I. MULTIPLE CHOICE QUESTIONS

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1 Objective Questions 1 I. MULTIPLE CHOICE QUESTIONS CHAPTER 1 : Partnership Final Accounts Q. No. 1 to 5 Trial Balance Dr. Cr. Debtors 1,15,000 Provision for Doubtful Debts 5,000 Bills Receivable 10,000 Closing Stock 45, ,000 goods sold on Sales or Approval basis. Goods are sold at a profit of 33 1 % on cost half 3 the goods are approved. About other half no intimation is received. 2. 5,000 Bills Receivable dishonoured. 3. Of the Debtors 20,000 outstanding for more than six months and 50% of which is bad which is to be written off. 4. Create 5% on Debtors. 1. Amount of New Bad debts (a) 10,000 (b) 20,000 (c) 5, How much amount of Sale on Approval to be deducted from debtors? (a) 20,000 (b) 10,000 (c) 5, What is the amount of New RDD? (a) 10,000 (b) 7,500 (c) 5, What is the amount of Closing Stock (a) 55,000 (b) 52,500 (c) 57, How much is the amount Debited to Profit & Loss Account for Bad Debts. (a) 10,000 (b) 15,000 (c) 5,000 Balance Sheet Assets Debtors 1,15,000 Add : B/R Dishonoured 5,000 1,20,000 Less : Sale on Approval 10,000 1,10,000 Profit & Loss Account (Dr. Side) Less : New Bad Debts 10,000 Old Bad Debts Net Debtors 1,00,000 New Bad Debts 10,000 Less : New RDD 5,000 Add : New RDD 5,000 95,000 15,000 Less : Old RDD 5,000 Closing Stock 45,000 10,000 Add Stock with Customers 7,500 52,500 Q. No. 6 to 7 Trial Balance Dr. Cr. Purchases 2,10,000 Carriage Outward 5,000 Return Outward 2,000 Creditors 80,000 Return Inward 6,000

2 2 Accountancy and Financial Management (S.Y.B.Com. Sem. III) Adjustments : 1. Goods worth 12,000 received during the year included in the Closing Stock but not recorded in the Books of Accounts. 2. Goods worth 5,000 distributed as free samples. No entry for the same is passed. 3. Goods worth 4,500 used for the purpose of Extension to Building. 6. What is the amount of Purchases (a) 2,05,500 (b) 2,06,500 (c) 2,10, What is the amount of Creditors? (a) 92,000 (b) 1,02,000 (c) 68,000 Q. No. 8 to 10 Trial Balance as on 31st December, 2007 Plant & Machinery 1,00,000 Furniture 50,000 Vehicles 40,000 Adjustments : 1. 30,000 plant purchased on 1st July, Half of the furniture and 1 of the vehicle used for personal purpose Depreciate 10% p.a. 5% 7.5% 8. What is the amount of depreciation on Plant and Machinery? (a) 10,000 (b) 8,500 (c) 9, Amount of depreciation on furniture debited to Profit & Loss Account (a) 2,500 (b) 1,250 (c) 1, Amount of depreciation on vehicle debited to Profit & Loss Account (a) 3,000 (b) 2,500 (c) 2,250 Q. No. 11 to 16 Trial Balance Dr. Cr. Plant & Machinery at cost 1,00,000 Furniture at cost 50,000 Vehicle at cost 40,000 Depreciation Provision for plant 30,000 Depreciation Provision for furniture 10,000 Depreciation Provision for vehicle 12,000 Adjustments : 1. Depreciate 10% on W.D.V. 2. Depreciate 10% on straight line basis. 3. Depreciate 10% on Book value. 11. What is the amount of depreciation on Plant and Machinery? (a) 10,000 (b) 7,000 (c) 9, What is the Net Balance of Plant and Machinery? (a) 70,000 (b) 63,000 (c) 90, What is the depreciation on furniture? (a) 5,000 (b) 2,000 (c) 4, What is the Net value of furniture at the end of the year? (a) 50,000 (b) 18,000 (c) 15, What is the amount of depreciation on vehicle? (a) 2,800 (b) 4,000 (c) 1, What is Net value of vehicle at the end of the year? (a) 24,000 (b) 15,000 (c) 25,200

3 Objective Questions 3 Q. No. 17 to 21 Trial Balance as on 31st December, 2007 Dr. Cr. 1. Leasehold Premises purchased on 1st July, ,000 (life 5 years) 2. Investment in Debentures 33,000 Face value 100 (Purchased at 110% of face value) 3. Loan from Rajan 60,000 (at 8% p.a ) 4. Loan given to Rahul) 80,000 ( Rate 10% p.a.) 17. Leasehold premises written off during the year. (a) 5,000 (b) 2,500 (c) 3, Leasehold premises value in Balance Sheet (a) 45,000 (b) 47,500 (c) 46, Amount of Interest receivable on Investment in Debentures (a) 2,700 (b) 2,970 (c) 2, Amount of Interest Payable to Rajan (a) 4,800 (b) 2,400 (c) 1, Amount of Interest Receivable from Rahul. (a) 8,000 (b) 6,000 (c) 4, Calculate closing stock Closing stock as on 31st December, 2007 : Cost 60,000, Market value 58,000 Above stock includes 5,000 goods received on consignment, 9,000 goods sent on consignment and 8,000 goods lying with the Branch not included : (a) 70,000 (b) 72,000 (c) 75,000 Q. No. 23 to 25 Trial Balance as on 31st December, 2007 Rent ( 2,000 P.M.) 20,000 Insurance 4,000 Adjustment : Insurance Includes 2,000 paid for the year ended 31st March, Amount of rent debited to Profit & Loss Account (a) 20,000 (b) 24,000 (c) 22, Amount of Insurance debited to Profit & Loss Account (a) 4,000 (b) 3,500 (c) 3, Amount of prepaid insurance shown in the Balance Sheet (a) 1,000 (b) 500 (c) 2,000 Q.No. 26 to 28 10,000 worth of goods lost by fire. Under following situations how much amount should be debited to Profit & Loss Account. 26. Goods are not insured (a) Nil (b) 10,000 (c) None 27. Insurance company accepted the claim of 75% of the value. (a) 7,500 (b) 10,000 (c) 2, Insurance company accepted the full claim (a) Nil (b) 10,000 (c) None 29. Goods lying in stock 10,000 insured for 8,000; 5,000 goods lost by fire Insurance Co. accepted the claim (a) 4,000 (b) 5,000 (c) 8,000 Dr. Cr.

4 4 Accountancy and Financial Management (S.Y.B.Com. Sem. III) 30. Trial Balance as on 31st December, 2007 Dr. Cr. Wages paid 60,000 Outstanding Wages ,000 Adjustment : Wages paid includes 3,000 paid for instalation of Plant and Current Year Outstanding wages is 3,000. Calculate the amount of wages. (a) 60,000 (b) 63,000 (c) 56, What is the amount of wages outstanding for the year? (a) 7,000 (b) 4,000 (c) 3, Trial Balance Dr. Cr. 33. Sales 3,10,000 (Includes in the above 5,000 sale of vehicle) Adjustment : Goods despatched during the year amounted to 15,000 but invoice was not entered. During the year amount of sales will be : (a) 3,25,000 (b) 3,20,000 (c) 3,05,000 Trial Balance as on 31st December, 2007 Dr. Cr. Return Outward 5,000 Purchases 5,60,000 Return Inward 10,000 Purchases includes 10,000 purchase of furniture. Calculate purchases. (a) 5,40,000 (b) 5,50,000 (c) 5,45, If sales are 5,00,000 and cost of goods sold is 3,50,000 and operating expenses are 50,000, the Gross Profit will be : (a) 1,50,000 (b) 1,00,000 (c) 4,50,000 (d) 3,00,000 Q.No If sales are 4,000 and the rate of G.P. on cost of goods sold is 25%. Then the cost of goods sold will be : (a) 3,200 (b) 30,000 (c) 2,000 (d) None Q.No Operating stock is 90,000, Closing stock is 45,000. The company purchases 1,65,000 on credit. During the year the company paid 1,75,000 to the suppliers. The goods are sold at 25% above cost. The sales for the year will be : (a) 3,62,000 (b) 2,62,500 (c) 3,40,000 (d) None 37. Trial Balance as on 31st December, 2007 Investment in 6% Debentures 30,000 (Interest is payable on 31st March & 30th September) Interest on Investments 9,000 Amount of accrued interest on 31st Dec., will be : (a) 2,000 (b) 450 (c) 1,800 (d) 900 Dr. Cr.

5 Objective Questions 5 Q.No. 38 to 42 Calculate Interest on drawing of 12% p.a. for the year ended in each of the following alternatives 38. If drawing during the year were 36,000 (a) 1,980 (b) 2,160 (c) 2, If he withdrew 3,000 p.m. in the beginning of every month. (a) 1,980 (b) 2,160 (c) 2, If he withdrew 3,000 p.m. at the end of every month. (a) 1,980 (b) 2,160 (c) 2, If he withdrew 2,500 p.m. (a) 1,950 (b) 1,800 (c) 1, If he withdrew the following amount as follows : Jan. 31st 10,000, 1st April 6,000, 1st Aug. 4,000 1st Oct. 5,000, 1st Nov. 7,000 (a) 1,990 (b) 2,000 (c) 2,190 Q.No. 43 to 48 Saurabh and Rishab started business with capital of 3,50,000 and 2,50,000. Calculate Interest on drawing of 10% p.a. for the year ended 31st December, 2007 in each of the following alternatives 43. If his drawing during the period were 12,000 (a) 450 (b) 600 (c) If he withdrew 1,500 p.m. in the beginning of every month (a) 900 (b) 975 (c) If he withdrew 1,500 at the end of every month. (a) 900 (b) 975 (c) If he withdrew 9,000 in the beginning of every quarter (a) 2,250 (b) 2,500 (c) 2, If he withdrew 9,000 at the end of every quarter (a) 1,500 (b) 1,350 (c) 1, Calculate the Interest on drawing of 10% p.a. for the year ended 31st December, 2007 if he withdrew 6,000 during the middle of each quarter (a) 1,100 (b) 1,200 (c) 1, Raveena & Kareena started business on 1st January, 2006 with capital of 4,00,000 and 3,00,000 respectively. There is no withdrawal or addition of capital during the year. Calculate Interest on 10% p.a. Accounts are closed on 31st December. Raveena Kareena Raveena Kareena (a) 40,000 30,000 (b) 1,800 40,000 Raveena Kareena (c) 35,000 35, Raveena & Kareena started business on 1st July, 2006; with capital 4,00,000 and 3,00,000 respectively. There is no withdrawal or addition of capital during the year. Calculate Interest on 9% p.a. If books of accounts are closed on 31st March every year. Raveena Kareena Raveena Kareena (a) 27,000 20,250 (b) 36,000 27,000 Raveena Kareena (c) 30,000 24, A and B started business on 1st January, 2006 with capital 6,00,000 and 4,00,000 respectively. On 1st April, A introduced in addition capital 1,50,000 and B withdraw 1,00,000 from his capital. On 1st July, A withdraw 2,00,000 from his capital B introduced 1,50,000 on his capital Interest on 12% p.a. Calculate Interest on Capital for the year ended 31st December. A B A B (a) 74,500 50,000 (b) 73,500 48,000 A B

6 6 Accountancy and Financial Management (S.Y.B.Com. Sem. III) (c) 71,500 46,000 6,00, ,00, ,000 12,000 7,50, ,00, ,500 9,000 5,50, ,00, ,000 27, Ritu & Nitu started business on 1st April, 2006 with capital of 3,00,000 and 2,00,000 respectively. On 1st Oct. they decided that their capital should be 2,50,000 each. The necessary adjustments in the capital were made by Introducing or withdrawing cash. Interest on capital is allowed at 9% p.a. Calculate Interest on capital as on 31st March, ,00, ,00, ,500 9,000 2,50, ,250 13, ,250 9, ,250 24,750 20,250 Ritu Nitu (a) 24,750 20,250 Ritu Nitu (b) 24,000 20,000 Ritu Nitu (c) 22,000 18, X and Y are parnters in a firm. X is to get a commission of 10% of Net Profit before charging any commission. Y is to get commission of 10% on Net Profit after charging all commission. Net Profit before charging any commission was 1,21,000. Find out the commission of A and B. A B (a) 12,100 9,900 A B (b) 12,100 10,890 A B (c) 12,100 1,10,000 Q.No. 53 to 54 Amar and Bimal are partners. They do not have any partnership agreement (partnership deed) what should be done in the following cases : 54. Amar spends twice time that Bimal devotes to business. Amar claims that he should get 3,000 per month for his extra time spent. a) Amar is entitled to salary of 3,000 p.m. b) Amar is entitled to half of salary of clerk. c) Amar is not entitled to any salary 55. Bimal has provided capital of 1,00,000 whereas Amar has provided 50,000 only as capital. Amar however, has provided 10,000 as loan to the firm. What Interest (if any) will be given to Amar and Bimal. a) Amar is entitled to claim Interest on his loan at 6% p.a. and Bimal Nil. b) Bimal 6,000 Amar 3,600 c) Amar Nil Bimal Nil 56. In absence of any agreement partners are entitled to receive interest on their loans. (a) 15% (b) 10.5% (c) 6% (d) 8.5%

7 Objective Questions A partner acts as an a) Agent c) Third party b) Employee 58. Relationship between the persons who have agreed to share profits of business is known as a) Partnership c) AOP b) J.V d) Body of Individuals 59. In the absence of an agreement partners are entitled to a) Commission c) Interest on Loans b) Salary d) Share of profit in Capital ratio 60. If provided in the agreement interest on capital will be paid to partners out of a) Future profits c) Accumulated profit b) Current profits d) Goodwill 61. In case a partner is given guarantee loss in such guarantee is borne by those a) who guaranteed c) All other partners b) partnership d) partners with highest profit sharing ratio 62. Interest on Drawings is recorded in a) Credit side of Profit and Loss appropriation A/c b) Debit side of Profit and Loss appropriation A/c c) Debit side of Profit and Loss A/c 63. Partners current A/c may have a) Debit balance c) a or b b) Credit balance 64. In absence of any agreement profits and losses are shared in a) Equal ratio b) Capital ratio c) Loan ratio 65. Interest on capital is a) an appropriation b) an expenditure c) a gain 66. Fixed capital A/c is credited by a) Salary of the partners b) Interest on capital c) Share of profit of the year 67. Fluctuating Capital A/c is credited by a) Salary of the partners b) Interest on capital c) Share of profit for the year d) All of the above 68. Partners Drawing A/c is closed by transfer to a) Partner's capital A/c b) partner's current A/c c) Either a or b 69. In absence of agreement partners are entitled to a) Interest on loan b) Salary c) Interest on capital d) Share of profit in capital ratio 70. Partners capital A/c generally shows a) Debit balance b) Credit balance c) Either of a or b

8 8 Accountancy and Financial Management (S.Y.B.Com. Sem. III) CHAPTER 2 : Piecemeal Distribution of Cash 1. If there are four liabilities e.g. creditors 10,000 Bills Payable 5,000, outstanding expenses 10,000, other loan 5,000 and cash available is 15,000. a) First pay 10,000 to creditors and Rs. 5,000 to Bills Payable. b) First pay 10,000 to outstanding expenses and 5,000 to other loan. c) Pay 5,000, 2,500, 5,000, 2,500 in Due Ratio 2 : 1 : 2 : For finding unit value capital is divided by a) Profit Sharing Ratio. b) Capital Ratio. c) None of above. 3. After finding the unit value of three partners A, B and C we select the unit value a) Which is lowest. b) Which is highest. c) Average. 4. Unit value we multiply with each one's a) Profit Sharing Ratio. b) Capital Ratio. c) Average. 5. Bank Overdraft Partners Loan 10,000 X Loan 10,000 Y Loan 10,000 Cash available is 15,000. How would you distribute? a) Pay Bank overdraft 10,000, Balance 2,500 each to X loan and Y loan. b) Pay all three 5,000 each. c) Pay 10,000 Bank overdraft and Rs. 5,000 to X loan. 6. Bank loan is 30,000 secured against stock and stock sold for 25,000, Balance 5,000 is a) Secured. b) Unsecured. c) None of above. 7. If Bank loan 50,000; Bank overdraft is 25,000, Bills Payable 15,000; creditors 10,000; Bank loan is secured against Land & Building. Bank overdraft is against stock. Assets Realised Bills Receivable 50,000. a) Pay Bank loan 50,000. b) Pay Bank overdraft 25,000; Bills Payable 15,000; 10,000 to creditors. c) Pay in due ratio 10 : 5 : 3 : If X loan 12,000 and Y loan is 8,000. Both are partners. Profit Sharing Ratio is 5 : 4. Cash available 9,000. How would you pay? a) 5,400 to X loan, 3,600 to Y loan. b) 5,000 to X loan, 4,000 to Y loan. c) 9,000 to X loan. 9. Balance Sheet Liabilities Assets Capitals : Fixed Assets 1,60,000 Patel 30,000 Cash Balance 20,000 Shah 40,000 Deferred Advertisement Desai 50,000 1,20,000 Expenditure 20,000 General Reserve 20,000 Profit & Loss 10,000 Capital Reserve 10,000 Creditors 60,000-2,10,000 2,10,000 a) Which partner is having ultimate excess (i) Patel (ii) Shah (iii) Desai b) Which two partners get second preference (i) Patel, Shah (ii) Patel, Desai (iii) Shah, Desai

9 Objective Questions Balance Sheet Liabilities Assets Creditors 10,000 Cash 5,000 Capitals : Other Assets 77,000 X 30,000 Current A/c Y 25,000 X 2,000 Z 20,000 Y 1,000 3,000 85,000 85,000 a) Which partner is having ultimate excess (i) X (ii) Y (iii) Z b) Which two partners get second preference (i) Y, Z (ii) X, Y (iii) X & Z 11. Balance Sheet Liabilities Assets Capitals : Fixed Asset 11,00,000 Reema 6,00,000 Cash 1,00,000 Reena 4,00,000 Ritu (minor) 2,00,000-12,00,000 12,00,000 Profit sharing ratio is 2 : 2 : 1 a) Which partner should be paid first (i) Reema (ii) Reena (iii) Ritu b) Which partner is having ultimate excess (i) Reema (ii) Reena (iii) None c) While calculating excess capital you have to consider i) All the three partners ii) Reema, Reena only iii) Reema and Ritu only 12. East, West and South are partners sharing in the ratio of 3 : 3 : 2. Their capitals are 24,000, 15,000 & 9,000 respectively. Which partner has ultimate surplus. (i) East (ii) West (iii) South 13. Contingency Reserve is 20,000 and contingent liability is 18,000. How would you deal with the remaining contingency Reserve. a) 2,000 should be distributed among the partners in their profit sharing ratio. b) 20,000 should be distributed among the partners in capital ratio. c) 18,000 should be distributed among the partners equally. 14. Realisation of assets on dissolution is a) Sudden b) Creditors c) Unexpected 15. External liabilities are liabilities due to a) Partners b) Creditors c) None 16. Employees dues are a) Preferential liabilities b) Contingent liabilities c) External liabilities 17. Contingent liabilities are the liabilities which are a) Contingent on happening of certain event in future b) Fixed liabilities c) Current liabilities

10 10 Accountancy and Financial Management (S.Y.B.Com. Sem. III) 18. Preferential liabilities are a) Payable to creditors b) Payable to government c) Payable to partners 19. Partners loan is a) Internal liability b) External liability c) Secured liability 20. Take over of liability by a partner is a) Added to capital of a partner b) Deducted from capital of a partner c) Neglected 21. General Reserve should be a) Distributed in profit sharing ratio b) Distributed in capital ratio c) Not distributed among the partners 22. Profit & Loss Account debit balance should be a) Deducted from Capitals b) Added to Capitals c) Transferred to Realisation Account 23. Relisation A/c is prepared in case of a) Admission b) Retirement c) Death d) Dissolution 24. Bills under discount is a a) Contingent liability b) Non-current liability c) Current liability d) Fixed liability 25. After payment of outside liabilities a) Govt. dues should be paid b) Partner's loan should be paid c) Partner's capital should be paid d) Expenses should be paid 26. After payment of partners loan payment should be made to a) The partner having surplus capital b) The partner having deficiency c) Govt. Loan d) Secured Loan 27. In case an asset of a firm purchased by any partner a) Partners capital should be debited b) Agreed value should be distributed among all the partners. c) Book value should be distributed among all the partners 28. The amount finally left unpaid on partner's capital account should be in a) Capital ratio b) Profit sharing ratio c) Equally d) Ratio of drawings

11 Objective Questions Government dues payable by the firm on the date of dissolution is treated as a) Secured creditors b) Unsecured creditors c) Preferential creditors 30. Employees dues payable on the date of dissolution is treated as a) Secured creditors b) Preferential creditors c) Unsecured creditors 31. Unsecured creditors are paid in the following order a) Employees dues, Government dues, other dues b) Government dues, employees dues, other dues c) All creditors proportionately d) All of the above 32. In case cash is not sufficient to pay all partners loans, payment is made a) Capital ratio b) Profit sharing ratio c) Ratio of unpaid loans 33. The firm has taken loan from Dena bank 3,00,000 which is partly secured by stock of 1,50,000 which realised 2,50,000 a) 50,000 is treated as unsecured creditors b) 1,50,000 is treated as secured creditors c) 1,50,000 is treated as preferential creditors 34. Excess capital method is also known as a) Surplus capital method b) Maximum loss method c) Notional loss method 35. Maximum loss method is also known as a) Notional loss method b) Highest relative capital method c) Surplus capital method 36. In piecemeal distribution liabilities of a firm are paid before a) Distribution of cash among the partners. b) Sale of asset c) Revaluation of assets 37. Any reserve in the Balance sheet on the date of dissolution should be distributed among the partners in a) Equal ratio b) Capital ratio c) Loan ratio 38. If the amount received from sale of asset is not sufficient to pay fully the firm's liabilities the deficiencies should be borne by the partners in a) Profit sharing ratio b) Capital ratio c) Loan ratio

12 12 Accountancy and Financial Management (S.Y.B.Com. Sem. III) 39. X, Y, Z are the three partners having capitals of 30,000, 36,000 and 18,000. The profit sharing ratio is 2 5 : 2 5 : 1 Under surplus capital method the capital considered as base is 5 a) X b) Y c) Z d) X and Y 40. Monika, Sonika, Ronika are partners sharing Profits and Losses in the ratio of 2:1:1 their Capitals are : Monika 40,000 Sonika 10,000 Ronika 5,000 Reserve fund 8,000 Contingency Reserve 6,000 Loan : Sonika 6,000 Ronika 4,000 On the date of dissolution contingent Liability was 2,000 Realisation expenses 2,000. Whose capital is considered as a base for calculation of surplus capital. a) Sonika b) Monika c) Ronika d) None 41. The adjusted capitals of the partners will be a) 46,000, 13,000, 8,000 b) 50,000, 26,000, 7,000 c) 44,000, 12,000, 7,000 c) 42,000, 11,000, 6, The ultimate surplus will be a) Monika 20,000 b) Sonika 5,000 c) Ronika 8, Cash available for payment to creditors on the date of dissolution is a) 2,000 b) 3,000 c) 1,000 d) 500 CHAPTER 3 : Amalgamation of Partnership Firms 1. Amalgamation is a) Merger of businesses b) Dissolution of firms c) None 2. Purchase consideration is the amount a) Payable by new firm to old firm b) Payable by old firms to partners c) Payable by one firm to another firm. 3. Assets are transferred to Realisation A/c at a) Book value b) Market value c) Cost

13 Objective Questions Excess of credit over debit side of Realisation Account is a) Profit on Realisation b) Loss on Realisation c) Surplus 5. Liabilities assumed by partners are a) Debited to Realisation Account b) Debited to Revaluation Account c) Debited to Partners' Capital Account 6. Realisation expenses are a) Debited to Bank Account b) Debited to Realisation Account c) Credited to Capital Account 7. Take over of asset by a partner is debited to a) Realisation Account b) Partners' Capital Account c) Bank Account 8. Excess of Net Assets over Purchase Consideration is a) Capital Reserve b) Goodwill c) Capital 9. Goodwill written off is debited to a) All partners Capital Account b) Goodwill Account c) Realisation Account 10. Profit or loss on Realisation is distributed among the partners in a) Profit sharing ratio b) Capital Ratio c) Claim Ratio 11. Purchase consideration is calculated by a) Net payment method b) Net Asset method c) Either a or b 12. Amalgamation is dealth with by a) AS 14 b) AS 16 c) AS Realisation A/c is opened when amalgamation is accounted by a) Revaluation method b) Realisation method c) Either a or b 14. On amalgamation of firms, Realisation A/c is opened in the books of a) Vendor firm b) Purchasing firm c) Both the firms 15. On amalgamation of firms the A/c opened in the books of a vendor firm is a) Realization A/c b) Profit and Loss Adjustment A/c c) Revaluation A/c d) Amalgamation Adjustment A/c 16. On amalgamation of firms fictitious assets of the vendor firm are transferred to a) Revaluation A/c b) Realisation A/c c) Profit and Loss Appropriation A/c d) Capital Accounts of partners

14 14 Accountancy and Financial Management (S.Y.B.Com. Sem. III) 17. On amalgamation of firms partners loans of vendor firm are transferred to a) Capital Accounts b) Revaluation A/c c) Purchasing firm's A/c 18. On amalgamation of firms, accumulated profits of old firm are distributed to a) Old partners in old ratio b) Old partners in new ratio c) New partners in New ratio 19. On amalgamation liabilities not taken over by the new firm are transferred to a) Capital Accounts of partners b) New firm's A/c c) Revaluation A/c 20. On amalgamation of firms profit or loss on sale of firm is determined by preparation of a) Realisation A/c b) Profit and Loss Appropriation A/c c) Revaluation A/c 21. On amalgamation of firms goodwill of both the firms is a) Ingored b) Valued separately c) Valued at cost 22. Deferred Revenue expenses in Balance sheet of amalgamating firms are transferred to a) Capital A/cs of partners b) Loan A/cs of partners c) Realisation A/c d) Revaluation A/c 23. On amalgamation dissolution expenses of the vendor firm paid by purchasing firm are debited to a) Goodwill A/c in the books of purchasing firm b) Partners capital A/cs in New ratio c) Vendor firm's A/c in the books of purchasing firm 24. In case these is a provision for doubtful debt against debtors such debtors should be transferred to Realisation A/c at a) Current value b) Gross value c) Net value d) None of he above 25. On amalgamation dissolution expenses paid by the vendor firm are debited to a) Realisation A/c b) Revaluation A/c c) Capital A/cs d) None of he above CHAPTER 4 : Accounting with the Use of Accounting Software 1. A cost centre is the unit of the organisation where a) Cost is incurred b) Income is generated c) Profit is generated d) All of the above

15 Objective Questions A profit centre has control over a) Cost b) Revenue c) Profit d) All of the above 3. An Investment centre has control over a) Cost & Revenue b) Profit c) Investment d) All of the above 4. Steps to create cost centre involves a) Gateway to Tally A/c Info. cost category single create b) A/c Info. cost category c) Cost category Single Create d) All of the above 5. To alter cost category a) Gateway to Tally A/c Info. Cost Category b) Select the cost category from Pop up list c) Select the cost category from cost records d) Both a & b 6. Select the inventory Info option to a) To learn the features related to Inventory management b) To record inventory c) To control inventory d) All of the above 7. To create multiple stock groups the steps include : a) Gateway of Tally Inventory info Stock groups Multiple create b) Inventory Info Stock groups c) Inventory info Gateway of Tally 8. The various costing methods in the pop up menu include : a) LIFO b) Standard cost c) Monthly Average cost d) All of the above 9. In last purchase cost method inventory is valued at a) Past cost b) Latest price c) Future price d) Average price 10. The lowest level of information on inventory a) Stock item b) Stock group c) Stock category 11. The highest level of information on inventory a) Main stock category b) Stock item c) Primary stock group

16 16 Accountancy and Financial Management (S.Y.B.Com. Sem. III) 12. Opening balance details are to be entered while creating a) Stock item b) Stock category c) Stock group 13. Consumption of goods is entered in a) Stock Voucher b) Stock Journal c) Receipt Note d) Issue Note 14. To display list of inventory in tally the key pressed is a) F7 c) F9 b) F10 d) F To select a company in tally the key pressed is a) F1 c) F3 b) F2 d) F4 16. For changing the date of voucher the key pressed in tally is a) Ctrl + F2 c) F2 b) F4 d) ctrl + F4 17. In tally default godown name is a) Main b) Primary c) Warehouse 18. In tally the key pressed for stock journal entry is a) Alt + F7 c) F7 b) F11 d) F The main options for all the masters in tally are a) 2 c) 4 b) 3 d) In tally default stock category is a) Basic b) Main c) Primary d) None 21. In Tally ERP of following is not a pre defined voucher a) Journal voucher b) Profit voucher c) Purchase voucher d) Contra voucher 22. In Tally ERP a voucher passed for Inter-godown Transfer is a) Transfer voucher b) Transfer Journal c) Stock Journal d) Journal voucher

17 Objective Questions 17 II. STATE WITH REASONS WHETHER THE FOLLOWING STATEMENTS ARE TRUE OR FALSE. CHAPTER 1 : Partnership Final Accounts 1. Final accounts are prepared at the end of each accounting year. 2. Net Profit is deducted from Capital. 3. Drawings are added to Capital. 4. Excess of Income over expenditure is net profit. 5. Capital Account always shows a credit balance. 6. Balance Sheet is prepared to show financial position of the business concern. 7. Assets must be equal to liabilities. 8. Excess of assets over liabilities is capital. 9. Purchase of machinery is shown in Trading Account on debit side. 10. Final Accounts must be prepared after considering the adjustments. 11. Every adjustment must be recorded twice. 12. Outstanding wages is a Nominal Account. 13. Income earned but not received is a liability. 14. Income received, but not earned is an asset. 15. Closing stock is valued at Cost Price or Market Price whichever is more. 16. Each partner has a right to take part in the conduct of the business of a firm. 17. There is no maximum limit to the number of partners in a firm. 18. Interest allowed on partners' capitals is debited to Profit & Loss Account and credited to Partners' Capital Accounts. 19. Sleeping partner is one who takes active part in the conduct of the business. 20. Adjustment to partners' capital are passed through current accounts when the capitals are fluctuating. 21. Interest on capital of a partner is debited to Profit & Loss Account. 22. Interest on drawings is an income to the partnership firm. 23. According to Indian Partnership Act, the partners are entitled to earn 6% p.a. on their respective capitals. 24. Interest on partner s loan is debited to P & L App. A/c. 25. General Reserve appears in the Balance Sheet on liability side. 26. Goodwill appears in the Balance Sheet on asset side. 27. Unproductive wages are debited to P & L A/c. 28. Carriage is debited to trading A/c. 29. Loss by fire is debited to P & L A/c. 30. As per partnership Act, partners should get interest on capital. 31. Balance sheet is an A/c which shows business results. 32. Unexpired insurance is an asset. 33. Partnership is a trading concern. 34. Capital Accounts always show a Debit balance 35. Each partner has a right to take part in business. 36. Partners are entitled to remuneration. 37. Partners must share profits and losses equally. 38. Under fixed capital method capital balance fluctuates Under Fluctuating capital method capital balance remains constant. 40. Purchase of computer is shown in trading A/c. 41. Partner's liability is unlimited. 42. Outstanding salary is a personal A/c. 43. Outstanding rent is a Nominal A/c 44. Agreement among the partners is for conduct of lawful business. 45. Partners current A/c may show debit balance.

18 18 Accountancy and Financial Management (S.Y.B.Com. Sem. III) 46. Closing stock is valued at cost or M. P. whichever is less. 47. Drawing A/c is transferred to partner's Loan A/c 48. Sleeping partner does not take active part in business. 49. Indian partnership Act is in force since Interest on drawings is a loss to partnership. 51. It is compulsory for a partner to contribute capital in business. 52. Income received in advance is a liability. 53. A partner cannot carry competitive business. 54. Total Assets need not be equal to Total liabilities. 55. Reserve for discount on creditors shows a Debit balance. 56. Reserve for Bad Debt shows a credit balance. 57. Profit and Loss A/c shows Revenue expenses and incomes. 58. In absence of any agreement profits and losses are shared by partners in capital ratio. 59. Expenses relating to purchases are debited to Trading A/c. 60. Expenses relating to sales are debited to Profit and Loss A/c. CHAPTER 2 : Piecemeal Distribution of Cash 1. Realisation of assets is sudden. 2. Liabilities due to outsiders are internal liabilities. 3. Govt. due are paid on preference basis. 4. Excess capital method is known as maximum loss method. 5. General Reserve is distributed among the partners in their capital ratio. 6. Unpaid balance on capital accounts represents profit on realisation. 7. Take over of liability by a partner should be deducted from capital account balance. 8. Bill under discount is a contingent liability. 9. Loss on realisation should be distributed among the partners in their capital ratio. 10. Unpaid salaries of employees is a preferential liability. 11. General Reserve is debited to partner s capital accounts. 12. In practice assets are realized gradually. 13. Excess capital method is known as Highest Relative Capital method. 14. Asset taken over by a partner is debited to his Capital A/c. CHAPTER 3 : Amalgamation of Partnership Firms 1. Amalgamation is merger of businesses. 2. On amalgamation old firms are dissolved. 3. Objective of amalgamation is to increase profitability of firms. 4. AS 16 deals with amalgamation. 5. Realisation Account is opened to implement amalgamation. 6. Loss on Realisation Account is credited to Partner's Capital Account. 7. Realisation expenses are debited to Bank Account and credited to Realisation Account. 8. Goodwill requires special treatment on amalgamation. 9. Capital accounts of partners are adjusted through Cash Account only. 10. Purchase consideration is amount payable by new firm to old firms. 11. AS 14 recognises Realisation method only 12. Profit and Loss Appropriation A/c is prepared on amalgamation. 13. On amalgamation Goodwill of both the firms is not considered. 14. Profit or loss on Realisation in case of amalgamation is transferred to capital accounts in profit sharing ratio. 15. On amalgamation of firms, fictitious assets of old firms are debited to capital Accounts. 16. On amalgamation of firms, fictitious assets of old firms are debited to capital Accounts equally.

19 Objective Questions 19 CHAPTER 4 : Accounting with the Use of Accounting Software 1. Receipt Note voucher is used to record receipt of new stock. 2. Rejection in voucher is used to record issue of stock. 3. Rejection in voucher is used to record goods returned by a customer. 4. Delivery Note voucher is used to record delivery of goods to customers. 5. Rejection out voucher is used to record return of rejected goods to supplier. 6. Stock journal voucher is used to record transfer of stock from one location to another location. 7. Physical stock voucher shows stock physically received. 8. Manufacturing Journal is used by trading companies. 9. Expiry date can be a date prior to the voucher date. 10. Batch voucher is a list of all vouchers for a particular stock item of the same batch. 11. Sorting method is used to sort the report alphabetical. 12. The lowest level of information on inventory is stock group 13. The highest level of information on inventory is primary stock group. 14. Consumption of goods is entered in stock voucher. 15. F1 is the key pressed to select a company in Tally. 16. In Tally the key pressed for stock journal entry is F7 17. There are 3 main options for all the masters in Tally. 18. In Tally Default stock category is primary. III. MATCH THE FOLLOWING COLUMNS. CHAPTER 1 : Partnership Final Accounts Group 'A' 1. Trading Account a) Balance Sheet Group 'B' 2. A Statement of Assets and Liabilities b) Profit & Loss Appropriation Account 3. Account showing distribution of Profit & Loss among the partners c) Gross Profit 4. Unsold Stock at the end of the year d) Closing Stock 5. Prepaid Expenses e) Asset Side f) Liability Side Group 'A' Group 'B' 1. Intangible Asset a) Bad Debt 2. Debts Irrecoverable b) Fixed Liabilities 3. Liabilities which are to be repaid after a c) Goodwill long period 4. Assets held temporarily d) Floating Assets 5. Income due but not received e) Outstanding Income 6. Reserve Fund f) Depreciation 7. Closing Stock g) Loss of goods by fire h) Accumulated Profit i) Closing Balance of Stock

20 20 Accountancy and Financial Management (S.Y.B.Com. Sem. III) CHAPTER 2 : Piecemeal Distribution of Cash Group 'A' Group 'B' 1. Mortgage Loan a) Insolvency 2. Govt. dues b) Should be deducted from capital 3. Bank Overdraft c) Loss on Realisation 4. Contingent Liability d) To be paid last 5. Partners capital e) Bill receivable discounted 6. Balance left unpaid in capital A/c f) Secured Loan 7. Surplus Capital g) Preferential Liabilities 8. Current A/c debit balance h) Unsecured i) Highest Relative capital method CHAPTER 3 : Amalgamation of Partnership Firms Group 'A' Group 'B' 1. Amalgamation a) Debited to partner s capital A/c 2. AS 14 b) Credited to partner s capital A/c 3. Purchase Consideration c) Deals with amalgamation 4. Profit on Realisation d) Amount agreed to be paid by purchasing firm to vendor firm 5. Loss on Realisation e) Credited to partner s capital A/cs 6. Accumulated profit f) Management of businesses 7. Payment of Realisation expenses g) Debited to Realisation A/c h) Credited to Realisation A/c CHAPTER 4 : Accounting with the Use of Accounting Software Group 'A' Group 'B' 1. Receipt Note Voucher a) Market value of stock 2. Std. Cost b) Pre- determined value 3. Market Value c) A place to stock 4. Godown d) Record return of rejected goods 5. Rejection out Voucher e) Manufacturing Industry 6. Manufacturing Journal f) Record receipt of new stock g) Average price IV. FILL IN THE BLANKS WITH SUITABLE WORDS. CHAPTER 1 : Partnership Final Accounts 1. Bad debts is a. 2. Trading Account shows either or. 3. Gross profit is carried to Account. 4. Net profit is divided between the partners in their ratio. 5. Carriage Inward is debited to Account. 6. Whereas carriage outward is debited to Account. 7. Royalty on production is debited to Account. 8. Interest on capital is added to.

21 Objective Questions Current Account showing debit balance is shown in the Balance Sheet on side. 10. The balance of the drawings account of a partner is transferred to his Account under the fixed capital method. 11. When all adjustments regarding salary, commission, interest on capital etc. are made to capital accounts only, the method is known as Capital Method. 12. The liability of the partners in a firm is. 13. The interest on capital of a partner is debited to. 14. Goodwill is an assets. 15. The interest on drawings of a partner is credited to. 16. When the balances of capitals of partners in a partnership change every year, it is known as Capital Method. 17. Debit balance of Current Account of a partner will appear on the side of the Balance Sheet. 18. is an intangible asset. 19. Gross profit is transferred to Account. 20. Income received in advance is shown on side of Balance Sheet. 21. When partner's capitals are fixed, interest on capitals is credited to Accounts. 22. Capital balances of partners go on changing, when Capital Accounts are maintained on basis. 23. Royalty on sale is shown in. 24. Interest on drawings is credited to. 25. Wages & salaries is debited to. 26. Productive wages are debited to. 27. Unproductive wages are debited to. 28. Unearned income is shown as a in Balance Sheet. 29. Expenses payable are shown on side in Balance Sheet. 30. Net profit is transferred to. 31. Share of loss is to partner s capital A/c. CHAPTER 2 : Piecemeal Distribution of Cash 1. Realisation of assets is. 2. Liabilities due to outsiders. 3. Liabilities due to partners. 4. Govt. dues are liabilities. 5. Creditors not secured by assets are. 6. Excess capital method is known as method. 7. Undistributed profit is distributed among the partners in their ratio. 8. The unpaid balance on capital accounts represents. 9. Take over of any liability by a partner is to capital / currents of the partners. 10. Employee s dues are liabilities. 11. In practice assets realise. 12. Secured creditors are paid out of the respective. 13. Realisation expenses are first adjusted from sale proceeds of. CHAPTER 3 : Amalgamation of Partnership Firms 1. Objective of amalgamation is. 2. On amalgamation, old firms are. 3. AS deals with amalgamations. 4. Under Realisation Method, Account is opened to implement amalgamation. 5. Amount agreed to be paid by the new firm to old firm is called. 6. Realisation Account may show either or loss. 7. Profit on Realisation is to Partners' Capital Accounts. 8. Loss on Realisation is to Partners' Capital Accounts.

22 22 Accountancy and Financial Management (S.Y.B.Com. Sem. III) 9. Assets and Liabilities are transferred to Realisation Account at. 10. In amalgamation goodwill of both the firms is considered for. 11. is the amount payable by purchasing firm to vendor firm. 12. In amalgamation profit/loss on realization is transferred to partners capital Accounts in their ratio. CHAPTER 4 : Accounting with the Use of Accounting Software 1. Manufacturing Journal is used by industry. 2. Expiry date cannot be a date to the voucher date. 3. is a list of all vouchers for a particular stock item in the same batch. 4. Configuration settings show. 5. is used to record the transfer of stock from one location to another location. 6. shows stock balance. 7. records receipt of new stock. 8. records delivery of goods to customers. 9. Under last purchase cost method, stock valuation is done at price. 10. Press key to delete anything in Tally. 11. In Tally stock is the goods that you manufacture. 12. In Tally stock is the largest level of information on inventory. 13. In tally stock journal is a pure transaction. 14. In tally Delivery Note is a pure transaction. 15. There are main options for all masters in Tally. 16. In Tally, Default stock category is. V. THEORY QUESTIONS (SHORT NOTES) CHAPTER 1 : Partnership Final Accounts 1. Partnership deed 2. Fixed capital method 3. Fluctuating capital method 4. Partner's salaries 5. Interest on partners capital 6. Outstanding expenses 7. Unexpired expenses 8. Unearned income 9. Income Received in Advance 10. Partner's Loans CHAPTER 2 : Piecemeal Distribution of Cash 1. External Liabilities 2. Preferential Liabilities 3. Contingent Liabilities 4. Secured Loans 5. Unsecured Loans 6. Highest Relative capital 7. Takeover of an asset by a partner

23 Objective Questions 23 CHAPTER 3 : Amalgamation of Partnership Firms 1. Amalgamation 2. Objectives of Amalgamation 3. Purchase consideration 4. Adjustment of capital A/c's 5. Net Asset method CHAPTER 4 : Accounting with the Use of Accounting Software 1. Cost centre. 2. Profit centre. 3. FIFO method. 4. Std. price method. 5. Market value method. 6. Rejections in voucher. 7. Rejections out voucher. 8. Physical stock voucher. 9. Manufacturing Journal. VI. Short Questions CHAPTER 1 : Partnership Final Accounts 1. What is partnership deed? 2. What do you mean by Goodwill? 3. What is fluctuating capital? 4. What is the Balance Sheet? 5. What do you mean by carriage inwards? 6. If the partnership deed is silent, in which ratio the partners will share the profit or loss? 7. Why is Partnership Deed necessary? 8. When are Partners' Current Accounts opened? 9. Under which method of Capital Accounts are the Current Accounts of the partners opened? 10. How many partners are required to form a partnership? 11. What is bad debt? 12. What do you mean by credit balance of Trading Account? 13. What is Gross Profit? 14. What is Net Profit? 15. What is Balance Sheet? 16. Which adjustments are made in P & L Appropriation A/c? 17. What is unexpired expense? 18. What is unearned income? 19. What is unpaid expense? 20. What is accrued income? 21. How do you disclose Goodwill in Balance Sheet? 22. What is cost of production? 23. What is cost of Goods sold? 24. What is an intangible asset? 25. How would you adjust drawings of partners.

24 24 Accountancy and Financial Management (S.Y.B.Com. Sem. III) CHAPTER 2 : Piecemeal Distribution of Cash 1. What is piecemeal distribution? 2. What is preferential liability? 3. What is secured liability? 4. What is unsecured liability? 5. How is preferential liability settled? 6. How is secured liability dealt with? 7. How is General Reserve dealt with on piecemeal distribution? 8. How is Goodwill dealt with on piecemeal distribution? 9. How is P & L A/c debit balance dealt with on piecemeal distribution? 10. What is the mechanism of distribution of cash among the partners on dissolution? 11. How does realization expenses dealt with on piecemeal distribution? CHAPTER 3 : Amalgamation of Partnership Firms 1. What is Amalgamation? 2. What is the objective of Amalgamation? 3. What are the consequences of Amalgamation? 4. Which Accounting Standard deals with Amalgamation? 5. Which method of accounting is recognised by AS 14? 6. What are the different methods of accounting for amalgamation? 7. What is purchase consideration? 8. How is profit on Realisation dealt with? 9. How is accumulated profit dealt with on Amalgamation? 10. Which A/c is debited by payment of Realisation expenses? 11. Which A/c is debited by take over of assets by a partner? 12. In what ratio the profit on Realisation is distributed among the partners? 13. How is purchase consideration calculated? CHAPTER 4 : Accounting with the Use of Accounting Software 1. What is a cost centre? 2. What is a profit centre? 3. What is stock group? 4. Mention the steps in deletion of a stock category. 5. What is Zero cost method? 6. What is FIFO method? 7. What is std. cost method? 8. What is LIFO method? 9. What is a godown? 10. What is Receipt Note voucher? 11. What is Rejection in voucher? 12. What is Rejection out voucher? 13. What is Delivery Note voucher? 14. What is stock Journal voucher? 15. What is physical stock voucher? 16. What is manufacturing Journal? 17. Which type of industry maintain manufacturing journal? 18. What are the contents of Batch vouchers?

25 Objective Questions 25 VII. NUMERICAL OBJECTIVE QUESTIONS CHAPTER 3 : Amalgamation of Partnership Firms 1. XYZ & Co. took over assets i.e. Land & Building 4,00,000; Plant & Machinery 3,00,000; Furniture 2,00,000; Stock 60,000; Debtors 1,50,000 and Cash and Bank balance 90,000. The liabilities taken over include creditors 1,50,000, Bills Payable 40,000 and Expenses payable 10,000. Purchase consideration is a) 10,00,000 b) 12,00,000 c) 14,00, Goodwill of two firms taken over 25,200. There are four partners of the new firm i.e. A, B, C & D who share in the ratio of 3 : 2 : 3 : 2. Goodwill is to be written off. Capital accounts of the partners will be debited by a) 6,300; 6,300; 6,300; 6,300 b) 6,000; 6,000; 6,000; 7,200 c) 7,560; 5,040; 7,560; 5, Capital balances of A, B, C & D were 65,275; 37,275; 28,300 and 17,100. Goodwill written off 7,560; 5,040; 7,560 and 5,040. Total Capital of the new firm is 1,12,000. Their new ratio is 3 : 2, 3 : 2. The adjustment is to be made through current accounts. How much is transferred to Current Account. a) A 24,115 B 9,835 C 12,860 Dr. D 10,340 Dr. b) A 2,687.5 B 2,687.5 C 2,687.5 D 2,687.5 c) A 2,500 B 2,500 C 2,500 D 3, Vehicle recorded 20% below cost should be recorded at cost. The value of vehicle 8,000. The cost price is : a) 10,000 b) 18,000 c) 9, Loan from M 2,000 is discharged by investment of 3,000. The loss on investment is a) 2,000 b) 1,000 c) 5, Stock of B & Co. includes 12,000 worth of goods purchased from W & Co. whose practice is to sell goods at cost plus 20%. The unrealised profit is a) 2,000 b) 2,400 c) 3, Total capital of the new firm is 40,000. There are four partners A, B, C & D whose share in the ratio of 30%, 30%, 20% and 20% respectively. The new capitals of the partners will be : a) 10,000; 10,000; 10,000; 10,000 b) 12,000; 8,000; 12,000; 8,000 c) 12,000; 12,000; 8,000; 8, Mr. B will make a gift of 10,000 to Mr. A towards his capital. The entry will be : a) B's Capital A/c Dr. To A's Capital A/c b) A's Capital A/c Dr. To B's Capital A/c c) No entry 9. Advertisement Suspense Account 5,000 should be written off among the partners K & L who share in the ratio of 3 : 2. The treatment will be : a) Debited to K & L's Capital by 3,000 and 2,000. b) Credited to K & L's Capital by 3,000 and 2,000. c) None 10. X took over investment having book value of 10,000 for 80% of its book value. X Account is debited by a) 10,000 (b) 8,000 (c) 18,000