Accounts
Question : Jan Dhan Yojana has induced millions of people to open their bank accounts. It will lead to an increase in __________
Option 1: Inflation
Option 2: Primary deposits
Option 3: Deflation
Option 4: Value of currency
Correct Answer: Primary deposits
Solution : The correct answer is (b). Primary deposits
The implementation of the Jan Dhan Yojana, a financial inclusion program in India, has indeed encouraged millions of people to open bank accounts. This has significant implications for the banking system and the economy. One of the
Question : P, R and S are in partnership sharing profits 4/8, 3/8 and 1/8 respectively. It is provided under the partnership deed that on the death of any partner his share of goodwill is to be valued at one-half of the net profits credited to his account during the last 4 completed years (books of accounts are closed on 31st March). R died on 1st April, 2018. The firm's profits for the last 4 years were as follows: 2015 (Profits Rs. 1,20,000); 2016 (Profits Rs.60,000); 2017 (Losses Rs.20,000) and 2018 (Profits Rs. 80,000). The amount that should be credited to R in respect of his share of goodwill will be
Option 1: Rs 45,000
Option 2: Rs 90,000
Option 3: Rs 40,000
Option 4: None of the above.
Correct Answer: Rs 45,000
Solution : Answer = Rs 45,000 Total profits of last 4 years= 1,20,000+ 60,000+ (20,000)+ 80,000= 2,40,000. R's share of profit= 2,40,000×$\frac{3}{8}$= 90,000. R's share of goodwill= 90,000×$\frac{1}{2}$= 45,000. Hence, the correct option is 1.
Question : There was an old computer which was written-off in the books of accounts in the pervious year. The same has been taken over by a partner Nitin for Rs.3,000 when the firm has been dissolved. Choose the Correct Journal entry :
Option 1: Nitin’s Capital A/c Dr. 3,000
To Realisation A/c 3,000
(Being unrecorded old computer taken over by the partner Nitin)
Option 2: Bank A/c Dr. 3,000
(Being unrecorded old computer taken over by the Partner)
Option 3: Realisation A/c Dr. 3,000
To Nitin’s Capital A/c 3,000
Option 4: None of the Above
Correct Answer: Nitin’s Capital A/c Dr. 3,000
Solution : Nitin’s Capital A/c Dr. 3,000
The correct answer is option 1.
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
Question : 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
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
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
Correct Answer: Rs 21,000
Solution : Answer = Rs 21,000
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
Correct Answer: Liability side: Sports Fund Rs. 17,500; Assets side: Sports Fund Investments Rs. 30,000
Solution : An Extract Balance Sheet
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