Q1. A sports club has a 'Tournament Fund' with an opening balance of ₹2,00,000. During the year, it received donations for the tournament amounting to ₹75,000 and earned interest of ₹15,000 on 'Tournament Fund Investments'. The total expenses incurred on conducting the tournament were ₹3,10,000. How will the deficit be treated in the final accounts?
Correct Answer: Option A (Debited to the Income and Expenditure Account for ₹20,000.)
Explanation: Detailed explanation will be updated shortly.
Q2. P and Q are partners. P withdrew ₹10,000 at the beginning of each quarter, and Q withdrew ₹15,000 at the end of every half-year. Interest on drawings is to be charged at 12% p.a. What will be the journal entry to close the Interest on Drawings accounts at the end of the year? (Books are closed on 31st March).
Correct Answer: Option A (Profit & Loss Appropriation A/c Dr. ₹4,300; To P's Capital A/c ₹2,500; To Q's Capital A/c ₹1,800)
Explanation: Detailed explanation will be updated shortly.
Q3. A firm earned an average profit of ₹6,00,000. The normal rate of return in the industry is 15%. The goodwill of the firm was valued at ₹18,00,000 based on 4 years' purchase of super profits. What is the amount of Capital Employed in the firm?
Correct Answer: Option A (₹10,00,000)
Explanation: Detailed explanation will be updated shortly.
Q4. On the admission of a new partner, the firm found an unrecorded liability for repairs of ₹50,000. Simultaneously, the provision for doubtful debts was found to be in excess by ₹20,000 and was thus reduced. What will be the net effect in the Revaluation Account?
Correct Answer: Option A (A net debit of ₹30,000 (Loss))
Explanation: Detailed explanation will be updated shortly.
Q5. A, B, and C are partners sharing profits in the ratio 5:3:2. B retires, and his share is taken over by A and C in the ratio of 2:1. Goodwill of the firm is valued at ₹1,50,000. Which of the following journal entries for goodwill adjustment is correct in the books?
Correct Answer: Option A (A's Capital A/c Dr. ₹30,000; C's Capital A/c Dr. ₹15,000; To B's Capital A/c ₹45,000)
Explanation: Detailed explanation will be updated shortly.
Q6. On dissolution of a partnership firm, a partner, 'X', agreed to pay off his wife's loan of ₹40,000, which was an external liability for the firm. Which account will be credited?
Correct Answer: Option A (Realisation Account)
Explanation: Detailed explanation will be updated shortly.
Q7. Zenith Ltd. invited applications for 50,000 shares of ₹10 each. Applications were received for 80,000 shares. Pro-rata allotment was made to applicants of 75,000 shares. An applicant, Rohan, who had applied for 1,500 shares, failed to pay the allotment money of ₹4 per share (including ₹1 premium). How much is the amount of Calls-in-Arrears on allotment from Rohan?
Correct Answer: Option A (₹6,000)
Explanation: Detailed explanation will be updated shortly.
Q8. A company forfeited 500 shares of ₹10 each (fully called up) for non-payment of the final call of ₹3 per share. Out of these, 300 shares were reissued as fully paid for ₹8 per share. What amount will be transferred to the Capital Reserve Account?
Correct Answer: Option A (₹2,100)
Explanation: Detailed explanation will be updated shortly.
Q9. A company issues 10,000, 9% Debentures of ₹100 each at a discount of 5%, redeemable after 5 years at a premium of 10%. What is the amount of 'Loss on Issue of Debentures' to be written off each year using the straight-line method?
Correct Answer: Option A (₹20,000)
Explanation: Detailed explanation will be updated shortly.
Q10. As per Schedule III of the Companies Act, 2013, which of the following items is NOT classified under the head 'Other Current Liabilities'?
Correct Answer: Option A (Unpaid Dividends)
Explanation: Detailed explanation will be updated shortly.
Q11. The Debt-to-Equity Ratio of a company is 1.5 : 1. The company decides to issue bonus shares to its existing shareholders. What will be the effect of this transaction on the ratio?
Correct Answer: Option A (Increase)
Explanation: Detailed explanation will be updated shortly.
Q12. In the Cash Flow Statement of a non-financial enterprise, 'Dividend Paid' on shares is classified as:
Correct Answer: Option A (An Operating Activity)
Explanation: Detailed explanation will be updated shortly.
Q13. Ram and Shyam are partners sharing profits 3:2. They admit Ghanshyam for a 1/5th share and guarantee that his share of profit will not be less than ₹50,000 p.a. At the end of the year, the firm incurred a total loss of ₹1,00,000. How much deficiency will be borne by Ram?
Correct Answer: Option A (₹50,000)
Explanation: Detailed explanation will be updated shortly.
Q14. A, B, C, and D were partners in a firm sharing profits in the ratio of 1:2:3:4. They decided to share future profits in the ratio of 4:3:2:1. As a result of this change, who gains/sacrifices?
Correct Answer: Option A (A gains 3/10, B gains 1/10, C sacrifices 1/10, D sacrifices 3/10)
Explanation: Detailed explanation will be updated shortly.
Q15. Calculate 'Operating Profit before Working Capital Changes' from the following: Net Profit after Tax and Interest ₹3,50,000; Tax paid ₹1,50,000; Interest on long-term loan ₹50,000; Profit on sale of machinery ₹25,000; Goodwill amortized ₹40,000.
Correct Answer: Option A (₹5,65,000)
Explanation: Detailed explanation will be updated shortly.
Q16. A club received ₹1,20,000 as subscriptions during the year 2023-24. This includes ₹15,000 for 2022-23 and ₹10,000 for 2024-25. At the end of 2023-24, subscriptions outstanding were ₹25,000. What amount should be credited to the Income and Expenditure Account for the year 2023-24?
Correct Answer: Option A (₹1,20,000)
Explanation: Detailed explanation will be updated shortly.
Q17. A company has issued 8% Debentures. The interest on these debentures is a charge against profit. This implies that:
Correct Answer: Option A (Interest is payable only if the company earns a profit.)
Explanation: Detailed explanation will be updated shortly.
Q18. The Inventory Turnover Ratio of a company is 5 times. Cost of Revenue from Operations is ₹18,00,000. The opening inventory is ₹50,000 less than the closing inventory. Calculate the value of closing inventory.
Correct Answer: Option A (₹3,85,000)
Explanation: Detailed explanation will be updated shortly.
Q19. From the following data, what is the absolute and percentage change in 'Revenue from Operations'?
Particulars | 2022-23 (₹) | 2023-24 (₹)
Revenue from Operations | 10,00,000 | 8,00,000
Correct Answer: Option A (Absolute Change: ₹2,00,000; Percentage Change: 25%)
Explanation: Detailed explanation will be updated shortly.
Q20. During the dissolution of a firm, an unrecorded typewriter valued at ₹10,000 was taken over by a creditor of ₹15,000 in full settlement of his claim. What is the journal entry for this transaction?
Correct Answer: Option A (Realisation A/c Dr. 5,000; To Creditor's A/c 5,000)
Explanation: Detailed explanation will be updated shortly.