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CBSE Class 12 Accountancy Sample Paper 2025-26

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AccountancyCBSE Class 12 · Sample paper, session 2025-26

CBSE Class 12 Accountancy: sample paper 2025-26

The sample question paper CBSE published for the 2025-26 session, as printed: 42 questions for 80 marks, in sections, with each OR choice shown as an alternative. Try each question first, then open our solution.

56 of 57 questions (counting each OR alternative) have our step-by-step solution so far. We show a solution only after an independent re-solve agrees with it; the rest say "Solution being checked".

Source: official sample question paper from cbseacademic.nic.in: https://cbseacademic.nic.in/web_material/SQP/ClassXII_2025_26/Accountancy-SQP.pdf. Questions are transcribed from that PDF; figures are described in words, so check the official paper for them.

Practise a paper like this, timedMy board paper sets a full paper in this exact format from real board questions, with a timer.Get your written answers markedThe Answer Coach marks a photo of your handwritten answer step by step, like the examiner.

How the paper is set

SectionQuestionsWhat it has
A1-26Part A: Accounting for Partnership Firms and Companies; Q1-16 one mark, Q17-20 three marks, Q21-22 four marks, Q23-26 six marks
B-I27-34Part B Option I: Analysis of Financial Statements
B-II27-34Part B Option II: Computerised Accounting

Instructions in brief: All questions compulsory; Part B has two options, attempt only one; no overall choice, internal choice in 7 one-mark, 2 three-mark, 1 four-mark and 2 six-mark questions.

Section A

Part A: Accounting for Partnership Firms and Companies; Q1-16 one mark, Q17-20 three marks, Q21-22 four marks, Q23-26 six marks

  1. Answer one of these 2 alternatives.

    Q1(a) · 1 mark · MCQAccounting for Partnership: Basic Concepts

    A partner’s capital account was credited with ₹80,000 during the year. Which of the following can be the possibility for such a credit in his capital account?

    1. (A)Opening Balance
    2. (B)Drawings during the year
    3. (C)Loss during the year
    4. (D)Capital introduced
    Try it first, then show our solutionSolution

    1. A capital account is credited when the partner's claim on the firm rises: capital introduced, interest on capital, salary, commission or share of profit. Drawings and losses are debits, and the opening balance is brought down, not credited during the year.

    2. So a fresh credit of ₹ 80,000 during the year can only be capital introduced. Option (D).

      1 mark

    Answer: (D) Capital introduced

    Where the marks are

    • Identifies capital introduced as a credit to the capital account (1 mark)

    Open Q1(a) on its own page

    OR

    Q1(b) · 1 mark · Assertion-reasonCompetency-basedAccounting for Partnership: Basic Concepts

    Assertion (A) :- Fluctuating Capital Account can show debit balance.
    Reason (R) :- Losses and Drawings can be more than Capital Balance.

    1. (A)Both A and R are correct and R is the correct explanation of A
    2. (B)Both A and R are correct but R is not the correct explanation of A
    3. (C)A is correct but R is incorrect
    4. (D)Both A and R are incorrect.
    Try it first, then show our solutionSolution

    1. Under the fluctuating capital method, drawings, interest on drawings and share of loss are all debited to the capital account itself.

    2. If these debits exceed the capital and credits, the account shows a debit balance. So the Assertion is true and the Reason explains it. Option (A).

      1 mark

    Answer: (A) Both A and R are correct and R is the correct explanation of A

    Where the marks are

    • Recognises that debits (losses, drawings) can exceed credits in a fluctuating capital account (1 mark)

    Open Q1(b) on its own page

  2. Q2 · 1 mark · MCQAccounting for Partnership: Basic Concepts

    On 1st July, 2024, A, B and C entered into partnership sharing Profits & Losses in the ratio 5:3:2. C was guaranteed that his share of profits will not be less than ₹ 60,000 p.a. Deficiency if any will be borne by A and B equally. For the year ended March 31, 2025, firm incurred loss of ₹ 1,25,000. Deficiency will be borne by A and B will be:

    1. (A)A ₹ 30,000 and B ₹ 30,000
    2. (B)A ₹ 43,750 and B ₹ 26,250
    3. (C)A ₹ 42,500 and B ₹ 42,500
    4. (D)A ₹ 35,000 and B ₹ 35,000
    Try it first, then show our solutionSolution

    1. The firm ran from 1st July, 2024 to 31st March, 2025, i.e. 9 months, so C's guarantee is ₹ 60,000 × 9/12 = ₹ 45,000.

    2. C's share of the loss = ₹ 1,25,000 × 2/10 = ₹ 25,000 (a loss). To give C ₹ 45,000, the deficiency is ₹ 45,000 + ₹ 25,000 = ₹ 70,000.

    3. A and B bear it equally: ₹ 35,000 each. Option (D).

      1 mark

    Answer: (D) A ₹ 35,000 and B ₹ 35,000

    Where the marks are

    • Time-proportioned guarantee ₹ 45,000 and deficiency ₹ 70,000 shared equally (1 mark)

    Open Q2 on its own page

  3. Answer one of these 2 alternatives.

    Q3(a) · 1 mark · MCQAccounting for Share Capital

    Pali Limited offered 2,00,000 shares of ₹ 10 each at a premium of ₹ 2 per share. Applications were received for 1,95,000 shares, which were duly allotted. The amount was payable as ₹3 on Application (including ₹1 premium), ₹ 6 on Allotment (including ₹1 premium) and balance on call. Manoj, holding 6,000 shares failed to pay allotment money and his shares were immediately forfeited. Out of the forfeited shares, 4,000 shares were re-issued @ ₹ 11 per share as fully paid up. The amount of Capital Reserve will be:

    1. (A)₹ 16,000
    2. (B)₹ 12,000
    3. (C)₹ 8,000
    4. (D)₹ 18,000
    Try it first, then show our solutionSolution

    1. Manoj paid only the application money of ₹ 3, of which ₹ 1 is premium, so ₹ 2 per share went to share capital. Amount forfeited = 6,000 × ₹ 2 = ₹ 12,000.

    2. The 4,000 shares were reissued at ₹ 11 (face value ₹ 10 + ₹ 1 premium), so there is no discount on reissue. Forfeited amount on these 4,000 shares = 4,000 × ₹ 2 = ₹ 8,000, all of which goes to Capital Reserve. Option (C).

      1 mark

    Answer: (C) ₹ 8,000

    Where the marks are

    • Forfeiture of ₹ 2 per share on 4,000 reissued shares moved to Capital Reserve (1 mark)

    Open Q3(a) on its own page

    OR

    Q3(b) · 1 mark · MCQAccounting for Share Capital

    Prafful Limited forfeited 15,000 shares of ₹ 20 each on which ₹ 8 (including ₹ 2 premium) was paid. Out of these 13,000 shares were re-issued @ ₹ 19 per share as fully paid up. Determine the amount of Share Forfeited balance.

    1. (A)₹ 90,000
    2. (B)₹ 91,000
    3. (C)₹ 12,000
    4. (D)₹ 16,000
    Try it first, then show our solutionSolution

    1. Paid ₹ 8 per share including ₹ 2 premium, so ₹ 6 per share was credited to capital. Share Forfeited A/c = 15,000 × ₹ 6 = ₹ 90,000.

    2. On reissue of 13,000 shares at ₹ 19 (discount ₹ 1), the gain on those shares goes to Capital Reserve. The balance left in Share Forfeited A/c relates only to the 2,000 shares not reissued: 2,000 × ₹ 6 = ₹ 12,000. Option (C).

      1 mark

    Answer: (C) ₹ 12,000

    Where the marks are

    • Balance = forfeited amount on 2,000 unissued shares = ₹ 12,000 (1 mark)

    Open Q3(b) on its own page

  4. Answer one of these 2 alternatives.

    Q4(a) · 1 mark · MCQIssue and Redemption of Debentures

    Pista Ltd. took over running business of Vista Ltd. comprising of Assets of ₹ 45,00,000 and Liabilities of ₹ 7,50,000 and in consideration issued them 30,000, 9% debentures of ₹ 100 each at 5% discount and a cheque of ₹ 10,00,000. Determine the amount of Goodwill or Capital Reserve.

    1. (A)Goodwill ₹ 9,00,000
    2. (B)Capital Reserve ₹ 9,00,000
    3. (C)Goodwill ₹ 1,00,000
    4. (D)Capital Reserve ₹ 1,00,000
    Try it first, then show our solutionSolution

    1. Net assets taken over = ₹ 45,00,000 − ₹ 7,50,000 = ₹ 37,50,000.

    2. Purchase consideration = debentures 30,000 × ₹ 95 = ₹ 28,50,000 plus cheque ₹ 10,00,000 = ₹ 38,50,000. It exceeds net assets by ₹ 1,00,000, which is Goodwill. Option (C).

      1 mark

    Answer: (C) Goodwill ₹ 1,00,000

    Where the marks are

    • Consideration ₹ 38,50,000 vs net assets ₹ 37,50,000 gives goodwill ₹ 1,00,000 (1 mark)

    Open Q4(a) on its own page

    OR

    Q4(b) · 1 mark · MCQAccounting for Share Capital

    Dawn Ltd. purchased Equipment and paid ₹ 2,20,000 by cheque and issued 16,000 equity shares of ₹ 10 each at 25% premium. The purchase consideration will be:

    1. (A)₹ 3,40,000
    2. (B)₹ 4,20,000
    3. (C)₹ 3,80,000
    4. (D)₹ 2,00,000
    Try it first, then show our solutionSolution

    1. Shares issued at 25% premium are issued at ₹ 12.50 each: 16,000 × ₹ 12.50 = ₹ 2,00,000.

    2. Purchase consideration = ₹ 2,20,000 (cheque) + ₹ 2,00,000 (shares) = ₹ 4,20,000. Option (B).

      1 mark

    Answer: (B) ₹ 4,20,000

    Where the marks are

    • Adds cheque and issue price of shares (1 mark)

    Open Q4(b) on its own page

  5. Q5 · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    Bala and Lala were partners in a firm with Capitals of ₹ 24,00,000 and 16,00,000. They admitted Mala as a new partner for 1/3 share for which Mala brings ₹ 20,00,000 as capital. There was Investment and Investment Fluctuation Reserve appearing in the books of ₹ 2,50,000 and ₹ 50,000 respectively. Bala took over 40% of the Investments at ₹ 80,000 and remaining Investments were valued at ₹ 1,10,000. By what amount Revaluation account will be affected for the above information?

    1. (A)Debited ₹ 60,000
    2. (B)Credited with ₹ 60,000
    3. (C)Debited ₹ 10,000
    4. (D)Credited ₹ 10,000
    Try it first, then show our solutionSolution

    1. Book value of investments ₹ 2,50,000. Bala takes 40% (book value ₹ 1,00,000) at ₹ 80,000; the remaining 60% (₹ 1,50,000) is valued at ₹ 1,10,000. New total = ₹ 1,90,000, a fall of ₹ 60,000.

    2. The Investment Fluctuation Reserve of ₹ 50,000 absorbs the fall first. Only the excess ₹ 10,000 is a loss debited to Revaluation Account. Option (C).

      1 mark

    Answer: (C) Debited ₹ 10,000

    Where the marks are

    • Fall ₹ 60,000 less IFR ₹ 50,000 = ₹ 10,000 debited to Revaluation A/c (1 mark)

    Open Q5 on its own page

  6. Q6 · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    Jai and Veeru were in a partnership sharing Profit &Loss in the ratio 5:3. Their Capitals were ₹ 10,00,000 and ₹ 8,00,000 respectively. The firm was also having reserves of ₹ 7,00,000. Normal rate of return was 10%. Firm made average profits of ₹ 2,30,000 for the year ended March 31, 2025 (after adjustment of loss of machinery of book value of ₹2,00,000 by fire against which insurance claim of ₹1,50,000 was admitted). Value of goodwill as per Capitalisation of super profits will be:

    1. (A)₹ 10,00,000
    2. (B)₹ 3,00,000
    3. (C)₹ 18,00,000
    4. (D)Nil.
    Try it first, then show our solutionSolution

    1. Capital employed = ₹ 10,00,000 + ₹ 8,00,000 + reserves ₹ 7,00,000 = ₹ 25,00,000. Normal profit at 10% = ₹ 2,50,000.

    2. The fire loss is abnormal: net loss = ₹ 2,00,000 − ₹ 1,50,000 = ₹ 50,000, so normal average profit = ₹ 2,30,000 + ₹ 50,000 = ₹ 2,80,000. Super profit = ₹ 30,000; goodwill = ₹ 30,000 × 100/10 = ₹ 3,00,000. Option (B).

      1 mark

    Answer: (B) ₹ 3,00,000

    Where the marks are

    • Adjusts abnormal loss, finds super profit ₹ 30,000 and capitalises at 10% (1 mark)

    Open Q6 on its own page

  7. Q7 · 1 mark · MCQAccounting for Partnership: Basic Concepts

    On 1st August, 2024 Tom, Jerry and Tyke entered into partnership with capitals of ₹5,00,000 each. Interest on Drawings was to be charged @ 6% p.a. For the year ended March 31, 2025, Tyke withdrew ₹ 80,000. What amount of Interest on drawings will be charged from Tyke?

    1. (A)₹ 4,800
    2. (B)₹ 1,600
    3. (C)₹ 3,200
    4. (D)₹ 2,400
    Try it first, then show our solutionSolution

    1. Dates of drawings are not given, so interest is charged for an average period of half the time the firm ran. The firm ran 8 months (1st August to 31st March), so the average period is 4 months.

    2. Interest on drawings = ₹ 80,000 × 6/100 × 4/12 = ₹ 1,600. Option (B).

      1 mark

    Answer: (B) ₹ 1,600

    Where the marks are

    • Average period of 4 months on ₹ 80,000 at 6% p.a. (1 mark)

    Open Q7 on its own page

  8. Answer one of these 2 alternatives.

    Q8(a) · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner

    A, B and C were partners sharing Profits &Losses in the ratio 7:2:1. B died. A took over 1/20 from his share and remaining share was taken over by C. Determine the new Profit sharing Ratio.

    1. (A)4 : 1
    2. (B)7 : 1
    3. (C)71 : 29
    4. (D)3 : 1
    Try it first, then show our solutionSolution

    1. B's share is 2/10 = 4/20. A takes 1/20 of it and C takes the remaining 3/20.

    2. A = 7/10 + 1/20 = 15/20; C = 1/10 + 3/20 = 5/20. New ratio A : C = 15 : 5 = 3 : 1. Option (D).

      1 mark

    Answer: (D) 3 : 1

    Where the marks are

    • Adds acquired shares to old shares to get 3 : 1 (1 mark)

    Open Q8(a) on its own page

    OR

    Q8(b) · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner

    X, Y and Z were partners sharing Profit & Losses in the ratio 5:3:2. Y retired, and he gifted half of his share to X and remaining half was taken over equally by X and Z. Determine the new Profit-sharing Ratio.

    1. (A)29 : 11
    2. (B)13 : 7
    3. (C)1 : 1
    4. (D)5 : 2
    Try it first, then show our solutionSolution

    1. Y's share is 3/10. Half (3/20) is gifted to X; the other 3/20 is taken equally, 3/40 each by X and Z.

    2. X = 5/10 + 3/20 + 3/40 = 29/40; Z = 2/10 + 3/40 = 11/40. New ratio = 29 : 11. Option (A).

      1 mark

    Answer: (A) 29 : 11

    Where the marks are

    • Adds gifted and acquired shares to X and Z (1 mark)

    Open Q8(b) on its own page

  9. Q9 · 1 mark · MCQDissolution of Partnership Firm

    X, a partner was assigned to look after the dissolution process and was allowed remuneration of ₹ 15,000. Actual realisation expenses amounted to ₹ 20,000, being paid by another partner Y. By what amount Realisation account will be debited for the above-mentioned information?

    1. (A)₹ 20,000
    2. (B)₹ 35,000
    3. (C)₹ 5,000
    4. (D)₹ 15,000
    Try it first, then show our solutionSolution

    1. Remuneration allowed to X for doing the dissolution is a realisation expense: Realisation A/c Dr. ₹ 15,000 to X's Capital A/c.

    2. The actual expenses of ₹ 20,000 were not borne by X but paid by partner Y, so they are also debited to Realisation A/c (credited to Y's Capital). Total debit = ₹ 15,000 + ₹ 20,000 = ₹ 35,000. Option (B).

      1 mark

    Answer: (B) ₹ 35,000

    Where the marks are

    • Debits both the remuneration and the expenses paid by Y (1 mark)

    Open Q9 on its own page

  10. Answer one of these 2 alternatives.

    Q10(a) · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    Arun and Barun were partners sharing Profits &Losses in the ratio 3:2. They admitted Charan into partnership for 20% share. Charan was to bring proportionate Capital and he brought ₹ 3,50,000 (including ₹ 50,000 for goodwill share) in firm. If adjusted capital of Arun after Revaluation Gain/Loss, Accumulated Profits/Losses and Goodwill treatment was ₹ 8,40,000. What was Barun’s Capital after Revaluation Gain/Loss, Accumulated Profits/Losses and Goodwill treatment?

    1. (A)₹ 5,60,000
    2. (B)₹ 3,60,000
    3. (C)₹ 12,00,000
    4. (D)₹ 6,60,000
    Try it first, then show our solutionSolution

    1. Charan brings ₹ 3,50,000, of which ₹ 50,000 is goodwill, so his capital is ₹ 3,00,000 for a 1/5 share. Total capital of the new firm = ₹ 3,00,000 × 5 = ₹ 15,00,000.

    2. Old partners together hold 4/5 = ₹ 12,00,000. Barun = ₹ 12,00,000 − ₹ 8,40,000 = ₹ 3,60,000. Option (B).

      1 mark

    Answer: (B) ₹ 3,60,000

    Where the marks are

    • Total capital from Charan's capital; Barun = 12,00,000 − 8,40,000 (1 mark)

    Open Q10(a) on its own page

    OR

    Q10(b) · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    Raghav and Sahil were partners sharing Profit &Loss in the ratio 5:3. Their capital balances were ₹ 7,20,000 and ₹ 2,80,000 respectively. There were balances of General Reserve of ₹ 5,00,000 and Deferred Revenue Expenditure of ₹ 4,00,000 in the books of the firm. They admitted Ojasv into partnership for 20% share for which he brings ₹ 4,00,000 as capital. Determine the goodwill share of Ojasv.

    1. (A)₹ 5,00,000
    2. (B)₹ 1,00,000
    3. (C)₹ 1,20,000
    4. (D)₹ 60,000
    Try it first, then show our solutionSolution

    1. From Ojasv's capital, total capital of the firm should be ₹ 4,00,000 × 100/20 = ₹ 20,00,000.

    2. Actual capital = old capitals ₹ 10,00,000 + General Reserve ₹ 5,00,000 − Deferred Revenue Expenditure ₹ 4,00,000 + Ojasv ₹ 4,00,000 = ₹ 15,00,000. Hidden goodwill = ₹ 5,00,000; Ojasv's share = 20% = ₹ 1,00,000. Option (B).

      1 mark

    Answer: (B) ₹ 1,00,000

    Where the marks are

    • Hidden goodwill ₹ 5,00,000 and Ojasv's 20% share (1 mark)

    Open Q10(b) on its own page

  11. Q11 · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner

    Building was appearing in the books at ₹ 20,00,000 which was overvalued by 25%. What amount will be shown in the Balance Sheet of a reconstituted firm for building?

    1. (A)₹ 25,00,000
    2. (B)₹ 16,00,000
    3. (C)₹ 24,00,000
    4. (D)₹ 15,00,000
    Try it first, then show our solutionSolution

    1. "Overvalued by 25%" means book value = true value × 125/100.

    2. True value = ₹ 20,00,000 × 100/125 = ₹ 16,00,000, the amount shown in the new Balance Sheet. Option (B).

      1 mark

    Answer: (B) ₹ 16,00,000

    Where the marks are

    • True value = book value × 100/125 (1 mark)

    Open Q11 on its own page

  12. Q12 · 1 mark · MCQCompetency-basedIssue and Redemption of Debentures

    From the given hypothetical situation, answer Q 12 – 14.
    Floater Ltd. issued 60,000; 8% debentures of ₹ 100 each at 5% Discount and to be redeemed at 10% premium at the end of 5 years. On the date of issue, balance in Securities Premium was ₹ 8,00,000 and Statement of Profit Loss (Dr.) was ₹ 5,00,000.

    Loss on Issue of Debentures is to be written off as ______ out of Securities Premium and ______ out of Statement of Profit and Loss.

    1. (A)₹ 4,50,000 ; ₹ 4,50,000
    2. (B)₹ 6,00,000 ; ₹ 3,00,000
    3. (C)₹ 8,00,000 ; ₹ 1,00,000
    4. (D)₹ 4,00,000 ; ₹ 5,00,000
    Try it first, then show our solutionSolution

    1. Face value = 60,000 × ₹ 100 = ₹ 60,00,000. Loss on issue = discount 5% (₹ 3,00,000) + premium on redemption 10% (₹ 6,00,000) = ₹ 9,00,000.

    2. Securities Premium is used first: ₹ 8,00,000. The balance ₹ 1,00,000 is written off from the Statement of Profit and Loss. Option (C).

      1 mark

    Answer: (C) ₹ 8,00,000 ; ₹ 1,00,000

    Where the marks are

    • Loss ₹ 9,00,000 written off from Securities Premium first (1 mark)

    Open Q12 on its own page

  13. Q13 · 1 mark · MCQCompetency-basedIssue and Redemption of Debentures

    After writing off Loss on Issue of Debentures, _______ balance in Statement of Profit and Loss will be ________

    1. (A)Debit ; ₹ 6,00,000
    2. (B)Credit ; ₹ 6,00,000
    3. (C)Debit ; ₹ 4,00,000
    4. (D)Credit ; ₹ 4,00,000
    Try it first, then show our solutionSolution

    1. The Statement of Profit and Loss already had a debit balance of ₹ 5,00,000.

    2. Writing off another ₹ 1,00,000 of loss on issue makes the debit balance ₹ 6,00,000. Option (A).

      1 mark

    Answer: (A) Debit ; ₹ 6,00,000

    Where the marks are

    • Debit balance rises by the ₹ 1,00,000 written off (1 mark)

    Open Q13 on its own page

  14. Q14 · 1 mark · MCQCompetency-basedIssue and Redemption of Debentures

    Premium on Redemption of Debentures account will have a balance of________ to be treated as ______ in the first year.

    1. (A)₹ 9,00,000 ; Non-Current Liabilities
    2. (B)₹ 9,00,000 ; Current Liabilities
    3. (C)₹ 6,00,000 ; Non-Current Liabilities
    4. (D)₹ 6,00,00 ; Current Liabilities
    Try it first, then show our solutionSolution

    1. Premium on redemption = 10% of ₹ 60,00,000 = ₹ 6,00,000.

    2. It is payable at the end of 5 years, so in the first year it is shown under Non-Current Liabilities (Long-term Borrowings). Option (C).

      1 mark

    Answer: (C) ₹ 6,00,000 ; Non-Current Liabilities

    Where the marks are

    • ₹ 6,00,000 shown as a non-current liability (1 mark)

    Open Q14 on its own page

  15. Q15 · 1 mark · MCQDissolution of Partnership Firm

    Arun, Basu and Tarun were partners sharing Profit &Loss in the ratio 5:3:2. Their firm was dissolved on March 31, 2025. On this date following assets and liabilities were appearing in their books of accounts.
    Building ₹ 2,00,000 ; Furniture ₹ 80,000 ; Stock ₹ 70,000 ; Goodwill ₹ 10,000 ; Debtors ₹ 40,000 ; Cash ₹ 20,000 ; Creditors ₹ 50,000 ; Arun’s Loan ₹ 60,000 ; Tarun’s Brother Loan ₹ 30,000.
    Assets realised at for ₹ 3,40,000. Determine the amount of Realisation Gain/Loss.

    1. (A)Realisation Loss ₹ 80,000
    2. (B)Realisation Gain ₹ 60,000
    3. (C)Realisation Loss ₹ 60,000
    4. (D)No Gain or Loss on Realisation
    Try it first, then show our solutionSolution

    1. Assets transferred to Realisation A/c (all except cash): Building 2,00,000 + Furniture 80,000 + Stock 70,000 + Goodwill 10,000 + Debtors 40,000 = ₹ 4,00,000. Outside liabilities (Creditors ₹ 50,000 and Tarun's brother's loan ₹ 30,000) are transferred in and paid off at book value, so they do not create a gain or loss. Arun's loan is not taken to Realisation A/c.

    2. Assets realise ₹ 3,40,000 against a book value of ₹ 4,00,000: Realisation loss = ₹ 60,000. Option (C).

      1 mark

    Answer: (C) Realisation Loss ₹ 60,000

    Where the marks are

    • Book value of assets ₹ 4,00,000 vs realised ₹ 3,40,000 (1 mark)

    Open Q15 on its own page

  16. Q16 · 1 mark · MCQCompetency-basedReconstitution of a Partnership Firm – Admission of a Partner

    John and Sourabh were partners sharing Profit &Loss equally. They decided to share future Profit &Loss in the ratio 3:2. Their manager Arya met with an accident in the office itself and his claim for compensation amounted to ₹. 50,000. The firm had a Workmen Compensation Reserve of ₹. 80,000. Which of the following statement holds true at the time of reconstitution?

    1. (A)₹ 50,000 will be provided as workmen claim out of Workmen Compensation Reserve and balance ₹ 30,000 will be distributed amongst partners in old ratio.
    2. (B)₹ 50,000 will be provided as workmen claim out of Workmen Compensation Reserve and balance ₹ 30,000 will be distributed amongst partners in new ratio.
    3. (C)₹ 50,000 will be provided as workmen claim out of Workmen Compensation Reserve and balance ₹ 30,000 will be credited to Revaluation Account.
    4. (D)₹ 50,000 will be provided as workmen claim out of Workmen Compensation Reserve and balance ₹ 30,000 will be carried forward in the books of the firm without any treatment.
    Try it first, then show our solutionSolution

    1. On a change in profit sharing ratio, the actual workmen compensation claim (₹ 50,000) is met out of the Workmen Compensation Reserve.

    2. The excess reserve of ₹ 30,000 belongs to the old partners and is credited to them in the old ratio. Option (A).

      1 mark

    Answer: (A) ₹ 50,000 provided for the claim; ₹ 30,000 distributed in the old ratio

    Where the marks are

    • Excess reserve distributed in old ratio (1 mark)

    Open Q16 on its own page

  17. Answer one of these 2 alternatives.

    Q17(a) · 3 marks · Short answerReconstitution of a Partnership Firm – Admission of a Partner

    Raju, Rinku and Munni were partners sharing Profits & Losses in the ratio 3:1:1. They admitted Chunni into partnership for 1/5 share. It was decided that Munni will have 1/4 share in future profits. Goodwill of the firm was valued at ₹ 3,20,000 and Chunni was unable to bring anything. Calculate New Ratio, Sacrificing Ratio and journalise for goodwill at the time of admission of Chunni.

    Try it first, then show our solutionSolution

    1. New ratio. Chunni gets 1/5 and Munni 1/4. Left for Raju and Rinku = 1 − 1/5 − 1/4 = 11/20, shared 3 : 1: Raju = 33/80, Rinku = 11/80. Munni = 20/80, Chunni = 16/80. New ratio = 33 : 11 : 20 : 16.

      1 mark

    2. Sacrifice. Raju 48/80 − 33/80 = 15/80; Rinku 16/80 − 11/80 = 5/80; Munni 16/80 − 20/80 = −4/80 (a gain of 1/20). Sacrificing ratio of Raju and Rinku = 15 : 5 = 3 : 1.

      1 mark

    3. Goodwill entry. Chunni's share = ₹ 3,20,000 × 1/5 = ₹ 64,000; Munni's gain = ₹ 3,20,000 × 1/20 = ₹ 16,000. The total ₹ 80,000 goes to Raju and Rinku in 3 : 1. Chunni brings nothing, so his Current A/c is debited.

      ParticularsDr. (₹)Cr. (₹)
      Chunni's Current A/c Dr.64,000
      Munni's Capital A/c Dr.16,000
      To Raju's Capital A/c60,000
      To Rinku's Capital A/c20,000
      (Being goodwill adjusted on Chunni's admission)
      1 mark

    Answer: New ratio 33 : 11 : 20 : 16; sacrificing ratio (Raju : Rinku) 3 : 1, Munni gains 1/20; Chunni's Current A/c Dr. ₹ 64,000 and Munni's Capital A/c Dr. ₹ 16,000 to Raju ₹ 60,000 and Rinku ₹ 20,000

    Where the marks are

    • New ratio 33 : 11 : 20 : 16 (1 mark)
    • Sacrificing ratio 3 : 1 with Munni's gain (1 mark)
    • Goodwill adjustment entry (1 mark)

    Open Q17(a) on its own page

    OR

    Q17(b) · 3 marks · Short answerReconstitution of a Partnership Firm – Admission of a Partner

    Yashasvi, Nitish and Harshit were partners sharing Profit &Loss in the ratio 5:3:2. W.e.f 01 April, 2025, they decided to share future Profit &Loss in the ratio 4:3:2. On the date of reconstitution Goodwill was appearing in the books of ₹ 4,00,000. Goodwill of the firm was valued at ₹ 7,20,000 on the date of reconstitution. Determine gain or sacrifice for each partner and pass necessary entries.

    Try it first, then show our solutionSolution

    1. Gain or sacrifice (old − new): Yashasvi 5/10 − 4/9 = 5/90 (sacrifice); Nitish 3/10 − 3/9 = −3/90 (gain); Harshit 2/10 − 2/9 = −2/90 (gain).

      1 mark

    2. Write off existing goodwill in the old ratio 5 : 3 : 2.

      ParticularsDr. (₹)Cr. (₹)
      Yashasvi's Capital A/c Dr.2,00,000
      Nitish's Capital A/c Dr.1,20,000
      Harshit's Capital A/c Dr.80,000
      To Goodwill A/c4,00,000
      (Being existing goodwill written off in old ratio)
      1 mark

    3. Adjust goodwill of ₹ 7,20,000 through capitals: Nitish pays 3/90 = ₹ 24,000 and Harshit 2/90 = ₹ 16,000 to Yashasvi.

      ParticularsDr. (₹)Cr. (₹)
      Nitish's Capital A/c Dr.24,000
      Harshit's Capital A/c Dr.16,000
      To Yashasvi's Capital A/c40,000
      (Being adjustment for goodwill on change in ratio)
      1 mark

    Answer: Yashasvi sacrifices 5/90; Nitish gains 3/90 and Harshit 2/90. Goodwill ₹ 4,00,000 written off in 5 : 3 : 2; Nitish ₹ 24,000 and Harshit ₹ 16,000 debited, Yashasvi credited ₹ 40,000

    Where the marks are

    • Gain/sacrifice of each partner (1 mark)
    • Existing goodwill written off (1 mark)
    • Goodwill adjustment entry (1 mark)

    Open Q17(b) on its own page

  18. Q18 · 3 marks · Short answerDissolution of Partnership Firm

    Hemant and Pankaj were partners sharing Profit & Loss in the ratio of 3:2. The firm was dissolved on March 31, 2024 and the following balances were appearing in the books of the firm.
    a. Hemant’s Loan ₹ 80,000
    b. Ruby’s Loan ₹ 50,000
    c. Creditors ₹ 1,00,000
    d. Capital Balances after all adjustments – Hemant ₹ 1,60,000 and Pankaj - ₹ 1,40,000
    Assets of the firm realised at ₹ 6,00,000. You are required to show the amounts and order of payments as per section 48 of Indian Partnership Act 1932 at the time of Dissolution of the firm.

    Try it first, then show our solutionSolution

    1. Section 48 of the Indian Partnership Act, 1932 sets the order: (i) debts of the firm to third parties, (ii) loans and advances from partners, (iii) partners' capitals, (iv) any surplus shared in the profit sharing ratio.

      ½ mark

    2. First, outside liabilities: Creditors ₹ 1,00,000 and Ruby's Loan ₹ 50,000 (total ₹ 1,50,000). Second, Hemant's Loan ₹ 80,000.

      1 mark

    3. Third, capitals: Hemant ₹ 1,60,000 and Pankaj ₹ 1,40,000 (total ₹ 3,00,000). Total paid so far = ₹ 5,30,000.

      ½ mark

    4. Fourth, surplus = ₹ 6,00,000 − ₹ 5,30,000 = ₹ 70,000, shared 3 : 2: Hemant ₹ 42,000, Pankaj ₹ 28,000.

      1 mark

    Answer: Creditors ₹ 1,00,000 and Ruby's Loan ₹ 50,000; then Hemant's Loan ₹ 80,000; then capitals Hemant ₹ 1,60,000 and Pankaj ₹ 1,40,000; surplus ₹ 70,000 to Hemant ₹ 42,000 and Pankaj ₹ 28,000

    Where the marks are

    • Outside liabilities paid first (1 mark)
    • Partner's loan, then capitals (1 mark)
    • Surplus ₹ 70,000 shared 3 : 2 (1 mark)

    Open Q18 on its own page

  19. Q19 · 3 marks · Short answerIssue and Redemption of Debentures

    On January 01, 2025 Ritu Ltd. Issued ₹ 40,00,000, 8% Debentures of ₹ 100 each at 5% discount to be redeemed at 10% premium at the end of 5 years. Balance in Securities Premium on the date of such issue was of ₹ 2,70,000. Pass entries for Issue of debentures.

    Try it first, then show our solutionSolution

    1. Number of debentures = ₹ 40,00,000 / ₹ 100 = 40,000. Issue price = ₹ 95, so cash received = ₹ 38,00,000. Loss on issue = discount ₹ 2,00,000 + premium on redemption 10% ₹ 4,00,000 = ₹ 6,00,000.

    2. Receipt of money

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.38,00,000
      To Debentures Application and Allotment A/c38,00,000
      (Being application and allotment money received, 1st January, 2025)
      1 mark

    3. Allotment

      ParticularsDr. (₹)Cr. (₹)
      Debentures Application and Allotment A/c Dr.38,00,000
      Loss on Issue of Debentures A/c Dr.6,00,000
      To 8% Debentures A/c40,00,000
      To Premium on Redemption of Debentures A/c4,00,000
      (Being 40,000 8% debentures of ₹ 100 each issued at 5% discount, redeemable at 10% premium)
      2 marks

    Answer: Bank Dr. ₹ 38,00,000 to Debentures Application and Allotment; then Debentures Application and Allotment Dr. ₹ 38,00,000 and Loss on Issue Dr. ₹ 6,00,000 to 8% Debentures ₹ 40,00,000 and Premium on Redemption ₹ 4,00,000

    Where the marks are

    • Entry for money received (1 mark)
    • Allotment entry with loss on issue ₹ 6,00,000 and premium on redemption ₹ 4,00,000 (2 marks)

    Open Q19 on its own page

  20. Q20 · 3 marks · Short answerReconstitution of a Partnership Firm – Admission of a Partner

    Ankur and Vikram were partners sharing Profits &Losses in the ratio 3:2. They decided to share future Profits & Losses equally. On the date of reconstitution there was Investment Fluctuation Reserve of ₹ 4,00,000 in the books of accounts. Pass entries in the following cases
    A. Value of Investment reduced by ₹ 2,50,000.
    B. Value of Investment increased by ₹ 5,00,000.
    C. There was no change in value of investments.

    Try it first, then show our solutionSolution

    1. Case A (fall ₹ 2,50,000): the reserve meets the fall; the remaining ₹ 1,50,000 goes to the old partners in 3 : 2.

      ParticularsDr. (₹)Cr. (₹)
      Investment Fluctuation Reserve A/c Dr.4,00,000
      To Investment A/c2,50,000
      To Ankur's Capital A/c90,000
      To Vikram's Capital A/c60,000
      (Being fall in investments met from the reserve and balance credited to partners)
      1 mark

    2. Case B (rise ₹ 5,00,000): the whole reserve goes to partners in 3 : 2, and the rise in value is a revaluation gain, also shared 3 : 2.

      ParticularsDr. (₹)Cr. (₹)
      Investment Fluctuation Reserve A/c Dr.4,00,000
      To Ankur's Capital A/c2,40,000
      To Vikram's Capital A/c1,60,000
      (Being reserve credited to partners in old ratio)
      Investment A/c Dr.5,00,000
      To Revaluation A/c5,00,000
      (Being increase in value of investments)
      Revaluation A/c Dr.5,00,000
      To Ankur's Capital A/c3,00,000
      To Vikram's Capital A/c2,00,000
      (Being revaluation gain credited to partners in old ratio)
      1½ marks

    3. Case C (no change): the whole reserve is free and goes to partners in 3 : 2.

      ParticularsDr. (₹)Cr. (₹)
      Investment Fluctuation Reserve A/c Dr.4,00,000
      To Ankur's Capital A/c2,40,000
      To Vikram's Capital A/c1,60,000
      (Being reserve credited to partners in old ratio)
      ½ mark

    Answer: A: IFR ₹ 4,00,000 to Investment ₹ 2,50,000, Ankur ₹ 90,000, Vikram ₹ 60,000. B: IFR to Ankur ₹ 2,40,000 and Vikram ₹ 1,60,000; Investment ₹ 5,00,000 to Revaluation; Revaluation gain to Ankur ₹ 3,00,000 and Vikram ₹ 2,00,000. C: IFR to Ankur ₹ 2,40,000 and Vikram ₹ 1,60,000

    Where the marks are

    • Case A entry (1 mark)
    • Case B entries (1½ marks)
    • Case C entry (½ mark)

    Open Q20 on its own page

  21. Q21 · 4 marks · Long answerAccounting for Share Capital

    Sapphire Ltd. Was registered with an authorised capital of ₹ 80,00,000 divided into 4,00,000 shares of ₹ 20 each. Company offered and issued 1,50,000 shares at a premium of ₹ 4 per share payable as ₹ 7 on application (including ₹ 1 premium), ₹ 12 on allotment (including ₹ 2 premium) and balance on first call. Rancho, holding 10,000 shares failed to pay allotment and call money. Another shareholder Sultan holding 5,000 shares failed to pay the call money. All the shares held by Rancho were forfeited and of these 8,000 were reissued at ₹ 22 per share as fully paid.
    Show Share Capital sub head as it would in the Balance Sheet of Sapphire ltd. along with notes to Account as per the Companies Act 2013.

    Try it first, then show our solutionSolution

    1. Working. Per share: application ₹ 6 capital + ₹ 1 premium; allotment ₹ 10 capital + ₹ 2 premium; call ₹ 4 capital + ₹ 1 premium. Rancho (10,000 shares) paid only application money, so ₹ 6 × 10,000 = ₹ 60,000 is forfeited. 8,000 shares are reissued at ₹ 22 (no discount), so the forfeiture on them (₹ 48,000) goes to Capital Reserve; ₹ 12,000 stays in Share Forfeiture A/c for 2,000 shares. Sultan's 5,000 shares have the call of ₹ 4 per share (capital) unpaid: calls in arrears ₹ 20,000.

      1 mark

    2. Balance Sheet of Sapphire Ltd. (extract)

      ParticularsNote No.Current Year (₹)
      I. Equity and Liabilities
      1. Shareholders' Funds
      (a) Share Capital129,52,000
      1 mark

    3. Note 1: Share Capital

      Particulars₹
      Authorised Capital: 4,00,000 equity shares of ₹ 20 each80,00,000
      Issued Capital: 1,50,000 equity shares of ₹ 20 each30,00,000
      Subscribed and fully paid up: 1,43,000 equity shares of ₹ 20 each28,60,000
      Subscribed but not fully paid up: 5,000 equity shares of ₹ 20 each, ₹ 20 called up (1,00,000) less calls in arrears (20,000)80,000
      Add: Share Forfeiture A/c12,000
      Total29,52,000
      2 marks

    Answer: Share Capital ₹ 29,52,000 (fully paid 1,43,000 shares ₹ 28,60,000; 5,000 shares ₹ 1,00,000 less calls in arrears ₹ 20,000; Share Forfeiture ₹ 12,000)

    Where the marks are

    • Balance Sheet extract showing Share Capital ₹ 29,52,000 (1 mark)
    • Authorised and issued capital (1 mark)
    • Subscribed fully paid and not fully paid with calls in arrears (1 mark)
    • Share Forfeiture ₹ 12,000 added (1 mark)

    Open Q21 on its own page

  22. Q22 · 4 marks · Long answerAccounting for Partnership: Basic Concepts

    Amit, Sumit and Pulkit were partners sharing Profit &Loss in the ratio 5:3:2. Their Capitals were ₹ 8,00,000; ₹ 7,00,000 and ₹ 5,00,000 respectively. According to Partnership Deed:-
    (a) Interest on Capital @ 10% p.a.
    (b) Salary to Amit ₹ 10,000 p.m and Pulkit ₹ 15,000 per quarter.
    (c) Commission to Sumit ₹ 70,000.
    (d) Sumit was being guaranteed that his share of profits will not be less than ₹ 65,000. Deficiency if any will be borne by Amit and Pulkit equally.
    Ignoring the above terms the profits of ₹ 6,00,000, for the year ended March 31, 2025 were divided equally between partners. You are required to pass necessary adjustment entry. Show your workings clearly.

    Try it first, then show our solutionSolution

    1. Correct distribution of ₹ 6,00,000. Interest on capital at 10%: Amit 80,000, Sumit 70,000, Pulkit 50,000. Salary: Amit 1,20,000 (10,000 × 12), Pulkit 60,000 (15,000 × 4). Commission to Sumit 70,000. Divisible profit = 6,00,000 − 2,00,000 − 1,80,000 − 70,000 = ₹ 1,50,000, shared 5 : 3 : 2 = 75,000 : 45,000 : 30,000. Sumit's share is ₹ 20,000 short of his ₹ 65,000 guarantee; Amit and Pulkit bear ₹ 10,000 each.

      1½ marks

    2. Adjustment table (Cr. = to be credited, Dr. = to be debited)

      ParticularsAmit (₹)Sumit (₹)Pulkit (₹)Total (₹)
      Interest on capital (Cr.)80,00070,00050,0002,00,000
      Salary (Cr.)1,20,00060,0001,80,000
      Commission (Cr.)70,00070,000
      Profit after guarantee (Cr.)65,00065,00020,0001,50,000
      Total due2,65,0002,05,0001,30,0006,00,000
      Less: profit already credited (equal)2,00,0002,00,0002,00,0006,00,000
      Net effect65,000 (Cr.)5,000 (Cr.)70,000 (Dr.)Nil
      1½ marks

    3. Adjustment entry (31st March, 2025)

      ParticularsDr. (₹)Cr. (₹)
      Pulkit's Capital A/c Dr.70,000
      To Amit's Capital A/c65,000
      To Sumit's Capital A/c5,000
      (Being adjustment for profits wrongly distributed)
      1 mark

    Answer: Pulkit's Capital A/c Dr. ₹ 70,000 to Amit's Capital A/c ₹ 65,000 and Sumit's Capital A/c ₹ 5,000

    Where the marks are

    • Correct appropriation including guarantee to Sumit (1½ marks)
    • Net effect table (1½ marks)
    • Adjustment entry (1 mark)

    Open Q22 on its own page

  23. Q23 · 6 marks · Long answerCompetency-basedAccounting for Share Capital

    Extract of Financial statements of Alexa Ltd are produced below.

    Balance Sheet (Extract)

    Equity and LiabilitiesNote no.31-03-25 (₹)31-03-24 (₹)
    Shareholders funds
    Equity Share capital12,37,60,0002,00,00,000
    Reserves and Surplus220,00,00010,00,000

    Note No. 1 Share Capital

    31-03-25 (₹)31-03-24 (₹)
    Authorised Share Capital: Equity shares of Rs.10 each--------------
    Issued Capital2,37,60,0002,00,00,000
    Subscribed capital (Fully Paid)2,37,60,0002,00,00,000

    Note No. 2 Reserves and Surplus

    31-03-25 (₹)31-03-24 (₹)
    Securities Premium20,00,00010,00,000

    During the year Alexa ltd. purchased business of Gloria ltd. with assets of Rs.50,00,000 and liabilities of Rs.20,00,000. With regards to the following additional Information:
    1) During the year 40,000 Equity Shares were issued at a premium of Rs.4 per share for cash.
    2) Besides this no shares were issued as sweat equity, bonus or as ESOP or in any other form.

    Give journal entries for issue of shares for cash and consideration other than cash. Also, prepare Share Capital A/c and Securities Premium Account in the books of Alexa ltd.

    Try it first, then show our solutionSolution

    1. Working. Cash issue: 40,000 shares × ₹ 10 = ₹ 4,00,000 capital and 40,000 × ₹ 4 = ₹ 1,60,000 premium. Increase in capital = 2,37,60,000 − 2,00,00,000 = ₹ 37,60,000, so shares to Gloria Ltd. = 37,60,000 − 4,00,000 = ₹ 33,60,000. Increase in premium = 20,00,000 − 10,00,000 = ₹ 10,00,000, so premium on shares to Gloria = 10,00,000 − 1,60,000 = ₹ 8,40,000. Purchase consideration = 33,60,000 + 8,40,000 = ₹ 42,00,000; net assets = 50,00,000 − 20,00,000 = ₹ 30,00,000; goodwill = ₹ 12,00,000.

      1 mark

    2. Shares issued for cash

      ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.5,60,000
      To Equity Share Application and Allotment A/c5,60,000
      (Being money received for 40,000 shares at ₹ 14)
      Equity Share Application and Allotment A/c Dr.5,60,000
      To Equity Share Capital A/c4,00,000
      To Securities Premium A/c1,60,000
      (Being shares allotted at a premium of ₹ 4)
      1 mark

    3. Business of Gloria Ltd. taken over and shares issued to it

      ParticularsDr. (₹)Cr. (₹)
      Sundry Assets A/c Dr.50,00,000
      Goodwill A/c Dr.12,00,000
      To Sundry Liabilities A/c20,00,000
      To Gloria Ltd. A/c42,00,000
      (Being business purchased)
      Gloria Ltd. A/c Dr.42,00,000
      To Equity Share Capital A/c33,60,000
      To Securities Premium A/c8,40,000
      (Being shares issued to Gloria Ltd. as purchase consideration)
      2 marks

    4. Equity Share Capital A/c

      Particulars₹Particulars₹
      To Balance c/d2,37,60,000By Balance b/d2,00,00,000
      By Equity Share Application and Allotment A/c4,00,000
      By Gloria Ltd. A/c33,60,000
      2,37,60,0002,37,60,000
      1 mark

    5. Securities Premium A/c

      Particulars₹Particulars₹
      To Balance c/d20,00,000By Balance b/d10,00,000
      By Equity Share Application and Allotment A/c1,60,000
      By Gloria Ltd. A/c8,40,000
      20,00,00020,00,000
      1 mark

    Answer: Cash issue: capital ₹ 4,00,000 + premium ₹ 1,60,000. Gloria Ltd.: consideration ₹ 42,00,000 (capital ₹ 33,60,000 + premium ₹ 8,40,000), goodwill ₹ 12,00,000. Closing balances: Share Capital ₹ 2,37,60,000; Securities Premium ₹ 20,00,000

    Where the marks are

    • Entries for cash issue (1 mark)
    • Business purchase with goodwill ₹ 12,00,000 and issue to vendor (2 marks)
    • Workings for consideration (1 mark)
    • Share Capital A/c (1 mark)
    • Securities Premium A/c (1 mark)

    Open Q23 on its own page

  24. Q24 · 6 marks · Long answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

    Alok, Deepak and Manish were partners sharing Profit &Loss in the ratio 5:3:2. Deepak retired on March 31, 2025. On this date his dues after all adjustments related to Revaluation Gain/Loss, Accumulated Profits/Losses and Goodwill treatment came out to be ₹ 6,40,000. He was paid ₹ 40,000 through Furniture on retirement and it was agreed to pay balance in three equal annual instalments together with interest as per the rate permissible by act, in the absence of any agreement. First instalment being paid on March 31, 2026. You are required to pass entry for immediate payment to Deepak on retirement and prepare Deepak’s Loan Account till it is finally closed.

    Try it first, then show our solutionSolution

    1. Settlement on retirement (31st March, 2025): ₹ 40,000 by furniture, balance ₹ 6,00,000 to his loan.

      ParticularsDr. (₹)Cr. (₹)
      Deepak's Capital A/c Dr.6,40,000
      To Furniture A/c40,000
      To Deepak's Loan A/c6,00,000
      (Being Deepak's dues settled by furniture and transfer to loan)
      1 mark

    2. With no agreement, Section 37 of the Indian Partnership Act allows interest at 6% p.a. on the unpaid amount. Each instalment of principal = ₹ 6,00,000 / 3 = ₹ 2,00,000. Interest: year 1 on ₹ 6,00,000 = ₹ 36,000; year 2 on ₹ 4,00,000 = ₹ 24,000; year 3 on ₹ 2,00,000 = ₹ 12,000.

      1 mark

    3. Deepak's Loan A/c

      Particulars₹Particulars₹
      31.03.2026 To Bank A/c2,36,00031.03.2025 By Deepak's Capital A/c6,00,000
      31.03.2026 To Balance c/d4,00,00031.03.2026 By Interest A/c36,000
      6,36,0006,36,000
      31.03.2027 To Bank A/c2,24,00001.04.2026 By Balance b/d4,00,000
      31.03.2027 To Balance c/d2,00,00031.03.2027 By Interest A/c24,000
      4,24,0004,24,000
      31.03.2028 To Bank A/c2,12,00001.04.2027 By Balance b/d2,00,000
      31.03.2028 By Interest A/c12,000
      2,12,0002,12,000
      4 marks

    Answer: Deepak's Capital Dr. ₹ 6,40,000 to Furniture ₹ 40,000 and Deepak's Loan ₹ 6,00,000; instalments paid ₹ 2,36,000 (2026), ₹ 2,24,000 (2027) and ₹ 2,12,000 (2028), interest at 6% ₹ 36,000, ₹ 24,000, ₹ 12,000

    Where the marks are

    • Entry for settlement (1 mark)
    • Interest at 6% under the Act and equal instalments of ₹ 2,00,000 (1 mark)
    • Loan account for three years, closed in 2028 (4 marks)

    Open Q24 on its own page

  25. Answer one of these 2 alternatives.

    Q25(a) · 6 marks · Long answerDissolution of Partnership Firm

    Dhwani and Iknoor were partners sharing Profits & Losses in the ratio 3:2. Their Balance Sheet on March 31, 2025 was as follows

    LiabilitiesAmount (₹)AssetsAmount (₹)
    Dhwani’s Capital2,40,000Cash in Hand50,000
    Iknoor’s Capital2,60,000Building3,00,000
    Investment Fluctuation Reserve50,000Debtors 80,000 (-) Prov for Doubtful Debts (8,000)72,000
    Employee Provident Fund50,000Stock88,000
    General Reserve60,000Accrued Income20,000
    Creditors40,000Profit and Loss1,00,000
    Bills Payable30,000Investment1,20,000
    Bank Overdraft20,000
    7,50,0007,50,000

    On the above date, they admitted Ishaya into partnership for 25% share. Ishaya brings ₹ 2,50,000 as capital and ₹ 40,000 for goodwill. Goodwill of the firm was valued at ₹ 2,00,000. Following agreements were agreed upon:-
    a) Bad Debts amounted to ₹ 5,000 and Provision for doubtful debts to be created at same existing rate.
    b) Investments were valued at ₹ 1,00,000.
    c) Accrued Income was recovered only of ₹ 14,500 in settlement.
    d) Building was overvalued by 20%.
    e) Capital of Dhwani and Iknoor were to be adjusted on the basis Ishaya’s capital contribution. Necessary adjustment to be done by opening Current Accounts.
    You are required to prepare Revaluation Account and Partner’s Capital Account at the time of admission of partner.

    Try it first, then show our solutionSolution

    1. Revaluation Account

      Particulars₹Particulars₹
      To Provision for Doubtful Debts4,500By Loss transferred to:
      To Accrued Income5,500Dhwani's Capital A/c36,000
      To Building50,000Iknoor's Capital A/c24,000
      60,00060,000

      Workings: debtors after bad debts = ₹ 75,000; provision at the existing 10% = ₹ 7,500; needed 5,000 + 7,500 = 12,500 against 8,000 held, so ₹ 4,500 more. Accrued income loss = 20,000 − 14,500 = ₹ 5,500. Building overvalued by 20%: true value = 3,00,000 × 100/120 = ₹ 2,50,000, loss ₹ 50,000. Fall in investments (₹ 20,000) is met from the Investment Fluctuation Reserve.

      2 marks

    2. Goodwill. Ishaya's share = 2,00,000 × 1/4 = ₹ 50,000; he brings ₹ 40,000 in cash and ₹ 10,000 is debited to his Current A/c. With no new ratio given, Dhwani and Iknoor sacrifice in 3 : 2.

      ½ mark

    3. Partners' Capital Accounts

      ParticularsDhwani (₹)Iknoor (₹)Ishaya (₹)ParticularsDhwani (₹)Iknoor (₹)Ishaya (₹)
      To Revaluation (loss)36,00024,000By Balance b/d2,40,0002,60,000
      To Profit and Loss60,00040,000By Investment Fluctuation Reserve18,00012,000
      To Balance c/d2,28,0002,52,0002,50,000By General Reserve36,00024,000
      By Cash2,50,000
      By Premium for Goodwill24,00016,000
      By Ishaya's Current A/c6,0004,000
      3,24,0003,16,0002,50,0003,24,0003,16,0002,50,000
      To Balance c/d4,50,0003,00,0002,50,000By Balance b/d2,28,0002,52,0002,50,000
      By Dhwani's Current A/c2,22,000
      By Iknoor's Current A/c48,000
      4,50,0003,00,0002,50,0004,50,0003,00,0002,50,000
      2½ marks

    4. Capital adjustment. Ishaya's ₹ 2,50,000 for 1/4 share gives total capital ₹ 10,00,000. Dhwani's 3/4 × 3/5 = 9/20 share needs ₹ 4,50,000 and Iknoor's 6/20 needs ₹ 3,00,000. Shortfalls of ₹ 2,22,000 and ₹ 48,000 are brought by debiting their Current Accounts.

      1 mark

    Answer: Revaluation loss ₹ 60,000 (Dhwani ₹ 36,000, Iknoor ₹ 24,000); adjusted capitals ₹ 2,28,000 and ₹ 2,52,000; final capitals Dhwani ₹ 4,50,000, Iknoor ₹ 3,00,000, Ishaya ₹ 2,50,000 with Current A/c debits of ₹ 2,22,000 and ₹ 48,000

    Where the marks are

    • Revaluation Account with loss ₹ 60,000 (2 marks)
    • Goodwill: premium ₹ 40,000 and ₹ 10,000 through Ishaya's Current A/c (½ mark)
    • Capital accounts with reserves, P&L and goodwill (2½ marks)
    • Capital adjustment through current accounts (1 mark)

    Open Q25(a) on its own page

    OR

    Q25(b) · 6 marks · Long answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

    Aman, Barman and Raman were partners sharing Profits & Losses in the ratio 5:3:2. Their Balance Sheet on March 31, 2025 was as follows

    LiabilitiesAmount (₹)AssetsAmount (₹)
    Aman’s Capital80,000Bank30,000
    Barman’s Capital70,000Building1,00,000
    Raman’s Capital50,000Furniture60,000
    Workmen Compensation Reserve50,000Debtors50,000
    Accumulated Depreciation on Building20,000Stock40,000
    Profit and Loss40,000Prepaid Expenses20,000
    Creditors25,000Deferred Revenue Exp.20,000
    Outstanding Expenses15,000Goodwill30,000
    3,50,0003,50,000

    On the above date Barman retired and his share was acquired by Aman and Raman equally. Following agreements were agreed upon:-
    a) Create Provision for doubtful debts @ 10%.
    b) Market value of Building is ₹1,00,000 and Furniture was overvalued by 20%.
    c) Stock was valued at ₹ 55,000. Creditors of ₹ 15,000 took over stock of ₹ 10,000 in settlement of their claims.
    d) Goodwill of the firm was valued at ₹ 80,000.
    e) Prepaid Expenses are worthless and Outstanding Expenses are now ₹20,000.
    f) ₹ 20,000 was immediately paid to Barman on retirement brought in Aman and Raman in ratio 3:2.
    Prepare Revaluation Account and Partner’s Capital Account at the time of retirement of partner.

    Try it first, then show our solutionSolution

    1. Revaluation Account

      Particulars₹Particulars₹
      To Furniture10,000By Building20,000
      To Prepaid Expenses20,000By Stock15,000
      To Provision for Doubtful Debts5,000By Creditors5,000
      To Outstanding Expenses5,000
      40,00040,000

      Workings: building net of depreciation = 1,00,000 − 20,000 = ₹ 80,000, market value ₹ 1,00,000, gain ₹ 20,000. Furniture overvalued by 20%: true value = 60,000 × 100/120 = ₹ 50,000, loss ₹ 10,000. Stock up from ₹ 40,000 to ₹ 55,000. Creditors of ₹ 15,000 settled by stock worth ₹ 10,000, gain ₹ 5,000. Result: neither gain nor loss.

      2 marks

    2. Goodwill. Barman's share = 80,000 × 3/10 = ₹ 24,000, borne by gainers Aman and Raman equally (₹ 12,000 each). Existing goodwill ₹ 30,000 and deferred revenue expenditure ₹ 20,000 are written off in 5 : 3 : 2; WCR and P&L credit balance are credited in 5 : 3 : 2.

      1 mark

    3. Partners' Capital Accounts

      ParticularsAman (₹)Barman (₹)Raman (₹)ParticularsAman (₹)Barman (₹)Raman (₹)
      To Deferred Revenue Exp.10,0006,0004,000By Balance b/d80,00070,00050,000
      To Goodwill (written off)15,0009,0006,000By Workmen Compensation Reserve25,00015,00010,000
      To Barman's Capital A/c12,00012,000By Profit and Loss20,00012,0008,000
      To Cash20,000By Aman's Capital A/c12,000
      To Barman's Loan A/c86,000By Raman's Capital A/c12,000
      To Balance c/d1,00,00054,000By Cash12,0008,000
      1,37,0001,21,00076,0001,37,0001,21,00076,000
      3 marks

    Answer: Revaluation: no gain or loss (₹ 40,000 each side). Barman gets ₹ 20,000 cash and ₹ 86,000 to his loan; closing capitals Aman ₹ 1,00,000 and Raman ₹ 54,000

    Where the marks are

    • Revaluation Account balancing at ₹ 40,000 (2 marks)
    • Goodwill and reserve treatment (1 mark)
    • Capital accounts with Barman's loan ₹ 86,000 and closing balances (3 marks)

    Open Q25(b) on its own page

  26. Answer one of these 2 alternatives.

    Q26(a) · 6 marks · Long answerAccounting for Share Capital

    Space Ventures Limited was registered with an authorised capital of ₹ 20,00,000 divided into 2,00,000 shares of ₹ 10 each. The company offered 80,000 shares for public subscription payable ₹ 4 on application and ₹ 7 on allotment (including ₹ 1 premium). Public had applied for 1,10,000 shares and pro-rata allotment was made in the ratio of 5:4. Remaining applications were rejected. Mukta, holding 6,000 shares failed to pay allotment money. Her shares were being forfeited and later re-issued 4,000 shares at a discount of ₹ 2 per share.
    Pass necessary entries in the books of Space Ventures Ltd.

    Try it first, then show our solutionSolution

    1. Working. Applicants for 1,00,000 shares get 80,000 (5 : 4); 10,000 applications are rejected. Excess application money of ₹ 80,000 is kept for allotment. Mukta, holding 6,000 shares, had applied for 7,500 and paid ₹ 30,000; ₹ 6,000 of it went towards allotment, so she owes ₹ 42,000 − 6,000 = ₹ 36,000 on allotment.

    2. ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.4,40,000
      To Share Application A/c4,40,000
      (Being application money received on 1,10,000 shares)
      ½ mark
    3. ParticularsDr. (₹)Cr. (₹)
      Share Application A/c Dr.4,40,000
      To Share Capital A/c3,20,000
      To Share Allotment A/c80,000
      To Bank A/c40,000
      (Being application money adjusted and refunded)
      1 mark
    4. ParticularsDr. (₹)Cr. (₹)
      Share Allotment A/c Dr.5,60,000
      To Share Capital A/c4,80,000
      To Securities Premium A/c80,000
      (Being allotment money due)
      ½ mark
    5. ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.4,44,000
      Calls in Arrears A/c Dr.36,000
      To Share Allotment A/c4,80,000
      (Being allotment money received except from Mukta)
      1 mark
    6. ParticularsDr. (₹)Cr. (₹)
      Share Capital A/c Dr.60,000
      Securities Premium A/c Dr.6,000
      To Share Forfeited A/c30,000
      To Calls in Arrears A/c36,000
      (Being Mukta's 6,000 shares forfeited)
      1½ marks
    7. ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.32,000
      Share Forfeited A/c Dr.8,000
      To Share Capital A/c40,000
      (Being 4,000 shares reissued at ₹ 8 as fully paid)
      Share Forfeited A/c Dr.12,000
      To Capital Reserve A/c12,000
      (Being gain on reissue of 4,000 shares transferred: 20,000 − 8,000)
      1½ marks

    Answer: Application ₹ 4,40,000 (refund ₹ 40,000, ₹ 80,000 to allotment); allotment due ₹ 5,60,000, received ₹ 4,44,000, arrears ₹ 36,000; forfeiture: Capital ₹ 60,000 + Premium ₹ 6,000 to Forfeited ₹ 30,000 and Calls in Arrears ₹ 36,000; reissue Bank ₹ 32,000 + Forfeited ₹ 8,000; Capital Reserve ₹ 12,000

    Where the marks are

    • Application and adjustment entries (1½ marks)
    • Allotment due and received with calls in arrears (1½ marks)
    • Forfeiture entry (1½ marks)
    • Reissue and Capital Reserve (1½ marks)

    Open Q26(a) on its own page

    OR

    Q26(b) · 6 marks · Long answerAccounting for Share Capital

    Chitinoor Ltd. invited applications for 2,00,000 shares of ₹ 10 each payable ₹ 3 on application, ₹ 5 on allotment (including ₹ 1 premium) and balance on call. Applications were received for 3,00,000 shares out of which 20% applications were rejected and remaining were allotted on pro-rata basis. Rohan, an applicant of 12,000 shares failed to pay allotment money and Mohan holding 8,000 shares paid the entire money along with allotment. Subsequently the call was made, all the money was duly received except from Rohan. Later on, company issued a notice to Rohan to pay the balance in 15 days failing which his shares would be forfeited.
    Rohan cleared his dues within the stipulated time period.
    Journalise.

    Try it first, then show our solutionSolution

    1. Working. 20% of 3,00,000 applications (60,000) are rejected; 2,40,000 applicants get 2,00,000 shares (6 : 5). Excess application money on them = 7,20,000 − 6,00,000 = ₹ 1,20,000, adjusted on allotment. Rohan applied for 12,000 and got 10,000 shares; his excess ₹ 6,000 reduces his allotment due of ₹ 50,000 to ₹ 44,000. The call is ₹ 10 − 3 − 4 = ₹ 3 per share, so Mohan, holding 8,000 shares, pays ₹ 24,000 as calls in advance with his allotment money.

    2. ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.9,00,000
      To Share Application A/c9,00,000
      (Being application money received on 3,00,000 shares)
      ½ mark
    3. ParticularsDr. (₹)Cr. (₹)
      Share Application A/c Dr.9,00,000
      To Share Capital A/c6,00,000
      To Share Allotment A/c1,20,000
      To Bank A/c1,80,000
      (Being application money adjusted and refunded)
      1 mark
    4. ParticularsDr. (₹)Cr. (₹)
      Share Allotment A/c Dr.10,00,000
      To Share Capital A/c8,00,000
      To Securities Premium A/c2,00,000
      (Being allotment money due)
      ½ mark
    5. ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.8,60,000
      Calls in Arrears A/c Dr.44,000
      To Share Allotment A/c8,80,000
      To Calls in Advance A/c24,000
      (Being allotment received, Rohan in arrears, Mohan's call money in advance)
      1½ marks
    6. ParticularsDr. (₹)Cr. (₹)
      Share First and Final Call A/c Dr.6,00,000
      To Share Capital A/c6,00,000
      (Being call money due)
      ½ mark
    7. ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.5,46,000
      Calls in Advance A/c Dr.24,000
      Calls in Arrears A/c Dr.30,000
      To Share First and Final Call A/c6,00,000
      (Being call money received except from Rohan; advance adjusted)
      1½ marks
    8. ParticularsDr. (₹)Cr. (₹)
      Bank A/c Dr.74,000
      To Calls in Arrears A/c74,000
      (Being Rohan's arrears received within the notice period)
      ½ mark

    Answer: Application ₹ 9,00,000 (refund ₹ 1,80,000, ₹ 1,20,000 to allotment); allotment due ₹ 10,00,000, Bank ₹ 8,60,000, arrears ₹ 44,000, advance ₹ 24,000; call ₹ 6,00,000, Bank ₹ 5,46,000, advance ₹ 24,000, arrears ₹ 30,000; Rohan pays ₹ 74,000 and his shares are not forfeited

    Where the marks are

    • Application and adjustment (1½ marks)
    • Allotment due and receipt with arrears and advance (2 marks)
    • Call due and receipt (2 marks)
    • Arrears received from Rohan (½ mark)

    Open Q26(b) on its own page

Section B-I

Part B Option I: Analysis of Financial Statements

  1. Q27 · 1 mark · MCQFinancial Statements of a Company

    A company had following balances in their books of Accounts

    31 March, 202531 March, 2024
    Raw Material40,00030,000
    Work in Progress1,00,0001,40,000
    Finished Goods70,0001,00,000
    Stock in Trade2,00,0001,20,000

    Determine the amount of Change in Inventories to be shown in Statement of Profit and Loss Account.

    1. (A)₹ 20,000
    2. (B)₹ (20,000)
    3. (C)₹ (10,000)
    4. (D)₹ 10,000
    Try it first, then show our solutionSolution

    1. Change in inventories covers work-in-progress, finished goods and stock-in-trade only; raw material goes into cost of materials consumed.

    2. Opening = 1,40,000 + 1,00,000 + 1,20,000 = ₹ 3,60,000; closing = 1,00,000 + 70,000 + 2,00,000 = ₹ 3,70,000. Change = opening − closing = ₹ (10,000). Option (C).

      1 mark

    Answer: (C) ₹ (10,000)

    Where the marks are

    • Opening minus closing of WIP, finished goods and stock-in-trade (1 mark)

    Open Q27 on its own page

  2. Answer one of these 2 alternatives.

    Q28(a) · 1 mark · MCQAccounting Ratios

    Inventory Turnover Ratio of company was 5 times. The firm had Revenue from operations of ₹ 5,00,000 and Gross Profit was 25% of Cost of Revenue from Operations. Determine the amount of Opening Inventory if Closing Inventory was ₹ 60,000.

    1. (A)₹ 80,000
    2. (B)₹ 60,000
    3. (C)₹ 1,00,000
    4. (D)₹ 50,000
    Try it first, then show our solutionSolution

    1. Gross profit is 25% of cost, so revenue = cost × 125/100 and cost of revenue from operations = 5,00,000 × 100/125 = ₹ 4,00,000.

    2. Average inventory = 4,00,000 / 5 = ₹ 80,000. Opening + closing = ₹ 1,60,000, so opening = 1,60,000 − 60,000 = ₹ 1,00,000. Option (C).

      1 mark

    Answer: (C) ₹ 1,00,000

    Where the marks are

    • Cost ₹ 4,00,000, average inventory ₹ 80,000, opening ₹ 1,00,000 (1 mark)

    Open Q28(a) on its own page

    OR

    Q28(b) · 1 mark · Assertion-reasonCompetency-basedAccounting Ratios

    Assertion (A) :- Gross Profit Ratio is always higher than Net Profit Ratio.
    Reason (R) :- To calculate Net Profit, Indirect Expenses are subtracted from Gross Profit and Indirect Incomes are added to Gross Profit.

    1. (A)Both A and R are correct, and R is the correct explanation of A
    2. (B)Both A and R are correct, but R is not the correct explanation of A
    3. (C)A is correct but R is incorrect
    4. (D)A is incorrect but R is correct
    Try it first, then show our solutionSolution

    1. The Reason correctly describes how net profit is reached from gross profit.

    2. Because indirect incomes are added, net profit can exceed gross profit when other income is large, so the Assertion ("always higher") is false. Option (D).

      1 mark

    Answer: (D) A is incorrect but R is correct

    Where the marks are

    • Recognises that indirect incomes can make NP exceed GP (1 mark)

    Open Q28(b) on its own page

  3. Answer one of these 2 alternatives.

    Q29(a) · 1 mark · MCQCash Flow Statement

    Proposed Dividend for the year ended March 31, 2025 and March 31, 2024 were ₹ 2,50,000 and ₹ 2,00,000 respectively. Shareholders finalised the dividend amount at ₹ 1,80,000 during the year ended March 31, 2025 in AGM held in June-July 2024. Unclaimed dividend as at March 31, 2025 was ₹ 10,000.
    Choose the correct option while preparing Cash Flow Statement for the year ended March 31, 2025:

    1. (A)Proposed Dividend added in Net Profit after tax will be ₹ 2,00,000 and outflow of Dividend paid in financing activities will be ₹ 1,90,000.
    2. (B)Proposed Dividend added in Net Profit after tax will be ₹ 2,50,000 and outflow of Dividend paid in financing activities will be ₹ 2,00,000.
    3. (C)Proposed Dividend added in Net Profit after tax will be ₹ 1,80,000 and outflow of Dividend paid in financing activities will be ₹ 1,90,000.
    4. (D)Proposed Dividend added in Net Profit after tax will be ₹ 1,80,000 and outflow of Dividend paid in financing activities will be ₹ 1,70,000.
    Try it first, then show our solutionSolution

    1. Dividend is recognised in the year it is approved by shareholders, so the amount added back to net profit is the dividend approved in the year: ₹ 1,80,000.

    2. Cash actually paid = 1,80,000 − 10,000 unclaimed = ₹ 1,70,000, shown as an outflow under financing activities. Option (D).

      1 mark

    Answer: (D) ₹ 1,80,000 added; outflow ₹ 1,70,000

    Where the marks are

    • Approved dividend added back and cash paid net of unclaimed dividend (1 mark)

    Open Q29(a) on its own page

    OR

    Q29(b) · 1 mark · MCQCash Flow Statement

    Provision for Tax for the year ended March 31, 2025 and 31 March 2024 were ₹ 3,00,000 and ₹ 2,80,000 respectively. During the year Tax paid was ₹ 2,50,000. Determine the amount of Tax proposed during the year by the firm.

    1. (A)₹ 3,00,000
    2. (B)₹ 2,30,000
    3. (C)₹ 2,80,000
    4. (D)₹ 2,70,000
    Try it first, then show our solutionSolution

    1. Provision for Tax A/c: opening ₹ 2,80,000 + provision made − tax paid ₹ 2,50,000 = closing ₹ 3,00,000.

    2. Provision made = 3,00,000 + 2,50,000 − 2,80,000 = ₹ 2,70,000. Option (D).

      1 mark

    Answer: (D) ₹ 2,70,000

    Where the marks are

    • Balances the provision account (1 mark)

    Open Q29(b) on its own page

  4. Q30 · 1 mark · MCQCash Flow Statement

    Which of the following is cash flow from Operating activities for a finance company:

    1. (A)Conversion of debentures into shares
    2. (B)Dividend received
    3. (C)Building purchased
    4. (D)Dividend paid
    Try it first, then show our solutionSolution

    1. For a finance company, earning interest and dividends is its main business, so dividend received is an operating activity.

    2. Conversion of debentures is a non-cash item, building purchased is investing and dividend paid is financing. Option (B).

      1 mark

    Answer: (B) Dividend received

    Where the marks are

    • Dividend received is operating for a finance company (1 mark)

    Open Q30 on its own page

  5. Answer one of these 2 alternatives.

    Q31(a) · 3 marks · Short answerAnalysis of Financial Statements

    Complete the following Comparative Balance Sheet as at March 31, 2024 and Match 31, 2025

    PARTICULARS31st March 202431st March, 2025Absolute ChangePercentage Change
    Shareholders' Funds6,00,000??3,00,000??
    Non-current Liabilities3,00,000??NIL??
    Current Liabilities??3,00,0002,00,000??
    TOTAL????????
    Non-current Assets7,00,000????50
    Current Assets????????
    TOTAL????????
    Try it first, then show our solutionSolution

    1. Shareholders' funds rise ₹ 3,00,000 to ₹ 9,00,000 (50%). Non-current liabilities stay ₹ 3,00,000 (nil). Current liabilities: 3,00,000 − 2,00,000 = ₹ 1,00,000 in 2024 (rise 200%).

      1 mark

    2. Totals: 2024 = ₹ 10,00,000, 2025 = ₹ 15,00,000, change ₹ 5,00,000 (50%).

      ½ mark

    3. Non-current assets rise 50%: 7,00,000 → ₹ 10,50,000 (change ₹ 3,50,000). Current assets = total − non-current: ₹ 3,00,000 → ₹ 4,50,000 (change ₹ 1,50,000, 50%).

      Particulars31.03.2024 (₹)31.03.2025 (₹)Absolute change (₹)% change
      Shareholders' Funds6,00,0009,00,0003,00,00050
      Non-current Liabilities3,00,0003,00,000NilNil
      Current Liabilities1,00,0003,00,0002,00,000200
      Total10,00,00015,00,0005,00,00050
      Non-current Assets7,00,00010,50,0003,50,00050
      Current Assets3,00,0004,50,0001,50,00050
      Total10,00,00015,00,0005,00,00050
      1 mark

    4. Both totals agree in each year, which checks the working.

      ½ mark

    Answer: Totals ₹ 10,00,000 (2024) and ₹ 15,00,000 (2025); SHF 9,00,000 (50%), CL 1,00,000 → 3,00,000 (200%), NCA 10,50,000 (+3,50,000), CA 3,00,000 → 4,50,000 (+1,50,000, 50%)

    Where the marks are

    • Liability side completed (1 mark)
    • Totals (½ mark)
    • Asset side completed (1 mark)
    • Totals agree (½ mark)

    Open Q31(a) on its own page

    OR

    Q31(b) · 3 marks · Short answerAnalysis of Financial Statements

    Prepare Common Size Statement of Profit and Loss for the year ended March 31, 2025

    PARTICULARS31st March, 2025
    Revenue from Operations40,00,000
    Other Expenses4,00,000
    Other Income6,00,000
    Employee Benefit Expenses8,00,000
    Purchases of Stock in Trade10,00,000
    Change in Inventory(2,00,000)
    Tax Rate50 %
    Try it first, then show our solutionSolution

    1. Revenue from operations is the base (100%). Total income = 40,00,000 + 6,00,000 = ₹ 46,00,000. Expenses = 10,00,000 − 2,00,000 + 8,00,000 + 4,00,000 = ₹ 20,00,000. Profit before tax = ₹ 26,00,000; tax at 50% = ₹ 13,00,000; profit after tax ₹ 13,00,000.

      1 mark

    2. Common Size Statement of Profit and Loss for the year ended 31st March, 2025

      Particulars₹% of revenue from operations
      I. Revenue from Operations40,00,000100
      II. Other Income6,00,00015
      III. Total Income46,00,000115
      Purchases of Stock-in-Trade10,00,00025
      Change in Inventories(2,00,000)(5)
      Employee Benefit Expenses8,00,00020
      Other Expenses4,00,00010
      IV. Total Expenses20,00,00050
      V. Profit before Tax (III − IV)26,00,00065
      Less: Tax @ 50%13,00,00032.5
      VI. Profit after Tax13,00,00032.5
      2 marks

    Answer: Total income 115%, total expenses 50%, profit before tax ₹ 26,00,000 (65%), profit after tax ₹ 13,00,000 (32.5%)

    Where the marks are

    • Correct totals (1 mark)
    • Percentages of revenue from operations (2 marks)

    Open Q31(b) on its own page

  6. Q32 · 3 marks · Short answerFinancial Statements of a Company

    Answer the following.

    1. (i)

      Give two examples of Inventory except Raw Materials, Work in Progress, Finished Goods and Stock in Trade.

      1 mark
    2. (ii)

      Where will you disclose the amount of loss on issue of debentures written off out of Statement of Profit and Loss?

      1 mark
    3. (iii)

      Where will you disclose Purchase of Raw Materials in Financial Statement of Company?

      1 mark
    Try it first, then show our solutionSolution

    1. (i) Other items of inventory: loose tools, and stores and spares.

      1 mark

    2. (ii) Loss on issue of debentures written off to the Statement of Profit and Loss is shown under Finance Costs.

      1 mark

    3. (iii) Purchase of raw materials is shown as part of Cost of Materials Consumed in the Statement of Profit and Loss.

      1 mark

    Answer: (i) Loose tools; stores and spares (ii) Finance Costs (iii) Cost of Materials Consumed

    Where the marks are

    • Two other inventory items (1 mark)
    • Finance Costs (1 mark)
    • Cost of Materials Consumed (1 mark)

    Open Q32 on its own page

  7. Answer one of these 2 alternatives.

    Q33(a) · 4 marks · Long answerAccounting Ratios

    Quick Ratio of Roxy Traders is 0.8 : 1. State with reasons whether the following transactions will increase , decrease or will have no change on the ratio
    a) Goods purchased on Credit
    b) Outstanding Expenses paid
    c) Sale of Fixed Assets a 20% loss
    d) Issue of Debentures at Premium to Vendors

    Try it first, then show our solutionSolution

    1. (a) Goods purchased on credit: inventory is not a quick asset, so quick assets stay the same while current liabilities (trade payables) rise. The ratio decreases.

      1 mark

    2. (b) Outstanding expenses paid: quick assets (cash) and current liabilities fall by the same amount. As the ratio is below 1 (0.8 : 1), it decreases (for example 80/100 becomes 70/90 = 0.78).

      1 mark

    3. (c) Sale of a fixed asset, even at a loss, brings in cash, so quick assets rise with no change in current liabilities. The ratio increases.

      1 mark

    4. (d) Debentures issued to vendors at a premium for assets bought: no quick asset or current liability is affected. No change.

      1 mark

    Answer: (a) Decrease (b) Decrease (c) Increase (d) No change

    Where the marks are

    • Each transaction with its reason (1 mark each)

    Open Q33(a) on its own page

    OR

    Q33(b) · 4 marks · Long answerAccounting Ratios

    From the following information, calculate Trade Receivables Turnover Ratio:
    Cost of Revenue from Operations (Cost of Goods Sold) : Rs. 6,00,000 Gross Profit on Cost : 25%
    Cash Sales: 20% of Total Sales Opening Debtors: Rs. 1,00,000 Closing Debtors : Rs. 2,00,000.
    Provision for Doubtful Debts: Opening Rs. 10,000 and Closing Rs.20,000.

    Try it first, then show our solutionSolution

    1. Revenue from operations = cost + gross profit on cost = 6,00,000 + 25% of 6,00,000 = ₹ 7,50,000.

      1 mark

    2. Cash sales = 20% of 7,50,000 = ₹ 1,50,000, so credit revenue from operations = ₹ 6,00,000.

      1 mark

    3. Average trade receivables = (1,00,000 + 2,00,000) / 2 = ₹ 1,50,000 (the provision for doubtful debts is not deducted, as the ratio uses gross receivables).

      1 mark

    4. Trade receivables turnover ratio = 6,00,000 / 1,50,000 = 4 times.

      1 mark

    Answer: 4 times

    Where the marks are

    • Revenue from operations ₹ 7,50,000 (1 mark)
    • Credit revenue ₹ 6,00,000 (1 mark)
    • Average receivables ₹ 1,50,000 (1 mark)
    • Ratio 4 times (1 mark)

    Open Q33(b) on its own page

  8. Q34 · 6 marks · Long answerCash Flow Statement

    Extracts of the Balance Sheets of M/s Agrawal Ltd. as on 31st March,2024 and 31st March 2025 along with additional information are given below. You are required to calculate:
    (i) Operating profit before changes in working capital.
    (ii) Cash Flows from Financing Activities.

    31.03.202531.03.2024
    Equity Share Capital12,00,0009,00,000
    10% Preference Share Capital4,00,0005,00,000
    Cash Credit2,50,0001,00,000
    Profit and Loss (Cr.)8,00,0006,00,000
    12% Debentures4,00,0003,00,000
    Bank overdraft1,00,00075,000
    Outstanding Interest on Debentures3,000--------

    Additional Information:
    a) New equity shares and debentures were issued on last day the current accounting year ended 31st March, 2025. Debentures were issued at a discount of 5% which was written off at the end of the year.
    b) Dividend on preference shares and interim dividend @ 15% were paid on equity shares on 31st March, 2025
    c) Preference Shares were redeemed on 1st April, 2025 at a premium of 5%. The premium was provided out of profits.

    Try it first, then show our solutionSolution

    1. Net profit before tax. Increase in surplus = 8,00,000 − 6,00,000 = ₹ 2,00,000. Add back appropriations: preference dividend 10% on ₹ 4,00,000 = ₹ 40,000 (₹ 1,00,000 was redeemed at the start of the year) and interim equity dividend 15% on ₹ 9,00,000 = ₹ 1,35,000 (new shares came on the last day). Net profit before tax = ₹ 3,75,000.

      1 mark

    2. Operating profit before working capital changes

      Particulars₹
      Net profit before tax3,75,000
      Add: Premium on redemption of preference shares provided out of profits (5% of 1,00,000)5,000
      Add: Interest on debentures (12% of 3,00,000)36,000
      Add: Discount on issue of debentures written off (5% of 1,00,000)5,000
      Operating profit before working capital changes4,21,000
      2 marks

    3. Cash flows from financing activities

      Particulars₹
      Proceeds from issue of equity shares3,00,000
      Redemption of preference shares (1,00,000 + 5,000)(1,05,000)
      Proceeds from issue of debentures (1,00,000 − 5,000)95,000
      Increase in bank overdraft25,000
      Increase in cash credit1,50,000
      Dividend paid on preference shares(40,000)
      Interim dividend paid on equity shares(1,35,000)
      Interest paid on debentures (36,000 − 3,000 outstanding)(33,000)
      Net cash from financing activities2,57,000
      3 marks

    Answer: (i) Operating profit before working capital changes ₹ 4,21,000 (ii) Net cash from financing activities ₹ 2,57,000

    Where the marks are

    • Net profit before tax ₹ 3,75,000 (1 mark)
    • Operating profit ₹ 4,21,000 (2 marks)
    • Financing activities ₹ 2,57,000 (3 marks)

    Open Q34 on its own page

Section B-II

Part B Option II: Computerised Accounting

  1. Answer one of these 2 alternatives.

    Q27(a) · 1 mark · MCQGraphs and Charts for Business Data

    A ‘legend’ can be repositioned on the chart:

    1. (A)On the right side only
    2. (B)On the left side only
    3. (C)On the bottom of x-axis
    4. (D)Anywhere
    Try it first, then show our solutionSolution

    1. Once a chart is made, its legend can be dragged or set (through Chart Elements or Format Legend) to any position: right, left, top, bottom or a custom place.

    2. So the legend can be placed anywhere on the chart. Option (D).

      1 mark

    Answer: (D) Anywhere

    Where the marks are

    • Legend can be repositioned anywhere (1 mark)

    Open Q27(a) on its own page

    OR

    Q27(OR) · 1 mark · MCQOverview of Computerised Accounting System

    The need for codification is for:

    1. (A)the generation of mnemonic codes
    2. (B)securing the accounting reports
    3. (C)easy processing of data and keeping records
    4. (D)the encryption of data

    Solution being checked. We show a solution only after an independent check agrees with it.

  2. Q28 · 1 mark · MCQGraphs and Charts for Business Data

    To see all available shape styles of a chart, which of the following buttons is clicked?

    1. (A)More
    2. (B)Chart tool
    3. (C)Picture
    4. (D)Custom
    Try it first, then show our solutionSolution

    1. In the Chart Tools Format tab, the Shape Styles group shows only a few styles in its gallery.

    2. Clicking the More button opens the full gallery of available shape styles. Option (A).

      1 mark

    Answer: (A) More

    Where the marks are

    • More button (1 mark)

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  3. Q29 · 1 mark · MCQOverview of Computerised Accounting System

    Which of the following is not an advantage of computerised accounting system?

    1. (A)Timely generation of reports in desired format
    2. (B)Ensures effective control over the system
    3. (C)Faster obsolescence of technology
    4. (D)Confidentiality of data is maintained
    Try it first, then show our solutionSolution

    1. Timely reports, effective control and confidentiality are all benefits of a computerised accounting system.

    2. Faster obsolescence of technology is a drawback, since hardware and software must keep being replaced. Option (C).

      1 mark

    Answer: (C) Faster obsolescence of technology

    Where the marks are

    • Identifies the limitation (1 mark)

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  4. Answer one of these 2 alternatives.

    Q30(a) · 1 mark · MCQOverview of Computerised Accounting System

    A sequential code refers to code applied to some documents where:

    1. (A)Account heads are assigned to documents
    2. (B)Numbers and letters are assigned in consecutive order
    3. (C)Special names are given to accounts
    4. (D)Documents are arranged in special sequence
    Try it first, then show our solutionSolution

    1. In sequential coding, numbers or letters are given to items in consecutive order, as for invoices or vouchers.

    2. That matches option (B). Option (B).

      1 mark

    Answer: (B) Numbers and letters are assigned in consecutive order

    Where the marks are

    • Consecutive order (1 mark)

    OR

    Q30(b) · 1 mark · MCQOverview of Computerised Accounting System

    Name the Accounting information sub-system which is linked with other sub-systems for obtaining information about cost and expenses:

    1. (A)Cash and Bank sub-system
    2. (B)Costing sub-system
    3. (C)Expense accounting sub-system
    4. (D)Final accounts sub-system
    Try it first, then show our solutionSolution

    1. The costing sub-system works out the cost of products, jobs or processes.

    2. To do that it draws data on costs and expenses from other sub-systems such as inventory and payroll. Option (B).

      1 mark

    Answer: (B) Costing sub-system

    Where the marks are

    • Costing sub-system (1 mark)

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  5. Q31 · 3 marks · Short answerOverview of Computerised Accounting System

    What is encryption and how is it helpful in CAS?

    Try it first, then show our solutionSolution

    1. Meaning. Encryption converts readable data into a coded (scrambled) form that can be turned back into readable data only with the right key or password.

      1 mark

    2. Help in CAS. It keeps accounting data confidential, so unauthorised users cannot read it even if they reach the files; it protects data while stored (on disk or cloud) and while sent over a network.

      1 mark

    3. It also guards data during processing and supports data security and privacy, reducing the risk of tampering and theft of financial records.

      1 mark

    Answer: Encryption scrambles data into a code readable only with a key; in CAS it protects accounting data at rest, in transit and during processing from unauthorised access

    Where the marks are

    • Meaning of encryption (1 mark)
    • Protection of stored and transmitted data (1 mark)
    • Security and confidentiality during processing (1 mark)

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  6. Q32 · 3 marks · Short answerOverview of Computerised Accounting System

    State any three limitations of Computerised Accounting System.

    Try it first, then show our solutionSolution

    1. System failure: a hardware crash or software fault can halt work and destroy data, especially without a backup.

      1 mark

    2. Cost of training: staff must be trained on each new version of hardware and software, which is costly.

      1 mark

    3. Security risks: stored financial data is exposed to hacking, viruses, data breaches and theft. (Other valid limitations: high installation cost, staff resistance, health hazards from long screen use.)

      1 mark

    Answer: System failure; high cost of training; security risks (any three valid limitations)

    Where the marks are

    • Any three limitations with a line of explanation (1 mark each)

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  7. Answer one of these 2 alternatives.

    Q33(a) · 4 marks · Long answerGraphs and Charts for Business Data

    State steps to be taken in preparation of a chart.

    Try it first, then show our solutionSolution

    1. Enter the data in a worksheet with proper row and column titles, then select it and create a basic chart from the Charts group of the Insert tab.

      1 mark

    2. Change the chart type, layout or style, and format chart elements as needed.

      1 mark

    3. Add or remove the chart title, axis titles and data labels; show or hide the legend, axes and gridlines.

      1 mark

    4. Move or resize the chart and save it with the workbook.

      1 mark

    Answer: Enter data → create basic chart → change layout/style → add titles and labels, legend, axes and gridlines → move/resize and save

    Where the marks are

    • Data entry and basic chart (1 mark)
    • Layout and style (1 mark)
    • Titles, labels, legend, axes (1 mark)
    • Move/resize and save (1 mark)

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    OR

    Q33(b) · 4 marks · Long answerSpreadsheet

    What are the uses of ‘Error Alert tab’?

    Try it first, then show our solutionSolution

    1. The Error Alert tab (in Data Validation) shows an alert when invalid data is typed into a validated cell.

      1 mark

    2. It lets the user type a title and an error message that the person entering data will see.

      1 mark

    3. Its Style list sets how strict the check is: Stop blocks the invalid entry.

      1 mark

    4. Warning shows a warning but lets the user go ahead; Information only informs and accepts the entry.

      1 mark

    Answer: Shows an alert on invalid entry, with a custom title and message; style Stop (blocks), Warning (warns, allows) or Information (informs, allows)

    Where the marks are

    • Displays alert on invalid data (1 mark)
    • Custom title and message (1 mark)
    • Stop style (1 mark)
    • Warning and Information styles (1 mark)

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  8. Q34 · 6 marks · Long answerSpreadsheet

    What is meant by ‘Merging a range of cells’? How is it done? State the steps to split a merged cell.

    Try it first, then show our solutionSolution

    1. Meaning. Merging joins two or more adjacent cells (across rows or columns) into one larger cell. The merged cell takes the address of the upper-left cell, and only that cell's content is kept, usually centred.

      2 marks

    2. How to merge. Select the adjacent cells; on the Home tab, in the Alignment group, click Merge & Center (or choose Merge Across / Merge Cells from its drop-down).

      2 marks

    3. Steps to split a merged cell. (1) Select the merged cell; the Merge & Center button shows as selected. (2) Click Merge & Center again (or choose Unmerge Cells). The content goes back to the upper-left cell of the range.

      2 marks

    Answer: Merging combines adjacent cells into one cell addressed by its upper-left cell; done with Home → Alignment → Merge & Center; split by selecting the merged cell and clicking Merge & Center (Unmerge) again

    Where the marks are

    • Meaning of merging (2 marks)
    • Steps to merge (2 marks)
    • Steps to split (2 marks)

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Source: official sample paper, cbseacademic.nic.in. Chapter tags and solutions are ours. Spotted a transcription error? Write tosupport@questionbuddy.in.