AccountancyCBSE Class 12 · Board exam 2026 (session 2025-26)

CBSE Class 12 Accountancy: 2026 board paper, set 67/5/1

The question paper set in the CBSE Class 12 board exam of 2026, 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.

Every question here has our step-by-step solution, split into the steps that earn marks. Each one was checked by an independent re-solve from the question paper.

Source: official question paper from cbse.gov.in: https://www.cbse.gov.in/cbsenew/question-paper/2026/XII/Accountancy.zip (a zip; this paper is the file 67_5_1_Accountancy_cl12.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

Section	Questions	What it has
A	1-26	Part A compulsory: MCQ 1-16 (1 mark), 17-20 (3 marks), 21-22 (4 marks), 23-26 (6 marks)
B-I	27-34	Option I Analysis of Financial Statements: MCQ 27-30, 31-32 (3 marks), 33 (4), 34 (6)
B-II	27-34	Option II Computerised Accounting: MCQ 27-30, 31-32 (3 marks), 33 (4), 34 (6)

Instructions in brief: All questions compulsory; Part B has two options, attempt only one; no overall choice but internal choice in a few questions.

Section A

Part A compulsory: MCQ 1-16 (1 mark), 17-20 (3 marks), 21-22 (4 marks), 23-26 (6 marks)

Q1 · 1 mark · MCQAccounting for Partnership: Basic Concepts
Arora and Gurmeet were partners in a firm sharing profits and losses in the ratio of 3 : 2. Starting from 1st October, 2024 Arora withdrew ₹ 30,000 at the beginning of each quarter for his personal use. Interest on drawings was to be charged @ 12% per annum. Interest on Arora's drawings for the year ended 31st March, 2025 was :
1. (A)₹ 1,800
2. (B)₹ 2,700
3. (C)₹ 450
4. (D)₹ 3,600
Try it first, then show our solutionSolution
1. Drawings fall on 1st October, 2024 and 1st January, 2025 (two quarters left in the year). Interest runs to 31st March, 2025: 6 months on the first and 3 months on the second.
2. Interest = 30,000 × 12% × 6/12 + 30,000 × 12% × 3/12 = 1,800 + 900 = ₹ 2,700. Option (B).
  1 mark
Answer: (B) ₹ 2,700
Where the marks are
- Interest for 6 and 3 months on the two drawings (1 mark)
Open Q1 on its own page
Q2 · 1 mark · Assertion-reasonCompetency-basedReconstitution of a Partnership Firm – Admission of a Partner
There are two statements Assertion (A) and Reason (R) :
Assertion (A) : At the time of admission of a new partner in a partnership firm, the newly admitted partner brings an agreed amount of capital either in cash or in kind.
Reason (R) : On admission, the new partner gets the right to acquire share in the assets and profits of the partnership firm.
Choose the correct option from the following :
1. (A)Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
2. (B)Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
3. (C)Assertion (A) is correct, but Reason (R) is incorrect.
4. (D)Assertion (A) is incorrect, but Reason (R) is correct.
Try it first, then show our solutionSolution
1. A new partner contributes capital (cash or kind) because admission gives him a right to a share in the firm's assets and future profits.
2. Both statements are true and the Reason explains why capital is brought in. 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 the right to share assets and profits as the reason for bringing capital (1 mark)
Open Q2 on its own page
Answer one of these 2 alternatives.
Q3(a) · 1 mark · MCQAccounting for Share Capital
Merak Ltd. forfeited 6,000 equity shares of ₹ 10 each for non-payment of final call of ₹ 3 per share. The minimum amount per share at which these shares can be reissued will be :
1. (A)₹ 3
2. (B)₹ 7
3. (C)₹ 10
4. (D)₹ 6
Try it first, then show our solutionSolution
1. The final call of ₹ 3 was unpaid, so ₹ 7 per share had been received and is forfeited.
2. The discount on reissue cannot exceed the amount forfeited, so the minimum reissue price is ₹ 10 − ₹ 7 = ₹ 3 per share. Option (A).
  1 mark
Answer: (A) ₹ 3
Where the marks are
- Minimum price = face value − amount forfeited (1 mark)
Open Q3(a) on its own page
OR
Q3(b) · 1 mark · MCQIssue and Redemption of Debentures
Nori Ltd. issued 20,000, 11% debentures of ₹ 100 each at a premium of 10%, redeemable at a premium of 5%. Loss on issue of debentures account will be debited by :
1. (A)₹ 20,00,000
2. (B)₹ 1,00,000
3. (C)₹ 3,00,000
4. (D)₹ 2,00,000
Try it first, then show our solutionSolution
1. Face value = 20,000 × ₹ 100 = ₹ 20,00,000. The 10% premium on issue is a gain credited to Securities Premium; it is not netted against the loss.
2. Loss on issue = premium payable on redemption = 5% of ₹ 20,00,000 = ₹ 1,00,000. Option (B).
  1 mark
Answer: (B) ₹ 1,00,000
Where the marks are
- Loss equals premium on redemption ₹ 1,00,000 (1 mark)
Open Q3(b) on its own page
Answer one of these 2 alternatives.
Q4(a) · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner
Guru and Prakash were partners in a firm sharing profits and losses in the ratio of 7 : 3. They admitted Anu as a new partner for 1/4th share in the profits of the firm. On the date of Anu's admission, the Profit and Loss Account of Guru and Prakash showed a credit balance of ₹ 40,000. The necessary journal entry for its treatment will be :
1. (A)Profit and Loss A/c Dr. 40,000; To Guru's Capital A/c 21,000; To Prakash's Capital A/c 9,000; To Anu's Capital A/c 10,000
2. (B)Profit and Loss A/c Dr. 40,000; To Guru's Capital A/c 28,000; To Prakash's Capital A/c 12,000
3. (C)Guru's Capital A/c Dr. 21,000; Prakash's Capital A/c Dr. 9,000; Anu's Capital A/c Dr. 10,000; To Profit and Loss A/c 40,000
4. (D)Guru's Capital A/c Dr. 28,000; Prakash's Capital A/c Dr. 12,000; To Profit and Loss A/c 40,000
Try it first, then show our solutionSolution
1. A credit balance in Profit and Loss Account is a past profit belonging to the old partners, so it goes to them in their old ratio 7 : 3; Anu gets nothing.
2. Guru = 40,000 × 7/10 = ₹ 28,000; Prakash = ₹ 12,000. Profit and Loss A/c Dr. ₹ 40,000 to the two capitals. Option (B).
  1 mark
Answer: (B) Profit and Loss A/c Dr. ₹ 40,000; To Guru's Capital ₹ 28,000; To Prakash's Capital ₹ 12,000
Where the marks are
- Credit balance to old partners in old ratio (1 mark)
Open Q4(a) on its own page
OR
Q4(b) · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner
Samta, Mamta and Geeta were partners in a firm sharing profits and losses in the ratio of 11 : 5 : 4. On 31st March, 2025 Samta died. On Samta's death, the goodwill of the firm was valued at ₹ 1,80,000. The necessary journal entry for the treatment of goodwill on Samta's death will be :
1. (A)Samta's Capital A/c Dr. 99,000; To Mamta's Capital A/c 55,000; To Geeta's Capital A/c 44,000
2. (B)Mamta's Capital A/c Dr. 1,00,000; Geeta's Capital A/c Dr. 80,000; To Samta's Capital A/c 1,80,000
3. (C)Samta's Capital A/c Dr. 1,80,000; To Mamta's Capital A/c 1,00,000; To Geeta's Capital A/c 80,000
4. (D)Mamta's Capital A/c Dr. 55,000; Geeta's Capital A/c Dr. 44,000; To Samta's Capital A/c 99,000
Try it first, then show our solutionSolution
1. Samta's share of goodwill = 1,80,000 × 11/20 = ₹ 99,000. The gainers are Mamta and Geeta in their old ratio 5 : 4.
2. Mamta pays 99,000 × 5/9 = ₹ 55,000 and Geeta ₹ 44,000; their capitals are debited and Samta's credited. Option (D).
  1 mark
Answer: (D) Mamta's Capital Dr. ₹ 55,000; Geeta's Capital Dr. ₹ 44,000; To Samta's Capital ₹ 99,000
Where the marks are
- Deceased partner's share charged to gainers in gaining ratio (1 mark)
Open Q4(b) on its own page
Q5 · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner
Mansi and Uma were partners in a firm and their capitals were ₹ 4,00,000 and ₹ 2,00,000 respectively. Normal rate of return in a similar business was 15% and the goodwill of the firm was valued at ₹ 4,00,000. If goodwill was calculated at four years purchase of super profits, the average profits of the firm were :
1. (A)₹ 90,000
2. (B)₹ 60,000
3. (C)₹ 1,00,000
4. (D)₹ 1,90,000
Try it first, then show our solutionSolution
1. Super profit = goodwill / number of years' purchase = 4,00,000 / 4 = ₹ 1,00,000. Normal profit = 15% of capital employed ₹ 6,00,000 = ₹ 90,000.
2. Average profit = normal profit + super profit = 90,000 + 1,00,000 = ₹ 1,90,000. Option (D).
  1 mark
Answer: (D) ₹ 1,90,000
Where the marks are
- Super profit ₹ 1,00,000 plus normal profit ₹ 90,000 (1 mark)
Open Q5 on its own page
Answer one of these 2 alternatives.
Q6(a) · 1 mark · MCQAccounting for Share Capital
Reserve capital is that portion of the _________ capital that can be called only in the event of winding up of the company.
1. (A)called-up
2. (B)uncalled
3. (C)paid-up
4. (D)subscribed
Try it first, then show our solutionSolution
1. Reserve capital is a part of the uncalled capital that the company decides, by special resolution, to call up only if it is wound up.
2. So the blank is "uncalled". Option (B).
  1 mark
Answer: (B) uncalled
Where the marks are
- Uncalled capital (1 mark)
Open Q6(a) on its own page
OR
Q6(b) · 1 mark · MCQIssue and Redemption of Debentures
The debentures which do not carry a specific rate of interest are known as :
1. (A)Irredeemable debentures
2. (B)Bearer debentures
3. (C)Specific coupon rate debentures
4. (D)Zero coupon rate debentures
Try it first, then show our solutionSolution
1. Zero coupon rate debentures carry no stated interest rate; they are issued at a deep discount and redeemed at face value or more.
2. The investor's return is the difference between issue and redemption price. Option (D).
  1 mark
Answer: (D) Zero coupon rate debentures
Where the marks are
- Zero coupon rate debentures (1 mark)
Open Q6(b) on its own page
Answer one of these 2 alternatives.
Q7(a) · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner
John, Honey and Racob were partners in a firm sharing profits and losses equally. On 31st July, 2025 John died. His share in the profits of the firm from the date of last balance sheet till the date of his death will be :
1. (A)Debited to Profit and Loss Account
2. (B)Credited to Profit and Loss Account
3. (C)Debited to Profit and Loss Suspense Account
4. (D)Credited to Profit and Loss Suspense Account
Try it first, then show our solutionSolution
1. Books are not closed on the date of death, so the deceased partner's share of profit is brought in through a temporary Profit and Loss Suspense Account.
2. Entry: Profit and Loss Suspense A/c Dr. to John's Capital A/c, i.e. the share is debited to Profit and Loss Suspense Account. Option (C).
  1 mark
Answer: (C) Debited to Profit and Loss Suspense Account
Where the marks are
- Profit and Loss Suspense A/c debited (1 mark)
Open Q7(a) on its own page
OR
Q7(b) · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner
Shashi, Maya and Komal were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. On 31st March, 2025 Komal retired. The new profit sharing ratio between Shashi and Maya was decided as 3 : 5. The gain or sacrifice of Shashi and Maya on Komal's retirement was :
1. (A)Shashi's sacrifice $\frac{1}{8}$ ; Maya's gain $\frac{13}{40}$
2. (B)Shashi's gain $\frac{1}{8}$ ; Maya's sacrifice $\frac{13}{40}$
3. (C)Shashi's sacrifice $\frac{1}{8}$ ; Maya's sacrifice $\frac{13}{40}$
4. (D)Shashi's gain $\frac{1}{8}$ ; Maya's gain $\frac{13}{40}$
Try it first, then show our solutionSolution
1. Shashi: old 5/10 = 20/40, new 3/8 = 15/40, so a sacrifice of 5/40 = 1/8. Maya: old 3/10 = 12/40, new 5/8 = 25/40, so a gain of 13/40.
2. Komal's 8/40 plus Shashi's 5/40 together make Maya's gain of 13/40. Option (A).
  1 mark
Answer: (A) Shashi's sacrifice 1/8; Maya's gain 13/40
Where the marks are
- Old − new share for each partner (1 mark)
Open Q7(b) on its own page
Q8 · 1 mark · MCQAccounting for Partnership: Basic Concepts
Alok, Sarah and Aditya were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. On 1st January, 2025 Alok advanced a loan of ₹ 2,00,000 to the firm. In the absence of a partnership agreement, the amount of interest on loan due to Alok on 31st March, 2025 will be :
1. (A)₹ 20,000
2. (B)₹ 12,000
3. (C)₹ 3,000
4. (D)₹ 5,000
Try it first, then show our solutionSolution
1. Without an agreement, Section 13(d) of the Indian Partnership Act allows 6% p.a. interest on a partner's loan.
2. From 1st January to 31st March is 3 months: 2,00,000 × 6% × 3/12 = ₹ 3,000. Option (C).
  1 mark
Answer: (C) ₹ 3,000
Where the marks are
- 6% p.a. for 3 months (1 mark)
Open Q8 on its own page
Answer one of these 2 alternatives.
Q9(a) · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner
Sudama, Sharma and Varun were partners in a firm sharing profits and losses in the ratio of 6 : 4 : 3. Sharma retired from the firm on 31st March, 2025. The gaining ratio of Sudama and Varun will be :
1. (A)3 : 2
2. (B)2 : 1
3. (C)1 : 2
4. (D)2 : 3
Try it first, then show our solutionSolution
1. With no new ratio given, the remaining partners gain in their old ratio.
2. Sudama : Varun = 6 : 3 = 2 : 1. Option (B).
  1 mark
Answer: (B) 2 : 1
Where the marks are
- Gaining ratio = old ratio of continuing partners (1 mark)
OR
Q9(b) · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner
Hari, Murari and Abhi were partners in a firm sharing profits and losses in the ratio of 8 : 7 : 4. Murari retired from the firm on 31st March, 2025. Hari and Abhi decided to share profits in the future in the ratio of 2 : 1. The gaining ratio of Hari and Abhi was :
1. (A)1 : 2
2. (B)8 : 7
3. (C)2 : 1
4. (D)7 : 4
Try it first, then show our solutionSolution
1. Gain = new share − old share. Hari: 2/3 − 8/19 = (38 − 24)/57 = 14/57. Abhi: 1/3 − 4/19 = (19 − 12)/57 = 7/57.
2. Gaining ratio = 14 : 7 = 2 : 1. Option (C).
  1 mark
Answer: (C) 2 : 1
Where the marks are
- New − old share for both partners (1 mark)
Q10 · 1 mark · MCQAccounting for Partnership: Basic Concepts
Munna and Sonu were partners in a firm sharing profits and losses in the ratio of 4 : 1. Their fixed capitals were ₹ 40,00,000 and ₹ 30,00,000 respectively. During the year ended 31st March, 2025, Munna withdrew ₹ 50,000 for personal use. Interest on drawings was to be charged @ 6% p.a. The journal entry for charging interest on Munna's drawings will be :
1. (A)Interest on Drawings A/c Dr. 1,500; To Munna's Capital A/c 1,500
2. (B)Munna's Capital A/c Dr. 1,500; To Interest on Drawings A/c 1,500
3. (C)Interest on Drawings A/c Dr. 1,500; To Munna's Current A/c 1,500
4. (D)Munna's Current A/c Dr. 1,500; To Interest on Drawings A/c 1,500
Try it first, then show our solutionSolution
1. Dates are not given, so interest is for an average of 6 months: 50,000 × 6% × 6/12 = ₹ 1,500.
2. Capitals are fixed, so interest on drawings is debited to the partner's Current Account: Munna's Current A/c Dr. ₹ 1,500 to Interest on Drawings A/c. Option (D).
  1 mark
Answer: (D) Munna's Current A/c Dr. ₹ 1,500; To Interest on Drawings A/c ₹ 1,500
Where the marks are
- Interest ₹ 1,500 debited to Current A/c under fixed capitals (1 mark)
Open Q10 on its own page
Q11 · 1 mark · MCQReconstitution of a Partnership Firm – Admission of a Partner
Sujata and Laxmi were partners in a firm sharing profits and losses in the ratio of 2 : 1. On 1st April, 2025, they admitted Raghu as a new partner for 1/5th share in the profits of the firm. On the date of Raghu's admission, it was found that the equipment is undervalued by ₹ 90,000. After revaluation, the Balance Sheet of Sujata, Laxmi and Raghu showed equipment at ₹ 3,00,000. The value of equipment shown in the books of the firm of Sujata and Laxmi before Raghu's admission was :
1. (A)₹ 3,90,000
2. (B)₹ 2,10,000
3. (C)₹ 3,00,000
4. (D)₹ 90,000
Try it first, then show our solutionSolution
1. Undervalued by ₹ 90,000 means the book figure was ₹ 90,000 below the revised value.
2. Book value before admission = 3,00,000 − 90,000 = ₹ 2,10,000. Option (B).
  1 mark
Answer: (B) ₹ 2,10,000
Where the marks are
- Revised value less undervaluation (1 mark)
Open Q11 on its own page
Q12 · 1 mark · MCQIssue and Redemption of Debentures
On 1st April, 2024, DD Ltd. issued 2,000, 9% Debentures of ₹ 50 each at a premium of 5%, redeemable at a premium of ₹ 10 per debenture after five years. Interest on the debentures was to be paid on half-yearly basis on 30th September and 31st March. Interest on the debentures for the year ended 31st March, 2025 will be :
1. (A)₹ 4,500
2. (B)₹ 9,000
3. (C)₹ 9,450
4. (D)₹ 4,725
Try it first, then show our solutionSolution
1. Interest is always on the face value: 2,000 × ₹ 50 = ₹ 1,00,000. Issue premium and redemption premium do not change it.
2. Interest for the year = 9% of 1,00,000 = ₹ 9,000 (₹ 4,500 each half-year). Option (B).
  1 mark
Answer: (B) ₹ 9,000
Where the marks are
- 9% on face value for a full year (1 mark)
Open Q12 on its own page
Q13 · 1 mark · MCQIssue and Redemption of Debentures
Universal Ltd. took over machinery of ₹ 3,30,000, furniture of ₹ 1,60,000 and liabilities of ₹ 80,000 from Amol Ltd. for a purchase consideration of ₹ 4,50,000. The payment to Amol Ltd. was made by issue of 10% Debentures of ₹ 50 each at a discount of 10%. The number of debentures issued to Amol Ltd. was :
1. (A)1,000
2. (B)4,500
3. (C)45,000
4. (D)10,000
Try it first, then show our solutionSolution
1. Each ₹ 50 debenture is issued at 10% discount, i.e. at ₹ 45.
2. Number of debentures = 4,50,000 / 45 = 10,000. Option (D).
  1 mark
Answer: (D) 10,000
Where the marks are
- Consideration ÷ issue price ₹ 45 (1 mark)
Q14 · 1 mark · MCQAccounting for Share Capital
At the time of forfeiture of shares, 'Share Capital Account' is debited with :
1. (A)Paid-up amount on forfeited shares
2. (B)Called-up amount on forfeited shares
3. (C)Face value of shares forfeited
4. (D)Unpaid amount on forfeited shares
Try it first, then show our solutionSolution
1. On forfeiture the share capital that had been called on those shares is cancelled; amounts received go to Share Forfeiture and unpaid calls are closed.
2. So Share Capital A/c is debited with the called-up amount. Option (B).
  1 mark
Answer: (B) Called-up amount on forfeited shares
Where the marks are
- Called-up amount (1 mark)
Open Q14 on its own page
Q15 · 1 mark · MCQDissolution of Partnership Firm
Sushil and Sapna were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2025, the firm was dissolved. On the date of dissolution there existed a balance of ₹ 1,20,000 in sundry creditors account. The sundry creditors were payable after three months. They were paid immediately at a discount of 12% p.a. The amount paid to sundry creditors was :
1. (A)₹ 1,20,000
2. (B)₹ 1,23,600
3. (C)₹ 1,16,400
4. (D)₹ 1,34,400
Try it first, then show our solutionSolution
1. Discount at 12% p.a. for 3 months = 3% of 1,20,000 = ₹ 3,600.
2. Amount paid = 1,20,000 − 3,600 = ₹ 1,16,400. Option (C).
  1 mark
Answer: (C) ₹ 1,16,400
Where the marks are
- Discount for 3 months deducted (1 mark)
Q16 · 1 mark · MCQReconstitution of a Partnership Firm – Retirement/Death of a Partner
Raha, Naveen and Vandana were partners in a firm sharing profits and losses equally. Naveen retired on 31st March, 2025. The balance in his capital account after making the necessary adjustments on account of reserves and revaluation of assets and reassessment of liabilities was ₹ 1,27,000. Naveen was paid ₹ 1,50,000 in full settlement of his claim. The value of goodwill of the firm on the date of Naveen's retirement was :
1. (A)₹ 1,50,000
2. (B)₹ 23,000
3. (C)₹ 69,000
4. (D)₹ 4,50,000
Try it first, then show our solutionSolution
1. Excess paid over his adjusted capital is his share of goodwill: 1,50,000 − 1,27,000 = ₹ 23,000.
2. Naveen's share is 1/3, so the firm's goodwill = 23,000 × 3 = ₹ 69,000. Option (C).
  1 mark
Answer: (C) ₹ 69,000
Where the marks are
- Goodwill share ₹ 23,000 grossed up for 1/3 share (1 mark)
Open Q16 on its own page
Q17 · 3 marks · Short answerReconstitution of a Partnership Firm – Retirement/Death of a Partner
Namita, Narendra and Kunwar were partners in a firm sharing profits and losses in the ratio of 3 : 1 : 1. The firm closes its books on 31st March every year. Kunwar died on 30th September, 2025. His share in the profits of the firm from 1st April, 2025 to 30th September, 2025 was calculated as per the provisions of the partnership deed which amounted to ₹ 15,600. On the date of Kunwar's death, the Balance Sheet of the firm showed General Reserve of ₹ 40,000 and Profit and Loss Account (Dr.) ₹ 80,000.
Pass necessary journal entries on Kunwar's death in the books of the firm.
Try it first, then show our solutionSolution
1. Share of profit till death (30th September, 2025)
  Particulars Dr. (₹) Cr. (₹)
  Profit and Loss Suspense A/c Dr. 15,600
  To Kunwar's Capital A/c 15,600
  (Being Kunwar's share of profit to the date of death)
  1 mark
2. General Reserve in old ratio 3 : 1 : 1
  Particulars Dr. (₹) Cr. (₹)
  General Reserve A/c Dr. 40,000
  To Namita's Capital A/c 24,000
  To Narendra's Capital A/c 8,000
  To Kunwar's Capital A/c 8,000
  (Being general reserve distributed in old ratio)
  1 mark
3. Debit balance of Profit and Loss in old ratio
  Particulars Dr. (₹) Cr. (₹)
  Namita's Capital A/c Dr. 48,000
  Narendra's Capital A/c Dr. 16,000
  Kunwar's Capital A/c Dr. 16,000
  To Profit and Loss A/c 80,000
  (Being accumulated loss written off in old ratio)
  1 mark
Answer: P&L Suspense Dr. ₹ 15,600 to Kunwar; General Reserve ₹ 40,000 to Namita ₹ 24,000, Narendra ₹ 8,000, Kunwar ₹ 8,000; capitals Dr. ₹ 48,000, ₹ 16,000, ₹ 16,000 to Profit and Loss ₹ 80,000
Where the marks are
- Profit share through P&L Suspense (1 mark)
- General reserve in old ratio (1 mark)
- Debit balance of P&L in old ratio (1 mark)
Open Q17 on its own page

Particulars	Dr. (₹)	Cr. (₹)
Profit and Loss Suspense A/c Dr.	15,600
To Kunwar's Capital A/c		15,600
(Being Kunwar's share of profit to the date of death)

Particulars	Dr. (₹)	Cr. (₹)
General Reserve A/c Dr.	40,000
To Namita's Capital A/c		24,000
To Narendra's Capital A/c		8,000
To Kunwar's Capital A/c		8,000
(Being general reserve distributed in old ratio)

Particulars	Dr. (₹)	Cr. (₹)
Namita's Capital A/c Dr.	48,000
Narendra's Capital A/c Dr.	16,000
Kunwar's Capital A/c Dr.	16,000
To Profit and Loss A/c		80,000
(Being accumulated loss written off in old ratio)

Q18 · 3 marks · Short answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

Naik, Vinay and Vibhuti were partners in a firm sharing profits and losses in the ratio of 4 : 2 : 3. On 31st March, 2025, their Balance Sheet was as follows :

Balance Sheet of Naik, Vinay and Vibhuti as at 31st March, 2025

Liabilities	Amount (₹)	Assets	Amount (₹)
Capitals :		Patents	54,000
Naik 1,20,000		Land and Building	2,07,000
Vinay 1,20,000		Stock	1,08,000
Vibhuti 1,20,000	3,60,000	Debtors	81,000
General Reserve	45,000	Cash at bank	54,000
Creditors	99,000
	5,04,000		5,04,000

Naik retired from the firm on the above date on the following terms :
(i) Goodwill of the firm was valued at ₹ 1,80,000 and the same was to be treated without opening goodwill account.
(ii) Revaluation of assets and reassessment of liabilities resulted in a loss of ₹ 18,000.
(iii) Amount payable to Naik was transferred to his loan account.
Pass necessary journal entries for general reserve, revaluation of assets and reassessment of liabilities and goodwill on Naik's retirement.

Try it first, then show our solutionSolution

General Reserve ₹ 45,000 in 4 : 2 : 3
Particulars Dr. (₹) Cr. (₹)
General Reserve A/c Dr. 45,000
To Naik's Capital A/c 20,000
To Vinay's Capital A/c 10,000
To Vibhuti's Capital A/c 15,000
(Being general reserve distributed in old ratio)
1 mark
Revaluation loss ₹ 18,000 in 4 : 2 : 3
Particulars Dr. (₹) Cr. (₹)
Naik's Capital A/c Dr. 8,000
Vinay's Capital A/c Dr. 4,000
Vibhuti's Capital A/c Dr. 6,000
To Revaluation A/c 18,000
(Being revaluation loss shared in old ratio)
1 mark
Goodwill. Naik's share = 1,80,000 × 4/9 = ₹ 80,000, borne by Vinay and Vibhuti in their gaining ratio 2 : 3.
Particulars Dr. (₹) Cr. (₹)
Vinay's Capital A/c Dr. 32,000
Vibhuti's Capital A/c Dr. 48,000
To Naik's Capital A/c 80,000
(Being Naik's share of goodwill adjusted)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
General Reserve A/c Dr.	45,000
To Naik's Capital A/c		20,000
To Vinay's Capital A/c		10,000
To Vibhuti's Capital A/c		15,000
(Being general reserve distributed in old ratio)

Particulars	Dr. (₹)	Cr. (₹)
Naik's Capital A/c Dr.	8,000
Vinay's Capital A/c Dr.	4,000
Vibhuti's Capital A/c Dr.	6,000
To Revaluation A/c		18,000
(Being revaluation loss shared in old ratio)

Particulars	Dr. (₹)	Cr. (₹)
Vinay's Capital A/c Dr.	32,000
Vibhuti's Capital A/c Dr.	48,000
To Naik's Capital A/c		80,000
(Being Naik's share of goodwill adjusted)

Answer: General Reserve ₹ 45,000 to Naik ₹ 20,000, Vinay ₹ 10,000, Vibhuti ₹ 15,000; revaluation loss Dr. ₹ 8,000, ₹ 4,000, ₹ 6,000; Vinay ₹ 32,000 and Vibhuti ₹ 48,000 Dr. to Naik ₹ 80,000 for goodwill

Where the marks are

General reserve entry (1 mark)
Revaluation loss entry (1 mark)
Goodwill adjustment in gaining ratio (1 mark)

Open Q18 on its own page

Answer one of these 2 alternatives.

Q19(a) · 3 marks · Short answerIssue and Redemption of Debentures

Kiara Ltd. purchased assets worth ₹ 12,40,000 and took over liabilities of ₹ 3,40,000 of Amrex Ltd. for a purchase consideration of ₹ 11,00,000. Kiara Ltd. paid half the amount by cheque. The balance amount was settled by issuing 9% debentures of ₹ 100 each at a premium of 10%.
Pass necessary journal entries for the above transactions in the books of Kiara Ltd.

Try it first, then show our solutionSolution

Net assets = 12,40,000 − 3,40,000 = ₹ 9,00,000; consideration ₹ 11,00,000, so goodwill = ₹ 2,00,000. Half (₹ 5,50,000) is paid by cheque; the other ₹ 5,50,000 by debentures at ₹ 110: 5,000 debentures = ₹ 5,00,000 face + ₹ 50,000 premium.
Particulars Dr. (₹) Cr. (₹)
Sundry Assets A/c Dr. 12,40,000
Goodwill A/c Dr. 2,00,000
To Sundry Liabilities A/c 3,40,000
To Amrex Ltd. 11,00,000
(Being assets and liabilities of Amrex Ltd. taken over)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Sundry Assets A/c Dr.	12,40,000
Goodwill A/c Dr.	2,00,000
To Sundry Liabilities A/c		3,40,000
To Amrex Ltd.		11,00,000
(Being assets and liabilities of Amrex Ltd. taken over)

Particulars	Dr. (₹)	Cr. (₹)
Amrex Ltd. Dr.	11,00,000
To Bank A/c		5,50,000
To 9% Debentures A/c		5,00,000
To Securities Premium A/c		50,000
(Being consideration paid by cheque and 5,000 9% debentures of ₹ 100 at 10% premium)

The payment may also be shown as two entries: cheque ₹ 5,50,000, and debentures ₹ 5,00,000 with premium ₹ 50,000.

2 marks

Answer: Goodwill ₹ 2,00,000; Amrex Ltd. paid ₹ 5,50,000 by cheque and 5,000 debentures (₹ 5,00,000 + premium ₹ 50,000)

Where the marks are

Purchase entry with goodwill ₹ 2,00,000 (1 mark)
Payment by cheque and debentures at premium (2 marks)

Open Q19(a) on its own page

Q19(b) · 3 marks · Short answerIssue and Redemption of Debentures

On 1st April, 2024, Zara Ltd. issued 8,000, 9% Debentures of ₹ 100 each at a discount of 10%. The company had a balance of ₹ 50,000 in the Securities Premium Account on the same date.
Pass necessary journal entries for the issue of debentures and to write off discount on issue of debentures.

Try it first, then show our solutionSolution

Particulars Dr. (₹) Cr. (₹)
Bank A/c Dr. 7,20,000
To Debenture Application and Allotment A/c 7,20,000
(Being money received on 8,000 debentures at ₹ 90, 1st April, 2024)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Bank A/c Dr.	7,20,000
To Debenture Application and Allotment A/c		7,20,000
(Being money received on 8,000 debentures at ₹ 90, 1st April, 2024)

Particulars	Dr. (₹)	Cr. (₹)
Debenture Application and Allotment A/c Dr.	7,20,000
Discount on Issue of Debentures A/c Dr.	80,000
To 9% Debentures A/c		8,00,000
(Being 8,000 9% debentures of ₹ 100 issued at 10% discount)

1 mark

Discount of ₹ 80,000 is written off first from Securities Premium (₹ 50,000) and the rest (₹ 30,000) from the Statement of Profit and Loss (31st March, 2025).
Particulars Dr. (₹) Cr. (₹)
Securities Premium A/c Dr. 50,000
Statement of Profit and Loss Dr. 30,000
To Discount on Issue of Debentures A/c 80,000
(Being discount on issue written off)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Securities Premium A/c Dr.	50,000
Statement of Profit and Loss Dr.	30,000
To Discount on Issue of Debentures A/c		80,000
(Being discount on issue written off)

Answer: Bank ₹ 7,20,000; Discount ₹ 80,000 with Debentures ₹ 8,00,000; discount written off from Securities Premium ₹ 50,000 and Statement of Profit and Loss ₹ 30,000

Where the marks are

Receipt entry (1 mark)
Allotment with discount (1 mark)
Write-off from Securities Premium then P&L (1 mark)

Open Q19(b) on its own page

Q20 · 3 marks · Short answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

Nandini, Shweta and Hiren were partners in a firm sharing profits and losses in the ratio of 9 : 7 : 4. On 1st April, 2025, Shweta retired. On the date of Shweta's retirement, there existed a balance of ₹ 1,00,000 in Workmen's Compensation Fund.
Pass necessary journal entries for treatment of Workmen's Compensation Fund on Shweta's retirement in each of the following cases :
(i) Claim on account of Workmen's Compensation was estimated at ₹ 1,20,000.
(ii) Claim on account of Workmen's Compensation was estimated at ₹ 80,000.
(iii) Claim on account of Workmen's Compensation was estimated at ₹ 1,00,000.

Try it first, then show our solutionSolution

(i) Claim ₹ 1,20,000 exceeds the fund; the extra ₹ 20,000 is a loss charged to Revaluation A/c.
Particulars Dr. (₹) Cr. (₹)
Workmen's Compensation Fund A/c Dr. 1,00,000
Revaluation A/c Dr. 20,000
To Provision for Workmen's Compensation Claim A/c 1,20,000
(Being claim of ₹ 1,20,000 provided)
1 mark

(ii) Claim ₹ 80,000: the surplus ₹ 20,000 goes to all partners in 9 : 7 : 4.

Particulars	Dr. (₹)	Cr. (₹)
Workmen's Compensation Fund A/c Dr.	1,00,000
To Provision for Workmen's Compensation Claim A/c		80,000
To Nandini's Capital A/c		9,000
To Shweta's Capital A/c		7,000
To Hiren's Capital A/c		4,000
(Being claim provided and surplus fund credited to partners)

1 mark

(iii) Claim ₹ 1,00,000 uses up the whole fund.
Particulars Dr. (₹) Cr. (₹)
Workmen's Compensation Fund A/c Dr. 1,00,000
To Provision for Workmen's Compensation Claim A/c 1,00,000
(Being claim equal to the fund provided)
1 mark

Answer: (i) Fund ₹ 1,00,000 + Revaluation ₹ 20,000 to Provision ₹ 1,20,000 (ii) Fund ₹ 1,00,000 to Provision ₹ 80,000 and capitals ₹ 9,000, ₹ 7,000, ₹ 4,000 (iii) Fund ₹ 1,00,000 to Provision ₹ 1,00,000

Where the marks are

Case (i) with excess claim to Revaluation (1 mark)
Case (ii) with surplus to partners in 9 : 7 : 4 (1 mark)
Case (iii) (1 mark)

Open Q20 on its own page

Q21 · 4 marks · Long answerIssue and Redemption of Debentures

Pass necessary journal entries for the issue of debentures for the following transactions :
(i) XS Ltd. issued 40,000, 9% Debentures of ₹ 100 each at a premium of 10%, redeemable at a premium of 5%.
(ii) YG Ltd. issued 50,000, 9% Debentures of ₹ 100 each at par, redeemable at a premium of 10%.

Try it first, then show our solutionSolution

(i) XS Ltd. Issue price ₹ 110: cash ₹ 44,00,000; premium on issue ₹ 4,00,000; premium on redemption 5% = ₹ 2,00,000 (a loss on issue).
Particulars Dr. (₹) Cr. (₹)
Bank A/c Dr. 44,00,000
To Debenture Application and Allotment A/c 44,00,000
(Being application money received on 40,000 debentures)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Bank A/c Dr.	44,00,000
To Debenture Application and Allotment A/c		44,00,000
(Being application money received on 40,000 debentures)

Particulars	Dr. (₹)	Cr. (₹)
Debenture Application and Allotment A/c Dr.	44,00,000
Loss on Issue of Debentures A/c Dr.	2,00,000
To 9% Debentures A/c		40,00,000
To Securities Premium A/c		4,00,000
To Premium on Redemption of Debentures A/c		2,00,000
(Being debentures issued at 10% premium, redeemable at 5% premium)

1 mark

(ii) YG Ltd. Issued at par for ₹ 50,00,000; premium on redemption 10% = ₹ 5,00,000.
Particulars Dr. (₹) Cr. (₹)
Bank A/c Dr. 50,00,000
To Debenture Application and Allotment A/c 50,00,000
(Being application money received on 50,000 debentures)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Bank A/c Dr.	50,00,000
To Debenture Application and Allotment A/c		50,00,000
(Being application money received on 50,000 debentures)

Particulars	Dr. (₹)	Cr. (₹)
Debenture Application and Allotment A/c Dr.	50,00,000
Loss on Issue of Debentures A/c Dr.	5,00,000
To 9% Debentures A/c		50,00,000
To Premium on Redemption of Debentures A/c		5,00,000
(Being debentures issued at par, redeemable at 10% premium)

1 mark

Answer: (i) Bank ₹ 44,00,000; allotment with Loss ₹ 2,00,000 to Debentures ₹ 40,00,000, Securities Premium ₹ 4,00,000, Premium on Redemption ₹ 2,00,000 (ii) Bank ₹ 50,00,000; allotment with Loss ₹ 5,00,000 to Debentures ₹ 50,00,000 and Premium on Redemption ₹ 5,00,000

Where the marks are

Each of the four entries (1 mark each)

Open Q21 on its own page

Answer one of these 2 alternatives.

Q22(a) · 4 marks · Long answerReconstitution of a Partnership Firm – Admission of a Partner

Jain and Gupta were partners in a firm sharing profits and losses in the ratio of 3 : 1. On 1st April, 2024, Agarwal was admitted as a new partner for 1/5th share in the profits of the firm with a minimum guaranteed amount of ₹ 75,000. Any deficiency arising out of this account will be borne by Jain and Gupta in the ratio of 1 : 3. During the year ended 31st March, 2025, the firm earned a net profit of ₹ 3,00,000.
Prepare Profit and Loss Appropriation Account of Jain, Gupta and Agarwal for the year ended 31st March, 2025.

Try it first, then show our solutionSolution

Agarwal's 1/5 share = ₹ 60,000, so the deficiency against his ₹ 75,000 guarantee is ₹ 15,000, borne by Jain and Gupta in 1 : 3 (₹ 3,750 and ₹ 11,250). Jain and Gupta share the remaining 4/5 in 3 : 1: ₹ 1,80,000 and ₹ 60,000.
1 mark

Profit and Loss Appropriation Account for the year ended 31st March, 2025

Particulars	₹	Particulars	₹
To Jain's Capital A/c (1,80,000 − 3,750)	1,76,250	By Profit and Loss A/c (net profit)	3,00,000
To Gupta's Capital A/c (60,000 − 11,250)	48,750
To Agarwal's Capital A/c (60,000 + 3,750 + 11,250)	75,000
	3,00,000		3,00,000

3 marks

Answer: Jain ₹ 1,76,250, Gupta ₹ 48,750, Agarwal ₹ 75,000 (deficiency ₹ 15,000 borne 1 : 3)

Where the marks are

Deficiency ₹ 15,000 split 1 : 3 (1 mark)
Jain ₹ 1,76,250 (1 mark)
Gupta ₹ 48,750 (1 mark)
Agarwal ₹ 75,000 (1 mark)

Open Q22(a) on its own page

Q22(b) · 4 marks · Long answerReconstitution of a Partnership Firm – Admission of a Partner

Annu, Bandhu, Sheelu and Golu were partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2 : 1. On 1st April, 2025, they decided to share the future profits equally. For this purpose the goodwill of the firm was valued at ₹ 4,00,000. Calculate gain or sacrifice of the partners on change in profit sharing ratio and pass a single adjustment journal entry for the treatment of goodwill.

Try it first, then show our solutionSolution

Gain or sacrifice (old − new, new = 1/4 each): Annu 4/10 − 1/4 = 3/20 sacrifice; Bandhu 3/10 − 1/4 = 1/20 sacrifice; Sheelu 2/10 − 1/4 = 1/20 gain; Golu 1/10 − 1/4 = 3/20 gain.
2 marks

Single adjustment entry (1st April, 2025), goodwill ₹ 4,00,000: Sheelu pays 1/20 = ₹ 20,000 and Golu 3/20 = ₹ 60,000; Annu receives ₹ 60,000 and Bandhu ₹ 20,000.

Particulars	Dr. (₹)	Cr. (₹)
Sheelu's Capital A/c Dr.	20,000
Golu's Capital A/c Dr.	60,000
To Annu's Capital A/c		60,000
To Bandhu's Capital A/c		20,000
(Being goodwill adjusted on change in profit sharing ratio)

2 marks

Answer: Annu sacrifices 3/20, Bandhu 1/20; Sheelu gains 1/20, Golu 3/20. Sheelu Dr. ₹ 20,000, Golu Dr. ₹ 60,000 to Annu ₹ 60,000 and Bandhu ₹ 20,000

Where the marks are

Gain or sacrifice of each partner (½ mark each)
Single adjustment entry (2 marks)

Open Q22(b) on its own page

Q23 · 6 marks · Case-basedCompetency-basedAccounting for Share Capital
Diwan Ltd. was registered with an authorised capital of ₹ 1,00,00,000, divided into 1,00,000 equity shares of ₹ 100 each. The company invited applications for issuing 50,000 shares. The amount was payable as follows :
On Application and Allotment – ₹ 30 per share
On First call – ₹ 40 per share
On Second and Final call – balance
The issue was fully subscribed. All amounts were duly received except from Nawal, a shareholder holding 700 shares, who failed to pay the second and final call. His shares were forfeited.
On the basis of the above information, answer the following questions :
1. (i)
  The Registered capital of Diwan Ltd. is :
  (A)₹ 1,00,00,000
  (B)₹ 1,00,000
  (C)₹ 50,00,000
  (D)₹ 50,000
  1 mark
2. (ii)
  The Issued capital of Diwan Ltd. is :
  (A)₹ 1,00,00,000
  (B)₹ 1,00,000
  (C)₹ 50,00,000
  (D)₹ 50,000
  1 mark
3. (iii)
  Calls in arrears of the company amounted to :
  (A)₹ 21,000
  (B)₹ 70,000
  (C)Nil
  (D)₹ 49,000
  1 mark
4. (iv)
  'Share Forfeiture Account' will appear in the 'Notes to Accounts' at :
  (A)₹ 21,000
  (B)₹ 70,000
  (C)Nil
  (D)₹ 49,000
  1 mark
5. (v)
  The amount of 'Share Capital' presented in the Balance Sheet of Diwan Ltd. will be :
  (A)₹ 49,30,000
  (B)₹ 50,00,000
  (C)₹ 49,79,000
  (D)₹ 49,49,000
  1 mark
6. (vi)
  If all the forfeited shares are reissued at ₹ 30 per share, fully paid-up, the amount transferred to 'Capital Reserve' will be :
  (A)₹ 49,000
  (B)₹ 70,000
  (C)₹ 21,000
  (D)Nil
  1 mark
Try it first, then show our solutionSolution
1. (i) Registered (authorised) capital = 1,00,000 × ₹ 100 = ₹ 1,00,00,000. Option (A).
  1 mark
2. (ii) Issued capital = 50,000 × ₹ 100 = ₹ 50,00,000. Option (C).
  1 mark
3. (iii) Nawal's unpaid final call was cancelled when his shares were forfeited, so calls in arrears are Nil. Option (C).
  1 mark
4. (iv) Nawal had paid ₹ 30 + ₹ 40 = ₹ 70 per share: Share Forfeiture = 700 × 70 = ₹ 49,000. Option (D).
  1 mark
5. (v) Share capital = (50,000 − 700) × ₹ 100 = ₹ 49,30,000 plus Share Forfeiture ₹ 49,000 = ₹ 49,79,000. Option (C).
  1 mark
6. (vi) Reissue at ₹ 30 fully paid gives a discount of ₹ 70 per share = ₹ 49,000, which uses the whole forfeited amount; nothing is left for Capital Reserve: Nil. Option (D).
  1 mark
Answer: (i) A ₹ 1,00,00,000 (ii) C ₹ 50,00,000 (iii) C Nil (iv) D ₹ 49,000 (v) C ₹ 49,79,000 (vi) D Nil
Where the marks are
- Each part (1 mark each)
Open Q23 on its own page

Q24 · 6 marks · Long answerReconstitution of a Partnership Firm – Admission of a Partner

Asha and Indra were partners in a firm sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet on 31st March, 2025 was as following :

Balance Sheet of Asha and Indra as at 31st March, 2025

Liabilities	Amount (₹)	Assets	Amount (₹)
Capitals :		Plant and Machinery	4,05,000
Asha 4,00,000		Furniture	1,20,000
Indra 3,00,000	7,00,000	Debtors 80,000
General Reserve	50,000	Less : Provision for doubtful debts 4,000	76,000
Creditors	20,000	Stock	1,54,000
		Cash at bank	15,000
	7,70,000		7,70,000

On 1st April, 2025, Suraj was admitted for 1/4th share in the profits of the firm on the following terms :
(i) Suraj will bring capital proportionate to his share in the profits of the firm.
(ii) Goodwill of the firm was valued at ₹ 1,00,000 and Suraj will bring his share of goodwill premium in cash.
(iii) Furniture was taken over by Asha at ₹ 1,00,000.
(iv) A liability of ₹ 5,000 included in creditors was not likely to arise.
(v) Plant and Machinery was revalued at ₹ 4,35,000.

Prepare Revaluation Account and Partners' capital accounts on Suraj's admission. Show the calculation of proportionate capital clearly.

Try it first, then show our solutionSolution

Revaluation Account

Particulars	₹	Particulars	₹
To Furniture (1,20,000 − 1,00,000)	20,000	By Creditors	5,000
To Gain transferred to:		By Plant and Machinery (4,35,000 − 4,05,000)	30,000
Asha's Capital A/c	9,000
Indra's Capital A/c	6,000
	35,000		35,000

2 marks

Goodwill. Suraj's share = 1,00,000 × 1/4 = ₹ 25,000, brought in cash and credited to Asha and Indra in their sacrificing ratio 3 : 2 (₹ 15,000 and ₹ 10,000). General Reserve ₹ 50,000 goes to them in 3 : 2.
½ mark

Partners' Capital Accounts

Particulars	Asha (₹)	Indra (₹)	Suraj (₹)	Particulars	Asha (₹)	Indra (₹)	Suraj (₹)
To Furniture A/c	1,00,000			By Balance b/d	4,00,000	3,00,000
To Balance c/d	3,54,000	3,36,000	2,30,000	By General Reserve	30,000	20,000
				By Premium for Goodwill	15,000	10,000
				By Revaluation A/c	9,000	6,000
				By Bank A/c			2,30,000
	4,54,000	3,36,000	2,30,000		4,54,000	3,36,000	2,30,000

2½ marks

Proportionate capital. Adjusted capitals of Asha and Indra = 3,54,000 + 3,36,000 = ₹ 6,90,000 for 3/4 share. Total capital = 6,90,000 × 4/3 = ₹ 9,20,000; Suraj's capital = 9,20,000 × 1/4 = ₹ 2,30,000.
1 mark

Answer: Revaluation gain ₹ 15,000 (Asha ₹ 9,000, Indra ₹ 6,000); capitals Asha ₹ 3,54,000, Indra ₹ 3,36,000; Suraj brings ₹ 2,30,000 capital and ₹ 25,000 goodwill premium

Where the marks are

Revaluation Account (2 marks)
Goodwill premium in sacrificing ratio (½ mark)
Capital accounts (2½ marks)
Proportionate capital ₹ 2,30,000 (1 mark)

Open Q24 on its own page

Answer one of these 2 alternatives.

Q25(a) · 6 marks · Long answerAccounting for Share Capital

Ajanta Ltd. invited applications for issuing 30,000 equity shares of ₹ 10 each at a premium of ₹ 5 per share. The amount was payable as follows :

On Application and Allotment – ₹ 10 per share (including premium)
On first and final call – Balance

Applications for 50,000 shares were received. Applications for 10,000 shares were rejected and their application money was refunded. Pro-rata allotment was made to the remaining applicants. Excess money received with application was adjusted towards sums due on first and final call. Sonu, an applicant of 4,000 shares, paid his entire share money with application. Vedika, to whom 300 shares were allotted, failed to pay the first and final call. After giving her the mandatory notice, her shares were forfeited.

Pass necessary journal entries for the above transactions in the books of Ajanta Ltd.

Try it first, then show our solutionSolution

Working. 40,000 applicants get 30,000 shares (4 : 3). Ordinary applicants (36,000) paid ₹ 3,60,000 for 27,000 shares: ₹ 2,70,000 needed, excess ₹ 90,000 kept as calls in advance. Sonu applied for 4,000 and paid ₹ 15 × 4,000 = ₹ 60,000 for 3,000 shares: ₹ 30,000 needed now and ₹ 15,000 for the call, so ₹ 15,000 is refunded. Calls in advance = ₹ 1,05,000; refund = 1,00,000 (rejected) + 15,000 = ₹ 1,15,000. Vedika (300 shares) applied for 400; her excess ₹ 1,000 covers part of her call of ₹ 1,500, leaving ₹ 500 unpaid.
Particulars Dr. (₹) Cr. (₹)
Bank A/c Dr. 5,20,000
To Equity Share Application and Allotment A/c 5,20,000
(Being application money received, including Sonu's full money on 4,000 shares)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Bank A/c Dr.	5,20,000
To Equity Share Application and Allotment A/c		5,20,000
(Being application money received, including Sonu's full money on 4,000 shares)

Particulars	Dr. (₹)	Cr. (₹)
Equity Share Application and Allotment A/c Dr.	5,20,000
To Equity Share Capital A/c		1,50,000
To Securities Premium A/c		1,50,000
To Bank A/c		1,15,000
To Calls in Advance A/c		1,05,000
(Being application money adjusted, refunded and excess held in advance)

1½ marks

Particulars Dr. (₹) Cr. (₹)
Equity Share First and Final Call A/c Dr. 1,50,000
To Equity Share Capital A/c 1,50,000
(Being call of ₹ 5 per share due on 30,000 shares)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Equity Share First and Final Call A/c Dr.	1,50,000
To Equity Share Capital A/c		1,50,000
(Being call of ₹ 5 per share due on 30,000 shares)

Particulars	Dr. (₹)	Cr. (₹)
Bank A/c Dr.	44,500
Calls in Advance A/c Dr.	1,05,000
Calls in Arrears A/c Dr.	500
To Equity Share First and Final Call A/c		1,50,000
(Being call money received except ₹ 500 from Vedika)

1½ marks

Particulars Dr. (₹) Cr. (₹)
Equity Share Capital A/c Dr. 3,000
To Share Forfeiture A/c 2,500
To Calls in Arrears A/c 500
(Being Vedika's 300 shares forfeited)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Equity Share Capital A/c Dr.	3,000
To Share Forfeiture A/c		2,500
To Calls in Arrears A/c		500
(Being Vedika's 300 shares forfeited)

Answer: Application ₹ 5,20,000: capital ₹ 1,50,000, premium ₹ 1,50,000, refund ₹ 1,15,000, calls in advance ₹ 1,05,000; call ₹ 1,50,000 received ₹ 44,500 with advance ₹ 1,05,000 and arrears ₹ 500; forfeiture Capital ₹ 3,000 to Forfeiture ₹ 2,500 and Arrears ₹ 500

Where the marks are

Money received (1 mark)
Adjustment of application money (1½ marks)
Call due (1 mark)
Call received with advance and arrears (1½ marks)
Forfeiture of Vedika's shares (1 mark)

Open Q25(a) on its own page

Q25(b) · 6 marks · Long answerAccounting for Share Capital

Answer the following.

(i)
Rao Ltd. forfeited 750 equity shares of ₹ 10 each for non-payment of first call of ₹ 3 per share (including premium of ₹ 1 per share). The second and final call of ₹ 3 per share was not yet made. Of the forfeited shares, 500 were re-issued for ₹ 2,500, ₹ 7 per share paid-up.
Pass necessary journal entries for the above transactions in the books of Rao Ltd.
3 marks
(ii)
Lily Ltd. forfeited 2,000 equity shares of ₹ 10 each for non-payment of first and final call of ₹ 2 per share. 750 of the forfeited shares were reissued to Ashok for ₹ 10,000 as fully paid-up. The remaining shares were reissued to Sudha at ₹ 9 per share fully paid-up.
Pass necessary journal entries for the above transactions in the books of Lily Ltd.
3 marks

Try it first, then show our solutionSolution

(i) Rao Ltd. Called up = ₹ 7 per share capital (₹ 1 premium on first call unpaid). Received ₹ 5 per share capital. Forfeiture = 750 × 5 = ₹ 3,750; unpaid call ₹ 2,250.

Particulars	Dr. (₹)	Cr. (₹)
Equity Share Capital A/c Dr.	5,250
Securities Premium A/c Dr.	750
To Share Forfeiture A/c		3,750
To Equity Share First Call A/c		2,250
(Being 750 shares forfeited for non-payment of first call)

1 mark

Reissue of 500 shares as ₹ 7 paid for ₹ 2,500: discount ₹ 1,000 from forfeiture.
Particulars Dr. (₹) Cr. (₹)
Bank A/c Dr. 2,500
Share Forfeiture A/c Dr. 1,000
To Equity Share Capital A/c 3,500
(Being 500 shares reissued, ₹ 7 paid up)
1 mark
Forfeited on 500 shares = 500 × 5 = 2,500, less discount 1,000 = ₹ 1,500 to Capital Reserve.
Particulars Dr. (₹) Cr. (₹)
Share Forfeiture A/c Dr. 1,500
To Capital Reserve A/c 1,500
(Being gain on reissue transferred)
1 mark
(ii) Lily Ltd. Paid ₹ 8 per share: forfeiture = ₹ 16,000.
Particulars Dr. (₹) Cr. (₹)
Equity Share Capital A/c Dr. 20,000
To Share Forfeiture A/c 16,000
To Equity Share First and Final Call A/c 4,000
(Being 2,000 shares forfeited)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Bank A/c Dr.	2,500
Share Forfeiture A/c Dr.	1,000
To Equity Share Capital A/c		3,500
(Being 500 shares reissued, ₹ 7 paid up)

Particulars	Dr. (₹)	Cr. (₹)
Share Forfeiture A/c Dr.	1,500
To Capital Reserve A/c		1,500
(Being gain on reissue transferred)

Particulars	Dr. (₹)	Cr. (₹)
Equity Share Capital A/c Dr.	20,000
To Share Forfeiture A/c		16,000
To Equity Share First and Final Call A/c		4,000
(Being 2,000 shares forfeited)

Ashok pays ₹ 10,000 for 750 shares (₹ 7,500 capital + ₹ 2,500 premium). Sudha pays ₹ 9 on 1,250 shares: ₹ 11,250, discount ₹ 1,250.

Particulars	Dr. (₹)	Cr. (₹)
Bank A/c Dr.	10,000
To Equity Share Capital A/c		7,500
To Securities Premium A/c		2,500
(Being 750 shares reissued to Ashok at a premium)
Bank A/c Dr.	11,250
Share Forfeiture A/c Dr.	1,250
To Equity Share Capital A/c		12,500
(Being 1,250 shares reissued to Sudha at ₹ 9)

1 mark

All forfeited shares are reissued: 16,000 − 1,250 = ₹ 14,750 to Capital Reserve.
Particulars Dr. (₹) Cr. (₹)
Share Forfeiture A/c Dr. 14,750
To Capital Reserve A/c 14,750
(Being gain on reissue transferred)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
Share Forfeiture A/c Dr.	14,750
To Capital Reserve A/c		14,750
(Being gain on reissue transferred)

Answer: (i) Forfeiture ₹ 3,750; reissue Bank ₹ 2,500 + Forfeiture ₹ 1,000; Capital Reserve ₹ 1,500 (ii) Forfeiture ₹ 16,000; Ashok ₹ 10,000 (capital ₹ 7,500, premium ₹ 2,500); Sudha ₹ 11,250 + Forfeiture ₹ 1,250; Capital Reserve ₹ 14,750

Where the marks are

(i) Forfeiture, reissue and capital reserve (1 mark each)
(ii) Forfeiture, reissues and capital reserve (1 mark each)

Open Q25(b) on its own page

Answer one of these 2 alternatives.

Q26(a) · 6 marks · Long answerReconstitution of a Partnership Firm – Admission of a Partner

Promil, Kamlesh and Ritika were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. From 1st April, 2025 they decided to share future profits in the ratio of 2 : 3 : 5. On 31st March, 2025, their Balance Sheet was as follows :

Balance Sheet of Promil, Kamlesh and Ritika as at 31st March, 2025

Liabilities	Amount (₹)	Assets	Amount (₹)
Sundry Creditors	3,00,000	Bank	1,80,000
General Reserve	1,60,000	Sundry Debtors	1,20,000
Capitals :		Stock	2,40,000
Promil 2,80,000		Land and Building	5,60,000
Kamlesh 2,20,000
Ritika 1,40,000	6,40,000
	11,00,000		11,00,000

It was agreed that :
(i) Land and Building will be valued at ₹ 6,62,000.
(ii) A provision of 5% on debtors will be made for bad and doubtful debts.
(iii) Goodwill of the firm will be valued at ₹ 1,80,000 and the same will be treated without opening goodwill account.
(iv) The value of stock will be reduced to ₹ 2,00,000.

Showing your working clearly, pass necessary journal entries for the above transactions in the books of the firm.

Try it first, then show our solutionSolution

General Reserve ₹ 1,60,000 in old ratio 5 : 3 : 2
Particulars Dr. (₹) Cr. (₹)
General Reserve A/c Dr. 1,60,000
To Promil's Capital A/c 80,000
To Kamlesh's Capital A/c 48,000
To Ritika's Capital A/c 32,000
(Being general reserve distributed in old ratio)
1 mark
Decrease in assets: provision 5% of 1,20,000 = ₹ 6,000; stock 2,40,000 → 2,00,000 = ₹ 40,000.
Particulars Dr. (₹) Cr. (₹)
Revaluation A/c Dr. 46,000
To Provision for Bad and Doubtful Debts A/c 6,000
To Stock A/c 40,000
(Being provision created and stock reduced)
1 mark
Increase in Land and Building (5,60,000 → 6,62,000)
Particulars Dr. (₹) Cr. (₹)
Land and Building A/c Dr. 1,02,000
To Revaluation A/c 1,02,000
(Being land and building revalued)
1 mark
Revaluation gain = 1,02,000 − 46,000 = ₹ 56,000 in 5 : 3 : 2
Particulars Dr. (₹) Cr. (₹)
Revaluation A/c Dr. 56,000
To Promil's Capital A/c 28,000
To Kamlesh's Capital A/c 16,800
To Ritika's Capital A/c 11,200
(Being revaluation gain shared in old ratio)
1 mark
Working (gain/sacrifice). Promil 5/10 − 2/10 = 3/10 sacrifice; Kamlesh 3/10 − 3/10 = nil; Ritika 2/10 − 5/10 = 3/10 gain.
1 mark
Goodwill ₹ 1,80,000 × 3/10 = ₹ 54,000
Particulars Dr. (₹) Cr. (₹)
Ritika's Capital A/c Dr. 54,000
To Promil's Capital A/c 54,000
(Being goodwill adjusted on change in profit sharing ratio)
1 mark

Particulars	Dr. (₹)	Cr. (₹)
General Reserve A/c Dr.	1,60,000
To Promil's Capital A/c		80,000
To Kamlesh's Capital A/c		48,000
To Ritika's Capital A/c		32,000
(Being general reserve distributed in old ratio)

Particulars	Dr. (₹)	Cr. (₹)
Revaluation A/c Dr.	46,000
To Provision for Bad and Doubtful Debts A/c		6,000
To Stock A/c		40,000
(Being provision created and stock reduced)

Particulars	Dr. (₹)	Cr. (₹)
Land and Building A/c Dr.	1,02,000
To Revaluation A/c		1,02,000
(Being land and building revalued)

Particulars	Dr. (₹)	Cr. (₹)
Revaluation A/c Dr.	56,000
To Promil's Capital A/c		28,000
To Kamlesh's Capital A/c		16,800
To Ritika's Capital A/c		11,200
(Being revaluation gain shared in old ratio)

Particulars	Dr. (₹)	Cr. (₹)
Ritika's Capital A/c Dr.	54,000
To Promil's Capital A/c		54,000
(Being goodwill adjusted on change in profit sharing ratio)

Answer: General Reserve to partners ₹ 80,000, ₹ 48,000, ₹ 32,000; revaluation gain ₹ 56,000 (₹ 28,000, ₹ 16,800, ₹ 11,200); Ritika Dr. ₹ 54,000 to Promil for goodwill

Where the marks are

General reserve (1 mark)
Revaluation loss items (1 mark)
Land and building (1 mark)
Revaluation gain distributed (1 mark)
Gain/sacrifice working (1 mark)
Goodwill entry (1 mark)

Open Q26(a) on its own page

Q26(b) · 6 marks · Long answerDissolution of Partnership Firm

Mr. Rinku and Mrs. Pinky were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2025, their balance sheet was as follows :

Balance Sheet of Mr. Rinku and Mrs. Pinky as at 31st March, 2025

Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors	86,000	Cash at Bank	43,000
Mrs. Rinku's Loan	20,000	Stock	20,000
Pinky's Husband's Loan	30,000	Investments	30,000
Investment Fluctuation Fund	12,000	Debtors 50,000
		Less : Provision for doubtful debts 5,000	45,000
General Reserve	30,000	Building	3,40,000
Capitals :
Mr. Rinku 1,00,000
Mrs. Pinky 2,00,000	3,00,000
	4,78,000		4,78,000

On the above date the firm was dissolved and the following transactions took place :
(i) Mr. Rinku agreed to pay Mrs. Rinku's loan and took away stock for ₹ 16,000.
(ii) Mrs. Pinky took half of the investments at 10% less. Debtors realised ₹ 44,000, Building realised ₹ 4,00,000, Creditors were paid ₹ 5,000 less and the remaining investments were sold for ₹ 19,000. An old furniture not recorded in the books of the firm was taken over by Mrs. Pinky for ₹ 18,000. Realisation expenses amounted to ₹ 6,000.
Prepare Realisation Account.

Try it first, then show our solutionSolution

Workings. Mr. Rinku pays his wife's loan himself (Realisation Dr., Rinku's Capital Cr. ₹ 20,000) and takes stock at ₹ 16,000. Mrs. Pinky takes half the investments (₹ 15,000) at 10% less = ₹ 13,500. Creditors are paid 86,000 − 5,000 = ₹ 81,000. The Investment Fluctuation Fund and the provision for doubtful debts are closed to Realisation Account.
1 mark

Realisation Account

Particulars	₹	Particulars	₹
To Stock	20,000	By Creditors	86,000
To Investments	30,000	By Mrs. Rinku's Loan	20,000
To Debtors	50,000	By Pinky's Husband's Loan	30,000
To Building	3,40,000	By Investment Fluctuation Fund	12,000
To Mr. Rinku's Capital A/c (Mrs. Rinku's loan)	20,000	By Provision for Doubtful Debts	5,000
To Bank A/c (creditors)	81,000	By Mr. Rinku's Capital A/c (stock)	16,000
To Bank A/c (Pinky's husband's loan)	30,000	By Mrs. Pinky's Capital A/c (investments)	13,500
To Bank A/c (realisation expenses)	6,000	By Mrs. Pinky's Capital A/c (old furniture)	18,000
To Gain on Realisation: Mr. Rinku's Capital	51,900	By Bank A/c (debtors)	44,000
To Gain on Realisation: Mrs. Pinky's Capital	34,600	By Bank A/c (building)	4,00,000
		By Bank A/c (investments)	19,000
	6,63,500		6,63,500

4 marks

Gain on realisation ₹ 86,500 is shared 3 : 2: Mr. Rinku ₹ 51,900, Mrs. Pinky ₹ 34,600.
1 mark

Answer: Realisation gain ₹ 86,500 (Mr. Rinku ₹ 51,900, Mrs. Pinky ₹ 34,600); account totals ₹ 6,63,500

Where the marks are

Assets and liabilities transferred (1 mark)
Payments, takeovers and realisations (4 marks)
Gain ₹ 86,500 shared 3 : 2 (1 mark)

Open Q26(b) on its own page

Section B-I

Option I Analysis of Financial Statements: MCQ 27-30, 31-32 (3 marks), 33 (4), 34 (6)

Answer one of these 2 alternatives.
Q27(a) · 1 mark · MCQAccounting Ratios
From the following information obtained from the books of accounts of Ananda Ltd., calculate 'Quick Ratio' of the company :
Total Current Assets (including stock and prepaid expenses) ₹ 2,00,000; Stock ₹ 20,000; Prepaid expenses ₹ 10,000; Current liabilities ₹ 1,70,000.
1. (A)20 : 17
2. (B)1 : 1
3. (C)18 : 17
4. (D)19 : 17
Try it first, then show our solutionSolution
1. Quick assets = current assets − stock − prepaid expenses = 2,00,000 − 20,000 − 10,000 = ₹ 1,70,000.
2. Quick ratio = 1,70,000 / 1,70,000 = 1 : 1. Option (B).
  1 mark
Answer: (B) 1 : 1
Where the marks are
- Quick assets ₹ 1,70,000 over current liabilities (1 mark)
OR
Q27(b) · 1 mark · MCQAnalysis of Financial Statements
'Analysis of financial statements is useful and significant to different users.' Which of the following users is concerned with a firm's long-term solvency and survival ?
1. (A)Labour unions
2. (B)Trade payables
3. (C)Finance manager
4. (D)Lenders
Try it first, then show our solutionSolution
1. Long-term lenders (debenture holders, banks giving term loans) care whether the firm will survive and be able to pay interest and repay principal over many years.
2. Trade payables look at short-term liquidity, labour unions at wages and profits, and the finance manager at overall management. Option (D).
  1 mark
Answer: (D) Lenders
Where the marks are
- Lenders are concerned with long-term solvency (1 mark)
Open Q27(b) on its own page
Q28 · 1 mark · MCQCash Flow Statement
Statement I : In case of non-financial enterprises, payment of interest and dividend are classified as financing activities.
Statement II : In case of financial enterprises, payment of interest and dividend are classified as investing activities.
Choose the correct option from the following :
1. (A)Both the statements are true.
2. (B)Both the statements are false.
3. (C)Statement I is true, but Statement II is false.
4. (D)Statement I is false, but Statement II is true.
Try it first, then show our solutionSolution
1. For a non-financial enterprise, interest and dividend paid are costs of raising finance, so they are financing activities: Statement I is true.
2. For a financial enterprise, interest paid is an operating activity, and dividend paid stays financing; neither is investing. Statement II is false. Option (C).
  1 mark
Answer: (C) Statement I is true, but Statement II is false
Where the marks are
- Classifies interest and dividend paid correctly for both kinds of enterprise (1 mark)
Open Q28 on its own page
Answer one of these 2 alternatives.
Q29(a) · 1 mark · MCQCash Flow Statement
During the year ended 31st March, 2025, H.P. Ltd. paid an interim dividend of ₹ 50,00,000.
From the following, choose the correct option for the purpose of preparing 'Cash Flow Statement' :
1. (A)₹ 50,00,000 paid as interim dividend during the year will be shown as outflow of cash under financing activities and added back to net profit to calculate cash flows from operating activities.
2. (B)₹ 50,00,000 paid as interim dividend during the year will be shown as outflow of cash under financing activities and deducted from net profit to calculate cash flows from operating activities.
3. (C)₹ 50,00,000 paid as interim dividend during the year will be shown as cash outflow from financing activities only.
4. (D)₹ 50,00,000 paid as interim dividend during the year will be added back to net profit to calculate cash flows from operating activities only.
Try it first, then show our solutionSolution
1. Interim dividend is an appropriation of profit, so it is added back to net profit to reach net profit before tax and extraordinary items in operating activities.
2. The cash actually paid is an outflow under financing activities. Option (A).
  1 mark
Answer: (A) Outflow under financing activities and added back to net profit
Where the marks are
- Added back to profit and shown as financing outflow (1 mark)
Open Q29(a) on its own page
OR
Q29(b) · 1 mark · MCQCash Flow Statement
Which of the following is a financing activity for the purpose of preparing a Cash Flow Statement ?
1. (A)Interest received
2. (B)Dividend received
3. (C)Royalties received
4. (D)Interest paid on debentures
Try it first, then show our solutionSolution
1. Interest, dividend and royalties received are operating or investing inflows for a non-financial company.
2. Interest paid on debentures is the cost of borrowed funds: a financing activity. Option (D).
  1 mark
Answer: (D) Interest paid on debentures
Where the marks are
- Interest paid on debentures (1 mark)
Open Q29(b) on its own page
Q30 · 1 mark · MCQAccounting Ratios
The following information is obtained from the books of Devdutt Ltd. :
Working capital – ₹ 4,00,000
Trade Payables – ₹ 50,000
Other Current liabilities – ₹ 1,00,000
Current assets of Devdutt Ltd. are :
1. (A)₹ 2,50,000
2. (B)₹ 4,50,000
3. (C)₹ 5,00,000
4. (D)₹ 5,50,000
Try it first, then show our solutionSolution
1. Working capital = current assets − current liabilities; current liabilities = 50,000 + 1,00,000 = ₹ 1,50,000.
2. Current assets = 4,00,000 + 1,50,000 = ₹ 5,50,000. Option (D).
  1 mark
Answer: (D) ₹ 5,50,000
Where the marks are
- Working capital plus current liabilities (1 mark)
Open Q30 on its own page

Q31 · 3 marks · Short answerAnalysis of Financial Statements

The following information was extracted from the Statement of Profit and Loss of Chaman Ltd. for the year ended 31st March, 2025 :

Particulars	31.3.2025 (₹)	31.3.2024 (₹)
Revenue from operations	40,00,000	32,00,000
Employee Benefit Expenses	20,00,000	16,00,000
Other Expenses	2,00,000	4,00,000
Tax Rate 50%

Prepare a Comparative Statement of Profit and Loss.

Try it first, then show our solutionSolution

Expenses: 2024 = 16,00,000 + 4,00,000 = ₹ 20,00,000; 2025 = 20,00,000 + 2,00,000 = ₹ 22,00,000. Profit before tax: ₹ 12,00,000 and ₹ 18,00,000; tax at 50%; profit after tax ₹ 6,00,000 and ₹ 9,00,000.
1 mark

Comparative Statement of Profit and Loss for the years ended 31st March, 2024 and 2025

Particulars	2023-24 (₹)	2024-25 (₹)	Absolute change (₹)	% change
Revenue from operations	32,00,000	40,00,000	8,00,000	25
Less: Employee benefit expenses	16,00,000	20,00,000	4,00,000	25
Other expenses	4,00,000	2,00,000	(2,00,000)	(50)
Total expenses	20,00,000	22,00,000	2,00,000	10
Profit before tax	12,00,000	18,00,000	6,00,000	50
Less: Tax @ 50%	6,00,000	9,00,000	3,00,000	50
Profit after tax	6,00,000	9,00,000	3,00,000	50

2 marks

Answer: Revenue +25%, total expenses +10%, profit before tax ₹ 12,00,000 → ₹ 18,00,000 (+50%), profit after tax ₹ 6,00,000 → ₹ 9,00,000 (+50%)

Where the marks are

Totals and profits (1 mark)
Absolute and percentage changes (2 marks)

Open Q31 on its own page

Q32 · 3 marks · Short answerFinancial Statements of a Company
Under which major head and sub-heads (if any) will the following items be presented in the Balance Sheet of a company as per Schedule III, Part I of the Companies Act, 2013 ?
(i) Demand deposits with banks
(ii) Long-term loans
(iii) Livestock
Try it first, then show our solutionSolution
1. (i) Demand deposits with banks: major head Current Assets, sub-head Cash and Cash Equivalents.
  1 mark
2. (ii) Long-term loans: major head Non-Current Liabilities, sub-head Long-term Borrowings.
  1 mark
3. (iii) Livestock: major head Non-Current Assets, sub-head Property, Plant and Equipment and Intangible Assets (under Property, Plant and Equipment).
  1 mark
Answer: (i) Current Assets – Cash and Cash Equivalents (ii) Non-Current Liabilities – Long-term Borrowings (iii) Non-Current Assets – Property, Plant and Equipment
Where the marks are
- Each item with major head and sub-head (1 mark each)
Open Q32 on its own page

Answer one of these 2 alternatives.

Q33(a) · 4 marks · Long answerAccounting Ratios

'Net Asset Turnover ratio' of a company is 2 times. State with reason whether the following transactions will increase, decrease or not affect the ratio :
(i) Cash sales ₹ 3,00,000
(ii) Issue of equity shares ₹ 10,00,000
(iii) Issue of 9% debentures ₹ 5,00,000
(iv) Credit purchase of goods ₹ 50,000

Try it first, then show our solutionSolution

Net asset (capital employed) turnover = revenue from operations / capital employed.
(i) Cash sales ₹ 3,00,000 raise revenue from operations; capital employed is unchanged. Increase.
1 mark
(ii) Issue of equity shares ₹ 10,00,000 raises capital employed; revenue is unchanged. Decrease.
1 mark
(iii) Issue of 9% debentures ₹ 5,00,000 raises capital employed (long-term funds); revenue is unchanged. Decrease.
1 mark
(iv) Credit purchase of goods affects neither revenue from operations nor capital employed (current assets and current liabilities rise equally). No effect.
1 mark

Answer: (i) Increase (ii) Decrease (iii) Decrease (iv) No effect

Where the marks are

Each transaction with reason (1 mark each)

Open Q33(a) on its own page

Q33(b) · 4 marks · Long answerAccounting Ratios

From the following information, calculate 'Proprietary Ratio' and 'Debt-to-Equity Ratio' :

Particulars	₹
Equity Share Capital	3,00,000
Preference Share Capital	1,00,000
Reserves and Surplus	1,00,000
Plant and Machinery	3,50,000
Non-Current Investments	1,00,000
Current Assets	2,00,000
Long-term Borrowings	1,50,000

Try it first, then show our solutionSolution

Shareholders' funds = 3,00,000 + 1,00,000 + 1,00,000 = ₹ 5,00,000.
1 mark
Total assets = 3,50,000 + 1,00,000 + 2,00,000 = ₹ 6,50,000. Proprietary ratio = 5,00,000 / 6,50,000 = 0.77 : 1.
1 mark
Debt = long-term borrowings ₹ 1,50,000; equity = shareholders' funds ₹ 5,00,000.
1 mark
Debt-to-equity ratio = 1,50,000 / 5,00,000 = 0.3 : 1.
1 mark

Answer: Proprietary ratio 0.77 : 1; Debt-to-equity ratio 0.3 : 1

Where the marks are

Shareholders' funds (1 mark)
Proprietary ratio (1 mark)
Debt and equity identified (1 mark)
Debt-to-equity ratio (1 mark)

Open Q33(b) on its own page

Q34 · 6 marks · Long answerCash Flow Statement

From the following information obtained from the books of 'Informatics India Ltd.', calculate 'Cash from Operations' :
Net Profit for year ended 31st March, 2025 after providing depreciation ₹ 60,000 and after writing off goodwill ₹ 2,000 was ₹ 3,40,000.
Additional Information :

Particulars	31.3.2024 (₹)	31.3.2025 (₹)
Rent received in advance	20,000	10,000
Accrued interest	30,000	40,000
Prepaid insurance	15,000	20,000
Outstanding salary	25,000	40,000
Trade receivables	1,24,000	1,25,000
Trade payables	1,30,000	1,50,000
Inventory	50,000	80,000
Other current assets	1,00,000	1,20,000

Try it first, then show our solutionSolution

Net profit ₹ 3,40,000 (taken as given; no tax data).
1 mark
Add non-cash items: depreciation ₹ 60,000 and goodwill written off ₹ 2,000 = ₹ 62,000. Operating profit before working capital changes = ₹ 4,02,000.
1 mark

Calculation of cash from operations

Particulars	₹
Net profit	3,40,000
Add: Depreciation	60,000
Add: Goodwill written off	2,000
Operating profit before working capital changes	4,02,000
Add: Increase in trade payables	20,000
Add: Increase in outstanding salary	15,000
Less: Decrease in rent received in advance	(10,000)
Less: Increase in accrued interest	(10,000)
Less: Increase in trade receivables	(1,000)
Less: Increase in prepaid insurance	(5,000)
Less: Increase in inventory	(30,000)
Less: Increase in other current assets	(20,000)
Cash generated from operations	3,61,000

4 marks

Answer: Cash from operations ₹ 3,61,000 (operating profit before working capital changes ₹ 4,02,000)

Where the marks are

Net profit (1 mark)
Non-cash items added (1 mark)
Each working capital change (½ mark each, 4 marks)

Open Q34 on its own page

Section B-II

Option II Computerised Accounting: MCQ 27-30, 31-32 (3 marks), 33 (4), 34 (6)

Answer one of these 2 alternatives.
Q27(a) · 1 mark · MCQOverview of Computerised Accounting System
Which of the following is not a feature of Tailored accounting software ?
1. (A)Designed specially for large enterprises
2. (B)Requires minimal or no support from system
3. (C)Requires special training before use
4. (D)Needs technical installation efforts
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1. Tailored software is customised for large or special businesses; it needs technical installation, special training and continuing support from the vendor.
2. So "requires minimal or no support" is not one of its features. Option (B).
  1 mark
Answer: (B) Requires minimal or no support from system
Where the marks are
- Identifies the non-feature (1 mark)
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OR
Q27(b) · 1 mark · MCQSpreadsheet
When an arithmetic expression or function is executed, the value produced is known as :
1. (A)Horizontal value
2. (B)Vertical value
3. (C)Derived value
4. (D)Basic value
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1. Values typed directly into a cell are basic values.
2. A value produced by evaluating a formula or function is a derived value. Option (C).
  1 mark
Answer: (C) Derived value
Where the marks are
- Derived value (1 mark)
Q28 · 1 mark · MCQSpreadsheet
How is navigation conducted from the first to the last cell in a cluster of data in a column by skipping all the cells in between ?
1. (A)END + Down arrow ( $↓$ )
2. (B)HOME + Page down
3. (C)HOME + Down arrow ( $↓$ )
4. (D)CTRL + Down arrow ( $↓$ ) successively
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1. Pressing END switches on End mode; the next arrow key jumps to the edge of the current block of data.
2. So END followed by the Down arrow moves from the first to the last cell of the data cluster in a column, skipping the cells between. Option (A).
  1 mark
Answer: (A) END + Down arrow
Where the marks are
- END + Down arrow (1 mark)
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Q29 · 1 mark · MCQUse of Spreadsheet in Business Applications
The PMT function in MS Excel is used to :
1. (A)Calculate the total interest on a loan.
2. (B)Calculate the periodic payment for a loan or investment.
3. (C)Calculate the future value of an investment.
4. (D)Calculate the present value of a series of payments.
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1. PMT(rate, nper, pv, [fv], [type]) returns the equal periodic payment (instalment) for a loan or investment at a constant rate.
2. Total interest, future value (FV) and present value (PV) have their own functions. Option (B).
  1 mark
Answer: (B) Calculate the periodic payment for a loan or investment
Where the marks are
- Periodic payment (1 mark)
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Answer one of these 2 alternatives.
Q30(a) · 1 mark · MCQSpreadsheet
#NAME? Error indicates :
1. (A)Syntax error in the formula
2. (B)Missing data in the worksheet
3. (C)Formula referring to a protected call
4. (D)Excel does not understand the text used in the formula.
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1. #NAME? appears when Excel does not recognise text in a formula, such as a misspelt function name or an undefined range name.
2. That is option (D). Option (D).
  1 mark
Answer: (D) Excel does not understand the text used in the formula
Where the marks are
- Unrecognised text in formula (1 mark)
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OR
Q30(b) · 1 mark · MCQOverview of Computerised Accounting System
Which of the following statements best describes the purpose of a data vault in an accounting software ?
1. (A)It helps in data analysis and reporting.
2. (B)It is used to maintain audit trails.
3. (C)It ensures data confidentiality and integrity through restricted access.
4. (D)It is used to back up deleted vouchers automatically.
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1. A data vault in accounting software adds a layer of security, typically by encrypting company data and allowing access only with the right password.
2. Its purpose is to keep data confidential and intact through restricted access. Option (C).
  1 mark
Answer: (C) It ensures data confidentiality and integrity through restricted access
Where the marks are
- Confidentiality and integrity through restricted access (1 mark)
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Q31 · 3 marks · Short answerOverview of Computerised Accounting System
What is meant by codification ? Explain the meaning of mnemonic codes with the help of an example.
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1. Codification means assigning codes (letters, numbers or symbols with a set meaning) to account heads and items so that data can be identified briefly and processed by machine; a code is an identification mark.
  1 mark
2. Mnemonic codes use letters or abbreviations that remind the user of what they stand for, so they are easy to remember.
  1 mark
3. Example: SJ for Sales Journal, PJ for Purchases Journal, CB for Cash Book. A reference list is still needed to read less obvious codes.
  1 mark
Answer: Codification is assigning short codes to items for identification and machine processing; mnemonic codes use memorable letters or abbreviations, e.g. SJ for Sales Journal
Where the marks are
- Meaning of codification (1 mark)
- Meaning of mnemonic codes (1 mark)
- Example (1 mark)
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Q32 · 3 marks · Short answerOverview of Computerised Accounting System
State any three limitations of Computerised Accounting System.
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1. Fast obsolescence: technology changes quickly, so hardware and software must be replaced within short periods, needing fresh investment.
  1 mark
2. Data loss: data may be lost or corrupted through power failure, system crash or virus.
  1 mark
3. Hacking and unplanned reports: data are prone to hacking, and reports not programmed or specified in advance cannot be produced. (Any three such limitations.)
  1 mark
Answer: Fast obsolescence of technology; loss or corruption of data; exposure to hacking (or inability to produce unprogrammed reports)
Where the marks are
- Any three limitations (1 mark each)
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Answer one of these 2 alternatives.
Q33(a) · 4 marks · Long answerSpreadsheet
Give the meaning of the following :
(i) Cell reference
(ii) Relative cell reference
(iii) Absolute cell reference
(iv) Mixed cell reference
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1. (i) Cell reference identifies a cell or range by its column letter and row number (its address), e.g. B5, for use in formulas.
  1 mark
2. (ii) Relative reference (e.g. A1) changes to match the new position when a formula is copied to another cell; this is the default.
  1 mark
3. (iii) Absolute reference puts a dollar sign before both the column letter and the row number of the address (A1 written with a dollar sign before "A" and before "1"). It stays fixed on the same cell however the formula is copied.
  1 mark
4. (iv) Mixed reference puts the dollar sign before only the column letter or only the row number, so one part stays fixed and the other changes when the formula is copied.
  1 mark
Answer: Cell reference = cell address; relative changes when copied; absolute stays fixed; mixed fixes only the row or only the column
Where the marks are
- Each meaning (1 mark each)
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Q33(b) · 4 marks · Long answerUse of Spreadsheet in Business Applications
Explain Array form of LOOKUP function.
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1. The array form of LOOKUP searches for a value in the first row or first column of an array and returns the value in the same position from the last row or last column.
  1 mark
2. Syntax: LOOKUP(lookup_value, array). lookup_value can be a number, text, logical value or a name; array is the range of cells to search.
  1 mark
3. If LOOKUP cannot find lookup_value, it uses the largest value in the array that is less than or equal to it; if lookup_value is smaller than the smallest value in the first row or column, it returns #N/A.
  1 mark
4. If the array is wider than it is tall, LOOKUP searches the first row; if it is square or taller than wide, it searches the first column.
  1 mark
Answer: LOOKUP(lookup_value, array) searches the first row or column of the array and returns the matching position from the last row or column; nearest smaller value if no exact match, #N/A if below the smallest
Where the marks are
- Meaning (1 mark)
- Syntax and arguments (1 mark)
- Behaviour when no exact match (1 mark)
- Row versus column search (1 mark)
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Q34 · 6 marks · Long answerGraphs and Charts for Business Data
'In MS Excel, charts can be formatted and customised to make them more attractive and meaningful.' Explain the procedure to change the shape style of a chart element. Also state various shape fill options available to the user for enhancing the appearance of a chart.
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1. Changing the shape style: select the chart element, go to the Format tab and use the Shape Styles group. Click the More button to see all shape styles.
  1 mark
2. To apply a predefined shape style, click the style wanted in the Shape Styles box.
  1 mark
3. Shape Fill options (Format tab → Shape Fill): pick a colour under Theme Colours or Standard Colours; or choose No Fill to remove colour.
  1 mark
4. Choose More Fill Colours to set a custom colour on the Standard or Custom tab of the Colours dialog box; custom colours then appear under Recent Colours.
  1 mark
5. Choose Picture to fill the shape with an image chosen in the Insert Picture dialog box.
  1 mark
6. Choose Gradient to apply a gradient variation (or More Gradients for more), or Texture to fill with a texture.
  1 mark
Answer: Format tab → Shape Styles (More button or a predefined style); Shape Fill options: theme/standard colour, No Fill, More Fill Colours, Picture, Gradient, Texture
Where the marks are
- Steps to change shape style (2 marks)
- Shape fill options: colour, no fill, more colours, picture, gradient, texture (4 marks)
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