April 17, 2022

MCQ of Accountancy CUET | Class 12 | Common University Entrance Test

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MCQ of Accountancy CUET 2022 | Class 12 | Central University Eligibility Test |

MCQ of Accounting Ratios

Q1. ………. involves the comparison of a firm’s ratio with that of some selected firms in the same industry or industry average at the same point of time.

  1. Time series analysis
  2. Cost analysis
  3. Cross sectional analysis
  4. Data analysis

Answer: Cross sectional analysis

Q2. …………. involves comparison of a firm’s present ratio with its past ratios.

  1. Time series analysis
  2. Cost analysis
  3. Cross sectional analysis
  4. Data analysis

Answer: Time series analysis

Q3. the objective of ratio analysis is to

  1. place an exact value of goodwill
  2. Ascertain the payment of cash and cash equivalent
  3. Locate the weak spots of business which need more attention
  4. Provide summary of personal and real account

Answer: Locate the weak spots of business which need more attention

Q4. Current assets does not include

  1. Short term loan and advance
  2. Short term borrowing
  3. Current investment
  4. Trade receivable

Answer: Short term borrowing

Q5. ……. ratios are calculated on the basis of ‘Cost of revenue from Operation’.

  1. Liquidity ratio
  2. Solvency ratio
  3. Activity ratio
  4. Profitability ratio

Answer: Activity ratio

Q6. Current ratio =

  1. Current liability/ Current assets
  2. Current assets/ Current liabilities
  3. Liquid assets/ Current liabilities
  4. Current liabilities/ Liquid aassets

Answer: Current assets/ Current liabilities

Q7. Quick ratio =

  1. Current liabilities/ Current assets
  2. Current assets/ Current liabilities
  3. Liquid assets/ Current liabilities
  4. Current liabilities/ Liquid assets

Answer: Liquid assets/ Current liabilities

Q8. Two basic measures of liquidity involve

  1. Current ratio and average collection period
  2. Gross profit margin and operating ratio
  3. Current ratio and liquid ratio
  4. Inventory turnover and current ratio

Answer: Current ratio and liquid ratio

Q9. Which of the following is an ideal current ratio?

  1. 1:2
  2. 2:1
  3. 1:1
  4. 1:3

Answer: 2:1

Q10. Which of the following is an ideal Quick ratio?

  1. 1:2
  2. 2:1
  3. 1:1
  4. 1:3

Answer: 1:1

Q11. Solvency ratio includes 

  1. Gross profit ratio
  2. Interest coverage ratio
  3. Net profit ratio
  4. Operating ratio

Answer: Interest coverage ratio

Q12. Profitability ratio is also known as

  1. Debt equity ratio
  2. Proprietary ratio
  3. Income ratio
  4. Total assets to debt ratio

Answer: Income ratio

Q13. Profitability ratio includes

  1. Proprietary ratio
  2. Return on investment
  3. Interest coverage ratio
  4. Debt equity ratio

Answer: Return on investment

Q14. Current assets doesn’t include

  1. Trade payable
  2. Short term loan
  3. Current investment
  4. Cash and cash equivalent

Answer: Trade payable

Q15. Current liabilities don’t include

  1. Short term loan
  2. Short term provision
  3. Short term borrowing
  4. Sundry creditors

Answer: Short term loan

Q16. Activity ratios include

  1. Proprietary ratio
  2. Debt equity ratio
  3. Operating ratio
  4. Stock turnover ratio

Answer: Stock turnover ratio

Q17. Turnover ratio is also called as

  1. Net profit ratio
  2. Activity ratio
  3. Income ratio
  4. Solvency ratio

Answer: Activity ratio

Q18. Formula for calculating liquid assets is

  1. Inventories – Prepaid expense + current assets
  2. Current assets + Inventories – advance tax
  3. Current assets  – inventories –  prepaid expenses
  4. Prepaid expenses  –  current assets

Answer: Current assets  – inventories –  prepaid expenses

Q19. ………… Ratio is expressed as relationship between long term debts and shareholder’s funds.

  1. Total assets to debt ratio
  2. Debt equity ratio
  3. Current ratio
  4. Liquidity ratio

Answer: Debt equity ratio

Q20. ……… Ratio is expressed as relationship between total assets and long term debts.

  1. Total assets to debt ratio
  2. Debt equity ratio
  3. Current ratio
  4. Liquidity ratio

Answer: Total assets to debt ratio

Q21. Working capital =

  1. Current assets / Current liabilities
  2. Current assets – Current liabilities
  3. Current liabilities / Current assets
  4. Current liabilities – Current assets

Answer: Current assets – Current liabilities

Q22. One of the objectives of profitability ratio is

  1. to measure the rate of net profit earned on revenue from operation
  2. to measure the margin of profit available on revenue from operation
  3. to measure how efficiently the capital employed in the business is being used
  4. None of the above

Answer: To measure the margin of profit available on revenue from operation

Q23. One of the objectives of Net Profit Ratio is 

  1. to measure the rate of net profit earned on revenue from operation
  2. to measure the margin of profit available on revenue from operation
  3. to measure how efficiently the capital employed in the business is being used
  4. None of the above

Answer: To measure the rate of net profit earned on revenue from operation

Q24. Return on investment is also known as

  1. Capital investment
  2. Net return
  3. Yield on capital
  4. Capital employed

Answer: Yield on capital

Q25. Ability of the business to pay its long term liabilities is called

  1. Profitability of business
  2. Liquidity of business
  3. Solvency of business
  4. Insolvency of business

Answer: Solvency of business

Q26. Earning capacity of the business is called

  1. Profitability of business
  2. Liquidity of business
  3. Solvency of business
  4. Insolvency of business

Answer: Profitability of business

Q27. One of the limitations of accounting ratio is that it ignore ……… factors.

  1. Quantitative
  2. Qualitative
  3. Definitive
  4. Gross

Answer: Qualitative

Q28. Calculate current ratio 

  1. 1:2
  2. 2:1
  3. 1:3
  4. 2:3

Answer: 2:1

Q29. Current Ratio is 3:5:1

Working Capital : Rs. 90,000

Calculate the amount of Current Assets and Current Liabilities.

  1. Current liabilities 36000 and current assets 126000
  2. Current liabilities 25 000 and current assets 120000
  3. Current liabilities 30000 and current assets 125000
  4. Current liabilities 34000 and current assets 124000

Answer: Current liabilities 36000 and current assets 126000

Q30. Handa Ltd. had inventory of Rs. 20,000. Total Liquid assets are Rs. 1,00,000 and quick ratio is 2:1. Calculate the current ratio.

  1. 1 : 2.4
  2. 2 : 1
  3. 2.4 : 1
  4. 1:3

Answer: 2.4:1

Q31. Calculate Inventory Turnover Ratio if : 

Inventory in the beginning is Rs. 76,250

Inventory at the end is Rs. 98,500

Gross Revenue from operations is Rs. 5,20,000

Return Inwards is Rs. 20,000.

Purchase is Rs. 3,22,250

  1. 2 times
  2. 3.43 times
  3. 4.5 times
  4. 5 times

Answer: 3.43 times

Q32.

MCQ of Accountancy CUET

  1. Quick ratio 0.54 : 1 ; inventory turnover ratio 3.74 times ; return on investment 41.17 %
  2. Quick ratio 0.2 : 1 ; inventory turnover ratio 2 times ; return on investment 51.3 %
  3. Quick ratio 0.35 : 1 ; inventory turnover ratio 3.12 times ; return on investment 36.3 %
  4. Quick ratio 1:2 ; inventory turnover ratio 2.54 times ; return on investment 39.2 %

Answer: Quick ratio 0.54 : 1 ; inventory turnover ratio 3.74 times ; return on investment 41.17 %

Q33. Calculate ‘Debt-Equity Ratio’ from the following information.

Total Assets : Rs. 3,50,000

Total Debt : Rs. 2,50,000

Current Liabilities : Rs. 80,000

  1. 1:2
  2. 1.7 : 1
  3. 2.1 : 1
  4. 3:1

Answer: 1.7:1

Q34. Calculate interest coverage ratio from the following information.

Net profit (After Taxes) = Rs. 1,00,000

Fixed Interest charges on long term borrowing = Rs. 20,000

Rate of Income Tax : 50%

  1. 9 times
  2. 10 times
  3. 11 times
  4. 13 times

Answer: 11 times

Q35. Cost of revenue from operations is Rs. 5,00,000. The opening stock is Rs. 40,000 and the closing stock is Rs. 60,000 (at cost). Calculate inventory turnover ratio.

  1. 9 times
  2. 10 times
  3. 11 times
  4. 13 times

Answer: 10 times

MCQ of Accounting for Partnership Firm

Q1. Main features of partnership do not include
a. Result of an agreement
b. Separate existence from its members
c. Sharing of profits
d. Two or more persons
Answer : Separate existence from its members

Q2. Every partner has the right to share profits or losses with other partners in the …… ratio.
a. Equal
b. Capital
c. Agreed
d. Loss
Answer : Agreed

Q3. LLP stands for
a. Legal Liability Partnership
b. Liability Legal Partnership
c. Legal Limited Partnership
d. Limited Liability Partnership
Answer : Limited Liability Partnership

Q3. Number of minimum and maximum partners in a partnership is 
a. 2 and 49
b. 3 and 50
c. 2 and 50
d. 2 and 100
Answer : 2 and 50

Q4. …… is a written document which contains the term of partnership agreement.
a. Article of memorandum
b. Partnership Deed
c. LLP
d. Journal
Answer : Partnership Deed

Q5. Profit & loss appropriation account is …… account
a. Real
b. Nominal
c. Personal
d. Human
Answer : Nominal

Q6. The partner has relationship of….. With the firm :
a. An agent
b. Seller and Buyer
c. An owner and an agent
d. Manager
Answer : An owner and an agent

Q7. …… partners don’t take any part in the conduct of the business but provide capital and share profits and losses in agreed ratio.
a. New
b. Ostensible
c. Retiring
d. Sleeping
Answer : Sleeping

Q8. …… partners do not contribute any capital and without having any interest in the business, lend their name to the business.
a. New
b. Ostensible
c. Retiring
d. Sleeping
Answer: Ostensible

Q9. Ram & Sham are partners sharing profits & losses in ratio of 3:2. Ram being non-working partner contributes Rs. 20,00,000 as his capital & Shyam being a working party, gets a salary of Rs. 8000 per month. As per partnership deed interest is paid @ 8% p.a. & salary is allowed. Profits before providing that for year ending 31st March 2015 were Rs. 80,000. Show the distribution of profits.
Profit divided should be :
a. Ram 40000and Shyam 40000
b. Ram 50000 and Shyam 30000
c. Ram 30000 and Shyam 50000
d. Ram 60000 and Shyam 20000
Answer: Ram 50000 and Shyam 30000

Q10. Calculate interest on drawings of Mr. X @ 10% p.a. if he withdrawn Rs. 1000 per month (i) in the beginning of each Month (ii) In the middle each of month (iii) at end of each month.
Total Amount with withdrawn Rs 12000
a. Rs 400 : Rs 550 : Rs 600
b. Rs. 750 : Rs 700 : Rs 600
c. Rs. 650 : Rs. 600 : Rs 550
d. Rs. 450 : Rs 650 : Rs 600
Answer : Rs. 650 : Rs. 600 : Rs 550

Q11. In the absence of an agreement to the contrary, partners share profits and losses in the
a. Ratio of their capitals at the beginning of the year
b. Ratio of their capitals at the end of the year
c. Ratio of average capital
d. Equal ratio
Answer: Equal ratio

Q12. Partners’ Current Accounts are opened when their capital accounts are
a. Fixed
b. Fixed and Fluctuating both
c. Fluctuating
d. None of these
Answer: Fixed

Q13. The interest on capital accounts of partners under the fluctuating capital account method is credited to
a. Interest Account
b. Profit and Loss Account
c. Partners’ Capital Accounts
d. None of these
Answer: Partners’ Capital Accounts

Q14. In the absence of an agreement to the contrary, the partners are
a. Entitled for 6% interest on their capitals, only when there are profits
b. Entitled for 9% interest on their capitals, only when there are profits
c. Entitled for interest on capital on the bank rate, only when there are profits
d. Not entitled for any interest in their capitals
Answer: Not entitled for any interest in their capitals

Q15. The current account of a partner
a. Will always have a credit balance
b. Will always have a debit balance
c. May have a debit or credit balance
d. Can never have a debit balance
Answer: May have a debit or credit balance

Q16. Interest payable on the capitals of the partners is changed to
a. Profit and Loss Account
b. Profit and Loss Adjustment Account
c. Realisation Account
d. Profit and Loss Appropriation Account
Answer: Profit and Loss Appropriation Account

Q17. Interest on partner’s drawing under a fluctuating capital account is debited to
a. Partner’s Capital Account
b. Profit and Loss Account
c. Drawing Account
d. None of the above
Answer: Partner’s Capital Account

Q18. On March 31, 2017 after the close of accounts, the capitals of Mishika , Harshita and kavya stood in the books of the firm at Rs 4,00,000, Rs 3,00,000 and Rs 2,00,000, respectively. Subsequently, it was discovered that the interest on capital @ 10% p.a. had been omitted. The profit for the year amounted to Rs 1,50,000 and the partner’s drawings had been Mishika : Rs 20,000, Harshita Rs 15,000 and kavya Rs 10,000. Calculate interest on capital.
Their interest on capital should be:
a. 37030 : 26980 : 16600
b. 34000 : 23410 : 14000
c. 37000 : 26500 : 16000
d. 34600 : 24521 : 15600
Answer : 37000 : 26500 : 16000

Q19. Bharam is a partner in a firm. He withdraws Rs 3,000 at the starting of each month for 12 months. The books of the firm closes on March 31 every year. Calculate interest on drawings if the rate of interest is 10% p.a.
a. Rs. 2950
b. Rs. 1950
c. Rs. 1900
d. Rs. 2000
Answer: Rs. 1950

Q 20.Raj and Neeraj are partners in a firm. Their capitals as on April 01, 2017 were Rs 2,50,000 and Rs 1,50,000, respectively. They share profits equally. On July 01, 2017, they decided that their capitals should be Rs 1,00,000 each. The necessary adjustment in the capitals were made by introducing or withdrawing cash by the partners’. Interest on capital is allowed @ 8% p.a. Compute interest on capital for both the partners for the year ending on March 31, 2018.
a. Raj 11000, Neeraj 9000
b. Raj 12000, Neeraj 10000
c. Raj 11500, Neeraj 8000
d. Raj 10500, Neeraj 9000
Answer : Raj 11000, Neeraj 9000

Q21. Amit, Sumit and Samiksha are in partnership sharing profits in the ratio of 3:2:1. Samiksha’ share in profit has been guaranteed by Amit and Sumit to be a minimum sum of Rs 8,000. Profits for the year ended March 31, 2017 was Rs 36,000. Divide profit among the partners.
Profit among Amit , Sumit, Samiksha respectively is :
a. 12000, 12000,  12000
b. 10000, 20000, 6000
c. 20000, 10000, 6000
d. 16800, 11200, 8000
Answer : 16800; 11200; 8000

Q22. Pinki, Deepati and Kaku are partner’s sharing profits in the ratio of 5:4:1. Kaku is given a guarantee that his share of profits in any given year would not be less than Rs 5,000. Deficiency, if any, would be borne by Pinki and Deepti equally. Profits for the year amounted to Rs 40,000. Record necessary journal entries in the books of the firm showing the distribution of profit.
a. 19500 : 15500 : 5000
b. 10000 :  20000 : 10000
c. 15000 : 10000 : 15000
d. 20000 : 10000 : 10000
Answer : 19500 : 15500 : 5000

Q23. Himanshu withdrews Rs 2,500 at the end Month of each month. The Partnership deed provides for charging the interest on drawings @ 12% p.a. Calculate interest on Himanshu’s drawings for the year ending 31st December, 2017.
a. Rs. 1450
b. Rs. 2000
c. Rs. 1340
d. Rs. 1650
Answer: Rs. 1650

Q24. Rishika is a partner in a firm. She withdrew the following amounts during the year ended March 31, 2018.
May 01, 2017 : 12000
July 31, 2017 : 6000
September 30, 2017 : 9000
November 30, 2017 : 12000
January 01, 2018 : 8000
March 31, 2018 : 7000
Interest on drawings is charged @ 9% p.a. Calculate interest on drawings.
a. Rs. 2290
b. Rs. 2200
c. Rs. 2295
d. Rs. 3000
Answer : Rs. 2295

Q25. Rahul, Rohit and Karan started partnership business on April 1, 2016 with capitals of Rs 20,00,000, Rs 18,00,000 and Rs 16,00,000, respectively. The profit for the year ended March 2017 amounted to Rs 1,35,000 and the partner’s drawings had been Rahul Rs 50,000, Rohit Rs 50,000 and Karan Rs 40,000. The profits are distributed among partner’s in the ratio of 3:2:1. Calculate the interest on capital @ 5% p.a.
a. 100000; 80000 ; 70000
b. 100000; 90000 ; 80000
c. 150000; 100000; 90000
d. 150000;90000 ; 80000
Answer : 100000; 90000 ; 80000

Q26. On March 31, 2017, after the close of books of accounts, the capital accounts of Ram, Shyam and Mohan showed balance of Rs 24,000 Rs 18,000 and Rs 12,000, respectively. It was later discovered that interest on capital @ 5% had been omitted. The profit for the year ended March 31, 2017, amounted to Rs 36,000 and the partner’s drawings had been Ram, Rs 3,600; Shyam, Rs 4,500 and Mohan, Rs 2,700. The profit sharing ratio of Ram, Shyam and Mohan was 3:2:1. Calculate interest on capital.
a. Rs. 480; Rs. 525 ; Rs. 435
b. Rs. 345 ; Rs. 456; Rs 430
c. Rs. 450 ; Rs 530 ; Rs 436
d. Rs. 450 ; Rs.450 ; Rs. 560
Answer : Rs. 480; Rs. 525 ; Rs. 435

Q27. Harish is a partner in a firm. He withdrew the following amounts during the year 2017 :
February 01 : 4000
May 01 : 10000
June 30 : 4000
October 31 : 12000
December 31 : 4000
Interest on drawings is to be charged @ 7.5 % p.a.
Calculate the amount of interest to be charged on Harish’s drawings for the year ending December 31, 2017.
a. Rs. 1000
b. Rs. 2050
c. Rs. 1075
d. Rs. 1095
Answer : Rs. 1075

Q28. The agreement of partnership may be
a. Oral
b. Written
c. Both a and b
d. None of these
Answer : Both a and b

Q29. Interest on capital will be paid to the partner if provided for in the partnership deed but only out of
a. Profits
b. Reserve
c. Accumulated profits
d. Goodwill
Answer: Profits

Q30. Goodwill is a/an… asset
a. Tangible
b. Intangible
c. Not an asset
d. None of these
Answer: Intangible

Q31. When only partner’s capital account is maintained all the adjustments are made
a. Partners’ capital Account
b. Partners’ current account
c. Cash account
d. None of these
Answer: Partners’ capital Account

Q32. The persons who have entered into the partnership are individually known as
a. Partners
b. Firm
c. Association
d. None of these
Answer: Partners

Q33. On 1st January 2019, a partner advanced a loan of Rs. 100000 to the firm. In the absence of agreement, interest on loan 31st march 2019 will be
a. Nil
b. Rs. 1500
c. Rs. 3000
d. Rs. 6000
Answer: Rs. 1500

Q34. Intangible assets (goodwill) has been defined in :
a. AS 16
b. AS 20
c. AS 26
d. AS 21
Answer: AS 26

Q35. Charulata is a partner in a firm . She withdrew Rs 10000 in each quarter during the year ended 31st march 2019.Interest on her drawing@ 9% per annum will be :
a. Rs. 1350
b. Rs. 2250
c. Rs. 900
d. Rs. 1800
Answer: Rs. 1800

Q36. If a fixed amount is withdrawn by a partner in each quarter, interest on the total amount is charged for … months.
a. 3
b. 6
c. 4.5
d. 7.5
Answer: 6

Q37. Interest on partner drawing will be debited to
a. Profit & loss account
b. Profit & loss appropriation account
c. Partner current account
d. Interest account
Answer: Partner current account

Q38. Rights, duties and liabilities of each partner is regulated by
a. Any one of all partner
b. New partner
c. Retiring partner
d. Partnership deed
Answer: Partnership deed

Q39. Profit & loss account has
a. Opening balance only
b. Closing balance only
c. Neither opening balance nor closing balance
d. Either opening balance or closing balance
Answer : Neither opening balance nor closing balance

Q40. Manager’s commission is a charge
a. Against the profits
b. As an appropriation of profit
c. Against capital Account of partners
d. Against current account of partners
Answer : Against the profits

MCQ of Change in Profit Sharing Ratio

Q1. The ratio of surrender of profit sharing ratio is called

  1. New ratio
  2. Gaining ratio
  3. Sacrificing ratio
  4. Old ratio

Answer: Sacrificing ratio

Q2. The ratio of gain of profit sharing ratio is called

  1. New ratio
  2. Gaining ratio
  3. Sacrificing ratio
  4. Old ratio

Answer: Gaining ratio

Q3. Sacrificing ratio =

  1. Old ratio – new ratio
  2. New ratio- old ratio
  3. Old ratio/ new ratio
  4. New ratio/ old ratio

Answer: Old ratio – new ratio

Q4. Gaining ratio =

  1. Old ratio – new ratio
  2. New ratio – old ratio
  3. Old ratio / new ratio
  4. New ratio / old ratio

Answer: New ratio – old ratio

Q5. The term goodwill is generally used to

  1. Pay off liabilities of the business
  2. Purchase goods on credit
  3. Denote the benefit arising from connections and reputation
  4. None of the above

Answer: Denote the benefit arising from connections and reputation

Q6. Essential Features of goodwill don’t involve

  1. It is a valuable asset
  2. It is helpful in earning excess profit
  3. It is an intangible asset
  4. It is very easy to place an exact value on goodwill

Answer: It is very easy to place an exact value on goodwill

Q7. Excess of actual average profit over normal profits is known as

  1. Average profit
  2. Accumulated profit
  3. Unearned profit
  4. Super profit

Answer : Super profit

Q8. When there is a change in profit sharing ratio amongst existing partners, so in …… ratio, partners will share profit or losses on revaluation of assets and liabilities.

  1. Old profit sharing
  2. New profit sharing
  3. Sacrificing
  4. Gaining

Answer : Old profit sharing

Q9. Goodwill is a/an …… Asset

  1. Fictitious
  2. Current
  3. Wasting
  4. Intangible

Answer : Intangible

Q10.  A and B had been partners in a firm sharing profit or loss equally. With effect from 1st April 2019 they agreed to share profits in the ratio of 4 : 3. Due to change in profit sharing ratio, A’s gain or sacrifice would be :

  1. Gain 1/ 14
  2. Sacrifice 1/14
  3. Gain 4/7
  4. Sacrifice 3/7

Answer : Gain 1/ 14

Q11. A and B had been partners in a firm sharing profit or loss equally. With effect from 1st April, 2019 they agreed to share profits in the ratio of 4 : 3. Due to change in profit sharing ratio, B’s gain or sacrifice would be :

  1. Gain 1/14
  2. Sacrifice 1/14
  3. Gain 4/7
  4. Sacrifice 3/7

Answer : Sacrifice 1/14

Q12. A and B had been partners in a firm sharing profit or loss in the ratio of 3 : 5. With effect from 1st April, 2019, they agreed to share profits or losses equally. Due to change in profit sharing ratio, A’s gain or sacrifice would be :

  1. Gain ⅜
  2. Gain ⅛
  3. Sacrifice ⅜
  4. Sacrifice ⅛

Answer : Gain ⅛

Q13. A and B had been partners in a firm sharing profits and losses in the ratio of 2 : 1. With effect from 1st January 2019 they agreed to share profits and losses equally. Individual partner’s gain or sacrifice due to change in the ratio would be:

  1. Gain by A ⅙; sacrifice by B ⅙
  2. Sacrifice by A ⅙;gain by B ⅙
  3. Gain by A ½ ; sacrifice by B ½
  4. Sacrifice by A ½; Gain by B ½

Answer : Sacrifice by A ⅙;gain by B ⅙

Q14. A and B shared profits and losses in the ratio of 3 : 2. With effect from 1st January, 2019, they agreed to share profits equally. Sacrificing ratio and Gaining Ratio would be :

  1. Sacrifice by A 1/10;sacrifice by B 1/10
  2. Gain by A 1/10 ; gain by B 1/10
  3. Sacrifice by A1/10; gain by B1/10
  4. Gain by A 1/10 ; sacrifice by B 1/10

Answer: Sacrifice by A1/10; gain by B1/10

Q15. A and B had been partners in a firm sharing profit or loss in the ratio of 3 : 1. With effect from Jan. 1, 2019 they agreed to share profit or loss in the ratio of 2 : 1. Due to change in profit-loss sharing ratio, B’s gain or sacrifice would be :

  1. Gain 1/12
  2. Sacrifice 1/12
  3. Gain 1/3
  4. Sacrifice ⅓

Answer : Gain 1/12

Q16. A, B and C had been partners sharing profit or loss in the ratio of 7 : 3 : 2. From Jan. 1,2019 they decided to share profit or loss in the ratio of 8 : 4 : 3. Due to change in the profit-loss sharing ratio, B’s gain or sacrifice would be :

  1. Gain 1/60
  2. Sacrifice 1/60
  3. Gain 2/60
  4. Sacrifice 3/60

Answer : Gain 1/60

Q17. X, Y and Z are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. The partners decide to share future profits and losses in the ratio of 2:2: 1. Each partner’s gain or sacrifice due to change in the ratio would be :

Answer : X nil ; Y gain 1/30 ; Z sacrifice 1/30

Q18. A, B and C had been partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. The partners decide to share future profits and losses in the ratio of 2:2:1. Each partner’s gain or sacrifice due to change in ratio would be :

Answer: sacrifice A 3/30;gain B 2/30; gain C 1/30

Q19. A, B and C had been partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. The partners decide to share future profits and losses in the ratio of 2:2: 1. Each partner’s gain or sacrifice due to change in the ratio would be :

Answer: sacrifice A 2/45 ; gain B 3/45 ; sacrifice C 1/45

Q20. A, B and C had been partners in a firm sharing profits in 4 : 3 : 2 ratio. They decided to share future profits in 4 : 3 : 1 ratio. Sacrificing ratio and gaining ratio would be :

Answer: A gain 4/72; B gain 3/72; C sacrifice 7/72

Q21.  X, Y and Z had been partners sharing profits in the ratio 2:3:4 with effect from 1st January, 2019 they agreed to share profits in the ratio 3:4:5. Each partner’s gain or sacrifice due to change in the ratio would be :

Answer : X gain 1/36; Y nil ; Z sacrifice 1/36

Q22. X, Y and Z had been in partnership sharing profits in the ratio 4 : 3 : 1. The partners agreed to share future profits in the ratio 5 : 4 : 3. Each partner’s gain or sacrifice due to change in ratio would be:

Answer : X sacrifice 2/24; Y sacrifice 1/24; Z gain 3/24

Q23.  A, B and C are equal partners in the firm. It is now agreed that they would share the future profits in the ratio 5:3:2. Sacrificing ratio and gaining ratio of different partners would be :

Answer : A gain 5/30; B sacrifice 1/30 ; C sacrifice 4/30

Q24. The excess amount which the firm gets on selling its assets over and above the saleable value of its assets is called

  1. Surplus
  2. Super profits
  3. Reserve
  4. Goodwill

Answer : Goodwill

Q25. Which of the following is NOT true in relation to goodwill?

  1. It is an intangible asset
  2. It is fictitious asset
  3. It has a realizable value
  4. None of the above

Answer : It is fictitious asset

Q26. When Goodwill is not purchased goodwill account can :

  1. Never be raised in the books
  2. Be raised in the books
  3. Be partially raised in the books
  4. Be raised as per the agreement of the partners

Answer :Never be raised in the books

Q27. The Goodwill of the firm is not affected by :

  1. Location of the firm
  2. Reputation of firm
  3. Better customer service
  4. None of the above

Answer: None of the above

Q28. Capital employed by a partnership firm is ₹5,00,000. Its average profit is ₹60,000. The normal rate of return in similar type of business is 10%. What is the amount of super profits?

  1. ₹50,000
  2. ₹10,000
  3. ₹6,000
  4. ₹56,000

Answer: ₹10,000

Q29. Weighted average method of calculating goodwill is used when :

  1. Profits are not equal
  2. Profits show a trend
  3. Profits are fluctuating
  4. None of the above

Answer :Profits show a trend

Q30. The profits earned by a business over the last 5 years are as follows : ₹12,000; ₹13,000; ₹14,000; ₹18,000 and ₹2,000 (loss). Based on 2 years purchase of the last 5 years profits, value of Goodwill will be :

  1. ₹23,600
  2. ₹22,000
  3. ₹1,10,000
  4. ₹1,18,000

Answer: ₹22,000

Q31. The average profit of a business over the last five years amounted to ₹60,000. The normal commercial yield on capital invested in such a business is deemed to be 10% p.a. The net capital invested in the business is ₹5,00,000. Amount of goodwill, if it is based on 3 years purchase of last 5 years super profits will be :

  1. ₹1,00.000
  2. ₹1,80,000
  3.  ₹30,000
  4.  ₹1,50,000

Answer: ₹30,000

Q32. The net assets of a firm including fictitious assets of ₹5,000 are ₹85,000. The net liabilities of the firm are ₹30,000. The normal rate of return is 10% and the average profits of the firm are ₹8,000. Calculate the goodwill as per capitalization of super profits.

  1. ₹20,000
  2. ₹30,000
  3. ₹25,000
  4.  None of these

Answer: ₹30,000

Q33. Capital invested in a firm is ₹5,00,000. Normal rate of return is 10%. Average profits of the firm are ₹64,000 (after an abnormal loss of 4,000). Value of goodwill at four times the super profits will be :

  1. ₹72,000
  2. ₹40,000
  3. ₹2,40,000
  4.  ₹1,80,000

Answer: ₹72,000

Q34. The average capital employed of a firm is Rs. 4,00,000 and the normal rate of return is 15%. The average profit of the firm is rs80,000 per annum. If the . remuneration of the partners is estimated to be Rs. 10,000 per annum, then on the basis of two years purchase of super-profit, the value of the Goodwill will be :

  1. ₹10,000
  2.  ₹20,000
  3. ₹60,000
  4. ₹80,000

Answer: ₹20,000

Q35. A, B and C were partners sharing profits and losses in the ratio of 7 : 3 : 2. From 1st January, 2019 they decided to share profits and losses in the ratio of 8:4:3. Goodwill is ₹1,20,000. In Adjustment entry for goodwill:

  1. Cr. A by ₹6,000; Dr. B by Rs. 2,000; Dr. C by ₹4,000
  2. Dr. A by ₹6,000; Cr. B by Rs. 2,000; Cr. C by ₹4000
  3.  Cr. A by ₹6,000; Dr. B by Rs. 4,000; Dr. C by ₹2,000
  4. Dr. A by ₹6,000; Cr. B by Rs. 4,000; Cr. C by ₹2,000

Answer : Cr. A by ₹6,000; Dr. B by rs. 2,000; Dr. C by ₹4,000

Q36.  Which of the following is responsible for the Reconstitution of Partnership?

  1. Retirement of an existing partner
  2. Change in existing profit sharing ratio
  3. Death of a partner
  4. All of these

Answer: All of these

Q37. What is the meaning of change in the profit sharing ratio:

  1. In which all partner including the deceased partner executor partner share future profit and loss
  2. Purchase of shares of profit by one partner form another partner
  3. In which all partner including the retired partner share future profit and loss
  4. In which all partner including the new partner share future profit and loss

Answer: Purchase of shares of profit by one partner form another partner

Q38. The circumstances when change in profit sharing ratio is needed:

  1. When new partner admitted
  2. When existing partner’s decide
  3. When existing partner retires
  4. All of these

Answer: All of these

Q39. The partner whose share has increased as a result of change is called

  1. Sacrificing partner
  2. Sacrificing ratio
  3. Gaining partner
  4. Gaining ratio

Answer: Gaining partner

Q40. What is gaining ratio:

  1. In which profit sharing ratio of sacrificing partners increase
  2. In which profit sharing ratio of sacrificing partners decrease
  3. In which profit sharing ratio of gaining partners increase
  4. In which profit sharing ratio of gaining partners decrease

Answer: In which profit sharing ratio of gaining partners increase

MCQ of Admission of a Partner

Q1. A new partner is needed into the business due to

  1. When more capital is needed for the expansion of the business
  2. To pay off the liability of the business
  3. To encourage a capable employee by taking him into the partnership
  4. Both a and c

Answer : Both a and c

Q2. In case of admission of a partner, sacrificing ratio is used to distribute

  1. Reserve
  2. Losses
  3. Salary & commission
  4. Goodwill

Answer: Goodwill

Q3. The old partners share the amount of cash brought in by the new partner as premium for goodwill in …… ratio.

  1. New
  2. Gaining
  3. Sacrificing
  4. Old

Answer: Sacrificing

Q4. What is hidden goodwill?

  1. When goodwill of the firm is hide from any one partner
  2. When goodwill of the firm is sold to outsiders
  3. When the goodwill of the firm is not given but has to be inferred on the basis of capital of the partners.
  4. When the goodwill of the firm is not given but has to be inferred on the basis of net worth of the firm

Answer : When the goodwill of the firm is not given but has to be inferred on the basis of net worth of the firm

Q5. The partners share the gain Or loss on revaluation of assets and liabilities in …… ratio.

  1. New profit sharing
  2. Sacrificing
  3. Gaining
  4. Old profit sharing

Answer: Old profit sharing

Q6. A new partner may be admitted into a partnership :

  1. With the consent of any one partner
  2. With the consent of majority of partners
  3. With the consent of all old partners
  4.  With the consent of 2/3rd of old partners

Answer : With the consent of all old partners

Q7. On the admission of a new partner :

  1. Old firm is dissolved
  2. Old partnership is dissolved
  3.  Both old partnership and firm are dissolved
  4. Neither partnership nor firm is dissolved

Answer : Old partnership is dissolved

Q8. A and B are partners sharing profit in the ratio of 3 : 2. They admit C as a partner by giving him 1/3 share in future profits. The new ratio will be :

  1. 12 : 8 : 5
  2. 8: 12 : 5
  3. 5 : 5 : 12
  4. None of the Above

Answer: None of the Above

Q9. X and Y are partners sharing profit in the ratio of 3 : 2. Z was admitted with 1/4 share in profits which he acquires equally from X and Y. The new ratio will be:

  1. 9 : 6 : 5
  2. 19 : 11 : 10
  3.  3 : 3 : 2
  4.  3 : 2 : 4

Answer: 19 : 11 : 10

Q10. A and B share profits in the ratio of 2:1 . C is admitted with 1/4 share in profits. C acquires 3/4 of his share from A and 1/4 of his share from B. The new ratio will be:

  1. 2 : 1 : 1
  2. 23 : 13 : 12
  3.  3 : 1 : 1
  4. 13 : 23 : 12

Answer: 23 : 13 : 12

Q11. B and N are partners in a firm sharing profits in the ratio of 3 : 2. They admit S as a partner for l/4th share in the profits. S acquires his share from B and N in the ratio of 2 : 1. The new profit-sharing ratio will be :

  1. 2:1:4
  2. 19:26: 15
  3. 3:2:4
  4. 26 : 19 : 15

Answer: 26 : 19 : 15

Q12. A and B are partners sharing profits and losses in the ratio of 7 : 5. They agree to admit C, their manager, into partnership who is to get 1/6th share in the profits. He acquires this share as 1/24th from A and 1/8th from B, The new profit sharing ratio will be :

  1. 13 : 7 : 4
  2. 7 : 13 : 4
  3. 7 : 5 : 6
  4. 5 : 7 : 6

Answer : 13 : 7 : 4

Q13. A and B share profits in the ratio of 3:2 . They agreed to admit C on the condition that A will sacrifice 3/25th of his share of profit in favour of C and B will sacrifice 1/25th of his profits in favour of C. The new profit sharing ratio will be :

  1. 12 : 9:4
  2. 3 : 2 : 4
  3. 66 : 48 : 11
  4.  48 : 66 : 11

Answer: 66 : 48 : 11

Q14. A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner C is admitted. A surrenders 1/15th share of his profit in favour of C and B surrenders 2/15th of his share in favour of C. The new ratio will be :

  1. 8 : 4 : 3
  2. 42 : 26 : 7
  3. 4 : 8 : 3
  4. 26 : 42 : 7

Answer : 42 : 26 : 7

Q15. A and B are partners sharing profit or loss in the ratio of 4 : 1. A surrenders 1/4 of his share and B surrenders 1/12 of his share in favour of C, a new partner. What will be the C’s share?

  1. ¾
  2. ⅕
  3. 1/10
  4. 3/10

Answer : 3/10

Q16. A and B are partners in a business sharing profits and losses in the ratio of 7 : 3 respectively. They admit C as a new partner. A sacrificed 1/7th share of his profit and B sacrificed 1/3rd of his share in favour of C. The new profit sharing ratio of A, B and C will be :

  1. 3 : 1 : 1
  2. 2 : 1 : 1
  3. 2 : 2 : 1
  4.  None of the above

Answer : 3 : 1 : 1

Q17. A and B are partners sharing profit or loss in the ratio of 3 : 2. C is admitted into partnership as a new partner. A sacrifices 1/3 of his share of B sacrifices 1/4 of his share in favour of C. What will be the C’s share in the firm?

  1. ⅕
  2. 2/10
  3. 3/10
  4. None of these

Answer : 3/10

Q18. A and B are partners in a firm sharing profits and losses in the ratio of 2 : 3. C is admitted for 1/5 share in the profits of the firm. If C gets it wholly from A, the new profit sharing ratio after C’s admission will be :

  1. 1 : 3 : 3
  2. 3 : 1 : 1
  3. 2 : 2 : 1
  4. 1 : 3 : 1

Answer : 1 : 3 : 1

Q19. A and B are partners sharing profits in the ratio of 4 : 3. They admitted C as a new partner who gets 1/5th share of profit, entirely from A. The new profit sharing ratio will be :

  1. 20 : 8 : 7
  2. 13 : 15 : 15
  3.  13 :15: 7
  4. 15 : 13 : 5

Answer: 13 :15: 7

Q20. A, B, C, D are in partnership sharing profits and losses in the ratio of 9 : 6 : 5 : 5. E joins the partnership for 20% share. A. B, C and D would in future share profits among themselves as 3/10 : 4/10 : 2/10 : 1/10. The new profit sharing ratio will be:

  1. 3:4:2: 1:5
  2. 9:6:5:5:5
  3.  6 : 8 : 4 : 2 : 5
  4.  8 : 6 : 4 : 2 : 5

Answer: 6 : 8 : 4 : 2 : 5

Q21.  A and B are in partnership sharing profits and losses as 3 : 2. C is admitted for 1/4th share. Afterwards, D enters for 20 paisa in the rupee. The new profit sharing ratio after D’s admission will be :

  1. 9 : 6 : 5 : 5
  2. 6 : 9 : 5 : 5
  3. 3 : 2 : 4 : 5
  4. 3 : 2 : 5 : 5

Answer: 9 : 6 : 5 : 5

Q22. X and Y are partners sharing profits in the ratio of 3 : 2. Z is admitted as a partner. Calculate sacrificing ratio if new profit sharing ratio is 9 : 7 : 4.

  1. 3 : 1
  2. 3 : 2
  3. 1:3
  4. 9 : 7

Answer: 3 : 1

Q23. A and B are partners sharing profits in the ratio of 5 : 3. A surrenders 14th of his share and B surrenders 15 of his share in favour of C, a new partner. What is the sacrificing ratio?

  1. 4 : 5
  2. 5 : 4
  3. 12 : 25
  4.  25 : 12

Answer: 25 : 12

Q24. A and B are partners sharing profits in the ratio of 11 : 4. C was admitted. A surrendered 111th of his share and B14 of his share in favour of C. The sacrificing ratio will be :

  1. 11 : 4
  2. 1 : 1
  3.  4:11
  4.  7 : 4

Answer: 1 : 1

Q25. P and Q are partners sharing profits in the ratio of 9 : 7. R is admitted as a partner with 9/20th share in the profits, which he takes 1/5th from P and 14th from Q Sacrificing ratio will be :

  1. 5 : 4
  2. 9 : 7
  3.  7 : 9
  4.  4 : 5

Answer: 4 : 5

Q26. When a new partner brings his share of goodwill in cash, the amount is debited to:

  1. Goodwill A/c
  2. Capital A/c of the new partner
  3.  Cash A/c
  4.  Capital A/c of the old partners

Answer: Cash A/c

Q27. When a new partner does not bring his share of goodwill in cash, the amount is debited to :

  1. Cash A/c
  2. Premium A/c
  3.  Current A/c of the new partner
  4.  Capital A/c of the old partners

Answer: Current A/c of the new partner

Q28. In the absence of an express agreement as to who will contribute to new partners’ share of profi t, it is implied that the old partners will contribute :

  1. Equally
  2. In the ratio of their capitals
  3. In their old profit sharing ratio
  4. In the gaining ratio

Answer : In their old profit sharing ratio

Q29. When a new partner brings goodwill in Cash, it is credited to :

  1. His Capital A/c
  2. Sacrificing Partner’s Capital A/c
  3. Old Partner’s Capital A/c
  4. All Partner’s Capital A/c

Answer: Sacrificing Partner’s Capital A/c

Q30. When the balance sheet is prepared after the new partnership agreement, the assets and liabilities are recorded at:

  1. Historical cost
  2. Current cost
  3. Realisable value
  4. Revalued figures

Answer : Revalued figures

Q31. Excess of the credit side over the debit side of revaluation account :

  1. Gain
  2. Loss
  3. Profit
  4. Expense

Answer: Profit

Q32. Balance sheet prepared after new partnership agreement, assets and liabilities are recorded at :

  1. Original value
  2. Revalued figure
  3. At realizable value
  4. None of these

Answer : Revalued figure

Q33. Profit or loss on revaluation is borne by :

  1. Old partners
  2. New partners
  3. All partners
  4. None

Answer : Old partners

Q34. When we use super profit method for goodwill valuation

  1. Firms earn higher profit
  2. Firms earns normal profit
  3. Average profit
  4. None of these

Answer: Firms earn higher profit

Q35. Profit sharing ratio is the ratio in which partners have agreed to share :

  1. Profit only
  2. Loss only
  3. Profit & losses
  4. None of these

Answer: Profit & losses

MCQ of Financial Statements of Companies

Q1. Financial statements are the …… of accounting process.
a. Primary steps
b. End products
c. Unnecessary parts
d. Hurdles
Answer: End products

Q2. Financial statements provide information about the :
a. Absenteeism of employees
b. Profitability of a business
c. Financial position of a business
d. Both b and c
Answer: Both b and c

Q3. As per section 2(40) of the companies act, 2013 , ” Financial statements ” in relation to a company, does not include :
a. A balance sheet as at the end of the financial year.
b. Cash flow statement for the financial year
c. Personal accounts of the partners for the financial year
d. A statement of profit & loss for the financial year
Answer : Personal accounts of the partners for the financial year

Q4. Which company are exempted from preparing cash flow statement with their financial statements?
a. One person company
b. Small company
c. Dormant company
d. All of these
Answer: All of these

Q5. As per… of the companies act, 2013 , all the companies are required to have a uniform financial year.
a. Section 2 ( 39 )
b. Section 2 ( 40 )
c. Section 2 ( 41 )
d. Section 2 ( 42 )
Answer : Section 2 ( 41)

Q6. Companies which are holding Or subsidiary of a foreign company required :
a. Not to maintain financial statements
b. To follow a uniform financial year
c. To follow different financial year
d. To follow their own created rules
Answer: To follow different financial year

Q7. … of the Companies act 2013, requires that the company should follow some values while preparing financial statements:
a. Section 128
b. Section 129(1)
c. Section 32
d. Section 133
Answer: Section 129(1)

Q8. Which of the following considered under values that a company should observe while preparing financial statements?
a. A company shall give a true and fair view of the state of affairs of the company
b. A company shall comply with the accounting standards notified under section 133
c. A company shall be in prescribed form given in schedule lll
d. All of these
Answer : All of these

Q9. Financial statements are related to
a. Future course
b. Past Period
c. Present conditions of a company
d. Personal transactions of a entrepreneur
Answer: Past Period

Q10. Financial statements are related to …… documents.
a. Personal
b. Historical
c. Current
d. Future
Answer: Historical

Q11. Financial statements are expressed in terms of
a. Money
b. Qualitative factors
c. Oral data
d. Both a and b
Answer: Money

Q12. Statement of profit & loss under financial statements are used to show:
a. Financial position
b. Absenteeism of employees
c. Profitability
d. Bad debts
Answer : Profitability

Q13. Balance sheet under financial statements are used to show:
a. Financial position
b. Absenteeism of employees
c. Profitability
d. Bad debts
Answer: Financial position

Q14. Balance sheet portrays the relationship between:
a. Business and entrepreneur
b. Manager and employees
c. Equity & liabilities and Assets
d. Sellers and buyers
Answer : Equity & liabilities and Assets

Q15. Balance sheet is prepared
a. For every 6 month
b. On a particular date
c. For a financial period
d. Whenever it’s seems to be profit
Answer : On a particular date

Q16. Financial position of the business is shown by the balance sheet according to
a. Accrual basis
b. Going concern concept
c. Historical cost concept
d. Money measurement concept
Answer : Going concern concept

Q17. Balance sheet is based on :
a. Absolute facts
b. Accounting assumptions
c. Personal judgement
d. Both b and c
Answer : Both b and c

Q18. Which of the following is not a characteristics of balance sheet?
a. It portrays relationship between equity & liabilities and Assets
b. It is based on absolute facts
c. It is prepared on a particular date
d. It shows the financial position of the business
Answer: It is based on absolute facts

Q19. Which of the following is not a characteristics of statement of profit & loss
a. It is prepared for a particular period
b. It is prepared for a past period
c. It portrays relationship between equity & liabilities and Assets
d. It matches the revenue and expenses of an enterprise for a particular period
Answer : It portrays relationship between equity & liabilities and Assets

Q20. Nature of financial statements include :
a. Recorded facts
b. Accounting convention
c. Personal judgment
d. All of these
Answer : All of these

Q21. …imply Certain fundamental accounting principles which have gained wide acceptance and which are followed while preparing financial statements.
a. Accounting standards
b. Accounting records
c. Accounting conventions
d. Financial statements
Answer : Accounting conventions

Q22. …… assets are held primarily for the purpose of being traded and are expected to realized within 12 months after the reporting date.
a. Non – current
b. Fictitious
c. Current
d. Fixed
Answer : Current

Q23. …… refers to the maximum capital for which a company is authorized to issue shares during it’s life time and the amount which is stated in the memorandum of Association.
a. Authorized capital
b. Issued capital
c. Subscribed capital
d. Fixed capital
Answer : Authorized capital

Q24. …… capital is that part of Authorized capital which is actually offered to the public for subscription.
a. Unissued
b. Subscribed
c. Issued
d. Fully paid up
Answer : Issued

Q25. The remaining part of the authorized capital is known as the …… capital
a. Unissued
b. Subscribed
c. Issued
d. Fully paid up
Answer: Unissued

Q26. …… reserve is created for a specific purpose and is a charge against revenue
a. Capital Reserve
b. General Reserve
c. Specific Reserve
d. revenue Reserve
Answer: Specific Reserve

Q27. …… Amount set aside to meet losses due to bad debts
a. Reserve
b. Provision
c. Assets
d. None of these
Answer: Provision

Q29. Debentures are shown in the Balance Sheet under the head of:
a. Short-term Loan
b. Secured Loan
c. Current Liability
d. Share Capital
Answer : Secured Loan

Q30. The assets of a business can be classified as :
a. Fixed and Non-fixed Assets
b. Tangible and Intangible Assets
c. Non-Current and Current Asset
d. All of these
Answer: Non-Current and Current Asset

Q31.Preliminary Expenses are shown in the Balance Sheet under
a. Fixed Assets
b. Reserves and Surplus
c. Loans & Advance
d. None
Answer: None

Q32. …… is reported an Annual Report issued by a company
a. Directors
b. Authors
c. Shareholders
d. Government
Answer: Shareholders

We would love your reading of MCQs for CUET 2022 of other subjects which are as follow.

# MCQ of Accountancy CUET

# MCQ of Accountancy CUET 2022

# MCQ of Accountancy CUET (Multiple Choice Questions)

# MCQ of Accountancy CUET With Answers

# MCQ of Accountancy CUET (Important Questions)

 

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