Case Based Questions in Accountancy Class 12 are designed to test your understanding of accounting concepts in real-world scenarios. They typically present a situation or a business case, and you're asked to analyze it, apply accounting principles, and make decisions based on the data provided. These questions often require a deeper level of thinking and problem-solving skills.

Common Topics for case-Based Questions:

Here are some common topics you might prepare for case study questions:

1. Partnership accounts: Dealing with the accounting aspects of partnerships, such as admission, retirement, or dissolution of partners.
2. Issue of shares and debentures: Recording and accounting for the issue of shares or debentures in a company.
3. Ratio analysis: Analyzing financial ratios to assess the performance and financial health of a business.
4. Comparative Statements: Filling the missing information.
5. Cash Flow Statement: Analysis of different activities resulting in cash flows - inflows or outflows.

Case-Based Questions from CBSE Resources

Following are a few questions taken from CBSE resources for Case Based Questions:

Question 1: (Fundamentals of Partnership Accounting)

Read the following hypothetical text and answer the given questions:
Amit and Mahesh were partners in a fast-food corner sharing profits and losses in ratio 3:2. They sold fast food items across the counter and did home delivery too. Their initial fixed capital contribution was ₹1,20,000 and ₹80,000 respectively. At the end of first year their profit was ₹ 1,20,000 before allowing the remuneration of ₹3,000 per quarter to Amit and ₹.2,000 per half year to Mahesh. Such a promising performance for first year was encouraging, therefore, they decided to expand the area of operations. For this purpose, they needed a delivery van, a few Scotties and an additional person to support. Six months into the accounting year they decided to admit Sundaram as a new partner and offered him 20% as a share of profits along with monthly remuneration of ₹ 2,500. Sundaram was asked to introduce ₹1,30,000 for capital and ₹70,000 for premium for goodwill. Besides this Sundaram was required to provide Rs.1,00,000 as loan for two years. Sundaram readily accepted the offer. The terms of the offer were duly executed, and he was admitted as a partner.

Questions:
Q1 Remuneration will be transferred to .............. of Amit and Mahesh at the end of the accounting period.
(a) Capital account.
(b) Loan account.
(c) *Current account.
(d) None of the above.

Q2 Upon the admission of Sundaram the sacrifice for providing his share of profits would be done:
(a) by Amit only.
(b) by Mahesh only.
(c) by Amit and Mahesh equally.
(d) *by Amit and Mahesh in the ratio of 3:2.

Q3 Sundaram will be entitled to a remuneration of ...............at the end of the year. *(₹15,000)

Q4 While taking up the accounting procedure for this reconstitution the accountant of the firm Mr. Suraj Marwaha faced a difficulty. Solve it be answering the following:
For the amount of loan that Sundaram has agreed to provide, he is entitled to interest thereon at the rate of .............. *(6% p.a.)

Case Based Questions in Accountancy

Question 2: (Admission of Partner)

Sterling enterprises is a partnership business with Ryan, Williams and Sania as partners engaged in production and sales of electrical items and equipment. Their capital contributions were ₹50,00,000, ₹50,00,000 and ₹80,00,000 respectively with the profit the sharing ratio of 5:5:8. As they are now looking forward to expanding their business, it was decided that they would bring in sufficient cash to
double their respective capitals. This was duly followed by Ryan and Williams but due to unavoidable reasons Sania could not do so and ultimately it was agreed that to bridge the shortfall in the required capital a new partner should be admitted who would bring in the amount that Sania could not bring and that the new partner would get share of profits equal to half of Sania’s share which would be sacrificed by Sania only. Consequent to this agreement Ejaz was admitted and he brought in the required capital and ₹30,00,000 as premium for goodwill.
Based on the above information you are required to answer the following questions.

Q1 What will be the new profit-sharing ratio of Ryan, Williams, Sania and Ejaz?
(a) 1:1:1:1
(b) 5:5:8:8
*(c) 5:5:4:4
(d) None of the above

Q2 What is the amount of capital brought in by the new partner Ejaz?
(a) ₹50,00,000
*(b) ₹80,00,000
(c) ₹40,00,000
(d) ₹30,00,000

Q3 What is the value of the goodwill of the firm?
*(a) ₹1,35,00,000
(b) ₹30,00,000
(c) ₹1,50,00,000
(d) Cannot be determined from the given data.

Q4 What will be correct journal entry for distribution of Premium for Goodwill brought in by Ejaz?
(a) Ejaz Capital A/c ……………...Dr. ₹30,00,000
To Sania’s Capital A/c ₹30,00,000
*(b) Premium for Goodwill A/c….......…Dr. ₹30,00,000
To Sania’s Capital A/c ₹30,00,000
(c) Premium for Goodwill A/c…........…Dr. ₹30,00,000
To Reyan’s Capital A/c ₹8,33,333
To William’s Capital A/c ₹8,33,333
To Ejaz’s Capital A/c ₹13,33,333
(d) Premium for Goodwill A/c…......…Dr. ₹30,00,000
To Reyan’s Capital A/c ₹10,00,000
To William’s Capital A/c ₹10,00,000
To Ejaz’s Capital A/c ₹10,00,000

Case Based Questions in Accountancy

Question 3: (Accounting for Share Capital)

Nidiya limited was incorporated on 1stApril 2017 with registered office in Mumbai. The capital clause of memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹10 each and 1,00,000 preference shares of ₹50 each. Since some large investments were required for building and machinery the company in consultation with vendors, Ms. VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par to them in full consideration of assets acquired. Besides this the company issued 2,00,000 equity shares for cash at par payable as ₹3 on application, ₹2 on allotment, ₹3 on first call and ₹2 on second call. Till date second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay first call on his 200 shares. Shares of Mr. Ajay were then forfeited and out of them 100 shares were reissued at ₹12 per share.

Based on above information you are required to answer the following questions:

Q1 Shares issue to vendors of building and machinery, Ms. VPS Enterprises, would be classified as:
(a) Preferential Allotment
(b) Employee Stock Option Plan
(c) *Issue for Consideration other than cash
(d) Right Issue of Shares

Q2 How many equity shares of the company have been subscribed?
(a) 3,00,000
(b) 2,99,500
(c) *2,99,800
(d) None of these

Q3 What is the amount of security premium reflected in the balance sheet at the end of the year?
(a) ₹200
(b) ₹600
(c) *₹400
(d) ₹ 1,000

Q4 What amount of share forfeiture would be reflected in the balance sheet?
(a) *₹600
(b) ₹900
(c) ₹200
(d) ₹ 300

Case Based Questions in Accountancy

Question 4: (Cash Flow Statement)

Read the following hypothetical text and answer the given questions on the basis of the same:
Krishika an alumni of IIM Ahemdabad initiated her startup Krishika Ltd. in 2018. The profits of Krishika Ltd. in the year 2019-20 after all appropriations was ₹31,25,000. This profit was arrived after taking into consideration the following items: -
1. Gain on sale of fixed tangible assets - ₹12,50,000
2. Goodwill written off - ₹7,80,000
3. Transfer to General Reserve - ₹8,75,000
4. Provision for taxation - ₹4,37,500

Additional Information: -
Particulars                             31.03.2020 (in ₹)                      31.03.2019 (in ₹)
Prepaid Expenses                      7,50,000                                        5,00,000
Inventory                                  10,50,000                                        8,20,000
Trade Payables                          4,50,000                                        3,50,000
Trade Receivables                    6,20,000                                         5,90,000

Questions:
Q1 Net Profit before tax will be ₹………….
(a)22,50,000 (b) 35,62,500 (c) 39,67,500 *(d) 44,37,500

Q2 Operating profit before working capital changes will be ₹…………                                                                                                                                  (a) 52,17,500 (b) 64,67,500 *(c) 39,67,500 (d) 39,69,500

Q3 Cash from operating activities before tax will be ₹………..
*(a) 35,57,500 (b) 40,67,500 (c) 37,87,500 (d) 35,67,300

Q4 Cash flow from Operating Activities will be ₹…………
(a) 39,95,000 *(b) 31,20,000 (c) 40,67,500 (d) 31,00,000

MCQs on Partnership Accounting Class 12

MCQs on Company Accounts Class 12

MCQs on Analysis of Financial Statements

The post Case Based Questions in Accountancy Class 12 appeared first on Commerceatease - Website for 11th & 12th Commerce.

All these questions have been taken from previous year CBSE examination question papers.

Question 1:

The Quick Ratio of a company is 1 : 2. Which of the following transactions will result in an increase in this ratio?

1. Cash received from debtors
2. *Sold goods on credit
3. Purchased goods on credit
4. Purchased goods on cash

Question 2:

Identify which of the following would result in inflow of cash from operating activities:

1. Payment to creditors
2. Interest received by a non-finance company
3. Dividend received by a non-finance company
4. *Amount received from debtors

Question 3:

Analysis of Financial Statements is useful and significant to different users. Which of the following users is particularly interested in firm's ability to meet their claims over a very short period of time?

1. Labour Unions
2. *Trade Payables
3. Top Management
4. Finance Manager

Question 4:

_____ ratios are calculated to determine the ability of the business to service its debt in the long run.

1. Liquidity
2. Turnover
3. *Solvency
4. Profitability

Question 5:

Acquisition of machinery by issue of equity shares will result in:

1. Cash inflow from financing activities
2. Cash outflow from financing activities
3. Cash outflow from investing activities
4. *No flow of cash

MCQs on Analysis of Financial Statements

Question 6:

The transaction "Capital gains tax paid on sale of fixed assets" is classified under which of the following:

1. Operating Activities
2. *Investing Activities
3. Financing Activities
4. Cash and Cash Equivalents

Question 7:

Which of the following is not an objective of Analysis of Financial Statements?

1. To assess the current profitability and operational efficiency of the firm.
2. To ascertain the relative importance of different components of the financial position of the firm.
3. *To consider the impact of price level changes.
4. To identify the reasons for change in the profitability/financial position of the firm.

Question 8:

_______ is also known as Acid-Test Ratio.

1. Current Ratio
2. *Quick Ratio
3. Gross profit Ratio
4. Operating Ratio

Question 9:

Current Ratio of Super Ltd. is 2 : 1. Which of the following transactions will result in decrease in this ratio?

1. Payment of ₹40,000 to creditors
2. Sale of furniture (book value ₹38,000) for ₹16,000 only
3. *Repayment of long-term loan of ₹7,00,000
4. Cash collected from debtors ₹1,18,000

Question 10:

Statement I: Issue of Debentures will result in inflow of cash.

Statement II: Issue of Debentures to the vendors for purchase of machinery will result in outflow of cash.

Choose the correct option from the following:

1. Both statements are correct.
2. Both statements are incorrect.
3. *Statement I is correct, and Statement II is incorrect.
4. Statement I is incorrect, and Statement II is correct.

MCQs on Analysis of Financial Statements

Question 11:

What will be the effect of “Purchase of Marketable Securities for cash” on Cash Flow Statement?

1. *No effect
2. Inflow from financing activities
3. Outflow from investing activities
4. Outflow from financing activities

Question 12:

₹5,00,000 to acquire shares in Neligare Industries and received a dividend of ₹30,000 after acquisition.

1. Cash outflow from financing activities ₹4,70,000
2. Cash inflow from investing activities ₹4,70,000
3. Cash inflow from financing activities ₹4,70,000
4. *Cash outflow from investing activities ₹4,70,000

Question 13:

The Debt-Equity Ratio of a company is 3 : 2. Which of the following transactions will result in increase in this ratio?

1. Purchase of goods on credit
2. *Issue of Debentures
3. Issue of Equity Shares
4. Cash received from Debtors

Question 14:

Statement I: Issue of fully paid bonus shares out of Securities Premium Account will result in inflow of cash.

Statement II: Cash withdrawn from bank will result in inflow of cash.

In the context of the above two statements, choose the correct option:

1. Both statement I and statement II are correct
2. *Both statement I and statement II are incorrect
3. Statement I is correct, and statement II is incorrect
4. Statement I is incorrect, and statement II is correct

Question 15:

Which of the following tools of Analysis of Financial Statements indicate the trend and direction of financial position and operating results?

1. *Comparative statements
2. Common size statements
3. Cash flow analysis
4. Ratio analysis

MCQs on Analysis of Financial Statements

Question 16:

________ indicate the speed at which activities of the business are being performed.

1. Liquidity ratios
2. *Turnover ratios
3. Solvency ratios
4. Profitability ratios

Question 17:

Which of the following transactions will result in cash flows from operating activities?

1. Cash receipts from sale of investments ₹60,000
2. *Cash receipts from sale of goods ₹94,000
3. Dividend received ₹31,000
4. Payment of cash for purchase of fixed assets ₹3,00,000

Question 18:

Dividend paid by a Finance Company is classified under which of the following:

1. Operating Activities
2. Investing Activities
3. *Financing Activities
4. Cash and Cash Equivalents

Question 19:

The Quick Ratio of a company is 1 : 1. Which of the following transactions will result in increase of this ratio?

1. Purchase of inventory ₹1,50,000 through cheque
2. *Sold inventory on credit ₹ 50,000
3. Outstanding expenses of ₹ 40,000 paid
4. Machinery purchased for cash ₹50,000

Question 20:

Which of the following transactions will result in cash outflow from operating activities?

1. *Payment to creditors
2. Proceeds from sale of investments
3. Dividend received by a non-finance company
4. Depreciation charged on furniture

MCQs on Analysis of Financial Statements

Question 21:

Which of the following is not a limitation of ‘Analysis of Financial Statements’?

1. It is just a study of the reports of the company.
2. It does not consider price level changes.
3. *It ascertains the relative importance of different components of the financial position of the firm.
4. It may be misleading without the knowledge of the changes in accounting procedures followed by a firm.

Question 22:

Ratios that are calculated for measuring the efficiency of operations of business based on effective utilization of resources are known as:

1. Liquidity ratios
2. *Turnover ratios
3. Solvency ratios
4. Profitability ratios

Question 23:

Sale of patents of ₹50,00,000 will result in:

1. Cash inflow of ₹50,00,000 from financing activities
2. Cash outflow of ₹50,00,000 from financing activities
3. Cash outflow of ₹50,00,000 from investing activities
4. *Cash inflow of ₹50,00,000 from investing activities

Question 24:

Income tax paid is classified under:

1. *Operating activities
2. Investing activities
3. Financing activities
4. Cash and cash equivalents

Class 12 Accountancy MCQs Financial Statements Analysis

Class 12 Accountancy MCQs Comparative Statements

Class 12 Accountancy MCQs Ratio Analysis

Class 12 Accountancy MCQs Cash Flow Statement

MCQs on Company Accounts Class 12

MCQs on Partnership Accounting Class 12

Case Based Questions in Accountancy Class 12

The post MCQs on Analysis of Financial Statements appeared first on Commerceatease - Website for 11th & 12th Commerce.

The following questions are all from the previous year CBSE question papers. Students can have idea of the level and type of questions asked in examination, to prepare well for the coming final exam.

Question 1:

Alfa Ltd. invited applications for 50,000 equity shares of ₹10 each at a premium of 30%. The whole amount was payable on application. Applications were received for 2,50,000 shares. The company decided to allot the shares on a pro-rata basis to all the applicants. The amount refunded by the company was:

1. ₹32,50,000
2. ₹15,60,000
3. ₹39,00,000
4. *₹26,00,000

Question 2:

Reserve capital is that part of _________ capital which cannot be called except at the time of winding up of the company.

1. Issued
2. Called up
3. *Uncalled
4. Nominal

Question 3:

Xeno Ltd. issued 25,000 equity shares of ₹0 each. The amount was payable as follows: On Application ₹4 per share, On Allotment ₹5 per share, On First and Final call Balance All the shares offered were applied for and allotted. All the money due on allotment was received except on 1,500 shares. These shares were forfeited immediately after allotment. First and final call was not yet made. At the time of forfeiture, Share Capital Account will be debited by:

1. ₹15,000
2. ₹24,000
3. *₹13,500
4. ₹18,000

Question 4:

Assertion (A) : Irredeemable debentures are also known as perpetual debentures.

Reason (R) : The company does not give any undertaking for the repayment of money borrowed by issuing such debentures. They are repayable on the winding up of the company or on the expiry of a long period.

1. *Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
2. Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
3. Assertion (A) is incorrect, but Reason (R) is correct.
4. Assertion (A) is correct, but Reason (R) is incorrect.

Question 5:

Money received in advance from shareholders before it is actually called up by the directors is:

1. *debited to calls in advance account
2. credited to calls in advance account
3. debited to share capital account
4. credited to share capital account

MCQs on Company Accounts

Question 6:

An offer of securities or invitation to subscribe securities to a select group of persons is termed as:

1. Buy back of shares
2. Employee stock option plan
3. *Private placement of shares
4. Sweat Equity

Question 7:

A share of ₹100 on which ₹80 is received is forfeited for non-payment of final call of ₹20. The minimum price at which this share can be reissued is:

1. ₹120
2. ₹100
3. ₹80
4. *₹20

Question 8:

Shiv Ltd. forfeited 500 shares of ₹10 each on which ₹7 per share was paid. These shares were reissued for ₹9 per share fully paid. Amount transferred to Capital Reserve Account will be:

1. *₹3000
2. ₹5000
3. ₹4500
4. ₹3500

Question 9:

If a share of ₹100 on which ₹70 has been paid is forfeited, then at which minimum price can it be re-issued ?

1. ₹100
2. *₹30
3. ₹70
4. ₹130

Question 10:

If a share of ₹10 issued at a premium of ₹2 per share, on which ₹8 (including premium) has been called and ₹6 (including premium) has been paid by the shareholder, is forfeited, then Share Capital Account will be debited with :

1. ₹10
2. ₹4
3. ₹8
4. *₹6

MCQs on Company Accounts

Question 11:

On 1st April 2022, Mega Ltd. issued 30,000, 10% Debentures of ₹100 each at a discount of 10%. The total amount of interest due on debentures for the year ending 31st March 2023 will be:

1. ₹2,70,000
2. *₹3,00,000
3. ₹27,000
4. ₹30,000

Question 12:

Maharaja Ltd. took over assets of ₹15,00,000 and liabilities of ₹2,00,000 of Dolphin Ltd. for an agreed purchase consideration of ₹12,60,000. It was agreed that the purchase consideration will be paid by issuing 11% Debentures of ₹100 each at 10% discount. The number of debentures issued will be:

1. 13,000
2. 12,600
3. 10,000
4. *14,000

Question 13:

Misha Ltd. issued 6,000, 8% Debentures of ₹100 each at ₹96 per debenture. 8% Debentures Account will be credited by:

1. ₹5,76,000
2. ₹24,000
3. *₹6,00,000
4. ₹60,000

Question 14:

Nominal/Authorized share capital is:

1. that part of the share capital which is issued by the company.
2. the amount of share capital which is actually applied for by the prospective shareholders.
3. *The maximum amount of share capital which a company is authorized to issue.
4. the amount actually paid by the shareholders.

Question 15:

The debentures which do not have a specific charge on the assets of the company are called:

1. Redeemable Debentures
2. *Unsecured Debentures
3. Zero Coupon Rate Debentures
4. Non-Convertible Debentures

MCQs on Company Accounts

Question 16:

Alfa Ltd. offered for public subscription 50,000 equity shares of ₹10 each at ₹110 per share. The entire amount was payable on application. Applications were received for 48,000 shares and allotment was made to all the applicants. The amount received on application will be:

1. *₹52,80,000
2. ₹55,00,000
3. ₹50,00,000
4. ₹48,00,000

Question 17:

Assertion (A): When the shares are forfeited, share capital account is debited with the amount called up and credited to (i) respective unpaid calls account i.e., calls in arrears and (ii) share forfeiture account with the amount already received on shares.

Reason (R): When the shares are forfeited, all entries relating to the shares forfeited, except those relating to securities premium, already recorded in accounting records must be reversed.

Choose the correct option from the following:

1. *Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).
2. Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
3. Assertion (A) is incorrect, but Reason (R) is correct.
4. Assertion (A) is correct, but Reason (R) incorrect.

Question 18:

Lexa Ltd. issued 50,000 equity shares of ₹10 each at a premium of ₹2 per share. The amount was payable as follows:

On application and allotment ₹7 per share (including premium)

On first and final call Balance

The issue was fully subscribed. All the money was duly received except the first and final call on 1,000 equity shares. These shares were forfeited. On forfeiture of these shares Calls in Arrears Account will be:

1. credited by ₹7,000
2. debited by ₹5,000
3. *Credited by ₹5,000
4. debited by ₹7,000

Question 19:

Minimum subscription for allotment of shares as per Securities and Exchange Board of India (SEBI) guidelines cannot be less than 90% of which of the following capital?

1. Reserve Capital
2. Nominal Capital
3. Subscribed Capital
4. *Issued Capital

Question 20:

KLB Ltd. forfeited 3,000 shares of 10 each, ₹8 per share called up for non-payment of first call of ₹2 per share. All these shares were reissued at ₹7 per share, ₹8 paid up. The amount transferred to Capital Reserve Account will be:

1. ₹18,000
2. ₹24,000
3. *₹15,000
4. ₹3,000

MCQs on Company Accounts

Question 21:

NUK Ltd. forfeited 1,000 shares of ₹10 each, fully called up for non-payment of final call of ₹2 per share. 800 of these shares were reissued at ₹11 per share fully paid. The amount credited to Capital Reserve Account will be:

1. *₹6,400
2. ₹8,000
3. ₹7,200
4. ₹10,000

Question 22:

The debentures which do not carry a specific rate of interest are called:

1. *Zero Coupon Rate Debentures
2. Specific Coupon Rate Debentures
3. Unsecured Debentures
4. Secured Debentures

Question 23:

Beeta Ltd. offered for subscription 1,00,000 equity shares of ₹ 10 each at a premium of 100% payable entirely on application. Applications were received for 5,00,000 equity shares. The company decided to allot the shares on pro-rata basis to all the applicants. The amount received by the company on application was:

1. *₹ 1,00,00,000
2. ₹ 20,00,000
3. ₹ 1,20,00,000
4. ₹ 80,00,000

Question 24:

The amount of share capital which a company is authorized to issue by its Memorandum of Association is called:

1. Issued capital
2. Subscribed capital
3. Reserve capital
4. *Nominal capital

Question 25:

Sinoy Ltd. issued 20,000 shares of ₹ 10 each at a premium of ₹ 6. The amount was payable as follows:

On Application – ₹ 7 per share (Including Premium ₹ 1 per share)

On Allotment – ₹ 5 per share (Including Premium ₹ 2 per share)

On First and Final call – Balance

The issue was fully subscribed. All the money was duly received except the allotment and first and final call on 1,000 shares. These shares were forfeited. On forfeiture of these shares, the ‘Securities Premium Account’ will be debited by:

1. ₹ 2,000
2. ₹ 3,000
3. *₹ 5,000
4. ₹ 20,000

MCQs on Company Accounts

Question 26:

Money not received from shareholders on allotment or calls is:

1. debited to calls in advance account.
2. credited to calls in advance account.
3. *Debited to calls in arrears account.
4. credited to calls in arrears account.

Question 27:

Those debentures where a charge is created on the assets of the company for the purpose of payment in case of default are known as:

1. *Secured Debentures
2. Registered Debentures
3. Specific Coupon Rate Debentures
4. Redeemable Debentures

Question 28:

Nagar Ltd. issued 6,000, 11% Debentures of ₹ 100 each at a discount of 10% redeemable at a premium. ‘Discount on issue of debentures’ and ‘Premium on redemption of debentures’ were accounted for through ‘Loss on issue of debentures account’. If the amount of ‘Loss on issue of debentures’ was ₹90,000, then the amount of premium on redemption of debentures was:

1. ₹ 60,000
2. ₹ 90,000
3. ₹ 1,20,000
4. *₹ 30,000

Question 29:

On 1st April 2022 Surya Ltd. issued 10,000, 12% Debentures of ₹ 100 each at a premium of 5%. The total amount of interest on debentures for the year ended 31st March 2023 will be:

1. *₹ 1,20,000
2. ₹ 50,000
3. ₹ 1,00,000
4. ₹ 1,26,000

Class 12 Accountancy MCQs Share Capital

Class 12 Accountancy MCQs Debentures

Case Based Questions in Accountancy Class 12

The post MCQs on Company Accounts Class 12 appeared first on Commerceatease - Website for 11th & 12th Commerce.

Question 1

Atul, Beena and Sita were partners in a firm sharing profits and losses in the ratio of 8 : 7 : 5. Damini was admitted as a new partner for 1/5th share in the profits which she acquired entirely from Atul. The NPSR after Damini's admission will be:

7 : 7 : 5 : 1

*4 : 7 : 5 : 4

8 : 7 : 5 : 4

7 : 5 : 8 : 4

Question  2

Rushil and Abheer were partners in a firm sharing profits and losses in the ratio of 4 : 3. They admitted Sunil as a new partner for 3/7th share in the profits of firm, which he acquired 2/7th share from Rushil and 1/7th share from Abheer. The new profit-sharing ratio of Rushil, Abheer and Sunil will be:

4 : 3 : 3

2 : 1 : 3

*2 : 2 : 3

4 : 3 : 1

Question 3

Abhay, Boris and Chetan were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Boris was guaranteed a profit of ₹95,000. Any deficiency on account of this was to be borne by Abhay and Chetan equally. The firm earned a profit of ₹2,00,000 for the year ended 31st March, 2023. The amount given by Abhay to Boris as guaranteed amount will be:

*₹17,500

₹35,000

₹25,000

₹10,000

Question 4

Aavya, Mitansh and Praveen were partners in a firm. On 31st March, 2023, the firm was dissolved. Creditors took over furniture of book value of ₹ 50,000 at ₹ 45,000 in part settlement of their amount of ₹ 60,000. The balance amount was paid to them through cheque. The amount paid through cheque will be:

₹ 10,000

₹ 50,000

₹ 45,000

*₹ 15,000

Question 5

Piyush, Rajesh and Avinash were partners in a firm sharing profits and losses equally. Shiva was admitted as a new partner for an equal share. Shiva brought his share of capital and premium for goodwill in cash. The premium for goodwill amount will be divided among:

Old partners in old ratio

New partners in new ratio

New partners in sacrificing ratio

*Old partners in sacrificing ratio

MCQs on Partnership Accounting

Question 6

Alex, Benn and Cole were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. They admitted Dona as a new partner for 1/5th share in the future profits. Dona agreed to contribute proportionate capital. On the date of admission, capitals of Alex, Benn and Cole after all adjustments were ₹1,20,000; ₹80,000 and ₹1,00,000 respectively. The amount of capital brought in by Dona will be:

*₹75,000

₹60,000

₹65,000

₹70,000

Question 7

Assertion (A) : Each partner is a principal as well as an agent for all the other partners.

Reason (R) : As per the definition of Partnership Act, partnership business may be carried on by all the partners or any of them acting for all.

Pick the correct option:

Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

*Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

Assertion (A) is correct, but Reason (R) is incorrect.

Assertion (A) is incorrect, but Reason (R) is correct.

Question 8

Abha and Babita were partners in a clay toy making firm sharing profits in the ratio of 2 : 1. On 1st April, 2023, their capital accounts showed balances of ₹5,00,000 and ₹10,00,000 respectively. The partnership deed provides for interest on capital @ 10% p.a. The firm earned a profit of ₹90,000 during the year. The amount of interest on capital allowed to Abha will be:

₹50,000

₹60,000

*₹30,000

₹1,00,000

Question 9

Abha and Babita were partners in a clay toy making firm sharing profits in the ratio of 2 : 1. On 1st April, 2023, their capital accounts showed balances of ₹5,00,000 and ₹10,00,000 respectively. The partnership deed provides for interest on capital @ 10% p.a. The firm earned a profit of ₹90,000 during the year. Babita's share in profit will be:

₹60,000

₹30,000

*Nil

₹1,00,000

Question 10

Mita, Veena and Atul were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Atul retired and his share was taken over by Mita and Veena in the ratio of 1 : 4. The new profit sharing ratio between Mita and Veena after Atul's retirement will be:

3:2

*8:7

7:3

2:3

MCQs on Partnership Accounting

Question 11

Which of the following items cannot be recorded in the capital account of partners if the capital accounts of partners are fixed?

*Drawings

Withdrawal of capital

Introduction of additional capital

Opening balance of capital

Question 12

Ashu and Basu are partners sharing profits and losses in the ratio of 2 : 1. Chetan is admitted as a new partner with 1/4th share in the profits which he acquires equally from Ashu and Basu. The new profit sharing ratio between Ashu, Basu and Chetan will be:

*13 : 5 : 6

13 : 2 : 1

2 : 13 : 5

1 : 1 : 1

Question 13

On 1st January, 2023, Abhishek, a partner, advanced a loan of ₹3,00,000 to the firm. In the absence of a partnership agreement, the amount of interest on the loan for the year ending 31st March, 2023 will be:

₹18,000

*₹4,500

₹9,000

NIl

Question 14

If a partner withdraws a fixed amount at the end of each quarter, interest on drawings will be charged for _____ months.

9

7.5

6

*4.5

Question 15

Bhim, Arjun and Nakul were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. With effect from 1st April, 2023, they agreed to share profits equally. Due to change in the profit sharing ratio, Arjun's sacrifice or gain will be:

Sacrifice 1/30

*Gain 1/30

Sacrifice 1/15

Gain 1/15

MCQs on Partnership Accounting

Question 16

Neeru and Meetu are partners in a firm with capitals of ₹2,00,000 and ₹1,50,000 respectively. If the firm earned a profit of ₹17,500 for the year ended 31st March, 2023, then interest on capital @ 10% p.a. would be:

Neeru ₹ 15,000; Meetu ₹ 20,000

Neeru ₹ 8,750; Meetu ₹ 8,750

Neeru ₹ 20,000; Meetu ₹15,000

*Neeru ₹10,000; Meetu ₹ 7,500

Question 17

At the time of dissolution of a firm, the total assets were ₹6,00,000 and outside liabilities were ₹2,40,000. If assets realised ₹7,20,000 and realisation expenses of ₹ 8,000 were paid, the profit or loss on realisation will be:

Loss ₹1,20,000

Profit ₹ 1,20,000

Loss ₹ 1,12,000

*Profit ₹ 1,12,000

Question 18

Kishore and Bimal are partners in a firm sharing profits and losses in the ratio of 4 : 3. Nand is admitted as a new partner in the firm for 1/4th share in the profits. Kishore and Bimal decide to share profits and losses equally in the future. The sacrificing ratio of Kishore and Bimal will be:

1 : 1

4 : 3

*11 : 3

3 : 11

Question 19

Raju, Sohan and Tina are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Tina is guaranteed a minimum amount of ₹40,000 as share of profit every year. Any deficiency arising on that account shall be borne by Raju. If profit of the firm for the year ended 31st March, 2023 is ₹1,60,000, Raju will bear a deficiency of:

*₹8,000

₹40,000

₹48,000

₹4,000

Question 20

Assertion (A) : The court does not intervene when dissolution of partnership takes place.

Reason (R) : Dissolution of partnership takes place by mutual agreement between the partners.

Choose the correct option from the following:

*Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is incorrect, but Reason (R) is correct.

Assertion (A) is correct, but Reason (R) is incorrect.

MCQs on Partnership Accounting

Question 21

Manas and Ranvir are partners in a firm having capital balances of ₹1,20,000 and ₹ 80,000 respectively. Sanju is admitted as a new partner in the firm for 1/5th share in future profits. Sanju brought ₹1,00,000 as his capital. The goodwill of the firm on Sanju's admission will be:

₹5,00,000

*₹2,00,000

₹3,00,000

₹1,00,000

Question 22

Assertion (A) : In a partnership firm, at the time of admission, the new partner brings in an agreed amount of capital either in cash or in kind.

Reason (R) : In a partnership firm, at the time of admission, the new partner acquires the right to share the assets and the profits of the partnership firm. Choose the correct option from the following:

*Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is incorrect, but Reason (R) is correct.

Assertion (A) is correct, but Reason (R) is incorrect.

Question 23:

Shrikant and Ajay were partners in a firm sharing profits and losses in the ratio of 5 : 3. Shrikant withdrew ₹10,000 in the beginning of each quarter during the year ended 31st March, 2023. Interest on Shrikant’s drawings @ 6% p.a for the year ended 31st March, 2023 will be :

(A) ₹2,400

(B) ₹1,200

*(C) ₹1,500

(D) ₹900

Question 24:

Abha, Manju and Rhea were partners in a firm sharing profits and losses in the ratio of 3 : 3 : 4. During the year ended 31st March, 2023, Rhea withdrew ₹30,000 at the beginning of each half year. Interest on Rhea’s drawings @ 10% p.a. for the year ended 31st March, 2023 will be :

(A) ₹6,000

*(B) ₹4,500

(C) ₹3,000

(D) ₹1,500

Question 25:

Seema and Laksh were partners in a firm sharing profits and losses in the ratio of 2 : 1. Their capitals were ₹2,00,000 and ₹1,80,000 respectively. They admitted Aadi as a new partner on 1st April, 2023 for 1/5th share in future profits. Aadi brought ₹1,50,000 as his share of capital. The goodwill of the firm on Aadi s admission will be :

(A) ₹7,50,000

*(B) ₹2,20,000

(C) ₹3,70,000

(D) ₹1,50,000

MCQs on Partnership Accounting

Question 26:

Lata, Mehu and Namita were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. They decided to dissolve the firm on 31st March, 2023. Creditors took over stock of book value of ₹80,000 at 80%, in part settlement of their amount of ₹90,000. The balance amount was paid to the creditors by cheque. The amount paid by cheque to the creditors will be :

*(A) ₹26,000

(B) ₹64,000

(C) ₹80,000

(D) ₹1,44,000

Question 27:

Sanya, Sarthak and Nitya were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 1. They decided to dissolve the firm on 31st March, 2023. On this date, the firm had debtors amounting to ₹3,00,000 and provision for doubtful debts of ₹30,000. On dissolution, debtors for ₹20,000 proved bad and the remaining debtors realised 90%. Amount realised from the debtors will be :

(A) ₹3,00,000

(B) ₹2,25,000

(C) ₹2,80,000

*(D) ₹2,52,000

Question 28:

Geeta and Hari were partners in a firm sharing profits and losses in the ratio of 3 : 2. Krish was admitted as a new partner for 1/5th share in profits of the firm which he acquired from Geeta and Hari in the ratio of 2 : 3. Krish brought ₹1,00,000 as his share of capital and ₹50,000 as premium for goodwill in cash. The sacrificing ratio of Geeta and Hari will be :

(A) 3 : 2

(B) 1 : 1

*(C) 2 : 3

(D) 13 : 7

MCQs on Partnership Accounting

Question 29:

Manu, Sonu and Rahul were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. With effect from 1st April, 2023, they decided to share profits and losses in the future in the ratio of 3 : 2 : 1. Their Balance Sheet showed Workmen Compensation Reserve of ₹84,000. The claim on account of Workmen Compensation is estimated at ₹75,000. The journal entry to give effect to the above transaction will be :

*(A) Workmen Compensation Reserve A/c Dr 84,000

To Workmen Compensation Claim A/c 75,000

To Manu’s Capital A/c 4,000

To Sonu’s Capital A/c 3,000

To Rahul’s Capital A/c 2,000

(B) Workmen Compensation Reserve A/c Dr 84,000

To Workmen Compensation Claim A/c 75,000

To Manu’s Capital A/c 4,500

To Sonu’s Capital A/c 3,000

To Rahul’sCapital A/c 1,500

(C) Manu’s Capital A/c Dr 500

To Rahul’s Capital A/c 500

(D) Workmen Compensation Reserve A/c Dr 84,000

To Workmen Compensation Claim A/c 75,000

To Manu’s Capital A/c 3,000

To Sonu’s Capital A/c 3,000

To Rahul’s Capital A/c 3,000

Question 30:

Assertion (A) : Partner current accounts under Fixed Capital Method may show a debit or a credit balance.

Reason (R) : In the Fixed Capital , all items like share of profit or loss, interest on capital, drawings, interest on drawings etc. are recorded in the partners capital accounts.

Choose the correct option from the following :

(A) Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

(B) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

*(C) Assertion (A) is correct, but Reason (R) is not correct.

(D) Both Assertion (A) and Reason (R) are not correct.

MCQs on Partnership Accounting

Question 31:

Read the following hypothetical situation and answer questions No. 1 and 2 on the basis of the given information :

Richa, Sheena and Tapti were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. The partnership deed provided for charging interest on drawings @ 10% p.a. The drawings of Richa, Sheena and Tapti during the year ended 31st March, 2023 amounted to ₹50,000, ₹40,000 and ₹30,000 respectively. The net profit for the year ended 31st March, 2023 was ₹57,000.

(a) Sheena’s interest on drawings will be :

(A) ₹5,000

(B) ₹4,000

(C) ₹3,000

*(D) ₹2,000

(b) Tapti’s share of profit will be :

(A) ₹11,500

(B) ₹34,500

*(C) ₹10,500

(D) ₹23,000

Question 32:

Nicku, Mala and Ritu were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Nicku died on 30th September, 2023. The deceased partner was entitled to his share of profit up to the date of death which was to be calculated on the basis of previous year profit. ₹80,000. Nicku s share of profit will be :

(A) ₹10,000

*(B) ₹20,000

(C) ₹30,000

(D) ₹40,000

Question 33:

Nikhil, Arun and Mansi were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 3. With effect from 1st April, 2023, they decided to share profits and losses in the ratio of 5 : 3 : 2. Due to change in the profit s gain or sacrifice will be :

(A) Gain 1/10

(B) Sacrifice 3/10

*(C) Sacrifice 1/10

(D) Gain 3/10

Question 34:

Hema and Tara were partners in a firm sharing profits and losses in the ratio of 2 : 3. They admitted Ojas as a new partner. Hema surrendered 1/3rd of her share and Tara surrendered ½  of her share in favour of Ojas. The new profit sharing ratio of Hema, Tara and Ojas will be :

*(A) 8 : 9 : 13

(B) 3 : 2 : 5

(C) 2 : 3 : 5

(D) 2 : 3 : 25

Question 35:

Aaroh, Bhuvan and Charu were partners in a firm sharing profits and losses in the ratio of 1 : 2 : 6. Charu died. Aaroh and Bhuvan acquired Charu’s share in 2 : 1. The new profit sharing ratio between Aaroh and Bhuvan after Charu’s death would be:

(A) 2 : 1

(B) 1 : 2

*(C) 5 : 4

(D) 4 : 5

MCQs on Partnership Accounting

Question 36:

Renu, Trilok and Mansi were partners in a firm sharing profits and losses in the ratio of 9 : 6 : 5. Hina was admitted as a partner for 1/10th share in the profits which she acquired equally from Renu and Trilok. The new profit sharing ratio after Hina’s admission will be :

(A) 5 : 5 : 2 : 8

(B) 5 : 5 : 8 : 2

(C) 8 : 2 : 5 : 5

*(D) 8 : 5 : 5 : 2

Question 37:

Ashu and Ria were partners in a firm sharing profits and losses in the ratio of 4 : 3. They admitted Nitu for a 3/7th share in the profits of the firm, which she took 2/7th from Ashu and 1/7th from Ria. The new profit sharing ratio between Ashu, Ria and Nitu will be :

(A) 4 : 3 : 3

(B) 2 : 1 : 3

*(C) 2 : 2 : 3

(D) 4 : 3 : 2

Question 38:

Nikhil and Sharat were partners in a firm sharing profits and losses in the ratio of 4 : 3. Nikhil withdrew ₹ 6,000 on the first day of every quarter for the year ended 31st March, 2023. Interest on drawings is to be charged @ 5% p.a. Interest on Nikhil’s drawings will be calculated for :

(A) 6 months

(B) 4.5 months

*(C) 7.5 months

(D) 3 months

Question 39:

Pawan, Kavita and Gaurav were partners in a firm. The firm was dissolved. Creditors took over furniture of book value of ₹ 60,000 at 10% less than the book value in part settlement of their amount of ₹ 60,000. The balance amount was paid to them through cheque. The amount paid through cheque will be :

(A) ₹ 5,000

*(B) ₹ 6,000

(C) ₹ 54,000

(D) Nil

Question 40:

Kamini, Lata and Meera were partners in a firm sharing profits and losses equally. Neel was admitted as a new partner for an equal share in the profits of the firm. Neel brought his share of capital and premium for goodwill in cash. On the date of admission of Neel, goodwill appeared in the books at ₹ 1,20,000. The existing goodwill is to be written off among :

*(A) Old partners in old ratio.

(B) New partners in new ratio.

(C) Sacrificing partners in sacrificing ratio.

(D) Old partners in sacrificing ratio

MCQs on Partnership Accounting

Question 41:

Arjun, Babita and Charlie were partners in a firm sharing profits in the ratio of 2 : 2 : 1. They admitted Dheeraj for 1/5th share in the profits of the firm. He has to contribute proportionate capital to acquire 1/5th share in future profits. On the date of admission, the capitals after all adjustments relating to goodwill and revaluation of assets and liabilities, were : Arjun ₹ 62,000, Babita ₹52,000 and Charlie ₹36,000. The capital brought by Dheeraj will be :

*(A) ₹ 37,500

(B) ₹ 30,000

(C) ₹ 32,500

(D) ₹ 35,000

Question 42:

There are two statements Assertion (A) and Reason (R) :

Assertion (A) : The maximum number of partners in a partnership firm are 50.

Reason (R) : The maximum number of partners are prescribed by the Partnership Act, 1932.

Choose the correct option from the following :

(A) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

(B) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

*(C) Assertion (A) is correct, but Reason (R) is incorrect.

(D) Assertion (A) is incorrect, but Reason (R) is correct.

Question 43:

Read the following hypothetical situation and answer questions (a) and (b) on the basis of the given information :

Daksh and Ekansh are partners in a firm sharing profits and losses in the ratio of 3 : 1. Their capitals were ₹ 1,60,000 and ₹ 1,00,000 respectively. As per partnership deed, they were entitled to interest on capital @ 10% p.a. The firm earned a profit of ₹ 13,000 for the year ended 31st March, 2023.

(a) Daksh’s interest on capital will be :

(A) ₹ 5,000

*(B) ₹ 8,000

(C) ₹ 16,000

(D) ₹ 10,000

(b) Ekansh’s share of profit/loss will be :

*(A) Nil

(B) ₹ 9,750 (Loss)

(C) ₹ 3,250 (Loss)

(D) ₹ 9,750 (Profit)

MCQs on Partnership Accounting

Question 44:

There are two statements Assertion (A) and Reason (R) :

Assertion (A) : Court does not intervene in case of dissolution of partnership.

Reason (R) : Dissolution of partnership takes place by mutual agreement among partners.

Choose the correct option from the following:

(A) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

*(B) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

(C) Assertion (A) is correct, but Reason (R) is incorrect.

(D) Assertion (A) is incorrect, but Reason (R) is correct.

Question 45:

Deepa, Elton and Frank were partners in a firm sharing profits in the ratio of 2 : 2 : 1. With effect from 1st April, 2023 they decided to change their profit sharing ratio as 1 : 2 : 2. There existed a Debit Balance of Profit and Loss Account of ₹50,000 in the books of the firm on the date of change in profit sharing ratio. The partners decided to retain the Debit Balance of Profit and Loss Account in the books. The adjustment entry will be :

*(A) Deepa’s Capital A/c Dr. 10,000

To Frank’s Capital A/c 10,000

(B) Deepa’s Capital A/c Dr. 5,000

To Frank’s Capital A/c 5,000

(C) Frank’s Capital A/c Dr. 10,000

To Deepa’s Capital A/c 10,000

(D) Frank’s Capital A/c Dr. 5,000

To Deepa’s Capital A/c 5,000

MCQs on Partnership Accounting

Question 46:

Som, Pam and Ron were partners in a firm sharing profits in the ratio of 7 : 2 : 1. With effect from 1st April, 2023 they decided to change their profit sharing ratio to 1 : 2 : 7. There existed a Credit Balance in the Profit and Loss Account of ₹ 1,00,000 on the date of change in profit sharing ratio in the books of the firm. The partners decided to retain the Credit Balance in Profit and Loss Account in the books. The adjustment entry will be :

(A) Ron’s Capital A/c Dr. 20,000

To Som’s Capital A/c 20,000

*(B) Ron’s Capital A/c Dr. 60,000

To Som’s Capital A/c 60,000

(C) Som’s Capital A/c Dr. 20,000

To Ron’s Capital A/c 20,000

(D) Som’s Capital A/c Dr. 60,000

To Ron’s Capital A/c 60,000

Question 47:

Anu, Bina and Roy were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Roy retired and his share was acquired by Anu. The new profit sharing ratio between Anu and Bina after Roy’s retirement will be :

(A) 3 : 2

(B) 3 : 1

(C) 1 : 1

*(D) 2 : 1

Question 48:

Asha, Yug and Zubin were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. Zubin retired. Zubin’s share was acquired equally by Asha and Yug. The new profit sharing ratio between Asha and Yug after Zubin’s retirement was :

(A) 3 : 2

*(B) 5 : 4

(C) 4 : 3

(D) 2 : 1

Class 12 Accountancy MCQs Partnership Basic Concepts

Class 12 Accountancy MCQs Valuation of Goodwill

Class 12 Accountancy MCQs Reconstitution of Partnership Firm

Class 12 Accountancy MCQs Admission of Partner

Class 12 Accountancy MCQs Retirement of Partner

Class 12 Accountancy MCQs Death of Partner

Class 12 Accountancy MCQs Dissolution of Partnership Firm

Case Based Questions in Accountancy Class 12

The post MCQs on Partnership Accounting Class 12 appeared first on Commerceatease - Website for 11th & 12th Commerce.

Questions are given here that are based on examination for practice by the students to prepare for final exams to score high.

1. Decrease in Bank Overdraft is shown under which heading in a Cash Flow Statement?

a) Operating

b) Financing

c) Investing

d) Cash and Cash Equivalent

2. Which of the following transactions would result in inflow of cash:

a) Cash withdrawn from Bank for office use.

b) Purchase of machinery worth ₹ 2,00,000 and issued shares in consideration thereof.

c) Sale of furniture for ₹ 3,000 to Mr. Mohan.

d) Cash received from Debtors ₹ 6,000.

3. CAE Ltd. earned profit of ₹1,00,000 after charging depreciation of ₹20,000 on assets and transfer to General Reserve of ₹30,000. Goodwill amortised was ₹7,000 and gain on sale of machinery was ₹3,000. Additional Information: Changes notes at the end of the year, Trade Receivables- increase ₹3,000, Trade Payables - increase ₹6,000, Prepaid Expenses - increase ₹200 and Outstanding Expenses - decrease ₹2,000. Cash Flow from Operating Activities will be:

a) ₹1,50,000

b) ₹1,54,800

c) ₹1,52,600

d) ₹1,60,200

4. Which of the following equations is correct:

a) Cost of Revenue from Operations = Revenue from Operations + Gross Profit

b) Cost of Revenue from Operations = Opening Inventory Net Purchases + Direct Expenses - Closing Inventory

c) Cost of Revenue from Operations = Opening Inventory + Closing Inventory

d) Cost of Revenue from Operations = Revenue from Operations - Gross Profit

5. Decrease in Bank Overdraft is shown under which heading in a Cash Flow Statement?

a) Operating

b) Financing

c) Investing

d) Cash and Cash Equivalent

6. Which of the following transaction does not result in Inflow or outflow of cash and cash Equivalents?

a) Collection of cash from trade receivables

b) Payment to trade payables

c) Cash received on maturity of marketable securities

d) Payment to employees

7. Read the following information:

31st March 2023               31st March 2024

Equipment (Cost)                                           ₹ 20,00,000                       ₹ 30,00,000

Accumulated Depreciation                           ₹ 4,80,000                         ₹ 5,90,000

During the year equipment worth ₹ 2,00,000 was sold for ₹ 1,10,000. Depreciation charged during the year was ₹ 1,50,000. Determine the amount to be shown under non-cash and non-operating expenses while preparing cash flow statement.

a) ₹ 1,50,000

b) ₹ 2,00,000

c) ₹ 2,40,000

d) ₹ 50,000

8. Assertion - Purchase of Fixed Assets is classified as Investing Activity in case of all enterprises. Reason - Payment of Dividend on shares is classified as Financing Activity in case of all enterprises. In the context of these two statements, which of the following is correct:

a) Assertion is correct but Reason is wrong

b) Both Assertion and Reason are correct, but Reason is not the correct explanation of Assertion

c) Both Assertion and Reason are incorrect

d) Both Assertion and Reason are correct and Reason is the correct explanation of Assertion

9. Which of the following is not correct:

a) Operating Profit = Revenue from Operations - Operating Cost

b) Operating Profit = Net Profit + Non-operating Expenses-Non-Operating Income

c) Operating Profit = Gross Profit Other Operating Expenses + Other Operating Income

d) Operating Profit = Revenue from Operations-Cost of Revenue from Operations

10. For Cash Flow Statement, Bank Overdraft and cash credit are to be treated as:

a) Cash Equivalents

b) Non-Current Liabilities

c) Investing Activity

d) Short Term Borrowings

Class 12 Accountancy MCQs Cash Flow Statement

11. Which of the following transaction does not result in Inflow or outflow of cash and cash Equivalents?

a) Collection of cash from trade receivables

b) Payment to trade payables

c) Cash received on maturity of marketable securities

d) Payment to employees

12. While preparing cash flow statement, will ‘Cash withdrawn from bank’ result into inflow, outflow or no flow of cash? Give reason in support of your answer.

a) Inflow of cash

b) Outflow of cash

c) No Flow of cash

13. Interest received in cash from loans and advance is considered as _____ activity while preparing cash flow statement.

a) Operating activity

b) Investing activity

c) Financing activity

14. While preparing Cash Flow Statement, write the sequence of treatment of following items:

1. Payment of Premium on Redemption of Preference Shares.
2. Transfer to General Reserve
3. Depreciation on Machinery.

a) 2,3,1

b) 1,2,3

c) 2,1,3

d) 3,1,2

15. Statement I - Sale of Marketable Securities will result in no flow of Cash.

Statement II - Debentures issued as collateral security will result in inflow of cash:

a) Both Statements are correct

b) Both Statements are incorrect

c) Statement I is correct and Statement II is incorrect

d) Statement I is incorrect and Statement I is correct

16. What will be the effect of issue of Bonus shares on Cash Flow Statement:

a) No effect

b) Inflow in Financing Activity

c) Inflow in Operating activity

d) Inflow in Investing Activity

17. CTE Ltd. provides you that there’s 10% Bank Loan, on 31.3.2024 - Nil and on 31.3.2023 - ₹1,00,000. Additional Information: Equity Share Capital raised during the year ₹3,00,000. 10% Bank Loan was repaid on 01.04.2023. Dividend received during the year was ₹20,000. Dividend Proposed for the year 2022-23 was ₹50,000 but only ₹20,000 was approved by the Shareholders. Find out the cash flow from Financing Activities:

a) ₹ 1,50,000

b) ₹ 2,00,000

c) ₹ 1,70,000

d) ₹ 1,80,000

18. A company received insurance claim of 7,50,000 for repairing the building which was damaged due to earthquake. Expenses on repairing the building was 6,50,000. Balance ₹ 1,00,000 was shown as Other Income in the Statement of Profit & Loss. It will be shown in the Cash Flow Statement as follows:

a) Added to Net Profit before Tax and Extraordinary item under Cash Flow from Operating Activities and Outflow under Investing Activities.

b) Deducted from Net Profit before Tax and Extraordinary item under Cash Flow from Operating Activities and Inflow under Investing Activities.

c) Deducted from Net Profit before Tax and Extraordinary item under Cash Flow from Operating Activities and Inflow under Investing Activities as Extraordinary Item.

d) no adjustment will be made.

19. From the following information calculate cash from sale of machinery:

31^st March 2024                 31^st March 2023

Machinery                      ₹ 5,00,000          ₹ 3,00,000

Additional information:

Depreciation for the year ended 31^st March 2024 ₹ 80,000

Purchase of Machinery during the year ₹ 4,00,000

Part of machinery was sold at a profit of ₹ 50,000

a) ₹ 2,00,000

b) ₹ 2,50,000

c) ₹ 3,00,000

d) ₹ 3,50,000

20. Which of the following will result in flow of cash?

a) Cash withdrawn from the bank ₹60,000

b) ₹1,00,000, 9% debentures issued to vendors of machinery

c) ₹35,000 received from debtors

d) Cheques of ₹ 40.000 deposited in the bank

Class 12 Accountancy MCQs Cash Flow Statement

21. An investment normally qualifies as cash equivalent only when it has a Short maturity, of………..from the date of acquisition.

a) Three months or more

b) Six months or less

c) One year or less

d) Three months or less

22. Which of the following is not an Investing activity?

a) Purchase of marketable securities for ₹20,000 cash.

b) Sale of building for ₹80,000 cash.

c) Sale of 500 shares (held as investment) for ₹55 each.

d) Purchase of Machinery for ₹5,00,000 cash.

23. Which of the following activities are operating activities for the purpose of preparing 'Cash Flow Statement'?

(i) Dividend and Interest received on securities.

(ii) Payment of employee benefits expenses.

(iii) Cash receipts from royalties and fees.

(iv) Issue of shares against purchase of machinery.

a) (i), (ii) and (iii)

b) (ii), (iii) and (iv)

c) (i), (ii) and (iv)

d) (ii) and (iii)

24. Statement I: - Sale of Marketable Securities will result in no flow of Cash.

Statement II: - Debentures issued as collateral security will result in inflow of cash.

a) Both Statements are correct.

b) Both Statements are incorrect.

c) Statement I is correct and Statement II is incorrect.

d) Statement I is incorrect and Statement I is correct.

25. Insurance Claim received by BT. Ltd. of ₹ 5,00,000 for Loss of Machinery due to theft will be recorded in Cash Flow Statement in which of the following manner?

a) Added under Operating Activities as Extraordinary Item and Subtracted from Operating Activities also.

b) Subtracted under Operating Activities as Extraordinary Item and Added to Operating Activities also.

c) Subtracted under Operating Activities as Extraordinary Item and Inflow under Investing Activities also.

d) Added under Operating Activities as Extraordinary Item and Outflow under Investing Activity also.

26. If the amount of goodwill is ₹ 40,000 at the beginning of a year and ₹ 48,000 at the end of that year then while preparing cash flow statement its effect on cash flow will be:

a) Cash received from operating activities

b) Cash used (payment) in investing activities

c) Cash used (payment) from operating activities

d) Cash used (payment) from financial activities

27. If a machine whose original cost is ₹ 60,000 having accumulated depreciation ₹ 22,000, were sold for ₹ 40,000 then while preparing cash flow statement its effect on cash flow will be:

a) Cash flow from financing activities ₹ 40,000

b) Cash flow from financing activities ₹ 38,0000

c) Cash flow from investing activities ₹ 40,000

d) Cash flow from investing activities ₹38,000

28. ST Ltd. purchased furniture for ₹ 2,00,000 paying 60% by issue of equity shares of ₹ 10 each and the balance by a cheque. This transaction will result in:

a) Cash used in investing activities ₹ 2,00,000.

b) Cash generated from financing activities ₹ 1,20,000.

c) Increase in cash and cash equivalents ₹ 80,000.

d) Cash used in investing activities ₹ 80,000.

More questions will be added from time to time...

Class 12 Accountancy MCQs Cash Flow Statement - Answers

1. b) Financing
2. d) Cash received from Debtors ₹ 6,000.
3. b) ₹1,54,800
4. d) Cost of Revenue from Operations = Revenue from Operations - Gross Profit
5. b) Financing
6. c) Cash received on maturity of marketable securities
7. c) ₹ 2,40,000
8. b) Both Assertion and Reason are correct, but Reason is not the correct explanation of Assertion
9. d) Operating Profit = Revenue from Operations-Cost of Revenue from Operations
10. d) Short Term Borrowings
11. c) Cash received on maturity of marketable securities
12. c) No Flow of cash
13. b) Investing activity
14. a) 2,3,1
15. c) Statement I is correct and Statement II is incorrect
16. a) No effect
17. d) ₹ 1,80,000
18. c) Deducted from Net Profit before Tax and Extraordinary item under Cash Flow from Operating Activities and Inflow under Investing Activities as Extraordinary Item.
19. a) ₹ 2,00,000
20. c) ₹35,000 received from debtors
21. d) Three months or less
22. a) Purchase of marketable securities for ₹20,000 cash.
23. d) (ii) and (iii)
24. c) Statement I is correct and Statement II is incorrect.
25. c) Subtracted under Operating Activities as Extraordinary Item and Inflow under Investing Activities also.
26. b) Cash used (payment) in investing activities
27. c) Cash flow from investing activities ₹ 40,000
28. d) Cash used in investing activities ₹ 80,000.

Class 12 Accountancy MCQs Ratio Analysis

Learning Games and Activities in Accountancy – Class 12

MCQs on Analysis of Financial Statements

The post Class 12 Accountancy MCQs Cash Flow Statement appeared first on Commerceatease - Website for 11th & 12th Commerce.

Class 12 Accountancy MCQs Ratio Analysis

1. Two basic measures of liquidity are:

a) Inventory turnover and Current ratio

b) Current ratio and Quick ratio

c) Gross Profit ratio and Operating ratio

d) Current ratio and average Collection period

2. A Company’s liquid assets are ₹4,00,000 and its current liabilities are ₹2,00,000. Thereafter, it paid ₹1,00,000 to its trade payables. Quick ratio will be:

a) 33:1

b) 5:1

c) 67:1

d) 3:1

3. Fixed Assets ₹5,00,000, Current Assets ₹3,00,000, Equity Share Capital ₹4,00,000, Reserve ₹2,00,000, Long –term debts ₹40,000. Proprietory Ratio will be:

a) 75%

b) 80%

c) 125%

d) 133%

4. Equity Share Capital ₹20,00,000, Reserves ₹5,00,000, Debentures ₹10,00,000, Current Liabilities ₹8,00,000. Debt-equity ratio will be:

a) 0.4 : 1

b) 0.32 : 1

c) 0.72 : 1

d) 0.5 : 1

5. Total revenue from operations ₹9,00,000, Cash revenue from operations ₹3,00,000, Debtors ₹1,00,000, Bills Receivable ₹20,000. Trade Receivables Turnover Ratio will be:

a) 5 Times

b) 6 Times

c) 5 Times

d) 9 Times

6. Opening Inventory ₹75,000, Closing Inventory ₹1,25,000, Purchases ₹6,00,000, Carriage ₹25,000, Wages ₹2,00,000. Inventory Turnover Ratio will be:

a) 6.6 Times

b) 7.4 Times

c) 7 Times

d) 7.75 Times

7. A firm’s Credit Revenue from Operations is ₹3,60,000, Cash Revenue from Operations is ₹90,000. Cost of Revenue from Operations is ₹3,60,000. Its Gross Profit Ratio will be:

a) 11%

b) 15%

c) 18%

d) 20%

8. Revenue from Operations ₹8,00,000, Gross Profit 20%, Office Expenses ₹60,000, Selling Expenses ₹40,000. Calculate operating ratio.

a) 80%

b) 85%

c) 92.5%

d) 96.33%

9. The gross profit ratio of a company is 50%. State with reason whether the decrease in rent received by ₹15,000 will……. the ratio.

a) increase

b) decrease

c) not change

10. What will be the impact of issuing ₹5, 00,000 equity shares to vendor for building purchased on the debt and equity of a company?

a) Debt will increase and equity will decrease.

b) Debt will remain same and equity will increase.

c) Debt will decrease and equity will decrease.

d) Debt will remain same and equity will increase.

Class 12 Accountancy MCQs Ratio Analysis

11. Assertion - Ratio analysis is a process of determining and interpreting relationships between the items of financial statements to provide meaningful understanding of the performance and financial position of an enterprise.

Reason - It is a technique of analyzing the financial statements by computing the various ratios.

a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.

b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion.

c) Assertion is true, but Reason is false

d) Assertion is false, but Reason is true.

12. Assertion - Accounting Ratio can be used to know the strong and weak points of business.

Reason - Ratio Analysis is a technique of Analysis of Financial Statement

a) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion.

b) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.

c) Assertion is true, but Reason is false

d) Assertion is false, but Reason is true.

13. Which one of the following is correct?

(i) Quick Ratio can be more than Current Ratio.

(ii) High Inventory Turnover ratio is good for the organisation, except when goods are bought in small lots or sold quickly at low margins to realise cash.

(iii) Sum of Operating Ratio and Operating Profit ratio is always 100%.

a) All are correct.

b) Only (i) and (iii) are correct.

c) Only (ii) and (iii) are correct.

d) Only (i) and (ii) are correct

14. Which of the following is not a Solvency Ratio?

a) Interest Coverage Ratio

b) Return on Investment

c) Debt to Capital Employed Ratio

d) Total Assets to Debt Ratio

15. Revenue from Operations ₹6,00,000; Gross Profit 25% on Cost. Gross Profit Ratio will be:

a) 15%

b) 25%

c) 20%

d) 30%

16. Debt-Equity Ratio of CAE Ltd. is 2,1. Which of the following would decrease the ratio:

a) Purchase of Fixed Asset on a credit of 2 months

b) Purchase of Fixed Asset on a long-term deferred payment basis

c) Issue of New Shares for Cash

d) Issue of Bonus Shares

17. Inventory Turnover Ratio of a company is 5 times. Which of the following transactions will decrease this ratio:

a) Purchase of Stock-in-Trade ₹50,000

b) Purchase Returns ₹20,000

c) Revenue from Operations on sale of Stock-in-Trade costing ₹20,000 for ₹25,000

d) Stock-in-Trade costing ₹10,000 distributed as free samples

18. Current ratio of a Ltd. Company is 3:2. Accountant wants to maintain it at 2:1. Following options are available.

(i) He can repay Bills Payable

(ii) He can purchase goods on credit

(iii) He can take short term loan

Choose the correct option:

a) Only (i) is correct

b) Only (ii) is correct

c) Only (i) and (iii) are correct

d) Only (ii) and (iii) are correct

19. ............ is included in current assets while preparing balance sheet as per revised Schedule III but excluded from current assets while calculating Current Ratio:

a) Debtors

b) Cash and Cash Equivalent

c) Loose tools and Stores and spares

d) Prepaid Expense

20. Debt-Equity Ratio of PTD Ltd is 3 is to 1. Which of the following will result in decrease in this ratio:

a) Issue of Debentures for Cash of ₹2,00,000

b) Issue of Debentures of ₹3,00,000 to Vendors from whom Machinery was purchased

c) Goods purchased on Credit of ₹1,00,000

d) Issue of Equity Shares of ₹2,00,000

Class 12 Accountancy MCQs Ratio Analysis

21. Which one of the following is correct?

(i) Aggregate of shareholders' funds and long term debt is known as capital employed.

(ii) The main objective of computing operating profit ratio is to determine the operational efficiency of the management.

(iii) Operating ratio = 100 - Operating profit ratio.

(iv) While calculating Trade Receivables Turnover Ratio, 'Provision for Doubtful Debts' is deducted from the total amount of Trade Receivables.

a) All are Correct

b) All are incorrect

c) Only (i) and (iii) are correct

d) Except (iv) all are correct.

22. Which of the following equations is correct :

a) Cost of Revenue from Operations = Revenue from Operations + Gross Profit

b) Cost of Revenue from Operations = Opening Inventory Net Purchases + Direct Expenses - Closing Inventory

c) Cost of Revenue from Operations = Opening Inventory + Closing Inventory

d) Cost of Revenue from Operations = Revenue from Operations - Gross Profit

More questions will be added from time to time...

Class 12 Accountancy MCQs Ratio Analysis - Answers

1. b) Current ratio and Quick ratio
2. d) 3:1
3. a) 75%
4. a) 0.4 : 1
5. a) 5 Times
6. d) 7.75 Times
7. d) 20%
8. c) 92.5%
9. c) not change
10. b) Debt will remain same and equity will increase.
11. a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
12. b) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
13. c) Only (ii) and (iii) are correct.
14. b) Return on Investment
15. c) 20%
16. c) Issue of New Shares for Cash
17. a) Purchase of Stock-in-Trade ₹50,000
18. a) Only (i) is correct
19. c) Loose tools and Stores and spares
20. d) Issue of Equity Shares of ₹2,00,000
21. d) Except (iv) all are correct.
22. d) Cost of Revenue from Operations = Revenue from Operations - Gross Profit

Class 12 Accountancy MCQs Comparative Statements

Class 12 Accountancy MCQs Cash Flow Statement

Learning Games and Activities in Business Studies Class 12

MCQs on Analysis of Financial Statements

The post Class 12 Accountancy MCQs Ratio Analysis appeared first on Commerceatease - Website for 11th & 12th Commerce.

All these MCQs are based on Examination for the practice by the students to prepare for final exams.

1. Comparative statements are also known as:

a) Dynamic analysis

b) Horizontal analysis

c) Vertical analysis

d) External analysis

2. Common size analysis is also known as ………. Analysis:

a) Dynamic analysis

b) Horizontal analysis

c) Vertical analysis

d) External analysis

3. Fixed assets of a company increased from ₹10,00,000 to ₹12, 00,000. The percentage change is

a) 20%

b) 33.3%

c) 25%

d) 40%

4. Which statement compares the assets and liabilities of a current year with that of previous year

a) Common size balance sheet

b) Comparative balance sheet

c) Common size income statement

d) Comparative statement of profit and loss

5. Which of the following depicts the operating result of more than one accounting period so that changes in absolute amount as well as in terms of percentage may be known.

a) Common size balance sheet

b) Comparative balance sheet

c) Common size income statement

d) Comparative statement of profit and loss

6. While preparing common- size income statement, each item of income statement is expressed as percentage of

a) Revenue from operations

b) Net Revenue from Operations

c) Total income

d) Profit before tax.

7. Assertion - Comparative balance sheet is horizontal analysis of balance sheet.

Reason - In Comparative balance sheet each item of Assets and liabilities is analysed vertically for two or more accounting periods

In the context of above two statements, which of the following is correct?

a) Assertion and Reason are correct but the Reason is not the correct explanation of Assertion

b) Both Assertion and reason are correct and the Reason is the correct explanation of Assertion.

c) Assertion is correct but Reason is not the correct.

d) Both Assertion and Reason are incorrect.

8. If Current year Revenue from Operations is ₹7,00,000 and percentage increase depicted by Comparative Statement of Profit and Loss is 40%, the amount of Revenue from Operations of the previous year was:

a) ₹6,00,000

b) ₹5,00,000

c) ₹8,00,000

d) ₹4,20,000

9. Which of the following statements are false?

A - Vertical Analysis is conducted for one accounting period.

B - Horizontal Analysis is useful in cross-sectional analysis.

C - Comparative Statements ignore qualitative factors.

a) Both A and B

b) Both A and C

c) Both B and C

d) All three A, B and C

10. Common Size Statement always needs statements of two consecutive years:

a) True

b) False

c) Sometimes

d) Never

More questions will be added from time to time.

Class 12 Accountancy MCQs Comparative Statements - Answers

1. b) Horizontal analysis
2. c) Vertical analysis
3. a) 20%
4. b) Comparative balance sheet
5. d) Comparative statement of profit and loss
6. b) Net Revenue from Operations
7. c) Assertion is correct but Reason is not the correct.
8. b) ₹5,00,000
9. a) Both A and B
10. b) False

Class 12 Accountancy MCQs Financial Statements Analysis

Class 12 Accountancy MCQs Ratio Analysis

Learning Games and Activities in Accountancy – Class 12

MCQs on Analysis of Financial Statements

The post Class 12 Accountancy MCQs Comparative Statements appeared first on Commerceatease - Website for 11th & 12th Commerce.

All questions are based on examination for practice by the students to prepare for final exams. Note your speed and accuracy to score high in board exam.

Financial Statements and Financial Analysis MCQs

1. In the balance sheet of a company, preliminary expenses are shown under:

a) Shareholders Fund

b) Non –current Liabilities

c) Current Liabilities

d) None of the above

2. ‘Freedom to Choose method of depreciation’ refers to which limitation of financial statement analysis.

a) Historical analysis

b) Qualitative aspect ignored.

c) Not free from bias.

d) Ignore Price level Changes.

3. Which of the following is not an objective of Analysis of financial statements?

a) To judge the financial health of the firm

b) To judge the short term and long-term liquidity position of the firm

c) To judge the reason for change in the profitability of the firm

d) To judge the variations in the accounting practices of the business followed by different enterprises

4. Financial statements are prepared on certain basic assumptions like:

a) Postulates

b) Provision of Companies Act, 2013

c) Accounting Standards

d) Basis of Accounting

5. Bank overdraft and Cash Credit are shown under which head in the company's Balance Sheet:

a) Current Assets

b) Non-current Liabilities

c) Short-term Borrowings

d) Cash Equivalents

6. Which of the following objective of Financial Analysis indicates the efficiency with which Resources are utilised in generating revenue:

a) To determine Liquidity

b) To determine Long-term Solvency

c) To determine Profitability

d) To determine Operating Efficiency

7. Which of the following is not a limitation of analysis of financial statements?

a) Price level changes ignored

b) Subjectivity

c) Intra firm comparison possible

d) Window Dressing

8. A statement of Assets (Current and Non-Current), Liabilities (Current and Non- current) and Equity indicating the financial position of an enterprise at a given date is known as:

a) Income Statement

b) Balance Sheet

c) Cash Flow Statement

d) Funds Flow Statement

9. Which analysis is considered as dynamic?

a) Horizontal Analysis

b) Vertical Analysis

c) Internal Analysis

d) External Analysis

10. Which Analysis is based on one year’s data?

a) Horizontal Analysis

b) Vertical Analysis

c) Cash Flow Statement

d) Dividend Analysis

Class 12 Accountancy MCQs Financial Statements Analysis

11. Which of the following is tool of financial analysis?

a) Comparative statement

b) Common size statements

c) Cash flow statement

d) All of these

12. Assertion - Financial statement analysis is Undertaker by investors, landers and creditors for assessing the safety of the amount invested in the company.

Reason - investors, landers and creditors Undertaker the financial statement analysis because they have invested their money in the company and have either indirect control or no control on the affair of the company.

In the context of above two statements which of the following is correct?

a) Assertion and reason are correct but the reason is not the correct explanation of Assertion

b) Both Assertion and reason are correct and the reason is the correct explanation of Assertion.

c) Only Assertion is correct.

d) Assertion is not correct but the reason is the correct.

More questions will be added from time to time...

Class 12 Accountancy MCQs Financial Statements Analysis - Answers

1. d) None of the above
2. c) Not free from bias.
3. d) To judge the variations in the accounting practices of the business followed by different enterprises
4. a) Postulates
5. c) Short-term Borrowings
6. d) To determine Operating Efficiency
7. c) Intra firm comparison possible
8. b) Balance Sheet
9. a) Horizontal Analysis
10. b) vertical Analysis
11. d) All of these
12. b) Both Assertion and reason are correct and the reason is the correct explanation of Assertion

Class 12 Accountancy MCQs Debentures

Class 12 Accountancy MCQs Comparative Statements

Learning Games and Activities in Accountancy – Class 12

MCQs on Analysis of Financial Statements

The post Class 12 Accountancy MCQs Financial Statements Analysis appeared first on Commerceatease - Website for 11th & 12th Commerce.

The questions given here for practice by the students, are based on actual examination. Students must do these after preparing the chapter to have an accurate idea of their preparation.

1. Sunflower Ltd. took up a loan from a SBI and issued its 8% Debentures as Collateral Security. The SBI:

a) will be entitled to interest on such debentures.

b) will be entitled to interest on primary security.

c) will not be entitled to interest on such debentures.

d) will not be entitled to interest on loan taken up from the bank.

2. City Ltd. purchased machinery from CT Ltd. for ₹8,00,000. The consideration was paid by issue of 9% Debentures of ₹1,000 each at a discount of 20%. The 9% Debentures account is credited with:

a) ₹10,40,000

b) ₹10,00,000

c) ₹9,60,000

d) ₹6,40,000

3. Tinky Ltd. took over assets of ₹12,00,000 and liabilities of ₹ 4,00,000 of Minky Ltd. for an agreed purchase consideration of ₹9,00,000. The amount was payable by issue of 12% debentures of ₹100 each at 10% discount. The number of debentures issued will be:

a) 9,000

b) 8,000

c) 10,000

d) 11,000

4. When debentures are issued at par and redeemable and premium the loss on such an issue is debited to:

a) profit and loss account

b) debenture application and allotment account

c) loss on issue of debentures account

d) discount on issue of debentures account

5. Premium received on issue of debentures may be utilised for writing off:

a) premium allowed on redemption of debentures

b) writing off preliminary expenses

c) writing off discount allowed on issue of shares

d) all of the above

6. Which of the following statements is incorrect?

a) Interest on debentures is a charge and not an appropriation.

b) Debenture holders do not have voting rights.

c) Debentures cannot be converted into shares.

d) Debentures can be issued at discount.

Read the following hypothetical situation and answer questions number 7. and 8. on the basis of given information.

On 1st April, 2022, Shruti Ltd. issued 5000, 9% Debentures of ₹ 100 each at 5% premium, redeemable at a premium of 10% after 3 years.

7. The total interest due on debentures for the year ending 31st March, 2023 will be:

a) ₹25,000

b) ₹40,000

c) ₹50,000

d) ₹75,000

8. Loss on Issue of Debentures Account should be debited by which of the following amount?

a) ₹50,000

b) ₹40,000

c) ₹75,000

d) ₹25,000

9. Which of the following statements is correct about debentures:

a) New Debentures can be issued at par/premium but not at discount

b) Debenture interest is calculated on issue price

c) Interest is not paid on Debentures issued as Collateral Security

d) Interest on debentures is an appropriation of profits

10. A machine was purchased by Shagun Ltd. for ₹11,00,000 from Moon. Shagun Ltd. issued 8% Debentures of ₹50 each against purchase consideration at a premium of 10%. 8% Debentures Account is credited by:

a) ₹10,00,000

b) ₹12,10,000

c) ₹11,00,000

d) ₹11,90,000

Class 12 Accountancy MCQs Debentures

11. CAE Ltd. took over assets of ₹3,00,000 and liabilities of ₹10,000 of ACE Ltd. for ₹2,70,000 payable by issue of 9% Debentures of ₹100 each at 20% premium. Which of the following statements is correct:

a) Capital Reserve is to be debited with ₹20,000

b) Capital Reserve is to be credited with ₹20,000

c) Goodwill Account is to be debited with ₹20,000

d) Goodwill Account is to be credited with ₹20,000

12. PT Ltd. purchased business of KT Ltd. for ₹9,60,000 payable 25% by cheque and balance by issue of 8% Debentures of ₹100 each at a discount of 4% redeemable at a premium of 6%. 8% Debentures Account is credited with:

a) ₹9,60,000

b) ₹7,20,000

c) ₹10,00,000

d) ₹7,50,000

13. CAE Ltd. had allotted 10,000, 9% Debentures of ₹100 each to the applicants of 14000, 9% Debentures on pro rata basis. Application money payable was ₹20 per Debenture. Twinkle had applied for 420 debentures. The number of debentures allotted and the excess application money adjusted against allotment money due from Twinkle are:

a) 60 Debentures, ₹1,200

b) 300 Debentures, ₹2,400

c) 320 Debentures, ₹2,000

d) 340 Debentures, ₹1,000

14. On 1st April 2023, Mala ltd. had a balance of ₹8,00,000 in Securities Premium account. During the year company issued 20,000 Equity shares of ₹10 each as bonus shares and used the balance amount to write off Loss on issue of Debenture on account of issue of 2,00,000, 9% Debentures of ₹100 each at a discount of 10% redeemable @ 5% Premium. The amount to be charged to Statement of P&L for the year for Loss on issue of Debentures would be:

a) ₹30,00,000

b) ₹24,00,00o

c) ₹2,200,000

d) ₹20,00,000

15. Ankita Ltd. purchased building from Shagun Ltd. for ₹8,00,000. The consideration was paid by issue of 8% debentures of ₹100 each at a discount of 20%. The 8% Debentures account is credited with:

a) ₹10,00,000

b) ₹10,40,000

c) ₹9,60,000

d) ₹6,40,000

16. Which of the following statements is incorrect about debentures:

a) Debenture holders are the creditors of a company

b) Debentures can be issued to vendors at discount

c) Interest on debentures is an appropriation of profits

d) Interest is not paid on Debentures issued as Collateral Security

17. Assertion - Debentures saves income tax.

Reason - Interest on debenture is tax deductible expenditure.

a) Both Assertion and Reason are true, Reason is the correct explanation of Assertion

b) Assertion is correct but Reason is incorrect

c) Assertion is incorrect but Reason is correct

d) Both Assertion and Reason incorrect.

18. Assertion - Balance in debentures Interest Account is transferred to Statement of Profit & Loss at the end of the year

Reason - Interest on Debenture is charge against profit

a) Assertion is correct but Reason is incorrect

b) Assertion is incorrect but Reason is correct

c) Both Assertion and Reason are incorrect.

d) Both Assertion and Reason are correct, Reason is the correct explanation of Assertion

More questions will be added from time to time...

Class 12 Accountancy MCQs Debentures - Answers

1. c) will not be entitled to interest on such debentures.
2. b) ₹10,00,000
3. c) 10,000
4. c) loss on issue of debentures account
5. d) all of the above
6. c) Debentures cannot be converted into shares.
7. b) ₹40,000
8. a) ₹50,000
9. c) Interest is not paid on Debentures issued as Collateral Security
10. a) ₹10,00,000
11. b) Capital Reserve is to be credited with ₹20,000
12. d) ₹7,50,000
13. b) 300 Debentures, ₹2,400
14. b) ₹24,00,000
15. a) ₹10,00,000
16. c) Interest on debentures is an appropriation of profits
17. a) Both Assertion and Reason are true, Reason is the correct explanation of Assertion
18. d) Both Assertion and Reason are correct, Reason is the correct explanation of Assertion

Class 12 Accountancy MCQs Share Capital

MCQs on Company Accounts Class 12

Class 12 Accountancy MCQs Financial Statements Analysis

Learning Games and Activities in Accountancy – Class 12

The post Class 12 Accountancy MCQs Debentures appeared first on Commerceatease - Website for 11th & 12th Commerce.

Here are a large number of MCQs for practice to prepare for final exams. Note time taken and the accuracy of your work to score high in final exam.

1. Preference shareholders have:

a) Preferential right as to dividend only

b) Preferential right in the management

c) Preferential right as to repayment of capital at the time of liquidation of the company

d) Preferential right as to dividend and repayment of capital at the time of liquidation of the Company

2. Capital included in the Total of Balance Sheet of a Company is called:

a) Issued Capital

b) Subscribed Capital

c) Called up Capital

d) Authorised Capital

3. Which of the following statements is true:

a) Authorised Capital = Issued Capital

b) Authorised Capital > Issued Capital

c) Paid up Capital > Issued Capital

d) None of the above

4. A company cannot issue:

a) Redeemable Equity Shares

b) Redeemable Preference Shares

c) Redeemable Debentures

d) Fully Convertible Debentures

5. Shares issued by a company to its employees or directors in consideration of ‘Intellectual Property Rights’ are called:

a) Right Equity Shares

b) Private Equity Shares

c) Sweat Equity Shares

d) Bonus Equity Shares

6. Minimum subscription amount of 90% is related to which share capital:

a) Authorised Capital

b) Issued Capital

c) Paid up Capital

d) Reserve Capital

7. Share Application Account is in the nature of:

a) Real Account

b) Personal Account

c) Nominal Account

d) None of the above

8. As per SEBI Guidelines, Application money should not be less than ……………. of the issue price of each share:

a) 10%

b) 15%

c) 25%

d) 50%

9. 2,000 Equity Shares of ₹10 each were issued at 5% premium to the promoters of a company for their services. Which account will be debited:

a) Share Capital Account

b) Goodwill Account/Incorporation Cost Account

c) Securities Premium Reserve Account

d) Cash Account

10. Assertion - Under Section 62(1)(b) of the Companies Act, 2013, a Company may offer shares to its employees under a scheme of ‘Employees Stock Option’ which means the option (right) given to the whole-time directors, officers or permanent employees of a company to purchase or subscribe the securities offered by the company at a future date, at a pre-determined price, which is lower than the market price.

Reason - The company need not to pass a special resolution to this effect.

Alternatives:

a) Assertion is incorrect, but Reason is Correct

b) Assertion is correct, but Reason is incorrect

c) Both Assertion and Reason are Correct and Reason is the correct explanation of Assertion

d) Both Assertion and Reason are Correct, but Reason is not the correct explanation of Assertion

Class 12 Accountancy MCQs Share Capital

11. A company forfeited 3,000 shares of ₹10 each, on which only ₹5 per share (including ₹1 premium) has been paid. Out of these few shares were re-issued at a discount of ₹1 per share were and ₹6,000 were transferred to Capital Reserve. How many shares were re-issued?

a) 3,000 shares

b) 2,000 shares

c) 1,500 shares

d) 1,000 shares

12. Jeet Ltd. invited applications for 2,00,000 shares of ₹ 10 each payable ₹ 5 on application, ₹ 3 on allotment and ₹ 2 on call. Public has applied for 3,80,000 shares. Pro-rata allotment was made in the ratio 7:4. Determine the amount to be refunded by the company at the time of allotment of shares.

a) ₹3,00,000

b) ₹9,00,000

c) ₹1,50,000

d) ₹7,50,000

13. BTS Ltd. forfeited 700 shares of ₹ 10 each issued at a premium of 10% for non-payment of allotment money of ₹ 5 per share (including premium) and first and final call of ₹ 3 per share. On forfeiture of these shares, Share Forfeiture Account should be credited with:

a) ₹7,000

b) ₹1,400

c) ₹4,900

d) ₹2,100

14. Assertion - Interest on bearer debentures is paid to a person who produces the interest coupon attached to such debentures.

Reason - Bearer debentures are debentures which can be transferred by way of delivery and the company does not keep any record of the debenture holders.

Select the correct answer from the following:

a) Assertion is correct, but Reason is wrong.

b) Both Assertion and Reason are correct, but Reason is not the correct explanation of Assertion.

c) Both Assertion and Reason are correct, and Reason is the correct explanation of Assertion.

d) Both Assertion and Reason are wrong.

15. Which of the following statements does not relate to ‘Reserve Capital’:

a) It is part of uncalled capital of a company.

b) It cannot be used during the lifetime of a company.

c) It can be used for writing off capital losses.

d) It is part of subscribed capital.

16. If PQR ltd. is issued fully paid shares of ₹2,25,000 in consideration of machinery of ₹2,50,000, the balance of ₹25,000 will be credited to:

a) Statement of Profit & Loss

b) Goodwill Account

c) Security Premium Reserve Account

d) Capital Reserve Account

17. Which of the following is not a capital profit:

a) Profit prior to incorporation of the company

b) Profit from the sale of fixed assets

c) Premium on issue of shares

d) Compensation received from insurance company

18. Maximum limit of Premium on shares is:

a) 5%

b) 10%

c) No Limit

d) 100%

19. When a company issue shares at a premium, the amount of premium should be received by the company:

a) Along with application money

b) A long with allotment money

c) Along with calls

d) Along with any of the above

20. For what purpose securities premium reserve account cannot be utilized:

a) Amortization of preliminary expenses

b) Distribution of dividend

c) Issue of fully paid bonus shares

d) Buy Back of own shares

Class 12 Accountancy MCQs Share Capital

21. A Company issued 20,000 shares of ₹50 each at 5% premium. ₹20 were payable on application and balance on allotment. What will be the allotment amount:

a) ₹5,00,000

b) ₹4,75,000

c) ₹6,50,000

d) ₹5,25,000

22. As per Table F, the Company is required to pay interest on the amount of calls in advance at:

a) 12% p.a.

b) 5% p.a.

c) 10% p.a.

d) 6% p.a.

23. Following amounts were payable on issue of shares by a Company- ₹3 on application, ₹3 on allotment. ₹2 on first call and ₹2 on final call. Mona holding 600 shares paid only application and allotment money whereas Shona holding 400 shares did not pay final call. Amount of calls in arrear will be:

a) ₹3,200

b) ₹2,800

c) ₹1,800

d) ₹6,200

24. The subscribed capital of a company is ₹60,00,000 and the nominal value of the share is ₹100 each. There were no calls in arrear till the final call was made. The final call was made and was paid on 57,500 shares only. The balance in the calls in arrear amounted to ₹62,500. Calculate the final call on share.

a) ₹7

b) ₹20

c) ₹22

d) ₹25

25. From which account, expenses on issue of shares will be written off first of all:

a) Statement of Profit and Loss

b) Miscellaneous Expenditure Account

c) Share Issue Expenses Account

d) Securities Premium Reserve Account

26. CT Ltd. invited applications for 1,00,000 shares and it received applications for 1,50,000 shares. Applications for 30,000 shares were rejected and the remaining were allotted shares on pro-rata basis. How many shares an applicant for 6,000 shares will be allotted:

a) 2,500 Shares

b) 3,600 Shares

c) 4,500 Shares

d) 5,000 Shares

27. PT Ltd. had allotted 10,000 shares to the applicants of 14,000 shares on pro-rata basis. The amount payable on application was ₹3. Anand applied for 420 shares. The number of shares allotted to Anand will be:

a) 60 shares

b) 340 shares

c) 320 shares

d) 300 shares

28. If applicants for 75,000 shares were allotted 50,000 shares on pro-rata basis, the shareholder who was allotted 1,000 shares must have applied for:

a) 900 Shares

b) 3,600 Shares

c) 1,500 Shares

d) 4,800 Shares

29. A Company offered 50,000 shares of ₹10 each at par, payable as ₹3 on applications, ₹5 on allotment and the balance on final call. Applications were received for 70,000 shares and the allotment was made pro-rata. The excess application money was to be adjusted on allotment and call. How much amount will be adjusted from Share Application with Share Allotment?

a) ₹1,80,000

b) ₹30,000

c) ₹60,000

d) ₹50,000

30. RL Limited has offered to issue 10,000 Equity shares to its wholetime directors and employees at a concessional price. These shares are:

a) Bonus shares

b) Redeemable Preference shares

c) Equity shares

d) Sweat equity shares

Class 12 Accountancy MCQs Share Capital

31. CAE Ltd. offered 6,00,000 equity shares of ₹10 each, ₹8 called-up. Applications were received for 5,00,000 shares, all amounts were duly received except from Adesh holding 4,000 shares, who didn't pay after application money of ₹2 per share and from Umesh who holds 1,000 shares has paid only ₹6 per share. Adesh's shares were forfeited. The amount of subscribed capital to be shown in the Balance Sheet is:

a) ₹39,74,000

b) ₹39,96,000

c) ₹49,96,000

d) ₹49,74,000

32. CAE Ltd. forfeited 300 Equity Shares of ₹10 each, fully called-up, held by Karam for non-payment of allotment money of ₹3 per share and first and final call of ₹4 per share. Out of these, few shares were re-issued at a discount of ₹2 per share and ₹250 was transferred to Capital Reserve as gain on re-issue. Number of shares re-issued were:

a) 100 shares

b) 200 shares

c) 250 shares

d) 150 shares

33. Assertion - Securities Premium Account is not debited at the time of forfeiture if premium has been received in respect of the forfeited shares.

Reason - The Section 52(2) of Companies Act, 2013 restricts the use of Securities Premium received and credited to Securities Premium Account. In the context of above two statements, which of the following is correct:

a) Assertion is correct but Reason is incorrect

b) Both Assertion and Reason are incorrect

c) Both Assertion and Reason are correct, and Reason is the correct explanation of Assertion

d) Both Assertion and Reason are correct, but Reason is not the correct explanation of Assertion

34. CAE Ltd. forfeited 1,000 shares of ₹10 each (₹8 called-up) for the non-payment of the allotment money of ₹5 per share including ₹2 as premium. Out of these, few shares were reissued to Naresh at ₹7 per share as ₹8 called up and ₹3,200 were transferred to Capital Reserve. Number of shares reissued were:

a) 500 Shares

b) 600 shares

c) 700 shares

d) 800 shares

35. Assertion -TP Ltd. is registered with an authorised capital of 50,000 Equity Shares of ₹100 each of which 20,000 Equity Shares were issued and subscribed. All the money had been called-up except ₹25 per share which was declared as 'Reserve Capital', Share capital shown in Balance Sheet as 'Subscribed and Fully paid-up' will be nil. Reason - Reserve capital can be used only at the time of winding up. In the context of above two statements, which of the following is correct:

a) Both Assertion and Reason are correct, and Reason is the correct explanation of Assertion

b) Both Assertion and Reason are correct, but Reason is not the correct explanation of Assertion

c) Both Assertion and Reason are incorrect

d) Assertion is correct, but Reason is incorrect

36. TP Ltd. forfeited 600 shares of ₹10 each issued at a premium of 10% for non-payment of first and final call money of ₹3 (Including premium). Out of these 400 shares were reissued to Mohan as ₹10 paid-up for ₹11 per share. The minimum amount that company should collect at the time of reissue of the remaining 200 shares is:

a) ₹800

b) ₹400

c) ₹600

d) ₹200

37. If 10,000 shares of ₹10 each were forfeited for non-payment of final call money of ₹3 per share and only 7,000 of these shares were re-issued @₹ 11 per share as fully paid up, then what is the minimum amount that company must collect at the time of re-issue of the remaining 3,000 shares:

a) ₹21,000

b) ₹9,000

c) ₹16,000

d) ₹30,000

38. Assertion - A Company is Registered with an Authorised Capital of 5,00,000 Equity Shares of ₹10 each of which 2,00,000 Equity shares were issued and subscribed. All the money had been called up except ₹2 per share which was declared as ‘Reserve Capital’. The Share Capital reflected in balance sheet as ‘Subscribed and Fully paid up’ will be Zero.

Reason - Reserve Capital can be called up only at the time of winding up of the company:

a) Both Assertion and Reason are Correct, but Reason is not the correct explanation of Assertion

b) Both Assertion and Reason are Correct and Reason is the correct explanation of Assertion

c) Assertion is incorrect, but Reason is Correct.

d) Assertion is correct, but Reason is incorrect

39. A company forfeited 3,000 shares of ₹10 each, on which only ₹5 per share (including ₹1 premium) has been paid. Out of these few shares were re-issued at a discount of ₹1 per share were and ₹6,000 were transferred to Capital Reserve. How many shares were re-issued:

a) 3,000 shares

b) 1,000 shares

c) 2,000 shares

d) 1,500 shares

Class 12 Accountancy MCQs Share Capital - Answers

1. d) Preferential right as to dividend and repayment of capital at the time of liquidation of the Company
2. b) Subscribed Capital
3. b) Authorised Capital > Issued Capital
4. a) Redeemable Equity Shares
5. c) Sweat Equity Shares
6. b) Issued Capital
7. b) Personal Account
8. c) 25%
9. b) Goodwill Account/Incorporation Cost Account
10. c) Both Assertion and Reason are Correct and Reason is the correct explanation of Assertion
11. b) 2,000 shares
12. c) ₹1,50,000
13. d) ₹2,100
14. c) Both Assertion and Reason are correct, and Reason is the correct explanation of Assertion.
15. d) It is part of subscribed capital.
16. d) Capital Reserve Account
17. d) Compensation received from insurance company
18. c) No Limit
19. d) Along with any of the above
20. b) Distribution of dividend
21. c) ₹6,50,000
22. a) 12% p.a.
23. a) ₹3,200
24. d) ₹25
25. d) Securities Premium Reserve Account
26. d) 5,000 Shares
27. d) 300 shares
28. c) 1,500 Shares
29. c) ₹60,000
30. d) Sweat equity shares
31. a) ₹39,74,000
32. c) 250 shares
33. c) Both Assertion and Reason are correct, and Reason is the correct explanation of Assertion
34. d) 800 shares
35. b) Both Assertion and Reason are correct, but Reason is not the correct explanation of Assertion
36. b) ₹400
37. b) ₹9,000
38. b) Both Assertion and Reason are Correct and Reason is the correct explanation of Assertion
39. c) 2,000 shares

Class 12 Accountancy MCQs Debentures

Class 12 Accountancy MCQs Dissolution of Partnership Firm

MCQs on Company Accounts Class 12

Learning Games and Activities in Accountancy – Class 12

The post Class 12 Accountancy MCQs Share Capital appeared first on Commerceatease - Website for 11th & 12th Commerce.