Navodaya Vidyalaya Samiti

Term – 1 Examination (2024-25)

Class: XII Subject: Accountancy (055)
Time allowed: 3 Hours Maximum Marks: 80
General Instructions: -
1. This question paper contains 34 questions. All questions are compulsory.
2. This question paper is divided into two parts, PART - A and B.
3. Question Nos. 1 to 16 and 25 to 28 carries 1 mark each.
4. Question Nos. 17 to 19 and 29 to 31 carries 3 marks each.
5. Question Nos. 20, 21 and 32 carries 4 marks each.
6. Question Nos. 22 to 24 and 33 to 34 carries 6 marks each.
7. There is no overall choice. However internal choice has been provided.

PART - A
(Accounting for Partnership)
1. On 1st January 2024, a partner advanced a loan of ₹ 1,00,000 to the firm. In the absence of
agreement, interest on loan on 31st March, 2024 will be : 1
(A) Nil (C) ₹ 3,000
(B) ₹ 1,500 (D) ₹ 6,000

2. Niyati and Aisha are partners in a firm sharing profit and losses in the ratio of 4:3. They
admitted Bina as a new partner. Niyati sacrificed 1/4th from her share and Aisha sacrificed
1/7th from her share in favour of Bina. Bina’s share in the profits of the firm will be:- 1
(A) 2/7 (C) 11/28
(B) 10/49 (D) 7/16

3. Interest on Partner’s drawings will be debited to:- 1

(A) Profit and Loss Account (C) Partner’s Current Account
(B) Profit and Loss Appropriation Account (D) Internet Account

4. Capital employed by a partnership firm is ₹ 5,00,000. Its average profit is ₹ 60,000. The
normal rate of return in similar type of business is 10%. What is the amount of super
profits? 1
(A) ₹ 50,000 (C) ₹ 56,000
(B) ₹ 6,000 (D) ₹ 10,000
Or
The profits earned by a business over the last 5 years are as follows:-
₹ 12,000; ₹ 13,000; ₹14,000; ₹ 18,000; ₹ 2,000 (loss). Based on 2 years purchase of the last 5
years profits, value of goodwill will be :-
(A) ₹ 23,600 (C) ₹ 1,10,000
(B) ₹ 22,000 (D) ₹ 1,18,000
5. Any change in the relationship of existing partners which results in an end of the existing
agreement and enforces making of a new agreement is called- 1
(A) Reconstitution of partnership (C) Realisation of partnership
(B) Revaluation of partnership (D) Dissolution of partnership

6. X, Y and Z are partners in a firm with profit sharing ratio of 3/8, ½ and 1/8. Z retires from
the firm. The new profit sharing ratio of X and Y will be : 1
(A) 3:1 (C) 1:1
(B) 3:2 (D) 3:4

7. Assertion (A): - If partnership is dissolved then books of account need not to be closed. 1
Reason (R): - Whether there is dissolution of partnership or partnership firm, books of
account must to be closed.
(A) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct
explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct
explanation of Assertion (A).
(C) Assertion (A) is correct and Reason (R) is incorrect.
(D) Assertion (A) is incorrect and Reason (R) is correct.

8. Green and Orange are partners. Green withdraws a fixed amount at the beginning of every
month. Interest on drawings is charged @ 8% p.a. At the end of the year, interest on Green’s
drawings amounts to ₹ 2,600. Monthly drawings of Green were : 1
(A) ₹ 8,000 (C) ₹ 60,000
(B) ₹ 7,000 (D) ₹ 5,000
Or
A partner, Gaurav, withdrew Rs. 12,000 in the beginning of each quarter during the year.
Interest on drawings was calculated as ₹ 2,400 at the end of accounting year 31st March,
2023. What was the rate of interest on drawings charged?
(A) 9% p.a. (C) 7% p.a.
(C) 8% p.a. (D) 5% p.a.
9. Vidit and Seema were partners in a firm sharing profits and losses in the ratio of 3:2. Their
capitals were ₹ 1,20,000 and ₹ 2,40,000. They were entitled to interest on capital @ 10% p.a.
The firm earned a profit of ₹ 18,000 during the year. The interest on Vidit’s capital will be: 1
(A) ₹ 12,000 (C) ₹ 10,800
(B) ₹ 7,000 (D) ₹ 6,000

10. To 12. Nadim, Kadar and Muna were partners in a firm sharing profits and losses equally.
The capital of Nadim, Kadar and Muna were ₹ 2,50,000; ₹ 3,50,000 and ₹ 5,00,000
respectively. The firm was engaged in manufacturing and distribution of surgical mask in
different places in India.
Because of increase in business activity in area managed by managed by Nadim, he had to
 devote more time. Finally Nadim demanded that his share in the profit of the firm be
increased, to which Kadar and Muna agreed. After final discussion between all partners, the
new profit sharing ratio was agreed 2:1:1. On this date, General reserve appeared in the
books of the firm ₹ 30,000. For this purpose the goodwill of the firm was valued at ₹
7,46,400.
Based on the above information you are required to answer the following questions.

11. General Reserve of ₹ 30,000 will be distributed between partners in their: 1

(A) Old profit sharing Ratio
(B) New profit Sharing Ratio
(C) Sacrificing Ratio
(D) Gaining Ratio

12. Individual partner’s gain and sacrifice due to change in profit sharing ratio will be: 1
(A) Kadar and Muna sacrifice by 1/3 each and Nadim gain by 2/3
(B) Nadim gain by 1/6 and Muna sacrifice by 1/6
(C) Nadim gain by 1/6 and Kadar & Muna sacrifice by 1/12 each
(D) Nadim sacrifice by 1/12 and kadar gain by 1/12

13. For Goodwill: 1

(A) Nadim is debited by ₹ 1,24,400
(B) Nadim is credited by ₹ 62,200
(C) Nadim is debited by ₹ 62,200
(D) Nadim is credited by ₹ 1,24,400

14. …………… is opened to credit the share of profit of the deceased partner, till the time his
death to his Capital Account. 1
(A) Profit and Loss Appropriation Account
(B) Profit and Loss Suspense Account
(C) Profit and Loss Account
(D) Profit and Loss Adjustment Account
Or
An account operated to ascertain the loss or gain on reassessment of assets and liabilities on
the death of a partner is:
(A) Realisation A/c
(B) Revaluation A/c
(C) Executer’s A/c
(D) Deceased Partner’s A/c

15. The Balance Sheet of a firm under dissolution shows Debtors at ₹ 60,000 and Provision for
doubtful debts at ₹ 2,500. If Debtors of ₹ 10,000 proved bad and remaining realized 90% of
its value, the amount to be credited to Realisation will be: 1
(A) ₹ 54,000
(B) ₹ 42,750
(C) ₹ 48,000
(D) ₹ 45,000
15 to 16. M and N are partners in a firm sharing profits in the ratio of 4:1. They admit O as a
partner with 1/4th share in the profits of the firm. At the same time, the Investment Fluctuation
Reserve shows a credit balance of ₹ 40,000 and Investment (Market Value ₹ 1,80,000) appears at ₹
1,90,000.
Based on the above information you are required to answer the following questions:

15. Investment Fluctuation Reserve will appear in the Liability side of the new balance sheet
with: 1
(A) ₹ 40,000
(B) ₹ 30,000
(C) ₹ 70,000
(D) Nil

16. Decrease in value of Investment will be: 1

(A) Debited to Revaluation A/c
(B) Debited to Partners capital A/c in their odd ratio
(C) Credited to Revaluation A/c
(D) Debited to Investment Fluctuation Reserve

17. The capital of the firm of Anuj and Benu is ₹ 10,00,000 and the market rate of interest is
15%. Annual salary to the partners is ₹ 60,000 each. The profit for the last three years were ₹
3,00,000, ₹ 3,60,000 and ₹ 4,20,000. Goodwill of the firm is to be valued on the basis of two
years purchase of last three years average super profits. Calculate the goodwill of the firm. 3

18. Lokesh and Azad are partners sharing profits in the ratio 3:2, with capitals of ₹ 50,000 and ₹
30,000 respectively. Interest on capital is agreed to be paid @ 6% p.a. Azad is allowed a
salary of ₹ 2,500 p.a. During 2023, the profits prior to the calculation of interest on capital
but after charging Azad’s salary amounted to ₹ 12,500. A provision of 5% of profits is to be
made in respect of manager’s commission. Prepare accounts showing the allocation of profits.
3
Or
Radha, Mary and Fatima are partners sharing profits in the ratio of 5:4:1. Fatima is given a
guarantee that her share of profit, in any year will not be less than ₹ 5,000. The profits for
the year ending March 31, 2023 amounts to ₹ 35,000. Shortfall if any, in the profits
guaranteed to Fatima is to be borne by Radha and Mary in the ratio of 3:2. Record necessary
journal entry to show distribution of profit among partner.

19. X, Y and Z are partners in a firm sharing profits and losses in the ratio of 4:1:1. On April 1st,
2023, X retires from the firm. On the date of X’s retirement, the book of the firm shows
following balances: 3
(i) General Reserve ₹ 24,000
(ii) Profit and Loss Account (Dr.) ₹ 18,000
(iii) Investment Fluctuation Reserve ₹ 30,000
Record necessary journal entries in the books of the firm at the time of Y’s retirement.

20. Puneet, Purav and Parth were partners in a firm sharing profits and losses in the ratio of
4:3:1. The firm closes its books on 31st March every year. As per the terms of partnership
deed, on the death of any partner, the Goodwill of the firm will be calculated on the basis 3
 times the average profits of last 4 years. Puneet died on 1 st July, 2023. The profits for last
four years were: 4
Year Profits (₹)
2019-20 90,000
2020-21 1,00,000
2021-22 1,30,000
2022-23 80,000

Puneet’s share of profit upto the date of death was to be calculated on the basis of previous
year’s profits.
(i) Calculate goodwill of the firm and Puneet’s share of goodwill.
(ii) Calacualte Puneet’s share in the profits of the firm till the date of his death.
(iii) Pass necessary journal entries for the treatment of goodwill and for Puneet’s share of
profit at the time of his death.

21. Mudit and Uday are partners in a firm sharing profits in the ratio 2:3. Their capital accounts
as on April 1, 2023 showed balances of ₹ 70,000 and ₹ 60,000 respectively. The drawings of
Mudit and Uday during the year 2023-24 were ₹ 16,000 and ₹ 12,000 respectively. Both the
amounts were withdrawn on 1st January 2024. It was subsequently found that the following
items had been omitted while preparing the final accounts for the year ended 31 st March
2024. 4
(i) Interest on capitals @ 6% p.a.;
(ii) Interest on drawings @ 6% p.a.;
(iii) Mudit was entitled to a commission of ₹ 4,000 for the whole year
Showing your workings clearly pass a rectifying entry in the books of the firm.

22. Gautam and Rahul are partners in a firm, sharing profits and losses in the ratio of 2:3. Their
Balance sheet as at 31st March, 2023 was as follows: 6
Balance Sheet as on 31st March, 2023

Liabilities ₹ Assets ₹
Sundry Creditors 5,000 Goodwill 10,000
Bills Payable 15,000 Furniture 25,000
General Reserve 10,000 Stock 15,000
Capital A/cs: Sundry Debtors 12,000
Gautam 30,000 Less: Provision for
Rahul 40,000 70,000 Doubtful Debts 2,000 10,000
Cash in Hand 40,000
1,00,000 1,00,000

Karim was to be taken as a partner with effect from 1st April, 2023 on the following terms:

(a) The new profit sharing ratio of Gautam, Rahul and Karim would be 5:3:2.
(b) Provision for Doubtful Debts would be raised to 20% of debtors.
(c) Karim would bring in cash, his share of capital of ₹ 40,000 and his share of goodwill
valued at ₹ 10,000.
(d) Gautam would take over the furniture at ₹ 22,000.
Prepare Revaluation Account, Partner’s Capital Accounts and new Balance Sheet of the firm.
Or
 X, Y and Z were partners in a firm sharing profits in 5:3:2 ratio. On 31 st March, 2023, Z
retired from the firm. On the date of Z’s retirement the Balance Sheet of the firm was as
follows:

Balance Sheet of X,Y and Z

as at 31st March, 2023

Liabilities ₹ Assets ₹
Creditors 27,000 Bank 80,000
Outstanding Rent 13,000 Debtors 20,000
Provision for Legal Claims 22,500 Less: Provision for
Capital A/cs: 57,500 Doubtful Debts 500 19,500
X 1,27,000 Stock 21,000
Y 90,000 Furniture 87,500
Z 71,000 2,88,000 Land and Building 2,00,000
4,08,000 4,08,000

On Z’s retirement it was agreed that:

(i) Land and Building will be appreciated by 5% and furniture will be deprecated by 20%.
(ii) Provision for doubtful debts will be made at 5% on debtors and provision for legal claims
will be made ₹ 60,000.
(iii) Goodwill of the firm was valued at ₹ 60,000
(iv) ₹ 70,000 from Z’s Capital Account will be transferred to his loan account and the
balance will be paid to him by cheque.
Prepare Revaluation Account, Partner’s Capital Accounts and Balance Sheet of X and Y after
Z’s retirement.

23. Pranav, Karan and Rahim were partners in a firm sharing profits and losses in the ratio of
2:2:1. On 31st March, 2023 their Balance Sheet was as follow: 6

Balance Sheet of Pranav, Karan and Rahim as on 31.03.2023

Liabilities ₹ Assets ₹
Creditors 3,00,000 Fixed Assets 4,50,000
General Reserve 1,50,000 Stock 1,50,000
Capitals : Debtors 2,00,000
Pranav 2,00,000 Bank 1,50,000
Karan 2,00,000
Rahim 1,00,000 5,00,000
9,50,000 9,50,000

Karan died on 12.06.2023. According to the partnership deed, the legal representatives of the
deceased partner were entitled to the following:
(i) Balance in the Capital Account.
(ii) Interest on Capital @ 12% p.a.
(iii) Share of goodwill. Goodwill of the firm on Karan’s death was valued at ₹ 60,000.
(iv) Share in the profits of the firm till the date of his death, calculated on the basis of last
year’s profit. The profit of the firm for the year ended 31.3.2023 was ₹ 5,00,000.

Prepare Karan’s Capital Account to be presented to his representatives.

 24. Pass necessary Journal Entries for the following transactions, on the dissolution of a
partnership firm of Kavita and Suman on 31st March, 2023 after the various assets (other
than cash) and third party liabilities have been transferred to Realisation Account. 6

(i) Kavita took over stock amounting to ₹ 1,00,000 at ₹ 90,000.

(ii) Creditors of ₹ 2,00,000 took over Plant and Machinery of ₹ 3,00,000 in full settlement of
their claim.
(iii) There was an unrecorded asset of ₹ 23,000 which was taken over by Suman at ₹ 17,000.
(iv) Realisation expenses ₹ 2,000 were paid by Kavita.
(v) Bank loan ₹ 21,000 was paid off.
(vi) Loss on dissolution amounted to ₹ 7,000.

PART - B
(Accounting for Companies)

25. Reserve Capital is not a part of : 1

(a) Authorized Capital (b) Subscribed Capital
(c) Unsubscribed Capital (d) Issued Share Capital
Or
Called up capital minus calls in arrears gives:
(a) Unsubscribed Capital (b) Uncalled Capital
(c) Subscribed Capital (d) Paid-up Capital

26. XYZ Limited issued 4,000; 12% debentures of ₹ 100 each at a premium of 5%. The total
amount of interest for one year will be: 1
(a) ₹ 48,000 (c) ₹ 50,000
(b) ₹ 58,000 (d) ₹ 50,400

27. As per Section 52 of Companies Act 2013, Securities Premium Reserve cannot be utilised for:
1
(A) Writing off Capital losses (B) Issue of fully paid bonus shares
(C) Writing off discount on issue of securities (D) Writing off Preliminary expenses

28. X Ltd. Purchased a building for ₹ 60,00,000 payable as 20% in Cash and balance by
allotment of 8% debentures of ₹ 500 each at a premium of 20%. Number of debentures
issued will be: 1
(A) 9,600 (C) 12,000
(B) 8,000 (D) 10,000

29. Rohit Ltd. Purchased machinery from Rohan Ltd., for ₹ 3,50,000. An amount of ₹ 73,500 was
paid by the means of a bank draft under cash discount of 2% and for the balance due Rohit
Ltd. issued equity shares of ₹ 10 each at a premium of 10%. Journalise the above
transactions in the books of the company. 3

30. During 2023-24, the company took a loan of ₹ 2,00,000 from the HDFC Bank for which the
company placed with the bank 12% debentures of ₹ 2,50,000 as collateral security. Pass
journal entries in the books of company and how will it appear in the balance sheet. 3

31. Y Ltd. Issued on 1st April, 2023, 20,000, 9% Debentures of ₹ 100 each at 4% discount
redeemable after four years at a premium of ₹ 5. All the debentures were subscribed. During
the year ended 31st March 2024, the company incurred a loss of ₹ 70,000. It has balance of ₹
 1,50,000 in Capital Reserve. Pass the Journal entries for issue of debentures and writing off
Loss on Issue of Debentures. 3

32. Tractors India Ltd. is registered with an authorized capital of ₹ 10,00,000 divided into
1,00,000 equity shares of ₹ 10 each. The company issued 50,000 equity shares at a premium
of ₹ 5 per share. ₹ 2 per share were payable with application, ₹ 8 per share including
premium on allotment and the balance amount on first and final call. The issue was fully
subscribed and all the amount due was received except the first and final call money on 500
shares allotted to Balram.
Present the ‘Share Capital’ in the balance sheet of ‘Tractors India Ltd.’ as per Schedule III
Part I of the Companies Act, 2013. Also prepare notes to accounts for the same. 4

33. Premier Tools Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a
premium ₹ 2 per share. The amount was payable as follows:
On application – ₹ 5 per share (including premium) On allotment – ₹ 3 per share
On first and final call – Balance
Applications were received for 2,50,000 shares. Applications for 10,000 shares were rejected
and pro-rata allotment was made to the remaining applications. Over payments received on
application were adjusted towards sums due on allotment.
All calls were made and duly received except allotment and first and final call from Naveen
who applied for 7,200 shares. His shares were forfeited. Half of the forfeited shares were
reissued for ₹ 48,000 as fully paid. Pass the necessary journal entries for the above
transactions in the books of Premier Tools Ltd. 6
Or
Eiko Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a premium of
₹ 3 per share. The amount was payable as follows:
On Application - ₹ 4 per share
On Allotment - ₹ 6 per share (including premium ₹ 3)
On First and Final Call - Balance
Applications were received for 3,00,000 shares and allotment was made on pro-rata basis to
all the applicants. Money overpaid on applications was utilised towards sums due on
allotment. Sunil, who applied for 6,000 shares failed to pay the allotment money while
Rishab holding 2,000 shares paid the first and final call money with allotment. Sunil’s shares
were forfeited immediately after allotment. Thereafter, first and final call was made and was
duly received. Half of the forfeited shares were reissued to Varsha as fully paid for ₹ 9 per
share.
Pass the necessary journal entries for the above transactions in the books of Eiko Ltd.

34. Suvidha Ltd. purchased machinery for ₹ 1,98,000 from Suppliers Ltd. The payment was
made by issue of 12% debentures of ₹ 100 each. Pass necessary journal entries for the
purchase of machinery and issue of debentures when
(i) Debentures are issued at par.
(ii) Debentures are issued at 10% discount.
(iii) Debentures are issued at 10% premium. 6
Or
Agam Ltd. issued 40,000, 9% debentures of 100 each on April 1, 2023 at a discount of 10%,
redeemable at a premium of 10%.
Assuming that the interest was paid half yearly on September 30 and March 31, give journal
entries for the year ended March 31, 2024.

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