Commerce (English Medium) Class 12 - CBSE Important Questions for Accountancy

Financial statements are prepared following the consistent accounting concepts, principles, procedures and also the legal environment in which the business organizations operate. These statements are the sources of information on the basis of which conclusions are drawn about the profitability and financial position of a company so that their users can easily understand and use them in their economic decisions in a meaningful way.
From the above statement identify any two values that a company should observe while preparing its financial statements. Also state under which major headings and sub-headings the following items will be presented in the balance sheet of a company as per Schedule III of the Companies Act 2013.
General Reserves, short term loans and advances, Capital work in progress and desgin.

Prepare common size statement of profit and loss from the following information:

Which of the following are not tools of Financial Analysis?

1. Cash Flow Statement
2. Income Statement
3. Balance Sheet
4. Ratio Analysis

From the following details obtained from the financial statements of JN Ltd. calculate 'interest coverage ratio'. Net profit after tax Rs.2, 00,000; 12% Long-Term Debt Rs.40, 00,000; Rate of tax 40%.

From the following information calculate inventory turnover ratio; Revenue from operations Rs.16,00,000; Average Inventory Rs.2,20,000; Gross Loss Ratio 5%.

From the Following information , compute Debt-Equity Ratio:

                                              Rs.

Long Term Borrowings          2,00,000

Long Term Provision             1,00,000

Current Liabilities                    50,000

Non-Current-Assets              3,60,000

Current -Assets                       90,000

The quick ratio of a company is 1.5: 1. A state with reason which of the following transactions would

i. increase:
ii. decrease or
iii. not change the ratio

a. Paid rent Rs 3,000 in advance.
b. Trade receivables included a debtor Shri Ashok who paid his entire amount due Rs 9,700.

From the following information, calculate the value of opening and closing inventory:

Inventory Turnover Ratio - 4 times.

Gross Profit = 20% on Revenue from Operations.

Revenue from Operations = ₹ 10,00,000.

Opening inventory is 25% of the inventory at the end.

Debt-Equity Ratio of Z Ltd. is 2: 1. State with reason whether the following transactions will improve, decline or will not change the debt-equity ratio:

1. Conversion of ₹ 3,00,000, 9% debentures into equity shares.
2. Cash received from debtors ₹ 1,00,000.
3. Redemption of ₹ 10,00,000, 11% debenture.
4. Purchase of goods on credit ₹ 4,00,000.

Vikas, Vishal and Vaibhav were partners in a firm sharing profits in the ratio of 2:2:1. The firm closes its books 31st March every year. On 31-12-2015 Vaibhav died. On that date his Capital account showed a credit balance of Rs. 3, 80,000 and Goodwill of the firm was valued at 1, 20,000. There was a debit balance of Rs. 50,000 in the profit and loss account. Vaibhav's share of profit in the year of his death was to be calculated on the basis of the average profit of last five years. The average profit of last five years was Rs. 75,000.

Pass necessary journal entries in the books of the firm on Vaibhav's death.

Kumar, Gupta and Kavita were partners in the firm sharing profits and losses equally. The firm was engaged in the storage and distribution of canned juice and its godowns were located at three different places in the city. Each godown was being managed individually by Kumar, Gupta and Kavita. Because of increase in business activities at the godown managed by Gupta, he had devoted more time. Gupta demanded that his share in the profits of the firm be increased, to which Kumar and Kavita agreed. The new profit sharing ratio was agreed to be 1: 2: 1. For this purpose, the goodwill of the firm was valued at two years purchase of the average profits of last five years. The profits of the last five years were as follows :

You are required to:

1) Calculate the goodwill of the firm

2) Pass necessary Journal Entry for the treatment of goodwill on the change in profit sharing ratio of Kumar, Gupta and Kavita.

Hemant and Nishant were partners in the firm sharing profits in the ratio of 3:2. Their capitals were Rs 1,60,000 and Rs 1,00,000 respectively. They admitted Somesh on 1st April 2013 as a new partner for 1/5 share in the future profits. Somesh brought Rs 1,20,000 as his capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transactions on Somesh's admission.

Describe two basic methods of charging depreciation.

Differentiate between the straight line method and the written-down value method.

A and B were partners in a firm sharing profits equally. Their capitals were : A ₹ 1,20,000 and B ₹ 80,000. The annual rate of interest is 20%. The profits of the firm for the last three years were ₹ 34,000; ₹ 38,000 and ₹ 30,000. They admitted C as a new partner. On C's admission the goodwill of the firm was valued at 2 years purchase of the super profits.

Calculate the value of goodwill of the firm on C's admission. 

Indu, Vijay, and Pawan were partners in a firm sharing profits in the ratio of 4 : 3 : 3. They admitted Subhash into partnership with effect from 1^st April, 2022. New profit sharing ratio among Indu, Vijay, Pawan, and Subhash will be 3 : 3 : 2 : 2. An extract of their Balance Sheet as at 31^st March, 2022, is given below:

Which of the following is the correct accounting treatment of ‘investment fluctuation reserve’ at the time of Subhash’s admission?

Aayush and Aarushi are partners sharing profits and losses in the ratio of 3 : 2. They admitted Naveen into partnership for 1/4^th share. Goodwill of the firm was to be valued at three years' purchase of super profits. Average net profit of the firm was ₹ 20,000. Capital investment in the business was ₹ 50,000 and Normal Rate of Return was 10%. Calculate the amount of Goodwill premium brought by Naveen. 

Vikas, Vishal and Vaibhav were partners in a firm sharing profits in the ratio of 2:2:1. The firm closes its books 31st March every year. On 31-12-2015 Vaibhav died. On that date his Capital account showed a credit balance of Rs. 3, 80,000 and Goodwill of the firm was valued at 1, 20,000. There was a debit balance of Rs. 50,000 in the profit and loss account. Vaibhav's share of profit in the year of his death was to be calculated on the basis of the average profit of last five years. The average profit of last five years was Rs. 75,000.

Pass necessary journal entries in the books of the firm on Vaibhav's death.

Manav, Nath and Narayan were partners in a firm sharing profits in the ratio of 1: 2: 1. The firm closes its books on 31st March every year. On 30th September, 2015 Nath died. On that date his capital account showed a debit balance of Rs.5,000. There was a debit balance of Rs.30,000 in the profit and loss account. The goodwill of the firm was valued at Rs.3,80,000. Nath's share of profit in the year of his death was to be calculated on the basis of average profit of last 5 years, which was Rs.90,000.

Pass necessary journal entries in the books of the firm on Nath's death.

Distinguish between ‘Dissolution of partnership’ and Dissolution of partnership firm ‘on the basis of closure of Books.