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# Board Paper of Class 12-Commerce 2021 Accountancy Term-I Delhi(Set 4) (Series : SSK/3)- Solutions

General Instructions :
1. This question paper contains 60 questions out of which 40 questions are to be attempted. All questions carry equal marks.
2. This question paper consists of three parts – Part I, II and III.
3. Part I is compulsory for all candidates. Attempt either Part II or Part III.
4. Part I comprises of three sections – Section A, B and C.
5. From Part I (Q. No. 1 to 36)– attempt any 14 questions each from Section A and B. Attempt any three questions from Section C.
6. From Part II OR III – (Q.No. 37 to 60) – attempt any four questions from Section A and any five questions from Section B.
7. Attempted first, desired number of questions only, in each Part/Section will be evaluated.
8. There is only one correct option for every multiple choice questions (MCQs). Marks will not be awarded for answering more than one option.
9. There is no negative marking.

• Question 1
The document that contains the terms of partnership is called:
(A) Partnership Agreement
(B) Partnership Contract
(C) Partnership Deed
(D) Partnership Rules VIEW SOLUTION

• Question 2
A, B, C and D are partners in a firm. They want to expand their business for which additional capital and more managerial experts are required. For this they want to admit more members in their firm. What is the maximum number of additional members that can be admitted by them in the firm:
(A) 02
(B) 50
(C) 20
(D) 46 VIEW SOLUTION

• Question 3
Vijay and Rattan are partners in a firm. The partnership agreement provides for interest on drawings @ 12% per annum. Which of the following accounts will be debited to transfer interest on drawings to Profit and Loss Appropriation Account :
(A) Interest on Drawings account
(B) Bank account
(C) Partner' Current accounts
(D) Partners' Capital accounts VIEW SOLUTION

• Question 4
A and B were partners in a firm. Their capitals at the end of the year ending on 31.3.2021 were ₹3,00,000 and ₹1,50,000 respectively. During the year B withdrew ₹10,000 which was debited to his capital account. Profit for the year ended 31st March, 2021 was ₹32,000 which was credited to their capital accounts. During the year B introduced additional capital ₹32,000. What was B's capital on 1.4.2020?
(A) ₹1,50,000
(B) ₹1,60,000
(C) ₹1,12,000
(D) ₹1,52,000 VIEW SOLUTION

• Question 5
P, Q and R were partners in a firm sharing profits and losses in the ratio 2:2:1. They admitted L as a new partner for 1/5th share in the profits. L was given a guarantee that his share of profit shall be ₹1,00,000. Any deficiency arising on account of guarantee to L will be borne by Q. The profit of the firm during the year ended 31.3.2021 was ₹4,00,000. The amount of deficiency borne by Q was:
(A) ₹80,000
(B) ₹20,000
(C) ₹1,00,000
(D) ₹6,667 VIEW SOLUTION

• Question 6
X and Y were partners in a firm sharing profits and losses equally. Their capitals were ₹2,00,000 and ₹3,00,000 respectively. Z was admitted as a new partner for $\frac{1}{4}\mathrm{th}$ share in the profits of the firm. Z brought ₹2,00,000 as his capital. The goodwill of the firm was:
(A) ₹ 1,00,000
(B) ₹ 25,000
(C) ₹ 2,00,000
(D) ₹ 7,00,000 VIEW SOLUTION

• Question 7
R and M were partners in a firm, sharing profits and losses in the ratio of 5:3. L was admitted as a new partner for $\frac{1}{5}\mathrm{th}$ share in the profits of the firm. The new profit ratio was 2:2:1 L brought ₹ 1,54,000 for his capital and did not bring his share of goodwill premium. Goodwill of the firm on L's admission was estimated at ₹ 4,50,000. It was decided not to raise goodwill account on L's admission.
Out of the following what will be the correct treatment of goodwill on L's admission?
(A) Debit L's current A/s by ₹ 90,000 and credit R's and M's capital A/c by ₹ 45,000 each.
(B) Debit L's current A/c by ₹ 90,000, Debit M's capital A/c by ₹ 11,250, credit R's capital A/c by ₹ 1,01,250.
(C) Debit L's current A/c by ₹ 90,000 and credit R's capital A/c by ₹ 56,250 and credit M's capital A/c ₹ 33,750.
(D) Debit L's current A/c by ₹ 4,50,000 and credit R's and M's capital A/c by ₹ 2,25,000 each. VIEW SOLUTION

• Question 8
Sharma and Verma were partners in a firm. The partnership deed provided that interest on partners' drawings will be charged @ 12% per annum. During the year Sharma withdrew ₹ 6,000. Interest on his drawings will be:
(A) ₹ 600
(B) ₹ 330
(C) ₹ 360
(D) ₹ 720 VIEW SOLUTION

• Question 9
When a combined 'Share application and Allotment Account' is opened in the books of the company, which of the following accounts will be debited for money refunded on rejected application:
(A) Share Application Account
(B) Share Application and Allotment Account
(C) Share Allotment Account
(D) Bank Account VIEW SOLUTION

• Question 10
Shubham Ltd. purchased a machinery of ₹ 3,80,000 from Ganpati Ltd. The payment was made by issue of 3,000 equity shares of ₹ 100 each at a premium of 10% and the balance by issuing a cheque. The amount of cheque issued in favour of Ganpati Ltd. was:
(A) ₹ 80,000
(B) ₹ 3,80,000
(C) ₹ 30,000
(D) ₹ 50,000 VIEW SOLUTION

• Question 11
Pooja Ltd. issued 50,00,000 equity share of ₹100 each at a premium of ₹30 per share. Half of the premium amount was payable on allotment and the remaining half was payable on first call. Raja to whom 500 shares were allotted failed to pay the first call and second and final call. His shares were foreited. On forfeiture of shares the amount debited to 'securities premium reserve account' was:
(A) ₹7,500
(B) ₹15,000
(C) Nil
(D) ₹50,000 VIEW SOLUTION

• Question 12
Y Ltd. invited applications for issuing 1,00,000 equity shares of ₹10 each at a premium of ₹8 per share. The amount per share was payable as follows:
On Application - ₹8 per share (including ₹5 premium)
On Allotment - ₹8 per share (including ₹3 premium)
On first and final call - Balance.
Applications for 1,50,000 shares were received. Mohan who had applied for 4,000 shares paid the entire share money, on shares applied, with application. The application money received was:
(A) ₹12,00,000
(B) ₹8,00,000
(C) ₹12,40,000
(D) ₹10,00,000 VIEW SOLUTION

• Question 13
Which of the following accounts will be debited for transferring loss on revaluation of assets and reassessment of liabilities at the time of admission of a new partner into the partnership firm:
(A) Old partner's capital accounts in old profit sharing ratio
(B) Old partners capital accounts in sacrificing ratio
(C) All partners capital accounts (including incoming partner) in new profit sharing ratio
(D) Revaluation account VIEW SOLUTION

• Question 14
A business earned average profits of ₹60,000 during the last three years. The normal rate of return on similar business is 12%. The value of net assets of the business is ₹4,00,000. Its goodwill by capitalisation of Average Profits Method will be:
(A) ₹1,00,000
(B) ₹2,00,000
(C) 4,00,000
(D) ₹50,000 VIEW SOLUTION

• Question 15
Due to change in the profit sharing ratio, Anisha's gain is $\frac{1}{5}th$ while Harit's sacrifice is $\frac{1}{5}th$. They decided to adjust the following without affecting their book values, by passing a single adjustment entry:  General Reserve ₹20,000 Profit & Loss Account (Dr.) ₹30,000
The necessary adjustment entry will be:
(A) Debit Anisha's capital account by ₹2,000 and credit Harit's capital account by ₹2,000.
(B) Debit Anisha's capital account by ₹10,000 and credit Harit's capital account by ₹10,000.
(C) Debit Harit's capital account by ₹2,000 and credit Anisha's capital account by ₹2,000
(D) Debit Harit's capital account by ₹10,000 and credit Anisha's capital account by ₹10,000 VIEW SOLUTION

• Question 16
Leela and Meeta were partners in a firm sharing profits and losses in the ratio of 7 : 3. Geeta was admitted as a new partner for a 3/13 share in the profits of the firm. The new profit sharing ratio will be :
(A) 7 : 3 : 7
(B) 7 : 3 : 3
(C) 3 : 7 : 7
(D) 1 : 1 : 1 VIEW SOLUTION

• Question 17
Given below are two statements one labelled as Assertion (A) and the other labelled as Reason (R) :
Assertion (A): Co-ownership of property amounts to partnership.
Reason (R): The element of business is present in co-ownership.
In the context of the above two statements which of the following is correct.
(A) Both (A) and (R) are correct and (R) is correct reason for (A).
(B) Both (A) and (R) are incorrect.
(C) (A) is correct but (R) is incorrect.
(D) Both (A) and (R) are correct but (R) is not the correct reason for (A). VIEW SOLUTION

• Question 18
Z Ltd. forfeited 800 shares of ₹10 each on which ₹8 per share was called and ₹6 per share was paid. The amount with which share capital account debited on the forfeiture of these shares was :
(A) ₹8,000
(B) ₹6,400
(C) ₹4,800
(D) ₹3,200 VIEW SOLUTION

• Question 19
A situation where number of shares offered to the public for subscription are less than the number of shares for which applications have been received is called :
(A) Under subscription
(B) Fully subscribed
(C) Over subscription
(D) Both (B) and (C) VIEW SOLUTION

• Question 20
Which of the following statements are correct :
(i) The liability of a partner for acts of the firm is unlimited.
(ii) Private assets of a partner can also be used for paying the debts of the firm.
(iii) Each partner is liable jointly with all other partners and also severally to the third parties for all the acts of the firm done, while he is a partner.
(iv) The liability of a partner is limited to the extent of his capital contribution.
(A) Only (iii)
(B) (i) and (ii)
(C) (i), (ii) and (iii)
(D) (i), (ii), (iii) and (iv) VIEW SOLUTION

• Question 21
Which of the following statement is not true for fixed capital account?
(A) The capital account balance remains unchanged unless there is addition to or withdrawal of capital.
(B) The capital accounts always show a credit balance.
(C) Each partner has only one account, i.e. capital account, under this method.
(D) All adjustments for drawings, salary, interest on capital etc. are made in the current accounts. VIEW SOLUTION

• Question 22
Amar and Samar were partners in a firm sharing profits and losses in the ratio of 1 : 5. On 1.4.2001 Ganesh was admitted for 1/5th share in the profits. On the date of Ganesh's admission the balance sheet of Amar and Samar showed a debit balance of ₹60,000 in the profit and loss account. The accounting treatment for the same in the books of accounts of the firm on Ganesh's admission will be:
(A) Amar's and Samar's Capital Accounts will be debited by ₹10,000 and ₹50,000 respectively and Profit and Loss Account will be credited by ₹60,000.
(B) Profit and Loss Account will be debited by ₹60,000 and Amar's and Samar's Capital Accounts will be credited by ₹10,000 and ₹50,000 respectively.
(C) Revaluation Account will be debited by ₹60,000 and Profit and Loss Account will be credited by ₹60,000.
(D) Profit and Loss Appropriation Account will be debited by ₹60,000 and Profit and Loss Account will be credited by ₹60,000. VIEW SOLUTION

• Question 23
On the reconstitution of a firm, the value of land was to be appreciated by ₹2,00,000 and plant and machinery was to be reduced to ₹7,00,000 from ₹10,00,000. Grain or Loss on revaluation will be:
(A) Gain ₹1,00,000
(B) Loss ₹1,00,000
(C) Loss ₹5,00,000
(D) Gain ₹5,00,000 VIEW SOLUTION

• Question 24
Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).
Assertion (A) : Goodwill is an intangible asset.
Reason (R) : It is the value of the reputation of a firm in respect of the profits expected in future over and above the normal profits.
In the context of the above statements which of the following is correct?
(A) Both (A) and (R) are correct.
(B) (A) is wrong but (R) is correct.
(C) (A) is correct but (R) is wrong.
(D) Both (A) and (R) are wrong. VIEW SOLUTION

• Question 25
When a new partner is admitted, the balance of 'General Reserve' appearing in the Balance Sheet is credit to:
(A) Profit and Loss Appropriation Account
(B) Capital Accounts of all partners
(C) Revaluation Account
(D) Capital Accounts of old partners. VIEW SOLUTION

• Question 26
Kavita and Karan are partners in a firm sharing profits and losses in the ratio 4 : 1. On 1st April, 2021, they admitted Mohit for 1/4th share in the profits of the firm. The balance sheet of Kavita and Karan showed stock at ₹45,000. On admission of new partner, the stock was found undervalued by 10%. The journal entry to give effect to the above adjustment on Mohit's admission will be:
 Debit Amount (₹) Credit Amount (₹) (A) Revaluation A/c Dr. 5,000 To Stock A/c 5,000 (B) Stock A/c Dr. 4,500 To Revaluation A/c 4,500 (C) Stock A/c Dr. 5,000 To Revaluation A/c 5,000 (D) Revaluation A/c Dr. 4,500 To Stock A/c 4,500​
VIEW SOLUTION

• Question 27
Sangeet and Suman were partners in a firms sharing profits and losses in the ratio of 7 : 3. During the year ended 31.3.2021 the firm earned a profit of ₹1,00,000. After preparation of the financial statements it was discovered that salary to Suman @ ₹3,000 per month had been omitted. The necessary adjustment entry for the same will be:

 Dr. (₹) Cr. (₹) (A) Profit and Loss Appropriation A/c Dr. 36,000 Suman's Capital A/c 36,000 (B) Sangeet’s Capital A/c Dr. 36,000 Suman’s Capital A/c 36,000 (C) Profit and Loss Adjustment A/c Dr. 36,000 Suman’s Capital A/c 36,000 (D) Sangeet’s Capital A/c Dr. 25,200 Suman’s Capital A/c 25,200
VIEW SOLUTION

• Question 28
Roopa and Divya were partners in a firm. They admitted Navin as a new partner for $\frac{1}{3}\mathrm{rd}$ share in the profits. On Navin's admission it was found that there was a claim against the firm for damages for which a liability for damages should be created. Which of the following accounts will be debited for creating the liability:
(A) Profit and Loss Appropriation Account
(B) Profit and Loss Account
(C) Revaluation Account
(C) Profit and Loss Adjustment Account VIEW SOLUTION

• Question 29
Given below are two statements, one labelled as Assertion (A) and the other as Reason (R).
Assertion (A): In case the company fails to receive minimum subscription it cannot proceed for the allotment of shares.
Reason (R): When the company fails to receive minimum subscription it has to return the application money within 120 days from the date of issue of prospectus.
In the context to the above two statements which of the following is correct:
(A) Both (A) and (R) are correct.
(B) (A) is correct but (R) is incorrect.
(C) Both (A) and (R) are incorrect.
(D) (A) is incorrect but (R) is correct. VIEW SOLUTION

• Question 30
X Ltd. invited applications for issuing 10,00,000 equity shares of ₹10 each at a premium of ₹9 per share. The amount was payable as follows:
On Application - ₹6 per share (including premium ₹3)
On Allotment - ₹8 per share (including premium ₹4)
On first and final call - Balance
Applications for 15,00,000 shares were received. Shares were allotted on pro-rata basis to all applicants. Excess application money received with applications was adjusted towards sums due on allotment. Dharam to whom 600 shares were allotted failed to pay the allotment money. Allotment amount that was not paid by Dharam was:
(A) ₹4,800
(B) ₹600
(C) ₹3,000
(D) ₹2,400 VIEW SOLUTION

• Question 31
PP Ltd. invited applications for issuing 10,000 equity shares of ₹10 each. Applications for 9,500 shares were received and allotment was made to all the applicants. Ravi a shareholder holding 200 shares failed to pay allotment money and his shares were forfeited. Mohan to whom 100 shares were allotted failed to pay the first call and his shares were forfeited immediately after the first call was made. Afterwards the second and final call was made. The second and final call will be due on how many shares?
(A) 9,500
(B) 9,300
(C) 9,200
(D) 10,000 VIEW SOLUTION

• Question 32
Raman Ltd. was registered with an authorised capital of ₹5,00,00,000 divided into shares of ₹10 each. The company offered for subscription 4,00,000 shares. Application were received for 4,50,000 shares. Applications for 50,000 shares were rejected. A shareholder holding 10,000 shares failed to pay the first and final call of ₹2 per share. The subscribed capital of the company is:
(a) ₹5,00,00,000
(b) ₹40,00,000
(c) ₹45,00,000
(d) ₹39,80,000 VIEW SOLUTION

• Question 33
Sun India Ltd. invited applications for issuing equity shares of ₹10 each at a premium of 10%. The premium was payable on allotment, Because of over-subscription all the applicants were divided into three categories for the purpose of allotment:
Category I-  Applications for 1,00,000 shares were allotted shares in full.
Category II- 3,00,000 shares were allotted to the application of this category. For every 5 shares applied, 3 shares were allotted.
Category III- 8,00,000 shares were allotted to the applicants of 12,00,000 shares.
Amount payable per share was as follow:
On Application- ₹2 per share
On Allotment- ₹5 per share (including premium)
On First and Final call- Balance
Excess money received with applications was adjustment towards sums due on allotment.

How many shares were offered to the public for subscription?
(A) 12,00,000
(B) 24,00,000
(C) 14,00,000
(D) 30,00,000 VIEW SOLUTION

• Question 34
Sun India Ltd. invited applications for issuing equity shares of ₹10 each at a premium of 10%. The premium was payable on allotment, Because of over-subscription all the applicants were divided into three categories for the purpose of allotment:
Category I-  Applications for 1,00,000 shares were allotted shares in full.
Category II- 3,00,000 shares were allotted to the application of this category. For every 5 shares applied, 3 shares were allotted.
Category III- 8,00,000 shares were allotted to the applicants of 12,00,000 shares.
Amount payable per share was as follow:
On Application- ₹2 per share
On Allotment- ₹5 per share (including premium)
On First and Final call- Balance
Excess money received with applications was adjustment towards sums due on allotment.

What was the amount of money received on allotment?
(A) ₹60,00,000
(B) ₹12,00,000
(C) ₹6,00,00,000
(D) ₹48,00,000 VIEW SOLUTION

• Question 35
On 1.4.2018 A and B started business with capitals of ₹8,00,000 and ₹16,00,000 respectively. They decided to share the future profits in the ratio of their capitals. On 1.4.2019 they admitted C as a new partner. A surrendered 1/4th of his share in favour of C and B surrendered 1/9th from his share in favour of C. On 1.4.2020 D was admitted as a new partner for 1/6th share. On 1.4.2021, E was admitted for 1/5th share in the profits and it was decided that all partners will share the future profits equally.
The profit sharing ratio of A, B and C was :
(A) 9 : 20 : 7
(B) 8 : 21 : 7
(C) 10 : 19 : 7
(D) 7 : 22 : 7 VIEW SOLUTION

• Question 36
On 1.4.2018 A and B started business with capitals of ₹8,00,000 and ₹16,00,000 respectively. They decided to share the future profits in the ratio of their capitals. On 1.4.2019 they admitted C as a new partner. A surrendered 1/4th of his share in favour of C and B surrendered 1/9th from his share in favour of C. On 1.4.2020 D was admitted as a new partner for 1/6th share. On 1.4.2021, E was admitted for 1/5th share in the profits and it was decided that all partners will share the future profits equally.
The profit sharing ratio of A, B, C and D was :
(A) 45 : 105 : 30 : 36
(B) 45 : 100 : 35 : 36
(C) 45 : 105 : 30 : 36
(D) 40 : 100 : 40 : 36 VIEW SOLUTION

• Question 37
The ratios that analyse profits in relation to revenue from operations or funds employed in the business are called:
(A) Profitability Ratios
(B) Turnover Ratios
(C) Solvency Ratios
(D) Liquidity Ratios VIEW SOLUTION

• Question 38
Because of exclusion of non-liquid current assets which of the following ratio is considered better then current ratio as a measure of liquidity position of the business?
(A) Debt – Equity Ratio
(B) Acid Test Ratio
(C) Proprietary Ratio
(D) Interest Coverage Ratio VIEW SOLUTION

• Question 39
Which of the following ratio establishes relationship of 'Shareholders funds' to 'Net assets'?
(A) Return on Investment
(B) Interest Coverage Ratio
(C) Proprietary Ratio
(D) Debt – Equity Ratio VIEW SOLUTION

• Question 40
Which of the following ratio establishes the relationship between 'Credit revenue from operations' and 'Trade receivables'?
(A) Inventory Turnover Ratio
(B) Interest Coverage Ratio
(D) Trade Receivables Turnover Ratio VIEW SOLUTION

• Question 41
Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R)
Assertion (A) : Profitability ratios are calculated to analyse the earning capacity of the business.
Reason (R) : Profitability ratios are calculated to determine the ability of the business to service its debt in the long run.
In the light of the above two statements which of the following is correct :
(A) Both (A) and (R) are correct.
(B) Both (A) and (R) are wrong.
(C) (A) is correct but (R) is wrong.
(D) (A) is wrong but (R) is correct. VIEW SOLUTION

• Question 42
Math the items given in Column I with the headings / sub-headings of Column II under which these are shown according to Schedule III  Part I of the Companies Act, 2013:
 I II (i) Securities Premium Reserve (a) Non current Liabilities (ii) Patents (b) Current Liabilities (iii) Short Term Loans and Advances (c) Current Assets (iv) Trade Payables (d) Intangible Assets (v) Long Term Borrowings (e) Reserves of Surplus

(A) (i) - (e), (ii) - (d), (iii) - (c), (iv) - (b), (v) - (a)
(B) (i) - (a), (ii) - (b), (iii) - (c), (iv) - (d), (v) - (e)
(C) (i) - (b), (ii) - (c), (iii) - (a), (iv) - (d), (v) - (e)
(D) (i) - (a), (ii) - (b), (iii) - (e), (iv) - (d), (v) - (c) VIEW SOLUTION

• Question 43
Current ratio of a company is 3 : 1. The value of its current liabilities is ₹4,00,000. Its current assets will be:
(A) ₹3,00,000
(B) ₹12,00,000
(C) ₹2,00,000
(D) ₹9,00,000 VIEW SOLUTION

• Question 44
Gross Profit Ratio of a Company is 25%. Cost of revenue from operations are 3/4th of revenue from operations. If revenue from operations is ₹60,00,000, the Gross Profit of the Company will be:
(A) ₹25,00,000
(B) 45,00,000
(C) 15,00,000
(D) 11,25,000 VIEW SOLUTION

• Question 45
Following information has been obtained from the statement of Profit and Loss of a Company:
Revenue from Operations - ₹20,00,000, cost of materials consumed - ₹8,00,000,
Employees benefit expenses - ₹20,000, Finance cost - ₹5,000, Depreciation - ₹25,000.
Its profit before tax will be:
(a) ₹12,00.000
(b) ₹11,80,000
(c) ₹11,75,000
(d) ₹11,50,000 VIEW SOLUTION

• Question 46

Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion(A):
'Sale of goods for cash' does not affect Dept-Equity ratio.
Reason(R): 'Sale of goods on cash basis' neither affect 'Debt' nor 'Equity'.
In the context of the above two statements which of the following is correct:
(a) Both (A) and (R) are correct and (R) is the correct reason of (A).
​(b) Only (A) is correct.
(c) Only (R) is correct.
​(d) Both (A) and (R) are incorrect.

VIEW SOLUTION

• Question 47
Following are two statements, one labelled as Assertion (A) and the other labelled Reason (R):
Assertion (A):
Operating ratio is = 100 – operating profit ratio.
Reason (R): Operating ratio is computed to reveal the operating margin on products sold.
In the context of the above two statements which of the following is correct:
(a) Both statements are incorrect.
(b) (A) is correct but (R) is incorrect.
(c) (A) is incorrect but (R) is correct.
(d) Both (A) and (R) are correct and (R) is the correct reason of (A).
VIEW SOLUTION

• Question 48

During the year ended 31.3.2021, Soma Ltd. earned net profit after tax ₹6,00,000. The company has a long term 10% debt of ₹50,00,000.
The tax rate is 40%. The interest coverage ratio of the company will be:
(a) 2 times
(b) 3 times
(c) 1.2 times
(d) 1.5 times

VIEW SOLUTION
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