+2 Accountancy Previous Year Questions

Ch : Accounting for Partnership – Basic Concepts – Click here

Ch.2 Partnership Basic Concepts

The written agreement of partnership is called ______.
(a) Articles of Association (b) Memorandum of Association (c) Partnership Deed (d) None of these
Ans : partnership deed
_______ account shows how profit is distributed among partners.
(a) Partners’ Current Account
(b) Profit and Loss Appropriation Account
(c) Partners’ Capital Account
(d) Profit and Loss Account
Ans : (b) Profit and Loss Appropriation Account
A Partnership firm incurs a loss ofRs. 28,000 during the year 2018-19. Which among the following is admissible to Partners at the end of this year ?
(a) Interest on Partners Loan
(b) Interest on Partners Capital
(c) Commission to Partners
(d) Salary to Partners
Ans : (a) Interest on Partners Loan
Identify the name of the account which is prepared to show, how the profits are distributed among partners.
(a) Income & Expenditure A/c.
(b) Profit & Loss A/c.
(c) Profit & Loss Appropriation A/c.
(d) None of these
Ans : (c) Profit & Loss Appropriation A/c.
Under fixed capital method of maintaining capital accounts, yearly adjustment are transferred to partner’s ______.
(a) Capital Account (b) Current Account
(c) Loan Account (d) Cash Account
Ans : Current Account
Partners are entitled to get _____ in the absence of an agreement.
(a) Salary (b) Share of Profit in capital ratio (c) Interest on Partners loan @ 6% p.a. (d) Commission
Ans : Interest on Partners loan @ 6% p.a
Under fixed capital method, the interest on drawings is :

(a) credited to capital account (b) debited to capital account (c) credited to current account (d) debited to current account
Ans : (d) debited to current account

A Partnership firm incurs a loss of Rs. 28,000 during the year 2018-19. Which among the following is admissible to Partners at the end of this year ?

(a) Interest on Partners Loan

(b) Interest on Partners Capital

(d) Salary to Partners
Ans : (a) Interest on Partners Loan

Siva is a partner in United Tours and Travels. He withdrawsRs. 4,000 per month regularly in the middle of every month during the year 2019. The rate of interest on drawings is 8%. Calculate Interest on drawings for the year 2019. (2 score)

Ans: Total drawings = 4000*12=48,000
Interest on drawing = 48000*8/100*6/12 = 1920
Rejith is a partner in a firm. On 1st January 2017, his capital account balance was Rs:2,20,000. As per partnership agreement a partner is entitled to 6% interest per annum on his capital. Rejith introduced additional capital Rs. 80,000 on 01-07-2017 and withdrew Rs: 50,000 on 1-10-2017. Calculate the interest on capital for the year ending 31st December 2017. (3 score)
Ans : Interest on capital
For 220000×6/100×6/12 = 6600 (220000 for 6 month, 1-1-17 to 1-7-17)
300000×6/100×3/12 = 4500 (300000 for 3 months ,1-7-17 to 1-10-17)
250000×6/100×3/12 = 3750 (250000 for 3 months ,1-10-17 to 31-12-17)
Interest on capital 14,850
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Madhu, a partner withdrewRs. 1,100 per month for his personal use during the year ending 31st December, 2017. Calculate interest on his drawings at 10% p.a. when the amount is withdrawn on the first day of every month.
Ans : Total drawings =1100*12=13200
Interest on drawings = 13200*10/100*6.5/12=715.00
Chaithanya and Sandra are partners in a firm, sharing profits and losses equally. During the financial year 2017-18, Sandra withdrew Rs.20,000 quarterly at the beginning of each quarter. Find out the interest on drawings @ 8% p.a.
Ans : Total Drawings = 20000*4 =80,000
Interest on drawings = 80000*8/100*7.5/12 =4000
Rajan and Gopan are partners in a firm. If they do not have any partnership agreement, what should be done in the following cases ?
(a) Rajan demands a salary of Rs.2,000 per month for his service in business.
(b) Gopan wants that profit should be distributed in the ratio of Capitals, but Rajan wants that it should be distributed equally.
How will you treat the following items in partnership accounts in the absence of partnership deed ? (2 Marks)
(a) Profit Sharing Ratio(b) Interest on Drawings

Ans :Rules applicable in the absence of partnership deed
1. Profit sharing ratio – equally
2. Interest on capital – not entitled
3. Interest on drawings – not entitled
4. Remuneration to partners – not entitled
5. Interest on loan –@ 6%
Write any 4 differences between fixed capital and fluctuating capital methods. (3Marks)
What are the two methods of maintaining Capital Accounts of partners ? Give any four differences between these two methods.

Ans : Fixed capital method and Fluctuating capital method
Difference between Fixed capital method and Fluctuating capital method

	Fixed Capital Method	Fluctuating Capital Method
1-Number of Accounts	Two accounts,Capital a/c and current a/c	One account- Capital a/c(all items included in capital a/c itself)
2-Nature	Remain un altered	Fluctuates
3-Adjustments	Made in Current a/c	Adjustment made in current a/c
4-Appearance in the B/S	Both Capital and Current a/c	Only capital a/c
5-Specifically mentioned in Partnership deed	It should be mentioned in the Partnership Deed		Not necessary

Calculate interest on drawings from the following :

Month & Year	AmountRs.
Jan.-1, 2018	12,000
Feb.- 28, 2018	6,000
April -1, 2018	8,000
Aug.-1, 2018	6,000
Nov.-30, 2018	4,000
Dec.-31, 2018	2,000

Accounting year closes on Dec. 31st every year and interest on drawings charged at 6% p.a.

Ans:

Date

Amount

Period (Months)

Product

Jan 1,2018

Feb 28,2018

April 1,2018

Aug 1,2018

Nov 30,2018

Dec 31,2018

12,000

6,000

8,000

6,000

40,000

2,000

14,400

60,000

72,000

30,000

4000

___0___

3,10,000

Interest on Drawings = 3,10,000×6/100×1/12 = Rs.1550 (5 Marks)
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Priya is a partner in a firm, her capital at the end of the financial year 2016-17 was 2,00,000. During the year she had withdrawn Rs.30,000. Her share of profit before charging interest on capital for the year wasRs. 8,000. Calculate interest on capital @ 10% p.a.
Ans :

Closing capital Balance – 200,000
Add : Drawings – 30000
2,30,000
Less : Share of profit 8000
Opening capital 2,22,000
Interest on capital = 2,22,000×10/100=22,200

List out any four items to be credited to a Partner’s current account ,when capitals are fixed. (2 marks)
Mr. Rajeev, a partner in a firm withdrew Rs .2,000 each every month from the firm. Calculate the amount of interest on drawings @ 8% per annum, assuming that he withdraws the amount :
(a) at the beginning of each month.
(b) at the end of each month.
Jeeja and Rekha are partners in a firm. Their capital balances as on 01-04-2020 were Jeeja Rs. 1,50,000 and Rekha Rs. 2,00,000. On 1-10-2020 Jeeja introduced additional capital ofRs. 50,000. Calculate the interest on capital @ 10% per annum assuming that they close their books of account on 31st March every year.
A & B are partners in a firm sharing profits and losses in the ratio of 2:1. They admit C as a partner for 1/4 share in profit with a guaranteed minimum profit of Rs.10,000. The net profit of the firm after C’s admission isRs. 30,000. C will get a profit of _______.
(a)Rs. 7,500 (b)Rs. 10,000 (c)Rs. 5,000 (d)Rs. 15,000
Ans :10,000
Akhil, a partner in a firm, withdrew the following amounts during the year ended March 31, 2021 for his personal use. Date of Withdrawal Amount

April 30, 2020 – 7,000
Sept. 30, 2020 – 4,000
Dec. 1, 2020 – 5,000

Calculate the amount of interest on drawings to be charged from Akhil, if the rate of interest is at 8% p.a.
Ans : Product method ,806.66 or 807

Santhosh and Suresh are partners in a firm. Their capital accounts showed a balance ofRs. 50,000 andRs. 40,000 as on 01/04/2020. Santhosh introduced an additional capital ofRs. 10,000 on 01/07/2020 and SureshRs. 5,000 on 01/01/2021. Calculate partners interest on capital @ 6% p.a. for the year ended 31/03/2021.
Ans : Santhosh – 3450, Suresh – 2475
Reena and Rehna are partners in a firm sharing profits and losses in the ratio of 3 : 2 with capitals ofRs. 5,00,000 andRs. 4,00,000 respectively. The profit of the firm for the year ended March 31, 2021 wasRs. 1,00,000. Interest on capital is to be allowed at 5% p.a. Reena is to be paid a salary ofRs. 2,500 per month. Prepare the Profit and Loss Appropriation Account to show the distribution of profit among the partners.
Ans : Profit Reena – 15000, Rehna – 10000

Complete the following table with regard to the provisions applicable in the absence of partnership deed on the basis of the hint given :

Hint : Interest on capital	No.
(a) Sharing of Profits and Losses	……………………..
(b) Interest on drawings	…………………….
(c) Interest on loan from a partner	………………………
(d) Remuneration to partner	…………………..

Mohan is a partner in a firm. On 1st April, 2017 his capital account showed a balance of 5,00,000. He had withdrawn 50,000 from his capital on 1st July,2017. Calculate the amount of interest on capital @ 6%p.a. for the year ending 31 st March, 2018.
Ans:27750
Roy and Sara are partners sharing profits and losses in the ratio of 2:1.The following details also available.

Roy

Sara

Capital

Salary (Per month)

Interest on capital

Drawings

Interest on drawings

1,00,000

800

8000

500

70,000

700

4500

350

Profit during the year amounts to Rs.60,000

Prepare partners capital accounts, assuming that capitals are fluctuating.
Ans : Roy – 149100, Sara – 99150.

Gireesh and Ramees are equal partners in firm and their capitals as on 01-04-2016 were Rs.80,000 and Rs 60,000 respectively. Asper the partnership deed Gireesh is entitled to monthly salary of Rs.3000.Ramees gets a commission of 10 on the Net profit of the business, before charging such commission .They are also eligible for interest on capital at 8% p.a. Interest on drawings is charged as 6%.p.a. Gireesh withdrew Rs.2000 ath the beginning of every month for his personal purpose.Total drawings of Ramees during 2016-17 was Rs .20000.

Prepare Profit and Loss Appropriation Account to show the distribution of profit among partners.The net profit of the business for the year ended 31-03-2017 was rs.124000(before charging above items)

Ans :

Profit – 65780
Cammissio – 124000
Interest on drawings
Gireesh – 24000 x 6/100 x 6.5/12 = 780
Ramees – 20000 x 6/100 x 6/12 = 600

Ch.3 Reconstitution of a Partnership – Admission of a Partner – Click here

Ch.3 Reconstitution of a Partnership – Admission of a Partner

. Reconstitution of a partnership happens at the time of ______.
(a) Admission of a partner (b) Retirement of a partner (c) Death of a partner (d) All of Z intothese
Ans : (d) All of these
X and Y are partners sharing profits in the ratio 3 : 2. They admit Z into partnership with 1/5 share in future profits. What will be the sacrificing ratio ?
(a) 3 : 2 (b) 2 : 1 (c) 1 : 1 (D) 3:1
Ans : (a) 3 : 2
What do you mean by goodwill ? List out any 2 factors affecting goodwill. (3Marks)
Ans : Goodwill

Goodwill the value of reputation of a firm in respect of the profits expected in future over and above the normal profits earned by other similar firms belonging to the same industry.( One score for meaning)

Factors affecting the value of goodwill (Any Two points – One score each. Max. 3 scores)

1) Favorable Location
2) Nature of business
3) Efficiency of management
4) Market situation
5) Special advantages
6) Time Factor

Amala and Nandana are partners in a firm sharing profits and losses in the ratio of 3 : 2. They decided to admit Hajara as a new partner for 1/5th share in profits,which she acquired equally from Amala and Nandana.Calculate the new ratio after admission. (3 Marks)
Ans :
Old Ratio of Amala and Nandana= 3:2
Hajira’s share = 1/5 (acquired equally(1/10 each) from old partners

So, Amala’s New share = 3/5 – 1/10 = (6/10-1/10) = 5/10 ( 1 score)
Nandana’s new share = 2/5 – 1/10 = (4/10- 1/10) = 3/10 ( 1 score)
Hajira’s share = 1/10+1/10 = 1/5 or 2/10 ( 1⁄2 score)
New ratio of Amala, Nandana and Hajira = 5:3:2 ( 1 1⁄2 scores)
on admission of a partner, the Debit Balance of Profit and Loss,Account shown in the Balance Sheet of the firm denotes :

(a) Accumulated Profit
(b) Accumulated Loss
(c) Revaluation Loss
(d) General Resele
Ans:(b) Accumulated Loss

Anu and Beena are partners in a flnn sharir.t-s profits in 3 : 2 ratio. They admitted Bindu as a new partner. Anu surrendered 1/ 3 of her share iu favor of Bildu and Beena surrendered 1/4 of her share in favour of Bindu. Calculate the new profit sharing ratio.
Ans:4:3:3
Afnas and Sakariya are partners in a firm sharing profits and losses in the ratio of 3 : 2. Ukkash is admitted as a new partnerr for 1/4 share in profits. He should . brings in Rs.50,000 as capital and his share of goodwill in cash, Firm’s goodwill is valued at Rs. 80,000 at the time of his admission.

Give necessary Journal Entries, on the assumption that 50% of the premium amount is withdrawn by the old partners.

Kareem and Raheem are partners in a firm sharing profits in the ratio 2 : 1. They admit Jacob into partnership. Kareem surrenders 1/4 of his share and Raheem 1/2 of his share in favour of Jacob. Calculate the new profit sharing ratio. (2 Score)
Ans : 3:1:2
Neena and Meera are partners in a business. Their total capital of the firm is Rs. 1,20,000.The normal rate of return on similar type of business is 10%. The actual profits for the three years were Rs. 34,000, Rs. 40,000 and Rs. 46,000. Calculate the value of goodwill if goodwill is valued at 2 years purchase of the last 3 years average super profit. (3 Score)
Ans: Normal Profit : 12,000.Average Profit – 40,000
Super profit – 28,000
GW -28000*2 = 56000
Goodwill brought in by the incoming partner in cash is credited to _______.

(a) Old Partners Capital Account in Sacrificing ratio
(b) Old Partners Capital Account in new ratio
(c) New Partners Capital Account in Gaining ratio
(d) New Partners Capital Account in new ratio
Ans : (a) Old Partners Capital Account in Sacrificing ratio

At the time of reconstitution of a firm the value of Building is found appreciated by 20%. What journal entry will be passed for above adjustment with regard to revaluation ?
Ans : Building A/c Dr
To Revaluation A/c
Briefly explain any two circumstances which need for valuation of goodwill in a Partnership firm. (2 score)
Ans :
1 – Change in the profit sharing ratio of partners
2 – Admission of a Partner
3 – Retirement of a Partner
4 – Death of a Partner
5 – Dissolution of Partnership firm
6 – Amalgamation of firms
Enumerate any two rights acquired by a newly admitted partner of a firm. (2 score)
Ans :
1 – Right to share the Assets of the firm
2 – Right to share the Profits of the firm
Abhinav and Adarsh are partners in a firm sharing profits and losses in the ratio of 5 : 3. Ananya is admitted in the firm for 1/5th share of profits. She has to bring in 20,000 as capital and 4,000 as her share of goodwill. Give the necessary journal entries if the amount of goodwill is retained in the business.
Ans : Journal Entries – Treatment of Goodwill:

(i) Cash A/c Dr. 20,000
To Ananya’s Capital A/c 20,000

(ii)Cash A/c Dr. 4000
To Goodwill A/c 4,000

(Capital and Goodwill brought in by Ananya)

(ii) Goodwill A/c Dr. 4,000
To Abhinav’s Capital A/c 2,500
To Adarsh’s Capital A/c 1,500

(Goodwill transferred to old partners in the ratio of 5:3)
( 2 scores for entry – 2 scores may be awarded for the calculation of sacrificing ratio, Max.4 scores)

The profits for 5 years of a firm are as follows :
2013 – Rs. 12,000
2014 – Rs. 18,000
2015 – Rs. 17,000
2016 – Rs. 14,000
2017 – Rs. 24,000
Calculate goodwill of the firm on the basis of 3 years purchase of 5 years average profits.
Ans : . Total Profit = 12000+18000+17000+14000+24000 = 85,000

Average Profit 85000/5 = 17,000

Goodwill = 3 years purchase of the average profit ie. 17000 x 3 = 51000

( One score for Total profit, Two scores for Average Profit, Two scores for Goodwill- Max. 5 scores)

What are the different modes of reconstitution of a partnership firm ? Briefly explain.
Ans:
Modes of Reconstitution of a Partnership Firm: 5

Change in the profit sharing ratio among the existing partners
Sometimes partners of an existing firm may decide to change their existing profit sharing ratio.The change in profit sharing ratio may lead to increase or decrease partner’s share in the firm. In other words, certain partner may gain others will lose.
Admission of a new partner
Inclusion of a person as a partner to an existing partnership firm is called admission of a partner. When a firm requires additional capital or managerial help or both for the expansion of its business, a firm can admit a person as a partner to an existing firm.
Retirement of a partner
Retirement means withdrawal of a partner from an existing business. Retirement may be due to his bad health, old age or change in business interests.
Death of a partner
Death of a partner will also result in the change of relationship between surviving partners. Their profit sharing ratio will change and it leads to reconstitution.
Amalgamation of two firms
Sometimes two firms amalgamate in order to avoid competition and reduce administrative cost.This arrangement brings new relationships among partners of two firms. A new agreement is signed. New profit sharing arrangements takes place. Here also reconstitution occurred.

( One score each for brief explanation of points – 1⁄2 scores each for points only- Max. 5 scores)

Abhirami and Dayana are partners in a firm sharing profits and losses equally. Their balance sheet as on 31st Dec. 2018 were as follows :

Liabilities

Amount

Assets

Amount

Creditors

Bills payable

Capital : Abhirami

Dhanya

12,000

6,000

38,000

40,000

Cash

Debtors

Furniture

Land &Building

P&L A/c

10,000

24,000

32,000

28,000

2,000

96,000

They decided to admit Manju as a partner on that date for a 1/4 share in profit and

the following were agreed upon :
(i) Manju contributed Rs. 20,000 as capital and Rs. 10,000 as her share of goodwill.
(ii) Furniture is valued at Rs. 28,000.
(iii) Land and buildings found appreciated by 10%.
(iv) A provision of 5% on debtors were created for bad debts.

Prepare the Revaluation account and Capital account of the firm after admission.
Ans : Revaluation loss 2400 ( 1200+1200)
Capital Ac Balance Abhirami – 40800, Dhanya – 42800, Manju – 20000

Given below is the Balance Sheet of Ramu and Jafar who were sharing Profits and Losses in the ratio of 3 : 2 as on 31st December, 2015. (2020 SAY)

Liabilities

Amount

Assets

Amount

Sundry creditors

Bills Payable

Outstanding expenses

Capital : Ramu 50,000

Jafar 40,000

27,500

12,000

2,500

90,000

Cash

Debtors

Stock

Furniture

Plant and Machinery

12,000

27,000

15,000

20,000

58,000

1,32,000

Shoby is admitted as a partner on the date of Balance Sheet on the following terms :

(a) Shoby will bring Rs. 30,000 as capital and Rs. 12,000 for his share of goodwill for ¼ share in profits.
(b) Plant and Machinery is depreciated by Rs. 8,000.

(d) A provision for doubtful debts is to be created at 10% on debtors.

(e) Creditors were unrecorded to the extent of Rs. 1,000.

Prepare Revaluation Account, Partners Capital Account and the new Balance Sheet after the admission of Shoby.
Ans : Revaluation Loss : 14700 ( Ramu – 8820,Jafer-5880)
Capital A/c Balance Ramu – 48380, Jafer – 38920, Shoby – 30,000)

The profit for the last five years of a firm were as follows :
Year Profit

2014 – 62,000
2015 – 58,000
2016 – 84,000
2017 – 78,000
2018 – 80,000
Capital employed in the firm is Rs. 5,00,000. Calculate the value of goodwill on the basis of 3 years purchase of Super Profit, assuming that the normal rate of return on capital employed is 12%.
Ans : 1 – Average profit = 362000/5=72400
2 – Normal profit = 500000*12/100=60000
3 – Super profit – 72400-60000=12400
4 – Goodwill = 12400*3 =37200

Sathy and Varsha are partners in a firm sharing profit and losses in the ratio of 3 : 1. Their Balance Sheet as on 1st January 2019 was as follows :

Liabilities

Amount

Assets

Amount

Rent outstanding

Creditors

General reserve

Capital – Sathy

Varsha

3000

18000

10000

200,000

60,000

Cash in hand

Investment

Stock

Debtors 44,000

Less provision Bad debts 4000

Machinery

building

12,000

60,000

24,000

40,000

30,000

1,25,000

2,91,000

Suma is admitted into the firm with 1⁄4 share in profits on the following terms :

(1) Market value of Investment are to be taken at Rs. 70,000.
(2) Buildings were found undervalued by Rs. 4,000.
(3) Stock is revalued at Rs. 26,000.
(4) It was found that creditors included a sum of Rs. 3,000 which was not to be paid.
(5) Machinery is to be depreciated by 10%.

Prepare Revaluation Account. (5 Marks)
Ans : Revaluation profit – 16000 (Sathy – 16000, Varsha – 4000)

Complete the following Journal Entry :
_________________________ A/c. Dr.
To Cash A/c.

(The amount of goodwill brought in by the new partner withdrawn by the existing partners.)
Ans: Old partners capital A/c Dr

The profits earned by a business firm during the last 4 years were Rs. 90,000,80,000, Rs. 1,20,000 and Rs. 1,10,000 respectively. Normal rate of return in similar business is 8%. Calculate the value of goodwill by capitalization of average profit. Assume that the value of net assets is Rs. 9,00,000.
Ans : Average profit – 100,000
Capitalisation of Average profit = 100000*100/8 =12,50,000
Goodwill = 12,50,000 – 900000= 3,50,000

Given below is the Balance Sheet of Amal and Midhun who share profits and losses in the ratio of 3 : 2.

Liabilities

Amount

Assets

Amount

Creditors

Partner’s capital A/c

Amal 40,000
Midhun 30.000

50,000

70,000

Cash at bank

Sundry debtors

Stock

Machinery

Furniture

5,000

20,000

50,000

25,000

1,20,000

Mr. Faisal is admitted into the partnership on the following terms :

(i) New partner has to bring in Rs. 25,000 as capital and Rs. 10,000 as goodwill for 1/6th share.
(ii) A creditor of Rs. 1,000 will not claim his amount.
(iii) Furniture is revalued at Rs. 20,000.
(iv) Stock reduced by Rs. 2,000.
(v) Depreciation on machinery @ 10% p.a.

Prepare the Revaluation A/c., Partners’ Capital A/c. and the Balance Sheet after admission.

Ans : Revaluation loss – 11000 ( Amal – 6600,Midhun – 4400)

Partner’s capital A/c
Amal kc -39400
Midhun -29600
Faisal – 25000
Balance sheet total :143000

on admission of a partner, the Debit Balance of Profit and loss account shown in the Balance Sheet of the firm, denotes :

(a) Accumulated Profit
(b) Accumulated Loss
(c) Revaluation Loss
(d) General Resele

The proportion in which existing partner surrender their share of profit in favor of newly admitted partner is called :

(a) Sacrificing ratio (b) Gaining ratio (c) Old ratio (d) New ratio

Arun and Babu are partners in a frim sharing profit and losses in the ratio of 3 : 2. They admitted Chandu as a partner for 1/6 share with a guaranteed minimum profit of Rs.15,000 The Net profit of the firm for the year ending 31st March, 2021 was Rs. 60,000. Chandu’s share of profit will be :

(a) Rs. 10,000 (b) Rs. 15,000

The capitalized value of average profit of a business is Rs. 5,00,000 and value of net assets of the business is Rs. 4,20,000. The Goodwill of the business under capitalization method will be

(a) Rs. 5,00,000 (b) Rs.4,20,000

State any two circumstances under which goodwill of a partnership firm is valued. Smitha and Varghese are partners sharing profits in the ratio of 2 : 1. They admitted Soorya as a new partner for 1/4share in the future profits of the firm. Calculate new profit sharing ratio of Smitha, Varghese and Soorya.
The share of goodwill brought in by the new partner is shared by the old partners in their _______.

(a) Old ratio (b) Sacrificing ratio (c) New ratio (d) Ratio of their capitals

Goodwill existing in the books at the time of admission of a partner is transferred to the capital accounts of _____.

(a) old partners in sacrificing ratio (b) all partners in new ratio (c) old partners in old ratio (d) all partners in capital ratio

State any four circumstances which require the valuation of goodwill.

Ans : Change in profit sharing ratio
Admission of a partner
Retirement and death of a partner
Dissolution of partners ship
Amalgamation of partnership

Balu and Binu are partners in a firm sharing profits in 5:3 ratio. They admit Babu as a new partner and the new profit sharing ratio was agreed at 4:2:1. Calculate the sacrificing ratio.
Ans : SR 3:54
Lalu and Balu were partners in a firm sharing profits and losses in the ratio of 3:1. They admitted Jisha as a new partner for 1/5 share. Jisha brings Rs. 1,00,000 as capital and Rs. 20,000 as her share of goodwill. On the date of Jisha’s admission the balance sheet of the firm showed a balance of Rs. 10,000 in Reserve Fund. Record necessary journal entries for the treatment of these items on Jisha’s admission.
The profit of a firm for the last four years are as follows :

Year Profit
2018 – 10,000
2019 – 15,000
2020 – 20,000
2021 – 30,000

Calculate the value of goodwill on the basis of 2 years purchase of weighted average profits based on weights 1, 2, 3 and 4.
Ans: GW – 44000

Following is the Balance Sheet of Leena and Jyothi who share profits in the ratio of 3:1 as on 31 March, 2021.

Rajesh is admitted as a partner on the date of the balance sheet as per the following terms :

Rajesh will bring in Rs. 1,00,000 as his capital for 1/5 share in profits.
2. Plant & Machinery is to be appreciated to Rs. 60,000 and the value of buildings is to be reduced by 10%.
3. Stock is revalued at Rs. 20,000.
4. Investment worth Rs. 2,500 is to be taken into account.
Prepare Revaluation Account.

Ans: Revaluation Profit – Leena – 7875, Jyothi – 2625

If an incoming partner brings the premium of goodwill in cash, it will be shared by the old partners in :

(a) new profit sharing ratio (b) old profit sharing ratio (c) capital ratio (d) sacrificing ratio

Calculate the value of goodwill under capitalization method.
Average profit of the last 5 years: Rs.40,000
Normal rate of return in similar business : 10%

Total assets: Rs.5,00,000
Outside liabilities: Rs. 1,80,000
Ans:80000

Haritha and Samitha are partners in a firm sharing profits and losses in the ratio of 5:3. The following is their balance sheet as on 31 st march 2018.

Balance sheet as on 31 St march 2018

Liabilities

Amount

Assets

Amount

Creditors

General reserved

Capital :

Haritha

samitha

32,000

8,000

40,000

30,000

Bank Accounts

Bills receivables

Debtors 18,000

Less Provision 1500

Stock

Furniture

Land & Building

12,000

2,500

16,500

17,000

22,000

40,000

1,10,000

They decided to admit Sameera into partnership on 1st April 2018 on the following terms.

That sameera has to bring Rs.25,000 as capital for ¼ share in future profits.
That sameera will bring her share of Goodwill Rs.9000
The value of land and Building be appreciated and brought upto Rs.45,000
Furniture to be reduced by 10%
Stock revalued by 10%
Creditors of Rs.2000 is not likely to be claimed.

Prepare Revaluation Account, the capital Accounts of Partners and Balance sheet of the new firm.
Ans : Rev. Profit – 3800, Capital – 53000,37800,25000 B/s – 145800

Ch.4 Retirement and Death of a Partner

Ch.4 Retirement and Death of a Partner .

The ratio in which the continuing partners share the profit of outgoing partner is called______.
Ans : (b) Gaining Ratio
(a) Old Ratio (b) Gaining Ratio (c) Sacrificing Ratio (d) New Ratio
New ratio – Old ratio = _______
(a) Sacrificing ratio (b) Current ratio(c) Gaining ratio d) None of these
Ans : (c) Gaining ratio
Give journal entries for the following :
(a) The amount due to retiring partner is paid cash in full.
(b) When the amount due to retiring partner is transferred to his loan account.

Ans : (a) Retiring partner’s Capital A/c Dr
To Cash / Bank A/c

(b) Retiring partner’s Capital A/c Dr
To Retiring partner’s loan A/c

Najeeba, Sherin and Nasar are equal partners. Nasar decides to retire. On the date of his retirement, the Balance Sheet of the firm showed a General Reserve of ` 40,000 and Profit and Loss Account ` 20,000 (Dr.)

Show the accounting treatment for the above.
Ans :a) General Reserve A/c Dr 40000
To Najeeba Capital A/c 13333
To Shering Capital A/c 13333
To Nasar Capital A/c 13334

b) Najeeba Capital A/c 6666
Shering Capital A/c 6666
Nasar Capital A/c 6667
To P&L A/c 20000

Sruthi, Aleena and Febina are partners in the ratio of 3 : 2 : 1. Sruthi retires and her share is acquired by the remaining partners in the ratio of 3 : 2. Calculate the new ratio.
Ans : New Ratio 19:11
On death of a partner, his legal representatives were settled by paying Rs,1,20,000 As per his Capital Account. The amount due to him after all adjustments was Rs.105000. Ascertain the deceased partners share of goodwill from the firm.(Hint : Case of hidden goodwill)

‘M’, ‘N’ and ‘O’ are equal partners. M decides to retire from the firm. On the date of his retirement the Balance Sheet of the firm showed the following :

(a) Profit and Loss Account (Dr.) ` 12,000.
(b) General Reserve ` 48,000.
Pass necessary journal entries to record the above.

Ans : a) M Capital A/c Dr – 4000
N Capital A/c Dr – 4000
O Capital A/c Dr – 4000
To Profit and Loss A/c 12000 (Debit balance – loss)

b) General Reserve A/c Dr 48,000
To M Capital A/c Dr – 16000
N Capital A/c Dr – 16000
O Capital A/c Dr – 16000

List out the various adjustments required in the accounts of a firm on retirement of a partner. (6 Points)
List out any 6 accounting treatments involved on the retirement or death of a partner. (3Marks)
Ans : Accounting Treatments on Retirement
1. Change in Profit sharing ratio.
2. Calculation of gaining ratio.
3. Adjustment regarding goodwill.
4. Adjustment of reserves and accumulated profits/losses.
5. Revaluation of assets and liabilities.
6. Ascertainment of profit or loss up to the date of retirement.
7. Calculation of total amount due to the retiring / deceased partner.
8. Settlement of total amount due to the retiring / deceased partner.
9. Adjustment of capitals of continuing partner
(Any six points – 1⁄2 scores for each point. Max. 3 scores)

Ameena, Fidha and Gayathri are partners sharing profits and losses in the ratio of 5 : 3 : 2. Fidha retires from the firm and her share was acquired by Ameena and Gayathri in the ratio of 2 : 1. Calculate the new ratio. (3Marks)

Ans: Old Ratio of Ameena, Fidha and Gayathri = 5:3:2 4
Fidha retires and her share = 3/10
Fidha’s share acquired by Ameena and Gayathri in the ratio of 2:1
Fidha’s share acquired by Ameena = 3/10 X 2/3 =6/30
So Amena’s new share =5/10 + 6/30 (15/30+ 6/30)=21/30
Fidha’s share acquired by Gayathri = 3/10 X 1/3 = 3/30
So Gayathri’s new share = 2/10+3/30(6/30+3/30)=9/30
New ratio of Ameena and Gayathri = 21:9 or 7 : 3
( One score each for above calculation – Max. 4 scores)

Manu, Nithin and Sanu are partners in a firm, sharing profits in the ratio 3 : 1 : 1. Their capital was :
Manu – ` 40,000
Nithin – ` 20,000
Sanu – ` 20,000
The partnership deed provided that
(a) Interest on capital was provided at 10% per annum.
(b) A joint life policy was taken by partners for ` 24,000.
(c) The goodwill of the firm is valued at ` 30,000.
(d) Sanu’s drawings for the previous year were ` 40,000.
(e) The profit of the last 3 years ending 31st December were ` 8,000, ` 6,400 and 6,000.
(f) Profit till the date of death is calculated on the basis of last three years average profit.

Sanu died on July 1, 2016. Prepare an account showing the amount payable to the representatives of Sanu. (5 Score)
Ans :
Sanu’s Executors Loan Account

Particulars

Amount

Particulars

Amount

Drawings

40,000

Sanu Capital

Interest on capital

Joint life policy

Goodwill

P&L Suspense A/c

Balance c/d

20,000

1,000

4,800

6,000

680

7520

40,000

Do you think that there is a need for the revaluation of assets and liabilities of a firm on the retirement of a partner ? Justify your answer. (2 score)
Ans : a) Yes
b) To find out the appropriate share of retiring partner in the firm.
Following is the Balance Sheet of Lekshmi, Priya and Deepa, who share profits and losses equally.

Liabilities

Amount

Assets

Amount

Creditors

Reserve fund

Capital – Lekshmi

Priya

Deepa

12,000

36,000

29,200

Cash at bank

Sundry debtors

Stock

Fixed assets

26,600

26,000

18,000

65,000

135600

Lekshmi died on 31st May 2017. According to the Partnership deed her legal representatives are entitled to :

(1) Balance in the capital account and undistributed profit/loss.
(2) Share of Goodwill under average profit method.
(3) Share in the profit upto the date of death based on last year Profit.
(4) Interest on capital @ 6% p.a.

The goodwill of the firm under average profit method is ` 42,000, and profit for the year 2016-17 ` 21,600. Calculate the amount payable to Lekshmi’s legal representatives.

Ans : Calculation of Amount payable Lekshmi’s executors
Capital Account Balance – 29,200
Add : Share of reserve (36000*⅓) -12,000
Share of Goodwill (42000*⅓) -14000
Share of Profit (21600*2/12*⅓) – 1200
Interest on capital (29200*6/100*2/12) – 292
Amount payable to lakshmi’s executors – 56692

Gracy, Shiyana and Subisha were partners in a firm sharing profits in the ratio of 5 : 3 : 2.
Their balance sheet as on 31-03-2017 stood as follows :

Balance Sheet as on 31-03-2017

Liabilities

Amount

Assets

Amount

Sundry creditors

General reserve

Partners capital A/c

Gracy 60,000

Shiyana 50,000

Subisha 30,000

22,000

12,000

1,40,111

Land and Building

Plant and Machinery

Stock of goods

Sundry debtors

Cash at bank

40,000

50,000

30,000

38,000

16,000

1.74.000

1,74,000

Gracy died on 1-10-2017. Her legal heirs are to be settled on the following terms :
(a) Interest on capital to be provided @ 10% p.a.
(b) Profit till the date of death may be calculated on the basis of last year’s profit, which was 30,000.
Prepare the Capital Account of the deceased partner.

On death of a partner, his legal representatives were settled by paying Rs.1,20,000′ As per the Capital Account. The amount due to him after all adjustments was Rs .1,05,000. Ascertain the deceased partner’s share of goodwill from the firm.

(Hint : Case of hidden goodwill)

On retirement of a partner, the amount of General Reserve is transferred to all partner’s capital account in :

(a) New Profit Sharing Ratio (b) Capital Ratio (c) Old Profit Sharing Ratio (d) Gaining Ratio

Anil, Biju and Chithra were partners sharing profit and losses in the ratio of 5 : 4 : 3. Biju retired from the firm. Gaining ratio of the remaining partners will be :

(a) 5 : 4 (b) 5 : 3 (c) 4 : 3 (d) Equal

Anila, Kamla and Vimla are partners in a firm. Anila retired from the firm on 1st April, 2017. On that date ` 2,00,000 becomes due to her and the amount was transferred to her Loan Account. Remaining partners promised to pay the amount due to her in four equal annual installments together with interest @ 8% annum. Prepare Anila’s Loan Account till the loan closed.
(last year balance 54000)
The balance of the Revaluation account prepared at the time of retirement of a partner is transferred to _______.

(a) All partners’ capital accounts in old ratio. (b) Existing partners capital account in new ratio. (c) Old partners capital account in gaining ratio. (d) Existing partners capital account in capital ratio.

Rekha, Remya and Resmi are partners in a firm. Remya retires from the firm and 36,000 becomes due to her. Rekha and Resmi promise to pay her the amount due in four equal installments at the end of every year with interest at 10% p.a. on outstanding balance. Prepare Remya’s Loan Account for 4 years.
( closing balance 9900)
Najeeba, Sherin and Nasar are equal partners. Nasar decides to retire. On the date of his retirement, the Balance Sheet of the firm showed a General Reserve of ` 40,000 and Profit and Loss Account ` 20,000 (Dr.)

Show the accounting treatment for the above.

Sruthi, Aleena and Febina are partners in the ratio of 3 : 2 : 1. Sruthi retires and her share is acquired by the remaining partners in the ratio of 3 : 2. Calculate the new ratio.
Ans: 19:11
Gracy, Shiyana and Subisha were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Their balance sheet as on 31-03-2017 stood as follows :

Gracy died on 1-10-2017. Her legal heirs are to be settled on the following terms :

(a) Interest on capital to be provided @ 10% p.a.

(b) Profit till the date of death may be calculated on the basis of last year’s profit, which was Rs. 30,000.

Prepare the Capital Account of the deceased partner.

(Ans :76500)

Muneer, Madhav and Mathew are partners sharing profits in the ratio of 5:3:2. Muneer retires from the firm. Madhav and Mathew decided to share future profits in the ratio of 4:3. Calculate gaining ratio of continuing partners.
Ans:19:16
Meera, Radha and Rajani are partners sharing profits and losses in the ratio of 4:3:2. Radha died on 30ft September, 2017. Calculate the share of profits payable to Radha from 1st April, 2017 upto her date of death on the basis of the average profits of the last 3 years.

Profits for the last 3 years are :

Year Profit

2014- 15 – 1,20,000
20t5- 16 – 80,000
2016- 17 – 70,000

Also, pass journal entry for the same.
(Ans :15000, P&L susp: A/c to Radha’s capital)

Neeraj, Nima and Aswin are partners sharing profits in the ratio of 4:3:2′ Goodwill is appearing in the books at a value of Rs. 45,000. Nima retires. on retirement, goodwill of the firm is valued at Rs.90,000. Neeraj and Aswin decided to share future profits in the ratio of 3:2 and also not to show goodwill in the books. Give journal entries’
Ans: GR :7:8
On death of a partner, his legal representatives were settled by paying Rs.1,20,000 As per his Capital Account. The amount due to him after all adjustments was
Rs.1,05,000. Ascertain the deceased pariner’s share of goodwill from the firm.

(Hint : Case of hidden goodwiil)

Arun, Hari and Jaya are partners in a firm sharing profits and losses in the ratio of 5 : 3 :2. Jaya retired from the firm and the continuing partners decided to share future profits in the ratio of 3 :2 respectively. On her retirement, the firm’s goodwill is valued at Rs.50.000.

Record necessary journal entries for the treatment of goodwill without opening the Goodwill Account.
(Ans: Arun-5000,Hari-5000 to Jaya -10000)

Tiji, Jiji and Mini are partners sharing profits in the ratio of 3:2:1. Tiji retires from the firm and her share is taken up by Jiji and Mini in the ratio of 3:2. Calculate the new profit sharing ratio.
Ans:19:11
Prakash, Rajesh and Sareesh are equal partners in a firm. Rajesh retires from the firm. On the date of retirement Rs.1,20.000 became due to him. Prakash and Sareesh promises to pay him in ‘4’ equal installments at the end of every year. plus accrued interest @ 12% p.a. on the unpaid balance.

(a) Pass journal entry for the amount due to Rajesli on the date of retirement.

(b) Prepare ‘Rajesh’s loan account’, till the amount is fully paid off.

Priya,Priji and Viji are partners ,sharing profit and losses in the ratio of 4:3:2. Priji retired and goodwill is valued at Rs.63,000.Priya and Viji are decided to share future profits and losses in the ratio of 5:3.Record necessary journal entry,when goodwill is raised full value and written off immediately.
(Ans: Good will to all partners -63000, Priya-39375,viji-23625 to goodwill – 63000
Renjith,Sumesh and Aneesh are partners in a firm.Sumesh retires from the firm.On the date of retirement of Sumesh Rs.45,000 become due tohim .Renjith and Aneesh promise to pay the amount in installments.Prepare Sumesh’s loan account ,when they agree to pay three yearly installments of Rs.15,000 including interest at 12% p.a. On the outstanding balance during the first three years and the balance including interest in fourth year.
P,Q and R are partners in a firm.Q retires.On his date of retirement Rs.60,000 becomes due to him.P and R promise to pay him in installments every yearat the end of the year.Prepare Q’s Loan A/c. in the following cases”

A -When the payment is made four yearly installments plus interest @12% p.a. On the unpaid balance.

B – When they agree to pay three yearly installments of Rs.20,000including interest @12% p.a. On the outstanding balance during the first three years and the balance including interest in the fourth year.

On retirement of a partner, the amount of General Reserve is transferred to all partner’s capital account in :
(a) New Profit Sharing Ratio (b) Capital Ratio
(c) Old Profit Sharing Ratio (d) Gaining Ratio
Rajesh, Sabu and Muneer were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Muneer retired from the firm and the new profit – sharing ratio after retirement is 3:2. The gaining ratio is :
(a) 3 : 2 (b) 2 : 1 (c) 1 : 1 (d) 2 : 3
The balance of Revaluation account prepared at the time of retirement of a partner is transferred to _______.

(a) All partners capital account in old ratio. (b) Existing partners capital account in new ratio. (c) Old partners capital account in gaining ratio. (d) Existing partners capital account in capital ratio.

Rekha, Remya and Resmi are partners in a firm. Remya retires from the firm and ` 36,000 becomes due to her. Rekha and Resmi promise to pay her the amount due in four equal instalments at the end of every year with interest at 10% p.a. Out outstanding balance. Prepare Remya’s Loan Account for 4 years.
Meera, Radha and Rajani are partners sharing profits and losses in the ratio of 4:3:2. Radha died on 30th September, 2017. Calculate the share of profits payable to Radha from 1st April, 2017 upto her date of death on the basis of the average profits of the last 3 years.

Profits for the last 3 years are :
Year Profit
2014-15 – 1,20,000
2015-16 – 80,000
2016-17 – 70,000

Also, pass journal entry for the same.

Ch.5 Dissolution of a Partnership Firm – Click here

Ch.5 Dissolution of a Partnership Firm .

Write down the journal entries for the following at the time of dissolution of a partnership firm. (2 Marks)
(a) For sale of assets
(b) For payment of realisation expenses

Ans :(a) Sale of Asset:
Cash / Bank Account Dr
To Realisation Account

b) Payment of realisations expenses:
Realisation Account Dr
To Cash / Bank Account
(One score each for correct entry)

Profit on realization is credited to _______ account.
(a) Profit and Loss Account
(b) Partners’ Capital Account
(c) Revaluation Account
(d) Profit and Loss Appropriation Account
Ans: (b) Partners’ Capital Account
At the time of dissolution of a firm, which of the following liability will be paid first ?

(a) Outstanding Salary of partners
(b) Partners Loan
(c) Partners Capital
(d) Sundry Creditors
Ans : (d) Sundry Creditors

Unrecorded assets when taken over by a partner are shown in ______.

(a) Debit side of Realization Account
(b) Credit side of Bank Account
(c) Debit side of Bank Account
(d) Credit side of Realization Account
Ans : (d) Credit side of Realization Account

Adithyan and Theertha are partners of Aswani Traders in the ratio of 2:3.Their Balance Sheet as on 31-12-2019 stood as follows

Balance sheet as on 31-12-2019

Liabilities

Amount

Assets

Amount

Capital – Adithyan 50,000

Theertha 30,000

Sundry creditors

80,000

20,000

Land and Buildings

Furniture

Stock

40,000

20,000

40,000

1,00,000

Prepare realisation account on the assumption that the firm is dissolved on the above date by considering the following:
A- Land and Building realised Rs.60,000
B- Furniture sold for Rs.20,000
C-Stock taken over by adithyan Rs.15,000
Ans : Realisation loss 5000 ( Adithyan – 2000, Theertha – 3000)

Jose and Joy are partners in a firm. Due to heavy loss in business Joy demands to dissolve the firm. Mention any four ways of dissolution of a firm. (2 Marks)
Ans : Dissolution by agreement
Compulsory dissolution
On happening of certain contingencies
Dissolution by court
Dissolution by notice
A and B are partners in a firm. They decided to dissolve the firm on 31st December, 2018. Give journal entries for the following transactions on dissolution :

(a) Realisation expense of 1,500 paid by the firm.
(b) Furniture taken over by ‘A’ for ` 4,000.
(c) ‘B’ is ready to discharge the creditors ` 5,000.

Ans: a) Realisation A/c Dr 1500
To Cash / bank a/c 1500

b) A’s Capital A/c Dr 4000
To Realisation A/c 4000

c) Realisation A/c Dr 5000
To B’s Capital A/c 5000

Sumith and Amith are partners, who were share profit in the ratio of 3 : 2. Following isthe Balance Sheet as on 31st March, 2018. (2020 Say)

Balance Sheet as on March 31.2018

Liabilities

Amount

Assets

Amount

Creditors

Reserve

Capital :Sumith

Amith

53,000

15,500

25,000

Bank

Stock

Debtors 28,500

Less.Prov.Doubtful debts- 500

Fixed Assets

30,000

12,000

28,000

48,500

1,18,500

The firm was dissolved on March 31, 2018. Prepare a realisation account with the following additional information :

(a) Stock realised at ` 1,000 less.
(b) Debtors realised at a discount of 10%.
(c) Fixed assets realised at ` 50,000.
(d) Realisation expense of ` 1,000 paid by Sumith.
Ans : Loss on realisation – 2850 ( Sumith – 1710, Amith – 1140)

State any three differences between dissolution of partnership and dissolution of firm. (3 score)
Mention two situations in which ‘Compulsory Dissolution’ of a partnership business takes Place. (2 score)
Ans: a) When the business of the firm becomes illegal

b) When all the partners or all except one become insolvent
c) When all the partners or all except one decides to retire from the firm
d) When all the partners or all except one die

Pass journal entries on dissolution of a firm in connection with realisation of assets in the following cases:
A – Furniture worth Rs.12,000 taken over by mr.Roy on of the partner at the book value.
B -Un recorded machinery sold out for Rs.4000
Ans : Roys capital A/c Dr – 12000
To Realisataion A/c – 12000
Cash A/c Dr – 4000
To Realisation A/c – 4000
Ashina, a Commerce student is in a dilemma that she has no clear idea about the differences between dissolution of partnership and dissolution of firm. Can you help her by giving three points of difference in this regard ?
Ans:

Basis	Dissolution of partnership	Dissolution of Firm
1-Termination of business	Business is not terminated	The business is terminated
2-settlement of Assets and liabilities	Assets and liabilities re valued and new B/S prepared	Assets are sold,liabilities are paid off and balance utilised towards settlement of partners
3-Court intervention	Court does not intervene.Dissolution of partnership by mutual agreement	A firm can be dissolved by the court order
4-Economic relationship	Economic relationship still continues,but with some changes	Economic relationship among the partners comes to an end
5-Closure of books	Books of accounts are not closed as the business is not terminated	All books of accounts are closed as business is terminated

Manu and Manoj are partners, who share profit in the ratio of 2 : 1. Following is the Balance Sheet as on 31st March 2018.

Balance Sheet of Manu and Manoj as on 31-3-2018

LIabilities

Amount

Assets

Amount

Sundry creditors

General reserve

Capital

Manu

manoj

48,000

30,000

1,40,000

80,000

Cash and Bank

Stock

Sundry Debtors

Land and Building

Furniture

40,000

60,000

78,000

1,00,000

20,000

2,98,000

On a dispute between the partners they decided to dissolve the firm on the following terms :

(1) Realisation expenses amounted to ` 4,000.
(2) Debtors realised at a discount of 5%.
(3) Stock realised at ` 50,000.
(4) Fixed Assets realised –

Land & Building ` 1,40,000
Furniture ` 18,000

(5) There was an unrecorded assets of ` 5,000, which was taken over by Manu.
(6) Creditors are paid in full.

Prepare necessary ledger accounts to close the books of firm .
Ans : Realisation Profit – 25100(Manu – 16733,Manoj – 8367)
(Capital Account Balance -Manu – 171733, Manoj – 98367)

Which among the following account is prepared at the time of dissolution of a partnership firm ?

(a) Profit and Loss Appropriation Account
(b) Profit and Loss Adjustment Account
(c) Revaluation Account
(d) Realisation Account

The business of the firm is terminated when _________ take place.

(a) Dissolution of Partnership
(b) Retirement of a partner
(c) Death of a partner
(d) Dissolution of firm

Select the suitable Account from brackets for the following :

(Realisation, Bank, Partners, Capital)

(a) On dissolution of the firm, capital accounts of partners are closed by transferring the capital balance to _______ Account
(b) The accumulated loss appearing in the balance sheet is closed by transferring to _______ Account.
Write any three differences between dissolution of partnership and dissolution of firm. Which of the following is prepared at the time of dissolution of a Partnership firm ?
(a) Revaluation Account (b) Balance Sheet (c) Profit and Loss Account (d) Realisation Account
Briefly explain the “treatment of losses” in the settlement of accounts on dissolution of a firm.

Ans:First out of profits
Next out of capital of partners
Last,if necessary by the partners individually in their profit sharing ratio.

16. Complete the journal entries passed at the time of dissolution of a partnership firm.

(a) Partner’s Capital A/c Dr.
To ……………….
(Asset taken over by a partner)

(b) …………………A/c Dr.
To Realisation A/c
(Sale of assets)

(c) …………………A/c Dr.
To Bank A/c
(Payment of Realisation expenses)
Ans : a ) Realisation A/s
b) Bank A/c
c) Realisation A/c

Select the suitable Account from brackets for the following :

(Realisation, Bank, Partners, Capital)
(a) On dissolution of the firm, capital accounts of partners are closed by transferring the capital balance to _______ Account.

(b) The accumulated loss appearing in the balance sheet is closed by transferring to_______ Account.

Ans : a ) bank, b) Partner’s capital A/c

Write any three differences between dissolution of partnership and dissolution of firm.
Briefly explain the “treatment of losses” in the settlement of accounts on dissolution of a firm.
Ans:a) Losses shall be paid first out of profits ,next out of capital, and lastly ,if necessary ,by the partners individually in the proportion of their profits sharing ratio.
Which of the following is prepared at the time of dissolution of a Partnership firm ?

(a) Revaluation Account (b) Balance Sheet (c) Profit and Loss Account (d) Realisation Account

Unrecorded assets when takenover by a partner are shown in ______.

(a) Debit side of Realization Account
(b) Credit side of Bank Account
(c) Debit side of Bank Account
(d) Credit side of Realization Account

An unrecorded asset rcalized at the time of dissolution should be credited to account.

(a) cash (b) realisation (c) capital (d) revaluation

Pass necessary journal entries in the following cases at the time of dissolution of a firm.

(a) Rohit, a partner, took over stock worth Rs. 7,500.
(b) Kiran, a partner, paid realization expenses amounting to Rs. 1,500 on behalf of the firm.
(c) Loss on realization of Rs. 6,300 transferred to partner’s capital account
Ans: Rohi’s cap: A/c Dr 7500
To Realisation A/c 7500
Realisation A/c Dr 1500
To Kiran’s Cap: A/c 1500
Realisation A/c Dr 6300
To Partner’s Cap: A/c 6300

Explain the order in which the amounts realised through the sale of assets are to be applied at the time of dissolution of partnership firm.
Ans:
a- In paying the realisation expenses
B- In paying the debt of the firm to third parties

C – In paying repayment of loans from partners.

D – In paying repayment of capital contributed by partners.

E -The balance amount shall be divided among the partners in the Profit sharing ratio

Prepare Realisation Account from the following details ,on dissolution of a firm
Balance sheet as on 31-03-2017

LIabilities

Amont

Assets

Amount

Reserve fund

Creditors

Capitals

Sudha – 20000

Bindu – 20000

8000

22000

40000

Cash in hand

Stock

Debtors

Furniture

12000

28000

10000

20000

70000

On the date of the balance sheet ,the firm was dissolved and all assets were sold out for Rs – 68000. Firm incurred Rs.1000 as the realisation expenses.
Ans : Reali.profit 9000

Complete the worksheet based on the hint given below :

	Description	Journal Entry
Hint	Transfer of assets to realisation account	Realisation A/c Dr To Assets A/c (Individually)
a	Sale of Assets	?
b	?	LIabilities A/c DR To Realisation A/c

Rineesha and Arya are partners in the ratio of 3 : 2. Their Balance Sheet as on 31-03-2017 is given below :

Balance Sheet as on 31-03-2017

LIabilities

Amount

Assets

Amount

Capital

Rineesha 22,000

Arya 25,000

Creditors

Reserve fund

47,000

60,000

26,000

Bank A/c

Stock in hand

Debtors

Assets

50,000

10,000

20,000

53,000

1,33,000

The firm is dissolved on 31-3-2017. Prepare the Realisation Account by considering the following :

(i) Stock realised ` 9,000

(ii) Sundry assets sold for ` 45,000

(iii) Realisation expenses met ` 2,000

(iv) Creditors paid in full

Ans : Realisation Loss – 11000(Rineesh – 6600, Arya – 4400,

Computerised Accounting previous year Questions and Answer keys

Ch.1 – Overview of Computerised Accounting system

Ch.1 – Overview of Computerised Accounting system

Pick out the one, which is not a component of computerised accounting system.
(a) Procedure (b) Data (c) People (d) Virus
Ans : (d) Virus
In an organization, Code ‘PL’ is used for Purchase Ledger, ‘SL’ is used for Sales Ledger. Which type of Code is used here ?
(a) Block Code (b) Sequential Code (c) Mnemonic Code (d) None of these
Ans : (c) Mnemonic Code
The Code CS101, CS102, CS103 for customer x, y and z is an example of ______code.
(a) Mnemonic (b) Sequential (c) Block (d) None of these
Ans :(b) Sequential
Develop a coding structure and the code number with assumed figures for allotting register numbers for the students in higher secondary exam with district code, school code and admission number
Ans : District code – KKD
School code : 162
Admission No : 1120
Student Register no : KKD1621120.
Numbers and letters or both of them assigned in a consecutive order as code is a _____.

(a) Block code (b) Mnemonic code (c) Sequential code (d) Numeric code
Ans : (c) Sequential code

List out any four components of Computerised Accounting System. (2Marks)
Ans:People
Data
Procedure
Hardware
software
Describe any three merits of Computerised Accounting System.

Ans:
A- Instant and automatic processing of transactions
B- saves times and money
C- Storage and retrieval of data is very easy
D- Accuracy, Voucher and cheque printing is possible
E- transparency and reliability ensured, etc..
F – Timely generation of reports in desired format.
G – Alterations and addition in transactions are easy and gives changed results easily.
H – Ensures effective control over the system. ( Any four merits – one score each)

Briefly explain the features of computerised accounting system. (5 Marks)
Features of computerised accounting system.
1. Simplicity: Computerized Accounting System (CAS) is an easy way to process the accounting transactions.

2.Comprehensive nature: Most of the accounting packages are complete and comprehensive.

Accuracy: The reports that are generated by computerized accounting system are free from mistakes.
Speed: Computers can process data millions of times faster than human beings.
5. No difficulty in alterations: Alterations and additions in transactions can be affected easily in computerized accounting.
( 5 features. One score each for brief explanation. 1⁄2 score each for points only. Any other features may be considered. Max. 5 scores)

Identify the types of codes for the given examples from the items in brackets

(Sequential code, Block code, Mnemonic code)
(a) Code Name of Railway Station
QLN – Kollam
TCR – Thrissur

(b) Code Textile Item
100-199 – Gents Wear
200-299 – Ladies Wear
Ans : a) Mnemonic Code
b) Block code

Range of numbers are used for codification in :

(a) Sequential codes (b) Block codes (c) Mnemonic codes (d) Alpha Numeric codes

Ans :(b) Block codes

Explain any two security features of a Standard computerised AccountingSoftware.
Discuss any two security features of Computerised Accounting System.
Briefly explain any two security features of Computerised Accounting System. (2 Score – March 22)
Briefly explain any two security features of Computerised Accounting System
Ans :
1-Password: can restrict access to company’s data to authorised users using password.
2-Data audit: This feature is available to administrator to track any unauthorised changes that have taken place in the data.
3-Data vault:– This feature is encrypting data for additional security.
Business firms. more often, made use alphabets or symbols for codification’ Identify the type of codes referred here. Give a suitable example for this type of codes’
Ans:
Sequential Codes – In sequential code,numbers and/or letters are assigned in consecutive order. These codes are primarily applied to source documents such as invoices, cheques etc.

Ex : N001 – ABC Ltd
N002 – PQR Ltd
N003 – XYZ Ltd
Block codes
In block code, a range of numbers is partitioned into a desired number of sub ranges and each sub range is allotted to a specific group.

Code Account Groups
001 – 500 Direct Expense
501 – 1000 Indirect Expense
1001- 1500 Direct Income
1501- 2000 Indirect Income

Mnemonic Codes
A mnemonic code consists of alphabets or abbreviations as symbols to codify an Account. E.g. Salary Account can be coded as ‘SLR’, Building Account can be coded as ‘BLD’ and so on

Ch:2 – Spreadsheet

The default base date used in ‘DATEVALUE’ function in LibreOffice Calc., is :
(a) 01-01-1990 (b) 02-01-1899 (c) 02-01-1991 (d) 30-12-1899
Ans: (d) 30-12-1899
Each cell in a Spreadsheet is identified with a unique name, which is known as_______.
(a) Range (b) Columns (c) Cell address (d) Rows
Ans : (c) Cell address
Pre-defined formulae in spreadsheets are called :
(a) Functions (b) Cell reference (c) Values (d) Operator
Ans:(a) Functions
The function that returns current time along with current date is _______.

(a) DAY – (b) TODAY (c) NOW (d) DATEVALUE
Ans: (c) NOW

The function which counts the number of numeric values in a given range of cell_____.

(a) COUNTA (b) COUNTBLANK (c) COUNT (d) COUNTIF
Ans : (c) COUNT

Describe any two features of LibreOffice Calc.
Ans: 1- Easy calculations
2 – What-If calculations
3 – Server as a database
4 – Arranging data
5 – Dynamic charts
Pre-defined formulae in spreadsheets are called :

(a) Functions (b) Cell reference (c) Values (d) Operator
Ans :(a) Functions

Identify the function which displays the current system date.

(a) TODAY (b) NOW (c) DATE (d) DATEVALUE
Ans : (c) DATE

Complete the missing area as per the hint given below :

Name of Function	Type of Function	Purpose
TODAY	Date and Time Displays	current system date
COUNTBLANK	…………a………………	………b…….
SUM	………c……	………d…

Ans : a) STATISTICAL Function
b) Displays number of empty cells
c)MATHEMATICAL Function
d)Sum of values

Write down the 5 features of Libre Office Calc. Briefly explain. (5 Marks)

Ans : Features of LibreOfficeCalc/ SpreadSheet

1) Easy Calculations : In LibreOffice Calc there are lot of tools which help the user to perform even complex calculations on different data across sheets with ease.

2) Arranging Data :The data stored in LibreOffice calc can be organised or reorganised according to the needs of the user.

3) Serve as Database :This programme allows storing any number of data in different sheets. Storing, retrieving, filtering etc are easy in it.

4) Dynamic Charts :Different types of charts are available in LibreOffice Calc and are enable the user to present various data in an appealing manner.

5) What If calculations :This lets users to predict what will happen if conditions change.

( 5 features. One score each for brief explanation. 1⁄2 score each for points only. Any other features may be considered. Max. 5 scores)

Describe the use and Syntax of the following functions in Libre Office Calc : (5 Score -20 March)
(a) Now
(b) Count
(c) IF
(d) Rate
(e) Concatenate
Ans :
a) Now – It shows the current system date and type Syntax is =NOW()
(b) Count – it count the cells that contain numbers
(c) IF – It analyse a logical test and evaluate the condition is true or false
Syntax is =IF(Test,Then value,Other value)
(d) Rate – It is used to evaluate the rate of return on investment or interest on loan
Syntax is=RATE(Nper,PMT,PV,FV,Type,Guess)
(e) Concatenate – It is used to join two or more strings together
Syntax is =CONCATENATE(“Text 1”,text 2”……..)
Convert the ‘relative’ cell reference ‘A5’ into ‘absolute’ and ‘mixed’ cell references.
Ans : Absolute reference “ A5” – $A$
Mixed reference “A5” – $A5 or A$5
Briefly explain any two Logical functions in LibreOffice Calc.
Ans : 1 – IF Function
2 – AND Function
3 – OR Function
4 – NESTEDIF Function
write the result displayed on a cell, if the following spread-sheet function is used :

(a) : ROUND (999.99, 0)
(b) : ROUNDDOWN (999.99,0)
(c) : ROUND (123.45,-1)
(d) : ROUNDUP (123.45,0)
Ans :
a) 1000
b) 999
c) 120
d) 124

Give the syntax and explain the parameters of the following spreadsheet functions functions:

(a) SLN
(b) DB
(c) PMT
Ans : a) Syntax is =SLN(Cost,Salvage,Life)
b) = DB(Cost,Salvage,LIfe,Period,Month)
c)=PMT(rate,nper,pv,fv,type)
Rate – rate of interest
Nper – the number of periods for which the loan is to be repaid
Pv – The present value of the loan
Fv – future value of the loan
Type – whether the payment is made at the start /end of month

write any three mathematical functions commonly used in spreadsheets and briefly explain them.
Mr. Ajay a newly admitted student in the class have no idea about the mathematical functions in Spreadsheet. Can you help him to learn any three mathematical functions and its purpose ?
Ans : SUM – It is used to add all the numbers in a range of cells.
SUMIF – SUMIF Function ADD the cells specified by a given criteria
ROUND – It rounds a number to a specified number of digits asper normal rounding rules
ROUNDUP – This function is similar to ROUND function.This function rounds a number up away from zero.
ROUNDDOWN – Round a number down towards zero.This function always round a number to downward, without considering the value next to the rounding digit.
Write any 2 methods to add a new worksheet in a Spreadsheet (Libre Office calc). (2Marks)
Ans :
1 – Right click the mouse at the ‘sheet tab’ and select ‘Insert Sheet’ from the pop up menu or
2 – click the ‘plus mark (+) near the sheet tab. ( or any other answer)
Describe any two features of LibreOffice Calc.
Ans: 1- Easy calculations
2 – What-If calculations
3 – Server as a database
4 – Arranging data
5 – Dynamic charts
Briefly explain the commonly used Text Functions.
Ans: TEXT,CONCATENATE
Have a look on the Spreadsheet tables given below and explain the procedure to fill the data in both the cases :

Ans: Edit – Fill – Series Or
Select a cell and Drag using the fill handle.

Match the following items in Column – A with Column – B :

A B

(a) TEXT – To calculate the accrued interest on investment

(b) ACCRINT – To search certain values from a table

(b) ACCRINT – To calculate the accrued interest on investment

Numbers and letters or both of them assigned in a consecutive order as code is a _____.

(a) Block code (b) Mnemonic code (c) Sequential code (d) Numeric code
Ans : (c) Sequential code

The function that returns current time along with current date is _______.

(a) DAY – (b) TODAY (c) NOW (d) DATEVALUE
Ans: (c) NOW

The function which counts the number of numeric values in a given range of cell_____.

(a) COUNTA (b) COUNTBLANK (c) COUNT (d) COUNTIF
Ans : (c) COUNT

Identify the relevant functions used for the following purposes : (3 Marks)
(a) To count the total number of cells which contains any value.
(b) To join several text strings in different cells into one string.
(c) To count the empty cells from a given range.
Ans : a) COUNTA
b) CONCATENATE
c) COUNTBLANK
Briefly explain any two Logical functions in LibreOffice Calc.
Ans : 1 – IF Function
2 – AND Function
3 – OR Function
4 – NESTEDIF Function
Match the following items in Column – A with Column – B :

A B

(a) TEXT – To calculate the accrued interest on investment

(b) ACCRINT – To search certain values from a table

(b) ACCRINT – To calculate the accrued interest on investment

The financial function used for preparing loan repayment schedule is _______.

(a) ACCRINT (b) PMT (c) PV (d) RATE
Ans : (b) PMT

Give the syntax of the following functions used in Libre Office Calc. (3 Marks)
(a) PV Ans : =PV(rate,Nper,Pmt,Fv,Type)
(b) PMT Ans : =PMT(Rate,Nper,Pv,Fv,Type)
(c) NPV Ans : =NPV(Rate,Value1,Value2,…..,ValueN)
Identify the relevant functions in LibreOffice Calc used for the following purposes :

(a) To count the cells that contain numbers only.
(b) To count all types of data in a range of cells.

Ans : a) COUNT
b) COUNTA

Identify the function used for EMI (Equated Monthly Installment) calculation while preparing a Loan Repayment Schedule in LibreOffice Calc.

(a) PMT (b) FV (c) PV (d) NPV
Ans : (a) PMT

Name the functions and syntax used to display the following results in Libre Office Calc.

(a) Current system date
(b) Current date with time
(c) Count of numeric values in a given range of cells.
(d) To count the number of empty cells in a given range. (4 Marks)

Ans:

	Name of function	Syntax
(a) Current system date	TODAY	=TODAY()
(b) Current date with time	NOW	=NOW()
(c) Count of numeric values in a given range of cells.	COUNT	=COUNT(Range)
d) To count the number of empty cells in a given range.	COUNTBLANK	=COUNTBLANK(Range)

Ch.3 – Use of Spreadsheet in Business Application

Ch.3 – Use of Spreadsheet in Business Application

Identify the function used to compute equated Donthlv installments (EMI) of a loan.
(a) PMT (c) PV (b) NPv (d) ACCRINT
Ans: (a) PMT
Identify the function used to compute equated Donthlv installments (EMI) of a loan.
(a) PMT (c) PV (b) NPv (d) ACCRINT
Ans: (a) PMT
Which among the following financial function is used for calculating straight line method of depreciation ?
(a) SLN (b) DB (c) PMT (d) PV
Ans : (a) SLN
Which one of the following is a deduction in the calculation of Net Pay in Pay roll statement ?
(a) HRA (b) PF (c) DA (d) BP
Ans : (b) PF
Which of the following is not a component of Payroll statement ?
Ans :(b) D.B.
(a) D.A. (b) D.B. (c) H.R.A. (d) P.F.
K

	A	B	C	D	E	F
1	PAY ROLL
2	Emp ID	Name of Employee	Basic Pay	DA	HRA	Gross Pay
3	E0101	Renjith	70000	?	5000	?

Write the formula to calculate DA and Gross Pay of Renjith if the DA is 7% of Basic pay.

Ans : DA in D3 =C3*7%
Gross Pay in F3

=SUM(C3:E3) Or C3+D3+E3

Write the equation to calculate Gross Salary and Net Salary, if B.P. (Basic Pay), DA, HRA and PF are given in a payroll statement. (3 Marks)
Ans :Gross Salary = Basic Pay + DA + HRA
Net Salary = Gross Salary – PF
( 1 1⁄2 scores each for one answer – Max 3 scores )
Name the functions used for calculating depreciation under straight line and written down value methods. Also, write their syntax in a spread sheet.
Narne the Spreadsheet function used for calculating the annual depreciation fixed installment method.
Ans : SLN
Find the odd one.

(Hint : one which is not an element of gross pay)
(a) HRA (c) PF (b) CCA (d) DA
Ans : (c) PF

The details of sales is given below in the following spread sheet :

	A	B	C	D
1	Code	Name of Salesman	Sales	Commission
2	101	Praveen	62000	?
3	102	Jaffar	74000
4	103	Johny	68000
5		Total Sales	? (a)

Write the formula to calculate :

(a) Total Sales in cell C5.

(b) 10% Sales Commission to Praveen in cell D2. (2 Score -20 March)
Ans : a) =SUM(A2:A4) OR =A2+A3+A4
b) =C2*10/100 OR = C2*10

One of your friends argued that there is no difference between SLN and DB functions in Spreadsheet. Do you agree with this ? Substantiate your answer.
ANS: No
SLN – Used for calculating depreciation under straight line(fixed installment) method
Syntax is =SLN(Cost,Salvage,Life)
Cost – Acquisition /Purchase cost of assets
Salvage – residual balance after useful life of assets
Life – Effective life of assets that can be put to use

DB – Used for calculating depreciation under DIMINISHING balance method
Syntax is = DB(Cost,Salvage,LIfe,Period,Month)
Cost – Acquisition /Purchase cost of assets
Salvage – residual balance after useful life of assets
Life – Effective life of assets that can be put to use
Period – period in years for which year depreciation is calculated
Month – It is the number of months in the first year of depreciation (Optional)
Identify the function used to compute equated monthly installments (EMI) of a loan.

(a) NPv (b) ACCRINT (c) PMT (d) PV
Ans: (c) PMT

Arun Traders took a loan of ` 1,00,000 for 24 months from SBI @ 12% interest for that period.

(a) Identify the financial function used for preparing loan repayment schedule in calc.
(b) Give its Syntax and explain its parameters. (3 Score -20 March)
Ans :
a) PMT
b) =PMT(Rate,Nper,Pv,Fv,type)
Rate is the periodic interest rate (if annual rate is given,find monthly rate
Nper is the number of periods over which the loan or investment is to be paid.
PV is the present value of loan or investment.
FV (optional) is the desired value (future value) to be reached at the end of the periodic payments
Type (optional) is the due date for the periodic payments. 1 for beginning and 0 for end of the period.

Ch.4 – Chart and Graphs for business data

Ch.4 – Chart and Graphs

A chart is given for you.

(a) Identify the name of above chart type.
(b) Briefly explain any two advantages of preparing charts. (3 Score -20 March)
Ans : a) Column Chart
b) Advantages of Chart
1- Visual appeal
2-Read the data easily
3-Analyse and interpret data quickly
4- Know the trends
A chart which displays data in rings is a
(a) Pie Chart (c) Radar Chart (b) Column Chart (d) Doughnut Chart
Ans: (d) Doughnut Chart
The chart used to display trends over a period of time is _______.

(a) Pie chart (b) Radar Chart (c) Area Chart (d) Line Chart
Ans : (d) Line Chart

Name any four elements of a spread-sheet graph or chart.
Identify the elements of a chart 1 to 4 from the following figure :

Ans: 1- Chart Title
2 – Data point/ Data Series /Plot area
3 – Legend
4 – X Axis

Write the steps to create a chart in Libre Office Calc. (3 Marks)
Ans: 1 – Open Libre office Calc , Application >Office>Libre office Calc
2 – Entering of Date
3 – Select the data
4 – Plotting Chart : Insert ->Chart wizard->Type -> Finish
Identify the name of charts mentioned in the following :

(a) Charts with vertical bars.
(b) Charts with horizontal bars.
Ans : a) Column Chart
b)Bar Chart

In most Spread-sheets, ‘Graphs and charts’ are available in ———-tab
Ans : Insert
Identify the chart that displays data in rings.

(a) Bar Chart (b) Column Chart (c) Area Chart (d) Donut Chart
Ans : (d) Donut Chart

Write any 4 elements of a chart. (2Marks)
Ans : Chart Area, Plot Area, Data Point, Data Series, Data labels, Grid Lines, Chart title, Legend ( any 4 elements – 1⁄2 score for each answer)
Write any two uses of the Pivot table. (2Marks)
Ans : Data can be organised ,summarised data,required data is available,quick and easy availability of data.
List out any 4 types of charts that can be prepared with the help of Libre Office calc. (2Marks)
Ans : Column Chart, Bar Chart, Line Chart, Pie Chart (1/2 scores each – Max 2 scores)
List out any two advantages of preparing Graphs and Charts.
Write any two advantages of chart and graph.
Ans : 1- It helps to create visual appeal
2- It helps to read the date easily
3 – It helps to analyse and interact the data quickly
4 – It helps to know the trends easily
5 = It helps to grasp the data quickly.
Identify the suitable argument in a financial function representing the number of payments from the following :
(a) FV (b) PV (c) Rate (d) Nper (MAR 19)
Ans : (d) Nper

Can you help Mr. Ajith Kumar by pointing out the missing steps to create a chart in Spreadsheet from the following :
Enter the data in cells Select the data __________ __________ Finish. (MAR 19)
Ans : Insert , Chart

Ch.5 – Accounting Package GNUKhata

Ch.5 – Accounting Package GNUKhata

Identify the group under which depreciation account is to be created in an accounting software.
(a) Current Asset
(c) Direct Expenses
(b) Fixed Asset
(d) Indirect Expenses
Ans: (d) Indirect Expenses
In an accounting software, the ledger’s ‘cash’ comes under __________ group.
(a) Investments (b) Current Assets (c) Fixed Assets (d) Capital (MAR 19)
Ans : (b) Current Assets
Which of the following is not a system generated ledger account in GNUKhata ?

(a) Opening Stock (b) Closing Stock (c) Cash (d) Profit and Loss Account
Ans: (c) Cash

4 – List out any two system generated ledger accounts in GNUKhata. (2 Score – 22 March)

Ans: opening tock ,Closing stock, P&L Account, Stock at the beginning

5 – Explain the purposes of using the following voucher types in GNUKhata :

(a) Receipt Voucher

(b) Payment Voucher

Ans : (a) Receipt Voucher – For Recording cash and bank receipts

(b) Payment Voucher – For recording cash and bank payments

6 – Which of the following voucher is used to make rectification entries ?

(a) Purchase Voucher (b) Sales Voucher (c) Receipt Voucher (d) Journal Voucher
Ans : Journal Voucher

7 – State the accounting groups of the following accounts in GNUKhata :

(a) Cash in hand

(b) Machinery
Ans : (a) Cash in hand – Current assets

(b) Machinery – Fixed assets

8 – Explain any three features of computerised accounting system.
Ans : 1 – Simple and Integrated
2 – Transparency and control
3 – Accuracy and speed
4 – Scalability
5 – Security

9 – Explain the purposes of using the following voucher types in GNUKhata :

(a) Receipt Voucher

(b) Payment Voucher

Ans : (a) Receipt Voucher – For Recording cash and bank receipts

(b) Payment Voucher – For recording cash and bank payments

10 – How to delete a Ledger Account in GNUKhata ?
Ans : Delta a ledger by selecting “Edit Account” from master menu.Select the ledger Acount to be deleted ,Click on “delete “ button and confirm the deletion.
Master ->Edit Account ->Select ledger -> Delete.

11 – Briefly explain any three Voucher types used in GNUKhata.
Ans : Receipt,Payment,Contra,Sales,Purchase,Journal,sales return,Purchase return

12 – Explain the uses of any five default accounting voucher types in an accounting software.
Ans :
Contra (F8)- Contra voucher is used to record transactions involving bank and cash accounts or between two bank accounts or two cash accounts.
Payments(F5):-Used to record allpayments.(cash/bank)
Receipt(F4):- Used to record receipt of cah (cash/bank)
Journal(F9):- Used to record adjusting and closing entries, purchase and sale of fixed asset on credit etc.usually it is used as a non cash voucher.
Sales(F6) :-Used to record sale of goods( cash and credit)
Purchase(F7) :– used to record all purchase of goods( cash and credit)
Debit note(CTRL+4): Used to record purchase return or discount rebate received
Credit note(CTRL+3) :-used to record sales return or discount or rebate allowed.

13 – Find the suitable voucher type used for recording ‘Payment by cash or cheque’ from the following in GNUKhata accounting software.
(a) Receipt (b) Purchase (c) Payment (d) Sales
Ans : (c) Payment

14 – State the accounting groups of the following accounts in GNUKhata :

(a) Cash in hand

(b) Machinery
Ans : (a) Cash in hand – Current assets

(b) Machinery – Fixed assets

15 – Explain any three features of computerised accounting system.
Ans : 1 – Simple and Integrated
2 – Transparency and control
3 – Accuracy and speed
4 – Scalability
5 – Security

16 – Which of the following is not a system generated ledger account in GNUKhata ?

(a) Opening Stock (b) Closing Stock (c) Cash (d) Profit and Loss Account
Ans: (c) Cash

17 – Which one of the following is a Free and Open Source Accounting Software ?
(a) Tally (b) GNU Khata (c) Peachtree (d) Daceasy
Ans: (b) GNU Khata

18 – Give any two system generated ledger accounts in GNU Khata. (2Marks)
Ans : Closing stock
Opening stock
Stock at the beginning
P & L A/c

19 – Write any 3 features of GNUKhata Accounting Software. (3 Marks)
Features of GNUkhata
a) It is a free and open source accounting software
b) It is based on double entry book keeping
c) Comprehensive financial reports are available like Ledgers, Trial balance, Profit and loss Account, Balance sheet etc.
d) Source document can be attached along with the voucher entry.
e) Export and import of data from Spreadsheet is possible.
f) Password security and data audit facility provided.
( any 3 features – one scores each Max. 3 scores)

20 – Explain the procedure of ‘Company Creation: in GNU Khata
Ans : Click on “Create Organisation” tab and enter “Organisation Name “
Case : As Is

Organisation Type : Profit Making

Financial year :01-01-2016 to 31-12-2016

Select “ Accounts only” and click “Proceed” button

Methods of maintaining Accounts
Accounts only: Select this option if financial accounts only are to be maintained
After entering the details save the screen.

21 – Name the system generated ledger accounts in GNUkhata. (2 Score -20 March)
Ans : 1 – Opening stock
2 – Closing stock
3 – Stock at the beginning
4 – Profit and Loss Account

22 – Read the following transactions. Then make up the following table for voucher entry in GNU Khata.
(a) Started business with cash worth ` 2,00,000
(b) Opened an account in SBI with ` 10,000
(c) Purchased goods worth ` 20,000
(d) Paid wages ` 5,000
(e) Cash sales ` 15,000

Account Name	Voucher	Dr/Cr	Amount

Ans :

Account Name

Voucher

Dr/Cr

Amount

Cash,capital

SBI ,Cash

Purchase, Cash

Wage, cash

Cash , Sales

Receipt

Contra

Purchase

Payment

Sales

Cash / Capital

SBI/ cash

Purchase/ Cash

Wage/ cash

Cash / Sales

2,00,000

10,000

20,000

5,000

15,000

23 – Devikha Agencies already created an organisation in GNUkhata. Now they want to create ledger accounts. Write the procedure to create the following ledger accounts by preparing a table showing relevant groups and subgroups, assuming that there is no opening balances.

(1) Capital
(2) Furniture
(3) Cash
(4) Debtors
(5) Creditors
(6) Purchases
(7) Sales
(8) Salary

Ans :

No	Ledger Account	Group	Sub group
1	Capital	Capital	None
2	Furniture	Fixed asset	Furniture
3	Cash	Current asset	Cash
4	Debtors	Current asset	Sundry debtors
5	Creditors	Current liability	Sundry creditors for Purchase
6	Purchases	Direct expenses	None
7	Sales	Direct income	None
8	Salary	Indirect expenses	None

24 – Complete the given table based on the hint given : (2Marks)

Name of Ledger	Group
A – Purchases	Direct expenses
B – Sales	?
C- Wages	?
D – Discount received	?
E – Salary	?

Ans : B – Direct Income
C – Direct Expenses
D – Indirect Income
E – Indirect expenses ( 1⁄2 score each for one answer – Max. 2 scores)

25 – Ms. Sunitha, a Commerce student, while presenting a seminar on accounting software package, commented that the procedure for entering closing stock and opening stock are one and same. Do you agree ? Explain the procedure in detail.
Ans : No,Opening Stock:-The stock of goods available at the beginning of current financial year is termed as opening stock.It is treated as Direct expenses and appears in the debit side of P&L A/c.

Stock at the Beginning:-If the accounts of business are computerised for the first time,the amount of opening stock can be inserted through the following steps:

Step 1 – Edit the Stock at the beginning Account
Master – -> Edit Accounts–>Select ‘Stock at the beginning Account’-> Click on Edit->Enter the Opening Balance
Step 2- Voucher->select Journal Voucher-> Enter Voucher No.& Opening date -> Debit Opening stock and credit stock at the beginning.

26 – Identify the group under which depreciation account is to be created in an accounting software.

(a) Current Asset (c) Direct Expenses (b) Fixed Asset (d) Indirect Expenses
Ans: (d) Indirect Expenses

Ch.6 – Database Management System

Ch.6 – Database Management System

Briefly explain how a ‘Table’ is created in Libre Office Base. (First 4 steps). (4 Marks)
Ans : 1. Application > Office > LibreOffice Base
2. Click on Create Table in Design View
3.. Enter the Field Name
4.. Enter the Field Type
5. Enter the Field Properties
Explain the procedure for creating ‘Table’ in a database and how to set the primary key.
Ans: Open Base – Application – Office – Base
Create new database – Database wizard-create new database-next- enter Finish Button.
From the database panel select the object table under design view ,Enter field type – save the table by selecting primary key.
_______ is used to retrieve information from a data base.
Ans : Query
A Data Base Management System (DBMS) has different components. List out any four of them.
Ans : Table,Form,Query,Report,Macro
The tool used to connect two tables in Libre Office Base.
(a) Report (b) Queries (c) Form (d) Relationship
Ans : (d) Relationship
Write the different steps for creating a Table in Libre Office Base. (3 Score -20 March)
Ans: Steps to create table in Libre Office base
1 – OPen LIbreOffice Base – Application>Office>Libreoffice base
2 – Create Table – Click on table > Create table in design view
3 – Enter the field name > Field Type > Set the primary ke > save
A Data Base Management System (DBMS) has different components. List out any four of them.
Ans : 1- Table
2 – Form
3 – Query
4 – Report
Write the steps to create a ‘Student’ Table and set the primary key in Libre Office base from the following details :
Admission No.
Name
Sex
Date of Birth
Class
Ans : Steps :
1 – Open Libre Office Base – Application ->Office -> LO Base
2 – Create Table , Name Student , Table – design view
3 – Enter field name ,data type as :

Admission no: – Text / Number
Name – Test
Sex – List
Date of birth – Date and Time
Class – Text
4 – Save : Give name “TBL student” – Ok
Set Primary key to Admission no. – left -cursor-click

10 – List out any four “data types” available in “Libre Office Base”. (2 Score -20 March)
Ans : Text,Number.Date.Time,yes/No,Memo

11 – Explain the terms ‘Entity’ and ‘Attribute’ with an example.
Ans : Entity – Anything in the real world with independent existence.Ex: Car ,person,Student,Employee Etc
Attribute: These are additional characteristics that further describe an entity . Ex: Height,Weight.DOB of a person

12 – Explain the purpose of creating the following elements in a database management system.

(a) Table
(b) Forms
(c) Queries
Ans :
(a) Table – Tables are used to store the data in the database
(b) Forms – Forms are used to add,view and edit the data in the database.
(c) Queries – Queries are used to retrieve the data from database.

13 – Name any four ‘DBMS, software firms.
Ans : MS Access, LIbre Office base,Oracle, MY SQL /SQL server

14 – What is DBMS ? Give a suitable example for it.
Ans : Database Management System. Ex : LIbreOffice Base, MS Access, Oracle, SQL Server etc.

15 – State the need for data validation in spreadsheet.
Ans : It is used to control the mistakes and repetitions in data entry.

16 – A Spreadsheet ‘3D’ chart has :
(a) ‘X’axis (b) Y axis (c) ‘Z’ axis (d) All of these

17 – List out the objects available in the database panel of LibreOffice Base ?
Ans : Tables,Forms,Queries and Reports

18 – Find the odd one among the computer software given below :
(a) GNU Khata b) TallY (c) SAP (d) Libreoffice Base

19 – methods of creating ‘FORMS’ in a data base software’
Ans: Forms : Forms are screens that allow viewing ,adding and updating the data stored in the table.
Forms can be created :-

Create Table in design view
Use wizard to create table
Click on Forms under Database – Use Wizard to create form– Select the table or query to add the fields into the form – Select appropriate options from the coming windows – Finish.

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Prepared by Navas PM, Vadakkumpad HSS Paleri