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## TN State Board 12th Accountancy Model Question Paper 5 English Medium

Instructions:

1. The question paper comprises of four parts.
2. You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
3. All questions of Part I, II. III and IV are to be attempted separately.
4. Question numbers 1 to 20 in Part I are Multiple Choice Questions of one mark each. These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer.
5. Question numbers 21 to 30 in Part II are two-mark questions. These are to be answered in about 50 words.
6. Question numbers 31 to 40 in Part III are three-mark questions. These are to be answered in about 150 words.
7. Question numbers 41 to 47 in Part IV are five-mark questions. These are to be answered in about 250 words. Draw diagrams wherever necessary.

Time: 2.30 Hours
Max Marks: 90

PART – I

Answer all the questions. Choose the correct answer. [20 × 1 = 20]

Question 1.
A firms total sales Rs 80,000 and its credit sales Rs 60,000. Then its cash sales is…………
(a) Rs 1,40,000
(b) Rs 70,000
(c) Rs 20,000
(d) Rs 80,000
(c) Rs 20,000

Question 2.
A firm has assets worth 47,500, and liabilities 17,700, Then its capital is…………
(a) Rs 29,800
(b) Rs 65,200
(c) Rs 35,400
(d) Rs 17,700
(a) Rs 29,800

Question 3.
Some organisations are established for the purpose of rendering services to the public without…………
(a) any profit motive
(b) any service motive
(c) both
(d) None of these
(a) any profit motive

Question 4.
Charitable institutions and educational institutions are example of………….
(a) Profit organisation
(b) Not-for-profit organisation
(c) both
(d) None of these
(b) Not-for-profit organisation

Question 5.
The rate of interest on capital is generally agreed by the partner and is mentioned in the…………
(a) Capital A/c
(b) Profit and Loss A/c
(c) Partnership deed
(d) None of these
(c) Partnership deed

Question 6.
Interest on capital is to be calculated on the capitals at the begining for the…………..
(a) Particular period
(b) Relevant period
(c) average period
(d) all of these
(b) Relevant period

Question 7.
The total capitalised value of the business is calculated by capitalising the average profits on the basis of………….
(a) average profit
(b) normal rate of return
(c) actual capital employed
(d) none of these
(b) normal rate of return

Question 8.
Goodwill is to be valued when …………
(a) analgamation takes place
(c) one company takes over another company
(d) all of the above
(d) all of the above

Question 9.
On admission of a partner if goodwill account is to be raised this should be debited to………….
(a) Partner’s capital A/c
(b) Goodwill A/c
(c) Revaluation A/c
(d) None of these
(b) Goodwill A/c

Question 10.
The old partners share all the accumulated profits and reserves in their……………
(a) new profit sharing ratio
(b) old profit sharing ratio
(c) capital ratio
(d) sacrificing ratio
(b) old profit sharing ratio

Question 11.
At the time of retirement of partners, the existing partners stand to…………..
(a) Gain
(b) Loss
(c) Income
(d) None of these
(a) Gain

Question 12.
At the time of retirement of a partners, calculation of new profit ratio is……………
(a) Compulsory
(b) Optional
(c) Necessary
(d) Not necessary
(c) Necessary

Question 13.
Equity’ shares are known as …………
(a) authorised capital
(b) issued capital
(c) subscribed capital
(d) ordinary capital
(d) ordinary capital

Question 14.
Authorised capital is also known as…………
(a) paid up capital
(b) called up capital
(c) nominal capital
(d) subscribed capital
(c) nominal capital

Question 15.
Common size statement can be prepared with……….
(a) Double columns
(b) single columns
(c) three columns
(d) five columns
(c) three columns

Question 16.
Which of the following are techniques tools or methods of analysis and interpretation of financial statements………..
(a) Ratio analysis
(b) Average analysis
(c) Trend analysis
(d) All of the above
(d) All of the above

Question 17.
Interpretation of accounts is the………….
(a) art and science of translating the figures
(b) to know financial strengths and weakness of a business
(c) to know the causes for the prevailing performance of business
(d) All the above
(d) All the above

Question 18.
The term ‘Financial Statement’ covers………….
(a) Profit and Loss Account
(b) Balance sheet and profit and loss statement appropriation account
(c) profit and loss statement and balance sheet
(d) none of these
(c) profit and loss statement and balance sheet

Question 19.
A technique that is used in comparative analysis of financial statement is…………..
(a) graphical analysis
(b) preference analysis
(c) common size analysis
(d) returning analysis
(c) common size analysis

Question 20.
In payment voucher cash or batik account is credited and other ledger account is…………..
(a) debited
(b) Credited
(c) both ‘a’ and ‘b’
(d) none of these
(a) debited

PART – II

Answer any seven questions in which question no. 30 is compulsory. [7 × 2 = 14]

Question 21.
What is a statement of Affairs?
A statement of affairs is a statement showing the balances of assets and liabilities on a particular date. The balance of assets are shown on the right side and the balance of liabilities on the left side. This statement resembles a balance sheet. The difference between the total of assets and total of liabilities is taken as capital.
Capital = Assets – Liabilities

Question 22.
From the following details calculate the amount that will be shown as subscription in Income and Expenditure Account for the year ending 31st March, 2017.

Subscription outstanding for the year 2016-17 is Rs 2,400. Subscription for 2016-17 received in 2015-16 was Rs 1,000.

Tutorial note:
(i) Subscription for the year 2015-16 Rs 7,500 and for the year 2017-18 Rs 1,500 do not relate to the current year. So they should not be recorded in Income and Expenditure Account.
(ii) Subscription outstanding for the current year 2016-17 is Rs 2.400. it should be added with the’ amount of subscription received during 2016-17.

Question 23.
Mani is a partner, who withdrew Rs 30,000 on 1st September, 2018. Interest on drawings is charged at 6% per annum. Calculate interest on drawings on 31st December, 2018 and show the journal entries by assuming that fluctuating capital method is followed.
Mani:
30,000 x $$\frac{6}{100}$$ × $$\frac{4}{12}$$ = Rs 600
Interest on drawings of Mani = Rs 600

Question 24.
What is goodwill?
Goodwill is the good name or reputation of the business which brings benefit to the business. It enables the business to earn more profit. It is the present value of a firm’s future excess earnings.

Question 25.
Arul and Anitha are partners sharing profits and losses in the ratio of 4 : 3. On 31.3.2018, Ajay was admitted as a partner. On the date of admission, the book of the firm showed a general reserve of Rs 42,000. Pass the journal entry to distribute the general reserve.

Question 26.
Mary, Meena and Mariam are partners of a firm sharing profits and losses equally.
Mary retired from the partnership on 1.1.2019. On that date, their balance sheet showed accumulated loss of Rs 75,000 on the asset side of the balance sheet. Give the journal entry to distribute the accumulated loss.
Journal entry

Question 27.
What is over-subscription?
When the number of shares applied for is more than the number of shares offered for . subscription it is said to be over subscription.

Question 28.
What is working capital?
Working capital statement or schedule of changes in working is prepared to disclose net changes in working capitals on two specific dates (generally two balance sheet dates). It is prepared from current assets and current liabilities.
Working Capital = Current Assets – Current Liabilities

Question 29.
Calculate quick ratio of Auantfe Constructions Ltd from the information given below.

Quick assets = Current assets – Inventories – Prepaid expenses
= 2,50,000 – 50,000 – 15,000
= 1,85,000

Question 30.
What are accounting reports?
Accounting report is a compilation of accounting information that are derived from the accounting records of a business concern. Accounting reports may be classified as routine reports and special purpose reports.

PART – III

Answer any seven questions in which question No. 40 is compulsory. [7 × 3 = 21]

Question 31.
Find out credit sales from the following information:

Question 32.

Subscription of Rs 9,000 is still in arrears for the year 2012-13. Prepare Income and Expenditure Account for 2013-2014.
Income and Expenditure Account for the year 31.03.14

Question 33.
Arul is a partner in a partnership firm. As per the partnership deed, interest on drawings is charged at 12% p.a. During the year ended 31st December 2018 he drew as follows:

Calculate the amount of interest on drawings.
Interest on drawings = Amount of drawings × Rate of interest × Period of interest

Question 34.
A firm’s profit for the last 5 years were Rs 20,000, Rs 30,000, Rs 40,000, Rs 50,000, and Rs 60,000. Calculated the value of firm’s goodwill on the basis of three years purchase of weighted average profit after using weight of 1, 2, 3, 4, 5 respectively.

Goodwill = Weighted avg. profit × Number of years purchase
= 46,667 × 3 = Rs 1,40,000 (appr.)

Question 35.
What are the adjustments required at the time of admission of a partner?
The following adjustments are necessary at the time of admission of a partner.

1. Distribution of accumulated profits, reserves and losses
2. Revaluation of assets and liabilities
3. Determination of new profit sharing ratio and sacrificing ratio
5. Adjustment of capital on the basis of new profit sharing ratio

Question 36.
Distinguish between sacrificing ratio and gaining ratio.

Question 37.
Anu Company forfeited 200 equity shares of Rs 10 each issued at par held by Thiyagu for non-payment of the final call of Rs 3 per share. The shares were reissued to Laxman at Rs 6 per share. Show the journal entries for forfeiture and reissue.
In the books of Anu Company
Journal entries

Question 38.
From the following particulars, prepare comparative income statement of Arul Ltd.

Comparative Income Statement Analysis of Arul Ltd. for the year ended 31.3.2016 to 31.3.2017

Question 39.
From the following statement of profit and loss of Mukesh Ltd. calculate
(i) Gross profit ratio
(ii) Net profit ratio.
Statement of Profit and Loss

Gross profit = Revenue from operations – Cost of revenue from operations
= 5,00,000 – 2,00,000
= Rs 3,00,000
Cost of revenue from operations = Purchase of stock in trade + Changes in inventories
= 1,80,000 + 20,000 = Rs 2,00,000

Question 40.
Explain arty five applications of computerised accounting system (CAS).
The applications of CAS are as follows

1. Maintaining accounting records
2. Inventory management
3. Pay-roll preparation
4. Report generation
5. Data Import/Export

PART – IV

Answer all the following questions. [7 × 5 = 35]

Question 41 (a).
Ananth does not keep his books under double entry system. Find the profit or loss made by him for the year ending 31st March, 2019.

Ananth had withdrawn Rs 60,000 for his personal use. He had introduced Rs 17,000 as capital for expansion of his business. Create a provision of 5% on debtors. Plant and machinery is to be depreciated at 10%.

[OR]

(b) What are the applications of computerised accounting system?
Computerised accounting system refers to the system of maintaining accounts using computer. It involves the processing of accounting transactions through the use of computer in order to maintain and produce accounting records and reports.
The applications of computerised accounting system are as follows:
(i) Maintaining accounting records:
In computerised accounting system, accounting records can be maintained easily and efficiently for long time period. It does not require a large amount of physical space. It facilitates fast and accurate retrieval of data and information.

(ii) Inventory management:
Computerised accounting system facilitates efficient management of inventory, fast moving, slow’ moving and obsolete inventory can be identified. Updated information about availability of inventory, Level of inventory etc, can be obtained instantly.

(iii) Payroll Preparation:
Payroll involves the calculation of amount due to an employee. Pay of an employee may be calculated based on hours/days worked or units produced.

(iv) Report generation:
Computerised accounting system helps to generate various routine and special purpose reports.

(v) Data import/export:
Accounting data and information can be imported from or exported to other users within the organisation as well as outside the organisation.

(vi) Taxation:
Computerised accounting system helps to compute various taxes and to deduct these and deposit .the same to the Government account.

Question 42 (a).
What are the Sailent Feature of tally ERP.9?
The first version of Tally was released in 1988 and through continuous development is now recognised as one of the leading accounting packages across the world with over a quarter million of customer Tally’s market share is more than 90%.

(ii) No accounting codes:
Unlike other computerised accounting packages which require numeric codes. Tally ERP 9 pioneered the “no accounting codes’” concept. Tally ERP 9 users have the freedom to allocate meaningful names in plain english to their data items in the system.

Tally ERP 9 provides a comprehensive solution to the accounting and inventory needs of a business. The packages comprises financial accounting book keeping and inventory accounting. It also has various tools to extract interpret and present data.

(iv) Speed:
It allows the user to maintain multiple companies and with unlimited levels of classification andJgrouping capabilities. It also allows dried down facility from report level to transaction level.

(v) Versatibility:
Tally ERP is suitable for a range of organisations from small grocery stores to large corporations with international locations and operations.

The Tally ERP 9 online help (AH + H) provides instant assistance on basic and advanced feathers or any other relavent topics of Tally ERP. 9.

[OR]

(b) From the following Receipts and Payments account and from the information given below of Ramanathapuram Sports Club, prepare Income and Expenditure account for the year ended 31st December, 2018 and the balance sheet as on that date.

(j) Capital fund as on 1st January 2018 Rs 30,000.
(ii) Opening stock of sports material Rs 3,000 and closing stock of sports material Rs 5,000.
Income and Expenditure Account for the year ended 31.12.18

Question 43 (a).
From the following Receipts and Payments account of Yercaud Youth Association, prepare Income and expenditure account for the year ended 31st March, 2019 and the balance sheet as on that date.

(i) Opening capital fund Rs 20,000.
(ii) Stock of books on 1.4.2018 Rs 9,200.
(iii) Subscription due but not received Rs 1,700.
(iv) Stock of stationery on 1.4.2018 Rs 1,200 and stock of stationery on 31.3.2019, Rs 2,000
Income and Expenditure Account for the year ended 31.03.19

[OR]

(b) From the following details of Rakesh, prepare Trading and Profit and Loss account for the year ended 31st March, 2019 and a Balance Sheet as on that date.

Question 44 (a).
Arulappan and Nallasamy are partners in a firm sharing profits and losses in the ratio of 4 : 1. On 1st January 2018, their capitals were Rs 20,000 and Rs 10,000, respectively. The partnership deed specifies the following:
(a) Interest on capital is to be allowed at 5% per annum.
(b) Interest on drawings charged to Arulappan and Nallasamy are Rs 200 and Rs 300, respectively.
(c) The net profit of the firm before considering interest on capital and interest on drawings amounted to Rs 18,000.
Give necessary journal entries and prepare Profit and loss appropriation account for the year ending 31st December 2018. Assume that the capitals are fluctuating.
Journal entries

[OR]

(b) Find out the value of goodwill by capitalising super profits:
(a) Normal Rate of Return 10%
(b) Profits for the last four years are Rs 30,000, Rs 40,000, Rs 50,000 and Rs 45,000.
(c) A non-recurring income of Rs 3,000 is included in the above mentioned profit of Rs 30,000.
(d) Average capital employed is Rs 3,00,000.

Total profit = 27000 + 40000 + 50000 + 45000 = 162000

Question 45 (a).
Vetri and Ranjit are partners sharing profits in the ratio 3 : 2. Their balance sheet as on 31st December 2017 is as under.

On 1.1.2018 they admit suriya into their firm as a partner on the following arrangements,
(i) Suriya brings Rs 10,000 as capital for 1/4 share of profit
(ii) Stock to be depreciated by 10%
(iii) Debtors to be revalued at Rs 7,500
(iv) Furniture to be revalued at Rs 40,000.
(v) There is an outstanding wages of? 4,500 not yet recorded. Prepare revaluation account, partners capital account and the balance sheet of the firm after admission.

[OR]

(b) Chandru, Vishal and Ramanan are partners in a firm sharing profits and losses equally. Their balance sheet as on 31st March, 2018 is as follows:

Ramanan retired on 31st March 2019 subject to the following conditions:
(i) Machinery is valued at Rs 1,50,000
(ii) Value of furniture brought down by Rs 10,000
(iii) Provision for doubtful debts should be increased to Rs 5,000
(iv) Investment of Rs 30,000 not recorded in the books is to be recorded now.
Pass necessary journal entries and prepare revaluation account and capital account of partners.

Question 46 (a).
Kannan, Rahim and John are partners in a firm sharing profit and losses in the ratio of 5 : 3 : 2. The balance sheet as on 31st December, 2017 was as follows:

John retires on 1st January 2018, subject to following conditions:
(i) To appreciate building by 10%
(ii) Stock to be depreciated by 5%
(iii) To provide ? 1,000 for bad debts
(iv) An unrecorded liability of ? 8,000 have been noticed
(v) The retiring partner shall be paid immediately
Prepare revaluation account, partners capital account and the balance sheet of the firm after retirement.

[OR]

(b) Sudha Ltd. offered 1,00,000 shares of Rs 10 each to the public payable Rs 3 on application, Rs 4 on share allotment and the balance when required. Applications for 1,40,000 shares were received on which the directors allotted as:
Applicants for 60,000 shares – Full
Applicants for 75,000 shares – 40,000 shares (excess money will be utilised for allotment)
Applicants for 5,000 shares – Nil
All the money due was received. Pass journal entries up to the receipt of allotment.

Working note

Question 47 (a).
Prepare common-size statement of financial position of Saleem Ltd as on 31st March, 2017 and 31st March, 2018.

Common-size balance sheet of Saleem Ltd as on 31st March, 2017 and 31st March, 2018

[OR]

(b) From the following Balance Sheet of James Ltd. as on 31.03.2019 calculate
(i) Debt-equity ratio
(ii) Proprietary ratio
(iii) Capital gearing ratio
Balance Sheet of James Ltd. as on 31.03.2019

Capital gearing ratio = 4 00 000 = $$\frac{500000}{400000}$$ = 1.25 : 1