HSC 12th Standard Accounts: March 2019 Board Paper Solution
Q. 1. Attempt any Three of the following sub–questions.
(A) Answer in ‘one’ sentence each. (5)
A balance sheet is a statement showing the financial position of a firm on a specific date, listing its assets, liabilities, and owner's equity.
The ratio by which the remaining partners benefit from a retiring partner's share of profit is known as the Gain Ratio or Benefit Ratio.
Authorised capital is the maximum amount of share capital that a company is legally permitted to issue to its shareholders, as stated in its Memorandum of Association.
A person who creates or "draws" a bill of exchange, ordering the drawee to pay a certain sum of money, is known as the drawer.
A Statement of Affairs is a summary of assets and liabilities prepared under the single-entry system to determine the capital of a business on a particular date.
(B) Write a word/term/phrase for the following statements: (5)
Partnership
Retirement of the bill
Debenture
Foreign bill
Analysis of financial statement
(C) Select the most appropriate alternative: (5)
(D) State whether the following statements are True or False: (5)
- ‘Not for Profit’ concerns concentrate their efforts on maximizing their profit. False
- On dissolution of a firm, the Cash or Bank account is closed automatically. True
- A bill can’t be deposited into a bank for collection. False
- A person to whom, or as per his order, the amount of a bill is payable is a payee. True
- Analysis of a financial statement is a tool but not a remedy. True
(E) Format of Bill of Exchange (5)
For the complete solution to this question, please refer to the detailed post.
Full Paper Solutions
Click the links below for detailed solutions to the other questions from the March 2019 paper.
Difficult Words: An Easy Guide
Here are simple meanings for some of the key terms used in this paper:
- Balance Sheet
- A report card for a business that shows everything it owns (Assets) and everything it owes (Liabilities) on a single day.
- Gain Ratio (or Benefit Ratio)
- When a partner leaves a firm, their share of the profit is divided among the remaining partners. The proportion in which they get this extra share is the Gain Ratio.
- Authorised Capital
- The maximum legal limit of money a company can raise by selling its shares to the public.
- Drawer
- The person or business who creates a Bill of Exchange (a formal IOU) and signs it, demanding payment from someone else.
- Statement of Affairs
- A simple version of a Balance Sheet used when a business doesn't keep full accounting records. It's an estimate of assets and liabilities to find the owner's capital.
- Partnership
- A business owned and run by two or more people who agree to share the profits and losses.
- Retirement of a Bill
- Paying off a Bill of Exchange before the official due date, often to get a small discount (rebate).
- Debenture
- A certificate issued by a company to acknowledge it has borrowed money. It is like a loan certificate that promises to pay interest and return the principal amount later.
- Profitability
- The ability of a business to make a profit. It's a measure of how successful a company is at generating earnings compared to its expenses.
- Drawings
- Money or goods taken from the business by the owner for personal use.
- Revaluation
- The process of re-calculating the value of a company's assets and liabilities, usually when a new partner joins or an old one leaves.
- Goodwill
- The value of a company's good reputation, brand name, and customer loyalty. It's an intangible asset that gives the business an advantage.
- Payee
- The person or company who will receive the money from a cheque or Bill of Exchange.
- Dissolution
- The process of officially closing down a business or partnership, selling all its assets, and paying off all its debts.
- ‘Not for Profit’ Concerns
- Organizations like charities, schools, or clubs whose main goal is to provide a service to the community, not to make a profit.