Accountancy Solved Question Paper 2023 [AHSEC Class 12 Solved question Papers]

Accountancy Solved Question Paper 2023
AHSEC Class 12 Solved Question Papers

Full Marks: 80

Pass Marks: 24

Time: Three hours

The figures in the margin indicate full marks for the questions.

1. (a) Fill in the blanks with appropriate word / words: (any four) 1x4=4

(1) Equity shareholders are _______ of the company.

Ans: Owners

(2) Receipts and Payments account is a summary of _______ transactions.

Ans: Cash

(3) Maximum number of members in a partnership business is _______.

Ans: 100

(4) In the absence of any agreement, at the time of retirement of partner goodwill is to be adjusted in _______ ratio.

Ans: Old profit sharing ratio

(5) Profit and Loss A/c is also known as _______ statement.

Ans: Income statement

(b) State whether the following statements are True or False:    1x2=2

(1) A company has a separate legal entity different from its members.

Ans: True

(2) Quick Assets = Current Assets = Inventory = Prepaid Expenses.

Ans: False, Quick Assets = Current Assets - Inventory - Prepaid Expenses.

(c) Choose the correct alternative:                           1x2=2

(1) The portion of the capital which can be called up only on the winding up of the company is called:

(a) Authorised capital.

(b) Uncalled capital.

(c) Reserve capital.

(d) Issued capital.

Ans: (c) Reserve capital.

(2) Donation received for a specific purpose is a: 

(a) Capital Receipt.

(b) Revenue Receipt.

(c) Asset.

(d) Liability.

Ans: (a) Capital Receipt.

2. What is Registered Debenture? 2

Ans: Registered Debentures: These are debentures for which the company maintains record of debenture holders. These debentures are not transferable by mere delivery. 

Or

What is ‘Data Validation’?

Ans:

3. What is Goodwill of a business?          2

Ans: Goodwill: Goodwill is an intangible asset which indicates the value of the reputation of a firm. It comes into existence due to various favourable factors such as favourable location, efficient management, good quality of product and services etc. It is one factor which distinguishes an old established business from a new business. It can also be defined as the capacity of a business to earn extra income.

4. What is meant by Cash Flow from Operating Activities?           2

Ans: Operating activities are the principal revenue generating activities of the business. These are cash flows from regular course of operations such as manufacturing, trading etc. All activities that are not investing or financing activities are included under operating activities.

5. A and B are partners sharing profits and losses in the ratio of 5:3. C is admitted as a new partner for 1/4^th share, which he acquires 1/6^th from A and 1/12^th from B. Calculate the new profit sharing ratio.  2

Ans:

Or

Mention two rights of a partner.              2

Ans: Rights of a Partner:

a) Every partner has a right to take part in the conduct and management of the business.

b) Every partner has a right to be consulted in the matters of the partnership.

6. Write two limitations of ratio analysis.             2

Ans: Limitations of Ratio Analysis

a) False Result: Ratios are calculated from the financial statements, so the reliability of ratio is dependent upon the correctness of the financial statements. If financial statements are misleading, then the accounting ratios also gives a false picture.

b) Ignores Price Level Changes: Change is price level affects the comparability of ratios. A change in the price level makes the ratio analysis of different accounting years invalid because accounting records ignores change in value of money.

Or

Mention two limitations of financial statements.             2

Ans: Financial analysis suffers from various limitations which are given below:

a) Historical Analysis: Financial statements are historical in nature. Financial analysis is simply a rearrangement of historical data. It analysed what has happened till date but it does not reflect the future.

b) Ignores Price Level Changes: Change is price level affects the comparability of financial statements. A change in the price level makes financial analysis of different accounting years invalid because accounting records ignores change in value of money.

Or

What is sequential code?                             2

Ans:

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ALSO READ (AHSEC ASSAM BOARD CLASS 12):

1. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE NOTES

2. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION (THEORY)

3. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION BANK (PRACTICAL)

4. AHSEC CLASS 12 ACCOUNTANCY PAST EXAM PAPERS (FROM 2012 TILL DATE)

5. AHSEC CLASS 12 ACCOUNTANCY SOLVED QUESTION PAPERS (FROM 2012 TILL DATE)

6. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE MCQS

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7. What is the meaning of Cash Flow from Investing Activities?                 2

Ans: The investing activities of a business include all cash flow arises due to acquisition and disposal of long term assets (whether tangible and intangible) and investments. Acquisition or disposal of companies also comes under investing activities. These are separately disclosed in cash flow statement.

Or

What is meant by the term ‘Cash Equivalents’?                 2

Ans: Cash Equivalents: Cash Equivalents are short-term, highly liquid investments that are readily convertible cash. Examples of cash equivalents are: (a) treasury bills, (b) commercial paper, (c) money market funds and (d) Investments in preference shares and redeemable within three months.

Or

Write a note on ‘Queries’.                           2

Ans:

8. Write any three essential features of partnership.      3

Ans: Essential (Characteristics) of Partnership:

a) Agreement: Partnership is the result of an agreement, either written or oral, between two or more persons. It arises from contract and not from status or process of law.

b) Number of Persons: In a partnership firm there must be at least two people to form the business. Partnership Act 1932, does not specifies the maximum numbers of persons, but the Indian Company Act 2013, restricts the number of Partners to 100 for a partnership firm. But in case of limited liability partnership there is no maximum limit.

c) Business: There must be a legal business. Business includes trade, vocation and profession.

Or

Write three distinctions between ‘Profit and Loss Account’ and ‘Profit and Loss Appropriation Account’.

Ans: Difference between Profit and loss account and Profit and loss appropriation account:

Profit and loss Account	Profit and loss appropriation account
1. It is prepared after trading account. 2. This account is prepared by every form of business organisation. 3. Items debited in profit and loss account are all expenses.	1. It is prepared after profit and loss account. 2. This account is prepared by partnership firm only.   3. Items debited in profit and loss appropriation account are all appropriations.

9. Give any three differences between equity shares and preference shares.   3

Basis of Difference	Preference Share	Equity Share
Right of Dividend	Preference shares are paid dividend before the Equity shares.	Equity shares are paid dividend out of the balance of profit available after the dividend paid to preference shareholders.
Rate of Dividend	Rate of dividend is fixed.	Rate of dividend is decided by the Board of Directors, year to year depending on profits.
Convertibility	Preference Shares may be converted into Equity shares, if the terms of issue provide so.	Equity shares are not convertible.

Or

Explain the following terms:                      3

(1) Calls-in-arrears.

Ans: Calls-in-Arrears: The amount which is not paid by shareholders when money is demanded by the company, such amount is known as ‘Calls-in-Arrears’. The maximum rate of interest to be provided on calls in arrears must not exceed 10% per annum.              

(2) Calls-in-advance.

Ans: Calls-in-Advance: Sometimes, it so happens that a shareholder may pay the entire amount on his shares even though the whole amount has not been called up. The amount received in advance of calls from such a shareholder should be credited to "calls in advance". The maximum rate of interest allowed on calls in advance is 12% per annum.

Or

Mention three uses of Spreadsheet.       3

Ans:

10. Calculate the income from subscription for the year 2021 from the following information:                   3

	1-1-2021 (Rs.)	31-12-2021 (Rs.)
Subscription outstanding Subscription received in advance	3,000 4,000	2,000 5,000

Subscription received during the year 2021 Rs. 70,000.

Ans: Out of syllabus

Or

Mention three objectives of preparing financial statements.     3

Ans: Objectives and purposes for which financial statements are prepared:

a) To provide information about economic resources and obligations of a business.

b) To provide information about earning capacity of the business and its ability to operate of profit in future.

c) To provide information that is useful in predicting the future earning power of the enterprise.

Or

Explain Database Management System.               3

Ans:

11. Current Liabilities of a company were Rs. 60,000 and its current ratio was 2:1 on 30^th March, 2021. On 31^st March, 2021, the company paid Rs. 20,000 to a creditor. Calculate the current ratio after the payment.                3

Ans:

Or

Mention three differences between ‘Capital account’ and ‘Current account’.      3

Ans: Difference between capital accounts and current Accounts:

Basic of difference	Capital Account	Current Account
1. Method	Capital Account is prepared under fixed capital method.	Current account is prepared under fluctuating capital method.
2. Transactions recorded	In capital account only capital introduced and withdrawn is recorded.	All order transactions between the firm and partners is recorded in the current account.
3. Interest	Interest is sometimes paid on capital account.	No such interest is payable on current account balances.

Or

Describe three features of the Spreadsheet.           3

Ans:

12. Prepare a Comparative Income Statement from the following particulars:                    6

Particulars	2020 (Rs.)	2021 (Rs.)
Gross Sales Sales Returns Cost of Goods Sold Operating Expenses Income Tax	1,20,200 10,400 80,000 24,000 50%	1,35,800 7,600 84,000 18,000 50%

Or

What is meant by analysis of financial statements? Explain in brief the tools of financial analysis.  1+5=6

Ans: Financial Statement Analysis: It is the process of identifying the financial strength and weakness of a firm from the available accounting information and financial statements. The analysis is done by properly establishing the relationship between the items of balance sheet and profit and loss account.

Ans: Tools of financial Statement analysis: The main objective of financial analysis to determine the financial health of a business enterprise. The analysis may be done with the help of following tools

a) Comparative Statements: These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods. It usually applies to the two important financial statements, namely, balance sheet and statement of profit and loss prepared in a comparative form. The financial data will be comparative only when same accounting principles are used in preparing these statements. If this is not the case, the deviation in the use of accounting principles should be mentioned as a footnote. Comparative figures indicate the trend and direction of financial position and operating results. This analysis is also known as ‘horizontal analysis’.

b) Common Size Statements: Common size statement is a statement in which amounts of individual item of balance sheet and profit and loss account for one or more years are expressed in terms of percentage of a common base. The common base can be net sales in the case of profit and loss account and total of balance sheet for the balance sheet.

c) Trend Analysis: Trend analysis is an important tool of horizontal financial analysis. This is helpful in making a comparative study of the financial statements over several years. Under these method trend percentages are calculated for each item of the financial statements taking the figure of base year as 100. Normally the starting year is taken as the base year. The trend percentages show the relationship of each item with its preceding year’s percentages.

d) Ratio analysis: A Ratio is an arithmetical expression of relationship between two related or interdependent items. If such ratios are calculated on the basis of accounting information, then they are called accounting ratios. Simply, accounting ratio is an expression of relationship between two accounting terms or variables or two set of accounting heads or group of items stated in financial statement. It is one of the techniques of financial analysis which is used to evaluate the operating efficiency and financial position of a business concern.

e) Cash Flow Statement:  Cash­ flow is made up of two words i.e. Cash and Flow, whereas Cash means cash balance in hand including cash at bank, and Flow means changes (which may be increase or decrease) in the cash movements of the business. So, Cash Flow Statement is a statement which shows the movement of cash and cash equivalents over a particular period of time and also analyses the reasons for changes in balance of cash in hand and at bank between two accounting period. It shows the inflows and outflows of cash and cash equivalents.

Or

Give the limitations of computerised accounting system. 6

Ans:

13. What is meant by issue of debentures as Collateral Security? Mention four differences between shares and debentures.  2+4=6

Ans: When debentures are issued as security in addition to any other security against a loan or bank overdraft such an issue of debentures is known as issue of debentures as collateral security. The use of such an issue is that if the company does not repay the loan and the interest and the main security is not sufficient, the bank will be entitled to sell the debentures in the market or the bank may keep the debentures with it. If the company repays the loan, the bank will return the debentures issued as collateral security to the company.

Difference between Shares and Debentures

Or

Explain the objectives of Database Management System (DBMS)?          6

Ans:

Or

Give Journal entries for issue and redemption of debentures under the following situations:                      2x3=6

(a) 1,000 12% debentures of Rs. 100 each, issued at premium of 5% and redeemable at par.

(b) 2,000, 12% debentures of Rs. 100 each, issued at 5% discount and redeemable at a premium of 5%.

(c) 3,000, 12% debentures of Rs. 100 each, issued at par and redeemable at a premium of 5%.

Ans:

14. A, B and C were in partnership sharing profit and losses equally. On 31^st December, 2021 their Balance Sheet was as follows:                6

Balance Sheet

Liabilities	Rs.	Assets	Rs.
Capital: A = 10,000 B =   5,000 C =   5,000 Reserve Fund Creditors	20,000 3,300 2,000	Plant and Machinery Stock Sundry Debtors Cash at Bank Cash in Hand	10,000 4,000 6,000 5,000 300
	25,300		25,300

The firm took a joint life policy for Rs. 9,000 payables on the first death.

C died on 31^st March, 2022. Under the partnership agreement the executors of a deceased partner were entitled to:

(1) Amount standing to the credit of deceased partner’s capital account.

(2) His share of goodwill on the basis of twice the average of the past three years’ profits.

(3) Share of profit from the closing of the last financial year to the date of death on the basis of last year’s profits.

(4) Interest on capital @ 5% p.a.

(5) Profits for the last three years were:

2019 = Rs. 6,000.

2020 = Rs. 8,000.

2021 = Rs. 7,000.

Prepare C’s capital account on the date of his death.

Ans:

Or

Prepare Income and Expenditure A/c from the following Receipts and Payments A/c and other details of ‘Parizat’ club for the year ended 31^st December, 2021:                              6 Out of syllabus

Receipts and Payments Account

Receipts	Rs.	Payments	Rs.
To Cash-in-hand on 1-1-21 To Subscription received To Entrance Fee To Donations To Donation for Club House To Life Membership Fee To Maintenance Grant To Capital Grant To Sale of Furniture	10,000 20,000 10,000 18,000 17,000 5,000 6,000 7,000 1,000	By Salaries By Rent and Taxes By Electric Charges By Sports Goods Purchased By Postage By Construction of Club House By Sundry Expenses By Payment of Outstanding Expenses Cash in hand on 31-12-21	12,000 6,000 3,000 25,000 5,000 36,000 2,000 500 4,500
	94,000		94,000

Other details:

(1) Total of Entrance Fee and Life Membership Fee are to be capitalised.

(2) Depreciation on Sports Goods is Rs. 2,500.

(3) Book value of the furniture sold was Rs. 1,500 on the date of sale.

Or

How would you compute the amount due to a retiring partner?                               6

Ans: Calculation of amount due to the retiring partner: The amount due to the retiring partner is paid according to the terms of partnership agreement. Amount due to the retiring partner is determined by preparing capital account of the retiring partner. Retiring partner’s capital account is debited with:

(a) The credit balance of Capital Account;

(b) His/her share in the Goodwill of the firm;

(c) His/her share in the Revaluation Profit:

(d) His/her share in General Reserve and Accumulated Profit;

(e) His/her share of profit till the date of his retirement.

(f) Interest on Capital, partner’s salary and commission.

But, the following items are debited in capital account to find amount due:

(a) His/her share in the Revaluation loss.

(b) His/her Drawings and Interest on Drawings up to the date of retirement.

(c) His/her share of any accumulated losses.

(d) Loan taken from the firm.

Payment of amount due to the retiring partners

The total amount so calculated is the claim of the retiring partner. He/she is interested in receiving the amount at the earliest. Total payment may be made immediately after his/her retirement. However, the resources of the firm may not be adequate to make the payment to the retiring partner in lump sum, then firm makes payment to retiring partner in installments together with interest.

15. Sunu, Nanu and Nidhi are partners in a firm sharing profits in the ratio of 2 : 1 : 1. Their Balance Sheet as on 31^st March, 2021 was as under:         6

Balance Sheet

Liabilities	Rs.	Assets	Rs.
Creditors Capital: Sunu =   80,000 Nanu =  80,000 Nidhi =  60,000	50,000       2,20,000	Land and Building Plant and Machinery Furniture Motor Car Debtors Cash	80,000 56,000 30,000 54,000 48,000 2,000
	2,70,000		2,70,000

The firm was dissolved on the above date. The assets realised as follows:

Furniture                             = Rs. 20,000.

Land and Building             = Rs. 1,00,000.

Plant and Machinery      = Rs. 50,000.

Motor Car                            = Rs. 28,000

Debtors                                = 50% of Book Value.

Realisation Expenses were Rs. 2,000.

Prepare Realisation A/c, Partner’s Capital A/c and Cash A/c to close the books of the firm.

Ans:

Or

Write the situations when a partnership firm is dissolved by the court.     6

Ans: Dissolution by Court (Sec. 44): A court may order a partnership firm to be dissolved in the following cases:

a)    When a partner becomes of unsound mind.

b)    When a partner becomes permanently incapable of performing his/her duties as a partner.

c)    When partner deliberately and consistently commits breach of partnership agreement.

d)    When a partner’s conduct is likely to adversely affect the business of the firm.

e)    When a partner transfers his/her interest in the firm to a third party;

f)     When the business of the firm cannot be carried on except at a loss in future also.

g)    When the court considers it just and equitable to dissolve the firm. The following are the cases for the just and equitable grounds:

1. Deadlock in the management.

2. Where the partners are in talking terms between them.

3. Loss of substratum.

4. Gambling by a partner on a stock exchange.

16. Amlan Co. Ltd. issued 50,000 equity shares of Rs. 10 each at a premium of Rs. 2 each, payable as under: 8

On Application = Rs. 2.

On Allotment = Rs. 5 (including premium).

On First and Final Call = Rs. 5.

The shares were fully subscribed, called up and paid-up except allotment and call money on 500 shares. These shares were forfeited. Give journal entries in the books of the company.

Ans:

Or

Write short notes on: (any four) 2x4=8

(a) Securities Premium.

Ans: If Shares are issued at a price, which is more than the face value of shares, it is said that the shares have been issued at a premium. The Company Act, 2013 does not place any restriction on issue of shares at a premium but the amount received, as premium has to be placed in a separate account called Securities Premium Account.

(b) Over Subscription.

Ans: When the number of shares applied is more than the number of shares issued by a company, the issue of shares is said to be oversubscribed. The company cannot allot shares more than those offered for subscription. In case of over-subscription, there are three possibilities arise:

(a) Some applicants may not be allotted any shares. This is known as ‘rejection of applications’.

(b) Some applicants may be allotted less number of shares than they have applied for. This is known as partial or pro-rata allotment.

(c) Some applicants may be allotted the full number of shares they have applied for. This is known as full allotment.

(c) Re-issue of forfeited shares.

Ans: Ans: After forfeiture of shares, the directors of the company can re-issue the forfeited shares at par, or at premium or at discount to maintain its equity capital balance. The forfeited shares may then be disposed by sale or in any other manner as directed by the Board.  

(d) Unissued Capital.

Ans: Issued capital is that part of the nominal capital, which is offered to the public for subscription. The balance of the nominal capital, which is not offered to the public for subscription, is called unissued capital.

(e) Current asset.

Ans: Current assets are those which are changed or converted into cash within one accounting year. Current Assets includes Cash in hand, Cash at Bank, Sundry Debtors, Bills Receivable, Stock of Goods, Short-term Investments, Prepaid Expenses, Accrued Incomes etc.

(f) Income Statement.

Ans: Profit and loss account or income statement: Income statement is one of the financial statements of business enterprises which shows the revenues, expenses, and profits or losses of business enterprises for a particular period of time. Its main aim is to show the operating efficiency of the enterprises.

Or

Explain the steps involved in Computerised Accounting System in detail.              8

Ans:

17. (a) Explain the average profit method of valuation of goodwill.          3

Ans: Average Profits Method: In this method, Actual maintainable profits of business over a number of years are taken into account. Actual maintainable profits earned over a number of years are totalled and average is determined by dividing total with number of years. The average profits so determined are multiplied by the number of year’s purchases to arrive at the value of goodwill.

For calculation of goodwill following steps are to be followed

a) Calculate Actual maintainable profits with the help of following formula. Actual maintainable profits = Net Profit + Abnormal loss – Abnormal Gain – regular business expenses not considered in accounts.

b) Calculate Average Maintainable Profit = Total Actual maintainable profits /no of years.

c) Calculate goodwill = Average maintainable Profit x no. of year’s purchase

(b) What is revaluation account?              2

Ans: Revaluation Account: At the time of reconstitution of partnership, it is necessary to revalue the assets and liabilities of the firm because the book value of the assets and liabilities as shown in balance sheet may be different from their market value. To record any decrease or increase in the value of assets and liabilities, a separate nominal account is prepared which is called revaluation account. The Revaluation account is credited if there is an increase in the value of assets, decrease in the value of liabilities and unrecorded assets.

(c) How the adjustment of capitals is made at the time of admission of a new partner? 3

 

Or

Nitul and Atul are partners in a firm sharing profits in the ratio 2:1. Pranjal is admitted into the firm as a new partner with 1/4^th share in profits. He will bring Rs. 30,000 as his capital. The Balance Sheet of Nitul and Atul as on 31-3-2020 was as under:                    8

Balance Sheet

Liabilities	Rs.	Assets	Rs.
Creditors Bills Payable General Reserve Capital: Nitul = 52,000 Atul =  30,000	8,000 4,000 6,000     82,000	Cash Debtors Stock Furniture Machinery Building	12,000 8,000 10,000 5,000 25,000 40,000
	1,00,000		1,00,000

Other terms of the agreement are as under:

(1) Pranjal will bring in Rs. 12,000 as his share of goodwill.

(2) Building was valued at Rs. 45,000 and Machinery at Rs. 23,000.

(3) A reserve for bad debt is to be created at 6% on debtors.

Prepare Revaluation A/c, Partner’s Capital A/c and the Balance Sheet of the new firm.

Ans:

18. Amit and Aditya are partners in a firm sharing profits and losses in the ratio of 3:1. The Trial Balance of the firm as on 31^st December, 2022 was as under:    8

Trial Balance

Debit	Rs.	Credit	Rs.
Machinery Salaries Carriage outward Building Furniture Debtors Bad Debts Cash at Bank Investment Cash in hand Establishment charges Closing Stock Depreciation on Machinery Publicity Drawings: Amit      = Rs. 5,000 Aditya   = Rs. 3,000 Rent and Rates	35,000 15,850 2,140 54,000 25,000 48,200 1,400 1,200 10,000 1,170 13,000 10,000 3,500 5,000     8,000 5,500	Capital: Amit      = Rs. 50,000 Aditya   = Rs. 30,000 Trading A/c: Gross Profit Creditors Bank Loan Discount Commission Outstanding Wages Provisions for Doubtful Debts	80,000   85,700 44,560 21,000 4,500 1,000 1,200 1,000
	2,38,960		2,38,960

Additional Information:

(1) Prepaid publicity Rs. 500.

(2) Commission received in advance Rs. 200.

(3) Provide for doubtful debts @ 5% on Sundry Debtors.

(4) Allow interest on partner’s capital @ 5% p.a.

From the above Trial Balance and additional information, prepare a Profit and Loss A/c, a Profit and Loss Appropriation A/c for the year ended 31^st December, 2022 and a Balance Sheet as on that date.

Ans:

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