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Cheese and Slice… (Class 12 Accountancy SQP 2023-24, Q18b)

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AccountancyCBSE Class 12 · Sample paper, session 2023-24 · 3 marks · Short answer

CBSE Class 12 Accountancy sample paper 2023-24: question 18(b)

From the official CBSE sample question paper for 2023-24, section A, question 18(b), for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q18(b) · 3 marks · Short answerAccounting for Partnership: Basic Concepts

Cheese and Slice are equal partners. Their capitals as on April 01, 2022 were Rs. 50,000 and Rs. 1,00,000 respectively. After the accounts for the financial year ending March 31, 2023 have been prepared, it is observed that interest on capital @ 6% per annum and salary to Cheese @ ₹5,000 per annum, as provided in the partnership deed has not been credited to the partners' capital accounts before distribution of profits.

You are required to give necessary rectifying entries using P&L adjustment account.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2023-24.

Hints

Open one hint at a time and try again before the next.

Hint 1

Omitted items are credited to partners through a P&L Adjustment account.

Hint 2

The total omitted (₹ 14,000) came out of profits already shared equally, so it is taken back equally.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Interest on capital at 6%: Cheese ₹ 3,000, Slice ₹ 6,000.

    ParticularsDr. (₹)Cr. (₹)
    Profit and Loss Adjustment A/c Dr.9,000
    To Cheese's Capital A/c3,000
    To Slice's Capital A/c6,000
    (Being interest on capital omitted earlier, now provided)
    1 mark

  2. Salary to Cheese

    ParticularsDr. (₹)Cr. (₹)
    Profit and Loss Adjustment A/c Dr.5,000
    To Cheese's Capital A/c5,000
    (Being salary omitted earlier, now provided)
    1 mark

  3. Close the adjustment account (debit ₹ 14,000) equally.

    ParticularsDr. (₹)Cr. (₹)
    Cheese's Capital A/c Dr.7,000
    Slice's Capital A/c Dr.7,000
    To Profit and Loss Adjustment A/c14,000
    (Being loss on adjustment transferred to partners equally)
    1 mark

Answer: P&L Adjustment Dr. ₹ 9,000 to Cheese ₹ 3,000 and Slice ₹ 6,000; P&L Adjustment Dr. ₹ 5,000 to Cheese; Cheese and Slice Dr. ₹ 7,000 each to P&L Adjustment ₹ 14,000

Where the marks are

  • Interest on capital entry (1 mark)
  • Salary entry (1 mark)
  • Transfer of ₹ 14,000 equally (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Accounting for Partnership: Basic Concepts, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2023-24: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.