Dr.

Virendra Swarup Education Centre, Panki

XII- Accountancy
Practice Paper
Time Allowed: 3 Hours Maximum Marks: 80

General Instructions:
1. This question paper contains 34 questions. All questions are compulsory.
2. This question paper is divided into two parts Part A and B.
3. Question Nos. 1 to 16 and 27 to 30 carry 1 mark each.
4. Question Nos. 17 to 20, 31 and 32 carry 3 marks each.
5. Question Nos. 21, 22 and 33 carry 4 marks each.
6. Question Nos. 23 to 26 and 34 carry 6 marks each.

Part-A (Accounting for Partnership Firms and Companies)

Q. 1. P, Q, R and S were partners sharing profits in the ratio of 2:3:5:2. S retires and sells his share of goodwill to Q
for ` 60,000 and to R for ` 40,000. New profit Sharing Ratio will be:
(A) 16:19:25 (B) 14:21:25 (C) 10:21:29 (D) 10:19:31

Q. 2. Pick the odd one out of:

(A) Interest on Partner's Capital (B) Rent to Partner (C) Interest on Partner's Drawings (D) Salary to Partner

Q. 3. ……………are issued without specified rate of interest.

OR
Balance of share forfeiture account is shown in the balance sheet under the head …………….
(A) Share Capital Account (B) Reserve and Surplus
(C) Current Liabilities and Provisions (D) Unsecured Loans

Q. 4. A and B are partners sharing profits in the ratio of 2: 3. Their Balance Sheet shows Machinery at ` 2,50,000,
Stock at ` 1,00,000 and Debtors at ` 2,00,000. C is admitted and new profit sharing ratio is agreed at 3:4:5. Machinery
is revalued at ` 1,90,000 and a provision is made for doubtful debts @ 5%. A's share in loss on revaluation amount to
` 20,000. Revalued value of Stock will be
(A) ` 2,20,000 (B) ` 80,000 (C) ` 90,000 (D) `1,20,000
OR
Akku and Bakku are partners in a partnership firm without any agreement. Akku devotes more time for the firm as
compare to Bakku. Akku will get the following commission in addition to profit in the firm's profit:
(A) 6% of profit (B) 4% of profit (C) 5% of profit (D) None of the above

Q. 5. X Ltd. forfeited 500 shares of ` 10 each fully called up for non-payment of final call of ` 3 per share. 300 of
these shares were reissued as fully paid up and after reissue the amount transferred to Capital Reserve was ` 1,800.
What is the reissue price?
(A) ` 6 per share (B) ` 8 per share (C) ` 7 per share (D) ` 9 per share

Q. 6. Which of the following is not an essential feature of partnership?

(A) An agreement, oral or written, should exist among the partners.
(B) Agreement should be to carry on lawful business.
(C) All the partners should contribute capital in the firm.
(D) There should be at least two partners.

Q. 7. While transferring assets to realisation account ………… is omitted to be transferred.

(A) Patents (B) Goodwill (C) Cash (D) Investments

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Q. 8. Which of the following transactions is debited to Revaluation Account?
(A) Increase in the value of Furniture. (B) Increase in Provision for Doubtful Debts.
(C) Creditors discharged at a discount. (D) Loss on revaluation of all assets and reassessment of all liabilities.
OR
Pick the odd one out from the following:
(A) Interest allowed on a loan taken by the firm from a partner
(B) Rent due to a partner of the firm for using his premises for business purposes.
(C) Salary due to the manager of the firm.
(D) Salary due to a partner of the firm.

Read the following hypothetical situation and answer Q. No. 9 and 10:
A, B and Care partners sharing profits in the ratio of 3:2:1. On 1st April, 2022, B retires and A and C decided to share
future profits in 3: 2. On that date their capitals were :
A ` 5,00,000; B ` 3,50,000 and C ` 2,00,000. Investment Fluctuation Reserve appears in their books at ` 40,000,
when Investments (market value ` 2,30,000) appear at ` 3,00,000.
Account of B was settled by giving him a cheque of ` 4,00,000 in full settlement. As per partnership deed A and C are
allowed salary of ` 10,000 per month and ` 5,000 per month respectively.
Profit for the year ending 31st March, 2023 amounted to ` 75,000 before allowing salaries to partners.
You are required to choose the correct answer from the following:

Q. 9. In respect of goodwill A's Capital A/c will be debited by

(A) ` 42,000 (B) ` 60,000 (C) ` 15,000 (D) ` 18,000

Q. 10. In respect of salary A's Capital A/c will be credited by

(A) ` 1,20,000 (B) ` 50,000 (C) ` 60,000 (D) ` 75,000

Q. 11. On Arti's retirement, Stock appeared in the books of the firm at ` 1,60,000 and Machinery at ` 5,00,000. On
revaluation, it was found that stock is undervalued by 20% and machinery is overvalued by 25%. There were bad
debts amounting to ` 10,000. Loss on Revaluation will be:
(A) ` 78,000 (B) ` 1,03,000 (C) ` 95,000 (D) ` 70,000

Q. 12. A and B were partners with capitals of ` 6,00,000 and ` 4,00,000 respectively. C was admitted for 1/5th share
in profits. The journal entry recorded for premium for goodwill brought in by C is given below:
Date Particulars L.F. Dr. (`) Cr. (`)
Premium for Goodwill A/c Dr. 2,00,000
To A's Capital A/c 1,20,000
To B's Capital A/c 80,000
(Adjustment for premium for goodwill brought in by C)
The new profit sharing ratio will be:
(A) 21:19.10 (B) 19:21:10 (C) 12:8:5 (D) 13:7:5

Q. 13. Artı and Bina are partners with profit sharing ratio of 2: 1 and capitals of ` 5,00,000 and ` 4,00,000
respectively. They are allowed 8% p.a. interest on their capitals and are charged 10% p.a. interest on their drawings.
Their drawings during the year were Arti ` 80,000 and Bina ` 60,000. Arti's share of net profit as per profit and loss
appropriation account amounted to ` 1,00,000. Net Profit of the firm before any appropriations was:
(A) ` 2,08,000 (B) ` 2,15,000 (C) ` 1,79,000 (D) ` 2,22,000
OR
Yuvraj is a partner in a firm. He withdrew regularly ` 9,000 at the end of every month for the sixth months ending
31st March, 2021. If interest on drawings is charged @ 10% p.a. the interest charged will be:
(A) ` 1,125 (B) ` 1,350 (C) ` 1,575 (D) ` 2,700

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Q. 14. Net Assets minus Capital Reserve is:
(A) Purchase consideration (B) Goodwill (C) Total assets (D) Liquid assets

Q. 15. Assertion (A): A company can make allotment of shares even if minimum subscription is not received.
Reason (R): As per SEBI Guidelines minimum subscription has been fixed at 90% of the issued amount.
In the context of the above two statements, which of the following is correct?
Codes:
(A) Both (A) and (R) are correct and (R) is the correct reason of (A).
(B) Both (A) and (R) are correct but (R) is not the correct reason of (A).
(C) Only (R) is correct.
(D) Both (A) and (R) are wrong.

Q. 16. Interest on debentures issued as Collateral Security is paid on:

(A) Nominal value of debentures (B) No interest is paid
(C) Face value of debentures (D) Paid up value of debentures
OR
Premium on Redemption of Debentures Account is:
(A) Personal Account (B) Real Account (C) Nominal Account (D) All of the Above

Q. 17. A, B and C are partners sharing profits and losses in the ratio of 1: 2: 3. From April 1, 2025, they decided to
share the profits in the ratio of 2: 3: 4. On that date, Profit and Loss Account disclosed a debit balance of ` 90,000.
Record the necessary journal entry for the distribution of the balance in the Profit and Loss Account.

Q. 18. A, B and C sharing profits and losses in the ratio of 2: 2: 1, decide to share profits and losses equally with effect
from 1st April, 2025. Following is an extract of their Balance Sheet as at 31st March, 2025:
Liabilities ` Assets `
Investment Fluctuation Reserve 50,000 Investments (At Cost) 2,00,000
Show the accounting treatment under the following alternative cases:
Case (1) If the market value of Investments is ` 2,00,000.
Case (if) If the market value of Investments is ` 1,80,000
Case (iii) If the market value of Investments is ` 1,30,000.
Case (iv) If the market value of Investments is ` 2,75,000.
OR
X. Y and Z are partners, their capitals being ` 3,00,000, ` 2.50,000 and ` 200.000 respectively. In arriving at these
figures, the profits for the year ended, 31st March, 2025 ` 2,40,000 has already been credited to the partners in the
proportion in which they share profits. Their drawings were X ` 50,000; Y ` 40,000 and Z ` 30,000 for the year
ending 31st March, 2025. Subsequently the following omissions were noticed and it was decided bring them into
Account.
(1) Interest on Capital at 10% p.a.
(2) Interest on Drawings X ` 2,500, Y ` 2,000 and Z ` 1,500.
Make the necessary journal entry and prepare Capital Accounts of Partners.

Q. 19. Gujarat Gas Ltd. issued 6,00,000, 9% debentures of ` 1,000 each payable as follows:
On application ` 300
On allotment ` 700
The debentures were fully subscribed and all the money was duly received. As per terms of issue, the debentures are
redeemable at ` 1,100 per debenture. Record necessary entries regarding issue of debentures.
OR
A Company purchased assets of the book value of ` 9,00,000 and took over liabilities of ` 3,00,000 from Bunny Ltd.
It was agreed that the purchase consideration settled at ` 6,30,000 be paid by issuing 8% debentures of ` 100 each at a

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premium of 10%. It was further agreed that any fraction of the debenture be paid in cash. Give journal entries in the
books of purchasing company.

Q. 20. P and Q are partners in a firm sharing profits and losses in the ratio of 3: 2. On 31st Manch, 2025, their Balance
Sheet was as under:
Liabilities ` Assets `
Creditors 1,75,000 Land & Building 5,60,000
Employee's Provident Fund 25,000 Debtors 2,00,000
Capitals A/cs Stock 1,50,000
P 4,50,000 Patents 10,000
Q 3,00,000 7,50,000 Bank 30,000
9,50,000 9,50,000
They admit R for 1/5th share in profit. R acquires 1/5th of his share from P and 4/5th share from Q.
(1) R shall bring in ` 2,00,000 as capital and ` 50,000 for his share of goodwill. R brings in only 40% of his share of
goodwill in cash.
(2) Advertisement Expenses of ` 30,000 are to be carried forward to next accounting period.
(3) Provision for doubtful debts is to be created @5%.
(4) Outstanding salary amount to ` 35,500, Employee's Provident Fund is to be increased by ` 10,000.
(5) Patents are to be written off from the books.
(6) Stock worth ` 1,00,000 was taken over by P and Q in their profit sharing ratio and the remaining stock was valued
at ` 40,000.
Prepare Revaluation Account and Partner's Capital Accounts,

Q. 21. A and B are partners sharing profits in the ratio of 3:2. Interest on Capital is allowed at 10% p.a. and charged
on drawings at the same rate. Fill up the missing figures in the following accounts:

PROFIT AND LOSS APPROPRIATION ACCOUNT

for the year ended 31st March, 2025
Particulars ` Particulars `
To Salary to B ……… By Profit & Loss A/c (Net Profit) ………
To ………… By Interest on Drawings:
A ……. A 2,500
B ……. ……… B 1,500 ………
To Profit transferred to:
A ……..
B …….. 1,20,000
……… 2,84,000

PARTNERS CAPITAL ACCOUNT

Particulars A B Particulars A B
To ………. ……. ……. By ………… ……. …….
……. ……. ……. …….

PARTNERS CURRENT ACCOUNT

Particulars A B Particulars A B
To ………. ……. ……. By Balance b/d 16,000 22,000
To ………. By ……… …….
To ………. By Interest on Capital 80,000 60,000
……. ……. ……. …….

Q. 22. A limited company forfeited 600 shares of ` 100 each (originally issued at 25% premium which was payable
along with application money) on which allotment money of ` 20 and first call money of ` 30 were not received; the

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final call money of ` 30 is not yet called. These shares were originally allotted on pro-rata basis in the ratio of 4: 3.
These shares were subsequently reissued at a discount of ` 5 per share, credited as ` 70 paid up.
Pass necessary Journal entries for forfeiture and reissue of shares.

Q. 23. Tanishq Ltd. invited applications for issuing 12,000 equity shares of ` 10 each at a premium of ` 3 per share.
The amount was payable as follows:
On Application and Allotment ` 6 per share. (Including Premium)
On First Call ` 4 per share.
On Second and Final Call The Balance
Applications for 18,000 shares were received and pro-rata allotment was made to all the applicants.
Excess money received with applications was adjusted towards sums due on first call. All calls were made and were
duly received except the first call and second and final call on 120 shares allotted to Krish. His shares were forfeited.
The forfeited shares were re-issued at the maximum permissible discount as per the provisions of the Companies Act,
2013. Pass necessary Journal Entries for the above transactions in the books of the company.
OR
Pushkar Ltd. issued 20,000 shares of ` 100 each at a premium of ` 5 per share. All the amounts were received except
the first & final call of ` 40 on 1,000 shares issued to Dushyant. His shares were forfeited.
It also issued 20,000, 7% Debentures of ` 100 each at a discount of 6% and redeemable at a premium of 5%, Entire
amount was payable on application.
Questions:
(a) Determine the amount that will be debited to Securities Premium Account on forfeiture of shares.
(b) The company wants to reissue the forfeited shares for ` 30,000 as fully paid-up Can the company do so? If not,
what is the minimum amount at which the forfeited shares can be reissued.
(c) What is amount of loss on Issue of Debentures?
(d) How will the Loss on Issue of Debentures dealt with?

Q. 24. P. Q and R share profits in the ratio of 4:3:2. Q retires and P and R decide to share future profits in the ratio of
5:3. Following is their Balance Sheet as at 31st March, 2025:
Liabilities ` Assets `
Sundry Creditors 1,65,000 Plant & Machinery 4,50,000
Workmen Compensation Reserve 40,000 Stock 2,12,000
Contingency Reserve 45,000 Investments 75,000
Investment Fluctuation Reserve 30,000 Sundry Debtors 1,75,000
Outstanding Expenses 20,000 Less: Provision 15,000 1,60,000
Capital Accounts: Advertisement Suspense A/c 36,000
P’s Capital 3,20,000 Cash at Bank 67,000
Q’s Capital 2,50,000
R’s Capital 1,30,000 7,00,000
10,00,000 10,00,000
Following terms were agreed upon:
(1) Goodwill of the firm is valued at ` 1,80,000.
(2) Investments Fluctuation Reserve be brought to ` 12,000.
(3) Outstanding expenses to be brought down by ` 15,000.
(4) There were bad debts amounting to ` 10,000.
(5) There was a claim for workmen compensation amounting to ` 50,000.
(6) It was found that there was a liability for ` 50,000 for goods received and included in stock but not recorded in the
books.
Prepare Revaluation Account & Capital Accounts of the Partners.
OR
A. B and C were partners in a firm sharing profits in the ratio of 1:2:3 On 31.7.2025 the firm was dissolved. From the
information given below complete Realisation Account, Capital Accounts and Bank Account:

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 REALISATION ACCOUNT
Particulars ` Particulars `
To Sundry Assets By Sundry Liabilities
Debtors 1,82,000 Provision for Bad Debts 6,000
Stock 50,000 Creditors 75,000 81,000
Computer 40,000 By Bank (Assets Realised) 6,36,000
Land & Building 5,10,000 7,82,000 By A’s Capital (Computer taken) …….
To Bank (Payment to Creditors) ……… C’s Capital (Stock taken) …….
To C’s Capital A/c By Loss transferred to:
(Realisation Expenses) ……… A’s Capital A/c ……….
B’s Capital A/c ……….
C’s Capital A/c 45,000 …….
……… …….

PARTNERS CAPITAL ACCOUNT

Particulars A B C Particulars A B C
To Realisation A/c (Computer 15,000 By ……. ...... 1,80,000 4,10,000
taken) ...... By General Reserve 10,000 ......
To Realisation A/c (Stock taken) ...... ……. ...... By Realisation A/c
To Realisation (Loss) ...... ……. ...... (Expenses paid) ......
To Bank A/c ...... ...... ...... 1,25,000 ...... 4,40,000

BANK ACCOUNT
Particulars ` Particulars `
To ……… ……… By Realisation A/c
To ……… ……… (Payment to Creditors) 70,000
By ……….. ..…..
By ……….. ..…..
By ……….. ..…..
……… ..…..

Q. 25. Pulkit, Nitin and Mukesh were partners in a firm sharing profits and losses in the ratio of 2:2:1 Their Balance
Sheet as at 31-3-2025 was as follows:
BALANCE SHEET
as at 31st March, 2025
Liabilities ` Assets `
Capitals: Plant & Machinery 5,00,000
Pulkit 3,00,000 Stock 3,10,000
Nitin 2,00,000 Sundry Debtors 60,000
Mukesh 1,00,000 6,00,000 Cash at Bank 40,000
General Reserve 2,50,000 Profit & Loss A/c 80,000
Creditors 1,40,000
9,90,000 9,90,000
Pulkit died on 30th June, 2025. According to the partnership deed, the executors of the deceased partner are entitled
to:
(a) Balance in partner's capital account.
(b) Salary @ ` 5,000 per quarter.
(c) Share of goodwill calculated on the basis of twice the average of past three years profits and share of profits from
the closure of the last accounting year till the date of death on the basis of last year's profit. Profits for 2022-23 and
2023-24 were ` 90,000 and ` 1,40,000 respectively.
(d) Pulkit withdrew ` 20,000 on 1st May, 2025 for his personal use.
Prepare Pulkit's Capital Account to be rendered to his executors.

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Q. 26. In 2024, Krishna Ltd. was registered with an authorized capital of ` 1,00,000 in Equity shares of ` 10 each. Of
these, 4,000 equity shares were issued as fully paid to vendors for the purchase of Plant and Machinery and the
remaining 6,000 shares were subscribed for by the public for cash. During the first year, ` 6 per equity share was
called up on these 6,000 shares, payable ` 3 on application, ` 1 on allotment and ` 2 on the first call.
The amount received in respect of these shares were as follows:
On 5,000 shares, the full amount called.
On 600 shares, ` 4 per share.
On 400 shares, ` 3 per share.
The company forfeited all those shares on which only ` 3 had been received and reissued them at ` 8 per share as fully
paid up.
(a) Subscribed Share Capital of the Company is:
(i) ` 76,000 (ii) 74,800 (iii) 76,400 (iv) None of the above

(b) The balance in Calls in Arrears A/c is:

(i) ` 2,400 (ii) ` 1,200 (iii) 1,600 (iv) None of the above

(c) The amount transferred to Capital Reserve A/c is:

(i) ` 400 (ii) ` 1,200 (iii) ₹3,600 (iv) None of the above

(d) Issued Share Capital of the Company:

(i) ` 1,00,000 (ii) ` 90,000 (iii) ` 60,000 (iv) ` 40,000

(e) On forfeiture of shares Share Capital A/c will be debited by:

(i) ` 1,200 (ii) ` 2,400 (iii) ` 4,000 (iv) None of the above

(f) Preliminary Expenses are written off:

(i) Within 5 years (ii) Within 3 years (iii) In the year in which they are incurred (iv) any time

Part-B (Analysis of Financial Statements)

Q. 27. Assertion (A): If the operating cycle of a business is 16 months, goods sold on credit period of 14 months will
be classified as current assets.
Reason (R): An asset shall be classified as current asset if the period of the operating cycle of the business is of
a period of more than 12 months.
In the context of the above two statements, which of the following is correct?
Codes:
(A) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(B) Both (A) and (R) are true and (R) is the correct explanation of (A).
(C) Both (A) and (R) are false.
(D) (A) is false, but (R) is true.
OR
What will be the Current Ratio from the following:
Liquid Assets ` 1,00,000; Inventory ` 90,000 (including loose tools ` 15,000); Prepaid Expenses ` 5,000; Working
Capital ` 1,20,000.
(A) 1.5:1 (B) 3.25:1 (C) 3:1 (D) 1.625:1

Q. 28. Which of the following is not true:

(A) Comparative Statement of Profit & Loss
(B) Common size Statement of Profit & Loss
(C) Common size Cash Flow Statement
(D) Comparative Balance Sheet

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Q. 29. A Company's liquid assets are ` 6,00,000, Inventory is ` 1,50,000 and its current liabilities are ` 4,00,000.
Subsequently, it purchased goods for ` 1,00,000 on credit. Quick ratio will be
(A) 1.5:1 (B) 1.2:1 (C) 1.4:1 (D) 1.7:1

Q. 30. From the following information, ascertain the Inflow of Cash:

31st March 2023 (`) 31st March 2022 (`)
Furniture 3,80,000 5,00,000
Additional Information:
(i) Depreciation for the year 2022-23 was ` 40,000.
(ii) Machinery purchased during the year was ` 70,000,
(iii) Part of machinery sold at a gain of ` 10,000.
(A) ` 1,50,000 (B) ` 1,40,000 (C) ` 1,60,000 (D) ` 2,00,000
OR
Cash deposits by customers in HDFC Bank will be:
(A) Cash Flow from Operating Activities (B) Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities (D) No Cash Flow

Q. 31. Under which major sub-headings will the following items be placed in the Balance Sheet of a company as per
Schedule-III, Part-1 of the Companies Act, 2013:
(i) Net Loss shown by Statement of Profit & Loss (ii) Bonds issued by the Company
(iii) Loans repayable on demand (iv) Vehicles
(v) Patents (vi) Goods acquired for trading

Q. 32. Complete the following:

COMPARATIVE STATEMENT OF PROFIT AND LOSS
for the years ending 31st March 2023 and 2024
Particulars Note 31st March 31st March Absolute Percentage
No. 2023 2024 Change Change
I. Revenue from Operations ….. 5,00,000 50
II. Less: Expenses
(a) Cost of Revenue from Operations ….. 10,50,000 ….. 75
(b) Other Expenses ….. ….. (50,000) (25)
Total Expenses ….. ….. 4,00,000 50
III. Profit before tax (I-II) ….. ….. ….. …..

Q. 33. From the following data, calculate:-

(i) Gross Profit Ratio (ii) Working Capital Turnover Ratio (iii) Debt-Equity Ratio.
Particulars `
Revenue from Operations 30,00,000
Gross Profit is 50% on Cost
Net Profit 3,00,000
Fixed Assets 6,50,000
Current Assets 6,00,000
Current Liabilities 2,00,000
Equity Share Capital 5,00,000
9% Debentures 2,50,000
OR
The following information is given about a company :-
Particulars `
Cost of Revenue from Operations 1,20,000
Gross Profit is 20% on Revenue from Operations
Operating Expenses 7,500
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 Opening Inventory 29,000
Closing Inventory 31,000
Trade Receivables 16,000
Net Fixed Assets 1,10,000
From the above information, calculate the following ratios:-
(i) Operating Ratio. (ii) Inventory Turnover Ratio (iii) Trade Receivables Turnover Ratio.

Q. 34. Prepare a Cash Flow Statement from the following Balance Sheets of Dry Fruits Ltd.
Particulars Note 31.03.2024 31.03.2024
No.
1. EQUITY AND LIABILITIES:
1. Shareholder's Funds
(a) Share Capital 2,00,000 2,00,000
(b) Reserve and Surplus 1 84,000 (8,000)

2. Non-Current Liabilities:
(a) Long-term Borrowings 2 1,35,000 1,00,000

3. Current Liabilities
(a) Trade Payables 68,000 62,000
TOTAL 4,87,000 3,54,000

IL ASSETS:
1. Non-Current Assets:
(a) Property, Plant and Equipment and Intangible Assets
(i) Property, Plant and Equipment 3 1,20,000 1,30,000

2. Current Assets:
(a) Current Investments (Marketable Securities) 22,000 15,000
(b) Inventories 61,000 80,000
(c) Trade Receivables 40,000 29,000
(d) Cash & Bank Balance 2,44,000 1,00,000
TOTAL 4,87,000 3,54,000
31.03.2025 31.03.2024
(`) (`)
Notes:
1. Reserves & Surplus
General Reserve 24,000 …..
Profit & Loss Balance 60,000 (8,000)

2. Long-term Borrowings
12% Mortgage Loan 1,35,000 1,00,000

3. Property, Plant and Equipment.

Machinery 1,45,000 1,60,000
Less Accumulated Depreciation 25,000 30,000

Additional Information :-
1. Interest paid on mortgage loan amounted to ` 14,100,
II. Interim Dividend paid during the year ` 20,000.
III. Machinery costing ` 40,000 (accumulated depreciation thereon being ` 18,000) was sold for ` 5,000.

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