Question : On dissolution of a firm, a partner took over Rs.34,000 investments for Rs.28,000. Which one of the following accounts will be debited/credited with how much amount?
Option 1: Partner's Capital Account Debit with 28,000
Option 2: Partner's Capital Account Credit with 34,000
Option 3: Realisation Account Credit with 34,000
Option 4: Realisation Account debited with 34,000
Correct Answer: Partner's Capital Account Debit with 28,000
Solution : Answer = Partner's Capital Account Debit with 28,000
When an investment valued at Rs 34,000 is taken over by any partner by Rs 28,000. Partner capital account will be debited by Rs 28,000 and credited to the realisation account by Rs 28,000.
Partner's capital a/c......Dr 28,000
To Realisation a/c 28,000.
Hence, the correct option is 1.
Answer laterQuestion : The emoluments and allowances of the President and other expenditures relating to his office are charged on the ____________of India.
Option 1: contingency fund
Option 2: estimates fund
Option 3: consolidated fund
Option 4: public accounts fund
Correct Answer: consolidated fund
Solution : The correct answer is Consolidated Fund.
The emoluments and allowances of the President and other expenditures relating to his office are charged to the Consolidated Fund of India. The budget consists of two types of expenditure - the expenditure 'charged' upon the Consolidated Fund of India and the expenditure 'made' from the Consolidated Fund of India.
Question : Cake and Muffin are partners sharing profits and losses in the ratio of 5: 4. On 1st April, 2016, they admit Cookie as a new partner for 1/6th share in the profits of the firm and the new ratio agreed upon is 3: 2: 1.
Goodwill, at the time of Cookie's admission is to be valued on the basis of capitalisation of the average profits of the last three years. Profits for the last three years were :
Year ended 31st March, 2014 Rs.39,000 (including an abnormal loss of Rs. 9,000).
Year ended 31st March, 2015 Rs.83,000 (including an abnormal gain of Rs.8,000).
Year ended 31st March, 2016 Rs.72,000.
On 1st April, 2016, the firm had assets of Rs.8,00,000. Its creditors amounted to Rs.3,60,000. The firm had a Reserve Fund of Rs. 40,000 while Partners' Capital Accounts showed a balance of Rs.4,00,000.
The normal rate of return expected from this class of business is 13%.
Cookie brings in Rs.2,00,000 for her capital but is unable to bring in cash for her share of goodwill.
The amount of cookie brought his share of goodwill will be .....
Option 1: Rs 60,000
Option 2: Rs 50,000
Option 3: Rs 10,000
Option 4: None of the above
Correct Answer: Rs 10,000
Solution : Answer = Rs 10,000
(i) Calculation of Cookie's Share of Goodwill in the firm :
Calculation of Average Normal Profit:
| Year ended | Profit | Rs. |
| 31st March, 2014 | (Rs. 39,000+Rs .9,000) | 48,000 |
| 31st March, 2015 | (Rs 83,000- Rs 8,000) | 75,000 |
| 31st March, 2016 | 72,000 | |
| 1,95,000 |
Average normal profit=$\frac{71,95,000}{3}$= Rs 65,000
Capitalised value of average profits= $\frac{\text { Average Normal Profit }}{\text { Normal Rate of Return }} \times 100$= $\frac{3,65,000}{13}$×100= Rs 5,00,000.
Capital employed (Net assets)= Total assets - Outside liabilities = Rs 8,00,000 - Rs 3,60,000= Rs 4,40,000.
Goodwill = Capitalised Value of Average Profits - Net Assets = Rs 5,00,000-Rs 4,40,000= Rs 60,000.
Cookie's share of goodwill= Rs 60,000×$\frac{1}{6}$= Rs 10,000.
Hence, the correct option is 3.
Question : According to the data of 2011-12, Regular salaried employees accounts for __ of work force in rural areas .
Option 1: 2%
Option 2: 5%
Option 3: 9%
Option 4: 8%
Correct Answer: 9%
Solution : According to the data of 2011-12, Regular workers accounts for 9% of work force in rural areas.
Hence Option C is correct.
Question : Which section of the Partnership Act specifies the mode of settlement of accounts on the dissolution of a partnership firm?
Option 1: Section 48
Option 2: Section 43
Option 3: Section 45
Option 4: Section 47
Correct Answer: Section 48
Solution : According to Section 48 of the Indian Partnership Act, 1932:
(a) Loss Provision: Losses, including capital deficits, are to be covered first out of profits, then out of capital, and last, if required, by each partner individually in the percentage of profits that they were entitled to.
(b) Application of assets provision - The firm's assets, including any funds donated by the partners to make up capital shortfalls, shall be applied in the following manner and order:
1. Repayment of loans obtained from outside sources,
2. The repayment of advances and loans made by the partners,
3. Partners' capital payments,
4. In accordance with the profit-sharing ratio, the partners will split the remaining funds.
Hence, the correct option is 1.
Question : Sentences of a paragraph are given below in jumbled order. Arrange the sentences in the correct order to form a meaningful and coherent paragraph.
A. In fact, he began his career as a peon in a small firm.
B. Before he joined us as the accounts officer, he was a junior clerk.
C. He learnt typing, accounting and even graduated.
D. But he gradually improved his qualifications.
Option 1: CDAB
Option 2: BADC
Option 3: CBAD
Option 4: BCDA
Correct Answer: BADC
Solution : The second option is the correct answer.
It starts with the introduction of the narrator's role as a junior clerk before becoming an accounts officer (B). The paragraph then provides additional context by revealing that the narrator began their career as a peon at a small firm (A).As the narrative unfolds, it mentions the gradual improvement in qualifications (D) and it concludes by highlighting the narrator's efforts in learning typing, accounting, and eventually graduating (C).
Therefore, the correct answer is BADC.
Question : Sharma, Verma and Goyal are partners in a firm. On 1st April 2012 the balances in their
Capital Accounts were as follows:
Sharma Rs. 4,00,000; Verma Rs. 4,20,000 and Goyal Rs. 3,70,000. The firm closes its accounts every year on 31st March. Verma died on 30th September 2012. In the event of the death of any partner following are the provisions in the Partnership Deed:
(i) Interest on Capital will be calculated at the rate of 10% p.a.
(ii) The deceased partner; 's legal representative will be paid Rs. 35,000 for his share of goodwill.
(iii) The firm had a Reserve Fund of Rs. 2,10,000. The deceased partner will be paid his share in the Reserve Fund.
(iv) His share of profit till the date of death will be calculated based on sales. It is also specified that the sales during the year 2011-12 were Rs. 15,00,000. The sales from 1st April 2012 to 30th September 2012 were Rs. 3,00,000. The profit of the firm for the year ending 31st March 2012 was Rs. 3,00,000.
Question:
The amount of goodwill distributed amongst the partners are
Option 1: Rs 17,500
Option 2: Rs 35,000
Option 3: Rs 24,000
Option 4: None of the above
Correct Answer: Rs 35,000
Solution : Answer = Rs 35,000
| Verma's capital a/c | |||
| To Verma's executor a/c (b/f) | 5,66,000 | By Bal b/d | 4,20,000 |
| By IOC | 21,000 | ||
| ($4,20,000 \times \frac{10}{100} \times \frac{6}{12}$) | |||
| By Reserve fund | 70,000 | ||
| ($2,10,000 \times \frac{1}{3}$) | |||
| By Sharma & Goyal capitals a/c | 35,000 | ||
| P & L suspense a/c | 20,000 | ||
| 5,66,000 | 5,66,000 | ||
$\frac{3,00,000}{15,00,000}$×3,00,000= 60,000$\times \frac{1}{3}$= 20,000.
Hence, the correct option is 2.
Question :
At the time of retirement of a partner, profit (gain) on revaluation will be credited to the Capital Accounts of
Option 1: retiring partner.
Option 2:
all partners in their old profit-sharing ratio.
Option 3:
the remaining partners in their old profit-sharing ratio.
Option 4:
the remaining partners in their new profit-sharing ratio.
Correct Answer:
all partners in their old profit-sharing ratio.
Solution : Answer = all partners in their old profit-sharing ratio.
When a partner retires, the gain on the revaluation of assets is credited to the Capital Accounts of all partners in their old profit-sharing ratio. This ensures that all partners benefit from the increased value of the assets and reflects their respective interests in the partnership's assets.
Hence, the correct option is 2.
Question :
Correct the following sentence if it is incorrect:
The current regime seems resolute to create perennial struggle for the downtrodden and that accounts to lots of injustice.
Option 1: perennial struggle for the downtrodden and this accounts to lots of injustice
Option 2: perennial struggle about the downtrodden and this accounts to lots of injustice
Option 3: perennial struggle for the downtrodden and that accounts for lots of injustice
Option 4: perennial struggle for the downtrodden and that accounts to lots of injustice
Option 5: perennial struggle to the downtrodden and that accounts to lots of injustice
Correct Answer: perennial struggle for the downtrodden and that accounts for lots of injustice
Solution : 'Accounts for' is the correct idiomatic usage.
Question : Sharma, Verma and Goyal are partners in a firm. On 1st April 2012 the balances in their Capital Accounts were as follows:
Sharma Rs. 4,00,000; Verma Rs. 4,20,000 and Goyal Rs. 3,70,000. The firm closes its accounts every year on 31st March. Verma died on 30th September 2012. In the event of the death of any partner following are the provisions in the Partnership Deed:
(i) Interest on Capital will be calculated at the rate of 10% p.a.
(ii) The deceased partner; 's legal representative will be paid Rs. 35,000 for his share of goodwill.
(iii) The firm had a Reserve Fund of Rs. 2,10,000. The deceased partner will be paid his share in the Reserve Fund.
(iv) His share of profit till the date of death will be calculated based on sales. It is also specified that the sales during the year 2011-12 were Rs. 15,00,000. The sales from 1st April 2012 to 30th September 2012 were Rs. 3,00,000. The profit of the firm for the year ending 31st March 2012 was Rs. 3,00,000.
Question:
Amount Due to the deceased's partner's capital account will be ......
Option 1: Rs 3,66,000
Option 2: Rs 6,06,000
Option 3: Rs 5,66,000
Option 4: None of the above
Correct Answer: Rs 5,66,000
Solution : Answer = Rs 5,66,000
| Verma's Capital A/c | |||
| By Verma's executor a/c (b/f) | 5,66,000 | By Bal b/d | 4,20,000 |
| By IOC | 21,000 | ||
| ($4,20,000 \times \frac{10}{100} \times \frac{6}{12}$) | |||
| By Reserve fund | 70,000 | ||
| ($2,10,000 \times \frac{1}{3}$) | |||
| By Sharma & Goyal capitals | 35,000 | ||
| By P & L suspense a/c | 20,000 | ||
| 5,66,000 | 5,66,000 | ||
$\frac{3,00,000}{15,00,000}$×3,00,000= 60,000$\times \frac{1}{3}$= 20,000.
Hence, the correct option is 3.
