BOOK KEEPING & ACCOUNTANCY (50)
(A) Select the correct option and rewrite the sentences : (5)
(1) A _____ is an intangible asset.
(2) Excess of income over expenditure in ‘Not for Profit Concern’ is termed as _____.
(3) Decrease in the value of assets should be _____ to Profit and Loss Adjustment account.
(4) Dissolution expenses are credited to _____ account.
(5) Notary public is a _____.
HSC Accounts Board Papers with Solution
Book Keeping and Accountancy
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(B) Complete the sentences : (5)
(1) Trading Account is prepared on the basis of _____ expenses.
(2) Income and Expenditure Account is a _____.
(3) Deceased partner’s executor’s account is shown on the _____ side of balance sheet.
(4) Fixed deposit account comes under _____ group.
(5) If an asset is taken over by the partner, _____ account is debited.
(C) Find the odd one : (5)
(1) Wages account, Salary account, Royalty account, Import duty account.
(2) Machinery account, Furniture account, Computer account, Rent account.
(3) General reserve account, Creditors account, Machinery account, Capital account.
(4) Notary public, Drawer, Drawee, Payee.
(5) At par, At premium, At discount, At loan.
(D) Do you agree or disagree with the following statements : (5)
(1) Partnership firm is a trading concern.
(2) ‘Not for profit concerns’ do not have profit motive.
(3) Retiring partner is called an outgoing partner.
(4) Gain ratio is calculated at the time of admission of new partner.
(5) Financial statement includes only balance sheet.
Q. 2. Admission of Partner (AOP) [10]
Option A: Admission of Partner (Deepak, Abhishek & Adinath)
In the books of Firm
Revaluation Account (Profit & Loss Adjustment A/c)
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Furniture A/c | 4,400 | By Stock A/c | 4,000 |
| To R.D.D. A/c | 3,200 | By Land & Building A/c | 1,600 |
| By Loss on Revaluation transferred to Old Partners' Capital A/c: | |||
| Mr. Deepak (3/4) | 1,500 | ||
| Mr. Abhishek (1/4) | 500 | ||
| 2,000 | |||
| Total | 7,600 | Total | 7,600 |
Partners' Capital Accounts
| Particulars | Deepak | Abhishek | Adinath | Particulars | Deepak | Abhishek | Adinath |
|---|---|---|---|---|---|---|---|
| To Revaluation A/c (Loss) | 1,500 | 500 | - | By Balance b/d | 1,20,000 | 40,000 | - |
| To Cash A/c (Surplus) | 25,500 | 8,500 | - | By General Reserve A/c | 12,000 | 4,000 | - |
| To Balance c/d | 1,20,000 | 40,000 | 40,000 | By Cash A/c | - | - | 40,000 |
| By Goodwill A/c | 15,000 | 5,000 | - | ||||
| Total | 1,47,000 | 49,000 | 40,000 | Total | 1,47,000 | 49,000 | 40,000 |
* Ratios: Old (3:1), New (3:1:1). Total Capital Adjusted: 2,00,000 (Deepak 1,20,000, Abhishek 40,000, Adinath 40,000).
New Balance Sheet as on 1st April 2019
| Liabilities | Amt (₹) | Amt (₹) | Assets | Amt (₹) |
|---|---|---|---|---|
| Partners' Capital: | Land & Building (32,000 + 1,600) | 33,600 | ||
| Mr. Deepak | 1,20,000 | Plant & Machinery | 60,000 | |
| Mr. Abhishek | 40,000 | Furniture (22,000 - 4,400) | 17,600 | |
| Adinath | 40,000 | 2,00,000 | Stock (40,000 + 4,000) | 44,000 |
| Sundry Creditors | 80,000 | Sundry Debtors | 64,000 | |
| Bank Overdraft | 42,000 | Less: R.D.D. (5%) | (3,200) | |
| Outer | 60,800 | |||
| Cash (Working Note) | 1,06,000 | |||
| Total | 3,22,000 | Total | 3,22,000 |
Dr. Bal b/d (80,000) + Adinath Cap (40,000) + Goodwill (20,000) = 1,40,000
Cr. Deepak Cap (25,500) + Abhishek Cap (8,500) + Bal c/d (1,06,000) = 1,40,000
Retirement of Partner (ROP)
Option B: Retirement (Aditya, Ajinkya & Arun)
In the books of Firm
Profit & Loss Adjustment Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Stock A/c | 875 | By Creditors A/c | 100 |
| To Furniture A/c | 125 | By Loss on Revaluation transferred to Partners' Capital A/c: | |
| To Machinery A/c | 5,000 | Aditya (5/10) | 3,175 |
| To R.B.D.D. A/c | 450 | Ajinkya (3/10) | 1,905 |
| Arun (2/10) | 1,270 | ||
| 6,350 | |||
| Total | 6,450 | Total | 6,450 |
Partners' Capital Accounts
| Particulars | Aditya | Ajinkya | Arun | Particulars | Aditya | Ajinkya | Arun |
|---|---|---|---|---|---|---|---|
| To P&L Adjustment A/c (Loss) | 3,175 | 1,905 | 1,270 | By Balance b/d | 21,000 | 18,500 | 16,600 |
| To Arun's Loan A/c | - | - | 18,830 | By Reserve Fund A/c | 3,750 | 2,250 | 1,500 |
| To Balance c/d | 26,575 | 21,845 | - | By Goodwill A/c (Raised) | 5,000 | 3,000 | 2,000 |
| Total | 29,750 | 23,750 | 20,100 | Total | 29,750 | 23,750 | 20,100 |
New Balance Sheet as on 1st April 2020
| Liabilities | Amt (₹) | Amt (₹) | Assets | Amt (₹) |
|---|---|---|---|---|
| Partners' Capital: | Debtors | 9,000 | ||
| Aditya | 26,575 | Less: R.B.D.D. (5%) | (450) | |
| Ajinkya | 21,845 | 48,420 | Outer | 8,550 |
| Creditors | 10,450 | Stock | 8,750 | |
| Less: Written-off | (100) | 10,350 | Less: Depreciation (10%) | (875) |
| Arun's Loan A/c | 18,830 | Outer | 7,875 | |
| Machinery | 50,000 | |||
| Less: Depreciation (10%) | (5,000) | |||
| Outer | 45,000 | |||
| Furniture | 2,500 | |||
| Less: Depreciation (5%) | (125) | |||
| Outer | 2,375 | |||
| Goodwill (Raised) | 10,000 | |||
| Cash | 3,800 | |||
| Total | 77,600 | Total | 77,600 |
Q. 3. Dissolution of Partnership Firm (DOPF) [10]
Option A: Dissolution (Sharmila, Urmila & Leela)
In the books of Jeevan Stores
Realisation Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Sundry Assets: | By Sundry Liabilities: | ||
| Goodwill | 45,600 | Creditors | 28,800 |
| Machinery | 73,000 | Bills Payable | 21,600 |
| Motor Car | 1,67,600 | 50,400 | |
| Building | 1,02,000 | By Sharmila's Capital A/c | 1,23,600 |
| Investment | 62,400 | (Building taken over) | |
| Debtors | 30,600 | By Urmila's Capital A/c | |
| Stock | 45,000 | Goodwill | 45,600 |
| 5,26,200 | Stock | 45,000 | |
| To Urmila's Capital A/c | Debtors | 30,600 | |
| Creditors | 28,800 | 1,21,200 | |
| Bills Payable | 21,600 | By Bank A/c | |
| 50,400 | Motor Car | 1,51,080 | |
| To Bank A/c | 6,800 | Machinery | 31,680 |
| (Being Realisation expenses paid) | 1,82,760 | ||
| By Leela's Capital A/c | 55,440 | ||
| (Investments taken over) | |||
| By Loss on Realisation transferred | |||
| to Partner's Capital A/c :- | |||
| Sharmila | 20,000 | ||
| Urmila | 20,000 | ||
| Leela | 10,000 | ||
| 50,000 | |||
| Total | 5,83,400 | Total | 5,83,400 |
Partners' Capital Accounts
| Particulars | Sharmila | Urmila | Leela | Particulars | Sharmila | Urmila | Leela |
|---|---|---|---|---|---|---|---|
| To Realisation A/c | 1,23,600 | - | - | By Balance b/d | 2,27,160 | 1,44,000 | 1,08,000 |
| To Realisation A/c | - | 1,21,200 | - | By Realisation A/c | - | 50,400 | - |
| To Realisation A/c | - | - | 55,440 | ||||
| To Realisation A/c | 20,000 | 20,000 | 10,000 | ||||
| (Loss) | |||||||
| To Bank A/c | 83,560 | 53,200 | 42,560 | ||||
| Total | 2,27,160 | 1,94,400 | 1,08,000 | Total | 2,27,160 | 1,94,400 | 1,08,000 |
Bank Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Balance b/d | 3,360 | By Realisation A/c (Exp) | 6,800 |
| To Realisation A/c (Assets) | 1,82,760 | By Sharmila's Capital A/c | 83,560 |
| By Urmila's Capital A/c | 53,200 | ||
| By Leela's Capital A/c | 42,560 | ||
| Total | 1,86,120 | Total | 1,86,120 |
Bills of Exchange (BOE)
Option B: Journal Entries in the books of Mansi & Mansi's A/c
Journal Entries in the books of Mansi
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| 1. | Bills Receivable A/c ... Dr Bank A/c ... Dr To Kanika's A/c (Being acceptance of bill received & balance amount received by crossed cheque) |
21,000 5,000 |
26,000 |
|
| 2. | Bansari's A/c ... Dr To Bills Receivable A/c (Being bill endorsed.) |
21,000 | 21,000 |
|
| 3. | Kanika's A/c ... Dr To Bansari's A/c (Being bill dishonoured with noting charges.) |
21,280 | 21,280 |
|
| 4. | Kanika's A/c ... Dr To Interest A/c (Being interest charged.) |
650 | 650 |
|
| 5. | Bills Receivable A/c ... Dr To Kanika's A/c (Being acceptance of new bill received.) |
21,930 | 21,930 |
|
| 6. | Bank A/c ... Dr To Bills Receivable A/c (Being new bill honoured.) |
21,930 | 21,930 |
|
| Total | 1,12,790 | 1,12,790 |
In the Books of Kanika
Mansi's A/c
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
|---|---|---|---|---|---|
| 1. | To Bills Payable A/c | 21,000 | 1. | By Balance b/d | 26,000 |
| 1. | To Bank A/c | 5,000 | 2. | By Bills Payable A/c | 21,000 |
| 4. | To Bills Payable A/c | 21,930 | 2. | By Noting Charges A/c | 280 |
| 3. | By Interest A/c | 650 | |||
| Total | 47,930 | Total | 47,930 |
Problem: Parimal Company Ltd issued 1,00,000 preference shares @ ₹ 20 (App 8, Allot 6, 1st Call 4, Final 2). Fully subscribed and received.
Journal Entries in the books of Parimal Company Ltd.
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) | |
|---|---|---|---|---|---|
| 1 | Bank A/c ...Dr To Preference Share Application A/c (Being application money on 1,00,000 shares @ ₹8 received) |
8,00,000 | 8,00,000 | ||
| 2 | Preference Share Application A/c ...Dr To Preference Share Capital A/c (Being application money transferred to capital) |
8,00,000 | 8,00,000 | ||
| 3 | Preference Share Allotment A/c ...Dr To Preference Share Capital A/c (Being allotment money due on 1,00,000 shares @ ₹6) |
6,00,000 | 6,00,000 | ||
| 4 | Bank A/c ...Dr To Preference Share Allotment A/c (Being allotment money received) |
6,00,000 | 6,00,000 | ||
| 5 | Preference Share First Call A/c ...Dr To Preference Share Capital A/c (Being first call money due on 1,00,000 shares @ ₹4) |
4,00,000 | 4,00,000 | ||
| 6 | Bank A/c ...Dr To Preference Share First Call A/c (Being first call money received) |
4,00,000 | 4,00,000 | ||
| 7 | Preference Share Final Call A/c ...Dr To Preference Share Capital A/c (Being final call money due on 1,00,000 shares @ ₹2) |
2,00,000 | 2,00,000 | ||
| 8 | Bank A/c ...Dr To Preference Share Final Call A/c (Being final call money received) |
2,00,000 | 2,00,000 | ||
| Total | 40,00,000 | 40,00,000 | |||
Explain the importance of Computerised Accounting system.
- Speed: It performs accounting functions much faster than manual systems.
- Accuracy: The possibility of errors is minimized as calculations are automated.
- Reliability: Standardized processes ensure consistent and reliable reports.
- Scalability: It can handle large volumes of transactions easily.
- Security: Data can be password protected and backed up.
- Reporting: Generates various reports (P&L, Balance Sheet) instantly.
Q. 5. Death of Partner (DOP) [8]
Option A: Death of Partner (Mahendra, Surendra & Narendra)
In the books of Firm
Narendra's Capital Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Drawings A/c | 2,700 | By Balance b/d | 12,000 |
| To Narendra's Executor's Loan A/c | 38,800 | By General Reserve A/c (2/10) | 3,200 |
| (Balancing Figure) | By Goodwill A/c | 18,000 | |
| By Profit & Loss Suspense A/c | 2,000 | ||
| By Salary A/c | 3,600 | ||
| By Interest on Capital A/c | 300 | ||
| By Profit & Loss Adjustment A/c | 2,400 | ||
| (Profit) | |||
| Total | 41,500 | Total | 41,500 |
Working Notes:
(1) Calculation of Narendra's Share of Goodwill:
Average Profit = (30,000 + 25,000 + 25,000 + 40,000) / 4 = 1,20,000 / 4 = ₹ 30,000.
Goodwill of the firm = Average Profit × No. of years purchase
= 30,000 × 3 = ₹ 90,000.
Narendra's Share = 90,000 × (2/10) = ₹ 18,000.
(2) Calculation of Narendra's Share of Profit upto death:
(Based on last year's profit)
Profit for 3 months = 40,000 × (3/12) = ₹ 10,000.
Narendra's Share of Profit = 10,000 × (2/10) = ₹ 2,000.
(3) Profit & Loss Adjustment A/c (Rough Work):
Credit: Land & Building Appreciated (+14,100)
Debit: Stock Depreciated (-300), Furniture Depreciated (-1,800)
Net Profit = 14,100 - 2,100 = 12,000.
Narendra's Share (2/10) = ₹ 2,400.
(4) Interest on Capital:
12,000 × 10% × (3/12) = ₹ 300.
Analysis of Financial Statement (AOFS)
Option B: Ratio Analysis
(A) Current Ratio:
Formula: Current Ratio = Current Assets / Current Liabilities
1. Find Current Assets:
Current Assets = Total Assets - Fixed Assets
Current Assets = 22,000 - 10,000 = 12,000
2. Find Current Liabilities:
Current Liabilities = Total Assets - Capital Employed
Current Liabilities = 22,000 - 20,000 = 2,000
3. Calculation:
Current Ratio = 12,000 / 2,000 = 6 / 1
Current Ratio = 6 : 1
(B) Net Profit Ratio:
Formula: Net Profit Ratio = (Net Profit / Sales) × 100
1. Calculation of Net Profit:
Sales = 76,000
Less: Cost of Goods Sold = (52,000)
Gross Profit = 24,000
Less: Indirect Expenses = (12,000)
Net Profit = 12,000
2. Calculation of Ratio:
Net Profit Ratio = (12,000 / 76,000) × 100
= (1200 / 76)
= 15.789...
Net Profit Ratio = 15.79%
Q. 6. Accounts of "Not for Profit" Concerns (NPO) [12]
In the books of Bhanubai Mahila Seva Kendra
Income & Expenditure A/c
For the year ended 31st March, 2020
| Expenditure | Amount (₹) | Income | Amount (₹) |
|---|---|---|---|
|
To Electricity Charges (25,000 - Last Year 7,000) |
18,000 |
By Subscriptions (45,000 + Outstanding 3,000) |
48,000 |
|
To Wages (22,000 - Last Year 8,000 + O/S 450) |
14,450 | By Other Receipts | 5,000 |
|
To Stationery (3,000 - Last Year 1,000) |
2,000 | By Deficit (Excess of Exp. over Inc.) | 3,250 |
| To Rent & Taxes | 11,800 | ||
| To Travelling Expenses | 8,000 | ||
| To Depreciation on Furniture | 2,000 | ||
| Total | 56,250 | Total | 56,250 |
In the books of Bhanubai Mahila Seva Kendra
Balance Sheet
As on 31st March, 2020
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
|
Capital Fund Op. Bal: 40,000 Add: Entrance Fees: 28,000 Less: Deficit: (3,250) |
64,750 | Machinery | 10,000 |
| Pre-received Subscription | 3,000 |
Furniture (20,000 - Dep. 2,000) |
18,000 |
| Outstanding Wages | 450 | Government Bonds | 6,500 |
| Outstanding Subscription (Last Year) | 6,500 | ||
| Cash in hand | 4,000 | ||
| Cash at Bank | 20,200 | ||
| Outstanding Subscription (Current) | 3,000 | ||
| Total | 68,200 | Total | 68,200 |
Q. 7. Partnership Final Accounts (PFA) [12]
In the books of Rajan & Rohit
Profit & Loss Account
For the year ended 31st March, 2020
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
|
To Insurance Less: Prepaid |
30,000 (6,000) 24,000 |
By Gross Profit b/d | 69,000 |
| To Salaries | 10,000 | ||
| To Export Duty | 5,000 | ||
| To Interest | 2,000 | ||
| To Outstanding interest on Bank Loan | 3,000 | ||
|
To Depreciation on: Land & Building Furniture |
9,000 4,000 13,000 |
||
|
To Further Bad Debts Add: New R.D.D. |
2,000 2,500 4,500 |
||
|
To Net Profit transferred to Partners' Capital A/c: Rajan Rohit |
3,750 3,750 7,500 |
||
| Total | 69,000 | Total | 69,000 |
In the books of Rajan & Rohit
Balance Sheet
As on 31st March, 2020
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
|
Partners' Capital Rajan (1,00,000 + 3,750) Rohit (1,00,000 + 3,750) |
1,03,750 1,03,750 2,07,500 |
Land & Building Less: Depreciation |
1,00,000 (9,000) 91,000 |
|
10% Bank Loan Add: Outstanding Interest |
60,000 3,000 63,000 |
Furniture Less: Depreciation at 5% |
80,000 (4,000) 76,000 |
| Bills Payable | 19,000 |
Debtors Less: Further Bad Debts Less: New R.D.D. 5% |
52,000 (2,000) (2,500) 47,500 |
| Prepaid Insurance | 6,000 | ||
| Closing Stock | 69,000 | ||
| Total | 2,89,500 | Total | 2,89,500 |
Working Note: Depreciation on Land & Building
Total Value: ₹ 1,00,000
- Opening Balance (Used for 12 months): 60,000 × 10% = 6,000
- Addition on 1st July 2019 (Used for 9 months): 40,000 × 10% × 9/12 = 3,000
Total Depreciation = 6,000 + 3,000 = ₹ 9,000