Strictly Based on the Latest Syllabus issued by CBSE Board for 2015 Examination QUESTION BANK. Chapter-Wise Solutions. Accountancy

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2 Strictly Based on the Latest Syllabus issued by CBSE Board for 2015 Examination QUESTION BANK Chapter-Wise Solutions Accountancy Includes Compartment (Solved) Paper Published by : OSWAAL BOOKS Oswaal House 1/11, Sahitya Kunj, M.G. Road, AGRA Ph.: , , Fax : , contact@oswaalbooks.com, website :

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4 CONTENTS Syllabus v - viii Compartment (Solved) Paper, PART - A : Accounting for Partnership firms and Companies Unit 1 : Accounting For Partnership Firms 1. Accounting for Partnership Firms Reconstitution and Dissolution Admission of a Partner Retirement & Death of a Partner Dissolution of Partnership Firm Unit 2 : Accounting for Companies 6. Accounting for Share Capital Accounting for Debentures PART - B : Financial Statement Analysis Unit 3 : Analysis of Financial Statements 8. Financial Statements Analysis of Financial Statement Tools for Financial Analysis Accounting Ratios Unit 4 : Cash Flow Statement 12. Cash Flow Statements

5 PREFACE CBSE always believes in Global Trends of Educational Transformation. The CBSE curriculum gets its lead from National Curriculum Framework 2005 and Right to Free and Compulsory Education Act The aim of CBSE Curriculum is not just to let learners obtain basic knowledge but to make them life-long learners. CBSE always updates and reviews the syllabus to make it more relevant with educational transformation and in last few years the chapters and topics which CBSE has added are very interesting and increase practical knowledge. Oswaal Question banks are designed to nurture individuality and thus enhance one's innate potentials which help in increasing the self-study mode for students. This book strengthens knowledge and attitude related to subject. It is designed in such a way that students can set their own goals and can improve their problem solving and thinking skills. The journey of this book is never ending as this book is reviewed every year and new questions, previous year's examination questions, new HOTS or any change in syllabus is updated time to time. Also regular review and reader's feedback increases the efficiency of this book gradually. Moreover, every Question Bank strictly follows the latest syllabus and pattern, and contains more than sufficient questions and brief description of chapters, which help students in practicing and completing the syllabus. Higher Order Thinking Skills (HOTS) questions, Value Based Questions, Previous Year Questions and Important Questions from NCERT makes this book complete and very efficient. Solutions are always checked twice and tried to make precise as per marking scheme. Practically, this book provides students everything they need to learn. At last we would like to thank our authors, editors, reviewers and specially students who regularly send us suggestions which helps in continuous improvement of this book and makes this book stand in the category of One of the Best. Wish you all Happy Learning. Publisher

6 One Paper SYLLABUS Accountancy (Code No. 055) Class XII ( ) Theory: 80 Marks 3 Hours Units Periods Marks Part A Accounting for Partnership Firms and Companies Unit 1. Accounting for Partnership Firms Unit 2. Accounting for Companies Part B Financial Statement Analysis Unit 3. Analysis of Financial Statements Unit 4. Cash Flow Statement Part C Project Work Project work will include: Project File: 4 Marks Written Test: 12 Marks (One Hour) Viva Voce: 4 Marks OR Part B Computerized Accounting Unit 3. Computerized Accounting Part C Practical Work Practical work will include: File 4 Marks Practical Examination 12 Marks (One Hour) Viva Voce 4 Marks Part A: Accounting for Partnership Firms and Companies ( v ) 60 Marks 150 Periods Unit 1: Accounting for Partnership Firms Partnership: features, Partnership deed. Provisions of the Indian Partnership Act 1932 in the absence of partnership deed. Fixed v/s fluctuating capital accounts.preparation of Profit & Loss Appropriation account- division of profit among partners, guarantee of profits. Past adjustments (relating to interest on capital, interest on drawing, salary and profit sharing ratio). Goodwill: nature, factors affecting and methods of valuation - average profit, super profit and capitalization. Scope: Interest on partner s loan is to be treated as a charge against profits. Accounting for Partnership firms - Reconstitution and Dissolution. Change in the Profit Sharing Ratio among the existing partners - sacrificing ratio, gaining ratio. Accounting for revaluation of assets and re-assessment of liabilities and treatment of reserves and accumulated profits. Admission of a partner - effect of admission of a partner on change in the profit sharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and re - assessment of liabilities, treatment of reserves and accumulated profits, adjustment of capital accounts and preparation of balance sheet.

7 Retirement and death of a partner: effect of retirement /death of a partner on change in profit sharing ratio, treatment of goodwill (as per AS 26), treatment for revaluation of assets and re - assessment of liabilities, adjustment of accumulated profits and reserves, adjustment of capital accounts and preparation of balance sheet. Preparation of loan account of the retiring partner. Calculation of deceased partner s share of profit till the date of death. Preparation of deceased partner s capital account, executor s account and preparation of balance sheet. Dissolution of a partnership firm: types of dissolution of a firm. Settlement of accounts - preparation of realization account, and other related accounts: Capital accounts of partners and Cash/ Bank A/c (excluding piecemeal distribution, sale to a company and insolvency of partner(s)). Note: (i) If value of asset is not given, its realised value should be taken as nil. (ii) In case, the realisation expenses are borne by a partner, clear indication should be given regarding the payment thereof. (iii) Workmen Compensation Fund is to be discussed. Unit -2 Accounting for Companies Accounting for Share Capital Share and share capital: nature and types. Accounting for share capital: issue and allotment of equity shares, private placement of shares, Public subscription of shares - over subscription and under subscription of shares; Issue at par and at premium and at discount, calls in advance and arrears (excluding interest), issue of shares for consideration other than cash. Accounting treatment of forfeiture and re-issue of shares. Disclosure of share capital in company s Balance Sheet. Accounting for Debentures Debentures: Issue of debentures at par, at a premium and at a discount. Issue of debentures for consideration other than cash; Issue of debentures with terms of redemption; debentures as collateral security-concept, interest on debentures. Redemption of debentures: Lump sum, draw of lots and purchase in the open market (excluding exinterest and cum-interest). Creation of Debenture Redemption Reserve. Part B: (i) Financial Statement Analysis 20 Marks 50 Periods Unit 3: Analysis of Financial Statements Financial statements of a company: Statement of Profit and Loss and Balance Sheet in the prescribed form with major headings and sub headings (as per Schedule VI to the Companies Act, 1956). Scope: Exceptional Items, Extraordinary Items and Profit (loss) from Discontinued Operations are excluded. Financial Statement Analysis: Objectives and limitations. Tools for Financial Statement Analysis: Comparative statements, common size statements, cash flow analysis, ratio analysis. Accounting Ratios: Objectives, classification and computation. Liquidity Ratios: Current ratio and Quick ratio. Solvency Ratios: Debt to Equity Ratio, Total Asset to Debt Ratio, Proprietary Ratio and Interest Coverage Ratio. Activity Ratios: Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Trade Payables Turnover Ratio and Working Capital Turnover Ratio. Profitability Ratios: Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, Net Profit Ratio and Return on Investment. Scope: As ratio analysis is a managerial tool, for the computation of profitability ratios, relevant information should be specified whether it is a part of Statement of Profit and Loss as per Schedule VI or not. ( vi )

8 Unit 4: Cash Flow Statement Meaning, objectives and preparation (as per AS 3 (Revised) (Indirect Method only) Scope: (i) Adjustments relating to depreciation and amortisation, profit or loss on sale of assets including investments, dividend (both final and interim) and tax. (ii) Bank overdraft and cash credit to be treated as short term borrwings. (iii) Current Investments to be taken as Marketable securities unless otherwise specified. PROJECT WORK Kindly refer to the Guidelines published by the CBSE. OR Part B: Computerised Accounting 20 Marks 40 Periods 20 Marks 60 Periods Unit 3: Computerised Accounting Overview of Computerised Accounting System. Introduction: Application in Accounting. Features of Computerised Accounting System. Structure of CAS. Software Packages: Generic; Specific; Tailored. Accounting Application of Electronic Spreadsheet. Concept of Electronic Spreadsheet. Features offered by Electronic Spreadsheet. Application in Generating Accounting Information - Bank Reconciliation Statement; Asset Accounting; Loan Repayment of loan schedule, Ratio Analysis Data Representation- Graphs, Charts and Diagrams. Using Computerized Accounting System. Steps in installation of CAS, codification and Hierarchy of account heads, creation of accounts. Data: Entry, Validation and Verification. Adjusting entries, preparation of balance sheet, profit and loss account with closing entries and opening entries. Need and security features of the system. Database Management System (DBMS) Concept and Features of DBMS. DBMS in Business Application. Generating Accounting Information - Payroll. Part C : Practical Work Please refer to the guidelines published by CBSE. Prescribed Books: Financial Accounting -I Class XI NCERT Publication Accountancy -II Class XI NCERT Publication Accountancy -I Class XII NCERT Publication Accountancy -II Class XII NCERT Publication 20 Marks 26 Periods ( vii )

9 One Paper Suggested Question Paper Design Accountancy (Code No. 055) Class XII ( ) March 2015 Examination Theory: 80 Marks Duration: 3 hrs. S. No. Typology of Questions Very Short Answer MCQ 1 Mark Short Answer I 3 Marks Short Answer II 4 Marks Long Answer I 6 Marks Long Answer II 8 Marks Marks % 1. Remembering - (Knowledge based Simple recall questions, to know specific facts, terms, concepts, principles, or theories; Identify, define, or recite, information) 2. Understanding- (Comprehension to be familiar with meaning and to understand conceptually, interpret, compare, contrast, explain, paraphrase, or interpret information) 3. Application (Use abstract information in concrete situation, to apply knowledge to new situations; Use given content to interpret a situation, provide an example, or solve a problem) High Order Thinking Skills (Analysis & Synthesis- Classify, compare, contrast, or differentiate between different pieces of information; Organize and/or integrate unique pieces of information from a variety of sources) Evaluation and Multi-Disciplinary- (Appraise, judge, and/or justify the value or worth of a decision or outcome, or to predict outcomes based on values) TOTAL 8x1=8 4x3=12 5x4=20 4x6=24 2x8=16 80(23) +20 Projects 100 ( viii )

10 SOLVED PAPER Compartment 2014 Accountancy (Delhi & Outside Delhi) Class XII Time allowed: 3 hours ] [ Maximum Marks : 80 GENERAL INSTRUCTIONS (i) This question paper contains three parts A, B and C. (i) Part A is compulsory for all candidates. (i) Candidates can attempt only one part of the remaining parts B and C. (i) All parts of the questions should be attempted at one place. Delhi Set 1 Code : 67/1/1 PART A (Accounting for Partnership Firms and Companies) 1. The partnership deed is silent on payment of salary to partners. Amita, a partner, claimed that since she managed the business, she should get a monthly salary of ` 10,000. Is she entitled for the salary? Give reason Under what circumstance will the premium for goodwill paid by the incoming partner not be recorded in the books of accounts? 1 3. Name the asset that is not transferred to the debit side of Realisation account, but brings certain amount of cash against its disposal at the time of dissolution of the firm What is meant by private placement of shares? 1 5. P, Q and R were partners in a firm sharing profits in the ratio of 5 : 4 : 3 respectively. Their capitals were ` 50,000, ` 40,000 and ` 30,000 respectively. State the ratio in which the goodwill of the firm, amounting to ` 6,00,000, will be adjusted in the capital accounts of the remaining partners on the retirement of Q At what rate, interest on calls-in-advance is paid by the company according to Table A of Companies Act, 1956? 1 7. What is meant by Debenture? 1 8. A business earned average profits of ` 6,00,000 during the last few years. The normal rate of profits in the similar type of business is 10%. The total value of assets and liabilities of the business were ` 22,00,000 and ` 5,60,000 respectively. Calculate the value of goodwill of the firm by super profit method if the goodwill is valued at 2½ years purchase of super profits Sargam Ltd. issued ` 1,00,000 6% debentures of ` 10 each at a permium ` 2 per debenture on 1 st April, The issue was fully subscribed. Interest will be paid at the end of each financial year. Pass necessary journal entries for the year Maharana Ltd s main business is manufacturing of tyres. The company is very particular about the observation of the provisions of the Companies Act and SEBI guidelines. On 1 st April, 2010 the company issued ` 18,00,000, 8% debentures of ` 100 each. The debentures were redeemed. Since the manufacturing of tyres results in air pollution, the company had installed a plant for its effective control. Pass necessary journal entries for the redemption of debentures. Also identify the value observed by Maharana Ltd. It is assumed that the company has adequate balance in Debenture Redemption Reserve Account. 3

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