Q1. A partnership firm had an unrecorded investment of ₹50,000. On the dissolution of the firm, this investment was taken over by a partner, 'X', to settle his wife's loan to the firm amounting to ₹45,000. The remaining value of the investment was settled in cash by the partner. What will be the net credit/debit in the Realisation Account for this entire transaction?
Correct Answer: Option A (Credit Realisation A/c by ₹5,000)
Explanation: Detailed explanation will be updated shortly.
Q2. X Ltd. forfeited 400 shares of ₹10 each (fully called-up), issued at a premium of ₹2 per share, for non-payment of allotment money of ₹5 (including premium) and first & final call of ₹3. Out of these, 300 shares were reissued to Z as fully paid-up for ₹8 per share. What amount will be transferred to the Capital Reserve Account?
Correct Answer: Option A (₹600)
Explanation: Detailed explanation will be updated shortly.
Q3. A and B are partners with capitals of ₹3,00,000 and ₹2,00,000 respectively. B is guaranteed a minimum profit of ₹80,000 per year. The firm incurred a loss of ₹1,00,000 for the year ended 31st March 2024. What will be the final amount debited to Partner A's Capital Account?
Correct Answer: Option A (₹1,10,000)
Explanation: Detailed explanation will be updated shortly.
Q4. A company issued ₹10,00,000, 9% Debentures at a discount of 5% on 1st April 2022, redeemable in four equal annual installments starting from 31st March 2024. The company follows the 'sum of years' digits' method for writing off the discount. What amount of discount will be written off in the year ending 31st March 2025?
Correct Answer: Option A (₹15,000)
Explanation: Detailed explanation will be updated shortly.
Q5. From the following information of a Not-for-Profit Organisation, what amount will be shown in the Balance Sheet as at 31st March 2024 for 'Tournament Fund'?
- Tournament Fund as on 1st April 2023: ₹2,00,000
- 10% Tournament Fund Investments as on 1st April 2023: ₹2,00,000
- Donations for Tournament received: ₹50,000
- Tournament Expenses incurred: ₹65,000
- Interest received on Tournament Fund Investments: ₹15,000
Correct Answer: Option A (₹2,20,000)
Explanation: Detailed explanation will be updated shortly.
Q6. If the Operating Ratio is 85%, what would be the effect of 'Sale of Goods for ₹50,000 (Cost ₹40,000)' on the ratio?
Correct Answer: Option A (The ratio will increase.)
Explanation: Detailed explanation will be updated shortly.
Q7. P, Q, and R are partners in a firm. On R's retirement, the firm's goodwill was valued at ₹1,80,000. P and Q decided to share future profits equally. No goodwill account is to be raised. The necessary adjustment entry involved a debit/credit to P and Q. If Q's account was debited by ₹30,000, what was the old profit-sharing ratio of P, Q, and R?
Correct Answer: Option A (2:3:1)
Explanation: Detailed explanation will be updated shortly.
Q8. Which of the following statements is INCORRECT regarding a Computerised Accounting System (CAS)?
Correct Answer: Option A (It guarantees 100% accuracy, eliminating any possibility of errors.)
Explanation: Detailed explanation will be updated shortly.
Q9. A financing company declared and paid a dividend of ₹5,00,000. It also received interest of ₹2,00,000 on loans given and paid interest of ₹1,50,000 on its borrowings. In its Cash Flow Statement, the net effect of these three items on Cash Flow from Financing Activities will be:
Correct Answer: Option A (Outflow of ₹4,50,000)
Explanation: Detailed explanation will be updated shortly.
Q10. A company's Balance Sheet shows Plant and Machinery (at cost) ₹10,00,000 and Accumulated Depreciation ₹3,00,000. During the year, a machine costing ₹2,00,000 with accumulated depreciation of ₹80,000 was sold for ₹1,00,000. What is the amount of cash flow from this transaction?
Correct Answer: Option A (Inflow of ₹1,00,000 from Investing Activities)
Explanation: Detailed explanation will be updated shortly.
Q11. A and B are partners sharing profits 3:2. C is admitted for 1/4th share, which he acquires wholly from A. C brings in ₹1,00,000 as capital and his required share of goodwill in cash. The total goodwill of the firm is valued at ₹80,000. What will be the closing capital balance of A, if his opening capital was ₹2,50,000 (after all adjustments except goodwill)?
Correct Answer: Option A (₹2,70,000)
Explanation: Detailed explanation will be updated shortly.
Q12. 'Cheques in Hand' are shown in a company's Balance Sheet under the major head 'Current Assets'. What is the appropriate sub-head as per Schedule III?
Correct Answer: Option A (Inventories)
Explanation: Detailed explanation will be updated shortly.
Q13. On the death of a partner, his share of profit till the date of death is to be calculated on the basis of the average profit of the last three years. Profits for the preceding three years were ₹1,20,000, ₹1,50,000, and ₹1,80,000. The deceased partner died three months after the date of the last balance sheet. His profit share was 1/5. What amount will be credited to his capital account?
Correct Answer: Option A (₹30,000)
Explanation: Detailed explanation will be updated shortly.
Q14. A company offers its existing equity shareholders the right to subscribe to new shares in proportion to their existing shareholding. This is known as:
Correct Answer: Option A (Private Placement)
Explanation: Detailed explanation will be updated shortly.
Q15. A company redeems its 5,000, 10% Debentures of ₹100 each by converting them into equity shares of ₹10 each, issued at a premium of ₹25 per share. How many equity shares will be issued?
Correct Answer: Option A (50,000 shares)
Explanation: Detailed explanation will be updated shortly.
Q16. Current Ratio is 2.5:1 and Working Capital is ₹90,000. If the inventory is ₹60,000, what is the Quick Ratio?
Correct Answer: Option A (1.5:1)
Explanation: Detailed explanation will be updated shortly.
Q17. A firm's average profit is ₹1,20,000. The total tangible assets in the firm are ₹14,00,000 and outside liabilities are ₹4,00,000. The normal rate of return in the same business is 10%. Calculate the value of goodwill by the Capitalisation of Super Profits method.
Correct Answer: Option A (₹2,00,000)
Explanation: Detailed explanation will be updated shortly.
Q18. As per Section 52(2) of the Companies Act, 2013, the Securities Premium amount can be utilised for all the following purposes, EXCEPT:
Correct Answer: Option A (For writing off preliminary expenses of the company.)
Explanation: Detailed explanation will be updated shortly.
Q19. X and Y are partners. The partnership deed is silent on the interest on loans provided by partners. X advanced a loan of ₹1,00,000 to the firm on 1st October 2023. The firm closes its books on 31st March 2024. How much interest is X entitled to receive for the year?
Correct Answer: Option A (₹6,000)
Explanation: Detailed explanation will be updated shortly.
Q20. A company issues debentures of ₹10,00,000 at par, redeemable at a 10% premium. This premium on redemption is a:
Correct Answer: Option A (Capital Loss, to be written off in the year of issue itself against Securities Premium or from the Statement of P&L.)
Explanation: Detailed explanation will be updated shortly.