent
account will be: b) Credited by t60,000
a) Webited by t60,000 d) Credited by t 1,80,000
c) Debited by tt,80,000
nd th 0th
30 Given below are two statements, one labelled as Assertion (A) a e er labelled as
Reason (R): .
Assertion (A): Pro rats allotment is proportionate allotment where applicants are allotted

less number of shares than applied for.

Reason (R): The balance of 'Forfeited shares account' is added to the Share capital under

'Subscribed Capital'
In the context of the above two.•stat~ ~ iiich-o~ following.is correct?
a) Both A and Rare indi~ criial'1 u-Qahd.tJsliJi/~ nrreci"e~planat1on of A
b) Both A and R are j,tl ~41fH~e-burRi s-no e
~'?~ct~ l\~ anation of A
c) A is true but R is/f~ISl\ , / l.,~,
d) A is false but jzmI~,/ \ () .
31 On I st April 2/ I ?,1e /.rst call of ,3 per share became due on\ ~9 equity shares

a shareholde holdin I 000 shares aid tho second and final cal ons er share along
with the first all. ·- ·1
Calls in adva ce ace : "' '
a) Debited b ,s,00
c) Debited by .1,500

32 Given below are ~ temen ion (A) ancl the other labelled as
~00~ ' . /
Assertion (A): Average Profitofiheitifin i~~oi>,bb_g,;m~ onnal Rate ofRetum is 10%.
Net assets were ,2s,oo,ooo andvil'luo-ot:.GoodwiH"6ased on Capitalisation of Average
Profit will be ,s,00,000
Reason (R): Goodwill when valued using Capitalisation of Average Profit, Average Profil
is dividedd by the rate of return. This gives the value of business from which net assets are
deducte .
In the context of the .above
. . two statements, which of the tioII owmg
. 1s. correct?
a) Both A and R are md1v1dually true and R is the corre t 1 .
b) Both A and Rare individually true but R is not the correct
c expexplanat1·on
anation of AfA
c) A is true but R is false o
d) A is false but R is true

6
3; Lily Ltd took over assets of, l 5,00,000 and liabilities of ,s,00,000 of Jasmine Ltd. for a
purchase consideration oHl3,68,S00. t25,500 were paid by issuing a promissory note
payable after two months and the balance was paid by issue of equity shares of~ 100 each
at a premium of 25%
In the books of Lily Ltd., Securities Premium Reserve will be credited with·
a) '2,50,000 b) t2,68,600
c) ~5,00,000 d) ~3,68,500

34 A and Bare partners sharing profits in 7:3 ratio, having fixed capital ~,00,000 and
~l,00,000 respectively. After closing the books, the accountant realized that interest on
capital is provided at 12% p.a instead of 10% p.a. The amount of adjustment will be:
a) ~00 b) ~600
c) ~400 d) ~300

35 A company forfeited 4,0.Ptrshares ~\-o}e6Jo · cation money oH3 has been

/ paid. Out of these 2,90-o~ ~S'~re-re'lss~fully A.iJ and ~4,000 has been
transferred to capi_tal ~~~rvc;,.,eilculate the rate at whlb the e's!{ares were reissued.
a) ~10 per s · b) ~9 per sh
c) ~11 per s d) ~8 per sh
\
' \
1
36 U, V and W1 • rofits • rati eci~e to share future
profits in the a · the following
revaluation d r asselb and liabilities by
\
passing an ad us
\ Revised Value (~)
l - - - - -~ ----'
Land And Buil9ing -""-=- 3,50,000
Furniture \ ---- 1,00,000
Sundry Creditors '\ 20,000
Outstanding Salaries 00 15,000
The single adjustment entry-Will .
a) Debit Wand Credit U by ~10,50 ~bT e it U and Credit W by ~10,500
c) Debit V and Credit U by ~10,500 d) Debit W and Credit V by 10,500

7
 PARTI
4 questions
Section C • Attempt an~ tion given below:
Case Study: Answer Question 37 to 39 on the asasb · of mforma
. f ~1 00 00 000 as per Its ·
. h ·
Hearty and Party Ltd is registered with an aut orJZe d capita 1o ' , ' '
ity shares of~ 100 each.
M • · d' 'd d ·nto t7 00 000 equ
emorandum of Association which 1s 1v1 e 1 ' ' d ovided skil1 development
The company set up food processing unit in the rural areas an a1so pr

centers for youth upliftment. . and e ui ment purchased and

The company issued 50 000 shares to the vendor for machmery q P
2,00,000 shares were is~ued to public. The amount was payable as foHows:
Application and Allotment - ~20 per share
On First Call - ~50 per share
On Second and Final Call - the balance
All calls were made and were duly received except on 100 shares held by Rajish, who failed to
pay the second and final call. His shares were forfeited.

C) 50,000 / r, \,:· • / d) 2,50,000~.• \ .. l \

It"•,/' '-
38 What amount _1l~ reJ1ected in the balance sheet for Sub~ ibed'an' fully paid up?
\
a) ~2,97,49,~ o::.,> bH2,49,oo,ooo \ ,... ) \
c}~2,49,97,poo.._ f
1
-~d). ~l,99,97,000 r
39 How much i~credite~~
I '
a) ~3,000 '
c) ~5,000

\
Case Study: Answer Q\lestion _ --• -~l-
/
-1
Varun and Vansh starteil'Jl firm to t~ 0
· '1P'' 0 n giveybeJow:
,
decided to share profits ancJ,,Josses in _ ,~-
] hce Vansh./was st'lJ . they
I studymg,
Varun - ~20,00,000; Vansh -, ti,O "' ° 3VfDsltli1\tragtJ.&J
..,OO,f®' · ey ad t1 fixed"ca
,( ~1'taI of
October "' ''-.... __ _:,_:_.,..,.,......,.un
er capital of ~5,00,000 on I st
The partnership Deed was drawn and it provided the following:
a) Interest on Capital @ l 0% p.a.
b) Varun's Salary tS0,000 p.a.
c) Vansh's Salary t3,000 p.m.
The accountant distributed the profit at the end of first year With
provisions. The firm made a profit of t4,86,000. out consid enng . the above
The accountant was instructed to pass an adjustment entry to re
On the basis of the above infonnation, answer the following infoso1ve this . oversight..
h . h .
40 At the end of the year, w at 1st e tota1Interest on capital th l'lllation
to the partners? at should have been provided
a) t3,00,000 b) ~3,50,0oo
c) tJ,25,ooo d) t2,so,ooo

8
41y What will be the adjustment entry to rectify the errors committed by the accountant?
1
a) Varun's Capital Ale Dr 37,700 b) Vansh's Capital Ale Dr 37,700
To Vansh's Capital Ale 37,700 To Varun's Capital Ale 37,700
e) Varun's Current Ale Dr 37,700 d) Vansh's Current Ale Dr 37,700
To Vansh's Current Ale 37,700 To Varun's Current Ale 37,700

PART II
Section A-Attempt any S questions
42 A transaction involving a decrease in Debt Equity Ratio and Increase in Current Ratio is
a) Issue of Debentures against purchase of fixed assets
b) Issue of Debentures for cash
c) Redemption of Preference Shares for Cash
d) Issue of Equity Shares for cash

43 Financial Statements are su~ i~ t i f e ~of-accounting data which provide

information of the busint;i,s ab ut ? [, b L
Jr,-..., __
a) Current Assets aq.,d _liiE ,rf>ebt.!fid ;~y.ity'.,_
c) Profitability 3.l}J Eiii'iyiciP'Position d) Operating . &~OI) '6o>erating Income
I .1.::-..,-..7' /. \ (~) \
44 Given below at€1M!o.1t
f y
i ements, one labelled as Assertion (A) m(d,\Jl\ other labelled as
\ r ,
Reason (R):~ / ; \ '~ \
Assertion ( : Fittn' ability to meet it~ -term financial 6bligation is known from
Liquidity rat s f.\
Reason (R): urren 'J._~ fl , tios w ich help in
assessing the financi · nancia obligations in
time. \ /
In the context of the abo ls owing i~ orrect?
a) Both A and R ~ e indivt · .' y..tm xplanatjon of A
b) Both A and R ar~4Ddividual orrect e~lanation of A
c) A ~s true but R i~ f~ls'-._
d) A IS false but R JS true "", 1.2' .s r
_· . ., . •- ,.. c.
·1 ~J ';) :;) ,..,,,....,
/;I / '"''

~ - ~...,.·
45 An Asset shall be shown / classified as Current Asset when:
a) It is expected to be realized in, or is intended for sale or consumption in company's
normal operating cycle
b) It is held primarily for the purpose of being traded
c) It is expected to be realized within 12 month after the reporting date
d) Any of the above

46 Working capital is ~7,20,000; Trade Payables ~40,000; Other Current Liabilities

n,00,000. Current ratio is
I a) 2:1 Id)b)4:l7:1
c) 5:1

9
 f Sh e h~Jder's funds . st share
47' Identify the items which is not a P~ 0 ar b) Money received again
a) Share application money pending warrants -------1
allotment d) Share calep1~·ta~1_ _ _ _ _ _ ___,
c) Reserves and Surplus
fit is 25% on cost, Operating Expenses
48 Revenue from Operations is ~9,00,000. Gross Pro
are ~90,000. Operating Ratio will be
b)50%
a) 100%
d) JO%
c)90%

PART II
Section B - Attempt any 6 questions 0th
. the Notes to Accounts on er
h
49 Out of the following items, identify which is nots own m
expenses
a) Courier Expenses
c) Rent for Factory
~· 0 ..
50 A transaction •urrent Ratio and Increas · s
a) Purchas e for cash b) SaJe o sets for Cash
c) Sale of d) Cash Pa urrent Liability
51 If credit rev ions is ~12,00,000, Trade Rece1v ver ratio is 6

o
Receivables
a) ~1,60,0

c) ~2,00,00 Jjijll'~i~;f /
52 Given below are\vo stat , · ' .· A) and., e otherlabelled as
Reason (R): \ I
Assertion (A): Borro'w~~ are 2 ~onth~~er the period of
Operating Cycle from~: ~t.B!S8rfe Sp~t §ao~Term Borrowin s
Reason
. . (R): Current
. Liabilities
. a r ~ i e s~ ich are payable WI'thg m • 12 months or
w1thmg the period
. . ofOperatmg Cycle
. from the date of Balance Sh t s·
ee · mce, loans that are
not payable w1thm the above period are Long Term Borrowings.
In the context of the above two statements, which of the follow· •
dR · d' 'd ll d . mg ts correct?
a) Both A an are '.n '.v'. ua y true an R _,s the correct explanation of A
b) Both A and R are md1v1dually true but R 1s not the correct 1 .
c) A is true but R is false exp anation of A
d) A is false but R is true

53 amount
When Current Ratio is 3:1 and the amount of Current LiabTf
of current assets?
11 .
ies is tl,l0,000, what is the
a) ~3,30,000 b) ~2,20,000
c) ~2,00,000 d) ~3,20,000

10
 is shown in a com ,
4 PanysBal
' provisions . ance Sheet under th
·d D· .d d esub head of Short tenn
a) l]npat tvt en b) Pro . .
c) calls in advance d) vision for Tax
Interest accru~ed:i::~- - - - J
- - - - and due on borrowings

,,
If there are fixed assets of ~10 'oo,ooo' Current Assets of 3J6 00
t3 oo 000 and net profit before tax and int . ' , ,000, Current Liabilities
, ' erest 1s ~2 60 000
-) 1So/i ' ' , return on investment will be
a O b) 25%

-
~20% d)30%