InterviewSolution
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InterviewSolution
This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 1901. |
Goodwill of the firm is valued at Rs. 5,00,000 at 2 years' purchase of average profit. Determine the missing values: Total Normal Profit = Rs. 2,50,000 + Rs. … + Rs. 3,00,000 - Rs. 1,00,000 + Rs. 3,50,000 = Rs. … Average Profit = ("Total Normal Profit")/("Number of Years")=("Rs. ...")/(5) = Rs. ... Goodwill = Rs. ... xx 2 = Rs. 5,00,000. |
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Answer» Solution :TOTAL NORMAL Profit = RS. 2,50,000 + Rs. 4,50,000 + Rs. 3,00,000 - Rs. 1,00,000 + Rs. 3,50,000 ` "" ` = Rs. 12,50,000 (STEP 3) Average Profit =`("Rs. 12,50,000")/(5)` = Rs. 2,50,000 (Step 2) Goodwill = Rs. 2,50,000 `xx` 2 = Rs. 5,00,000 (Step 1) Note : Total Normal Profit = Average Profit `xx` 5 = 12,50,000. |
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| 1902. |
Goodwill under Average Profit Method means |
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Answer» AVERAGE profit `XX` Number of YEARS purchase |
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| 1903. |
Goodwill of the firm is not affected by |
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Answer» LOCATION of the firm |
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| 1904. |
Goodwill is valued |
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Answer» at the time of CHANGE in PROFIT -SHARING ratio |
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| 1905. |
Goodwill appears in a Company's Balance Sheet under the Sub-head ......... |
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Answer» Unamortized Assets |
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| 1906. |
Goodwill is |
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Answer» an INTANGIBLE ASSET |
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| 1907. |
Globe Ltd.Issues 20,000, 9 % debentures of . Rs 100 each at a discount of 5 % redeemable at the end of 5 years at a premium of 6 % . For what amount 'Loss on Issue of Debentures Account ' will br debited ? |
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Answer» `.RS 1,00,000` |
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| 1908. |
Gobind, Hari and Pratap are partners. On retirement of Gobind, the goodwill already appears in the Balance Sheet at Rs. 24,000. The goodwill will be written-off |
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Answer» by debiting all partners’ CAPITAL ACCOUNTS in their OLD profit sharing ratio. |
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| 1909. |
Global Savings Bank Ltd. Is to redeem 10,000, 10% Debentures of Rs.100 each on 30th june , 2018. How much amount should be transferred to DRR by it? |
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Answer» Rs.2,50, 000. |
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| 1910. |
Global Savings Bank Ltd. Is to redeem 10,000, 10% Debentures of Rs 100 each on 30th June, 2018 How much amount should be transferred to DRR by it ? |
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Answer» RS 2,50,000 |
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| 1911. |
Given one point of distinction between Reserve Capital and Capital Reserve. |
| Answer» SOLUTION :RESERVE Capital is created out of UNCALLED capital WHEREAS capital reserve is created out of capital profits. | |
| 1912. |
Given an example of Financing Activity |
| Answer» SOLUTION :CASH procceds from ISSUING SHARES of DEBENTURES. | |
| 1913. |
Givenatransaction, a part of whichas an InvestingActivity and part as FinancingActivity. |
| Answer» Solution :PAYMENTOF instalments under Hire-Purchase System .Theinstalment has two COMPONENTS, i.e, PRINCIPALAND INTEREST. Principalis SHOWN as anInvesting Activity and interest as aFinancingActivity. | |
| 1914. |
Give two tiems which may appear on the debit side of partner's Current Account. |
| Answer» SOLUTION :(i) DRAWINGS, (II) INTERST on Drawings. | |
| 1915. |
Give two sources of finance for Rdemption of Debentures. |
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Answer» SOLUTION :(i) Out of profit, and (II) from the proceeds of the FRESH ISSUE of Share Capital and Debentures. |
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| 1916. |
Give two reasons in favour of having a Parenership Deed. |
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Answer» Solution :(i) In CASE of any dispure or doubt, PARTNERSHIP DEED is the guiding document. (ii) It can specify the rights and DUTIES of each partner. |
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| 1917. |
Give two purposes which are served by Analysis of Financial Statements. |
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Answer» SOLUTION :(i) It helps to determine the creditworthiness and earning potential of a business ENTITY. (II) Long-term as well as short-term solvency can be DETERMINED with the help of Analysis of Financial Statements. |
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| 1918. |
Give two points of distinction between Revaluation Account and Realisation Account . |
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| 1919. |
Give two main sources of income of a 'Not-for-Profit Organisation'. |
| Answer» SOLUTION :(i) SUBSCRIPTION, and (II) DONATION. | |
| 1920. |
Give two exaples of Cash flow fron Operating Activities . |
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Answer» SOLUTION :(i) Cash RECEIPTS from the sale of GOODS and the rendering of sevices, (ii) Cash payments to supplies for goods PURCHASED and for services availed . |
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| 1921. |
Give two features of Receipts and Payments Acconunt. |
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Answer» Solution :(i) It is a summary of CASH receipts and cash payments or it is a summarised FORM of Cash Book. (II) All recipts and payments are recorded on debit and credit sides IRRESPECTIVE of nature of transactions. |
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| 1922. |
Give two examples of non-cash transactions. |
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Answer» SOLUTION :(i)Conversion of Deberntures/Preference SHARES into Equity shares. (i) Issue of BONUS shares. |
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| 1923. |
Give two examples of Cash Flow from Operating Activities. |
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Answer» Solution :(i) CASH RECEIPTS from the sale of goods and the RENDERING of services. (ii) Cash payments to suppliersfor goods PURCHASED and for services availed. |
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| 1924. |
Give two examples of Cash Equivalents. |
| Answer» SOLUTION :(i) Treasury Bills(II) MARKETABLE Securities. | |
| 1925. |
Give two examples each of Non-current Assets and Non-current Liabilities. |
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Answer» |
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| 1926. |
Give two conditions required to be satisfied for any investment to qualify as cash equivalents |
| Answer» Solution :Two important conditions required to be satisfied for any investment to QUALIFY as cash equivalents are: (Short-term maturity (THREE MONTHS or less), and (i) Insignificant risk of changes in VALUE. | |
| 1927. |
Give two circumstance in which the Gaining Ratio is comouted. |
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Answer» Solution :(i) When a PARTNER ratires or DIES. (II) When there is a CHANGR in the profit-sharting RATIO. |
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| 1928. |
Give two circumstance in which sacrificing ratio may be applied. |
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Answer» Solution :(i) At the TIME of adimission of a new PARTNER. (II) At the time of change in profit sharing RATIO of existing partners. |
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| 1929. |
Give two circumstance in which gaining ratio may be applied. |
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Answer» SOLUTION :(i) At the time of retirment of a PARTNER. (ii) At the time of change in profit SHARING ratio of existing partners. |
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| 1930. |
Give two characteristics of Goodwill. |
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Answer» Solution :(i) It is an INTANGIBLE ASSET not a fictitious asset. It is a VALUABLE assets. (ii) It is HELPFUL in earning excess profits. |
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| 1931. |
Give two characteristics of a Balance Sheet |
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Answer» Solution :(i) A BALANCE SHEET is prepared at a particular point of time. It shows the financial position of the firm at a particular date. (ii)It is a summary of BALANCES of Ledger Accounts that have not been closed by TRANSFER to Tradingand Profit and Loss Account. |
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| 1932. |
Give two areas of interest for investors which are analysed by Financial Statements. |
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Answer» Solution :Areas of INTEREST for INVESTORS or Shareholders: • Knowledge of short-term and long-term solvency of the firm. •Knowledge of return on INVESTMENT, i.e., PROFITABILITY. |
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| 1933. |
Give two areas of interest for management while analysing the Financial Statements. |
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Answer» SOLUTION :Areas of Interest for Investors or SHAREHOLDERS: • KNOWLEDGE of performance of the enterprise as a whole, i.e., profitability. • Knowledge of short-term and long-term SOLVENCY position of the enterprise. |
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| 1934. |
Give two areas of interest for bankers/lenders while analysing the Financial Statements. |
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Answer» Solution :Areas of INTEREST for Bankers/Lenders: • To ASSESS whether the company will be able to repay the AMOUNT of loan/credit or not as well as to assess whether the interest on loan will be received periodically. • To assess the liquidity, SOLVENCY, profitability and efficiency of the business. |
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| 1935. |
Give the necessary Journal entries for the following transactions on dissolution of the firm of Aman and Rajat on 31st March, 2016, after the transfer of various assets (other than cash) and the third party liabilities to RealisationAccount. They shared profits and losses in the ratio of 2:1. (a) There was a bill of exchange of Rs 10,000 under discount. The bill was received from Derek who became insolvent. (b) Bills payable of Rs 30,000 falling due on 30th April, 2016 were discharged at Rs 29,550. (c) Creditors of Rs 30,000 took over stock of Rs 10,000 at 10% discount and the balance was paid to them in cash. (d) There was an old typewrite which had been written off completely. It was estimated to realise Rs 600. It was taken away by Rajat at 25% less than the estimated price. (e) Aman agreed to take over the responsibility of completing dissolution at an agreed remuneration of Rs 1,000 and to bear all realisation expenses. Actual realisation expenses Rs 800 were paid by the firm. (f) Loss on realisation was Rs 54,000. |
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Answer» Solution :(a) Dr. REALISATION A/C and CR. Bank A/c by Rs 10,000. (b) Dr. Realisation A/c and Cr. Bank A/c by Rs 29,550. (c ) Dr. Realisation A/c and Cr. Bank A/c by Rs 21,000. (d) Dr. Rajat's CAPITAL A/c and Cr. Realisation A/c by Rs 450. (e) (i) Dr. Realisation A/c and Cr. Aman's Capital A/c by Rs 1,000. (ii) Dr. Aman's Capital A/c and Cr. Bank A/c by Rs 800. (f) Dr. Aman's Capital A/c-Rs 36,000 and Rajat's Capital A/c-Rs 18,000, Cr. Realisation A/c-Rs 54,000. |
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| 1936. |
givethreeitermsthat mayappearon thedebit sideof theofpartners's Current Account. |
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Answer» Solution :(i) INTERESTON drawings (ii)DRAWING (III) SHARE of LOSS |
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| 1937. |
Give the treatment of non-cash transactions in Cash Flow Statement |
| Answer» Solution : Investing and FINANCING TRANSACTIONS that do not require the USE of cash or cash EQUIVALENTS should be excluded from Cash Flow STATEMENT | |
| 1938. |
Give three essential features of the Income and Expenditure Account. |
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| 1939. |
Give the name of the compensation which is paid by the new partner to sacificing partners for sacrificing their share of profits. |
| Answer» Solution :Compensation paid to the SACRIFICING partners by the NEW partner is termed as Goodwill PR PREMIUM for Goodwill | |
| 1940. |
Givethe meaning of 'Registered Capital' of a company. Or Give the meaning of 'Authorised (Nominal) Capital'. |
| Answer» Solution :According to Section 2(8) of theCompanies Act, 2013,'''AUTHORISED Capital' or 'Nominal Capital' MEANS such capital as is authorised by the memorandum of a company to be the MAXIMUM share capital of the company.''It is the maximum amount which the company is, for the TIME being, authorised to raise. | |
| 1941. |
Give the meaning of 'Subscribed and Fully Paid-up-Capital'. |
| Answer» Solution :When the ENTIRE face VALUE of a share is CALLED by the company and is ALSO paid by the shareholder, it is said to be subscribed and fully paid-up capital. | |
| 1942. |
Give the meaning of 'Share Capital'. |
| Answer» Solution :The SHARE CAPITAL is the amount that a COMPANY raises byissue of shares. | |
| 1943. |
Give the meaning of 'Long-term Provisions'. |
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Answer» |
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| 1944. |
Give the meaning of Calls-in-Arrears. |
| Answer» Solution :Calls-in-Arrears is that PART of CAPITAL which has been called-up but has not YET been PAID by the shareholders. | |
| 1945. |
Give the meaning of Calls-in-Advance. |
| Answer» SOLUTION :Call-in-Advance REFERS to the amount PAID by SHAREHOLDERS in exccss of the amount DUE from them. | |
| 1946. |
Give the Journal entry of the treatment of partner's loan appearing on the asset side of the Balance Sheet, on dissolution of a partnership firm. |
Answer» SOLUTION : Note: Partner's Lone APPEARING on the assets SIDE of the Balance Sheet IMPLIES Lone given to the partner by the FIRM. |
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| 1947. |
Give the Journal entry for the treatment of partner's loan appearing on the assets side of the Balance Sheet , on dissolution of partnership firm . |
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| 1948. |
Give the meaning of Bond. |
| Answer» Solution :BOND is SIMILAR to debentures, both in TERMS of contents and texture. TRADITIONALLY, bond are ISSUED by the Government.But these days, bonds are also being issued by semi-government and non-government organisations as an acknowledgement of debt. | |
| 1949. |
Give the formula for calculating gaining share of a partner in a partnership firm . |
| Answer» SOLUTION :GAINING SHARE = NEW Share - OLD Share . | |
| 1950. |
Give the formula for calculating Gaining Ratio of a partner in a partnership frim. |
| Answer» SOLUTION :GAINING RATIO = NEW Ratio - OLD Ratio. | |