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QUESTION BANK

CLASS 12

-BOOK KEEPING & ACCOUNTANCY

For

MARCH2017Exam

OSWAAL MAHARASHTRA HSC

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1 INTRODUCTION TO PARTNERSHIP 25 - 35

l Topic 1 - Concept of Partnership

2 PARTNERSHIP FINAL ACCOUNTS 36 - 80

l Topic 1- Final Accounts

l Topic 2 - Final Account with Adjustment

3 RECONSTITUTION OF PARTNERSHIP 81 - 108

l Topic 1 - Goodwill : Meaning, Valuation and Treatment

l Topic 2 - Admission of a Partner

4 RECONSTITUTION OF PARTNERSHIP (RETIREMENT OF A PARTNER) 109 - 121

5 RECONSTITUTION OF PARTNERSHIP (DEATH OF A PARTNER) 122 - 134

l Topic 1 - Death of a Partner

6 DISSOLUTION OF PARTNERSHIP FIRM 135 - 154

l Topic 1 - Simple Dissolution

l Topic 2 - Dissolution under Insolvency Situation

7 ACCOUNTS OF ”NOT FOR PROFIT” CONCERNS 155 - 188

8 SINGLE ENTRY SYSTEM 189 - 217

9 BILL OF EXCHANGE (ONLY TRADE BILL) 218 - 261

l Topic 1 - Bill of Exchange

l Topic 2 - Dishonour of a Bill of Exchange

10 COMPANY ACCOUNTS PART-I ACCOUNTING FOR SHARES 262 - 284

l Topic 1 - Issue of Shares for Cash

l Topic 2 - Issue of Shares for Consideration other than Cash

11 COMPANY PART-II ACCOUNTING FOR DEBENTURES 285 - 301

l Topic 1 - Issue of Debentures for Cash

l Topic 2 - Issue of Debentures for Consideration other the cash and Interest on Debentures

12 ANALYSIS OF FINANCIAL STATEMENTS 302 - 312

l Topic 1 - Analysis of Financial Statements (Meaning, Objectives, Limitations and Tools)

l Topic 2 - Cash Flow Analysis and Ratio Analysis

�ll

( 3 )

l Examination Paper of HSC Exam March 2016 9 - 13

l Topper Answers of HSC Exam March 2015 14 - 24

CONTENTS

Note : Solutions of the Examination Paper are given within the book in their respective chapters / topics.

( 4 )

PREFACEMalcolm Forbes said “Education's purpose is to replace an empty mind with an open one” and

this is something which is always followed by Maharashtra State Board of Secondary & Higher Education (MSBSHSE). The aim of the Board is not just to let learners obtain basic knowledge but to make

them life-long learners.

The purpose of this book is to nurture individuality and thus enhance one's innate potentials which help in increasing the self-study mode for students. This book strengthens knowledge and attitude related to subject. This book is designed in such a way that students can set their own goals and can improve their problem solving and thinking skills.

This book is strictly as per the latest Maharashtra Board Curriculum for HSC Exams. It

contains variety of questions from latest textbooks. It contains all types of questions like VSA Questions (Very Short Answer), SA Questions (Short Answer), MCQs (Multiple Choice Questions) and LA Questions (Long Answer). A synopsis is given for every chapter which contains important points from that chapter. Each chapter has high quality figures wherever required for better, fast and clear understanding.

OSWAAL HSC Question Bank is different and better in terms of High Quality Questions which

are developed by 'OSWAAL Expert Panel'. The Question Bank is strictly based on the latest MSBSHSE

Textbooks and is arranged ‘TOPIC-WISE’ where each Topic from every Chapter is explained in detail.

Through OSWAAL Books students are taught how to think, not what to think. We at OSWAAL Books try to use quality content, standard language, creativity and high quality figures, which makes readers to enjoy it because we believe if our readers don't enjoy reading our book then there is no use in reading it at all. This is one of the reasons that the scope of this book extends from students to teachers. Teachers can use this book as a perfect teaching guide and students can use this book for good learning and practice.

At last we would like to thank our authors, editors, reviewers and specially students whom we request to send suggestions regularly which will help in continuous improvement of this book and will

make this book “One of the Best”. Wish you all Happy Learning.

–Publisher

1. Chapter-wise and Topic –wise resentation in Question Banks facilitates systematic study.

2. Question Banks can be referred to by the

students throughout the year as well as at

the completion of each chapter in school.

3. Question Banks, take into account any

changes in syllabus or layout and hence are

fully updated and aligned as per the latest

specifications by the Board.

Question Bank Previous Years' Paper

1. Year Wise presentation restricts methodical flow of learning.

2. These can be referred to only after the completion of the full syllabus in school.

3. Previous Years' questions cannot be changed and hence fail to be adept with the latest Board specifications

Why Topic Wise Question Banks Are A Better Choice than Previous Year’s Papers ?

( 5 )

LATEST SYLLABUS

1. INTRODUCTION TO PARTNERSHIP Ø Meaning and Definitions.Ø The Indian Partnership Act, 1932Ø Methods of Capital Accounts :

(a) Fixed Capital Method (b) Fluctuating Capital Method. Learning objective :

Ø Understanding the meaning of Partnership.Ø Know the salient features of Partnership.Ø Understand the meaning of The Indian Partnership Act, 1932.Ø Know the importance of Partnership Deed.Ø Understand the provisions applicable in the absence of Partnership Deed.Ø Know how to maintain Capital Accounts of Partners.

2. PARTNERSHIP FINAL ACCOUNTS

Ø Introduction and Necessity of preparation of Final Accounts with following adjustments.l Closing Stock l Outstanding expensesl Prepaid expenses l Income received in advancel Income receivable l Bad debtsl Provision for doubtful debts l Reserve for discount on debtors and creditorsl Depreciation l Interest on capital, drawings and loansl Interest on investment and loansl Goods destroyed by fire/accident (insured/uninsured)l Goods stolen l Goods distributed as free samplesl Goods withdrawn by partners l Unrecorded purchases and salesl Capital expenditure included in revenue expenses and vice-versa.l Bills Receivable dishonoured l Bills Payable dishonouredl Deferred expensesl Capital receipts included in revenue, receipts and vice-versa.l Commission to working partner/managers on the basis of Gross Profit, Net Profit, Sales, etc.

Ø Learning Objectives : After studying this chapter a student will be able to :l Understand the meaning of Final Accounts.l Know the need and importance of Final accounts.l Know the effects of adjustments in Final accounts.l Know the meaning of Trading Account, Profit and Loss Account and Balance Sheet.l Know how to find out financial results of the business.

3. RECONSTITUTION OF PARTNERSHIP

Ø Meaning and different ways of Reconstitution.Ø Admission of a partner :

(a) Meaning and Need (b) Capital brought by a new partner (c) New profit sharing ratio (d) Sacrifice ratio (e) Meaning of Goodwill (f) Methods of Valuation of Goodwill : (i) Average Profit Method (ii) Super Profit Method.

Ø Treatment of Goodwill.Ø Adjustment of accumulated profits and loss.Ø Revaluation of assets and liabilities.Ø Adjustment of capital.

Learning Objectives :Ø Know the meaning and different ways of Reconstitution.Ø Know the meaning and need of admission of partner in the existing Partnership firm.Ø Identify the matters that require adjustments on admission of a partner.Ø Calculate new profit sharing ratio and sacrifice ratio.Ø Know the methods of calculation of Goodwill.

( 6)

Ø Know the treatment of Goodwill in the books of account while admitting a new partner.Ø Know the accounting treatment as regards accumulated profits and losses.Ø Make necessary adjustments for revaluation of assets and liabilities.Ø Determine capital as per new profit sharing ratio.

4. RECONSTITUTION OF PARTNERSHIP (RETIREMENT OF A PARTNER)

Ø Meaning, NeedØ New RatioØ Gain RatioØ Treatment of GoodwillØ Adjustment of Accumulated Profits and LossesØ Revaluation of Assets and LiabilitiesØ Adjustment of CapitalØ Amount due to Retiring Partner.

Learning Objectives :Ø Meaning of Retirement in Partnership Business.Ø Various ratios connected to Retirement of Partnership.Ø The treatment of Goodwill.Ø The effects of Reserves Accumulated Profits and Losses.Ø The effects of Revaluation of Assets and Re-assessment of Liabilities.Ø The adjustments to be made for remaining Partners' Capitals.Ø The various modes of final payment to be made to Retiring Partner.

5. RECONSTITUTION OF PARTNERSHIP (DEATH OF A PARTNER)

Ø MeaningØ New Profit Sharing RatioØ Gain (Benefit) RatioØ Revaluation of Assets and LiabilitiesØ Amount due to Deceased Partner ExecutorØ Settlement of amount dueØ Accounting treatment

Learning Objectives :Ø Calculate various ratiosØ Calculate share of profit upto the date the death of a partnerØ Calculate share of Goodwill of the Deceased PartnerØ Calculate amount due to deceased partners' executorØ Settle the account of the executor

6. DISSOLUTION OF PARTNERSHIP FIRM

Ø Simple DissolutionØ Dissolution under Insolvency SituationØ Learning objectives : After studying These topics, Students will be able to understandØ The meaning and concept of DissolutionØ Reasons of Dissolution of Partnership FirmØ Effects of Dissolution of Partnership FirmØ Accounting treatment for settlement of accountsØ Accounting procedures under simple Dissolution and Insolvency of a Partner

7. ACCOUNTS OF "NOT FOR PROFIT" CONCERNS

Ø Introduction, Meaning and Features of ”Not for Profit” Concerns.Ø Receipts and Payments Account-Meaning and Features.Ø Distinction between Income and Expenditure Account.Ø Preparation of Income and Expenditure Account and Balance Sheet with the following.

(a) Additional Information :Ø Outstanding Expenses and Prepaid Expenses of the Current and Previous Year.

...Contd.

Ø Accrued Income and Income Received in Advance.Ø Subscription Received in Advance and Subscription Outstanding of the Current and Previous Year.Ø Depreciation.Ø Capitalisation of Entrance Fees.Ø Creation of Special Funds Out of Donation.Ø Stock of StationeryØ Opening Balances of Assets and Liabilities.

(b) Important Items :Ø Entrance Fees, Subscription, Legacy, Life Membership Fees, Sale of Old Assets, Scrap, Newspapers,

Specific Donation, General Donations, Specific Funds and Endormant Fund.Ø Learning Objectives : After studying this unit a student will be able to.Ø Understands the meaning and features of "Not for Profit" Concerns.Ø Understands the meaning and features of Receipts and Payments Account.Ø Understand the meaning of ‘Income and Expenditure Account' and its difference from ‘Profit and Loss

Account'.Ø Acquire skill for preparing Income and Expenditure Account and Balance Sheet of "Not for Profit"

Concern.

8. SINGLE ENTRY SYSTEM

Ø Introduction.Ø Meaning of Single Entry System.Ø Difference between Single Entry and Double Entry System.Ø Preparation of StatementsØ Additional Information :

(i) Additional Capital (ii) Drawings (iii) Depreciation on Fixed Asset (iv) Bad Debts (v) Reserve for Doubtful Debts (vi) Undervaluation and Overvaluation of Assets and Liabilities (vii) Interest on Loan (viii) Interest on Capital (ix) Interest on Drawings (x) Partners' Salary (xi) Outstanding / Unpaid Expenses (xii) Prepaid Expenses / Expenses Paid in Advance. (xiii) Illustrations Learning objectives : After studying this chapter, students will be able to understand

Ø Meaning of Single Entry System.Ø The difference between Single Entry System and Double Entry System.Ø Preparation of Opening Statement of Affairs, Closing Statement of Affairs and Statement of Profit or

Loss.Ø The difference between Balance Sheet and Statement of Affairs.

9. BILL OF EXCHANGE (ONLY TRADE BILL)

Ø Introduction, Necessity, Meaning and Definition of Bill of Exchange.Ø Draft/Format of Bills, Parties to the Bill of Exchange, Acceptance of Bill, Terms of Bill, Days of Grace,

Date of Maturity, Due Date and Types of Bill.Ø Honouring of Bill, Dishonour of Bill, Noting and Protesting of Bill, Notary Public and Noting Charges.Ø Accounting Treatment of Bill by the Drawer/Holder and Drawee in following cases :

(i) Retaining the Bill till due date, Honour/Dishonour, Insolvency of the Drawee/Acceptor. (ii) Endorsement of the Bill, Honour/Dishonour and also Insolvency of Acceptor. (iii) Discounting the Bill with the Bank Honour/Dishonour and Insolvency. (iv) Sending the Bill to the Bank for Collection, Honour/Dishonour and Insolvency. (v) Renewal of Bill-Reasons for Renewal of the Bill. Renewal of Bill with or without charging interest. (vi) Making part payment of basic amount, interest an noting charges and drawing of New Bill. (vii) Honour/Dishonour of New Bill. (viii) Insolvency of the Acceptor and Settlement of his Account. (ix) Retirement of Bill.

( 7 )

...Contd.

( 8 )

...Contd.

(x) Journal Entries and Ledger Learning Objectives : After studying this chapter students will be able to :

Ø Define and explain the meaning of a Bill of ExchangeØ Explain different concepts used in Bill of Exchange.Ø Prepare draft of Bill of Exchange.Ø Explain the different types of Bill of Exchange.Ø Understand Retaining, Sending Bill for Collection, Discounting, Endorsing, Honour, Renewal and

Retiring of the Bill.Ø Explain the accounting treatment of Bills of Exchange.

10. COMPANY ACCOUNTS PART-I ACCOUNTING FOR SHARES

Ø Share and Share Capital : Meaning, Nature and TypesØ Accounting for Share Capital : Issue and Allotment of Equity Shares. Private Placement of Shares. Public

Subscription of Shares. Over Subscription and Under-subscription of Shares. Issue at Par and Premium, and at Discount, Calls in Advance in Arrears, Issue of Shares for Consideration other than Cash

Ø Accounting treatment of Forfeiture and Re-issueØ Disclosure of Share Capital in Company's Balance Sheet (Horizontal form) Learning Objectives:

Afterstudying these topics, the students will able to :Ø Learn the Types of Shares and Share Capital.Ø Understand the concept of Public Subscription and Private Placement.Ø Know the Concept of Under and Over-subscription of Shares and Accounting Treatment if Shares are

issued at Par at Premium and at Discount.Ø Differentiate the accounting treatment for Under-subscription and Oversubscription of Shares as well as

Calls in Arrears and Calls in Advance.

11. COMPANY PART-II ACCOUNTING FOR DEBENTURES

Ø Debentures : Meaning, Issue of Debentures at Par, at Premium and at DiscountØ Issue of Debentures for Consideration other than Cash and Interest on Debentures.

Learning Objectives : After studying these topics the students will able to know :Ø Concept of Debentures.Ø Distinction between Debentures and Shares.Ø Types of Debentures.Ø Procedures for Issue of Debentures.Ø Accounting entries for Issue of Debentures.

12. ANALYSIS OF FINANCIAL STATEMENTS

Ø Debentures : Meaning, Issue of Debentures at Par, at Premium and at DiscoØ Financial Statement Analysis : Meaning, Objectives and Limitations.Ø Tools for Financial Statement Analysis : Meaning of Comparative Statements, Common-sized

Statements, Cash Flow Analysis and Ratio Analysis.Ø Accounting Ratios : Meaning, Objectives and Classification of Ratios.Ø Introductions to Current Ratio, Liquid Ratio, Gross Profit Ratio, Operating Profit Ratio and Net Profit

Ratio. ROI, ROCI. Learning Objectives : After studying these topics, students will able to know :

Ø Meaning, Objectives and Limitations of Financial Statement Analysis.Ø Tools for Financial Statement Analysis.Ø Comparative StatementsØ Common-sized StatementsØ Cash Flow AnalysisØ Meaning, Objectives and Classification of Accounting Ratios and Ratio Analysis

��qq

ExaminationPaper

Maharashtra HSC ExamMarch 2016

Set No. J-783

Book Keeping &

Accountancy

Time : 3 Hours Max. Marks : 80

General Instructions : 1. All questions are compulsory. 2. Draw tables/diagrams wherever necessary. 3. Figures to the right indicate full marks. 4. Write answers to all questions on new pages.

Q. 1. Attempt any three of the following sub-questions : [15] (A) Answer the following questions in 'one' sentence each : 5 1. What is Bad Debts ? 2. What is Surplus ? 3. What are Noting Charges ? 4. What is Gain Ratio ? 5. What do you mean by Analysis of Financial Statement ? (B) Write a word / term or phrase which can substitute each of the following statements : 5 1. Expenses which are paid before due. 2. Excess of expenditure over income of 'Not for Profit' concerns. 3. Payment of the bill before due date. 4. An account opened to find out the profit or loss on sale of assets and settlement of liabilities. 5. A statement similar to Balance Sheet. (C) Select the most appropriate alternative from those given below and rewrite the statements : 5 1. If shares are issued at its face value, it is called as issue at .......... . (a) premium (b) discount (c) par (d) none of these 2. A person who accepts the bills called .......... . (a) drawer (b) acceptor (c) payee (d) creditor 3. The capital in the beginning of the accounting year is ascertained by preparing .......... . (a) closing statement of affairs (b) cash account (c) statement of profit or loss (d) opening statement of affairs 4. If any asset is taken over by partner from firm, his Capital Account will be .......... . (a) credited (b) debited (c) added (d) none of these 5. The proportion in which old partners make a sacrifice is called .......... ratio. (a) capital (b) gaining (c) sacrifice (d) new (D) State whether the following statements are True of False : 5 1. The interest on capital is an income of the firm. 2. The inland bill which is drawn in and payable in the same country. 3. The debentureholder is owner of the company. 4. Purchase of fixed asset is Operating Cash Flow. 5. Noting charges are payable to the Notary public, in case of honour of a bill.

Oswaal Maharashtra HSC Previous YearQuestions With Complete Solution

Chapterwise For Class 12 BookKeeping and Accountancy For 2017

Exam

Publisher : Oswaal Books ISBN : 9789386177728 Author : Panel Of Experts

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