Question : A, B and S were partners sharing profits in the ratio 2: 2: 1. On July 1, 2017, Shreya died. The books of accounts are closed on March 31 every year. Sales for the year 2016-17 amounted to Rs.5,00,000 and that from 1st April to 30th June 2017 were Rs. 1,40,000. The rate of profit during the past three years had been 10% on sales. Since S's legal representative was her only son, who is specially abled, it was decided that the profit for the purpose of settling S's account is to be calculated as 20% of sales.
Calculate S's share of profits till the date of her death and pass the necessary journal entry for the same.
Option 1: Debited profit and loss account by Rs 5,600 and credited S's capital account
Option 2: Debited profit and loss suspense account by Rs 5,600 and credited S's account
Option 3: Debited S's capital account and credited profit and loss suspense account
Option 4: None of the above
Correct Answer: Debited profit and loss suspense account by Rs 5,600 and credited S's account
Solution : Answer = Debited profit and loss suspense account by Rs 5600 and credited S's account
Sales (IApril to Dure 30,2017)=1,40,000
Profit= $1,40,000 \times \frac{20}{100}$= 28,000.
Shreys's share= $28000 \times \frac{1}{5}$= 5,600
Protit and cass suspense AlC or 5600
To Shreya's Capital AIC - 5600
Hence, the correct option is 2.
Answer laterQuestion : Which of the following claims concerning the cost of education is true?
Option 1: In India, the majority of total educational spending is spent at the elementary level.
Option 2: In India, tertiary education accounts for the majority of all educational spending.
Option 3: In India, secondary schooling accounts for the majority of all educational spending.
Option 4: The majority of India's total educational spending is spent at higher levels.
Correct Answer: In India, the majority of total educational spending is spent at the elementary level.
Solution : Higher education accounts for the least amount of the total budget and elementary education for the most. The government places more focus on elementary education because it is the foundational or first level of schooling.
Hence option a is the correct answer.
Question : P, Q and R are equal partners with fixed capitals of Rs. 5,00,000, Rs. 4,00,000 and Rs. 3,00,000, respectively. After closing the accounts for the year ending 31st March 2019. It was discovered that interest on capital @ 7% instead of 9% p.a. In the adjustment entry.
Option 1: P will be credited by Rs. 2,000 and
Q will be debited by Rs. 2,000.
Option 2: P will be debited by Rs. 2,000 and
Q will be credited by Rs. 2,000
Option 3: P will be debited by Rs. 2,000 and
R will be credited by Rs. 2,000.
Option 4: P will Be credited By Rs. 2,000 and
R will Be debited by Rs. 2000
Correct Answer: P will Be credited By Rs. 2,000 and
R will Be debited by Rs. 2000
Solution : Answer = P will Be credited By Rs 2,000 and R will Be debited by Rs 2000
R's current a/c Dr 2,000
To P's current a/c 2,000
| Interest on capital @ 9% p.a. | P | Q | R | Firm | ||||
| Dr | Cr | Dr | Cr | Dr | Cr | Dr | Cr | |
| - | 10,000 | - | 8,000 | - | 6,000 | 24,000 | ||
| loss(1:1:1) | 8,000 | - | 8,000 | - | 8,000 | - | 24,000(loss) | |
| 8,000 | 10,000 | 8,000 | 8,000 | 8,000 | 6,000 | 24,000 | 24,000 | |
| 2,000(Cr) | 2,000(Dr) | |||||||
Hence, the correct option is 4.
Question : What is a significant difference between British and Indian accounts of the Revolt of 1857 in terms of their focus?
Option 1: British accounts focus on military strategies, while Indian accounts focus on social impact
Option 2: British accounts emphasize the role of technology, while Indian accounts highlight traditional warfare
Option 3: British accounts portray the revolt as a criminal act, while Indian accounts view it as a struggle for freedom
Option 4: British accounts are more factual, while Indian accounts are more emotional
Correct Answer: British accounts portray the revolt as a criminal act, while Indian accounts view it as a struggle for freedom
Solution : Correct Option: 3
Explanation: A significant difference between British and Indian accounts of the Revolt of 1857 is that British accounts often portray the revolt as a criminal act or a mutiny, while Indian accounts tend to view it as a legitimate struggle for freedom from colonial oppression.
Question : Bharat and Bhushan are partners in a retail business. Balances in their Capital and Current Accounts as on 31st March, 2020 were:
| Capital Account | Current Account |
| Bharat Rs. 2,00,000 |
Rs. 50,000 |
| Bhushan Rs. 2,40,000 |
Rs. 10,000 (Dr.) |
The firm earned an average profit of Rs. 90,000. If the normal rate of return is 10%, value of goodwill.
Option 1: Rs 4,20,000
Option 2: Rs 4,10,000
Option 3: Rs 13,80,000
Option 4: None of these
Correct Answer: Rs 4,20,000
Solution : Answer = 4,20,000
Capitalised Value of the Business = = Rs. 90,000 x = Rs. 9,00,000
Capital employed R= 2,00,000+2,40,000+50,000-10,000=4,80,000
Goodwill =Rs 9,00,000-4,80,000= Rs 4,20,000.
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 : At the time of admission of a partner, what will be the effect of the following information? Balance in Workmen compensation reserve Rs. 1,40,000. Claim for workmen compensation Rs. 1,10,000.
Option 1: Rs. 1,40,000 Debited to the Partner's Capital Accounts.
Option 2: Rs. 1,10,000 Debited to Revaluation Account.
Option 3: Rs. 30,000 Credited to the Partner's Capital Accounts.
Option 4: Rs. 30,000 to Debited Revaluation Account.
Correct Answer: Rs. 30,000 Credited to the Partner's Capital Accounts.
Solution : Answer = Rs. 30,000 Credited to the Partner's Capital Accounts.
Rs 30,000 should be distributed to the old partner and in their profit sharing ratio.
Rs 1,10,000 should be shown on the liabilities side of the New firm balance sheet.
Hence, the correct option is 3.
Question : When the Company decided to record the issue of Debentures as Collateral Security: Which of the following accounts should be debited?
Option 1: % Debenture account
Option 2: Debentures suspense account
Option 3: Bank loan account
Option 4: No entry required
Correct Answer: Debentures suspense account
Solution : Answer = Debentures suspense account
When a company decides to record the issue of debentures as collateral security, the appropriate account to be debited is the "Debentures Suspense Account." This account is used to temporarily hold the debenture proceeds until the collateral is provided. It ensures accurate recording and tracking of the transaction until it is finalized.
Hence, the correct option is 2.
Question : Hari and Kavi are partners sharing profits and losses in the ratio of 3: 2. They admit Ravi as a partner who contributes Rs. 30,000 as his capital for 1/5th share in the profits of the firm. It is decided that after Ravi's admission, the capitals of the Hari and Kavi will be adjusted on the basis of Ravi's share of capital in the business, and any surplus or deficiency to be adjusted through current accounts. Before any adjustments were made, the capitals of Hari and Kavi were: Rs. 59,000 and Rs. 35,000 respectively.
At the time of Ravi's admission :
(a) The firm's goodwill was valued at Rs. 40,000.
(b) General Reserve was Rs.25,000.
(c) Loss on revaluation of assets and liabilities was Rs.4,000.
CHOOSE: The correct Journal entry for surplus and shortage
Option 1: Crediting Hari's current account by Rs 4,400 and debiting Kavi's current account Rs 1,400
Option 2: Debiting Hari's current account by Rs 4,400 and crediting Kavi's current account Rs 1,400
Option 3: Debiting Hari's current account Rs 4,400 and debiting Kavis current account Rs 1,400
Option 4: Crediting Hari's Current account Rs 4,400 and Crediting Kavi's current account Rs 1,400
Correct Answer: Crediting Hari's current account by Rs 4,400 and debiting Kavi's current account Rs 1,400
Solution : Answer = Crediting Hari's current account by Rs 4,400 and debiting Kavi's current account Rs 1,400
| Hari | Kavi | Ravi | Hari | Kavi | Ravi | ||
| Revaluation(loss) | 2400 | 1600 | - | By Bal. B/D | 59000 | 35,000 | - |
| Reserve | 1500 | 1000 |
- |
||||
| Bal. C/D | 76400 | 46600 | 30,000 | Bank | - | - | 30,000 |
| Premium for Goodwill | 4800 | 3200 | - | ||||
| 78800 | 48200 | 30,000 | 78800 | 48200 | 30,000 | ||
| Current A/c | 44000 | - | - | Bal. B/D | 76400 | 46600 | 30,000 |
| Bal. C/D | 72000 | 48,000 | 30,000 | Current A/c | - | 1400 | - |
| 76400 | 48000 | 30,000 | 76400 | 48000 | 30,000 |
Let total capital of the new firm be = 1
Ravi's share = 1/5
1/5 = 30,000
1= 30,000 x 5 = 150,000
Hari = 3/5 x 4/5 = 12/25 x 1,50,000 = 72,000
Kavi = 2/5 x 4/5 = 8/25 x 1,50,000 = 48,000
Ravi = 1/5 x 5/5 = 5/25 x 1,50,000 = 30,000
Hence, the correct option is 1.
Question : What is a notable feature of the administrative records found in Ain-i-Akbari?
Option 1: Detailed accounts of military campaigns
Option 2: Comprehensive descriptions of legal procedures
Option 3: Systematic documentation of revenue collection
Option 4: Personal anecdotes about Akbar's life
Correct Answer: Systematic documentation of revenue collection
Solution : Correct Option: Option 3
Explanation: A notable feature of the administrative records found in Ain-i-Akbari is the systematic documentation of revenue collection, which provides insights into the economic management of the Mughal Empire.
