Plus Two Accountancy Previous Year Question Paper 2017

Kerala Plus Two Accountancy Previous Year Question Paper 2017

Time Allowed: 2 hours
Cool off time: 15 Minutes
Maximum Marks: 60

General Instructions to Candidates

•  There is a ‘cool off time’ of 15 minutes in addition to the writing time of 2 hrs.
• Your are not allowed to write your answers nor to discuss anything with others during the ‘cool off time’.
• Use the ‘cool off time’ to get familiar with the questions and to plan your answers.
•  Read questions carefully before you answering.
• All questions are compulsory and only internal choice is allowed.
• When you select a question, all the sub-questions must be answered from the same question itself.
• Calculations, figures and graphs should be shown in the answer sheet itself.
•  Malayalam version of the questions is also provided.
• Give equations wherever necessary.
•  Electronic devices except non programmable calculators are not allowed in the Examination Hall.

Question 1:
The ratio in which the old partners agree to sacrifice their share of profit in favor of incoming partner is (1)
a. New ratio
b. Old ratio
c. Sacrificing ratio
d. Gaining ratio

Question 2:
Sanu and Binu are partners in a firm sharing profit and losses in the ratio of 3:1. They admit Jinu for 3/7 share. Calculate the new profit sharing ratio. (1)

Question 3:
Write journal .entry for recording unrecorded liability at the time of retirement of a partner. (1)

Question 4:
Anand sports clubreceived Rs. 1,75,000 as subscription for the year ended 31^st March 2016. Consider the following adjustments and mention whether we should add or deduct each items to find out subscription for the year. (2)

a. Subscription outstanding on 31^st March 2016 Rs. 15,000.

b. Subscription outstanding on 1^st April 2015 Rs. 20,000.

c. Subscription received in advance as on 1^st April 2015 Rs. 16,000.

d. Subscription received in advance as on 31^st March 2016 Rs. 12000.

Question 5:
Firoz and Shahin are partners in a firm. The firm did not have any partnership deed. Specify how the following situations are treated. (1)

a. Sharing of profit and losses

b. Interest on advance given by Firoz to the firm.

Question 6:
Priya, Priji and Viji are partners, sharing profit and losses in the ratio of 4:3:2. Priji retired and goodwill is valued at Rs. 63,000. Priya and Viji are decided to share future profits and losses in the ratio of 5:3. Record necessary journal entry, when goodwill is raised at its full value and written off immediately. (2)

Question 7:
Mention the name of account where profit or loss on realization is transferred. (1)

Question 8:
What journal entry will be passed if realization expenses are paid by a partner on behalf of the firm.? (1)

Question 9:
Partners capital account and current account are not maintained separately under —— method of maintaining capital account. (1)

Question 10:
Anoop and Johny are partners in a firm, sharing profit and losses in the ratio of 3:2. The firm was decided to dissolve on 31st March 2016. Mention any four ways of dissolution of firm. (2)

Question 11:
Anwar a partner in Akbar Travels with draw money during the year ending 31st March 2016 from his capital account for his personal use . Calculate interest on drawings on the following situations if rate of interest is 9% p.a. (3)

a. If he withdrew Rs.2,500 per month at the beginning of the month.
b. If the amount withdrawn were on 1 – 6 – 2015, Rs. 7,500 on 31-8-2015 Rs. 3,000 and 30 – 9 – 2015 Rs.6,500.

Question 12:
The capital of the firm of Mohan and Rissam is Rs. 75,000 and the rate of interest is 15%. Annual salary to partners is Rs. 5,000 each. The profit for the last 3 years were Rs. 36,000, 38000 and 31,000. Goodwill is to be valued at 2 years purchase of the last 3 years average super profits. Calculate the goodwill of the firm. (3)

Question 13:
Renjith, Sumesh and Aneesh are partners in a firm. Sumesh retires from the firm.
On the date of retirement of Sumesh, Rs.45,000 become due to him. Renjith and Aneesh promise to pay the amount in installments. Prepare Sumesh’s loan account, when they agree to pay three yearly installments of Rs. 15,000 including interest at 12% p.a. on the outstanding balance during the first 3 years and the balance including interest in the fourth year.

Question 14:
A, B & C are partners sharing profit and losses in the ratio of 5 : 3: 2. Their Balance Sheet as on 31^st March 2015 was as follows:


The firm was dissolved on that date.
Prepare realization account with the following information:

a. Building realized for Rs. 120000; Bills receivables realized for Rs. 70,000; Stock realized for Rs. 40,000 and Machinery sold for Rs, 33,000 and furniture Rs.60,000.

b. Bank loan was settled for Rs. 70,000; Creditors and bills payable were settled at 10% discount.

c. Realisation expenses Rs. 1,500.

Question 15:

L is admitted on the following terms:

1. L will bring Rs. 15,000 as capital and Rs.5,000 as premium for goodwill for 1/6 share.

2. The value of stock is reduced by 10% and plant and machinery increased by 5%.

3. Investment worth Rs.1,5oo(not mentioned in the Balance Sheet) is to be taken into account.

Prepare revaluation account and capital account of partners.

Question 16:
a. From the following Receipt and Payment Account of a club, prepare income and expenditure account for the year ended 31st December 2016 and Balance Sheet as on that date:

Additional information:

a. The club has loo members each paying an annual subscription of Rs. 900. Subscripti ons outstanding on December 31, 2015 were Rs. 3,800.

b.On December 31^st, 2016, salary outstanding amounted to Rs. 1,000, salary paid included Rs. 1,000 for the year 2015.

c. On January 1, 2016 the club owned land and building Rs. 25,000, furniture Rs.2,600 and books Rs. 6,200.

b. One of your friend wish to take membership in a cricket club. He does not know anything about Not-for-profit organizations. Can you explain him what it is and what are different accounting records maintained in such organization and steps for preparing final accounts? (8)

Answers

Answer 1:
(c) Sacrificing ratio

Answer 2:
3 : 1: 3

Answer 3:
Revaluation A/c Dr.
To Unrecorded liability

Answer 4:

Answer 5:
a. Equally
b. 696 interest on loan should be given to the partner Mr.Firoz

Answer 6:
Goodwill (premium) A/c Dr. 63000
To Priya’s Capital A/c 28000
To Priji’s Capital A/c 21000
To Viji’s Capital A/c 14000
(Goodwill raised at its full value and credited to old partner’s capital account in their old ratio)
Priya’s Capital A/c Dr. 39375
Viji’s Capital A/c Dr. 23625
To Goodwill A/c 63000
(Full value of goodwill written off to continuing partners’ capital account in their new ratio)

Answer 7:
Partners’ Capital Account or Partner’s Current Account

Answer 8:
Realization A/c Dr.
To Partner’s Capital A/c

Answer 9:
Fluctuating Capital Method

Answer 10:
Dissolution by agreement
Compulsory Dissolution
Dissolution on the happening of certain contingencies – like expiry of term of firm, death etc.,
Dissolution by notice
Dissolution by court

Answer 11:
a. Calculation of interest on Drawings:
Total Drawing = 2500 x 12 = 30000
Average period = 6.5
Interest on drawing = 30000 x 6.5/12
9% = 1462.50

Interest on drawings for one month on the
sum of products = sum of products x \(\frac { 1 }{ 2 }\) x \(\frac { Rate of interest }{ 100 }\) 135000 x \(\frac { 1 }{ 12 }\) x9/100 = 1012.5

Answer 12:
Calculation of goodwill-Super Profit Method
Goodwill = Super Profit No.of years purchase
Super Profit= Average Profit – Normal Profit
∴ Average Profit = 36ooo+38ooo+3iooo= 105000/3 =35000
Normal Profit = Interest on capital+Partner’s Salary
Interest on capital = 75000 x 15% =11250
Partner’s Salary = 5000 x 2 = 10000
Normal Profit = 11250 + 10000=21250
Super Profit = 35000 – 21250 = 13750
Goodwill = 13750 * 2 = 27500

Answer 13:

Answer 14:

Answer 15:

Answer 16:

b. Not-for -profit Organisation refer to the organisations that are for used for the welfare of the society and are set up as charitable institutions which function without any profit motive. Their main aims is to provide service to a specific group or the public at large. Normally, they do not manufacture, purchase of sell goods and may not have credit transactions. Hence they need not maintain many books of account (as the trading concerns do) and Trading and Profit and ^ Loss Account. The funds raised by such organisations are credited to capital fund or general fund. The major sources of their income usually are subscriptions from their members donations, grants-in-aid, income from investments, etc. The main objective of keepting records in such organisations is to meet the statutory requirement and help them in exercising control over utilization of their funds. They also have to prepare the financial statements at the end of each accounting period (usually a financial year) and ascertain their income and expenditure and the financial position, and submit them to the statutory authority called Registrar of Societies.

As stated earlier, normally such organisations are not engaged in any trading or business activities . The main sources of their income are subcriptions from members, donations, financial assistance from government and income from investments. Most of their transactions are in cash or through the bank. These institutions are required by law to keep proper accounting records and keep proper control over the utilization of their funds. This is why they usually keep a cash book in which all receipts and payments are duly recorded. They also maintain a ledger containing the accounts of all incomes, expenses, assets and liabilites which facilitates the preparation of financial statements at the end of the accounting period. In addition, they are required to maintain a stock register to keep complete record of all fixed assets and the consumables.

Final Accounts of Financial Statements: The Not-for-Profit Organisations are also required to prepare financial statements at the end of the each accounting period. Although these organisations are non-profit making entities and they are not required to make Trading and Profit & Loss Account but it is necessary to know whether the income during the year was sufficient to meet the expenses or not. Not only that they have to provide the necessary financial .information to members, donors, and contributors and also to the Registrar of Societies. For this purpose, they have to prepare their final accounts at the end of the accounting period and the general principles of accounting are fully applicable in their preparation as stated earlier, the final accounts of a ‘not-for- profit organisation’ consist of the following.

1. Receipt and Payment Account
2. Income and Expenditure Account, and
3. Balance Sheet.

The Receipt and Payment Account is the summary of cash and bank transations which helps in the preparation of Income and Expenditure Account and the , Balance Sheet. Income and Expenditure Account is akin to Profit and Loss Account. The Not-for-Profit Organisations usually prepare the Income and Expenditure Account and a Balance Sheet with the help of Receipt and Payment Account.

In fact, if an organisation has followed the double entry system they must prepare a trial balance for checking the accuracy of the ledger accounts and it will also facilitate the preparation of receipt and Payment account. Income and Expenditure Account and the Balance Sheet.
Following steps may be helpful in preparing an Income and Expenditure Account from a given Receipt and payment Account:

1. Persye the Receipt and Payment Account thoroughly
2. Exclude the opening and closing balances of cash and bank as they are not an income.
3. Exclude the capital receipts and capital payments as these are to be shown in the Balance Sheet.
4. Consider only the revenue receipts to be shown on the income side of Income and Expenditure Account. Some of these need to be adjusted by excluding the amounts relating to the preceding and the succeeding periods and including the amounts relating to the current year not yet received.
5. Take the revenue expenses to the expenditure side of the Income and Expenditure. Account with due adjustments as per the additional information provided relating to the amounts received in advance and those not yet received.
6. Consider the following items not appearing in the Receipt and Payment Account that need to be taken into account for determing the surplus/deficit for the current year:
   •  Depreciation of fixex assets.
   • Provision for doubtful debts, if required.
   • Profit or loss on sale of fixed assets.

Preparation of Balance Sheet
The following procedure is adopted to prepare the Balance Sheet:

1. Take the Capital/General Fund as per the opening balance sheet and add surplus from the Income and Expenditure Account. Further, add entrance fees, legacies, life membership fees, etc. received during the year.
2. Take all the fixed assets (not sold/discarded/or destroyed during the year) with additions (from the Receipts and Payments account) after charging depreciation (as per Income and Expenditure account) and show them on the assets side.
3. Compare items on the receipts side of the Receipts and Payments Account with income side of the Income and Expenditure Account. This is to ascertain the amounts of:
   • subscriptions due but not yet received
   •  incomes received in advance
   • sale of fixed assets made during the year;
   • items to be capitalised (i.e. taken directly to the Balance Sheet)
     e.g. legacies, interest on specific fund investment and so on.
4. Similarly compare, items on the payments side of the Receipt and Payment Account with expenditure side of the Income and Expenditure Account. This is to ascertain the amounts if:
   • outstanding expenses;
   • prepaid expenses;
   • purchase of a fixed asset during the year;
   • depreciation on fixed assets;
   • stock of consumable items like stationery in hand;
   • Closing balance of cash in hand and cash at bank as, and so on.

Plus Two Accountancy Previous Year Question Papers and Answers