Bihar Board 12th Accountancy Model Question Paper 1 in English Medium

Bihar Board 12th Accountancy Model Papers

Bihar Board 12th Accountancy Model Question Paper 1 in English Medium

Time : 3 Hours 15 Min
Full Marks: 100

Instructions for the candidates

1. Candidates are required to give their answers in their own words as far as practicable.
2. Figures in the right-hand margin indicate full marks.
3. While answering the questions, the candidate should adhere to the word limit as for as practicable.
4. 15 minutes of extra time has been allotted for the candidate to read the questions carefully.
5. This question paper has two sections: Section – A and Section – B.
6. In Section – A, there are 50 objective type questions which are compulsory, each carrying 1 mark. Darken the circle with black/blue ball pen against the correct option on OMR Sheet provided to you. Do not use Whitener/Liquid/Blade/Nail on OMR Sheet, otherwise, the result will be treated as invalid.
7. In Section – B there are Non-objective type questions. There are 25 Short answer type questions, out of which any 15 questions are to be answered. Each question carries 2 marks. Apart from this, there are 8 Long answer type questions, out of which any 4 of them are to answer. Each question carries 5 marks.
8. Use of any electronic device is prohibited.

Objective Type Questions

Question No. 1 to 50 have four options, out of which only one is correct, you have to mark the correct option on the OMR Sheet. (50 × 1 = 50)

Question 1.
Income and Expenditure Account is:
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) None of these.
(c) Nominal A/c

Question 2.
Life membership fees received by a club is shown in:
(a) Income & Expenditure A/c
(b) Balance sheet
(c) Cash A/c
(d) None of these
(b) Balance sheet

Question 3.
Legacy should be treated as:
(a) A Liability
(b) Revenue receipts
(c) An income
(d) None of these
(b) Revenue receipts

Question 4.
In the absence of partnership deed, the partner will be allowed interest on the amount advance to the firm:
(a) 5%
(b) 6%
(c) 9%
(d) 8%
(b) 6%

Question 5.
Which one is not the feature of partnership?
(a) Agreement
(b) Sharing of profit
(c) Limited Liability
(d) Two or more than two-person
(c) Limited Liability

Question 6.
In the absence of partnership deed, interest on capital will be given to the partners at;
(a) 8%. p.a.
(b) 6% p.a.
(c) 9%
(d) None of these.
(b) 6% p.a.

Question 7.
Interest on partners capital is calculated on:
(a) Opening capital
(b) Closing capital
(c) Average capital
(d) None of these
(b) Closing capital

Question 8.
Interest payable on the capital of the partners is recorded in:
(a) Profit & Loss A/c
(b) Realisation A/c
(c) Profit & Loss Appropriation A/c
(d) None of these
(c) Profit & Loss Appropriation A/c

Question 9.
Change in the partnership agreement resulting in:
(a) Reconstitution
(b) Dissolution of firm
(c) Amalgamation of firm
(d) None of these
(a) Reconstitution

Question 10.
Excess of credit side over the debit side in Revaluation Account is a:
(a) Profit
(b) Loss
(c) Receipt
(d) Expense
(a) Profit

Question 11.
Revaluation A/c or Profit & Loss adjustment A/c is a:
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) None of these.
(b) Real A/c

Question 12.
Generally, the interest on capital is considered as:
(a) An appropriation of profit
(b) An asset
(c) An expense
(d) None of these
(a) An appropriation of profit

Question 13.
Goodwill is:
(a) Tangible Asset
(b) Intangible Asset
(c) Current Asset
(d) None of these
(b) Intangible Asset

Question 14.
The excess of average profits over the normal profit is called:
(a) Super profit
(b) fixed profit
(c) Abnormal
(d) Normal profit
(a) Super profit

Question 15.
The monetary value of the reputation of the business is called:
(a) Goodwill
(b) Super profit
(c) Surplus
(d) Normal profit
(a) Goodwill

Question 16.
Profit or Loss on Revaluation is borne by:
(a) Old partners
(b) New partners
(c) All partners
(d) Only two partners.
(a) Old partners

Question 17.
Which of the following asset is compulsorily revalued at the time of admission of a new partner:
(a) Stock
(b) Fixed Assets
(c) Investment
(d) Goodwill
(d) Goodwill

Question 18.
Share of goodwill brought in cash by the new partner is called:
(a) Assets
(b) Profit
(d) None of these.

Question 19.
A firm can be voluntarily dissolved by the partners:
(a) On the majority
(b) On 3/4 members decision
(c) On 1/2 members decision
(d) None of these.
(a) On the majority

Question 20.
Insolvency of a partner will come under what type of dissolution of a firm?
(a) Dissolution by court
(b) Compulsory Dissolution
(c) On the happening of certain contingencies
(d) None of these.
(b) Compulsory Dissolution

Question 21.
On the firm’s dissolution, which one of the following accounts should be prepared at the last?
(a) Realisation Account
(b) Partners capital Account
(c) Bank Account
(d) Partners Loan Account
(a) Realisation Account

Question 22.
In the event of dissolution of a partnership firm, the provision for doubtful debts is transferred to:
(a) Realisation Account
(b) Partner’s capital A/c
(c) Sundry debtors Account
(d) None of the above.
(b) Partner’s capital A/c

Question 23.
On dissolution, If a partner undertakes to make payment of a liability of the firm, the account to be debited is:
(a) Profit & Loss A/c
(b) Realisation A/c
(c) Partner’s Capital A/c
(d) Bank Account
(c) Partner’s Capital A/c

Question 24.
Which of the following is transferred to Realisation A/c:
(a) Balance of cash A/c
(b) Balance of P/L A/c
(c) Creditors
(d) Reserves
(c) Creditors

Question 25.
On dissolution of the firm, Loss on realization account is debited to which account?
(a) Cash account
(b) Partner’s capital account
(c) Realisation account
(d) None of these
(b) Partner’s capital account

Question 26.
Cash balance shown in the balance sheet is shown on the dissolution of the firm in:
(a) Realisation A/c
(b) Cash A/c
(c) Capital A/c
(d) None of these
(a) Realisation A/c

Question 27.
On dissolution of a firm, Bank overdraft is transferred to:
(a) Cash A/c
(b) Bank A/c
(c) Realisation A/c
(d) Partner’s Capital A/c
(c) Realisation A/c

Question 28.
On dissolution, goodwill account is transferred to:
(a) Partner’s Capital A/c
(b) Credit side of cash A/c
(c) Debit side of Realisation A/c
(d) Credit side of Realisation A/c
(a) Partner’s Capital A/c

Question 29.
On dissolution when a partner takes over an asset, is debited:
(a) Realisation A/c
(b) Partner’s capital account
(c) Cash account
(d) Asset account
(b) Partner’s capital account

Question 30.
Unrecorded Liabilities when paid are shown in:
(a) Debit side of Realisation A/c
(b) Debit side of Bank A/c
(c) Credit side of Realisation A/c
(d) Credit side of Bank A/c
(a) Debit side of Realisation A/c

Question 31.
Share Allotment Account is:
(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(d) None of these
(a) Personal A/c

Question 32.
Which one of the following is the registered capital of the company:
(a) Paid-up capital
(b) Uncalled-up capital
(c) Authorized capital
(d) Issued capital
(c) Authorized capital

Question 33.
Dividends are usually paid on:
(a) Authorised capital
(b) Issued capital
(c) Called up capital
(d) Paid-up capital
(d) Paid-up capital

Question 34.
Which statement is issued before the issues of shares:
(a) Prospectus
(b) Article of Association
(c) Memorandum of Association
(d) All of these
(a) Prospectus

Question 35.
A debenture is a:
(a) Loan certificate
(b) Cash certificate
(c) Credit certificate
(d) None of these
(a) Loan certificate

Question 36.
Generally, debentures are:
(a) Secured
(b) Party secured
(c) Unsecured
(d) None of these
(c) Unsecured

Question 37.
Rate of Interest on debenture is:
(a) 12% p.a
(b) 20% p.a
(c) Fixed rate
(d) 15% p.a
(a) 12% p.a

Question 38.
Parents and copyrights fall under the category of:
(a) Current Assets
(b) Liquid Assets
(c) Intangible Assets
(d) None of these
(c) Intangible Assets

Question 39.
Goodwill falls under which category of assets:
(a) Current Assets
(b) Tangible Assets
(c) Intangible Assets
(d) None of these
(c) Intangible Assets

Question 40.
Preliminary expenses are shown in the Balance sheet under which head:
(a) Fixed Assets
(b) Reserve and Surplus
(d) None of these

Question 41.
The financial statements of a business enterprise include:
(a) Balance-sheet
(b) P/L account
(c) Cash flow statement
(d) All of the above
(d) All of the above

Question 42.
In which meeting of company directors report is presented:
(a) Director’s meeting
(b) Annual General meeting
(c) Manager’s meeting
(d) All of the above
(b) Annual General meeting

Question 43.
Which of the following is the limitation of financial analysis:
(a) Window – dressing
(b) Basis of Valuation
(c) Lack of Accuracy
(d) All the above
(a) Window – dressing

Question 44.
The term “Current Liabilities” does not include:
(a) Sundry Creditors
(b) Debentures
(c) Bills payable
(d) o/s expenses
(b) Debentures

Question 45.
Liquid Ratio is also known as:
(a) Current Ratio
(b) Quick Ratio
(c) Capital Ratio
(d) None of these

Question 46.
Debit-Equity Ratio is:
(a) Liquidity Ratio
(b) Activity Ratio
(c) Solvency Ratio
(d) Operating Ratio
(c) Solvency Ratio

Question 47.
Which of the following is non-operating expense:
(a) Rent
(b) Selling expense
(c) Wages
(d) Loss on sale of machinery

Question 48.
The gross profit ratio is the ratio of gross profit to:
(a) Net cash sale
(b) Net credit sale
(c) Closing stook
(d) Net total sale
(d) Net total sale

Question 49.
Which activity comes under “Operating Activities”:
(a) Purchase of Land
(b) Issue of Debentures
(c) Issue of Equity share
(d) Cash Sales
(d) Cash Sales

Question 50.
Which of the following is not a cash inflow:
(a) Sale of Fixed Assets
(b) Purchase of Fixed Assets
(c) Issue of debentures
(d) Sale of goods for cash
(b) Purchase of Fixed Assets

Non-Objective Type Questions

Question no. 1 to 25 are short answer type. Answer any 15 questions. Each question carries 2 marks. (15 × 2 = 30)

Question 1.
What is the Receipt & Payment Account?
A Receipts and Payments Account is a summary of cash receipts and cash payments relating to a given period. According to William Pickles, “ Receipts and Payments Account is nothing more than a Summary of cash Book over a certain period, analysed and classified under suitable headings. It is the form of account most commonly adopted by the treasurers of societies, clubs, associations, etc. When preparing the result of the year’s working

Question 2.
State two objectives of Receipt & Payment A/c.
Following are the two objectives of Receipts and Payments Accounts.

• Receipts and Payments account is prepared to show cash and bank receipts and payments during the period to derive the closing balance of cash and bank.
• It is prepared on the cash basis of accounting.

Question 3.
State any two contents of Partnership deed.
Following are the two contents of a Partnership deed:

• The name and address of the firm and its main business.
• The amount of capital to be introduced by Parents.

Question 4.
List any two items which usually appear on the debit side of partners capital Account, when the capital is fixed.
Following are the items which usually appear on the debit side of the partner’s capital account, when the capital is fixed:

• Drawings
• Interest on the drawing.

Question 5.
State the circumstances on which reconstitutions of partnership firm can take place?
The circumstances on which reconstitutions of partnership firm can take place are as below:

• Change in the profit-sharing ratio among the existing partners.
• Admission of a new partner.
• Retirement of an existing partner.
• Death of a partner.
• The amalgamation of two (or more) partnership firms.

Question 6.
What is the difference between sacrifice ratio & gaining Ratio?
Difference between sacrificing ratio and Gaining ratio

Question 7.
Why Revaluation A/c is prepared on the admission of a partner?
Revaluation account is a nominal account prepared for the purpose of distributing and transferring the profit or loss arising out of increase or decrease in the book value of assets and/or liabilities of the partnership firm at the time of change in profit sharing ratio, admission of a partner, the retirement of a partner as well as at the time of death of a partner.

Question 8.
How would you calculate the amount payable to the retiring partner?
Considering the following point, we can calculate the amount payable to the retiring partner.
(i) The entire amount can be paid in cash.
(i) If fund available:
Journal Entry:
Retiring partner’s capital A/c … Dr.
To Cash A/c
(ii) If the loan is taken from the bank:
(a) Bank or cash A/c … Dr.
To Bank loan A/c
(b) Retiring partner’s capital A/c … Dr
To Bank or Cash A/c
(ii) By transferring capital Balance into Retiring partner’s loan Account:
Journal Entry:
Retiring Partner’s Capital A/c … Dr.
To Retiring Partner’s Loan A/c
(iii) Payment partly in cash and partly by transferring to loan A/c.
Journal Entry:
Retiring Partner’s Capital A/c … Dr
To Cash A/c
To Retiring Partner’s Loan A/c
(iv) Payment of Retiring partner’s loan.in Instalments.
Journal Entry:
(a) Interest A/c … Dr.
To Retiting partner’s Loan A/c
(b) Retiring Partners’s Loan A/c … Dr
To Cash or Bank A/c
(c) Profit and Loss A/c … Dr
To Interest A/c

Question 9.
What are the methods of calculating the deceased partner’s share in the profit of the firm up to the date of death?
Following are the method of calculating the deceased partner’s share in the profit of the firm up to the date of death.

• On the basis of time
• On the basis of turnover or sales.

Question 10.
State any two bases on which a court can pass an order for dissolution of the firm.
Two bases on which a court can pass an order for dissolution of the firm are mention below.

• A partner becoming of unsound mind.
• On misconduct of a partner affecting business.

Question 11.
Give any two objectives of preparing Realisation A/C.
Following are the two objects of preparing realisation Account.

• Realisation account is prepared for disposing of all the assets of the firm and making payment to all the liabilities and dissolution expenses.
• Realisation account is prepared to find out the profit or loss on realisation of assets and payment of liabilities.

Question 12.
What is meant by Government Company?
A government company is a company registered under the Indian Companies Act in which not less than 51% of paid-up share capital is held by the Central Government or State government or partly by Central government partly by one or more State government.

Question 13.
What is meant by the issue of shares at a premium?
A company issues its shares at a premium; when the price at which it sells the shares is higher than their par value. This is quite common since the par value is typically set a minimal value such as Rs. 10 per share. The amount of the premium is the difference between the par value and the selling price.

Question 14.
State two provisions of the companies Act, 2013 for the issue of shares at a discount.
When shares are issued at a price less than their face value it is said they have been issued at discount.
According to section 53:

• Except as provided in section 54 of the Indian Companies Act, 2013, a company shall not issue shares at a discount.
• Any shares issued by a company at a discounted price shall be void.

Question 15.
State two purposes for which security premium amount can be used by a company.
Following are the two purpose for which security premium amount can be used by a company.

• Issuing fully paid bonus shares to the members.
• Writing off the Preliminary expenses of the company.

Question 16.
How would you treat discount on issue of debentures?
When debentures are issued at a discount the amount of discount is debited to Discount on issue of Debentures is a capital loss and is normally recorded at the time of allotment money due.
Discount or loss should be written off as early as possible but within the loan period.

Question 17.
Name out the ways of redemption of debentures.
Methods or way of redemption of debentures are as follow:

• Lump-sum payment on Maturity.
• The draw of lots or Annual drawings payments in instalments.
• Purchase of own Debentures in the open market.
• Redemption by conversion in shares or Debentures.

Question 18.
What are the elements of financial statements?
Elements of financial statements are as follow.

• Assets
• Liabilities
• Equity
• Income
• Expenses.

Question 19.
What are the limitations of Financial Statements?
Limitations of financial statement are as follow:

• Based on historical data.
• Based on Traditions and conventions.
• Ignore Qualitatitave Aspect.
• Ignore price level changes.
• Scope of Manipulations.
• Influenced by Personal Judgements.
• Artificial view.

Question 20.
State two objectives of Financial Statement Analysis?
Following are the two objectives of Financial Analysis:

• To determine the value of the business.
• To determine the value of goodwill.

Question 21.
State the two utility of Comparative financial statement.
Following are the two utility of comparative financial statements.

• Easy comparison.
• Indicate the trend of progress.

Question 22.
What is Profitability Ratio?
Profitability refers to the ability of a business to earn a profit. It shows the efficiency of the business. These ratios measures the profit earning capacity of the company. Profitability has a direct link with sales. This is why we calculate these ratios on the basis of sales.

Question 23.
Name the two importance of Ratio – Analysis.
Importance of Ratio Analysis are as below:

• Accounting ratios make the figures simple and understandable.
• Accounting ratios facilitate comparative analysis of the performance.

Question 24.
Explain the uses of the cash flow statement.
Following are the uses of the cash flow statement:

• Cash flow statement aims at high lights the cash generated from operating activities.
• Cash flow statement helps in planning the repayment of loan schedule and replacement of fixed assets etc.
• Cash is the centre of all financial decisions. It is used as the basis for the projection of future investing and financing plans of the enterprise.
• Cash flow statement helps in the efficient and effective management of cash.

Question 25.
What is meant by cash flow from operating activities?
Cash flows from operating activities are the cash flows from the principal revenue-producing activities of the enterprise.

Question No. 26 to 33 are long answer type. Answer any 4 questions. Each question carries 5 marks. (4 × 5 = 20)

Question 26.
A Rotary Club has kept its accounts on a cash basis and figures for the last year are given below. Prepare Receipts & Payments Account for the year.
Receipts and payments Account

Question 27.
How is income and Expenditure Account prepared from Receipts and Payments Account?
Income and expenditure are prepared from receipts and payment account and additional information mention below. Step involved in the preparation of Income and expenditure account following is the steps to be taken care while preparing income and expenditure account from receipts and payment A/c.

• Step – 1: Include all items of revenue receipts and expenses, on the respective side of the account.
• Step – 2: Ensure that no items of capital incomes and expenses are included in this account.
• Steps – 3: Also, adjustment for amounts prepared and outstanding, with respect to each item will have to be made.
• Step – 4: Further, items included in receipts and payment account, depreciation, provisions, and profit or loss on the sale of assets will have to be included in this account.
• Steps – 5: Finally, after putting down all items of revenue and expenses. You will get a balance. The resulting balance will then reveal the surplus or deficit for the period.

Question 28.
A and B are equal partners in a firm. On 1st January 2018, their capital respectively is Rs. 13000 and Rs. 11000. They admit C a partner for 1/4 share of the firm. This new partner brought his capital on the basis of the combined capital of A & B Adjust the old partners capital account according to the new profit sharing ratio.
The combined capital of A and B = Rs. 13,000 + 11,000 = 24,000
C’s share in profit = 1/4
Let the profit of the firm be 1, then
Combined share of A and B = $$1-\frac{1}{4}=\frac{5}{4}$$
Reciprocal of $$\frac{5}{4}=\frac{4}{5}$$
Therefore, the total capital of the firm = Rs. 24000 × $$\frac{5}{4}$$ = 30,000
C’s share in total capital = 30,000 × $$\frac{1}{4}$$ = 7500
C’s share in capital on the basis of combined capital of A and B = 24,000 × $$\frac{1}{4}$$ = 6000

Question 29.
Describe the methods of payment of the amount due to a retiring partner?
Following are the adjustment at the time of retirement of a partner. On the retirement of a partner, there is a change in the relations of the partners and reconstitution of the partnership firm. An existing partner leaves the firm and remaining partners continue in the firm under the fresh agreement. Following are the various matters that need adjustment at the time of retirement of a partner.

• Changing in profit – sharing Ratio.
• Accounting Treatment of Goodwill.
• Revaluation of Assets and Liabilities.
• Distribution of Accumulated profits (Reserve) and Losses.
• Joint Life (Insurance) Policy.
• Calculation of Total Amount Payable to Retiring Partner.
• Statement of the Total Amount Payable to Retiring Partner.

Question 30.
What Journal entries will you pass in case of dissolution of the partnership firm?
Journal entries at the time of Dissolution of a firm are the following:

Question 31.
Pass the necessary journal entries for the following transactions on the dissolution of the firm of P and Q after the various Assets (other than cash) and outside liabilities have been transferred to Realisations A/C:

1. Bank loan Rs. 12,000 paid.
2. Stock worth Rs. 16,000 was taken over by partner Q.
3. Partner P paid a creditor Rs. 4,000
4. Assets not appearing in the books of account realized Rs. 1200.
5. Expenses of Realisation Rs. 2,000 paid by partner Q.

Question 32.
A company earns a gross profit of 20 % on cost. Its credit sales are twice its cash sales. If the credit sales are Rs. 4,00,000, Calculate the gross profit of the company.
Gross profit = $$\frac{600,000 \times 16.67}{100}$$ = 100,020