You are on page 1of 13

myCBSEguide

Class 12 - Accountancy
Sample Paper 09

Maximum Marks: 40
Time Allowed: 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 69 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. A, B and C are partners sharing profits equally. A and B has given a minimum guarantee of Rs. 8,000 to
the C. How much amount of profit C will get when the profit of the firm is Rs.30,000.
a. 22,000
b. 10,000
c. 30,000
d. 8,000
2. X, Y and Z are partners in firm sharing profits in 1 : 2 : 3 ratio. Their Balance Sheet as at 31.3.2003
showed a balance of Rs. 1,20,000 in General Reserve. From 1.4.2003, they will share profits equally.
Give adjustment entry.
a. Dr. X and Cr. Z by Rs 40,000 each
b. Dr. X and Cr. Z by Rs 20,000 each
c. Dr. X and Cr. Z by Rs 2,000 each
d. Dr. X and Cr. Z by Rs 60,000 each
3. R, S and T are partners in a firm. They decided to share profits up to Rs. 10,000 in the ratio 30%, 50%
and 20% respectively. Above this amount, profits are shared equally. If the profits of the firm for the
year was Rs. 25,600. Distribute the profit.
a. R= ₹8,200, S= ₹10,200 and T= ₹7,200
b. R= ₹9,200, S= ₹7,200 and T= ₹8,200
c. R= ₹10,200, S= ₹9,200 and T= ₹7,200
d. R= ₹12,200, S= ₹8,200 and T= ₹7,200
4. Goodwill is an ________ asset.
a. Both Intangible asset and Tangible asset

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 1 / 13


myCBSEguide

b. None of these
c. Intangible asset
d. Tangible asset
5. Which Section of the Partnership Act defines Partnership as the relation between persons who have
agreed to share the profits of a business carried on by all or any of them acting for all?
a. Section 61
b. Section 48
c. Section 13
d. Section 4
6. Poonam, Pooja and Priya are partners in a firm sharing profits and losses in the ratio of 5:3:2. They
decide to share future profits and losses in the ratio of 3:2:1. Each partner's gain or sacrifice due to the
change in the ratio will be:
a. Poonam Nil; Pooja Sacrifice ; Priya Gain
b. Poonam Nil; Pooja Gain ; Priya Sacrifice
c. Poonam Sacrifice ; Pooja Gain ; Priya Nil
d. Poonam Gain ; Pooja Nil ; Priya Sacrifice
7. Goodwill given in the old Balance Sheet will be:
a. Credited to old Partners Capital accounts
b. Written off to the old partners
c. Written off by the Sacrificing partners
d. Distributed by Gainer partners
To practice more questions & prepare well for exams, download myCBSEguide App. It provides
complete study material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams.
8. Incoming partner may acquire his share from the old partners
A. In their old profit sharing ratio
B. In a particular ratio
C. In particular fraction from some of the partners
a. Only A
b. A and B
c. All of these
d. A and C
9. ________ means good name, a good reputation earned by a firm through the hard work and honesty of
its owners.
a. Negative Super Profit
b. Low Average profit
c. Revaluation Profit
d. Goodwill
10. Which of the following is responsible for the Reconstitution of Partnership?
a. Change in the value of Debtors
b. Both Change in existing profit sharing ratio and Retirement/death of a partner
c. Change in existing profit sharing ratio
d. Retirement/death of a partner
11. Items listed below appear in the Profit and loss appropriation account except:
a. Salary to partner’s
b. Interest on capital
c. Commission to partner’s

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 2 / 13


myCBSEguide

d. Insurance Premium
12. When the incoming partner pays his share of goodwill privately to the sacrificing partner outside the
business. Which account should be debited in the books of account?
a. Cash A/c
b. Premium for goodwill A/c
c. Partner’s capital A/c
d. No entry should be recorded
13. According to AS 26, which goodwill is recorded in the books :
a. both (i) and (ii)
b. None of the above
c. purchased goodwill
d. self generated goodwill
14. Revaluation Account or Profit and Loss Adjustment Account is a:
a. None of these
b. Real Account
c. Personal Account
d. Nominal Account
15. VN, MN and KN are partners sharing profits in the ratio of 5:3:2 respectively. They have decided to
share future profits in the ratio of 3:5:2. Workmen compensation reserve given in the balance sheet is
Rs.6,000. How much amount of workmen compensation reserve is to be adjustment in gaining or
sacrificing ratio?
a. 900
b. 1,200
c. 1,000
d. 600
16. Balance of forfeiture a/c after the shares have been re-issued is transferred to:
a. securities premium reserve
b. general reserve
c. None of these
d. Capital reserve
17. If goodwill already existing in the ________, it should be written off by debiting old partners in their old
profit sharing ratio
a. Trading account
b. Balance sheet
c. Trial Balance
d. Profit and loss account
18. Other name for registered capital is:
a. nominal capital
b. Issued capital
c. None of the above.
d. reserve capital
Part - I (Section - B)
19. Goodwill is capitalized valued of ________.
a. Normal Profit
b. Super Profit
c. Capital employed
d. Gross Profit

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 3 / 13


myCBSEguide

20. When shares issued are 10,000 but applied shares are 8,000 then it is a case of:
a. None of the above
b. pro-rata
c. under subscription
d. Over-subscription
21. The minimum share application money is:
a. none of the above
b. 10% of nominal value of shares
c. 5% of nominal value of shares
d. Rs. 5 per share
22. Assertion (A): Capital is the amount introduced in cash or in-kind by the partners.
Reason (R): A Capital Account is opened in the name of each partner and the introduction is debited to
this account.
a. Both A and R are true and R is the correct explanation of A.
b. Both A and R are 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.
23. In case of private placement of shares to raise the amount of capital, a company:
a. Invites the public through prospectus
b. Does not invite the public
c. Invite the public through advertisement
d. None of the above
24. The agreement among the partners is called:
a. Partnership bye laws
b. Partnership constitution
c. Partnership Deed
d. None of these
25. Securities Premium Reserve collected by the company can be used for:
a. None of these
b. Payment of dividend
c. Issue of bonus shares
d. Any business purpose
26. Assertion (A): A change in profit sharing ratio amounts to dissolution of partnership firm.
Reason (R): Existing agreement comes to an end and a new agreement comes into existence.
a. Both A and R are true and R is the correct explanation of A.
b. Both A and R are 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.
27. Specify the rate of interest to be used on calls in arrear as per the TABLE - F.
a. 20% p.a.
b. 26 % p.a.
c. 10% p.a.
d. 16% p.a.
28. Formula for capitalization of Average Profit is
a.

b.

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 4 / 13


myCBSEguide

c.

d.
29. According to Companies Act company cannot issue its share at ________.
a. Par
b. Discount
c. Both Discount and Par
d. Premium
30. Among following which statement is not true about a private company?
a. Restriction on the right to transfer its shares
b. The private company ends with the words ‘Private Limited’.
c. Atleast 2 directors
d. Minimum paid-up capital is 5,00,000
31. Assertion (A): Equity shares are those shares that do not preference shares.
Reason (R): Equity shares are the least issued class of shares and carry the minimum risks and
rewards of the business.
a. Both A and R are true and R is the correct explanation of A.
b. Both A and R are 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.
32. Minimum directors a public company can have compulsorily ________.
a. 2
b. 3
c. 7
d. 15
33. Anu and Babita are partners in a firm sharing profits and losses in the ratio of 3:2. On April 1, 2003,
they admit Deepak as a new partner for share in the profits. Deepak contributed the following
assets towards his capital and for his share of goodwill: Land ₹90,000, machinery ₹70,000, stock
₹60,000 and debtors ₹40,000. On the date of admission of Deepak, the goodwill of the firm was valued
at ₹5,20,000, which does not appear in the books. Calculate the amount of goodwill brought in by a new
partner.
a. ₹1,00,000
b. ₹1,15,000
c. ₹1,20,000
d. ₹1,10,000
34. Which of the following statement is incorrect about Preference Shares?
a. Can be converted
b. Return of capital on winding up of company
c. Right to receive Dividend
d. No Dividend
35. Share Forfeiture account is a ________.
a. Nominal Account
b. Fictitious Account
c. Personal Account
d. Real account
36. Which type of shares cannot be issued as per the Companies Act, 2013?
a. Irredeemable Preference Shares

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 5 / 13


myCBSEguide

b. Equity Shares
c. Bonus Shares
d. Preference Shares
Part - I (Section - C)

Question No. 37 to 38 are based on the given text. Read the text carefully and answer the
questions:

A, B, C are partners sharing profits and losses in the ratio of 5 : 3 : 2. They decide to share future profits
and losses equally with effect from 1st April, 2017. The goodwill of the firm has been valued at ₹ 90,000.
Goodwill is already appearing in the books at ₹ 15,000. Show the necessary accounting treatment.

37. What was the gain of C?


a.
b.
c.
d.
38. Who was the sacrificing partner among the three partners?
a. C
b. B
c. A
d. Both B and C

Question No. 39 to 41 are based on the given text. Read the text carefully and answer the
questions:

On the same date, C is admitted as a partner on the following terms

i. A gives rd of his share, while B gives th from his share to C.


ii. Goodwill is valued at 2 years' purchase of the average profits of the last 5 years, which does not
bring his share of goodwill in cash.
39. What was the amount of firm's goodwill?
a. ₹2,80,000
b. ₹84,000
c. ₹1,64,000
d. ₹1,40,000
40. The given balance of profit and loss account will be debited in ________ partners' accounts in the
________ ratio.
a. old, old profit sharing
b. all, new profit sharing
c. old, new profit sharing
d. old, sacrificing
41. What was the sacrificing ratio of A and B?
a. 2 : 1
b. 3 : 2
c. 3 : 10
d. 1 : 1

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 6 / 13


myCBSEguide

Part - II (Section - A)
42. Assertion (A): Certain accounting conventions like conventions of consistency, conservatism, full
disclosure, etc. are followed while preparing financial statements.
Reason (R): Use of accounting conventions makes the financial statements comparable, simple and
realistic.
a. Both A and R are true and R is the correct explanation of A.
b. Both A and R are 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.
43. Nature of financial statement _______.
a. postulates
b. All of these
c. recorded facts
d. accounting convention
44. For calculating trend percentages any year is selected as:
a. None of these
b. Current year
c. Base year
d. Previous year
45. The ________ of a business firm is measured by its ability to satisfy its short-term obligations as they
become due.
a. debt
b. activity
c. liquidity
d. profitability
46. Items such as Trade payables on account of purchase of Fixed Assets and interest accrued thereon, will
come under the head
a. Other Long Term Liabilities
b. Long Term provisions
c. Long Terms borrowings
d. Deferred Tax Liabilities
47. Shareholders are interested in the analysis of financial statement because….
a. For the assessment of tax
b. For the payment to the financial institutions
c. They want to judge the present and future earning capacity of the business.
d. For Research
48. A high Debt to Equity Ratio means …….
a. Firm has no debts at all
b. Firm is depend upon Equity only
c. Firm is free from debts
d. Firm is depend upon borrowings/debts
Part - II (Section - B)
49. Financial analysis becomes useless because it:
a. measures the Solvency
b. lacks Qualitative Analysis
c. makes a comparative study
d. measures the profitability

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 7 / 13


myCBSEguide

50. Liquid Ratio is also known as :


a. Debt Equity Ratio
b. Gross Profit Ratio
c. Acid Test Ratio
d. Current Ratio
To practice more questions & prepare well for exams, download myCBSEguide App. It provides
complete study material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams.
51. The information available from the Analysis, serves which of the following sections
a. Stock Exchange
b. Potential Investors
c. Economist and Researchers
d. All of these
52. Assertion (A): The standard ratio of current ratio is 2 : 1.
Reason (R): A high operating ratio leaves a high margin to meet non-operating expenses.
a. Both A and R are true and R is the correct explanation of A.
b. Both A and R are 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.
53. Assertion (A): Internal analysis carried out by management is more detailed, extensive, and correct.
Reason (R): Management has access to all the information relating to the organization.
a. Both A and R are true and R is the correct explanation of A.
b. Both A and R are 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.
54. If Trade Payable turnover ratio shows a high turnover ratio it means……
a. Shows after how much times funds are collected
b. Profitability of the firm
c. Net Profit
d. Availability of less credit or fast payment
55. Interest on loans given by a financial company is shown in the Statement of Profit and Loss as:
a. Revenue from Operations
b. Receivables
c. Other Income
d. Receipts

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 8 / 13


myCBSEguide

Class 12 - Accountancy
Sample Paper 09

Solution

Part - I (Section - A)
1. (b) 10,000
Explanation: Minimum guarantee of profit to a partner means, that partner will not get the less
amount than the guarantee amount. If there is any deficiency, it will be borne by the existing partners
who have given guarantee. But it does not mean that he will get only guarantee amount if his profit
exceeds the limit of guaranteed amount, that will be paid to him. For example, in the above question
guaranteed amount of C is Rs. 8,000 but he is getting Rs. 10,000 (Rs. 30,000 ) as per the profit-
sharing ratio. So he will get Rs. 10,000 instead of Rs. 8000.
2. (b) Dr. X and Cr. Z by Rs 20,000 each
Explanation: Adjustment of General Reserve at the time of change in profit sharing ratio:
Old Ratio = 1:2:3 and New Ratio 1:1:1
X = - = Gain
Y = - = No Sacrifice/No Gain
Z = - = Sacrifice
Share of General reserve = 120000 = 20000
3. (a) R= ₹8,200, S= ₹10,200 and T= ₹7,200
Explanation: Calculation of Distribution of Profits During the year:
First Rs. 10,000 of profit will be distributed in 30%, 50% and 20% i.e. 3,000; 5,000 and 2,000
Next 15,600 (25,600 - 10,000) in equal ratio i.e. 5,200 each (15,600 1/3).
R’s Share of Profit = 3,000 + 5,200 = Rs. 8,200
S’s Share of Profit = 5,000 + 5,200 = Rs. 10,200
T’s Share of Profit = 2,000 + 5,200 = Rs. 7,200
To practice more questions & prepare well for exams, download myCBSEguide App. It provides
complete study material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams.
4. (c) Intangible asset
Explanation: Goodwill is an intangible asset, which cannot be seen or touched but it plays important
role in earning more and more profits. If a business firm is having a good reputation in the market, it
will enjoy more profits and goodwill in future. Goodwill is an intangible asset which is shown in non-
current assets in the balance sheet.
5. (d) Section 4
Explanation: Section 4 of the Indian Partnership Act, 1932 defines partnership as the relation between
persons who have agreed to share the profits of a business carried on by all or any of them acting for
all. The partnership is a relationship between partners to share the profit of the business.
6. (b) Poonam Nil; Pooja Gain ; Priya Sacrifice
Explanation: Sacrificing Ratio = Old ratio - New ratio.
7. (b) Written off to the old partners
Explanation: Goodwill existing in the old balance sheet of a partnership firm before admitting a new
partner will be written off to the capital accounts of the old partners in their old profit sharing ratio.
This Goodwill belongs to old partners only.
8. (c) All of these

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 9 / 13


myCBSEguide

Explanation: A newly admitted partner may acquire his share of profit from one partner or two
partners or from all partners in an agreed ratio. He may acquire his share in the old ratio of the
existing partners or in an agreed sacrificing ratio.
9. (d) Goodwill
Explanation: Goodwill means good name, a good reputation earned by a firm through the hard work
and honesty of its owners. It is an intangible asset.
10. (b) Both Change in existing profit sharing ratio and Retirement/death of a partner
Explanation: Reconstitution of the firm can take place on the following occasions in case of
partnership:
i. Change in the profit sharing ratio of the existing partners (old partners)
ii. Admission of a new partner
iii. Retirement of an existing partner
iv. Death of a partner
11. (d) Insurance Premium
Explanation: Insurance Premium paid for the business is a charge against the profit. It means this
transaction will reduce the profit of the firm. All charge items are shown in profit and loss account
only. That’s why Insurance Premium paid for the business is shown in profit and loss account and not
in profit and loss appropriation account. It is not an appropriation of profit.
12. (d) No entry should be recorded
Explanation: When a new partner pays his share of the premium for goodwill amount privately to the
sacrificing partners, No entry will be passed in the books of accounts.
13. (c) purchased goodwill
Explanation: purchased goodwill
14. (d) Nominal Account
Explanation: Revaluation Account or profit & loss adjustment account is Nominal
Account. Revaluation account is opened by the firm to record the gains and losses arising from the
revaluation of assets and reassessment of liabilities at the time of reconstitution of the firm. Hence, the
output is either a profit or a loss, so it is a nominal account.
15. (b) 1,200
Explanation: Calculation of adjustment of the amount of workmen compensation reserve:
Old Ratio 5:3:2
New Ratio 3:5:2
Sacrifice ratio = Old ratio - New ratio
VN: - = Sacrifice
MN: - = Gain
KN: - = No Sacrifice/No Gain
Share in WCR = 6000 = 1200
16. (d) Capital reserve
Explanation: Capital reserve
17. (b) Balance sheet
Explanation: The goodwill already existing in the balance sheet of the old firm should be written off
and transferred to the old partners capital account/ current account (in case of fixed capital account) in
the old ratio.
18. (a) nominal capital
Explanation: nominal capital
Part - I (Section - B)

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 10 / 13


myCBSEguide

19. (b) Super Profit


Explanation: Goodwill is the capitalized value of super-profits. To find out the super-profits, we
deducted normal profits from the actual average profits (average profits - normal profits). To find out
the value of goodwill of the firm, super profit should be Capitalized i.e. super profits 100/Normal
Rate of Return (NRR).
Value of Goodwill = Super Profit 100/NRR.
20. (c) under subscription
Explanation: under subscription
21. (c) 5% of nominal value of shares
Explanation: 5% of nominal value of shares
22. (c) A is true but R is false.
Explanation: A Capital Account is opened in the name of each partner and the introduction are
credited to this account.
23. (b) Does not invite the public
Explanation: Does not invite the public
24. (c) Partnership Deed
Explanation: The partnership is created by an agreement between the parties. The agreement may be
in writing or by word of mouth or implied by the conduct of the parties. However, it is always desirable
for the partners to have the agreement in writing. The document in writing should contain the
important terms of partnership as agreed upon by the partners themselves to avoid any future dispute.
So the document in writing containing the terms and conditions as agreed between the partners is
called the partnership deed. Partnership deed in writing is evidence in case of disputes.
25. (b) Payment of dividend
Explanation: Payment of dividend
26. (d) A is false but R is true.
Explanation: A change in profit sharing ratio amounts to dissolution of partnership only, not
partnership firm.
27. (c) 10% p.a.
Explanation: As per the Companies Act, 2013, when Table F is followed by the company, the rate of
interest on calls in arrear should not exceed 10% p.a. When any shareholder fails to pay the amount
due on the allotment or on any of the calls, such amount is known as 'Calls-in-Arrears'/'Unpaid Calls'.
Interest at a rate 10% shall have to be paid on Calls-in-arrears for the period from the day fixed for
payment and the time of actual payment thereon. Table F applies when an article of association is
silent.
28. (c)
Explanation: Step 1. Calculate Average profit (total profits of previous years divided by No. of years)
Step 2. Find out capitalised value of average profit (Average profit × 100/Normal Rate of Return)
Step 3. Find out Goodwill = Capitalised value of average profits - Net Assets
29. (b) Discount
Explanation: As per the Companies Act, 2013, (new guidelines), a company cannot issue its shares at
discount. The company can issue its shares at par and premium only. Either equity or preference no
share can be issued at discount.
30. (d) Minimum paid-up capital is 5,00,000
Explanation: Minimum paid-up capital of a private company is 1,00,000. A private company cannot
transfer its shares and all private companies’ ends with the words ‘Private Limited’. The company can
take min 2 and max 15 directors.

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 11 / 13


myCBSEguide

31. (c) A is true but R is false.


Explanation: Equity shares are the most commonly issued class of shares and carry the maximum
risks and rewards of the business.
32. (b) 3
Explanation: According to the Companies Act, a public company should have at least 3 Directors and a
maximum of 15 directors.
33. (c) ₹1,20,000
Explanation: Calculation of goodwill amount brought by new partner:
Total goodwill of the firm = Rs.5,20,000
Deepak will bring the share of Premium of Goodwill = 5,20,000 = 1,20,000
34. (d) No Dividend
Explanation: Preference Shares are those shares on which dividend to be paid as a fixed amount.
Divided into preference shareholders is paid before dividend-paying to equity shareholders. These
shares are convertible and can be redeemed.
35. (a) Nominal Account
Explanation: All accounts which are prepared for the calculation of profit or loss are nominal
accounts. Rule related to the nominal account is Debit all expenses and losses and credit all gains.
36. (a) Irredeemable Preference Shares
Explanation: There are two types of preference shares in context to the redemption i.e. Redeemable
and Non-redeemable preference shares. As per the Companies Act, 2013, companies cannot issue
Irredeemable Preference Shares. Redeemable preference shares are those which can be redeemed by
the company although the company can issue redeemable preference shares, equity shares, bonus
shares.
Part - I (Section - C)
37. (c)
Explanation:
38. (c) A
Explanation: A
39. (a) ₹2,80,000
Explanation: ₹2,80,000
40. (a) old, old profit sharing
Explanation: old, old profit sharing
41. (a) 2 : 1
Explanation: 2 : 1
Part - II (Section - A)
42. (a) Both A and R are true and R is the correct explanation of A.
Explanation: Both A and R are true and R is the correct explanation of A.
43. (b) All of these
Explanation: All of these
44. (c) Base year
Explanation: Any year is selected as the base year for calculating trend percentage.
45. (c) liquidity
Explanation: The liquidity of business firms is measured by its ability to satisfy its short-term
obligations as they come due. Liquidity describes the degree to which an asset or security can be
quickly bought or sold in the market.
46. (a) Other Long Term Liabilities

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 12 / 13


myCBSEguide

Explanation: Normally these liabilities are repayable after one accounting year. Amount of such
liabilities are normally high and the company may pay the amount to such creditors in instalments, in
such case, the repayment time is more than one accounting year.
47. (c) They want to judge the present and future earning capacity of the business.
Explanation: Shareholders are interested in the analysis of financial statement because they want to
judge the present and future earning capacity of the business. They want to know whether their
investment would yield how many returns.
48. (d) Firm is depend upon borrowings/debts
Explanation: A high Debt to Equity Ratio means a business has been aggressive in financing its growth
with debt. Aggressive leveraging practices are often associated with high levels of risk
Part - II (Section - B)
49. (b) lacks Qualitative Analysis
Explanation: Financial analysis lacks qualitative analysis.
To practice more questions & prepare well for exams, download myCBSEguide App. It provides
complete study material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams.
50. (c) Acid Test Ratio
Explanation: This ratio attempts to measure a company's ability to pay off its short term debt
obligations. This is done by comparing a company's most liquid assets, those that can be easily
converted to cash, with its short term liabilities
51. (d) All of these
Explanation: Information available from the analysis of financial statement will serve the following:
•Potential Investors (to make decisions regarding investment)
•Economist and Researchers(to make policies)
•Stock Exchange(to know about company's worth and market standing)
52. (a) Both A and R are true and R is the correct explanation of A.
Explanation: Both A and R are true and R is the correct explanation of A.
53. (a) Both A and R are true and R is the correct explanation of A.
Explanation: Both A and R are true and R is the correct explanation of A.
54. (d) Availability of less credit or fast payment
Explanation: A high ratio indicates the shorter payment period means that the company is paying off
suppliers at a faster rate.
55. (a) Revenue from Operations
Explanation: Interest on loans given by a financial company is shown in the Statement of Profit and
Loss as Revenue from Operations.

Copyright © myCBSEguide.com. Mass distribution in any mode is strictly prohibited. 13 / 13

You might also like