Question : In the event of a change in the profit-sharing ratio, the General Reserve existing in the Balance Sheet is transferred to the Capital Accounts of partners in their
Option 1: sacrificing ratio
Option 2: gaining ratio
Option 3: old profit-sharing ratio
Option 4: new profit-sharing ratio
Correct Answer: old profit-sharing ratio
Solution : Answer = old profit-sharing ratio
If at the time of change in profit sharing ratio, reserve, accumulated profit and losses exist in the books of the firm, they are transferred to the partner's capital account on their old profit sharing ratio because reserve and accumulated profit and losses as on the date of change in profit sharing ratio were earned before the reconstitution of the firm.
Hence, the correct option is 3.
Answer laterQuestion : The computerised accounting system refers to -
Option 1: Printing of Balance sheet and Profit and loss accounts using computer
Option 2: Processing of accounting transaction through computer and produce reports and records
Option 3: Processing of accounting related data and priting reports
Option 4: None of the above
Correct Answer: Processing of accounting transaction through computer and produce reports and records
Solution : In order to provide reports that meet user needs, computerised accounting systems handle financial transactions and events in accordance with generally accepted accounting principles (GAAP).
Hence the Correct answer is option 2.
Question : A, M and N are in partnership, sharing profits in the proportion of two-thirds, one-sixth and one-sixth respectively.
A died on the 30th June, 2018, three months after the annual accounts had been prepared and in accordance with the partnership agreement, his share of the profits to the date of death was estimated on the basis of the profit for the preceding year. In addition to this, the agreement provided for interest on capital at 5 per cent per annum on the balance standing to the credit of the capital account at the date of the last Balance Sheet, and also for goodwill, which was to be brought into account at two year’s purchase of the average profits for the last three years.
A’s capital on 31st March, 2018 stood at Rs.1,20,000, and his drawings from then to the date of death amounted to Rs.9,000.
The net profits of the business for the three preceding years amounted to Rs.33,500; Rs.41,500 and Rs.40,500, respectively.
Amount payable to A’s executors________________.
Option 1: Rs. 1,70,583
Option 2: Rs 1,70,580
Option 3: Rs 1,70,853
Option 4: None of the above
Correct Answer: None of the above
Solution : Answer = None of the above
Amount Payable to A's Excutor will be
A's Capital Balance = 1,20,000
Add Interest on Capital = 1500
(1,20,000 × 5/100× 3/12 )
Add Goodwill
(1,15,500 × 2/3)
= (38500 × 2) = 77000 × 2/4 = 38,500
[A, M: N = 1/3 :1/6:1/6 = 2:1:1]
Less Drawings = (9000)
Add Profit
(40500 × 2/4 ×3/12) = 5062.50
= 1,20,000 + 1500 + 38500 +5063 - 9000
= 1,56,063
Hence, the correct option is 4.
Question : X, Y and Z were in partnership sharing profits and losses in the ratio 3: 2: 1. Z retired from the firm on 1st April, 2016. After adjustments, his Capital Account shows a credit balance of Rs. 1,00,000 on the date of retirement. Z is to be paid in four equal annual instalments from 31st March, 2017 along with interest @ 10% p.a. Accounts are closed on March 31, every year.
Question:
Amount of Installment to be paid at the end of march 31,2018 will be
Option 1: Rs 32,500
Option 2: Rs 35,000
Option 3: Rs 30,000
Option 4: Rs 27,500
Correct Answer: Rs 32,500
Solution : Answer = Rs 32,500
Amount of Interest paid on March 31, 2018 = Rs 32500
(23000 + 7500 Interest)
Hence, the correct option is 1.
Question : Accounts must be codified in order to:
Option 1: maintain a hierarchy between groups and components
Option 2: process data more quickly and prepare final accounts
Option 3: keep data and information safe
Option 4: none of the above.
Correct Answer: maintain a hierarchy between groups and components
Solution : Accounts must be codified in order to maintain a hierarchy between groups and components. Hence, the correct option is 1.
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 on the basis of 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 of Interest on capital will be
Option 1: Rs 24,000
Option 2: Rs 21,000
Option 3: Rs 20,000
Option 4: None of the above
Correct Answer: Rs 21,000
Solution : Answer = Rs 21,000
| 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 | ||
| 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 2.
Question : Show how will you deal with the following items in the final accounts of a club :Rs.
Sports Fund 15,000
Sports Fund Investments 30,000
Income from Sports Fund Investments 1500
Donations for Sports Fund 12,000
Sports Prizes awarded 7,000
Expenses on Sports events 4,000
Option 1: Liability side: Sports Fund Rs. 17,500; Assets side: Sports Fund Investments Rs. 30,000
Option 2: Liability side: Sports Fund Rs. 14,500; Assets side: Sports Fund Investments Rs. 30,000
Option 3: Liability side: Sports Fund Rs. 20,500; Assets side: Sports Fund Investments Rs. 30,000
Option 4: None of the above
Correct Answer: Liability side: Sports Fund Rs. 17,500; Assets side: Sports Fund Investments Rs. 30,000
Solution : An Extract Balance Sheet
| Liabilities | Amount | Assets | Amount |
| Sports fund |
15000 | ||
| Sports Fund Investment |
30000 | ||
| (+) Donation for Sports Fund |
12000 | ||
| 27000 | |||
| (-) Sports | (7000) | ||
| Prize awarded | 2000 | ||
| (+) Int on | 1500 | ||
| Sports Fund Investment |
21500 | ||
| (-) Exp on (4000) Sports event |
(4000) | ||
| 17,500 |
Answer = Liability side: Sports Fund Rs. 17,500; Assets side: Sports Fund Investments Rs. 30,000.
Hence, the correct option is 1.
Question : Assertion (A): Hari and Mohan are equal partners. They admit Kunal as a partner for 1/4th share. The value of assets was increased by Rs 1,00,000 and an unrecorded liability of Rs 40,000 was brought into books, The gain (profit) of Rs 60,000 will be credited in the capital accounts of Hari and Nimrat equally.
Reason (R): Gain (profit) or loss on revaluation of assets and reassessment of liabilities is credited or debited to the Capital Accounts of old partners in their old profit-sharing ratio.
In the context of the above two statements, which of the following is correct?
Option 1: Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A).
Option 2: Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation Assertion (A).
Option 3: Assertion (A) is correct but the Reason (R) is not correct.
Option 4: Both Assertion (A) and Reason (R) are not correct.
Correct Answer: Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation Assertion (A).
Solution : Answer = Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
Both Assertion and Reason are correct and Reason is the correct explanation of assertion.
Gain and lose on revaluation are distributed in old partners in their old profit-sharing ratio.
Hence, the correct option is 2.
Question : A and T are equal partners with fixed Capitals of Rs. 2,00,000 and Rs. 1,00,000, respectively. After closing the accounts for the year ending 31st March 2019. It was discovered that interest on capital 8% p.a. was omitted to Be provided. In the adjustment Entry:
Option 1: A will be credited By Rs. 16,000 and
T will be debited by Rs. 8,000
Option 2: A will be debited By Rs. 16,000 and
T will be debited by Rs. 8,000
Option 3: A will be credited By Rs. 4,000 and
T will be debited by Rs. 4,000
Option 4: A will be debited by Rs. 4,000 and
T will Be credited by Rs. 4,000.
Correct Answer: A will be credited By Rs. 4,000 and
T will be debited by Rs. 4,000
Solution : Answer = A will be credited By Rs 4,000 and T will be debited by Rs 4,000.
| Interest on capital @ 8% p.a. | A | T |
Firm
|
|||
| Dr | Cr | Dr | Cr | Dr | Cr | |
| - | 16,000 | - | 8,000 | 24,000 | 24,000(loss) | |
| 12,000 | 12,000 | 24,000 | 24,000 | |||
| Loss (1:1) | 12,000 | 16,000 | 12,000 | 8,000 | ||
| 4,000(Cr) | 4,000(Dr) | |||||
Hence, the correct option is 3.
Question : The largest committee of Parliament of India is
Option 1: Public Accounts Committee
Option 2: Estimates Committee
Option 3: Committee on Public Undertakings
Option 4: Joint Parliamentary Committee
Correct Answer: Estimates Committee
Solution : The correct answer is Estimates Committee.
The largest committee in the parliament is called the Estimates Committee. This committee's duties include providing reports on spending and the economy, as well as recommendations for actions that could be taken to strengthen the economy and related laws. To improve administration efficiency and the economy, it analyses the projected expenditures and revenues of different departments and makes alternative policy recommendations.
