Bihar Board 12th Accountancy Model Question Paper 5 in English Medium

Bihar Board 12th Accountancy Model Papers

Bihar Board 12th Accountancy Model Question Paper 5 in English Medium

Time : 3 Hours 15 Min
Full Marks: 100

Instructions for the candidates

1. Candidates are required to give their answers in their own words as far as practicable.
2. Figures in the right-hand margin indicate full marks.
3. While answering the questions, the candidate should adhere to the word limit as for as practicable.
4. 15 minutes of extra time has been allotted for the candidate to read the questions carefully.
5. This question paper has two sections: Section – A and Section – B.
6. In Section – A, there are 50 objective type questions which are compulsory, each carrying 1 mark. Darken the circle with black/blue ball pen against the correct option on OMR Sheet provided to you. Do not use Whitener/Liquid/Blade/Nail on OMR Sheet, otherwise, the result will be treated as invalid.
7. In Section – B there are Non-objective type questions. There are 25 Short answer type questions, out of which any 15 questions are to be answered. Each question carries 2 marks. Apart from this, there are 8 Long answer type questions, out of which any 4 of them are to answer. Each question carries 5 marks.
8. Use of any electronic device is prohibited.

Objective Type Questions

Question No. 1 to 50 have four options, out of which only one is correct, you have to mark the correct option on the OMR Sheet. (50 × 1 = 50)

Question 1.
Income & Expenditure Account is
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) None of these
Answer:
(c) Nominal A/c

Question 2.
Legacy should be treated as
(a) liability
(b) capital receipt
(c) revenue receipt
(d) None of these
Answer:
(a) liability

Question 3.
Specific donation is
(a) Capital Receipt
(b) Revenue Receipt
(c) Assets
(d) None of these
Answer:
(a) Capital Receipt

Question 4.
Subscriptions received by an organisation is
(a) Capital Receipt
(b) Revenue Receipt
(c) Both
(d) None of these
Answer:
(b) Revenue Receipt

Question 5.
Current Account is
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) None of these
Answer:
(a) Personal A/c

Question 6.
Making partnership agreement is
(a) compulsory
(b) voluntary
(c) partly compulsory
(d) None of these
Answer:
(a) compulsory

Question 7.
For the firm interest on partner’s drawing is a/an
(a) expense
(b) income
(c) loss
(d) receipt
Answer:
(b) income

Question 8.
In the partnership firm, profit and loss are shared
(a) equally
(b) ratio of capital
(c) according to agreement
(d) none of these
Answer:
(c) according to agreement

Question 9.
P/L Appropriation A/c is prepared
(a) for reserve fund
(b) for net profit
(c) for divisible profit
(d) none of these
Answer:
(c) for divisible profit

Question 10.
Interest on advance given to the firm is
(a) an appropriation
(b) profit
(c) charge
(d) none of these
Answer:
(c) charge

Question 11.
The excess of average profit over the normal profit is called
(a) super profit
(b) Fixed profit
(c) Abnormal profit
(d) normal profit
Answer:
(a) super profit

Question 12.
The monetary value of the reputation of the business is called
(a) goodwill
(b) surplus
(c) abnormal profit
(d) none of these
Answer:
(a) goodwill

Question 13.
Profit or loss on revaluation is borne by
(a) old partners
(b) new partners
(c) all partners
(d) only two
Answer:
(a) old partners

Question 14.
Excess of the credit side over the debit side of Revaluation Account is
(a) profit
(b) loss
(c) receipt
(d) expense
Answer:
(a) profit

Question 15.
The opening balance of Partner’s Capital A/c is credited with
(a) interest on capital
(b) interest in drawing
(c) drawing
(d) share in loss
Answer:
(a) interest on capital

Question 16.
Share of goodwill brought in cash by the new partner is called
(a) Assets
(b) Profit
(c) Premium
(d) none of these
Answer:
(c) Premium

Question 17.
On the retirement of a partner, the full amount of goodwill is credited to the capital accounts of
(a) retiring partner
(b) remaining partners
(c) all partners
(d) none of these
Answer:
(d) none of these

Question 18.
Gaining Ratio is calculated
(a) at the time of admission
(b) at the time of retirement
(c) on the dissolution
(d) none of these
Answer:
(b) at the time of retirement

Question 19.
Profit & Loss on Revaluation at the time of retirement is shared by
(a) remaining partners
(b) all partners
(c) new partners
(d) none of these
Answer:
(a) remaining partners

Question 20.
A, B and C are partners sharing profit & loss in the ratio of 5 : 3 : 2. A retires. The gaining ratio is
(a) 3 : 2
(b) 5 : 3
(c) 5 : 2
(d) None of these
Answer:
(c) 5 : 2

Question 21.
The amount due to the deceased partner is paid to his
(a) Father
(b) Friend
(c) Wife
(d) Executors
Answer:
(d) Executors

Question 22.
On the death of a partner in a firm final payment are made to
(a) Capital A/c
(b) Executor A/c
(c) Current A/c
(d) Loan A/c
Answer:
(b) Executor A/c

Question 23.
The executors of a deceased partner will be paid interest on the amount from the date of death of the partner at
(a) 5% p.a.
(b) 6% p.a.
(c) 7% p.a.
(d) 8% p.a.
Answer:
(b) 6% p.a.

Question 24.
Joint life policy of the partners is an _______ account.
(a) nominal A/c
(b) personal A/c
(c) liability
(d) goodwill.
Answer:
(b) personal A/c

Question 25.
Revaluation A/c is prepared at the time of
(a) Admission
(b) Retirement
(c) Death
(d) All of these
Answer:
(d) All of these

Question 26.
Payment of credit balance of partners Capital Account at the time dissolution of a firm is made to
(a) partners
(b) firm
(c) wife
(d) none of these
Answer:
(a) partners

Question 27.
Realisation expenses are recorded in which side of Realisation Account?
(a) Liabilities
(b) Assets
(c) Debit
(d) Credit
Answer:
(b) Assets

Question 28.
At the time of dissolution of the firm book value of assets is recorded in which side of the Realisation A/c?
(a) Debit side
(b) Credit side
(c) Liabilities side
(d) Assets side
Answer:
(a) Debit side

Question 29.
Realisation Account is a
(a) Personal A/c
(b) Nominal A/c
(c) Real A/c
(d) None of these
Answer:
(b) Nominal A/c

Question 30.
On the dissolution of a firm, Partners Capital A/c is closed through
(a) Realisation A/c
(b) Drawing A/c
(c) Bank A/c
(d) None of these
Answer:
(c) Bank A/c

Question 31.
Expenses on the dissolution of a firm is called
(a) Realisation expense
(b) Legal expense
(c) Loss expenses
(d) None of these
Answer:
(a) Realisation expense

Question 32.
A firm can be voluntarily dissolved by the partners
(a) on majority’s decision
(b) on \(\frac{3}{4}\) of the member’s decision
(c) on \(\frac{1}{2}\) of the member’s decision
(d) none of these
Answer:
(b) on \(\frac{3}{4}\) of the member’s decision

Question 33.
On the firm’s dissolution which one of the following A/c should be prepared at the last?
(a) Realisation A/c
(b) Cash A/c
(c) Capital A/c
(d) Loan A/c
Answer:
(a) Realisation A/c

Question 34.
On dissolution, Goodwill A/c is transferred to
(a) Realisation A/c
(b) Capital A/c
(c) Drawing A/c
(d) Loan A/c
Answer:
(a) Realisation A/c

Question 35.
At the time of dissolution of a firm. Balance of general reserve shown in the Balance sheet is credited to
(a) Realisation A/c
(b) Creditors A/c
(c) Capital A/c
(d) Profit & Loan A/c
Answer:
(c) Capital A/c

Question 36.
Cash balance shown in the Balance Sheet is shown on the dissolution of the firm in
(a) Realisation A/c
(b) Cash A/c
(c) Capital A/c
(d) None of these
Answer:
(b) Cash A/c

Question 37.
On dissolution of a firm. Bank overdraft is transferred to
(a) Cash A/c
(b) Bank A/c
(c) Realisation A/c
(d) Capital A/c
Answer:
(c) Realisation A/c

Question 38.
On dissolution of a firm, Partners Loan A/c is transferred to
(a) Realisation A/c
(b) Capital A/c
(c) Current A/c
(d) None of these
Answer:
(c) Current A/c

Question 39.
Shares may be issued
(a) at par
(b) at premium
(c) at discount
(d) all of these
Answer:
(d) all of these

Question 40.
Equity shareholders are _______ of the company.
(a) Bankers
(b) Creditors
(c) Debtors
(d) Owners
Answer:
(d) Owners

Question 41.
Money received from a dead man’s legacy is called
(a) Legacy
(b) Honorarium
(c) Donation
(d) Subscription
Answer:
(a) Legacy

Question 42.
Payment of honorarium to the secretary is:
(a) Capital expenditure
(b) Revenue expenditure
(c) Cash expenditure
(d) Deferred Revenue Expenditure
Answer:
(b) Revenue expenditure

Question 43.
Interest is to be given a partner to the firm in the absence of partnership deed.
(a) 5%
(b) 6%
(c) 8%
(d) 9%
Answer:
(b) 6%

Question 44.
Interest on capital will be given to the partners in the absence of a partnership agreement
(a) 5%
(b) 6%
(c) 8 %
(d) nome of these
Answer:
(d) nome of these

Question 45.
The current account is:
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) None of these
Answer:
(a) Personal A/c

Question 46.
Drawings of the partners debited to:
(a) Partners capital A/c
(b) Profit & Loss A/c
(c) P & L appropriate A/c
(d) Revaluation A/c
Answer:
(a) Partners capital A/c

Question 47.
Interest on parter’s capital is to be credited
(a) Profit & Loss A/c
(b) Realisation A/c
(c) Partners Capital A/c
(d) Revaluation A/c
Answer:
(c) Partners Capital A/c

Question 48.
Excess of real profit on general profit is called
(a) Super profit
(b) Definite profit
(c) Abnormal profit
(d) General profit
Answer:
(a) Super profit

Question 49.
A and B are the partners of profit is divided in 3 : 1. They give a \(\frac{1}{4}\) part of profit in future and admitted in. New profit-distribution ratio is:
(a) Explanation/Working
(b) A \frac{81}{16}: B \frac{4}{16}: C \frac{4}{16}
(c) \(A \frac{10}{16}: B \frac{2}{16}: C \frac{4}{16}\)
(d) \(A \frac{8}{16}: B \frac{9}{16}: C \frac{10}{16}\)
Answer:
(a) Explanation/Working

Question 50.
X and Y are partners of profit into 3 : 2. Z become partner for \(\frac{1}{5}\) share Z takes from X \(\frac{3}{20}\) and from Y \(\frac{1}{20}\). Then new profit ratio is:
(a) 9 : 7 : 4
(b) 8 : 8 : 4
(c) 6 : 10 : 4
(d) 10 : 6 : 4
Answer:
(a) 9 : 7 : 4

Non-Objective Type Questions

Short Answer Type Questions

Question No. 1 to 25 are Short answer type questions. Answer any 15 out of them. Each question carries 2 marks. (15 × 2 = 30)

Question 1.
What Journal entry will be recorded for the amount payable to a deceased partner?
Answer:
Profit and Loss of Suspense A/c … Dr.
To deceased partner’s capital A/c
(Being deceased partner’s capital A/c credited with his share in profit)

Question 2.
On dissolution, what entry is passed if a partner takes over an asset of the firm?
Answer:
Partner’s capital A/c …Dr.
To Realisation A/c
(Being assets were taken over by partners.)

Question 3.
State four features of Receipts and Payments Account.
Answer:
Following are the four features of Receipt and Payment Account:

• It is a Real Account
• It records all receipts whether it Revenue or capital in nature in the debit side
• It records all Payments in credit side, whether it is revenue or capital in native
• It doesn’t record any non-cash item. i.e. Depreciation, outstanding etc.

Question 4.
State four features of a partnership.
Answer:
Following are the essential features of a partnership firm:

• Two or More Persons: There must be two or more competent Persons to form a Partnership firm.
• Agreement between the Partners: Partnership is created by an agreement which forms the basis of mutual rights and duties of Partners. This agreement may be either oral or in writing.
• Engagement in legal business: The Partnership should be for carrying on some legal business with the intention of earning profits.
• Sharing of Profit: Profit earned should be divided amongst Partners in the agreed Profit sharing ratio.

Question 5.
Explain three factors affecting goodwill.
Answer:
Some Following Factors affecting the value of goodwill.

• Location: A Favourable location of the business helps to a great extent in attracting customers.
• Nature of Business: The nature of the business also affects the value of goodwill.
• Time: An older business will have more goodwill since it is better known to the customers.
• Risk Involved: The more the risk involves in the business, less the nature of goodwill.

Question 6.
Distinguish between the Average Profit Method and Super Profit Method of calculating goodwill.
Answer:
Distinguishment between Super profit method and Average profit method of calculating goodwill. Super profit method Under this method, super profits constitute the basis of calculation of the value of goodwill. And hence, goodwill is calculated by multiplying the super-profits by a reasonable number of years.
Formula:
Goodwill = Super profit × Agreed on number of year’s purchase.
Where Super profit = Actual average profit – Normal profit.
Average profit method: Under average profit method, goodwill is valued on the basis of the agreed number of years’ because of the average profits of the last few years.
Formula:
Goodwill = Average profit × Number of years purchase.

Question 7.
How will you calculate the amount due to a deceased partner?
Answer:

Question 8.
A, B and C are partners sharing the profit in the ratio of 3 : 2 : 1. They admit D for 1/6 the share. It is agreed that C would retain his original share. Calculate New Ratio.
Answer:

Question 9.
P, Q and R are partners sharing profits in the ratio of 5 : 4 : 3. Q retires and his share was divided equally between P and R. Calculate new profit sharing ratio of P and R.
Answer:
Q’s Share will be divided between P and R equally:

Question 10.
Distinguish between the dissolution of partnership and dissolution of the firm.
Answer:
Difference between the dissolution of partnership and dissolution of firm are as fellow:

• Change in relation: The dissolution of the firm implies a complete break-down of the partnership relationship between all the partners whereas dissolution of the partnership merely involves a change in the relation of the partners.
• Continuance of business: In the case of dissolution of a firm the business comes to an end whereas in case of dissolution of partnership the business of the firm is continued.
• Effect: Dissolution of partnership does not necessarily mean the dissolution of the firm whereas dissolution of the firm necessarily implies the dissolution of a partnership.
• Closure of Books of Accounts: On dissolution of the firm all accounts books are closed whereas in case of dissolution of partnership closure of books is not required.
• Nature: Dissolution of the partner is voluntary whereas dissolution of the firm is voluntary and compulsory.
• Court order: The firm may be dissolved by the order of the court whereas dissolution of the partnership is a process of reconstitution.
• Disposal of Assets and Liabilities: In case of dissolution of partnership assets and liabilities are revalued and new Balance sheet is drawn. But in case of dissolution of a firm, assets are realised and liabilities are paid off.

Question 11.
In what circumstance can a firm be dissolved?
Answer:
Following are the circumstances under which a firm can be dissolved

• Retirement of any of the partner
• Death of any of the partner
• Any of the partners declared as insolvent
• The incapability of any partner
• Completion of the venture
• At the expiry of the term of the partnership.

Question 12.
State the ways of redemption of debentures.
Answer:

• Payment in annual Installment
• Purchase own debenture in the open market

Question 13.
State two objectives of Financial Statements.
Answer:
Two objectives of Financial statements

• Source of Financial Information
• Help in Financial Forecasting
• Information about Earning capacity.

Question 14.
State two limitations of analysis of Financial Statement.
Answer:
Two Limitation of Financial Analysis

• Lack of Preciseness
• The problem of Interpretation.

Question 15.
State two objectives of ratio analysis.
Answer:
Two objectives of ratio analysis

• To measure the profitability of the concern
• To assess the solvency of the business
• Facilitate comparative analysis.

Question 16.
Give two examples of cash flow from operating activity.
Answer:
Two examples

• Cash sale of goods
• Receipt from debtors.

Question 17.
What do you mean by Fixed Charges and Floating Charges?
Answer:
Fixed charges are made on specific assets of a company, on the other hand. Floating charges are made on
General assets of a company.

Question 18.
What is the difference between Reserve and Provision?
Answer:

Provision	Reserve
(i) Provision is made for a specific loss or liability.	(i) Reserve is made for uncertain liability.
(ii) Its object to meet the know loss or deprecitation.	(ii) Its object is to increase in working capital and meet to unknown loss.
(iii) It is Compulsory to make Provision.	(iii) It is made only when company earn Profit.

Question 19.
What is meant by Analysis of Financial Statement?
Answer:
The analysis is the process of critically examining the accounting information given in financial statements. For this purpose of analysis, individual items are studies, their inter-relationship with other related figures is established.
According to Finley and Miller,”Financial analysis consists in separating facts according to some definite plan, arranging them in groups according to certain circumstances and then presenting them in a convenient and easily readable and understandable form.”

Question 20.
What is meant by Comparative Financial Statement?
Answer:
Comparative Financial Statement: Statement showing financial data of Balance Sheet or profit & loss statement for two or more than two years, placed side by side to facilitates comparison is called comparative financial statements. This type of analysis is called horizontal analysis.

Question 21.
Distinguish between preference share and equity share.
Answer:

Basis	Preference Shares	Equity Shares
1. Rate of dividend	The rate of dividend on Preference shares is fixed.	The rate of dividend on equity shares is changed year to year.
2. Payment of dividend	Preference shares holder has the right to receive the dividend before making any Payment out of Profit.	Dividend on equity shareholders is paid only when a dividend is paid on Pref. shares.
3. Management.	Preference shareholders are not entitled to participate in management.	Equity Shareholders are entitled to participate in management.

Question 22.
State any three differences between shareholders and debenture holders.
Answer:

Shareholders	Debenture holders
(i) Shareholders are the owner of the company.	(i) Debenture holders are creditors of the company.
(ii) Shareholders is get paid dividend on their shares.	(ii) A debenture holder is get paid interest on their debenture at fixed-rate
(iii) Shareholders have the right to participate in management.	(iii) Debenture holder has no right to participate in management.

Question 23.
Why is Cash flow statement prepared?
Answer:
Cash Flow Statement is one of the important tools of cash management because it throws light on cash inflows of cash equivalents during a specific period. This statement exhibits the flow of incoming cash. This statement assesses the ability of the enterprise to generate cash and utilise the cash. And so cash flow statement is one of the tools for assessing the liquidity and solvency of the enterprises.

Question 24.
Current Ratio is 2 : 1. Working Capital is Rs. 1,50,000. Calculate the amounts of current assets and current liabilities.
Answer:

Question 25.
What do you mean by the company? State its essential features.
Answer:
A company means a company incorporated or registered under the Companies Act, 2013 or under any other earlier companies Act.

It a voluntary association of persons formed for some common purpose having a capital divided into transferrable shares. It is created by law and effected by law. A company may be defined as an artificial person created by law, having perpetual succession and a common seal.

According to L.H. Haney. “A company is an artificial person created by law having a separate entity with perpetual succession and a common seal. It is a voluntary association of individuals for-profits, having a capital divided into transferrable shares ownership of which is the condition of membership.”

Following are the essential features of the company:

• Association of persons: A company is an association of persons, usually for profit.
• Artificial person: It is an artificial person created by law.
• Separate legal entity: It has a separate legal entity from its members. So it can be sued in its own name. It can own or dispose of the property in its own name.
• Limited liability: It has limited liability. Liability of members is limited to the extent of the face value of shares need by them.
• Perpetual succession: A company being an artificial person never dies. It is a creation of law, so, its existing law. It is not affected by the death of shares held by them.
• Common seal: It has a common seal which acts as the official signature of the company. Any document without the common seal of the company is not binding on the company.
• Transferability of shares: The capital of a company is divided into shares. The shares of a company are transferable except in case of a private company.
• Separate ownership and management: In companies, there is a divorce between ownership and management. It is owned by members (shareholders) but it is managed by the Board of Directors who are elected by shareholders. Members of a company can not directly participate in the management of the business of the company.

Long Answer Type Questions

Question No. 26 to 33 are long answer type questions. Answer any 4 of them. Each question carries 5 marks. (4 × 5 = 20)

Question 26.
Form the following statement of profit and loss of the year ended 31st March 2014, prepare a comparative statement of profit and loss of X Ltd:

Answer:

Question 27.
Receipts and Payments A/c of Maitree Club for the year ended March 31, 2013, shows that the subscriptions received were Rs. 25,000. Additional information is as follows:

Ascertain the amount of income from a subscription for the year 2012-13 and show how relevant items of subscriptions appear in Opening and Closing Balance Sheet.
Answer:
Statement showing Income from a subscription for the year ended 2012-13

Question 28.
A, B and C are equal partners. Their fixed capitals as on 1st April. 2012 were A Rs. 10,000, B Rs. 20,000 and C Rs. 30,000. Profits for the year 2012-13 amounted to Rs. 12,000 which were distributed. Give the necessary Journal entries if the interest on capital was credited @ 10% p.a. instead of 12% p.a.
Answer:

Question 29.
X, Y and Z are partners in a firm in the ratio of 3 : 2 : 1. On 1st April 2013 they decided to share profits in future in the ratio of 7 : 5 : 4. On that date general reserve is Rs. 76,000 and profit on revaluation of assets and liabilities being Rs. 68,000. It was decided that adjustment should be made without altering the figures in the Balance Sheet. Make adjustment by one Single Journal entry.
Answer:

Question 30.
A, B and C are partners sharing profits and losses equally. They dissolved the firm on 30th December 2013 on which date their positions were as under:

All the assets realise less than 10% book value. Creditors were paid in full. Expenses of realisation amounted to Rs. 500. Prepare Realisation account. Partners Capital account and cash or bank account.
Answer:

Question 31.
Rudra Company Ltd. issued 35,000 equity shares of Rs. 10 each at a premium of Rs. 2 payable as follows:
On Application – Rs. 3
On Allotment – Rs. 5
The balance on the first call
Record Journal entreis.
Answer:

Question 32.
Urvashi Ltd. purchased one established business for Rs. 50,000 payable Rs. 15,000 in cash and the balance by Issue of 9% debentures of Rs. 100 at a discount of 10%. Give journal entries in the books of Urvashi Ltd.
Answer:

Question 33.
From the following data, prepare a statement of profits in the comparative form:

Answer: