ACCOUNTS GURU’S CONCLAVE

MOCK SAMPLE PAPER (2021-22)

(Based on New Pattern)
DR. VIKAS VIJAY
International Author, Motivational Speaker,
Success Coach and Founder & CEO Full Marks
ACCOUNTANCY
Education Research Institute
B.Com (H), M.Com, B.Ed., C.WA (I),
CLASS - XII
M.Phil, P.hd., L.L.B, Master Trainer NLP
9810278915 (Whats App) (TERM 1)

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ACCOUNTS GURU’S MOCK SAMPLE PAPER
in association with RACHNA SAGAR PVT. LTD.

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Time allowed : 90 minutes Maximum Marks : 40
General Instructions :



1.
2.
3.
All questions are compulsory.
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This paper contains Multiple Choice Questions of 40 marks.

All parts of the question to be marked at its specific serial number.

4. No negative marking
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5. The paper consists of two parts : Part 1 and Part 2 of 18 and 22 marks each.
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PART 1 (18 Marks)

(Fundamentals of Partnership, Change in Profit Sharing Ratio and
Admission of a New Partner)
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1. The following question consist of two statements, one labelled as the ‘Assertion (A)’ and the other as
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‘Reason (R)’. You are to examine these two statements carefully and select the answers using the
code given below:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and R are individually true but R is not the correct explanation of A
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(c) A is true but R is false

(d) A is false but R is true
Assertion (A): In order to compensate a partner for contributing capital to the firm in excess of the
profit sharing ratio, firm pays such interest on partner’s capital.
Reason (R): Interest on capital is treated a charge against profit.
2. The profits for the previous three years are given below:
2018-2019 ` 23,000 (including an abnormal gain of ` 8,000)
2019-2020 ` 40,000 (after charging an abnormal loss of ` 12,000)
2020-2021 ` 38,000 (after writing off bad debts amounting to ` 6,000)

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 The amount of goodwill at two years purchase of the average profits of the last three years will be
___________.
(a) ` 65,000 (b) ` 70,000 (c) ` 68,000 (d) ` 35,000
3. A and B are partners sharing profits in the ratio of 2 : 3. Their Balance Sheet shows machinery at
` 4,00,000; stock at ` 80,000 and Debtors at ` 3,20,000.
C is admitted and new profit sharing ratio is agreed at 6 : 9 : 5. Machinery is revalued at ` 3,40,000 and
a provision is made for doubtful debts @ 2.5%.
A’s share in loss on revaluation amounted to ` 20,000.
Revalued value of stock will be:
(a) ` 98,000 (b) ` 1,00,000 (c) ` 60,000 (d) ` 62,000
4. Gagandeep, a partner advanced a loan of ` 60,000 to the firm on 30th November 2020. The firm
incurred a loss of ` 15,000 during the year ending 31st March, 2021. In the absence of partnership

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deed interest a loan allowed to Gagandeep will be
(a) ` 3,600 (b) ` 900 (c) ` 1,200 (d) ` 1,800
5. Vikas and Yogesh were in partnership sharing profits and losses in the ratio of 2 : 1. They admitted
Kunal as a new partner. Kunal brought ` 1,00,000 as his share of goodwill premium, which was entirely

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credited to Vikas’s capital account. On the date of admission, goodwill of the firm was valued at
` 5,00,000. The new profit sharing ratio of Vikas, Yogesh and Kunal will be:
(a) 7 : 5 : 3 (b) 7 : 3 : 5 (c) 5 : 7 : 3 (d) 3 : 5 : 7
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6. P, Q and R are partners in a firm. Net profit before appropriations is ` 7,87,000. Total interest on
capital and salary to the partners amounted to ` 40,000 and ` 75,000 respectively. P and Q are entitled
to receive a commission @ 6% each on net profit after taking into consideration interest on capital
salaries and all commission. Calculate commission payable to P and Q.
(a) ` 18,000 each (b) ` 40,320 each (c) ` 36,000 each (d) ` 24,000 each
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7. Charvi and Vaanya were partner sharing Profit and Losses in 3 : 2 with affect from 1st April 2021, they
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decided to share future profits equally. On that date, following journal entry was passed by the firm:

Dr. Amount Cr. Amount

Date Particulars L.F.
(`) (`)
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Charvi’s Current A/c Dr. 30,000

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To Vaanya’s Current A/c 30,000

Which of the following balance was existing in the books of the firm on the date of reconstitution?
(a) Contingency Reserve ` 3,00,000
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(b) Profit and Loss (Dr.) Balance ` 3,00,000

(c) Profit and Loss (Cr.) Balance ` 3,00,000
(d) Advertisement Suspense Account ` 2,00,000
8. The following question consist of two statements, one labelled as the ‘Assertion (A) ‘and the other as
‘Reason (R)’. You are to examine these two statements carefully and select the answers using the code
given below:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and R are individually true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
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Assertion (A): It is necessary to show the true position of the firm at the time of admission of a new
partner.

Reason (R): The gain or loss on revaluation which is transferred to all the partner’s capital account in
new profit sharing ratio.
9. The assets of the firm including Profit and Loss (Dr) balance of ` 10,000 are ` 90,000. The Liabilities
of the firm amounted to ` 40,000. The normal rate of return is 10% and the average profits of the
firm are ` 12,000. The value of goodwill as per capitalization of super profits is __________.
(a) ` 70,000 (b) ` 80,000 (c) ` 40,000 (d) ` 50,000
10. Sanyam, Charvi and Yuvraj are partners in a firm. Yuvraj has been given a guarantee of minimum profit
of ` 14,000 by the firm. Firm incurred a loss of ` 6,000 during the year. Capital accounts of Sanyam
and Charvi will be debited by:
(a) ` 20,000 each (b) ` 7,000 each (c) ` 3,000 each (d) ` 10,000 each

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Answer Question 11 to 18 on the basis of formation given below :
A and B share profits in the ratio of 3 : 1. Their Balance Sheet as on 31st March, 2021 was as under:
Amount Amount

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Liabilities Assets
(`) (`)
Capitals: A 60,000 Machinery 50,000
B 29,000 89,000 Goodwill 16,000
Workmen Compensation Fund
Creditors
GU9,000 Patent
24,000 Furniture
1,500 Sundry Debtors 30,000
6,000
10,000
Outstanding Expenses
Bills Payable 15,000 (–) Provision for bad debts (4,000) 26,000
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Stock 25,000
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Cash 5,500
1,38,500 1,38,500

hey admitted C as partner on this date. New profit sharing ratio agreed to be 2 : 1 : 1. All partners agreed
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that:
(a) C will bring ` 33,000 as Capital.
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(b) C will also bring ` 14,000 as his share of goodwill.

(c) There was a claim of ` 1,000 for workmen compensation.
(d) 5% of the creditors are untraceable and hence to be written back.
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(e) Outstanding expenses shown in Balance Sheet are to be reduced to ` 1,200.

(f) Accrued income of ` 1,000 is to be brought in books.
(g) Provision for bad debts was found in excess by ` 1,500.
Answer the following questions:
11. Creditors of ` 1,200 will be:
(a) Debited to Revaluation A/c
(b) Credited to Revaluation A/c
(c) Shown on Liability side of the Balance Sheet
(d) Shown on Asset side of the Balance Sheet
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 12. Accrued income of ` 1,000 to be:
(a) Debited to Revaluation A/c
(b) Credited to Revaluation A/c
(c) Shown on Liability side of the Balance Sheet
(d) Not recorded anywhere
13. Excess of Provision for Doubtful Debts of ` 1,500 will be:
(a) Credited to Revaluation A/c
(b) Debited to Revaluation A/c
(c) Shown on Liability side of the Balance Sheet
(d) Not recorded anywhere
14. What journal entry will be passed for Workmen’s Compensation Fund?
(a) Dr. Workmen’s Compensation Fund ` 9,000, Cr. Claim for Workmen’s Compensation ` 1,000; Cr. A’s

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Capital A/c ` 6,000; Cr. B’s Capital A/c ` 2,000
(b) Dr. Workmen’s Compensation Fund ` 9,000; Cr. A’s Capital A/c ` 6,000; Cr. B’s Capital A/c ` 3,000
(c) Dr. A’s Capital A/c ` 6,000; Dr. B’s Capital A/c ` 2,000; Dr. Claim for Workmen’s Compensation
` 1,000; Cr. Workmen’s Compensation Reserve A/c ` 9,000

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(d) Dr. Revaluation ` 1,000; Cr. Claim for Workmen’s Compensation ` 1,000
15. What journal entry is passed for premium for goodwill?
(a) Dr. Premium for Goodwill A/c ` 14,000; Cr. A’s Capital A/c ` 10,500; Cr. B’s Capital A/c
` 3,500 GU
(b) Dr. Premium for Goodwill A/c ` 14,000; Cr. B’s Capital A/c ` 14,000
(c) Dr. Premium for Goodwill A/c ` 14,000; Cr. A’s Capital A/c ` 14,000
(d) Dr. Premium for Goodwill A/c ` 14,000; Cr. Revaluation A/c ` 14,000
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16. Profit (gain) on Revaluation of Assets and Reassessment of Liabilities is:
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(a) ` 2,500 (b) ` 3,000 (c) ` 3,700 (d) ` 4,000

17. The new Capital Balances of all the partners will be:
(a) A – ` 71,000, B – ` 28,000, C – ` 33,000 (b) A – ` 83,000, B – ` 32,000, C – ` 33,000
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(c) A – ` 69,000, B – ` 28,000, C – ` 33,000 (d) A – ` 69,000, B – ` 32,000, C – ` 33,000

18. Cash balance would appear in the new balance sheet at:
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(a) ` 19,500 (b) ` 38,500 (c) ` 52,500 (d) ` 47,000

PART 2 (22 Marks)

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(Accounting for Share Capital,

Financial Statements of a Company and Ratio Analysis)
19. Debit Balance of Profit and Loss account is shown under the sub head _________ of the Balance Sheet
as per Revised Schedule III of Companies Act, 2013.
(a) Other Current Assests (b) Reserves and Surplus
(c) Other Current Liabilities (d) Long-term Provisions
20. Sale of scrap is a part of ____________ .
(a) Other income (b) Other expenses
(c) Finance of cost (d) Revenue from operations

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 21. Which of the following is not a limitation of analysis of financial statements?
(a) Window Dressing (b) Price level changes ignored
(c) Subjectivity (d) Intra-firm comparison possible
22. Under which of the following headings / sub-headings, calls-in-advance will be presented in the Balance
Sheet of a company as per Schedule III, Part I of the Companies Act, 2013?
(a) Current Liabilities
(b) Share Capital
(c) Share Application Money Pending Allotment
(d) Reserves and Surplus
23. The following question consist of two statements, one labelled as the ‘Assertion (A) ‘and the other as
‘Reason (R)’. You are to examine these two statements carefully and select the answers using the code
given below:
(a) Both A and R are individually true and R is the correct explanation of A

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(b) Both A and R are individually true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true

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Assertion (A): Forfeiture of share refers to the cancellation or termination of membership of a share
holder by taking away the shares and rights of membership.
Reason (R): Forfeited shares can be reissued at a discount.
24. The minimum share application money is:
(a) ` 5 per share
(c) 10% of the nominal value of shares
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(d) 10% of the nominal value of shares
25. H Ltd. had allotted 20,000 shares to the applicants of 28,000 shares on pro-rata basis. The amount
payable on application was ` 2 per share. S applied for 840 shares. The number of shares allotted and
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the amount carried forward for adjustment against allotment money due from S will be:
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(a) 120 shares; ` 240 (b) 680 shares; ` 320 (c) 640 shares; ` 400 (d) 600 shares, ` 480
26. 250 shares of ` 20 each on which first and final call of ` 6 per share is not paid is forfeited. Out of these,
200 shares are reissued for ` 14 per share fully paid up. The amount transferred to capital reserve
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will be:
(a) ` 1,800 (b) ` 1,200 (c) ` 2,800 (d) ` 1,600
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27. Which of the following transactions will increase the Debt of Equity ratio, which is 1 : 2?
(a) Issue of shares for cash (b) Redemption of Preference shares
(c) Redemption of Debentures (d) Conversion of Debentures into Shares
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28. The following questions consist of two statements, one labelled as the ‘Assertion (A)’ and the other as
‘Reason (R)’. You are to examine these two statements carefully and select the answers using the code
given below:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and R are individually true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
Assertion (A): The limitations of financial statements also form the limitations of the ratio analysis.
Reason (R): Since the ratios are derived from the financial statements, any weakness in the original
financial statements will also creep in the derived analysis in the form of Accounting Ratios.

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On the basis of the information given below answer the following questions (Q. 29 to 32)
Accounts Guru Ltd. want to analyse its liquidity position along with assessment of Inventory position from
the given information:
Inventory Turnover Ratio : 4 times,
Inventory in the beginning was ` 20,000 less than Inventory at the end,
Revenue from Operations ` 6,00,000, Current Liabilities ` 60,000.
Gross Profit Ratio 25%, Quick Ratio 0.75 : 1
Answer the following questions:
29. State the amount of Cost of Revenue from Operations.
(a) ` 4,50,000 (b) ` 4,90,000 (c) ` 4,80,000 (d) ` 3,50,000
30. State the amount of average inventory.

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(a) ` 1,25,000 (b) ` 1,12,500 (c) ` 2,50,000 (d) ` 1,52,000
31. State the amount of closing inventory.
(a) ` 1,12,000 (b) ` 1,12,500 (c) ` 1,67,500 (d) ` 1,22,500

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32. State the current ratio of Accounts Guru Ltd.
(a) 2.4:1 (b) 2.5:1 (c) 2.79:1 (d) 2.6:1

On the basis of the information given below answer the following questions (Q. 33 to 40)
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Ranvijay Ltd. invited applications for issuing 1,00,000 shares of ` 10 each at a premium of ` 2 per share.
Amount per share was payable as follows :
On Application — ` 4 (including premium ` 1)
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On Allotment — ` 4 (including premium ` 1)
On First and Final Call — Balance
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Applications were received for 1,50,000 shares and allotment was made to the applicants as follows:
(i) Applicants of 80,000 shares were allotted 60,000 shares.
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(ii) Applicants of 50,000 shares were allotted 40,000 shares.

(iii) No shares were allotted to the remaining applicants and their application money was returned.
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Yuraj, who belonged to category (ii) and who had applied for 5,000 shares failed to pay the allotment and
call money. His shares were forfeited. Later, half of Yuraj’s forfeited shares were reissued @ ` 18 per share
as fully paid up.
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Answer the following questions:

33. State the amount of excess application money refunded to the applicants.
(a) ` 2,00,000 (b) ` 80,000 (c) ` 40,000 (d) ` 1,00,000
34. State the excess application money being adjusted to share allotment account to whom pro-rata allotment
has been made.
(a) ` 2,00,000 (b) ` 80,000 (c) ` 40,000 (d) ` 1,20,000
35. State the amount of calls-in-arrears at the time of receipt of allotment money?
(a) ` 12,000 (b) ` 16,000 (c) ` 18,000 (d) ` 24,000

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 36. The amount of calls-in-arrear at the time of receipt of first call is:
(a) ` 12,000 (b) ` 16,000 (c) ` 18,000 (d) ` 24,000
37. The amount forfeited on 4,000 shares is:
(a) ` 12,000 (b) ` 14,000 (c) ` 16,000 (d) ` 18,000
38. At the time of forfeiture of shares, Securities Premium Reserve Account will be debited with:
(a) ` 4,000 (b) ` 6,000 (c) ` 8,000 (d) ` 10,000
39. State the amount received at the time of reissue of forfeited shares.
(a) ` 20,000 (b) ` 16,000 (c) ` 36,000 (d) ` 30,000
40. State the amount to be transferred to Capital Reserve Account.
(a) ` 6,000 (b) ` 8,000 (c) ` 3,000 (d) ` 4,000

ANSWERS

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1. (c) 2. (b) 3. (a) 4. (c) 5. (a)
6. (c) 7. (b) 8. (c) 9. (b) 10. (d)
11. (b) 12. (b) 13. (a) 14. (a) 15. (c)

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16. (d) 17. (a) 18. (c) 19. (b) 20. (d)
21. (d) 22. (a) 23. (b) 24. (b) 25. (d)



26. (d)
30. (b)  ` 1,12,500
35. (a)
27. (b)
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28. (a)
31. (d)  ` 1,22,500 32. (c) 2.79:1
36. (b) 37. (c)
29. (a)  ` 4,50,000
33. (b)
38. (a)
34. (d)
39. (c)
40. (b)
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