Quiz about Accounts in Class 12

Question 1

(i) When the firm is dissolved Reserve is transferred to ________ in theprofit- sharing ratio.(ii) Unrecorded liability paid at the time of dissolution of the firm is to be debited to_________ Account.(iii) When an unrecorded asset is realised at the time of dissolution of the firm __________ Account is debited and ___________ Account is credited.(iv) Goodwill Account appearing in the books on the dissolution date is closed by transferring it to _____________ side of the __________ Account. (v) Entry for the asset taken over by a creditor is ___________ but entry for the net payment to the creditor is made. (vi) Debit balance of profit and loss Account is transferred to __________ Accounts at the time of dissolutionof the firm.(vii) Expenses of realisation are ___________ to Realisation Account.(viii) Unrecorded asset taken by a partner is ____________ to Partners Capital Account.(ix) Balance ofRealisation Account is transferred to ____________.

Accepted Answer

NA

Question 2

Ideal Quick Ratio is

Accepted Answer

NA

Question 3

Ideal Current Ratio is

Accepted Answer

NA

Question 4

(i) Vishesh Ltd. forfeited 1000 Equity Shares of Rs. 10 each issued at a premium of Rs. 2 per share for non-payment of allotment money of Rs. 5 per share including premium. The final call of Rs. 2 per share was not yet called on these shares. Of the forfeited shares 800 shares were reissued at Rs. 12 per share fully paid-up. The remaining shares were reissued at Rs. 11 per share fully paid up.  (ii) G. Ltd. forfeited 7000 equity shares of Rs. 100 each for the non-payment of first call of Rs. 30 per share. These shares were issued at a premium of Rs. 30 per share. The second and final call of Rs. 20 per share was not yet made. The forfeited shares were re-issued at Rs. 80 per share fully paid up.

Accepted Answer

NA

Question 5

(i) The profit or loss shown by the Revaluation Account at the time of retirement of a partner is transferred to the Capital Accountsof the partners in the ___________ratio.(ii) At thetime of retirement death the undistributed profit - losses and reserves are distributed_________among all the partners in their ______________ Profit - sharing ratio.(iii) Unless agreedotherwise it is presumed the continuing partners gain in their ____________ and hence their__________ isSameas their old profit - sharing ratio.(iv)_______________isthe ratio in which the remaining partners acquire the share of retiring or deceased partner . (v) At time of retirement or death of a partners in their _____________ ratio.(vi) When firm pays an amount in excess of total amount due to the retiring partner then excess amount is treated as ___________.

Accepted Answer

NA

Question 6

(i) The basis of Cash Flow Statement is__________.(ii) Debentures issued for consideration other than cash are not shown in the Cash Folw Statementbecause __________ is not received against the issue.(iii) Marketable Securities are included in __________(iv) Current investments are shown as __________(v)Buy back of own shares is shown as outflow in Financing Activity as__________.(vi) Share issue expenses paid are shown as outflow under_________.(vii)Discount Loss on Issue of Debentures written off is shown by way of deduction from _____________ of the debentures.(viii) Patents purchased and completely amortised in the year of purchase is added under ___________ and shown as Outflow under__________(ix)Purchase and sale of securitiresby a financing comoanyis _________.(x) Purchase of securities by a non - finance compant is _________.

Accepted Answer

NA

Question 7

(i) The obective of financial statement analysis is ___________comparison.(ii) _________ financial statement analysis is based on one year s data.(iii)Financial Statement analysis is not free from _________ bias.(iv) Financial Statement analysis ignores price level changes . It is its_________.(v)__________ financial statement analysis of dynamic.

Accepted Answer

NA

Question 8

(i)Shares on which the company has called total nominal value and has alsoreceived it is shown in the Note to Accounts on Share Capital under Subscribed Capital as _________.(ii) Minimum subscription prescribed is __________.(iii) Shares on which the company has called the total nominal value but has not fully received final callof Rs.2 on 500 shares the sharesonwhich the final call is not received are shown in the Note to Account onShare Capital under Subscribed Capital as __________.(iv) A Company has resolved to call Rs. 2 per Share at the time of winding up the company . Rs 2 per share is _________ Capital.(v) Securities Premium Reserve isshown in the liabilities side in the Balance Sheet under ___________(vi) Trade Payables unless agreed otherwise are shown as _________.(vii) Prepaid Insurance is shown as ___________ in the Balance Sheet.

Accepted Answer

NA

Question 9

(i) Realisation Account is a Real Account.(ii) On dissolution of a firm is closed wherese on dissolution of the partnership the share of the outgoing partner is determlned and the firm is not closed .(iii) Any amount realised from the unrecorded asset is credited to Realisation Account. (iv) Goodwill at the time of dissolution is treated like any other asset and is closed by transferring it to Realisation Account . (v) Assts when realised are credited to Realisation Account. (vi) In dissolution closing balance of Cash Account will be nil at the end.(vii) All assets inclusive of cash are transferred to the Realisation Account.(viii) Dissolution of the firm means the dissolution of the partnership.

Accepted Answer

NA

Question 10

(i) Receipts and payments Account is _________ of the year s _________.(ii) In the Receipts and Payment Account receipts are shown on the _________ side.(iii)Credit balance in the income and Expenditure Account means excess of __________over _____________.(iv) Income and Expenditure Account shown all ________ receipts and _________ payments for an acccounting year.(v) Subscriptions received in advance by a club are shown on the ____________ side of the Balance Sheet.(vi) Life Membership Fess received by a club is shown in the _________.(vii) Excess of expenditure over income is ___________ Capital Fund in the Balance Sheet.(viii) Income and Expenditure Accountis prepared by _________ concerns. (ix) Match Fund of Rs. 1000 appears in the books . Match expenses for a year amount to Rs. 1200. ______________ will be debited to the Income and Expenditure Account.(x) If expenditure is Rs. 16000 and surplus credited to Capital Fund Rs. 4500 income is _____________.

Accepted Answer

NA

Question 11

(i) Receipts and Payments Account shows the receipts andpayments of revenue nature only.(ii) Receipt from the sale of an old asset is an income.(iii) Receipts and payments Accountin a summary of cash transactions. (iv)Surplus of Non -Trading Organisationdistributed among the member . (v) Income and Expenditure Account isequivalent to the profit and loss Account of a business enterprise. (vi) Proceeds from the sale ofold newspapers are taken as income. (vii) Receipts and Paymants Account shows total income and expenditure.(viii) Only revenue nature items are shown in the income andExpenditure Account. (ix) Scholarships granted to students provided by government is debited toIncome and Expenditure Account. (x) Payment of honorarium is a revenue expenditure.(xi) Any expenditure relating to special fund is deducted from that special fund. (xii) Loss on sale of fixed assert is debited to Income and Expenditure Account . Whereas gain (profit) on sale of fixed assert is credited to Income and Expenditure Account.

Accepted Answer

NA

Question 12

(i) Name any two ratios to know the short term solvency of the firm.  (ii)What is the effect of receipt of cash from debtors on acurrent ratio of 11?  (iii) What is the effect of cash paid to creditors on quick ratio of 11?

Accepted Answer

NA

Question 13

(i) Liquidity Ratios measure ____________ solvency of the enterprise.(ii) ___________ and stores and spares are not considered in computing Current Ratio.(iii) Debit balance in Surplus i.e. Balance in spares are notconsidered in computing Current Ration.(iv)It is an objective of _________ ratio is to measure proportion of fixed assets financed by the Shareholders Funds.(v) ___________ establishes the number of timed amount invested in trade receivables is turned over ina year in relation to Revenue from Operations.(vi)The formula for Working Capital Turnover ratio is __________.(vii) Complete the formula for Inventory Turnover RatioCost of Revenue from Operations ___________.(viii) Gross Profit + Other Imcome- ____________ = Net Profit.(ix)_____________ and Operating Profit Ratio are complimentary to each other.(x)Trade Payable is the sum total of Creditoes and __________.

Accepted Answer

NA

Question 14

(i) increase Colllection from debtors will decrease the closing debtros which will result in incvrease in  Trade receivables trunover ratio i.e (Rs 400000)(Rs 60000+Rs 80000)(2)=5.71 Times  (ii) Decrease credit sales will increase credit sales as well as closing debtors by the same amount which will result in decrease in trade receivables trunover ratioi.e (Rs 440000)(Rs 60000+ Rs 140000) =4.4 Times. (iii)increase sales return will decrease credit sales as well as closing debtors by the same amount which will result in increase in trade Receivables Turnover Ratio i.e ((Rs 390000)(Rs 60000+ Rs 90000))(2)=5.2 Times (iv) Neither the credit sales nor the debtors are affected.

Accepted Answer

NA

Question 15

(i) How will you treat Accumulated ProfitsLosses at the time of dissolution of the firm ?  (ii) What will be the accounting treatment of balance of the Realisation Account ?

Accepted Answer

NA

Question 16

(i) Goodwill is an __________ asset but not a ____________ asset. (ii) Goodwill is a capitalised value of ____________. (iii) Under Average Profit Method goodwill is calculated by multiplying the _____________by a certain number of years purchase as agreed by the partners. (iv) ______________ is the excess of actual profit over the normal profit. (v) When the business is taken over by another business the excess of purchase consideration over its net asset value is referred to as ___________. (vi) The value of goodwill is based on _________ judment of the value.(vii) Under __________ method goodwill is the excess of Capitalised value of business over Net Assets. (viii) Average Profit= ___________. (ix) Any firm that earns only normal profits or is curring loss normally does not have__________.

Accepted Answer

NA

Question 17

(i) Efficiency of management doesnot affect the goodwill of business. (ii) Purchased goodwill may arise on acquisition of an existing business . (iii) Goodwill can be defined as the present value of anticipated profits.(iv) Self - Generated Goodwill is recorded in the books of account as some consideration is paid for it. (v) Under capitalisation of Super profit Method goodwill is ascertained capitalising the Super profit on the basis of Normal Rate ofReturn.

Accepted Answer

NA

Question 18

(i) Debentures are________ of the company.(ii) Debenture - holders are ___________ of the company.(iii) Debentues Account is always credited with the__________ value of the debentures.(iv)Interest on debentures is paid whether the company _________ or _____________.(v) An entry may or amy not be passed in theBooks of Account for Debentures issued as ___________. (vi) ________ isnot paid on Debentures issued as collateral security.(vii) __________ is written off in the year when debentures are issued(viii)Discount or Loss on Issue of Debentures is written off in the year when debentures are issued first from __________ . (ix)A company has loss onIssue of Debentures ofRs.50000 . It has a balance in Securities Premium Reserve of Rs. 25000. It Will debit_______ by Rs.25000 and __________ by Rs.22000 in the year of issue.(x) A company has issued 5000 7% Debentures of Rs. 100 each at a price of Rs.94 . It will credit 7%Debentures Account by ____________.(xi) A company has issued 5000 7% Debentures of Rs. 100 each at a price of Rs.94 . It will credit 7%Debentures @ ____________ on ____________.(xii) Discount or Loss onIssue of Debentures Account will not have __________at the year end.

Accepted Answer

NA

Question 19

(i) If the partners of a firm decide to change their profit - sharing ratio the gaining partner compensates the sacrificing partner by paying the proportionate amount of _________.(ii) Change in relationship among the partners is __________ of the partnership firm.(iii) Revaluation of assets on the reconstitution of partnership is necessary because their present value may be different from their ________ .(iv) A change in profit- sharing ration among the existing partners result in _________ of the partnership firm .(v) Revaluation Account is a ________ Account.(vi) Workmen Compensation Reserve is a reserve created out of profit to meet the_____________.(vii) The ration in which all the parners share future profits and losses is known as__________.

Accepted Answer

NA

Question 20

(i) Debentures are redeemed without setting aside amount to Debenture Redemption Reserve (DRR). It is redemption out of ___________.(ii) Debenture are redeemed setting aside full nominal (face) value of debentures to Debenture Redemption Reserve (DRR) . It is redemption out of _____________(iii)Debentures are redeemedsetting aside 25% of nominal nominal (face) value of debentures to Debenture Redemption Reserve (DRR) . It is redemption out of _____________(iv)Amount should be set aside to ______ before the redemption of debentures.(v)Debenture Redemption Investment (DRI) should be made of an amount at least equal to __________ of the nominal (face) value of the debentures to be redeemed during the yearending March 31 of the next year.(vi) Debenture Redemption investment (DRI) should be made _______________ 30th April of the year in which debentures are redeemed.(vii) Discount or Loss on Issue of Debentures is a__________(Viii) Itis not necessary for_____________ to set aside amount to Debenture RedemptionReserve (DRR).(ix)Itnot necessary for the India Financial indtitutions regulated regulated by RBI and Banking Companies to invest amount in __________ .(x)Once the debentures are redeemed amount of DRR is transferred to ______________.

Accepted Answer

NA

Question 21

(i) Debenture is an evidence of companys borrowig.(ii) Share are not borrowing of a company whereas Debentures are borrowings of the companu.(iii) Unlike shares debentures can be issued at a discount. (iv) ABC Ltd . Issued 10000 8% Debentures of Rs. 100 each at Rs. 98 . it is a case of issue of debentures at premium.(v) Debentures may or may not secured by a charge on the assets of the company.(vi)Debentureare relatively riskier than shares.(vii) Debentures are repaid after repayment ofshare capital.(viii)Debentures are normally shown asLong - term Borrowings under Non - current Liabilities.(ix) Debentures out of Long - term Borrowings that are due for redemption within 12 Months from the date of Balance Sheet are shown as Short - term Borrowings.(x) Debenturesarealways issued payable in lumpsum.(xi) Premium received on Debentures is Credited to Securities Premium Reserce.(xii) A company has issued 5000 10% Debentures of Rs.1000 each as security for a loan of Rs. 7500000. It may or may not pass anentry for theissue of such debentures.(xiii) Purchase consideration can be paid partly by cheque . an acceptance and balance by issue of debentures at par or discount orpremium.(xiv) Loss on issue of Debentures is written off in the year the debentures areissued fromStatement of profit and loss alone.(xv) Loss on Issue of Debentures is written off in the year the debentures are issued from Securities Premium Reserve if it exists and then from Statement of Profit and Loss.(xvi) Debentures Account is credited withthe amount received for the debentures.

Accepted Answer

NA

Question 22

(i) Debenture Redemption Reserve is set aside by allcompanies except All India Financial institutions regulated by RBI and Banking companies.(ii) Debenture Redemption Investment is made by the companies required to set aside amount to Debenture Redemption Reserve.(iii) Debenture Redemption Reserve can be used only for redemption of debentures.(iv) Debenture Redemption Investment (DRI) can be used by a company for any purposes after the debentures have been redeemed.(v) Debenture Redemption Reserve is not set aside in cash the debentures are fully convertible only into shares.(vi)Debenture Redemption Reserve is set aside in the caseof partly Convertible Debentures on the convertible part of the debentures.(vii) Debenture Redemption Reserve may be set aside by a company out of any reserve.(viii) Debenture Redemption Reserve isset aside by a company out of amount available for payment of dividend.(ix) General Reserve can be transferred to Debenture Redemption Reserve.(x) Surplus .i.e. Balance in Statement of Profit and Loss can not be transferred to Debenture Redemption Reserve.(xi) Atleast 25% of the redeemable value of debenturesshould be set aside to Debenture Redemption Reserve before the redemption of debentures.(xii) If a company sets asids profit to Debenture Redemption Reserve . it means redemption is not fully out of capital.(xii) If a company sets aside profit equivalent to full nominal (face) value of debentures to Debenture Redemption Reserve it means redemption is fully out of profits.(xvi) Redemption of Debentures by banking Company can be redemption purely out of capital.(xv) Once the debenutures are redeemed the amount of Debenture Reserve is transferred to capital Reserve.(xvi) Discount or Loss on Issue of Debentures is written off from Securities Premium Reserve as section 52(2) of Companies Act 2013 permits so

Accepted Answer

NA

Question 23

(i) cost of revenue form operations to average inventory  (ii) credit revenue from operations to average trade receivables (iii) Net credit purchases to average trade payables  (iv) Reavenue from opeartions tio working capital.

Accepted Answer

NA

Question 24

(i) Currnt Liabilities Rs 80000 and current Assets Rs 200000(ii) Rs 16000 (iii)2.41(iv) inventory prepaid Expenses unamoritised expensesLosses.

Accepted Answer

NA

Question 25

(i) Comparison of value of a firm with those of another firm is termed as inter- firm comparison .(ii) Comparison of values of two years of the firm is termed as intra - firm comparison.(iii)Revenue from Operations is not taken as 100 in preparing Common - size Balance Sheet.(iv)Total of Assets Liabilities part is taken as base for preparing Commom - size Balance Sheet.(v) Comparative Statements are the tools of financial statement analysis.

Accepted Answer

NA

Question 26

(i) Comparative Statement is a tool of _________ analysis.(ii) Comparative Statement is a techinique of _________ of two or more years.(iii)In common - size Balance Sheet each item of Balance sheet is expressed as a percentage of _____________(iv)Comparison of values of two year of the firm is know as ____________ comparison.(v) Comparison of values of two firms is called __________ comparison.

Accepted Answer

NA

Question 27

(i) Change in profit- sharing ratio of the existing partners result in the reconsitution of the partnership firm.(ii) Change in profit -sharing ratio does not change the relationship among the existing partners.(iii) The parners whose shares have decreased as a result of change in profit -sharing ratio are know as sacrificing partners.(iv) The partners whose shares have increased as result of change in profit -sharing ratio are know as gaining partners. (v) Reserve Accumulated profitLoss should always be distributed at the time of reconstitution of partnership even if the question is silent. (vi) There is no difference between furniture rebuced by 20% and furniture reduce to 20%. (vii) After revaluation assets and liabilities may or may not be shown in the Balance Sheet at the revised values.

Accepted Answer

NA

Question 28

(i) Assets are revalued and liabilities are reassessed at the time of admission of a partner.(ii) Accumulated profits and losses are transferred to Revaluation Account at the time of admission of a partner.(iii) Contingent liability becoming a certain liability is debited to Revaluation Account at the time of admission of a partner.(iv) The purpose of Revaluation Account is to ascertain the gain loss arising on account of Revaluation of Assets and Reassessment of Liabilits.(v) A new partner is liable for the past losses of the firm. (vi) On revaluation of assets and liabilities Capital Accounts of old Partners do not change.(vii) Old Partner are no allowed to withdraw the amount of the goodwill brought in by the new partner .(viii) Unless agreed otherwise the new profit- sharing ratio of old partners will be the same as their old profit - sharing ratio.(ix) It is necessary that partner should have captials in their profit - sharing ratio. (x) A new partner bring goodwill into the firm to acquire right to share the future profit of the firm.

Accepted Answer

NA

Question 29

(i) Authorised Capital is shown in the note to Accounts on share capital.(ii) Authorised capital for equity share capital and preference share capital is not shown separately in the note to Accouns on share capital(iii) Issued Share Capital is that part of Authorised share capital that for subscription whether subscrided or not. (iv) Issued Share Capital can be more than the Authorised Share Capital. (v) Subscribed capital is that part of issued capital that is subscribed.(vi) Subscribed capital need not be shown separately for Equity share capital and perference share capital.(vii) Share on which the company has received the entire nominal (face) value whether called or not are shown as subscribed and fully paid - up. (viii) Share on which the company has not received the call made are shown as Subscribed but not Fully - up.(ix) A company at its discretion may or may not prepare note to Account on line item of the Balance Sheet.(x)Authorised capital cannotbe more than share capital.(xi) Subscribed share capital can be less than or equil to issued share capital but cannot be more .(xii) A part of share capital that will be called - upat the time of winding up of the company is reserve capital. (xiii) Share can issuedto public at a discount.(xiv) Share can issued to employees at a discount.(xv) Share are always issuedat par.(xvi) Securities premium receivedon issueof shares is creditedis credited to securities premium reserve Account.(xvii)Securities premium reserve can be used for used for issuing partly paid bonus share.(xix) Securities premium reserve can be used for writing off preliminary expences.(xx) Pro rata allotment is made in the event shares are undersubscribed. (xxi) Share cannot be issued unless minimum subscription is received by the company.(xxii) If a company does not receive the amount called by it on share it can forfeit the shares.(xxiii) Forfeited share can be reissued by the comapny on the terms as decided by it.(xxiv) Profiton reissue of forfeited shares is transferred to capital redemption reserve.(xxv) Application Money receives over and above the alloment money is always transferred to called in advance Account.(xxvi) In the case of undersubscription allotment money and calls amount is demandedonthe basis of share applied and shares issued.(xxvii) Preference shares do not have preferential right as to dividend and repayment of share capital at the time of companys winding up.(xxviii)Preference shares cannot be issued at premium.(xxix)Equity share cannot be issued at discount whereas preference share can be issued at discount.(xxx) Cumulative preference shares mean that arrears of dividend is payable before dividend is paid on preference shares.(xxxi) Preference share capital is not is not shown as shareholders Funds but is shown as long - term Borrowings.

Accepted Answer

NA

Question 30

(i) Cash equivalents are short - term highly liquid investments that are readily convertible into known amount of cash and which are subject to insignificant change in value.(ii) Operating Activities are the principal revenue producing activities or an enterprise and those activities which are not investing or financing activites.(iii)shares issued to promoters in considers in consideration of their services are shown as Financing Activity.(iv)Gratuity paid to a retiring employee is an Operating Activity.(v) Income tax paid is always shown asOperatingActivity.(vi) Dividendpaid is alwaysshown as Financing Activity.(vii) Issue of bonus shares is shown as Financing Activity.(viii)Debentures issued for consideration other than Cash is shown as inflow under Financing Activity.(ix)Depreciation and Amortisation are added to net profit before tax and Extraordinary items they being non- cash expense.(x)Preliminary expenses paid during the year are added to net profit before tax and Extra - ordinary items and shown as outflow under Financing Activity.

Accepted Answer

NA

Question 31

(i) An objective of financial analysis isto determine operating effciency and profitability.(ii) Determini operating effciency and profitability is not an objective of financial analysis.(iii) Financial anaylsis is used for credit analysis.(iv)The purpose offinancial statement analysis by trade creditors is to determining whether the amount due to them issafe.(v)Financial Statement analysis doesnot ignore qualitative elements.

Accepted Answer

NA

Question 32

(i)A Partner can retire from the firm with the consent of all other partner only.(ii) In the event of death the combined share of profit of the continuing partnerswill decrease . (iii) A family member of the retiring partner will automatically become the new partner in a reconstituted firm.(iv) Gain or loss on revaluation of assets at the time of retirement of a partner is a capital profit. (v) In the event of death profit or loss on Revaluation Account is transferred to the continuing partners in the old profit-sharing ratio.(vi) The amount due retiring partner if not paid in cash istransferred to his Loan Account.(vii) At the time of retirement death undistributed profits losses and reserves are distributed among all the partners in their old profit- sharing ratio.(viii) The amount due to the retiring partner is always settled in cash.(ix) The firm is under obilgation to pay an agree rate of interest for the unpaid balance to the retiring partner.(x) Gaining Ratio is calculated at the time ofretirement or death of a partner and chage inProfit -sharing ratio.

Accepted Answer

NA

Question 33

(i) 1000 10% Debentures of Rs.100 each out of 10 000 10% Debentures are redeemable within the 12 months of of the date of balance sheet . They will be shoen in the Current Liabilities as Short - term Borrowings in the Balancesheet.ltbtgt(ii) Dividend is paid on paid -up Capital.(iii) Debentures are shown under the head Other Long - term Liabilites in the Balance Sheet .(iv)Share Application Money pending Allotment is shown as aline item .(v) Loose Tools and Stores and Spares and Spares are shown as inventories in the Balance Sheet.(vi)Bills Receivable is shown as Trade Receivables in the Balance Sheet.(vii) Reserve Capital is part of Share Capital that a Company resolves not to call at any time it desires.

Accepted Answer

NA

Question 34

(i) A B and C share profits and losses in the ratio of 1213and 16 respectively . D a new partner is given 18th share . Then new profit - sharing ratio will be __________.(ii)The ratio in which the old partners are surrendering their share of profit in favour of the new partner is called ____________.(iii) Calculation of sacrificing ratio is necessary when the new partner will bring ________ in cash.(iv) The capital balance of A and B are Rs.25000 and Rs. 20000 respectively after making all the adjustments . If C the incoming partner is to bring 13rd of the total capitalof the firm then his share of capital will be _________.(v) For any decrease in the value of liability the Revaluation Account is _________.(vi) C the incoming partner is to bring Rs. 6000 as goodwill for15th share in the firms profit . Total goodwill of the firm will be _________.(vii) investment Fluctuation Reserve is a reserve set aside out of profit to adjust the difference between _________and __________ of investments.(viii) In case of admission of a new partner the Accumulated Profits Reserve Losses and Fictition Assets should be transferred to ______________ Partners Capital Current Accounts in their __________ Profits- sharing ratio.(ix) If goodwill is appearing in the Balance Sheet at the time of admission of a new partner the existing goodwill is written - off among _____________ partner in ___________ratio.

Accepted Answer

NA

Question 35

(i) (a) Debt to Equity Ratio (b) Interest coverage Ratio  (ii) (a) Net profit Ratio (b) Return on investment (ROI)

Accepted Answer

NA

Question 36

(i) Accounting ratio is a mathematical expression of relationship between two items or group of items in the financial statements.(ii) Price level changes are ignored in ration analysis. Itis an advantage of Ratio Analysis.(iii) Quick Ratio establishes the relationship between current assets and current liabilities.(iv) In calculating Debt - Equity ratio allexternal debts are considered.(v) Debit balance in Surplus i.e. Balance in Statement of profit and Loss in not deducted to calculate Shareholders Funds to calculate Debt - Equity Ratio.(vi)The objective of calculating Proprietary Ratio is to measure proportion of fixed assets financed by the Shareholders Funds.(vii) In Debt to Total Assets Ratio debt includes only long - term Borrowings and Long - term Provisions(viii) Interest Coverage ration Shoes the amount of profit avaliable to cover the interest. (ix) The formula for Trade Payables Turnover Ratio is net Cretit Purchase Average Trade Receivables.(x) Loose tools and Stores and Spares and Turnover Ration are excluded to calculate Working Capital to calculate Working Capital Turnover Ratio.(xi)Gross profit helps in fixing selling prices and assessing efficiency of trading activities.

Accepted Answer

NA

Question 37

(i) 3.75 Times (ii) 4Times

Accepted Answer

NA

Question 38

(i) 15% (ii)85%

Accepted Answer

NA

Question 39

HP Computers Ltd. has an opening credit balance of Surplus i.e. Balance in Statement of Profit and Loss and Securities Premium Reserve of Rs 100000 and Rs 200000 respectively. During the year it incurred a loss of Rs 150000. How will it be shown in Note to Accounts on Reserves and Surplus?

Accepted Answer

NA

Question 40

HP Ltd. Issued 5000 8% Debentures of Rs.100 each at Rs.95 . It will credit 8% Debentures Account by

Accepted Answer

NA

Question 41

HP Ltd. Issued 5000 8% Debentures of Rs 100 each at Rs 95. It will will credit 8% Debentures Account by

Accepted Answer

NA

Question 42

How would you treat the following items in the case of a ‘not-for-profit’ organisation? Tournament Fund Rs. 40000. Tournament Expenses Rs. 14000. Receipts from Tournament Rs. 16000.

Accepted Answer

NA

Question 43

How would you treat the following items in the case of a ‘not-for-profit’ organisation? Table Tennis match expenses Rs. 4000.

Accepted Answer

NA

Question 44

How would you treat the following items in the case of a ‘not-for-profit’ organisation?  Receipts from Charity Show Rs. 7000. Expenses on Charity Show Rs. 3000.

Accepted Answer

NA

Question 45

How would you treat the following items in the case of a ‘not-for-profit’ organisation?  Prize Fund Rs. 22000. Interest on Prize fund Investments Rs. 3000. Prizes given Rs. 5000. Prize fund Investments Rs. 18000.

Accepted Answer

NA

Question 46

How would you account for Subscription received in advance in the books of a non-trading organisation?

Accepted Answer

NA

Question 47

How would you account for Subscription due to be received in the current year in the books of a non-trading organisation?

Accepted Answer

NA

Question 48

How will you treat subscription at the time of preparing the accounts of ao not-trading arganisation ?

Accepted Answer

NA

Question 49

How will you treat payment of Intereset on Debentures while preparing a Cash Flow Statement?

Accepted Answer

NA

Question 50

How will you deal with the following items while preparing for the Bombay Women Cricket Club its income and expenditure account for the year ending 31.3.2017 and its Balance Sheet as on 31.3.2017    Give reasons for your answers.

Accepted Answer

NA

Explore topic-wise InterviewSolutions in .

Ideal Quick Ratio is :

Ideal Current Ratio is :

(i) Name any two ratios to know the short term solvency of the firm. (ii)What is the effect of receipt of cash from debtors on acurrent ratio of 1:1? (iii) What is the effect of cash paid to creditors on quick ratio of 1:1?

(i) How will you treat Accumulated Profits/Losses at the time of dissolution of the firm ? (ii) What will be the accounting treatment of balance of the Realisation Account ?

(i) cost of revenue form operations to average inventory (ii) credit revenue from operations to average trade receivables (iii) Net credit purchases to average trade payables (iv) Reavenue from opeartions tio working capital.

(i) Currnt Liabilities Rs 80000 and current Assets Rs 200000,(ii) Rs 16000, (iii)2.4:1,(iv) inventory prepaid Expenses, unamoritised "expenses//Losses".

(i) (a) Debt to Equity Ratio, , (b) Interest coverage Ratio (ii) (a) Net profit Ratio,, (b) Return on investment (ROI)

(i) 3.75 Times (ii) 4Times

(i) 15%, (ii)85%

HP Computers Ltd. has an opening credit balance of Surplus, i.e., Balance in Statement of Profit and Loss and Securities Premium Reserve of Rs 1,00,000 and Rs 2,00,000 respectively. During the year, it incurred a loss of Rs 1,50,000. How will it be shown in Note to Accounts on Reserves and Surplus?

HP Ltd. Issued 5,000, 8% Debentures of Rs.100 each at Rs.95 . It will credit 8% Debentures Account by

HP Ltd. Issued 5,000, 8% Debentures of Rs 100 each at Rs 95. It will will credit 8% Debentures Account by

How would you treat the following items in the case of a ‘not-for-profit’ organisation? Tournament Fund Rs. 40,000. Tournament Expenses Rs. 14,000. Receipts from Tournament Rs. 16,000.

How would you treat the following items in the case of a ‘not-for-profit’ organisation? Table Tennis match expenses Rs. 4,000.

How would you treat the following items in the case of a ‘not-for-profit’ organisation? Receipts from Charity Show Rs. 7,000. Expenses on Charity Show Rs. 3,000.

How would you treat the following items in the case of a ‘not-for-profit’ organisation? Prize Fund Rs. 22,000. Interest on Prize fund Investments Rs. 3,000. Prizes given Rs. 5,000. Prize fund Investments Rs. 18,000.

How would you account for 'Subscription received in advance' in the books of a non-trading organisation?

How would you account for 'Subscription due to be received' in the current year in the books of a non-trading organisation?

How will you treat subscription at the time of preparing the accounts of ao not-trading arganisation ?

How will you treat payment of 'Intereset on Debentures' while preparing a Cash Flow Statement?

How will you deal with the following items while preparing for the Bombay Women Cricket Club its income and expenditure account for the year ending 31.3.2017 and its Balance Sheet as on 31.3.2017: Give reasons for your answers.

1751.	(i) When the firm is dissolved , Reserve is transferred to ________ in theprofit- sharing ratio.(ii) Unrecorded liability paid at the time of dissolution of the firm is to be debited to_________ Account.(iii) When an unrecorded asset is realised at the time of dissolution of the firm, __________ Account is debited and ___________ Account is credited.(iv) Goodwill Account appearing in the books on the dissolution date is closed by transferring it to _____________ side of the __________ Account. (v) Entry for the asset taken over by a creditor is ___________ but entry for the net payment to the creditor is made. (vi) Debit balance of profit and loss Account is transferred to __________ Accounts at the time of dissolutionof the firm.(vii) Expenses of realisation are ___________ to Realisation Account.(viii) Unrecorded asset taken by a partner is ____________ to Partner's Capital Account.(ix) Balance ofRealisation Account is transferred to ____________.
Answer» SOLUTION :(i) Partners' capital Accounts ; (ii) REALISATION ; (iii) Cash , Realisation;(iv) DEBIT, Realisation ; (v) not passed ; (vi) Partners' Capital ; (vii) debited; (viii) debited; (IX) Capital Accountsof the Partners INTHEIR profit - sharing ratio.]

1752.	Ideal Quick Ratio is :
Answer» `1:1` `1:2` `1:3` `2:1` ANSWER :A

1753.	Ideal Current Ratio is :
Answer» `1:1` `1:2` `1:3` `2:1` ANSWER :D

1754.	(i) Vishesh Ltd. forfeited 1,000 Equity Shares of Rs. 10 each issued at a premium of Rs. 2 per share for non-payment of allotment money of Rs. 5 per share including premium. The final call of Rs. 2 per share was not yet called on these shares. Of the forfeited shares 800 shares were reissued at Rs. 12 per share fully paid-up. The remaining shares were reissued at Rs. 11 per share fully paid up. (ii) G. Ltd. forfeited 7,000 equity shares of Rs. 100 each for the non-payment of first call of Rs. 30 per share. These shares were issued at a premium of Rs. 30 per share. The second and final call of Rs. 20 per share was not yet made. The forfeited shares were re-issued at Rs. 80 per share fully paid up.
Answer» Solution :Amount TRANSFERRED to Capital Reserve Reserve Case (i) RS. 5,000 and Case (ii) Rs. 2,10,000. HINT : In Case (i) it may be ASSUMED that all the shares are reissued at the same time.

1755.	(i) The profit or loss shown by the Revaluation Account at the time of retirement of a partner is transferred to the Capital Accountsof the partners in the ___________ratio.(ii) At thetime of retirement / death , the undistributed profit - losses and reserves are distributed_________among all the partners in their ______________ Profit - sharing ratio.(iii) Unless agreedotherwise , it is presumed the continuing partners gain in their ____________ and hence their__________ isSameas their old profit - sharing ratio.(iv)_______________isthe ratio in which the remaining partners acquire the share of retiring or deceased partner . (v) At time of retirement or death of a partners in their _____________ ratio.(vi) When firm pays an amount in excess of total amount due to the retiring partner , then excess amount is treated as ___________.
Answer» Solution :[ (i) OLD profit - sharing ; (II) old ;(iii) old profit - sharing RATIO , gaining ratio; (iv) Gaining ratio; (v) all , old ; (VI) hidden goodwill .]

1756.	(i) The basis of Cash Flow Statement is__________.(ii) Debentures issued for consideration other than cash are not shown in the Cash Folw Statementbecause __________ is not received against the issue.(iii) Marketable Securities are included in __________(iv) Current investments are shown as __________(v)Buy back of own shares is shown as outflow in Financing Activity as__________.(vi) Share issue expenses paid are shown as outflow under_________.(vii)Discount/ Loss on Issue of Debentures written off is shown by way of deduction from _____________ of the debentures.(viii) Patents purchased and completely amortised in the year of purchase is added under ___________ and shown as Outflow under__________(ix)Purchase and sale of securitiresby a financing comoanyis _________.(x) Purchase of securities by a non - finance compant is _________.
Answer» Solution :(i) cash BASIS; (ii) cash; (iii) cash and cash equivalents; (iv) cash and cash equivalents; (v) extraordinary; (VI) financing activity; (vii)nominal VALUE (FACE value); (viii) operating activity, investing actives; (ix) operating activity; (X) investing activity.

1757.	(i) The obective of financial statement analysis is ___________comparison.(ii) _________ financial statement analysis is based on one year 's data.(iii)Financial Statement analysis is not free from _________ bias.(iv) Financial Statement analysis ignores price level changes . It is its_________.(v)__________ financial statement analysis of dynamic.
Answer» SOLUTION :(i) intra- firm; (ii) vertical; (iii) PERSONAL; (IV) LIMITATION; (V) Horizontal.

1758.	(i)Shares on which the company has called total nominal value and has alsoreceived it is shown in the Note to Accounts on Share Capital under Subscribed Capital as _________.(ii) Minimum subscription prescribed is __________.(iii) Shares on which the company has called the total nominal value but has not fully received final callof Rs.2 on 500 shares, the sharesonwhich the final call is not received are shown in the Note to Account onShare Capital under Subscribed Capital as __________.(iv) A Company has resolved to call Rs. 2 per Share at the time of winding up the company . Rs 2 per share is _________ Capital.(v) Securities Premium Reserve isshown in the liabilities side in the Balance Sheet under ___________(vi) Trade Payables , unless agreed otherwise , are shown as _________.(vii) Prepaid Insurance is shown as ___________ in the Balance Sheet.
Answer» Solution :[.(i) Subscribed and Fully paid up ; (II) `90%`; (iii) Subscribed but not fully paid - up;(iv) Reserve; (v) RESERVES ; (VI) Current Liabilities; (VII) Other Current Assets.]

1759.	(i) Realisation Account is a Real Account.(ii) On dissolution of a firm is closed , wherese on dissolution of the partnership , the share of the outgoing partner is determlned and the firm is not closed .(iii) Any amount realised from the unrecorded asset is credited to Realisation Account. (iv) Goodwill at the time of dissolution is treated like any other asset and is closed by transferring it to Realisation Account . (v) Assts , when realised , are credited to Realisation Account. (vi) In dissolution , closing balance of Cash Account will be nil at the end.(vii) All assets inclusive of cash are transferred to the Realisation Account.(viii) Dissolution of the firm means the dissolution of the partnership.
Answer» Solution :[(i) False ; (ii) True ; (III) True ;(iv) True ; (vi) True ; (VII) False; (VIII) True.]

1760.	(i) Receipts and payments Account is _________ of the year 's _________.(ii) In the Receipts and Payment Account, receipts are shown on the _________ side.(iii)Credit balance in the income and Expenditure Account means excess of __________over _____________.(iv) Income and Expenditure Account shown all ________ receipts and _________ payments for an acccounting year.(v) Subscriptions received in advance by a club are shown on the ____________ side of the Balance Sheet.(vi) Life Membership Fess received by a club is shown in the _________.(vii) Excess of expenditure over income is ___________ Capital Fund in the Balance Sheet.(viii) Income and Expenditure Accountis prepared by _________ concerns. (ix) Match Fund of Rs. 1,000 appears in the books . Match expenses for a year amount to Rs. 1,200. ______________ will be debited to the Income and Expenditure Account.(x) If expenditure is Rs. 16,000 and surplus credited to Capital Fund Rs. 4,500, income ,is _____________.
Answer» Solution : (i) a summary, cash and bank transactions ; (ii) debit ; (iii) Income, Expenditure ;(iv) Revenue, Revenue ; (v) Balance SHEET ; (vii) DEDUCTED from ;(viii) not - for PROFIT ; (ix) Rs. 200 ; (X) 20,500 .

1761.	(i) Receipts and Payments Account shows the receipts andpayments of revenue nature only.(ii) Receipt from the sale of an old asset is an income.(iii) Receipts and payments Accountin a summary of cash transactions. (iv)Surplus of Non -Trading Organisationdistributed among the member . (v) Income and Expenditure Account isequivalent to the profit and loss Account of a business enterprise. (vi) Proceeds from the sale ofold newspapers are taken as income. (vii) Receipts and Paymants Account shows total income and expenditure.(viii) Only revenue nature items are shown in the income andExpenditure Account. (ix) Scholarships granted to students provided by government is debited toIncome and Expenditure Account. (x) Payment of honorarium is a revenue expenditure.(xi) Any expenditure relating to special fund is deducted from that special fund. (xii) Loss on sale of fixed assert is debited to Income and Expenditure Account . Whereas gain (profit) on sale of fixed assert is credited to Income and Expenditure Account.
Answer» Solution :(i) FALSE ; (ii) False ;(iii) True ;(iv) False ; (V) True ; (vi) True ; (vii) False ; (viii)True ; (ix) False ; (X) True ;(xi)True ; (XII) True.

1762.	(i) Name any two ratios to know the short term solvency of the firm. (ii)What is the effect of receipt of cash from debtors on acurrent ratio of 1:1? (iii) What is the effect of cash paid to creditors on quick ratio of 1:1?
Answer»

1763.	(i) Liquidity Ratios measure ____________ solvency of the enterprise.(ii) ___________ and stores and spares are not considered in computing Current Ratio.(iii) Debit balance in Surplus , i.e., Balance in spares are notconsidered in computing Current Ration.(iv)It is an objective of _________ ratio is to measure proportion of fixed assets financed by the Shareholders' Funds.(v) ___________ establishes the number of timed amount invested in trade receivables is turned over ina year in relation to Revenue from Operations.(vi)The formula for Working Capital Turnover ratio is __________.(vii) Complete the formula for Inventory Turnover Ratio:Cost of Revenue from Operations/ ___________.(viii) Gross Profit + Other Imcome- ____________ = Net Profit.(ix)_____________ and Operating Profit Ratio are complimentary to each other.(x)Trade Payable is the sum total of Creditoes and __________.
Answer» Solution :(i) Short -term; (ii) Loose tools; (iii) Shareholders; Funds; (iv) PROPRIETARY; (v) Trade Receivables Turnover Ratio ; (VI) Revenue fromOperation/ WORKING CAPITAL; (VII)Average Inventory ; (viii) Indirect Expenses; (ix) Operating Ratio ; (x) Bills Payables.

1764.	(i) increase: Colllection from debtors will decrease the closing debtros which will result in incvrease in Trade receivables trunover ratio i.e (Rs 400000)/(Rs 60000+Rs 80000)/(2)=5.71 Times (ii) Decrease: credit sales will increase credit sales as well as closing debtors by the same amount which will result in decrease in trade receivables trunover ratioi.e (Rs 440000)/(Rs 60000+ Rs 140000) =4.4 Times. (iii)increase: sales return will decrease credit sales as well as closing debtors by the same amount which will result in increase in trade Receivables Turnover Ratio i.e ((Rs 390000)/(Rs 60000+ Rs 90000))/(2)=5.2 "Times" (iv) Neither the credit sales nor the debtors are affected.
Answer»

1765.	(i) How will you treat Accumulated Profits/Losses at the time of dissolution of the firm ? (ii) What will be the accounting treatment of balance of the Realisation Account ?
Answer» SOLUTION :(i) Accumulated Profits/Losses will be TRANSFERRED to the Partner's Capital Accounts in their profit-sharing ratio. (ii) It is transferred to Partner's Capital Accounts in their profit-sharing ratio.

1766.	(i) Goodwill is an __________ asset , but not a ____________ asset. (ii) Goodwill is a capitalised value of ____________. (iii) Under Average Profit Method , goodwill is calculated by multiplying the _____________by a certain number of year's purchase as agreed by the partners. (iv) ______________ is the excess of actual profit over the normal profit. (v) When the business is taken over by another business, the excess of purchase consideration over its net asset value is referred to as ___________. (vi) The value of goodwill is based on _________ judment of the value.(vii) Under __________ method goodwill is the excess of Capitalised value of business over Net Assets. (viii) Average Profit= ___________. (ix) Any firm that earns only normal profits or is curring loss, normally does not have__________.
Answer» Solution :[(i) intangible , fictious; (ii) Super profit; (III) Average profit; (IV) Super profit; (v) Purchased Goodwill ; (vi) subjective ; (vii) Capitalisation of Average profit; (viii) Total profits/ No . Of relevant year ; (ix) goodwill.]

1767.	(i) Efficiency of management doesnot affect the goodwill of business. (ii) Purchased goodwill may arise on acquisition of an existing business . (iii) Goodwill can be defined as the present value of anticipated profits.(iv) Self - Generated Goodwill is recorded in the books of account as some consideration is paid for it. (v) Under capitalisation of Super profit Method, goodwill is ascertained capitalising the Super profit on the basis of Normal Rate ofReturn.
Answer» Solution :[(i) False ; (II) TRUE ; (III) True ; (IV) False ; (v) True.]

1768.	(i) Debentures are________ of the company.(ii) Debenture - holders are ___________ of the company.(iii) Debentues Account is always credited with the__________ value of the debentures.(iv)Interest on debentures is paid whether the company _________ or _____________.(v) An entry may or amy not be passed in theBooks of Account for Debentures issued as ___________. (vi) ________ isnot paid on Debentures issued as collateral security.(vii) __________ is written off in the year when debentures are issued(viii)Discount or Loss on Issue of Debentures is written off in the year when debentures are issued first from __________ . (ix)A company has loss onIssue of Debentures ofRs.50,000 . It has a balance in Securities Premium Reserve of Rs. 25,000. It Will debit_______ by Rs.25,000 and __________ by Rs.22,000 in the year of issue.(x) A company has issued 5,000 , 7% Debentures of Rs. 100 each at a price of Rs.94 . It will credit 7%Debentures Account by ____________.(xi) A company has issued 5,000 , 7% Debentures of Rs. 100 each at a price of Rs.94 . It will credit 7%Debentures @ ____________ on ____________.(xii) Discount or Loss onIssue of Debentures Account will not have __________at the year end.
Answer» Solution :[(i)borrowing; (II) lenders; (iii) nominal(face); (IV) earns PROFIT, incurs; (v) collateral security; (VI) INTEREST ; (vii) Discount or Loss on Issue of Debentures; (viii) Securities Premium Reserve ; (ix) Securities Premium Reserve, Statement of Profit and Loss (finance Cost); (x) Rs.5,00,000; (xi) `7%` , Rs.5,00,000; (xii) balance,]

1769.	(i) If the partners of a firm decide to change their profit - sharing ratio , the gaining partner compensates the sacrificing partner by paying the proportionate amount of _________.(ii) Change in relationship among the partners is __________ of the partnership firm.(iii) Revaluation of assets on the reconstitution of partnership is necessary because their present value may be different from their ________ .(iv) A change in profit- sharing ration among the existing partners result in _________ of the partnership firm .(v) Revaluation Account is a ________ Account.(vi) Workmen Compensation Reserve is a reserve created out of profit to meet the_____________.(vii) The ration in which all the parners share future profits and losses is known as__________.
Answer» Solution :[(i) GOODWILL; (II) reconstitution ; (III) book value ; (iv) reconstitution ; (V) Nominal; (vi) Workmen Compensation Liability; (vii) new profit - sharing ratio.]

1770.	(i) Debentures are redeemed without setting aside amount to Debenture Redemption Reserve (DRR). It is redemption out of ___________.(ii) Debenture are redeemed setting aside full nominal (face) value of debentures to Debenture Redemption Reserve (DRR) . It is redemption out of _____________(iii)Debentures are redeemedsetting aside 25% of nominal nominal (face) value of debentures to Debenture Redemption Reserve (DRR) . It is redemption out of _____________(iv)Amount should be set aside to ______ before the redemption of debentures.(v)Debenture Redemption Investment (DRI) should be made of an amount at least equal to __________ of the nominal (face) value of the debentures to be redeemed during the yearending March 31 of the next year.(vi) Debenture Redemption investment (DRI) should be made _______________ 30th April of the year in which debentures are redeemed.(vii) Discount or Loss on Issue of Debentures is a__________(Viii) Itis not necessary for_____________ to set aside amount to Debenture RedemptionReserve (DRR).(ix)Itnot necessary for the India Financial indtitutions regulated regulated by RBI and Banking Companies to invest amount in __________ .(x)Once the debentures are redeemed, amount of DRR is transferred to ______________.
Answer» Solution :[(i) capital; (ii) profit; (iii) profit and capital; (iv)Debenture REDEMPTION Reserve by (DRR); (v) `15%`; (VI) on or before; (vii) capital loss; (viii) All INDIA Financial Institutions regulated by RBI and Banking Companies; (ix) Debenture Redemption Investment (DRI); (x) GENERAL Reserve.]

1771.	(i) Debenture is an evidence of company's borrowig.(ii) Share are not borrowing of a company whereas Debentures are borrowings of the companu.(iii) Unlike shares, debentures can be issued at a discount. (iv) ABC Ltd . Issued 10,000, 8% Debentures of Rs. 100 each at Rs. 98 . it is a case of issue of debentures at premium.(v) Debentures may or may not secured by a charge on the assets of the company.(vi)Debentureare relatively riskier than shares.(vii) Debentures are repaid after repayment ofshare capital.(viii)Debentures are normally shown asLong - term Borrowings under Non - current Liabilities.(ix) Debentures , out of Long - term Borrowings , that are due for redemption within 12 Months from the date of Balance Sheet are shown as Short - term Borrowings.(x) Debenturesarealways issued payable in lumpsum.(xi) Premium received on Debentures is Credited to Securities Premium Reserce.(xii) A company has issued 5,000, 10% Debentures of Rs.1,000 each as security for a loan of Rs. 75,00,000. It may or may not pass anentry for theissue of such debentures.(xiii) Purchase consideration can be paid partly by cheque . an acceptance and balance by issue of debentures at par or discount orpremium.(xiv) Loss on issue of Debentures is written off in the year the debentures areissued fromStatement of profit and loss alone.(xv) Loss on Issue of Debentures is written off in the year the debentures are issued from Securities Premium Reserve , if it exists and then from Statement of Profit and Loss.(xvi) Debentures Account is credited withthe amount received for the debentures.
Answer» Solution :[(i) True ; (ii) True; (iii) True; (iv) FALSE; (v) True; (vi) False; (VII) False; (viii) True; (ix) False; (X) False; (xi) True; (xii) True; (xiii) True; (xiv) False; (XV) True; (xvi) False.]

1772.	(i) Debenture Redemption Reserve is set aside by allcompanies except All India Financial institutions regulated by RBI and Banking companies.(ii) Debenture Redemption Investment is made by the companies required to set aside amount to Debenture Redemption Reserve.(iii) Debenture Redemption Reserve can be used only for redemption of debentures.(iv) Debenture Redemption Investment (DRI) can be used by a company for any purposes after the debentures have been redeemed.(v) Debenture Redemption Reserve is not set aside in cash the debentures are fully convertible only into shares.(vi)Debenture Redemption Reserve is set aside , in the caseof partly Convertible Debentures, on the convertible part of the debentures.(vii) Debenture Redemption Reserve may be set aside by a company out of any reserve.(viii) Debenture Redemption Reserve isset aside by a company out of amount available for payment of dividend.(ix) General Reserve can be transferred to Debenture Redemption Reserve.(x) Surplus .i.e., Balance in Statement of Profit and Loss can not be transferred to Debenture Redemption Reserve.(xi) Atleast 25% of the redeemable value of debenturesshould be set aside to Debenture Redemption Reserve before the redemption of debentures.(xii) If a company sets asids profit to Debenture Redemption Reserve . it means redemption is not fully out of capital.(xii) If a company sets aside profit equivalent to full nominal (face) value of debentures to Debenture Redemption Reserve, it means redemption is fully out of profits.(xvi) Redemption of Debentures by banking Company can be redemption purely out of capital.(xv) Once the debenutures are redeemed , the amount of Debenture Reserve is transferred to capital Reserve.(xvi) Discount or Loss on Issue of Debentures is written off from Securities Premium Reserve as section 52(2) of Companies Act, 2013 permits so
Answer» Solution :[(i)True; (II) True; (iii) True ;(iv) True ;(v) False ; (vi) False; (VII) False; (viii) True; (IX) True; (x) False; (XI) False; (xii) True; (XIII) True; (xiv) True; (xv) False; (xvi) True.]

1773.	(i) cost of revenue form operations to average inventory (ii) credit revenue from operations to average trade receivables (iii) Net credit purchases to average trade payables (iv) Reavenue from opeartions tio working capital.
Answer»

1774.	(i) Currnt Liabilities Rs 80000 and current Assets Rs 200000,(ii) Rs 16000, (iii)2.4:1,(iv) inventory prepaid Expenses, unamoritised "expenses//Losses".
Answer»

1775.	(i) Comparison of value of a firm with those of another firm is termed as inter- firm comparison .(ii) Comparison of values of two years of the firm is termed as intra - firm comparison.(iii)Revenue from Operations is not taken as 100 in preparing Common - size Balance Sheet.(iv)Total of Assets / Liabilities part is taken as base for preparing Commom - size Balance Sheet.(v) Comparative Statements are the tools of financial statement analysis.
Answer» SOLUTION :(i) True; (ii) True; (III) True;(IV) FALSE; (iv) True; (v) True.

1776.	(i) Comparative Statement is a tool of _________ analysis.(ii) Comparative Statement is a techinique of _________ of two or more years.(iii)In common - size Balance Sheet , each item of Balance sheet is expressed as a percentage of _____________(iv)Comparison of values of two year of the firm is know as ____________ comparison.(v) Comparison of values of two firms is called __________ comparison.
Answer» Solution :(i) financial; (ii) financial analysis; (iii) total ASSETS; (IV) intra- FIRM; (v) INTER - firm.

1777.	(i) Change in profit- sharing ratio of the existing partners result in the reconsitution of the partnership firm.(ii) Change in profit -sharing ratio does not change the relationship among the existing partners.(iii) The parners whose shares have decreased as a result of change in profit -sharing ratio are know as sacrificing partners.(iv) The partners whose shares have increased as result of change in profit -sharing ratio are know as gaining partners. (v) Reserve, Accumulated profit/Loss should always be distributed at the time of reconstitution of partnership even if the question is silent. (vi) There is no difference between 'furniture rebuced by 20% and furniture reduce to 20%. (vii) After revaluation , assets and liabilities may or may not be shown in the Balance Sheet at the revised values.
Answer» SOLUTION :[(i)True;(II) FALSE; (iii) True; (iv) True ; (v) True ; (VI) False ; (VII) True.]

1778.	(i) Assets are revalued and liabilities are reassessed at the time of admission of a partner.(ii) Accumulated profits and losses are transferred to Revaluation Account at the time of admission of a partner.(iii) Contingent liability becoming a certain liability is debited to Revaluation Account at the time of admission of a partner.(iv) The purpose of Revaluation Account is to ascertain the gain /loss arising on account of Revaluation of Assets and Reassessment of Liabilits.(v) A new partner is liable for the past losses of the firm. (vi) On revaluation of assets and liabilities , Capital Accounts of old Partners do not change.(vii) Old Partner are no allowed to withdraw the amount of the goodwill brought in by the new partner .(viii) Unless agreed otherwise , the new profit- sharing ratio of old partners will be the same as their old profit - sharing ratio.(ix) It is necessary that partner should have captials in their profit - sharing ratio. (x) A new partner bring goodwill into the firm to acquire right to share the future profit of the firm.
Answer» SOLUTION :[(i) True; (ii) False ; (III) True; (IV) True; (v) False ; (vi) False; (vii) False; (viii) True; (IX) False; (X) True.]

1779.	(i) Authorised Capital is shown in the note to Accounts on share capital.(ii) Authorised capital for equity share capital and preference share capital is not shown separately in the note to Accouns on share capital(iii) Issued Share Capital is that part of Authorised share capital that for subscription whether subscrided or not. (iv) Issued Share Capital can be more than the Authorised Share Capital. (v) Subscribed capital is that part of issued capital that is subscribed.(vi) Subscribed capital need not be shown separately for Equity share capital and perference share capital.(vii) Share on which the company has received the entire nominal (face) value, whether called or not, are shown as subscribed and fully paid - up. (viii) Share on which the company has not received the call made are shown as Subscribed but not Fully - up.(ix) A company , at its discretion may or may not prepare note to Account on line item of the Balance Sheet.(x)Authorised capital cannotbe more than share capital.(xi) Subscribed share capital can be less than or equil to issued share capital but cannot be more .(xii) A part of share capital that will be called - upat the time of winding up of the company is reserve capital. (xiii) Share can issuedto public at a discount.(xiv) Share can issued to employees at a discount.(xv) Share are always issuedat par.(xvi) Securities premium receivedon issueof shares is creditedis credited to securities premium reserve Account.(xvii)Securities premium reserve can be used for used for issuing partly paid bonus share.(xix) Securities premium reserve can be used for writing off preliminary expences.(xx) Pro rata allotment is made in the event shares are undersubscribed. (xxi) Share cannot be issued unless minimum subscription is received by the company.(xxii) If a company does not receive the amount called by it on share , it can forfeit the shares.(xxiii) Forfeited share can be reissued by the comapny on the terms as decided by it.(xxiv) Profiton reissue of forfeited shares is transferred to capital redemption reserve.(xxv) Application Money receives over and above the alloment money is always transferred to called in advance Account.(xxvi) In the case of undersubscription , allotment money and calls amount is demandedonthe basis of share applied and shares issued.(xxvii) Preference shares do not have preferential right as to dividend and repayment of share capital at the time of company's winding up.(xxviii)Preference shares cannot be issued at premium.(xxix)Equity share cannot be issued at discount whereas preference share can be issued at discount.(xxx) Cumulative preference shares mean that arrears of dividend is payable before dividend is paid on preference shares.(xxxi) Preference share capital is not is not shown as shareholders' Funds but is shown as long - term Borrowings.
Answer» Solution :[(i) True; (ii) False; (III) True; (iv) False; (vi)True;(vi)False;(vii) False; (VIII) True; (ix) False; (x)False; (xi) True; (xii) True; (xiii) False; (xvi) True; (XV) False; (xvii) False; (XVIII) False; (xix) True; (xx) False; (xxi) True; (xxii)True ; (xxiii)True; (xxiv) False; (xxv) False; (xxvi) True; (xxvii) False; (xxviii) False; (xxix) False; (xxx) True; (XXXI) False.]

1780.	(i) Cash equivalents are short - term , highly liquid investments that are readily convertible into known amount of cash and which are subject to insignificant change in value.(ii) Operating Activities are the principal revenue producing activities or an enterprise and those activities which are not investing or financing activites.(iii)shares issued to promoters in considers in consideration of their services are shown as Financing Activity.(iv)Gratuity paid to a retiring employee is an Operating Activity.(v) Income tax paid is always shown asOperatingActivity.(vi) Dividendpaid is alwaysshown as Financing Activity.(vii) Issue of bonus shares is shown as Financing Activity.(viii)Debentures issued for consideration other than Cash is shown as inflow under Financing Activity.(ix)Depreciation and Amortisation are added to net profit before tax and Extraordinary items ,they being non- cash expense.(x)Preliminary expenses paid during the year are added to net profit before tax and Extra - ordinary items and shown as outflow under Financing Activity.
Answer» Solution :(i) True; (ii) True; (III) False; (IV) True;(V)False; (VI) True; (vii) False; (viii) False; (ix)True;(X) False.