cs found. accounts test paper foundation all a… · 23. the profit and losses for the last few...

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Cs found. ACCOUNTS TEST PAPER STUDENT NAME:-_______________________ DATE:-______________________

TIME ALLOWED 1 Hr. FULL MARKS 30*1=30

Use the following information for question 22 & 23:-

Consider the following data pertaining to W. Ltd As on 31st

march 2009:-

Share capital

Issued, Subscribed, Called up (20,000 shares of Rs 100 each) Rs 20,00,000

Calls in arrear Rs 10,000 profit & loss A/c (Cr) as on April 01, 2008 Rs 67,000

Profit of the year Rs 1, 90,610

The company wants to create a Debenture Redemption Reserve and to transfer Rs 50,000 every

year out of profits to redeem the debentures.

1. The amount of dividend declared =? (a)Rs 1, 00,700 (b) Rs 2, 25, 761 (c) Rs 1, 99,000 d) Rs 2,

00,00

2. The balance of Profit and Loss Appropriation account transferred to Balance Sheet after

effecting the above transactions=' (a) Rs 6,000 (b) Rs 68,100 (c) Rs 8,610 (d) Rs 6,S10

3. The Securities Premium amount may be utilized by a company for_____ (a) Writing off any loss

on sale of fixed asset (b) Writing off any loss of Revenue nature (c) Payment of dividends (d)

Writing off the expenses/discount on the issue of debentures

4. Which of the following can be utilized for Redemption of Preference shares (a) The proceeds of

fresh issue of equity shares (b) The proceeds of issue of debentures (c) The proceeds of issue of

fixed deposit (d) All of the above

5. Preference shares amounting to Rs 2, 00,000 are redeemed at a premium of 5%, by issue of

shares amounting to Rs 1, 00.000 at a premium of 10%. The amount to be transferred to capital

redemption reserve:, ' (a) Rs 1, 05, 000 (b) Rs 1, 00. 000 (c) Rs 2, 00, 000 (d) Rs 1, 11, 000

6. R.Ltd purchased Machinery from G. Company for a book value of Rs 4, 00,000. The

consideration was paid by issue of 10% debentures of Rs 100 each at discount of 20%.. The

debenture account was credited with-(a)Rs 4, 00, 000 (b) Rs 5, 00, 000 (c) Rs 3, 20, 000 (d) Rs 4,

80, 000

7. Debentures carrying charge on all the asset is known as___ (a) Fixed (b) Mortgage (c) Naked

(d) Floating

8. Securities premium cannot be used to ... (a) Issue bonus shares (b) Redeemed Preference

shares (c) Write -off preliminary expenses (d) Write-off discount on issue of stares

9. A company cannot issue redeemable preference shares for a period exceeding

(a) 5 yrs (b) 10 yrs (c) 15 yrs (d) 20

10. On 1.5.07, R.Ltd issued 7% 4,000 convertible debentures, of Rs 100 each at a Premium of 20%.

Interest is payable on September 30 and March 31, every year. Assuming that the interest runs

from the date of issue, the amount of interest expenditure debated to Profit & Loss account for

the year ended 31.3.08 will be (a) Rs 2, 80, 000 (b) Rs 2, 33, 333 (c) Rs 3,36,000 Rs 2, 56, 667

11. _______ is usually created for redemption of debentures----(a) Debenture redemption fund (b)

Capital redemption fund (c) Debenture reserve fund (d) Debenture redemption reserve

12. If the balance of the Debenture Redemption Reserve fund is less than the amount of

debentures to be redeemed, then where is the deficit amount transferred? (a) Capital Reserve

A/C (b) Reserve Capital A/C (c) Profit & Loss A/C (d) Debenture premium A/C

13. Premium on redemption of debentures is shown in Balance sheet under-(a) Reserve and

Surplus (b) Current Liabilities and Provisions (c) Current assets (d) Miscellaneous Expenditure.

14. R Ltd. Issued 15,000, 15% debentures of Rs. 100 each at a premium of 10%, which are

redeemable after 10 years at a premium of 20%. The amount of loss on redemption of

debentures to be written off every year is-(a)Rs.15, 000 (b) Rs.30, 000 (c) Rs.45, 000 (d) Rs.22,

500

15. R.ltd. took over assets of Rs.3, 50,000 and liabilities of Rs 30, 000 of X.Ltd. for a purchase

consideration of Rs 3, 33, 000.R.Ltd paid the purchase consideration by issuing 12% debentures

of Rs 100 each at 10% premium. No. of debentures issued will be-(a) 3,000 debentures (b)

3,100 debentures (c) 2,800 debentures (d) None of the three

16. On 1.1.07, R.Ltd. issued 14% Rs 1, 00,000 debentures at a discount of 6% repayable at the end

of 5 years. Amount of discount to be written-off every year will be-(a) Rs 1200 (b) Rs 1000 (c)

Rs1500 (d) None of these

17. Non-Convertible' debentures refer to-(a) Owners capital (b) Loan capital (c) Short-term debts

(d) All of these

18. When shares are issued to promoters for the services offered by them, the account that will be

debited with the nominal value of shares is ___ (a) Preliminary expenses (b) Goodwill account

(c) Asset account (d) Share capital account.

19. Loss on issue of debentures is treated as (a) intangible asset (b) current asset (c) current

liability (d) Misc. exp

20. C,D and E are partners sharing profit and losses in the proportion of ½, 1/3 and 1/6. D retired

and the new profit sharing ratio between C and E is 3:2 and the reserve of Rs 12000 is divided

among the partners in the ratio: a) Rs 2000:4000:6000, b) Rs 5000:5000:2000, c) Rs

4000:6000:2000, d) Rs 6000:4000:2000

21. Balances of A, B and c sharing profits and losses in proportion to their capitals, stood as: A Rs 2,

00,000; B Rs 300000 and C Rs 200000. A desired to retire from the firm, B and C share the

future profits equally. Goodwill of the entire firm is valued at Rs 140000 and no Goodwill

Account is raised. A) credit partners capital account with old profit sharing ratio for Rs. 140000

b) credit partners capital account with new profit sharing ratio forRs.140000 c) credit A’s

account with Rs.40000 and debit B’s capital account with Rs. 10,000 and C’s capital account Rs.

30,000 d) credit partner’s capital account with gaining ratio for Rs.1,40,000

22. Find out the goodwill of the firm using capitalization method from the following information:

total capital employed in the firm Rs. 8,00,000; Reasonable rate of return 15%, profit for the

year Rs. 12,00,000 a).Rs 82,00,000 b)Rs. 12,00,000 c) Rs. 72,00,000 d)Rs 42,00,000

23. The profit and losses for the last few years are as follows 2007-08 loss Rs 10,000 2008-09 losses

Rs 2500,2009-10 profit Rs 98000,2010-11 profit Rs 76000. The average capital employed in the

business is Rs 200,000. The rate of interest expected from the capital invested is 12%. The

remuneration of the partner is estimate to be 100 Rs per month not changes in the above

profit/losses. Calculate the value of the goodwill on the basis of 2 years purchase of super

profits based on the average of four years a) Rs 9000, b) 8750, c) Rs 8500,d) Rs 8250

24. Following are the factors affecting goodwill except:- a) nature of business, b) Efficiency of

management, c) Technical know how, d) Location of the customer.

25. The profit and losses for the last few years are as follows 2007-08 loss Rs 10000, 2008-09 loss

Rs 2500, 2009-10 Profit Rs 98000, 2010-11 Profit Rs 76000. The average capital employed in the

business is Rs 200000. The rate of the interest expected from capital invested is 12%. The

remuneration of partners is estimated to be Rs 1000 per month. Calculate the value of the

goodwill on the basis of 4 years purchase of super profit based on the annuity for the for years.

Take discounting rate as 10% a) Rs 13500, B) Rs 13568 c) 13668, d) Rs 13868

26. Adam, Brian and cherish were equal partner 0f a firm with goodwill of Rs 120000 shown in the

balance sheet and they agreed to take Daniel as an equal partner on the term that he should

bring Rs 160000 as his capital and goodwill. His share of goodwill was evaluated at Rs 60000

and the goodwill account is to be written off before admission. What will be the treatment of

the goodwill? a) write of the goodwill of Rs 120000 in old ratio, b) Cash brought in by Daniel for

goodwill will be distributed among the old partners in the sacrificing ratio, c) Both A and B, d)

None of the above

27. Which of the following assets is compulsory to revalued at the time of admission of a new

partner) Stock, b) Fixed Assets, c) Investment, d) Goodwill

28. X and Y partners sharing profit in the ration of 3:1. They admitted Z as a partner who pays Rs

4000 as goodwill and the new profit sharing ratio being 2:1:1. The amount of the goodwill is to

be credited to:- a) X and Y as Rs 3000 and Rs 1000 respectively, b) X only, c) Y only, d) None of

the above

29. Sacrificing ratio is equal to:- a) Old ratio minus the new ratio, b) New ratio minus the old ratio,

c) old ratio plus new ratio, d) All of the above

30. A,B and C are 3 partners sharing profit and loses in the ratio 4:3:1. A retired and his share taken

over by B and C equally. The new profit sharing ratio will be:- a) 3:2, b) 5: 3 c) 4:2, None of the

above

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CS FOUNDATION LAW & ACCOUNTS TEST PAPER

TOTAL MARKS :- 60 MARKS TIME ALLOWED 2 HRS

SALE of GOODS ACT

1) The doctrine of ‘Caveat Emptor’ does not apply when : (a) The goods are bought by sample (b) The goods are

bought by description from, a seller who deals in goods of that description (c) The goods are purchased under its

brand name (d) All of the above.

2) The actual sale of future goods is: (a) Never possible (b) Possible (c) Illegal (d) Only a myth.

3) Finder of lost goods is in a position of: (a) Bailor (b) Owner (c) Pawner (d) Bailee.

4) The goods which are either owned or possessed by the seller at the time of the contract are known as: (a) Generic

goods (b) Future goods (c) Existing goods (d) Contingent goods.

5) A stipulation which is collateral to the main purpose of the contract and provides the buyer only right to claim, the

damages is known as: (a) Condition (b) Guarantee (c) Warrantee (d) Agreement to sell.

6) In case of an agreement to sell, ownership to goods remains with: (a) The buyer (b) The seller (c) Both the buyer

and the seller (d) None of the above.

7) In case of sale of goods; the title of goods remains with: (a) Seller (b) Buyer (c) Hirer (d) None of the above.

8) A contract of sale of goods under Section 4 of the Sale of Goods Act, 1930 comprises of: (a) Executory contract of

sale (b) Executed contract of sale (c) Both executory and executed contracts of sale (d) None of the above.

9) An unpaid seller of goods has a right: (a) Against the buyer only (b) Against bpth the buyer and the goods (c) Against

the goods only (D) None of the above

10) Which of the following gives a right to claim damages for its breach? (a) Conditions (b) Warranties (c) Both (a) and

(b) above (d) None of the above.

11) As per the Sale of Goods Act, 1930, goods include, I. Existing goods II. Future goods III. Contingent goods IV.

Actionable claims Correct option is— (a) I, II and III (b) II, lll and IV (c) I, II and IV (d) I, II, III and IV.

12) Which of the following maxim means ‘No one pan pass a better title than, he himself has? (a) Caveat emptor (b)

Nemo dat quod non habet (c) Res integra (d) Sine die.

13) The doctrine of “Caveat Emptor” implies- (a) Let the buyer beware (b) Let the seller beware (c) Let the buyer be

brave (d) Let the seller be brave

14) When does a seller becomes an implied seller? (a) When half of the price, has not been paid (b) When the full

amount has not been paid (c) When 25% amount has not been paid (d) When 75% amount has hot been paid.

15) Which of the following is conducted under Sales of Goods Act? (a) Goods (b) Contract (c) Sales (d) Partnership

16) Which is not an implied condition? (a) Condition as to title (b) Condition as to wholesomeness (c) Condition as to

Encumbrances (d) Condition as to sale by sample

17) Seller means a person who: (a) Sells or agrees to sell goods (b) Has sold goods (c) Sells goods (d) Agrees to sell

goods.

18) The unpaid seller may exercise his right of stoppage of goods in transit: (a) By taking actual possession of the goods

(b) By giving notice of his claim to the carrier (c) By giving notice of his claim to the bailee in. whose possession the

goods are (d) All applicable

19) Right of stoppage can be exercise when: (a) When seller has not been paid the amount of goods and service (b)

When the amount has been paid by the mean of exchange but has been dishonored (c) Both of the above ‘ (d) None

of the above.

20) Right of lien is exercised for: (a) Retaining the possession (b) Regaining the possession (c) Both (a) and (b) (d)

Stoppage in transit

21) A seller transfers possession of the goods already being sold in good faith: (a) Valid (b) Voidable. (c) Void (d) Invalid

22) Which of the following is not a mercantile agent? (a) Factor (b) Salesman (c) Auctioneer (d) Brokers.

23) Under what circumstances the unpaid seller can exercise right of resale: (a) When the goods are very expensive (b)

When the buyer has not paid in terms of the contract does not specify, about resale (c) When he gives notice to the

buyer of his intention to resale and the buyer does not within reasonable time pay the price (d) When the buyer

does not pay on demand.

24) In a hire purchase contract the hirer: (a) Is not given the possession of goods (b) Must buy the goods (c) Has an

option to buy the goods (d) Must return the goods.

25) Actual sale of future good is: (a) Illegal (b) A myth (c) Impossible (c) Possible through an agreement to sell.

26) The Sale of Goods Act, 1930 deals with: (a) Pledge (b) Guarantee (c) Mortgage (d) Sale

27) In an agreement to sell, the seller in case of damages to good...................... (a) Can sue the buyer for injunction (b)

Has no recourse (c) Can sue for price (d) Can sue for damages.

28) Which of the following is not a mercantile agent? (a) Brokers (b) Salesman (c) Auctioneers (d) Factor

29) The objective of the Sale of Goods Act, 1930 ie to define and amend the law relating to — (a) Sale of Immovable

Properties (b) Sale of Goods (c) Agreements to Sell (d) All of the above.

30) The Sale of Goods Act, 1930 extends to the whole of India, except the state of — (a) Maharashtra (b) Jammu and

Kashmir (c) Tamilnadu (d) Uttar Pradesh

ACCOUNTS B.R.S.

1) A Bank Statement is a copy of: a) Account holders; b) Overdraft as per Pass Book; c) Credit balance as per

Pass Book; d) A customers account in the Bank's book.

2) Credit balance in Bank pass book means a) Bank overdraft; b) Bank balance; c) Balance as per cash book; d)

Total of Bank a/c 3) A bank reconciliation is prepared by the: a) Bank b) Creditors c) Business d) suppliers

4) A wrong entry on the debit side of cash book would lead to: a) Cash book showing more balance; b) Cash book

showing less balance; c) Cash withdrawal; d) Purchases.

5) Payment done by the account holder through issuing a cheque is entered in : a) The pass-book at the time of

receipt of cheque; b) The Cash-book at the time of presenting the cheque to the bank for payment; c) The

pass-book at the time of presenting the cheque to the bank for payment; d) The none of these 6) The credit balance as per pass book of Mr. Vashu was Rs.65,600. Cheques issued but not presented for payment

Rs.75,800. Cheques deposited by one of the customers of the bank but wrongly credited in Mr. Vashu account

Rs.20,600. The balance as per cash book will be. a) 30,800 Debit; b) 30,800 overdraft; c) 1,20,800 Debit; d) 10,400

overdraft 7) Benefits of preparing Bank Reconciliation statement includes:- a) It brings not any errors committed in preparation

of cash book/Bank pass book; b) Highlights undue delay in clearance off cheques deposited but not credited; c) Help

to know bank's performance; d) Both (a) and (b) 8) Which one of these is not a cause of difference in balance as per pass book and as per cash book? A) Errors in cash

book; b) Errors in pass book; c) Cheques deposited and NOT cleared; d) Cash embezzlement by cashier(Theft) 9) While preparing bank reconciliation statement with favorable balance as per cash book which of the following will

not be added? A) Cheques deposited but not cleared; b) Cheques issued but not presented bank; c) Cheques

directly deposited in bank by a customer; d) Overcastting of Cr. Side of the bank account in cash book. 10) Bank reconciliation statement is prepared to a) Ascertain the cash book balance; b) Ascertain the bank balance; c)

Ascertain the overdraft balance; d) Reconcile balance as shown by cash book with that shown by the pass book.

JOINT VENTURE

11) A and B enter into a joint venture to underwrite shares of K Ltd. K Ltd make an equity issue of 200000

equity shares. 80% of the shares underwritten by the venturer. 160000 shares are subscribed by the

public. How many shares are to be subscribed by the venturer? A) Nil, b) 32000, c) 36000, d) None

12) P and Q enter into a Joint Venture sharing profits and losses in the ratio 3:2. P purchased goods costing

200,000. Other expenses of P RS. 10000. Q sold the goods for 180000. Remaining goods were taken over

by Q at RS. 20000. The amount of final remittance to be paid by Q to P will be: a) 215000, b) 204000, c)

210000, d) None

13) R and M entered into a joint venture to purchase and sell New Year gifts. They agreed to share the profit

and losses equally. R purchased goods worth RS. 100,000 and spent 10000 in sending the goods to M. He

also paid 5000 for insurance. M spent Rs. 10000 as selling expenses and sold goods for 200000.

Remaining goods were taken over by him at 5000. Find out profit on venture? A) 70000, b) 75000, c)

80000, d) 85000

14) A bought goods of the value of 10000 and consigned them to B to be sold by them on a joint venture,

profits being divided equally, A paid Rs.1000 for freight and insurance. A draws a bill on B for 10000. A got

it discounted at ! 9500. B sold the goods for 15000. Commission payable to B, 500. Find out the profit on

venture? A) 12500, b) 13000, c) 14500,d) 13500

15) Advise which of the statement is true: a) The Joint Venture can be formed by a single person only., b) A

legal deed should be drafted before forming Joint Venture., c) The profit to be shared between the

venturer in agreed ratio, d) Joint Venture follows going concern concept.

16) A and B were partners in a joint venture sharing profits and losses in the proportion of 3/ 5th and 2/5th

respectively. A supplies goods to the value of Rs. 60000 and incur expenses amounting Rs. 6000. B

supplies goods to the value of 16000 and his expenses amount to Rs. 3000. B sells goods on behalf of the

joint venture and realizes Rs.120000. B entitled to a commission of 5% on sales. B settles his account by

bank draft. How much amount, B will pay to A as final settlement? A) Rs. 83400, b) Rs. 93200, c) Rs.

80000, d) Rs. 66000

17) A and V enter into a joint venture to sell a consignment of biscuits sharing profits and losses equally. A

provides biscuits from stock Rs. 10000. He pays expenses amounting to Rs. 1000. V incur further expenses

on carriage Rs. 1000. He receives cash for sales 15000. He also takes over goods to the value of 2000. Find

out profit on venture? A) 3000, b) 5000, c) 6000, d) 3500.

18) A purchased 1000 kg of rice costing Rs. 200 each. Carriage Rs. 2000, insurance 3000. 4/5th of the boxes

were sold by B at Rs. 250 per boxes. Remaining stock were taken over by B at cost. The amount of stock

taken over will be: a) 40000, b) 41000, c) 50000, d) 50200.

19) A and B entered into a joint venture. They agreed to share profits and losses equally. Purchased goods

worth 16,000. Goods of 4,000 were destroyed by fire. Insurance claim of 3,000 is received. B sold the rest

of the good for RS. 20,000 A and B share profits equally A's share of profits is: a) 4000, b) 3000, c) 15000,

d) None.

20) A and B entered into joint venture. A supplied goods worth 7,000 and incurred expenses of 300. B sold

the goods for 10,000 and incurred expenses of 500. What is the amount of final remittance? A) 8400, b)

7900, c) 8900, d) 8900.

CONSIGNMENT

21) Lakshay of Kolkata sends out goods costing 100,000 of Y of Mumbai at cost + 25%. Consignor's expenses

Rs.2000. 3/5the of the goods were sold by consignee at 85000. Commission 2% on sales + 20% of gross

sales less all commission exceeds invoice value. Amount of commission will be : a) Rs.3083, b) Rs 3000, c)

Rs 2500, d) Rs 2000

22) A of Kolkata sends out 500 boxes to B of Delhi costing Rs.200 each. Consignor's expenses Rs.5000. 1/5th

of the boxes were still in transit. 3/4the of the goods received by consignee, were sold. The amount of

goods still in transit will be :a) Rs. 20,000, b) Rs 21000, c) Rs 21200, d) None

23) K of Delhi sends out goods to S of Kolkata, goods costing Rs. 2, 00,000 at cost + 25%, with the instruction

to sell it at cost + 50%. If 4/5th of the goods are sold at stipulated selling price and commission allowable

2% on sales. What will be the profit on consignment in the books of consignor ? a) Rs.86,200, b)

Rs.70,000, c) Rs.75,200, d) Rs.76,800

24) If consignor draws a bill on consignee and discounted it with the banker the discounting charges will be

debited in: a) General P/L, b) Consignment A/c, c) Consignee, d) Debtors

25) X of Kolkata sends out goods costing Rs. 3,00,000 to Y of Delhi. Commission agreement - 2% on sales + 3%

on sales as del-credere commission. The entire goods is sold by consignee for Rs. 4 lacs. However,

consignee is able to recover Rs. 3,95,000 from the debto Rs. The amount of profit to be transferred to P/L

as net commission by consignee will be: a) Rs. 15,000, b) Rs.22,000, c) Rs. 2 1,000, d) Rs. 20,000

26) X sent out certain goods to Y of Delhi at a profit of 20% on Invoice Price 1/10 of the goods were lost in

transit. Invoice value of goods lost is Rs. 25,000. Invoice value of goods sent out on consignment will be: a)

Rs. 2,40,000, b) Rs. 2,50,000, c) Rs. 2,80,000, d) Rs. 2,00,000.

27) X sent out certain goods to Y of Mumbai at cost + 25% '/2 of the goods received by Y is sold at f 3,52,000

at 10% above IP. The cost of goods sent out is: a) Rs. 7,04,000, b) Rs. 6,40,000, c) Rs. 4,80,000, d) Rs.

5,12,000

28) X sent out 4,00 boxes costing 1 00 each with the instruction that sales are to be made at cost + 45%. X

drew a bill on Y for an amount equivalent to 60% of sales valu(e) The amount of bill will be: a) Rs.

3,48,000, b) Rs. 4,00,000, c) Rs. 5,80,000, d) Rs. 2,40,000

29) C consigned goods costing Rs. 6,000 to his agent at Delhi. Freight and insurance paid by consignor Rs. 100.

Consignee's expenses ^ 400. 4/5th of the goods were sold for Rs. 6,000. Commission 2% on sales.

Consignee want to settle the balance with the help of a bank draft. The amount of draft will be: a) Rs.

5,480, b) Rs. 5,600, c) Rs.6,000, d) Rs.3,600

30) The relationship between consignor and consignee is: a) consignor, b) Is allowed to consignee by

consignor for protecting consignor from bad debt, c) Principal & Agent, d) Is rendered by Consignee to

Consignor

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PARTNERSHIP ACCOUNTS

TIME ALLOWED 1.30 HRS DATE:- FULL MARKS 1*30 =30

NAME of STUDENT:- 1. If a firm prefers Partners' Capital Accounts to be shown at the amount introduced by the partners as capital in

firm then entries for salary, interest, drawings, interest on capital and _. drawings and profits are made in

a) Trading Account. B)Profit and Loss Account, c) Balance Sheet, d) Partners' Current Account.

2. Ram and Shyam are partners sharing profits and losses in the ratio of 3:2 having the capital of Rs. 80,000 and

Rs. 50,000 respectively. They are entitled to 9% p.(a) interest on capital before distributing the profits. During

the year firm earned Rs. 7,800 after allowing interest on capital. Profits apportioned among Ram and Shyam is:

a) 4,680 and 3,120., b) 4,800 and 3,000., c) 5,000 and 2,800., d) None of these

3. Sohan and Mohan are partners with the capital of Rs. 25,000 and Rs. 15,000 respectively. Interest payable on

capital is 10% p.(a) Find the interest on capital for both the partners when the profits earned by the firm is Rs.

2,400. A) Rs. 2,500 and Rs. 1,500., b) Rs. 1,500 and Rs. 900., c) Rs. 1,200 and Rs. 1,200., d) None of the above.

4. The relationship between persons who have agreed to share the profit of a business carried on by all or any of

them acting for all is known as a) Partnership., b) Joint Venture., c) Association of Persons. d) Body of

Individuals.

5. In the absence of an agreement, partners are entitled to ' a) Salary., b) Commissions, c) Interest on Loan and

Advances, d) Profit share in capital ratio.

6 When a partner is given Guarantee by the other partner, loss on such guarantee will be borne by a)

Partnership firm, b) All the other partners., c) Partner who gave the guarantee, d) Partner with highest profit

sharing ratio.

7 What time would be taken into consideration if equal monthly amount is drawn as drawings at the beginning

of each month? a) 7 Month, b) 6 month, c) 5 Month, d) 6.5 month.

8 How would you close the Partner's Drawings Account? A) By transfer to Capital or Current Account debit

side., b) By transfer to Capital Account credit side., c) By transfer to Current Account credit side., d) Either

'b' or 'c'.

9. The capital of A and B sharing profits and losses equally are Rs. 90,000 and Rs. 30,000 respectively. They value

the goodwill of the firm at Rs. 84,000, which was not recorded in the books. If goodwill is be raised now, by

what amount each partner's capital account will be debited:

a) Rs. 21,000 and Rs. 63,000., b) Rs. 42,000 and Rs. 42,000., c) Rs. 63,000 and Rs. 21,000., d) None of these

10. A, B and C are equal partners. D is admitted to the firm for one-fourth share. D brings Rs. 20,000 capital and

Rs. 5,000 being half of the premium for goodwill. The value of goodwill of the firm is

a) Rs. 10,000, b) Rs. 40,000., c) Rs. 20,000., d) None of the above.

11. A and B are partners with capitals of Rs. 10,000 and Rs. 20,000 respectively and sharing profits equally. They

admitted C as their third partner with one-fourth profits of the firm on the payment of Rs. 12,000. The amount

of hidden goodwill is, b) 10,000 ., c) 8,000.00, d) None of the above.

12. X and Y share profits and losses in the ratio of 2 : 1. They take Z as a partner and the new profit sharing ratio

becomes 3 : 2 :1. Z brings Rs. 4,500 as premium for goodwill. The full value of goodwill will be a) Rs. 4,500., b)

Rs. 18,000., c) Rs. 27,000., d) Rs. 24,000.

13. Under average profit basis goodwill is calculated by: a) No. of years purchased multiplied with average

profits., b) No. of years purchased multiplied with super profits., c) Summation of the discounted value

of expected future benefits., d) Super profit divided with expected rate of return.

14. A and B are partners sharing profits in the ratio 5:3, they admitted C giving him 3/10th share of profit. If C

acquires 1/5th share from A and 1/10th from B, new profit sharing ratio will be: a) 5:6:3. b) 3:06:09, c)

18:24:38. , d) 17:11:12

15. C was admitted in a firm with 1/4th share of the profits of the firm. C contributes Rs. 15,000 as his capital, A

and B are other partners with the profit sharing ratio as 3:2. Find the required capital of A and B, if capital

should be in profit sharing ratio taking C's as base capital a) Rs. 27,000 and Rs. 16,000 for A and B respectively.,

b) Rs. 27,000 and Rs. 18,000 for A and B respectively., c) Rs. 32,000 and Rs. 21,000 for A and B respectively, d)

Rs. 31,000 and Rs. 26,000 for A and B respectively

16. A, B and C are partners sharing profits and losses in the ratio 6:3:3, they agreed to take D into partnership for

1/8th share of profits. Find the new profit sharing ratio. A) 12:27:36:42. B) 14:7:7:4.c) 1:2:3:4. , d) 7:5:3:1.

17. X and Y are partners sharing profits in the ratio 5:3. They admitted Z for 1/5th share of profits, for which he

paid Rs. 1,20,000 against capital and Rs. 60,000 against goodwill.

Find the capital balances for each partner taking Z's capital as base capital. A) 3,00,000; 1,20,000 and

1,20,000., b) 3,00,000; 1,20,000 and 1,80,000., c) 3,00,000; 1,80,000 and 1,20,000., d) 3,00,000; 1,80,000 and

1,80,000.

18. A, B and C are partners with profits sharing ratio 4:3:2. B retires and Goodwill Rs. 10,800 shown in books of

account. If A & C shares profits of B in 5:3, then find the new profit sharing ratio. A) 13:11

b) 17:11, c) 18:13, d) 14:21

19. A, B and C are partners with profits sharing ratio 4:3:2. B retires and Goodwill Rs. 10,800 was shown in books

of account. If A & C shares profits of B in 5:3, then find the value of goodwill shared between A and C. a) Rs.

1,850 and Rs. 1,950. B) Rs. 1,650 and Rs. 1,750., c) Rs. 2,000 and Rs. 1,600.d) Rs. 1,950 and Rs. 1,650.

20. C, D and E are partners sharing profits and losses in the proportion of '/2, 1/3 and 1/6. D retired and the new

profit sharing ratio between C and E is 3:2 and the Reserve of Rs. 12,000 is divided amount the partners in the

ratio: a) 2000:4000:6000., b) 5000:5000:2000., c) 4000:6000:2000., d) 6000:4000:2000

21. Balances of A, B and c sharing profits and losses in proportion to their capitals, stood as: A Rs 2, 00,000; B Rs

300000 and C Rs 200000. A desired to retire from the firm, B and C share the future profits equally. Goodwill

of the entire firm is valued at Rs 140000 and no Goodwill Account is raised. A) credit partners capital account

with old profit sharing ratio for Rs. 140000 b) credit partners capital account with new profit sharing ratio

forRs.140000 c) credit A’s account with Rs.40000 and debit B’s capital account with Rs. 10,000 and C’s capital

account Rs. 30,000 d) credit partner’s capital account with gaining ratio for Rs.1,40,000

22. Find out the goodwill of the firm using capitalization method from the following information: total capital

employed in the firm Rs. 8,00,000; Reasonable rate of return 15%, profit for the year Rs. 12,00,000 a).Rs

82,00,000 b)Rs. 12,00,000 c) Rs. 72,00,000 d)Rs 42,00,000

23. The profit and losses for the last few years are as follows 2007-08 loss Rs 10,000 2008-09 losses Rs 2500,2009-

10 profit Rs 98000,2010-11 profit Rs 76000. The average capital employed in the business is Rs 200,000. The

rate of interest expected from the capital invested is 12%. The remuneration of the partner is estimate to be

100 Rs per month not changes in the above profit/losses. Calculate the value of the goodwill on the basis of 2

years purchase of super profits based on the average of four years a) Rs 9000, b) 8750, c) Rs 8500,d) Rs 8250

24. Following are the factors affecting goodwill except:- a) nature of business, b) Efficiency of management, c)

Technical knowhow, d) Location of the customer.

25. The profit and losses for the last few years are as follows 2007-08 loss Rs 10000, 2008-09 loss Rs 2500, 2009-

10 Profit Rs 98000, 2010-11 Profit Rs 76000. The average capital employed in the business is Rs 200000. The

rate of the interest expected from capital invested is 12%. The remuneration of partners is estimated to be Rs

1000 per month. Calculate the value of the goodwill on the basis of 4 years purchase of super profit based on

the annuity for the for years. Take discounting rate as 10% a) Rs 13500, B) Rs 13568 c) 13668, d) Rs 13868

26. Adam, Brian and cherish were equal partner 0f a firm with goodwill of Rs 120000 shown in the balance sheet

and they agreed to take Daniel as an equal partner on the term that he should bring Rs 160000 as his capital

and goodwill. His share of goodwill was evaluated at Rs 60000 and the goodwill account is to be written off

before admission. What will be the treatment of the goodwill? a) write of the goodwill of Rs 120000 in old

ratio, b) Cash brought in by Daniel for goodwill will be distributed among the old partners in the sacrificing

ratio, c) Both A and B, d) None of the above.

27. Which of the following assets is compulsory to revalued at the time of admission of a new partner) Stock, b)

Fixed Assets, c) Investment, d) Goodwill

28. X and Y partners sharing profit in the ration of 3:1. They admitted Z as a partner who pays Rs 4000 as goodwill

and the new profit sharing ratio being 2:1:1. The amount of the goodwill is to be credited to:- a) X and Y as Rs

3000 and Rs 1000 respectively, b) X only, c) Y only, d) None of the above

29. Which of the following asset is compulsory to revalue at the time of admission of a new partner? A) Stock, b)

Fixed assets, c) Investment, d) Goodwill.

30. Revaluation account is prepared at the time of: a) Admission of a partner, b) Retirement of a partner, c) Death

of a partner, all of the above.

PARTNERSHIP LAW 1. In which of the following cases a partnership firm is re-con-stituted: (a) Admission (b) Retirement (c) Death (d) All of the

above.

2. A partner may apply to the court for dissolution of the firm on: (a) insanity of a partner (b) Misconduct of a partner (c)

Perpetual losses in business (d) All of the above.

3. A partner, who is entitled to share in the profits of a partner-ship firm without being, liable to the losses, is called: (a)

Partner in Profits only (b) Sleeping Partner (c) Active Partner (d) Dummy Partner.

4. Death of a partner has the effect of: (a) Dissolution of the firm (b) Continuance of the business of the firm (c) His legal

heir 'Joining the firm (d) Shutting down the business for 15 days.

5. A person, whose behavior arouses misunderstanding that he is a partner in the firm but actually he is not, is called: (a)

Nominal partner (b) Dormant partner (c) Ostensible partner (d) Partner by estoppels.

6. Which one of the following cannot be claimed as a matter of right by a partner? (a) To have access to books of account

(b) To take part in the conduct of the business (c) To share the profits (d) To receive remuneration.

7. According to Section 25 of the Indian Partnership Act, 1932, the liability of a partner is: (a) Joint (b) Several (c) Joint and

several (d) None of the above

8. The relationship of partnership arises out of: (a) An agreement (b) Statute (c) Operation of law (d) Both an agreement

and statute,

9. In which of the following cases, a partnership firm may be dissolved? X. On the death of a partner Y. On the insolvency of

a partner z. On the retirement of a partner Correct option is -(a) X and Y (b) X and 7 (c) Y and (d) X, Y and Z

10. Which type of partner is not personally liable? (a) Active (b) Nominal (c) Dormant (d) Minor 12.

11. Person doing business solely is known as: (a) Single person (b) Sole proprietor (c) Company (d) Partner

12. Minor may be admitted in the firm for: (a) Sharing of profits (b) Mutual benefit (c) Both (a) and (b) (d) None of these.

13. Voluntary registration is related with? (a) HUF (b) Partnership (c) Sole-proprietorship (d) Company

14. The court may not dissolve the firm in case of a Insanity of a partner; b. Permanent in capability of a partner; c.

Retirement of a partner; d. Misconduct of a partner.

15. The Court may not dissolve the firm in case of ___________ (a) Permanent in capability of a partner (b) Insanity of a

partner (c) Misconduct of a partner (d) Retirement of a partner.

16. Which of the following conditions are true against an unregistered firm? (a) Paying outside creditors (b) Represent

himself in continuing the business (c) A suit or Claim of set off, the value of which does not exceed one hundred rupees

(d) Equitable

17. The circumstances of dissolution of firm does not include: (a) Dissolution on the happening of certain contingency (b)

Dissolution by agreement (c) Losses in the firm (d) Compulsory dissolution.

18. Each of the partner in a partnership firm is: (a) Only agent of the firm (b) Principal as well as agent (c) Only co-partner of

the firm (d) Only representative of the firm.

19. In setting the accounts of a firm during dissolution: (a) The goodwill must not be included in the assets. (b) The goodwill

should be distributed among all the partners, (c) The goodwill must be included in the assets. (d) The goodwill should be

separated before settlement.

20. On dissolution of partnership, firm the partners remain liable unless: (a)Partners dues are paid off (b) The registrar

strikes off the name (c) Public notice is given of the dissolution Accounts are settled (d) Accounts are settled.

CA CS MOHIT AGARWAL

9830741471

Student name:- date:- 08/11/2017


9830741471/8017567120/03325551197



(REDEMPTION OF PREFERENCE SHARES; ISSUE OF SHARES & DEBENTURES)

TIME ALLOWED 1 HRS FULL marKS1*50=50

1) A member can not be held liable for the acts of the company even if he hold virtually the entire share

capital. This is related to: a) An artificial person created by law, b) Separate legal entity, c) Perpetual

existence, d) Common seal.

2) Free transferability of share is the characteristic of the company. It is possessed by: a) all companies, b)

all private companies, c) All public companies , d) none of these

3) An authorized capital refers to: a) Paid up value of all shares allotted, b) Nominal value of shares allotted

for consideration other than cash, c) All of the above

4) Equity shareholders have a right to: a) Vote, b) 20% dividend, c) Have preference on redemption, d) All of

the these

5) CNP Ltd. Was formed with a capital of Rs.1,00,000 divided into shares of Rs.10, each. Out of these 2,000

shares were issued to the vendors as fully paid as purchased consideration. 6,500 shares was offered to

the public and of these 6,000 share were applied for an allotted the directors called Rs.6 per share and

received the entire amount except a call of Rs.2 per share on 500 share The amount of issued capital is-

a) 20,000, b) 65,000, c) 85,000, d) 80,000

6) CNP Ltd was formed with a capital of Rs.10,00,000 divided into shares of Rs.10, each. It offered 90%

shares called up 40% on application and 20% on allotment. The subscribers paid Rs.3,40,000 on

application and Rs.1,69,000 on allotment. The subscribed capital is- a) 1,000,000, b) 510,000, c) 509,000,

d) 340,000

7) Which is not to be disclosed in the Balance sheet of a company? A) Authorised capital, b) Issued capital,

c) Subscribed capital, d) Reserve capital

8) The amount payable on application on each share must be at least- a) 5% of the nominal amount of

share, b) 25% of the nominal amount of share, c) 25% of the called amount of share, d) 5% of the called

amount of share

9) As per SEBI guidelines, the amount payable on application on each share must be at least- a) 5% of the

nominal amount of share, b) 25% of the nominal amount of share, c) 25% of the called amount of share,

d) 5% of the called amount of share

10) A company can issue shares at premium- a) If the articles authorize the company to do so, b) Even in the

absence any express authority in its aritcels, c) If the memorandum authorize the company to do so, d)

None of these

11) On approval from the central government, the rate of discount on issue of shares can be percent of the

nominal value of the shares.a) 5, b) 10, c) 20, d) none of these

12) Maximum amount that can be collected as premium as a percentage of face value=? A) 20%, b) 30%, c)

40%, d) unlimited

13) Which of the following should be deducted from the share capital to find out paid up capital? A) Call in

advance, b) Calls in arrears, c) Forfeited shares, d) Discount on issue of shares

14) The interest on calls-in-advance is paid for the period from a) Date of receipt of application money to

the date of appropriation, b) Date of receipt of allotment money to the date of appropriation, c) Date of

receipt of advance to the date of appropriation, d) Date of appropriation to the date of dividend

payment

15) Capital reserves are created out of a) Balance in profit and loss account, b) Capital profits, c) Revenue

profits, d) Provision

16) The directors of VVIP Ltd. Made the final call of Z 30 per share on May 15. 2014 indicating the last date of

payment of call money to be May 31, 2014. Mr. X holding 10,000 shares paid the call money on July 15,

2014.If the company adopts Table A, the amount of interest on calls in arear to be paid by Mr. X is____ a)

1,250, b) 1,875, c) 1,500, d) 2,250

17) X Ltd. Proposed to issue 5000 equity shares of Rs.100 each at a premium of 20%. The minimum amount

of application money to be collected per share? A) 25, b) 6, c) 7, d) 8.4

18) The authorized capital of Vijay Ltd. consists of booth cumulative preference shares and equity shares.

Each 5% cumulative preference shares has a particulars value Rs.100. Each equity share has aapar value

Rs.10. during the year April 01, 2014 to March 31, 2015, the cumulative preference share capital balance

was Rs.4,00,000 and the equity share capital balance was Rs.10,00,000. If dividend declaration totaled

Rs.16,000 and Rs.30,000 in the year 2013-14 and 2014-15 respectively, the dividends allocated to the

equity share holders in the year 2014-15=? A) 6,000, b) 10,000, c) 20,000, d) 24,000

19) The following list of accounts with their balances was taken from the general ledger of D

Ltd. as on March 31, 2015: Discount on issue of debentures-8500, cash-73,500, Equity Share Capital Rs.

100 each-6,80,000, General Reserve-2,31,500, Securities premium-3,95,000, Dividends Payable-22,000,

Profit and Loss appropriation account-80,000, 10% Debentures Z 100 each-1,00,000. The Shareholders

equity as on March 31, 2015 is: a) 1,378,000, b) 1,386,500, c) 1,400,000, d) 1,408,500

20) A Limited provides you the following information, Equity share capital, Called up Rs.4,00,000 Calls in

advance Rs.25,000 Calls in arrears Rs.40,000.The amount of paid up capital to be shown in the Balance

sheet of A Limited will be? a) 335,000, b) 385,000, c) 360,000, d) 425,000

21) On 1.5.07, R.Ltd issued 7% 4,000 convertible debentures, of Rs 100 each at a Premium of 20%. Interest is

payable on September 30 and March 31, every year. Assuming that the interest runs from the date of

issue, the amount of interest expenditure debated to Profit & Loss account for the year ended 31.3.08

will be (a) Rs 2, 80, 000 (b) Rs 2, 33, 333 (c) Rs 3,36,000 Rs 2, 56, 667

22) _______ is usually created for redemption of debentures----(a) Debenture redemption fund (b) Capital

redemption fund (c) Debenture reserve fund (d) Debenture redemption reserve

23) If the balance of the Debenture Redemption Reserve fund is less than the amount of debentures to be

redeemed, then where is the deficit amount transferred? (a) Capital Reserve A/C (b) Reserve Capital A/C

(c) Profit & Loss A/C (d) Debenture premium A/C

24) Premium on redemption of debentures is shown in Balance sheet under-(a) Reserve and Surplus (b)

Current Liabilities and Provisions (c) Current assets (d) Miscellaneous Expenditure.

25) R Ltd. Issued 15,000, 15% debentures of Rs. 100 each at a premium of 10%, which are redeemable after

10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every

year is-(a)Rs.15, 000 (b) Rs.30, 000 (c) Rs.45, 000 (d) Rs.22, 500

26) R.ltd. took over assets of Rs.3, 50,000 and liabilities of Rs 30, 000 of X.Ltd. for a purchase consideration

of Rs 3, 33, 000.R.Ltd paid the purchase consideration by issuing 12% debentures of Rs 100 each at 10%

premium. No. of debentures issued will be-(a) 3,000 debentures (b) 3,100 debentures (c) 2,800

debentures (d) None of the three

27) On 1.1.07, R.Ltd. issued 14% Rs 1, 00,000 debentures at a discount of 6% repayable at the end of 5 years.

Amount of discount to be written-off every year will be-(a) Rs 1200 (b) Rs 1000 (c) Rs1500 (d) None of

these

28) Non-Convertible' debentures refer to-(a) Owners capital (b) Loan capital (c) Short-term debts (d) All of

these

29) Loss on issue of debentures is treated as (a) intangible asset (b) current asset (c) current liability (d) Misc.

exp

30) Debentures carrying charge on all the asset is known as___ (a) Fixed (b) Mortgage (c) Naked (d) Floating

Use the following information for questions 31 & 32

D Ltd. issued 10,000 equity shares of Rs 10 each at a premium of 20%. The share amount was payable as:-

On application Rs 2

On allotment ( including premium) Rs 5

On first call Rs 3

On second & final call Rs 2

Application were received for 14,000 shares and the shares were allotted to application on pro- data basis.

E, who was allotted 300 shares, failed to pay the first call. On his subsequent failure to pay the second and

final call, all his shares were forfeited. Out of the forfeited shares, 200 shares were re- issued @ Rs 9 per

share.

31) The amount transfer to capital reserve =? A) Rs 200, b) Rs 1100, c) Rs 1800, d) Rs 1300

32) Balance in share forfeiture account =? A) Rs Nil, b) Rs 700, c) Rs 500, d) Rs 400

33) Q.1) S Ltd issued 2,000 10% preference share of Rs. 100 each at par, which are redeemable at a

premium of 10%. For the purpose of redemption, the company issued 1,500 equity shares of Rs.

100 each at a premium of 20% per share. At a time of redemption of preference shares, the

amount to be transferred by the company to the capital redemption reserve a/c is

34) a. Rs. 50,000 b. Rs. 40,000 c. Rs. 2,00,000 d. Rs. 2,20,000

35) Q.2) During the year 2005-06, T Ltd. Issued 20,000,12% preference shares of Rs. 10 each at a

premium of 5%, which are redeemable after 4 years at par. During the year 2010-11, as the

company did not have sufficient cash resources to redeem the preference shares, it issued 10,000

14% debentures of Rs. 10 each at a premium of 10%. At the time of redemption of 12% preference

shares, the amount to be transferred to capital redemption reserve? a. Rs. 90,000 b. Rs. 1,00,000 c.

Rs. 2,00,000 d. Rs. 10,000

36) Q.3) According to section 78 of the companies act, the amount in the securities premium a/c cannot be

used for the purpose of: a. Issue of fully paid bonus shares b. Writing off losses of the company c.

Writing off preliminary expenses d. Writing off commission or discount on issue share

37) Which of the following can be utilized for the redemption of preference shares?

a. The proceeds of fresh issue of equity shares b. The proceeds of issue of debentures

c. The proceeds of issue of fixed deposits d All of the above

38) Which of the statements is true? a. Capital redemption reserve a/c cannot be used for writing off misce.

expenses and losses b. Capital profit realized in cash cannot be used for payment of dividend c.

Reserves created by revaluation of fixed assets are not permitted to be capitalized d. Dividend is

payable on the calls paid in advance bi shareholders

39) Consider the following information pertaining to E Ltd.

On 4/9/2011 the company issued 12,000 7% debentures giving a face value of Rs. 100 each at a discount

of 2.5%. On 12/9/2011 the company issued 25,000 8% preference shares of Rs 100 each at a premium of

5% together with one month dividend thereon. Bank balance as on 31/8/2011 was Rs. 29,25,000 After

affecting the above transactions, the bank balance as on 30/9/2011? a. Rs. 33,15,000 b. Rs.

33,30,000 c. Rs. 33,45,000 d. Rs. 34,30,000

40) Which of the following accounts can be used for transfer to capital redemption reserve a/c? a) General

reserve a/c b) Forfeited share a/c c)Profit prior to incorporation d) Securities premium a/c

41) Preference share amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of share

amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption

reserve a/c? a) Rs. 1,05,000 b) Rs. 1,00,000 C) Rs. 2,00,000 d) Rs. 1,11,000

42) Securities premium cannot be used to: a) Issue bonus shares b) Redeem preference shares c) Write off

preliminary expenses D) Write off discount on issue of share

43) A company cannot issue redeemable preference share for a period exceeding a) 5 years B) 10 years C)

15 years D) 20 years

44) which of the following cannot be used for the purpose of capital redemption reserve a/c? A) Profit and

loss a/c (Cr.) B) General reserve a/c C) Unclaimed dividend a/c D) All of the above

Q.45 to 47 Rs 10 lacs, 12% preference share capital redeemed @ 10% premium. 1500 equity share of Rs

10 issued at par. Compute:-

45) Amount received:- a) Rs 10 lacs, c) Rs 11 lacs, c) Rs 12 lacs, d) Rs 1 lacs

46) CRR:- a) Rs 8,50,000, b) Rs 9,85,000, c) Rs 10,00,000, d) Rs1,50,000

47) Amount received by issue of equity shares will be:- a) Rs 1,50,000, b) Rs 1,65,000, c) Rs 15,000, d) Rs

1,00,000

48) Minimum tenure of pr. Share is:- a) 20 years, b) 6 Months, c) 1 Years, d) 3 years.

49) Preference shareholders are:- a) Creditors, b) Owners, c) Both, d) None

50) Free reserves include:- a) general reserve, b) P/L, c) Income tax reserve (utilized) d) all of these.

CA CS MOHIT AGARWAL

9830741471

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