ACCOUNTANCY SAMPLE PAPER

1. A, B and C are partners sharing profits and losses in the ratio of 3:2:1. D is admitted as a
new partner. The new profit sharing ratio between A, B ,C and D will be 3:3:2:2. Goodwill
of the firm is valued at ₹1,80,000. D brings his share of goodwill by cheque. Journal entry
for adjustment of goodwill will be

(a) premium for goodwill a/c – Dr. 36,000

To A’s capital a/c 18,000
To B’s capital a/c 12,000
To C’s capital a/c 6000

(b) premium for goodwill a/c – Dr. 36,000

To A’s capital a/c 18,000
To B’s capital a/c 18,000

(c) C’s capital a/c – Dr. 6000

premium for goodwill a/c – Dr. 36,000
To A’s capital a/c 36,000
To B’s capital a/c 6000

(d) none of the above

2. Assertion (A): rent paid to a partner is transferred to the debit of profit and loss account.
Reason (R): rent paid to a partner is a charge against profit

In the context of above 2 statements which of the following is correct?

(a) Assertion (A) is correct but Reason (R) is incorrect
(b) both Assertion (A) and reason are correct, but Reason (R) is not the correct explanation
of Assertion (A)
(c) both Assertion (A) and Reason (R) are incorrect
(d) both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct
explanation of Assertion (A)

3. Zee limited forfeited a share of ₹100 issued at a premium of 20% for non payment of first
call of ₹30 per share and final call of ₹10 per share. The minimum price at which this share
can be reissued is
A) ₹40
B) ₹60
C) ₹20
D) ₹100

OR
Coco light limited issued a prospectus inviting applications for 10,000, 10% debentures. The
issue was oversubscribed to the extent of 15,000 debentures. Applications for 3000
debentures were sent letters of regret and remaining applicants were allotted debentures. S
 was allotted 700 debentures under pro rata category. How many debentures he must have
applied for?
A) 1000
B) 940
C) 740
D) 840

4. Anil, Sunil and Ramesh are partners sharing profits and losses in the ratio of 5:4:2. On 1st
April 2023 they decided to share future profits and losses in the ratio of 4:3:2. On this date
general reserve was ₹87,250 and loss on revaluation of assets and liabilities ₹13,000. They
also decided that adjustment should be made without affecting the book figures of assets and
liabilities.
Which of the following option reflect the correct treatment of the above information?

(a) Ramesh’s capital a/c – Dr. 3000

To Anil’s capital a/c 750
To Sunil’s capital a/c 2250

(b) Anil’s capital a/c – Dr. 3000

To Ramesh’s capital a/c 750
To Sunil’s capital a/c 2250

(c) Sunil’s capital a/c – Dr. 3000

To Anil’s capital a/c 750
To Ramesh’s capital a/c 2250

(d) none of the above

OR

Profits of a firm for the last 4 years were as follows

years
2022-23 = 90,000
2021-22 = (60,000)
2020-21 = 1,30,000
2019-20 = 50,000

additional information:-
on 1st April 2021 a major repair cost of ₹1,00,000 incurred at the time of purchasing a
second hand machine was debited to profit and loss account. Depreciation is charged at 10%
per annum on written down value method. The average profit of the last 4 years is
a) ₹72,750
b) ₹32,250
c) ₹92,750
d) ₹50,250

5. Interest on capital of a partner may be provided for in the partnership deed is __________
A) @ 6% per annum
B) @ 7% per annum
 C) @ 8% per annum
D) any rate

6. Start limited issued 1,00,000, 9% debentures of ₹100 each at 10% discount and redeemable
at a premium. Loss on issue of debentures was ₹20,00,000 which was written off from
statement of profit and loss. The amount at which each debenture will be redeemed is
a) ₹105
b) ₹110
C) ₹115
d) ₹120

OR

P limited issued 50,000, 8% debentures of ₹100 each at a discount of 5% and redeemable at

a premium. Loss on issue of debentures was written off ₹3,00,000 from securities premium
and ₹7,00,000 from statement of profit and loss account. What is the premium payable per
debenture on redemption?
A) ₹10
b) ₹15
C) ₹5
d) ₹20

7. Assertion (A): securities premium can be applied to issue fully paid bonus shares
Reason (R): while passing an entry for forfeiture, share capital account is debited with the
amount paid up(excluding securities premium) till the stage of forfeiture.

In the context of above 2 statements which of the following is correct?

(a) Assertion (A) is correct but Reason (R) is incorrect
(b) both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct
explanation of Assertion (A)
(c) both Assertion (A) and Reason (R) are incorrect
(d) both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct
explanation of Assertion (A)

8. X, Y and Z are partners in a firm sharing profits in the ratio of 3:2:1. Z is guaranteed
minimum profit of ₹20,000 as a share of profit every year. Form earned profit of ₹90,000
during the year. Partners will get:-
A) X ₹40,000, Y ₹30,000 and Z ₹20,000
B) X ₹45,000, Y ₹30,000, and Z ₹15,000
C) X ₹42,000, Y ₹28,000, and Z ₹20,000
D) none of the above

OR

A and C are partners in a firm. On 1st July 2021, A advanced loan of Rs 6,00,000 to the firm.
There is no partnership deed. On 31st March 2022, A was entitled to get the following
amount as interest on loan:-
a) ₹36,000
b) ₹18,000
 C) ₹9000
d) ₹27,000

read the following hypothetical situation and answer question 9 and 10

on 1st October 2022 sindhu and Rahul decided to start their partnership firm. After 2 months
they admitted their college friend Rakesh into partnership who helped them setup the
business in digital mode. Since they were good friends, they did not enter into an agreement.
Sindhu and Rahul have capitals of ₹1,00,000 each while Rakesh invested ₹50,000. The
books were closed on 31st March 2023 on which date following information was provided
by the firm.

Particulars Amount (Rs.)

Total sales (all in cash/bank) 16,00,000
total purchases (cash and credit) 7,20,000
returns outward 55,000
remuneration to Rakesh for digital work 20,000
Building rent 60,000
salary of workers (for the relevant period) 20,000
closing inventory 70,000
Rahul provided loan to the firm on 1st January 2023 1,00,000

9. Amount of profit to be transferred to profit and loss appropriation account will be

A) ₹7,50,000
b) ₹7,60,000
C) ₹7,85,000
d) ₹9,23,500

10. Interest on rahul's loan for the current accounting period will be
a) ₹1200
b) ₹1500
C) ₹1600
d) ₹1800

11. Gross profit of a partnership firm is ₹20,50,000 and indirect expenses (before manager’s
Commission) is ₹70,000. Manager is entitled to a Commission of 10% on net profit after
charging such Commission. Manager’s Commission will be
a) ₹1,95,000
b) ₹2,00,000
C) ₹1,80,000
d) ₹1,98,000

12. Which of the following statements is incorrect?

a) interest on debentures is a charge and not an appropriation
b) debentures can be issued at discount
c) debenture holders do not have voting rights
d) debentures cannot be converted into shares
13. B limited issued for subscription 2,00,000 shares of ₹10 each at a premium of ₹2 per share
payable ₹7(including premium) on application and balance on allotment. Applications were
received for 6,00,000 shares. Applications for 3,00,000 shares were rejected and pro rata
allotment was made to the remaining applicants. The due amount was duly received. Amount
received on allotment will be
A) ₹3,00,000
b) ₹4,00,000
C) ₹5,00,000
d) ₹6,00,000

14. Pankaj and naresh are partners sharing profits in the ratio of 5:3. They admitted saurabh for
1/5th share of profits, for which he paid ₹2,40,000 towards capital and ₹1,20,000 towards
goodwill. Capitals are to be proportionate in profit sharing ratio based on saurabh's capital.
Capital balances for each partner will be
A) ₹6,00,000; ₹2,40,000 and ₹2,40,000
B) ₹6,00,000; ₹2,40,000 and ₹3,60,000
C) ₹6,00,000; ₹3,60,000 and ₹2,40,000
D) ₹6,00,000; ₹3,60,000 and ₹3,60,000

15. If equal amounts are withdrawn in the beginning of each month throughout the year, formula
to calculate interest on drawings is

a) total drawings X rate of interest/100 X 5.5/12

b) total drawings X rate of interest/100 X 6.5/12
c) total drawings X rate of interest/100 X 6/12
d) total drawings X rate of interest/100 X 5/12

OR

Raja a partner withdrew ₹16,000 at the end of each quarter and interest on drawings was
calculated as ₹1440 at the end of accounting year 31st March 2023. What is the rate of
interest on drawings charged?
A) 6% per annum
B) 8% per annum
C) 10% per annum
D)12% per annum

16. At the time of dissolution of partnership firm if amount paid for a liability is not given, it is
assumed the __________ of the liability is paid.
A) market value
b) book value
C) book value or market value, whichever is higher
d) book value or market value, whichever is lower

17. X, Y and Z Are partners in a firm sharing profits in the ratio of 4:3:2. Y died on 30th June
2023. New profit sharing ratio decided between X & Z is 2:1. Compute the missing values in
the following journal entries

Particulars Dr. Cr.

 X’s capital a/c – Dr. …..
Y’s capital a/c – Dr. …..
Z’s capital a/c – Dr. 20,000
To goodwill a/c
(existing goodwill return off)

X’s capital a/c – Dr. …..

Z’s capital a/c – Dr. …..
To Y’s capital a/c 30,000
(Y’s share of goodwill adjusted among partners)

X’s capital a/c – Dr. …..

Z’s capital a/c – Dr. …..
To Y’s capital a/c 15,000
(Y’s share of general reserve provided to him. General
reserve will remain as it is in the books)

18. Ankit, Bobby and karthik were partners in a firm sharing profits in the ratio of 5:7:8. Their
fixed capitals were ankit- ₹5,00,000; Bobby- ₹7,00,000 and karthik- ₹8,00,000. Their
partnership deed provided for the following
1. Interest on capital at 10% percent p.a.
2. Salary of ₹10,000 per month to Karthik
3. Interest on drawings at 12% percent p.a.
Ankit withdrew ₹40,000 on 1st may 2022, Bobby withdrew ₹50,000 on 30th June 2022 and
karthik withdrew ₹30,000 on 31st March 2023.
During the year ended 31st March 2023 the firm earned profit of ₹351100.
Prepare profit and loss appropriation account for the year ended 31st March 2023.

OR

Ashok bheem and chitra are partners in a firm. For the year ended 31st March 2023 profit of
the firm ₹1,20,000 was distributed equally among them without giving effect to the
following terms of the partnership deed.
1. Bheem’s guarantee to the firm that the firm would earn profit of at least 1,35,000.
Shortfall if any in profit will be met by him.
2. Profits to be shared in the ratio of 2 :2:1
you are required to pass the necessary journal entries to rectify the error in accounting.

19. Apple orchards limited purchased machinery for ₹50,00,000 from M machines on 1st
January 2023. It paid the amount as follows
a. Issued a cheque of rupees 10,00,000 dated 1st February 2023 and
b. By taking loan from Bank of ₹40,00,000
it issued 50,000, 10% debentures of ₹100 each to bank as collateral security.
Pass the journal entries in the books of apple orchards limited

OR
 Premium energy limited took over the business of premium transmission limited having
assets of rupees 2,00,00,000 and liabilities of rupees 50,00,000 for a consideration of rupees
1,88,00,000. The consideration was paid by
a. Issuing a check of ₹1800 000
b. Issuing 1,00,000, 8% preference shares of ₹100 each at a premium of ₹10 each,
redeemable at par
c. Balance amount was paid by taking a loan from bank and 90,000, 12% debentures of ₹100
each as collateral security.

Pass the journal entries in the books of premium energy limited for payment of consideration
and bank loan, including issue of debentures as collateral security.

20. Calculate goodwill of a firm on the basis of 3 years purchase of the weighted average profit
of the last 4 years. Profits of these 4 years ended 31st March were:-

year ended 31st March 2020 = ₹4,04,000

year ended 31st March 2021 = ₹4,96,000
year ended 31st March 2022 = ₹4,00,000
year ended 31st March 2023 = ₹6,00,000

the weights assigned to each year under 31st March are

2020 = 1; 2021 = 2; 2022 = 3 and 2023 = 4

you are provided with the following additional information:

1. On 31st March 2022 a major plant repair was undertaken for ₹1,20,000 which was
accounted as expense. It is to be capitalised for goodwill calculation subject to adjustment of
depreciation at 10% percent per annum on reducing balance method.
2. Closing stock for the year ended 31st March 2021 was overvalued by ₹48,000.

21. Farmland limited issued 60,000 shares of ₹10 each at a premium of ₹2 per share payable as
₹3 on application, ₹5(Including premium) on allotment and the balance on first and final
call. Applications were received for 92,000 shares. Shares were allotted as follows:
1. Applicants of 40,000 shares 30,000 shares
2. Applicants of 50,000 shares 30,000 shares and
3. Applicants of 2000 shares nil
Rajesh who had applied for 800 shares in category 1. and somesh who was allotted 600
shares in category 2. did not pay the allotment money.
You are required to:
a. Calculate the amount received on allotment of shares
b. Pass the journal entries for the amount received as allotment money using calls in arrears
account and
c. Explain how calls in arrears will be shown in the Note to accounts on share capital

22. (a) Tara and anjali were partners in a firm sharing profits and losses equally. They resolved
their partnership firm on 31st March 2023. On this date balance sheet of their firm apart
from the realisable assets and outside liabilities showed following
Tara’s capital- ₹35,000 (Cr.)
Anjali’s capital- ₹9000 (Dr.)
Tara’s loan - ₹3000 (Dr.)
 Additional information:
on the dissolution of the firm:
1. The firm realised ₹22,000 from the sale of assets and paid ₹7000 to discharge its outside
liabilities
2. The realisation account showed a profit of ₹6000 which was shared by the partners in their
profit sharing ratio
3. Partners capital accounts were closed with a partner either bringing the cash to cover the
deficit of a capital or a partner being paid her surplus capital.
4. The bank account was closed
you are required to prepare the bank account on the date of dissolution of the firm to
determine its balance at bank as shown in the balance sheet as at 1st March 2023.

(b) S and G were partners sharing profits and losses in the ratio of 4:5. They dissolved their
partnership on 31st March 2023 when they are balance sheet showed following balances:

S’s capital - ₹30,000

G’s capital - ₹35,000
G’s current account (Dr.) -₹2000
General reserve - ₹18,000
profit and loss account (Dr.) -₹4500
on the date of dissolution:
1. Realisation of assets and settlement of liabilities resulted in profit of ₹9000
2. G paid realisation expenses of ₹2000
3. G paid outstanding salary of the manager of the firm of ₹1000 which was unrecorded in
the books.
You are required to prepare partners capital accounts

23. Vijay Lakshmi limited invited applications for issuing 40,000 equity shares of ₹10 each at a
premium of ₹2 per share. The amount was payable as follows:
On application ₹6 (including premium) and balance on allotment.
₹3,00,000 was received as application money. Pro rata allotment was made to all the
applicants. Excess money received on application was adjusted towards amount due on
allotment.
Shyam a shareholder to whom 8000 shares were allotted failed to pay the allotment money
and therefore his shares were forfeited. Later the forfeited shares were reissued for ₹70,000
as fully paid up.
Pass necessary journal entries in the books of Vijay Lakshmi limited

OR

(a) kranti limited forfeited folowing equity shares of ₹10 each issued at a premium of ₹2 per
share.
(i) 700 shares issued to Rakesh for the non payment of second and final call of ₹3 per share
(ii) 500 shares issued to gopal for the non payment of first call of ₹2 per share and second
and final call of ₹3 per share.
Forfeited shares were reissued to Rajesh for ₹11 per share fully paid. Pass the entries to
record the forfeiture and reissue of shares.
 (b) Shiv limited forfeited 2000 shares of ₹10 each (fully called up) for non payment of the
allotment money of ₹6 per share including ₹2 as premium. Of these 1500 shares were
reissued to gaurav at ₹9 per share fully paid.
Journalise the above transactions regarding the forfeiture and reissue in the books of Shiv
limited.

24. Amit and balan are partners in a firm sharing profits in the ratio of 2:1. Chander is admitted
in the firm for 1/4 share in profits. He brings ₹3,00,000 as his capital. The balance sheet of
Amit and balan as at 31st March 2023 was as under

BALANCE SHEET OF AMIT AND BALAN AS AT 31ST MARCH 2023

Liabilities Amount Assets Amount
Creditors 1,20,000 cash at bank 120000
general reserve 60,000 Debtors 80000
Stock 150000
Amit’s capital 5,20,000 Machinery 250000
Balan’s capital 3,00,000 Building 400000
1000000 1000000

Other terms of the agreement are as under:

1. Chandar will bring ₹1,20,000 as his share of goodwill
2. Building was valued at ₹4,50,000 and machinery at ₹2,30,000
3. Provision for doubtful debts is to be created at 6% on debtors
prepare revaluation account, partners capital accounts and the balance sheet of the new firm

OR

Alpha, beta and gamma are in partnership sharing profits in the ratio of 5:3:2. Their balance
sheet on 1st April 2023, the day beta retired from firm, was as follows

BALANCE SHEET
Liabilities Amount Assets Amount
Alpha 300000 Building 250000
Beta 200000 Machinery 150000
Gama 200000 Investments 250000
Debtors 100000
General reserve 100000 Stock 50000
Creditors 100000 Cash at bank 100000
900000 900000

The terms of retirement were:

1. Beta takes goodwill from alpha of ₹30,000 and from gamma of ₹40,000 for foregoing his
share of profits
2. Stock to be appreciated by 20% and building by ₹5,00,000
3. Investments were sold for ₹2,70,000
4. Beta is paid by bank draft
prepare revaluation account, partners capital accounts and balance sheet of the new firm.
25. Ganesh, harish and Anil were partners sharing profits and losses equally. Harish died on 30th
June 2020. Following entry was passed for the treatment of goodwill:-

Ganesh capital account debit ₹24,000

Anish capital account debit ₹12,000
To harish capital account ₹36,000
(goodwill adjusted by debiting gaining partners in gaining ratio)

Harish’s share of profit till date of death was estimated as ₹80,000 based on the previous
years profit. Amount payable to harish’s executor on the day of death was determined as
₹3,30,000 without considering the following:

unrecorded asset(furniture) taken by harish earlier ₹50,000

unrecorded liabilities assumed by the executors of harish ₹5000

(i) what is the correct amount due to harish’s executors?

(ii) prepare harish’s executors account till final settlement if he was paid ₹60,000 on 30th
June 2020 and balance was to be paid in 3 equal annual instalments starting from 30th June
2021 together with interest rate as specified in section 37 of the Indian partnership act.

26. Pass necessary journal entries for the following transactions relating to the issue of
debentures:
(a) gagan limited issued rupees 1000000, 9% debentures of ₹100 each at a premium of 5%,
redeemable at par after 4 years
(b) KS limited issued ₹100 0000, 10% debentures of ₹100 each at par, redeemable at 10%
premium after 4 years
(c) QR limited issued ₹100 0000, 9% debentures of ₹100 each at a discount of 10%,
redeemable at a premium of 5% after 5 years.

PART B
(ANALYSIS OF FINANCIAL STATEMENTS)

27. Which of the following equations is correct?

1. Cost of revenue from operations = revenue from operations + gross profit
2. Cost of revenue from operations = opening inventory - net purchases + direct expenses
3. Cost of revenue from operations = opening inventory + closing inventory
4. Cost of revenue from operations = revenue from operations - gross profit

OR

which of the following is a tool/tools of analysis of financial statements?

(i) Cash flow statement
(ii) Statement of profit and loss
(iii) Notes to accounts
(iv) Balance sheet

choose the correct option:

(a) (i)
(b) (i) and (ii)
 (c) (ii)
(d) (i), (ii) and (iii)

28. From the following information the proprietor’s funds are:

current assets - ₹2000 000

non current assets - ₹4000 000
long term borrowings - ₹25,00,000
proprietary ratio - 25%

a. ₹10,00,000
b. ₹14,00,000
c. ₹24,00,000
d. ₹15,00,000

29. Objective of analysis of financial statements is

1. To determine liquidity and long term solvency of the enterprise
2. To determine operating efficiency with which resources are utilised in generating revenue
3. To determine profitability with respect to sales and investment
4. All of the above

OR

current liability as per schedule III of the Companies Act 2013 is that liability which is
1. Expected to be settled in the company's normal operating cycle
2. Due to be settled within 12 months after the reporting date i.e. Balance sheet date
3. held primarily for the purpose of being traded
4. All of the above

30. Following is the extract of balance sheet of Max limited for the year ended 31st March 2023

Equity and liabilities 31st March 31st March

2023 2022
Surplus i.e. Balance in statement of profit and loss 1100000 500000
dividend payable 50000 40000

additional information:-
proposed dividend in the years and 31st March 2022 and 2023 were ₹7,00,000 and ₹6,00,000
respectively.
Which of the following options is correct as net profit before tax and extraordinary items?
a. ₹6,40,000
b. ₹8,40,000
c. ₹11,40,000
d. ₹13,00,000

31. (a) cash revenue from operations (cash sales) 60% of credit revenue from operations (credit
sales). Revenue from operations ₹5,20,000, closing trade receivables ₹80,000, opening trade
receivables 3/4th of closing trade receivables. Compute trade receivables turnover ratio.
 (b) current liabilities ₹1,60,000, liquid ratio is 1.5:1 and current ratio is 2.5:1. Calculate
inventory(stock), quick assets and current assets

32. Classify the following items under the major heads and subheads (if any) in the balance
sheet of a company as per schedule III of the Companies Act 2013
1. Provision for warranties
2. Income received in advance
3. Licenses and franchises
4. Building under construction
5. Investment in land and building (long term)
6. Finished goods

33. From the following balance sheet of surbhi limited as at 31st March 2023, prepare a common
size balance sheet

Balance sheet of surbhi limited as at 31st March 2023

Particulars note 31st March 2023 31st March 2022
number
I. Equity and liabilities
1. Shareholders funds
(a) share capital 20,00,000 9,00,000
(b) reserve and surplus 2,00,000 1,00,000
2. Non current liabilities
long term borrowings 12,00,000 5,00,000
3. Current liabilities
trade payables 6,00,000 5,00,000
TOTAL 40,00,000 20,00,000

II. Assets
1. Non current assets
Property, plant and equipment
and intangible assets:
Property, plant and equipment 2000000 1000000
2. Current assets
(a) inventories 1900000 800000
(b) cash and cash equivalents 100000 200000
TOTAL 4000000 2000000

OR

From the following balance sheet of Aman India limited as at 31st March 2023, prepare
comparative balance sheet

Particulars note 31st March 31st March

no. 2023 2022
I. Equity and liabilities
1. Shareholders funds
(a) share capital 280000 180000
(b) reserve and surplus 100000 100000
 2. Non current liabilities
long term borrowings 80000 20000
3. Current liabilities
trade payables 50000 30000
TOTAL 510000 330000

II. Assets
1. Non current assets
(a) Property, plant and equipment and intangible
assets:
(i) Property, plant and equipment 280000 180000
(ii) Intangible assets 50000 30000
(b) Non current investments 80000 50000
2. Current assets
(a) inventories 70000 30000
(b) cash and cash equivalents 30000 40000
TOTAL 510000 330000

34. (i) calculate cash flow from investing activities for the year ended 31st March 2023 from the
following information

Particulars 31st March 2023 31st March 2022

plant and machinery 1500000 1200000
Accumulated depreciation (240000) (180000)
12% investments 400000 300000

Additional information:
1. During the year ended 31st March 2023 machinery costing ₹1,50,000 was sold at a loss of
₹30,000
2. Depreciation charged during the year was ₹1,00,000
3. Additional investments were purchased on 1st July 2022

(ii) determine the missing values/figures and how it will affect cash flow statement

provision for tax account

Particulars Amount Particulars Amount
To …?…. …?…. By …?…. 70000
To …?…. 80000 By …?…. …?….
…?…. 190000