BEST HIGHER SECONDARY SCHOOL

AHMEDABAD

Multiple Choice Question(1 Mark)

(1) How is the Reserve for Discount on creditors shown in Balance Sheet ?
(a) Added into creditors
(b) Deducted from debtors
(c) Deducted from creditors
(d) Deducted from discount received
(2) The closing stock values are as under
Cost price
Market price
Rs. 20,000
Rs. 18,000
Rs. 30,000
Rs. 35,000
Goods of Rs. 1,000 needs repairing. Find out closing stock value.
(a) Rs. 50,000 (b) Rs. 49,000 (c) Rs. 48,000 (d) Rs. 47,000
(3) What the credit balance of Revaluation Account suggest?
(a) Debt
(b) Assets
(c) Loss
(d) Profit
(4) To which account is the outstanding amount due to retiring partner transferred ?
(a) Capital A/c.
(b) Current A/c.
(c) Drawing A/c.
(d) Loan A/c
(5) Partner A, B and C change their profit and loss ratio from 3:3:4 to 3:5:12, then
gain for partner C is.
(a) 1/20
(b) 2/20
(c) 3/20
(d) 4/20 OR 1/5
(6) To which account, total amount of goodwill is to be credited at the time of
retirement?
(a) To Capital account of retiring partners
(b) To revaluation account
(c) To partners capital account
(d) To capital account of continuing partners
(7) What is workmen's profit sharing fund for the partnership firm?
(a) Receivables
(b) Reserve (c) Assets
(d) Payables
(8) Published financial statements increase the. of the company.
(a) credibility

(b) efficiency

(c) profitability
(d) performance
(9) If A, B and C share profits or losses as 3 : 1 : 1respectively. On retirement of C, if
the continuing partners A and B decide to share profit as 11 : 4. then the gain ratio of
A and B would be
(a) 3 :1
(b) 1 : 3
(c) 2 : 1
(d) 1 : 2
(10) Which accounts or statements are included in financial statements?
(a)

Trading A/c. and Profit & Loss A/c.

(b)

Trading A/c. and Trial Balance

(c)

Profit & Loss A/c. and Balance Sheet

(d)

Trading A/c. and Balance Sheet

(11) Which account will be closed at the time of payment for credit balance of capital

account of partners?
(a) Cash
(b) Realisation(c) Not any one
(d) P & L A/c
(12) What is interest on partners' capital for a partner? (March 06)
(a) Expense
(b) Payables
(c) Income
(d) Loss
(13) Kalaben and Jayantilal are partners of a firm sharing profit and losses in 2:3
ratio. Not profit and loss ratio decided at the time of admission of a new partner Parth
is 2:2:1. Parth brought Rs. 15,000 as goodwill. Find out the amount to be credited to
Jayantilal's account.
(a) Rs. 5,000
(b) Rs. 10,000 (c) Rs. 15,000 (d) Rs. 20,000
(14) To which account amount of reserve fund will be credited at the time of
Revaluation?
(a) Revaluation A/c.
(b) Profit and Loss A/c.
(c) Partners Capital/Current A/c.
(d) Profit and Loss Appro. A/c.
(15) At the time of dissolution of partnership firm, amount of general reserve account
is transferred to
(a) Profit and loss A/c
(b) realization A/c
(c) Partners capital A/c
(d) Balance sheet
(16) Operating Ratio is a . ratio.
(a) Liquidity

(b) Profitability

(c) Activity

(d) Solvency

(17) In fixed capital account method, to which account is the partners' salary be
credited?
(a) Capital account
(b) Profit & loss account
(c) Profit & loss appropriation account
(d) Current account
(18) At the time of admission of a partner to which account and in which ratio general
reserve amount is to be credited?
(a) In old ratio of old partners capital account
(b) In new ratio of new partners capital account
(c) In new ratio
(d) In old ratio
(19) Which ratio indicates the average period of credit allowed?
(a) Creditor's Ratio

(b) Debtors Ratio

(c) Liquid Ratio

(d) Activity Ratio

(20) Premium on Redemption of Debenture A/c. is amount.

(a) Asset

(b) Expense

(c) Liability

(d) Miscellaneous expenditure

(21) How many methods are there in final account for maintaining capital account?
(a) One
(b) Two
(c) Three
(d) Four
(22) When a new partner brought his share of goodwill in cash it will not be debited
to .

(a) Capital A/c

(b) Goodwill A/c
(c) Cash/Bank A/c
(d) Revaluation A/c
(23) If there is an increase in reserve for discount on creditors after admission of a
new partner, it is written on...
(a) assets side of new Balance Sheet (b) credit side of Profit and Loss A/c
(c) debit side of Profit and Loss A/c (d) credit side of Revaluation A/c
(24) Following information is given. Find ouf amount to be written off.
Trialbal. as on 31/12/06
Particulars
Debit (Rs.)
Credit (Rs.)
(1) Leasehold building
70,000
(from 1-7-2004 for 5 years)
(a) Rs. 14,000 (b) Rs.7,000
(c) Rs. 3,500 (d)Rs.20,000
(25) While calculating partners sacrifice, if answer comes to negative (-), then we can
say that.
(a) Partner receives benefit/gain
(b) Partner sacrifices
(c) No gain or no loss for the partner (d) None of the above
(26) X, Y and Z are partners sharing profit and losses in 1/4, 1/3 and 5/12 ratio. If X
retires then new profit and loss ratio is:
(a) 1/3:5/4
(b) 3:4
(c) 3:5
(d) 4:5
(27) In the business if there is monopoly then its value of Goodwill will be...
(a) fixed
(b) more
(c) less
(d) uncertain
(28) Which method is very simple and popular for valuation of Goodwill?
(a) Purchase of Super profit method
(b) Capitalized of average profit method
(c) Weighted average profit method
(d) Simple average profit method
(29) The partner who is unable to pay his liabilities is called an / a partner.
(a) solvent
(b) insolvent
(c) doubtful
(d) working
(30) Credit balance of partners' current account is shown in...
(a) Assets-Debts side of Balance Sheet
(b) Capital -Liabilities side of Balance Sheet
(c) Credit side of Profit and Loss A/c
(d) Credit side of Profit and Loss Appropriation A/c
(31) Alka and Shirin are partners sharing profit and loss account in 2:1 ratio. They
admitted Hiral as a partner with 1/6 th share in profit. What is new profit and loss
sharing ratio?
(a) 3:1:10
(b) 10:5:3
(c) 3:10:5
(d) 5:10:3
(32) In what proportion is the share of goodwill of a retiring partner debited to
continuing partners ?
(a) new ratio
(b) old ratio
(c) gaining ratio
(d) sacrifice ratio
(33) Pratick and Prit are partners haring profit and losses in 2:1 ratio. They changes
this ratio and new ratio is 1:2 then
(a) Pratick received gain and Prit has to sacrifice

(b)
(c)
(d)

Prit received gain and Pratick has to sacrifice

Both will received gain
Both has to sacrifice
(34) Choose one of the following alternatives :
Accounting ratios are :
(a)
useful only for the purpose of borrowing loan from bank
(b)
not useful to anybody other than managers of business
(c)
useful for owners of business, creditors, bank and all other related parties.
(35) X and Y are equal partners, admit Z into the partnership. If Z's share is the new
profit sharing ratio of the partners will be...
(a) 1:1:1
(b) 3:3:2
(c) 2:3:3
(d) 3:2:3
(36) When a new partner brought his share of goodwill it will be debited to
(a) Capital A/c
(b) Drawing A/c
(c) Cash/Bank A/c
(d) Revaluation A/c
(37) Which of the following expense is a financial expense ?
(a) Salary
(b) Int. .on capital
(c) Int. on drawings
(d) Rent and Taxes
(38) In the case of retirement of a partner, which account is opened for revaluation of
the assets and liabilities ?
(a) Profit-Loss A/c.
(b) Profit-Loss Appropriation A/c.
(c) Profit-Loss adjustment A/c.
(d) Memorandum Profit-Loss Adjustment A/c.
(39) What share premium for company?
(a) Capital profit

(b) Capital expense

(c) Revenue profit

(d) Revenue income

(40) How the goodwill amount payable to a retiring partner be debited to continuing
partners account?
(a) In sacrifice ratio
(b) In equal ratio
(c) In gain ratio
(d) In capital ratio
(41) Fixed assets are shown in the Balance sheet at their..
(a) real values

(b) market values

(c) cost price

(d) depreciated values
(42) What is 'Premium on Redemption of Debenture A/c.' for a company?
(a) Asset

(b) Liability

(c) Debts

(d) Loss

(43) Which type of account is Realization A/c?

(a) Personal A/c
(b) Real A/c
(c) Nominal A/c
(44) Choose one of the following alternatives :
Current Ratio:
(a)
Indicates profitability of business

(d) Special A/c

(b)
(c)

Indicates short term solvency of business

Indicates the capital invested in business.
(45) In what proportion is reduction in the value of Goodwill transferred to partners'
capital accounts?
(a) Old profit sharing ratio
(b) New profit sharing ratio
(c) Equal ratio
(d) Average profit sharing ratio
(46) What will be the entry for bad debts returns at the time of dissolution of a firm?
(a) Revaluation A/c will be credited.
(b) Profit and Loss A/c will be credited.
(c) Relization A/c will be credited.
(d) Partners' Capital A/c will be credited.
(47) Normally the realization expense is paid by the...
(a) court
(b) all partners
(c) solvent partner
(d) firm
(48) What is meant by credit balance of Revaluation Account?
(a) Profit
(b) Loss
(c) Gross profit
(d) Net profit
(49) In a firm dealing in banking business, how many maximum number of partners
are allowed?
(a) 10
(b) 15
(c) 20
(d) 25
(50) Due to admission of a new partner, total profit distribution among old partners(a) Decreases
(b) Increases
(c) Remains unaltered
(d) Remains same
(51) If there is no written agreement between the partners, then how is the profit and
loss distributed among them?
(a) ratio of their capital
(b) equally distributed
(c) ratio of their drawings
(d) unequally distributed
(52) Employees profit sharing fund is for business.
(a) Dues
(b) Debts
(c) Accumulated profit
(d) Accumulated loss
(53) Companies can call unpaid amounts on shares in maximum
installments.
(a) two

(b) three

(c) four

(d) five

(54) Havalas are.

(a) adjustments

(b) Kacha Khatas

(c) Pakka Khatas

(d) Kharid Vakra Khata

(55) Minimum two partners are received in a partnership firm because (a) Partnership takes place with partnership deed
(b) More risk in partnership firm
(c) More capital required in partnership firm
(d) Unlimited liabilities of partners.
(56) If any unrecorded liability is paid on dissolution of the firm, which account is

debited?
(a) Liability account
(b) Creditor account
(c) Partners' capital account
(d) realization account
(57) Where will you record accumulated reserves and profit amount at the time of
admission of a new partner?
(a) To Profit and Loss Appropriation Account
(b) To capital accounts of old partners
(c) To capital accounts of new partners
(d) None of the above
(58) Goodwill by method of capitalizing of the average profit method means.
(a) Amount invested in business - Capitalized profit
(b)
Capitalized profit - Capital invested in business
(c)
Capitalized profit x Years of purchase for goodwill
(d)
None of the above
(59) Books of account shows the balance of Rs. 10,000 for intangible asset (e.g.
Goodwill, copyright, If instruction is not given regarding its deposal then which effect
would be passed?
(a) No account effect is to be passed
(b) Realize amt. credited to Partners Capital Account
(c) Reralised amt. credited to Realization Account
(d) Realised amt. debited to Partners Capital Account.
(60) The excess of the capitalized value over the net assets is the value is...
(a) Super profit
(b) Expected rate of return
(c ) Goodwill
(d) Capitalized profit
(61) Amount realized from the sale of assets at the time of dissolution, will be given
first to the
(a) partners' loan
(b) partner's wife loan
(c) dissolution expense
(d) business expense
(62) When partners agreed to decrease their capitals permanently, the withdrawal
amount brought is debited to which account?
(a) Capital account
(b) Current account
(c) Drawings account
(d) Profit and Loss Appropriation account
(63) Which type of account is Joint Insurance Policy Account ?
(a) Personal
(b) Real
(c) Nominal
(d) None of these
(64) The credit balance of profit and Loss Account means...
(a) Gross profit
(b) Net profit
(c) Divisible profit
(d) Distributed profit
(65) While giving the effect of revaluation of debt if debt value decreases, where will
you record it?

(a) On debit or credit side of Revolution account

(b) On debit side of Revaluation Account
(c) On credit side of Revaluation Account
(d) None of the above
(66) The debentures which get automatically converted in the equity share are
known
(a) Convertible debentures
(c) Redeemable debentures

(b) Non-convertible debentures

(d) Irredeemable debentures

(67) What is another name of Revaluation Account?

(a) Profit and Loss Account
(b) Profit and Loss Adjustment Account
(c) Profit and Loss Appropriation Account
(d) Revised Profit and Loss Account
(68) X and Y are partners sharing profit and losses in 4:3 ratio. New profit and loss
ratio decided at the time of admission of a new partner Z is 13:8:7. Find the sacrifice
ratio.
(a) 4:3
(b) 3:4
(c) 6:1
(d) 1:6
(69) At the time of retirement, general reserve amount shown in balance sheet are
credited to partners capital account in
(a) New profit and loss sharing ratio (b) Old proportion
(c) New ratio
(d) Gain ratio
(70) Income Tax paid is to be shown in
(a) Partners current account
(b) Profit and loss account
(c) Profit and loss appro. account
(d) None of the above
(71) If the goodwill account amount is increased by Rs. 30,000 the .
Account will be debited by the same account.
(a) Partners capital account
(b) Cash account
(c) Partners current account
(d) Goodwill account
(72) The accounts pertaining to people and assets are known as Shri
(a) Paka Khatas

(b) Kacha Khatas

(c) Vigat Khatas

(d) Deshavar Khatum
(73) Choose one of the following alternatives :
The one not useful for knowing probability of follows :
(a)
Net Profit Ratio
(b)
Current Ratio
(c)
Gross Profit Ratio
(74) A, B and C are partners of a firm sharing profit and losses in 2:2:1 ratio.
Goodwill account is not there in the books of account. But firm's goodwill amount is
decided to Rs. 1,00,000. Find out the amount to be credited to C's capital account.
(a) Rs. 20,000 (b) Rs. 15,000 (c) Rs. 10,000 (d) Rs. 5,000
(75) At the time of reconstruction of partnership, accumulated loss will be transferred

to...
(a) Credit side of partner's capital A/c
(b) Debit side of partner's capital A/c
(c) Assets side of the Balance Sheet
(d) Liabilities side of the Balance Sheet
(76) Value of closing stock is Rs. 20,000. Out of which market value of 10% goods is
less by 20% and 20% goods is 10% more. Find out dosing stock value.
(a) Rs. 18,000 (b) Rs. 19,600 (c) Rs. 20,000 (d) Rs. 19,800
(77) Where will you show prepaid insurance premium given in trial balance in final
accounts of partnership firm?
(a) Debit side of Profit and Loss A/c
(b) Credit side of Profit and Loss A/c
(c) Assets- Debts side of Balance Sheet
(d) Capital -Liabilities side of Balance Sheet
(78) After admission of the new partner all partners distribute future profit or loss of
the partnership firm, in...
(a) Old profit sharing ratio
(b) New profit sharing ratio
(c) Equal profit sharing ratio
(d) unequal profit sharing ratio
(79) How the goodwill account be written off (which was created) after the admission
of a prater?
(a) In equal ratio of all partners
(b) In old ratio of old partners
(c) In new ratio of new partners
(d) In new ratio of all partners
(80) Old ratio of profit and loss for Alpa, Jalpa and Shilpa is 2:1:1. New ratio of profit
and loss for them is 1:2:1, then sacrifice by Shilpa is.
(a) 1/4
(b) -1/4
(c) 0
(d) None of the above
(81) Four sacrifice given by a prater, new partner gave some amount as compensation
known as(a) Income
(b) Expense (outstanding)
(c) Premium
(d) Incomes
(82) Which ratio helps to know the proportion of equity shareholder's funds in total
investment in business?
(a) Proprietary ratio

(b) Debt-Equity ratio

(c) Creditors ratio

(d) Net Profit ratio
(83) It is decided to give Rs. 1,200 as dissolution exp. To a Parth Shah. But actual
dissolution exp. Incurred is Rs. 800. Find the amount to be debited to Realisation A/c.
(a) Rs. 800
(b) Rs. 1,000
(c) Rs. 1,200
(d) Rs. 2,000
(84) How many methods are there to keep capital accounts of partners in a
partnership firm?
(a) Two
(b) Three
(c) Four
(d) Five
(85) As per provision of Partnership Act, in how many ways a partner can be entered
in a partnership firm?

(a) One
(b) Two
(c) Three
(d) Four
(86) The maximum capital which a company can raise and one which is shown in the
Memorandum of Association of company is called
(a) Issued capital

(b) Subscribed capital

(c) Authorised capital

(d) Called up capital
(87) Small traders prepare..
(a) Rojmel

(b) Bethomel

(c) Achalmel

(d) Kachi Nondh

(88) To which amount the interest received on Debenture Redemption Fund's

credited?
(a)

Debenture A/c.

(b)

Debenture Redemption Fund A/c.

(c)

Debenture Discount A/c.

(d)

Debenture Interest A/c

(89) Which of the following, is current assets ?

(a) Building
(b) Machine
(c) Patents
(d) Bills Receivable
(90) Sales book total is undercasted by Rs. 2,000, pass the effect of adjustments.
(a) To be added in purchase (C)
(b) To be added in sales
(c) To lie added in purchases and in creditors
(d) To be added in sales and in debtors.
(91) If an asset is appreciated after admission of a new partner...
(a) Profit and Loss A/c is debited
(b) Profit and Loss A/c. is credited
(c) Profit and Loss Adjustment A/c is debited
(d) Profit and Loss Adjustment A/c is credited
(92) To which account is credit or debit balance of Revaluation Account transferred?
(a) Old partners' capital Accounts
(b) New partners' capital Accounts
(c) Memorandum Revaluation Account
(d) Profit and Loss Account
(93) How many methods are there to calculate the value of Goodwill?
(a) Two
(b) Three
(c) Four
(d) Five
(94) (1)
The company can repay money to these debenture holders by periodic
purchase, this method is.
(a)

Purchase from open market

(b)

Buy Back Method

(c)

Conversion of debentures into shares method

(d)

Redemption of debentures on a fixed date method

(95) Working Capital Turnover ratio is.

(a) Activity ratio

(b) Liquidity ratio

(c) Profitability ratio

(d) Solvency ratio

(96) At the time of dissolution, last payment made from the realization of asset
amount is known as
(a) Dissolution exp
(b) Third party's debt
(c) Excess of capital amount
(d) None of the above
(97) Following factors are affecting the valuation of goodwill except(a) Business location
(b) Nature of Business
(c) Competitiveness of business
(d) Customer's frequency
(98) On dissolution of a firm, where are the balances of accumulated profit
transferred?
(a) Credited to Partners' Capital A/c (b) Credited to Realization A/c
(c) Credited to Partners' Loan A/c
(d) Credited to Revaluation A/c
(99) ........... is the rate of interest on partner's loan when partnership deed is silent for
interest rate.
(a) 5%
(b) 6%
(c) 7%
(d) Interest is not to be calculated.
(100) Carriage charges paidisRs. 900 and outStanding carriage charges is .1/3. Now,
ratio of carriage inward and carriage outward is 2:3. Find the amount of carriage
inward.
(a) Rs. 400
(b) Rs. 540
(c) Rs.300
(d) Rs. 810