Half Yearly Test 2023 Kautilya
Total Marks = 80
Accounts
General Instructions:
1. This question paper contains 34 questions. All questions are compulsory.
2. Question No.1 to 16 and 27 to 30 carries 1 mark each.
3. Questions No. 17 to 20, 31and 32 carries 3 marks each.
4. Questions No. from 21 ,22 and 33 carries 4 marks each .
5. Questions No. from 23 to 26 and 34 carries 6 marks each.
1. X, Y and Z are partners in a firm sharing profits
and losses in the ratio of 6:4:1. X guaranteed a
profit of ₹ 15,000 to Z. The net profit for the year
ending 31st March, 2019 was ₹ 99,000. X's share
in the profit of the firm will be :
(1) 30,000
(2) 15,000
(3) 48,000
(4) 45,000
2. In the absence of any agreement, the rate of
interest payable on the amount remaining unpaid
to the executor of deceased partner is
(1) 8% p.a. (2) 6% p.a.
(3) 9% p.a. (4) 12% p.a.
3. Meera, Myra and Neera 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,2019. Their Balance Sheet as on
that date showed a balance of Rs.45,000 in
Advertisement Suspense Account. The amount
to be debited respectively to the capital accounts
of Meera, Myra and Neera for writing off the
amount in Advertisement Suspense Account will
be :-
(1) Rs.18,000, Rs.18,000 and Rs.9,000
(2) Rs.15,000, Rs.15,000 and Rs.15,000
(3) Rs.21,000, Rs.15,000 and Rs.9,000
(4) Rs.22,500, Rs.22,500 and Nil
4. Mona and Tina were partners in a firm sharing
profits in the ratio of 3:2. Naina was admitted
with 16th share in the profits of the firm. At the
time of admission, Workmen’s Compensation
Reserve appeared in the Balance Sheet of the
firm at Rs.32,000. The claim on account of
workmen’s compensation was determined at
Rs.40,000. Excess of claim over the reserve will
be:-
(1) Credited to Revaluation Account
(2) Debited to Revaluation Account
(3) Credited to old partner’s capital account
(4) Debited to old partner’s capital account
Time Allowed: 3 Hours
Date: 21\09\2023
Read the following paragraph and answer the
following Question from 5 to 6.
Bhavya and Naman were partner in a firm
carrying on a tiffin service in Hyderabad.
Bhavya noticed that a lot of food is left at the end
of the day. To avoid wastage, she suggested that
it can be distributed to the needy. Naman wanted
that It should be mixed with the food being
served the next day. Naman then give a personal
that if his share in the profit increased, he will
not mind free distribution of leftover food.
Bhavya happily agreed. So they decided to
change their profit sharing ratio 1:2 with
immediate effect. On that date revaluation of
assets and reassessment of liability was carried
out that resulted into a gain of Rs. 18,000. On
that day at the Goodwill of the firm was valued
at Rs. 1,20,000.
Based on the above information you are required
to answer the following questions.
5. Pass the journal entry for adjustment of
Goodwill.
(1) Naman’s Capital a/c Dr. 1,20,000
To Bhavya’s Capital a/c 1,20,000
(2) Bhavya’s Capital a/c Dr. 60,000
To Naman’s Capital a/c 60,000
(3) Naman’s Capital a/c Dr. 20,000
To Bhavya’s Capital a/c 20,000
(4) Naman’s Capital a/c Dr. 1,00,000
To Bhavya’s Capital a/c 1,00,000
6. Sacrificing /gain of Bhavya and Naman will be
(1) Bhavya sacrifice 1/6 , Naman gains 1/6
(2) Bhavya gains 1/6 , Naman sacrifice 1/6
(3) Only Bhavya gains 1/6
(4) Only Naman sacrifice 1/6
7. Assertion: Superman, a partner in a firm with
four partners has advanced a loan of ₹50,000 to
the firm for the last six months of the financial
year without any agreement. He claims an
interest on loan of ₹3,000 despite the firm being
in loss for the year.
 Reasoning: In the absence of any agreement / (4) None of these.
provision in the partnership deed, provisions of
Indian Partnership Act, 1932 would apply. 12. Navya and Radhey were partners sharing profits
(1) Both A and R are correct, and R is the and losses in the ratio of 3: 1. Shreya was
correct explanation of A. admitted for 1/5th share in the profits. Shreya
(2) Both A and R are correct, but R is not the was unable to bring her share of goodwill
correct explanation of A. premium in cash. The journal entry recorded for
(3) A is correct but R is incorrect. goodwill premium is given below:
(4) A is incorrect but R is correct. Date Particulars Debit Credit
Shreya’s Current A\c 24,000
To Navya’s Capital
8. On retirement/death of a partner, the remaining A\c 8,000
partner(s) who have gained due to change in To Radhe’s Capital
A\c 16,000
profit sharing ratio should compensate the
The new profit-sharing ratio of Navya, Radhey
(1) Retiring partners only.
and Shreya will be:
(2) Remaining partners (who have sacrificed)
(1) 41: 7:12
as well as retiring partners.
(2) 13:12: 10
(3) Remaining partners only (who have
(3) 3:1:1
sacrificed).
(4) 5:3:2
(4) None of these
13. Vihaan and Mann are partners sharing profits
9. Sun and Star were partners in a firm sharing
and losses in the ratio of 3:2. The firm maintains
profits in the ratio of 2 : 1. Moon was admitted
fluctuating capital accounts and the balance of
as a new partner in the firm. New profit sharing
the same as on 31st March 2022 is 4,00,000 and
ratio was 3:3:2. Moon brought the following
4,65,000 for Vihaan and Mann respectively.
assets towards his share of goodwill and his
Drawings during the year were 65,000 each. As
capital:
per the partnership Deed, Interest on capital @
₹
10% p.a. on Opening Capital has been allowed
Machinery 200000
to them. Calculate the opening capital of Vihaan
Furniture 1,20,000
given that the divisible profits during the year
Stock 80,000
2021-22 was 2,25,000.
Cash 50,000
(1) Rs.3,30,000
If his capital is considered as 3,80,000, the
(2) Rs.4,40,000
goodwill of the firm will be:
(3) Rs.4,00,000
(1) 70,000
(4) Rs.3,00,000
(2) 2,80,000
(3) 4,50,000
14. A, B and C are partners in a firm. If D is admitted
(4) 1,40,000
as a new partner:
(1) Old firm is dissolved
10. A, B and C were partners in a firm sharing profits
(2) Old firm and old partnership is dissolved
and losses in the ratio of 5:3: 2. C retired and his
(3) Old partnership is reconstituted
capital balance after adjustments regarding
(4) None of the above.
reserves, accumulated profits/losses and his
share of gain on revaluation was 2,50,000. C was
15. A, B and C who were sharing and losses in the
paid 3,22,000 including his share of goodwill.
ratio of 4:3:2 decides to share the future profits
The amount credited to C's capital account, on
and losses in the ratio to 2 : 3 : 4with effect from
his retirement, for goodwill will be:
1st April 2023. An extract of their Balance Sheet
(1) 72,000
as at 31st March 2023 is:
(2) 7,200 Liabilities Amount Assets Amount
(3) 24,000 Workmen
(4) 36,000 Compensation
Reserve 65,000
11. Gobind, Hard and Pratap are partners. On At the time of reconstitution, a certain amount of
retirement of Gobind, the goodwill already Claim on workmen compensation was
appears in the Balance Sheet at Rs. 24,000. The determined which B’s share of loss amounted to
goodwill will be written-off Rs. 5,000. The Claim for workmen
(1) By debiting all partners' capital accounts in compensation would be:
their old profit sharing ratio. (1) Rs.15,000
(2) By debiting remaining partners' capital (2) Rs.70,000
accounts in their new profit sharing ratio. (3) Rs.50,000
(3) By debiting retiring partners' capital (4) Rs.80,000
accounts from his share of goodwill. OR
 A, B and C are in partnership business. A used
22,00,000 belonging to the firm without the
information to other partners and made a profit
of 235,000 by using this amount. Which decision
should be taken by the firm to rectify this
situation?
(1) A need to return only 2,00,000 to the firm.
(2) A is required to return ₹35,000 to the firm.
(3) A is required to pay back 235,000 only
equally to B and C.
(4) A need to return ₹2,35,000 to the firm
16. G, S and T were partners sharing profits in the
ratio 3:2:1. G retired and his dues towards the
firm including Capital balance, Accumulated
profits and losses share, Revaluation Gain
amounted to 5,80,000. G was being paid *
7,00,000 in full settlement. For giving that
additional amount of 1,20,000, S was debited for
40,000. Determine goodwill of the firm.
(1) ₹1,20,000
(2) ₹80,000
(3) ₹2,40,000
(4) ₹3,60,000
OR
Annu, Banu and Chanu are partners, Chanu has
been given a guarantee of minimum profit of
28,000 by the firm. Firm suffered a loss of
25,000 during the year. Capital account of Banu
will be ………….. by ₹______.
(1) Credited, 6,500.
(2) Debited, 6,500.
(3) Credited, 1,500.
(4) Debited, ₹1,500.
17. Raju and Jai commenced business in partnership
on April 1, 2006. No partnership agreement was
made whether oral or written. They contributed
Rs. 4,00,000 and Rs. 1,00,000 respectively as
capitals. In addtion, Raju advanced Rs. 2,00,000
as loan to the firm on October 1, 2006. Raju met
with an accident on July 1, 2006 and could not
attend the business up to september 30, 2006.
The profit for the year ended March 31, 2007
amounted to Rs. 50,600. Disputes have arisen
between them on sharing the profits of the firm.
Raju Claims:
(i) He should be given interest at 10 % p.a on
capital and so also on loan.
(ii) Profit should be distributed in the
proportion of capitals. Jai Claims:
(i) Net profit should be shared equally.
(ii) He should be allowed remuneration of Rs,
1.000 p.a. during the period of Raju's
illness.
(iii) Interest on capital and loan should be given
@ 6 % p.a. State the correct position on
each issue as per the provisions of the
partnership Act 1932.
18. What is sacrificing ratio? Why is it calculated
19. Tripati and Chauhan are partners in a firm sharing
profits and losses in the ratio of 3:2. Their capitals
were Rs. 60,000 and Rs. 40,000 as on January 01 ,
2005. During the year they earned a profit of Rs.
30,000. According to the partnership deed both
the partners are entitled to Rs. 1,000 per month as
Salary and 5 % interest on their capital. They are
also to be charged an interest of 5 % on their
drawings, irrespective of the period, which is Rs.
12,000 for Tripathi, Rs. 8,000 for Chauhan.
Prepare Partner's Accounts when, capitals are
fixed.
20. Explain the treatment of goodwill at the time of
retirement or on the event of death of a partner?
21. Rakhi and Shikha are partners in a firm, with
capitals of Rs. 2,00,000 and Rs, 3,00,000
respectively. The profit of the firm, for the year
ended 2006-07 is Rs. 23,200. As per the
Partnership agreement, they share the profit in
their capital ratio, after allowing a salary of Rs.
5,000 per month to Shikha and interest on
Partner's capital at the rate of 10% p.a. During
the year Rakhi withdrew Rs. 7,000 and Shikha
Rs. 10,000 for their personal use. You are
required to prepare a Profit and Loss
Appropriation Account and Partner's Capital
Accounts.
22. Arti and Bharti are partners in a firm sharing
profits in 3:2 ratio, They admitted Sarthi for 1/ 4
share in the profits of the firm. Sarthi brings Rs.
50,000 for his capital and Rs. 10,000 for his 1 /
4 share of goodwill. Goodwill already appears in
the books of Arti and Bharti at Rs. 5,000. the new
profit sharing ratio between Arti, Bharti and
Sarthi will be 2: 1: 1. Record the necessary
journal entries in the books of the new firm?
23. Mohan, Vijay and Anil are partners, the balance
on their capital accounts being Rs. 30,000, Rs.
25,000 and Rs. 20,000 respectively. In arriving
at these figures, the profits for the year ended
March 31, 2007 amounting to Rupees 24,000
had been credited to partners in the proportion in
which they shared profits. During the year the
drawings for Mohan, Vijay and Anil were Rs.
5,000, Rs. 4,000 and Rs. 3,000, respectively.
Subsequently, the following omissions were
noticed:
(a) Interest on Capital, at the rate of 10 % p.a.,
was not charged.
(b) Interest on Drawings: Mohan Rs. 250, Vijay
Rs. 200, Anil Rs. 150 was not recorded in
the books.
Record necessary corrections through journal
entries.
24. The following was the Balance Sheet of Arun, sharing ratio after retirement of Bajaj.
Bablu and Chetan sharing profits and losses in Surplus/deficit, if any, in their capital
6 5 3 accounts will be adjusted through current
the ratio of  : :  respectively. accounts.
 14 14 14 
Prepare necessary ledger accounts and draw the
Liabilities Amount Assets Amou
Balance Sheet of the reconstituted firm.
nt
Creditor’s 9,000 Land &
Bills Payable 3,000 Building 24,000
Capital Furniture 3,500 26. Azad and Babli are partners in a firm sharing
Account Stock 14,000 profits and losses in the ratio of 2: 1. Chin tan is
Arun 19,000 Debtors 12,600 admitted into the firm with 1/4 share in profits.
Bablu Cash 900
16,000 Chin tan will bring in Rs. 30,000 as his capital
Chetan 8,000 43,000 and the capitals of Azad and Babli are to be
55,000 55,000 adjusted in the profit sharing ratio. The Balance
They agreed to take Deepak into partnership and Sheet of Azad and Babli as on December 31,
give him a share of 1/8 on the following terms: 2006 (before Chin tan's admission) was as
a) that Deepak should bring in Rs. 4,200 as follows:
goodwill and Rs. 7,000 as his Capital; (b) that Liabilities Amount Assets Amount
furniture be depreciated by 12%; (c) that stock Creditors 8,000 Cash in 2,000
Bills Payable 4,000 Hand
be depreciated by 10% (d) that a Reserve of 5% General 6,000 Cash at 10,000
be created for doubtful debts: (e) that the value Reserve Bank
of land and buildings having appreciated be Capital Sundry 8,000
Accounts: Debtors
brought upto Rs. 31,000 ;(f) that after making the Azad 50,000 Stock 10,000
adjustments the capital accounts of the old Babil Furniture 5,000
partners (who continue to share in the same 32,000 82,000 Machinery 25,000
Building 40,000
proportion as before) be adjusted on the basis of 1,00,000 1,00,000
the proportion of Deepak's Capital to his share in
the business, i.e., actual cash to be paid off to, or It was agreed that:
brought in by the old partners as the case may be. i) Chintan will bring in Rs. 12,000 as his share
Prepare Cash Account, Profit and Loss of goodwill premium.
Adjustment Account (Revaluation Account) and ii) Buildings were valued at Rs. 45,000 and
the Opening Balance Sheet of the new firm. Machinery at Rs. 23,000.
iii) A provision for doubtful debts is to be
25. Narang, Suri and Bajaj are partners in a firm created @6% on debtors.
sharing profits and losses in proportion of 1/ 2, iv) The capital accounts of Azad and Babli are
1/6 and 1 / 3 respectively. The Balance Sheet on to be adjusted by opening current accounts.
April 1, 2007 was as follows: Record necessary journal entries, show
Books of Suri, Narang and Bajaj necessary ledger accounts and prepare the
Balance Sheet as on April 1, 2007 Balance Sheet after admission.
Liabilities Amount Assets Amount
Bills Payable 12,000 Freehold 40,000
Sundry 18,000 Premises 27. In the absence of an agreement, partners are
Creditors 12,000 Machinery 30,000 entitled to:
Reserves Furniture 12,000
Capital Stock 22,000 i) Profit share in capital ratio.
Accounts: Sundry ii) Commission for making additional sale
Narang Debtors iii) Interest on Loan & Advances by them to the
30,000 20,000
Suri 20,000 Less: firm .
Bajaj 28,000 88,000 Reserve iv) Salary for working extra hours.
for Bad
debt 1,000 19,000
v) Interest on Capital.
Cash 7,000 Choose the correct option:
1,30,000 1,30,000 (1) Only i), iv) and v).
Bajaj retires from the business and the partners (2) Only ii) and iii).
agree to the following: (3) Only iii).
a) Freehold premises and stock are to be (4) Only i) and iii).
appreciated by 20 % and 15 % respectively.
b) Machinery and furniture are to be
depreciated by 10 % and 7 % respectively.
c) Bad Debts reserve is to be increased to Rs.
1,500.
d) Goodwill is valued at Rs. 21,000 on Bajaj's
retirement.
e) The continuing partners have decided to
adjust their capitals in their new profit
28. A, B and C are partners. A's capital is 3,00,000
and B's capital is *1,00,000. C has not invested
any amount as capital but he alone manages the
whole business. C wants 30,000 p.a. as salary,
though the deed is silent. Firm earned a profit of
1,50,000. How much will each partner receives
as an appropriation of profits?
(1) A 60,000; B 60,000; C 30,000
(2) A 90,000; B 30,000; C30,000
(3) A 40,000; B40,000 and C 70,000
(4) A 50,000; B 50,000 and C 50,000
29. Ganga and Jamuna are partners sharing profits in
the ratio of 2:1. They admit Saraswati for 1/5th
share in future profits. On the date of admission,
Ganga’s capital was ₹ 1,02,000 and Jamuna’s
capital was ₹ 73,000. Saraswati brings ₹ 25,000
as her share of goodwill and she agrees to
contribute proportionate capital of the new firm.
How much capital will be brought by Saraswati?
(1) ₹ 43,750
(2) ₹ 37,500
(3) ₹ 50,000
(4) ₹ 40,000
30. Chaman, Raman and Suman are partners sharing
profits in the ratio of 5: 3: 2. Raman retires, the
new profit sharing ratio between Chaman and
Suman will be 1: 1. The goodwill of the firm is
valued at Rs. 1,00,000 Raman's share of
goodwill will be adjusted
(1) By debiting Chaman's Capital account and
Suman's Capital Account with Rs 15,000
each.
(2) By debiting Chaman's Capital account and
Suman's Capital Account with Rs. 21,429
and 8,571 respectively.
(3) By debiting only Suman's Capital Account
with Rs, 30,000.
(4) By debiting Raman's Capital account with
Rs. 30,000.
31. Aparna, Manisha and Sonia are partners sharing
profits in the ratio of 3: 2: 1. Manisha retires
and goodwill of the firm is valued at Rs.
1,80,000. Aparna and Sonia decided to
share future in the ratio of 3: 2. Pass
necessary journal entries.
32. Journalise the following transactions regarding
realisation expenses :
Realisation expenses amounted to Rs.2,500.
33. Himanshu, Gagan and Naman are partners
sharing profits and losses in the ratio of 3: 2: 1.
On March 31, 2007, Naman retires.
The various assets and liabilities of the firm on
the date were as follows:
Cash Rs. 10,000, Building Rs. 1,00,000, Plant
and Machinery Rs. 40,000, Stock Rs. 20,000,
Debtors Rs. 20,000 and Investments Rs. 30,000.
The following was agreed upon between the
partners on Naman's retirement:
(i) Building to be appreciated by 20 %.
(ii) Plant and Machinery to be depreciated by
10 %.
(iii) A provision of 5 % on debtors to be created
for bed and doubtful debts.
(iv) Stock was to be valued at Rs. 18,000 and
Investment at Rs. 35,000.
Record the necessary journal entries to the above
effect and prepare the revaluation account
34. A, B and C were partners in a firm sharing
profits
in the ratio of 3 : 2 : 1 . Their Balance Sheet as
on 31st March, 2015 was as follows:
Liabilities Amount Assets Amount
Creditors 50,000 Land 50,000
Bills 20,000 Building 50,000
Payables Plant 1,00,000
General 30,000 Stock 40,000
Reserve Debtors 30,000
Capitals A\c Bank 5,000
A 1,00,000
B 50,000
C 25,000 1,75,000
2,75,000 2,75,000
From 1st April, 2015, A, B and C decided to
share profits equally. For this it was agreed that:
(i) Goodwill of the firm will be valued at₹
1,50,000.
(ii) Land will be revalued at ₹80,000 and
buildings will be depreciated by 6%.
(iii) Creditors of ₹6,000 were not likely to be
claimed and hence should be written off.
Prepare Revaluation Account, Partners Capital
Accounts and Balance Sheet of the reconstituted
Firm.

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