NIOS Class 12 Question Paper Accountancy 320 with Solution Exam 2024

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ACCOUNTANCY

(Principles and Practice of Financial Accounting)

(320)

Time: 3 Hours] [ Maximum Marks: 100

Note : All questions of an Option are compulsory.

(i) This Question Paper has two Sections—Section ‘A’ and Section ‘B’.

(ii) Section—A has 36 questions from Question Nos. 1 to 36. All questions are compulsory.

(iii) Section—B has 11 questions from Question Nos. 37 to 47.

(iv) Section—B has two Options. Option—I : Analysis of Financial Statements and Option—II : Application of Computers in Financial Accounting. Candidates are required to attempt questions from one Option only.

(1) Answers of all questions are to be given in the Answer-Book given to you.

(2) 15 minutes time has been allotted to read this question paper. The question paper will be distributed at 2:15 p.m. From 2:15 p.m. to 2:30 p.m., the students will read the question paper only and will not write any answer on the Answer-Book during this period.

SECTION – A

Which of the following is the correct formula of accounting equation? 1

(A) Assets = Capital – Liabilities

(B) Assets = Capital + Liabilities

(D) Assets = Capital – Loss

Ans. (B) Assets = Capital + Liabilities

Or

What will be the effect on accounting equation when goods of Rs 4,000 are sold for Rs 4,500 on credit?

(A) Increase in assets by Rs 4,500 and decrease in assets by Rs 4,000

(B) Increase in assets by Rs 4,000 and increase in liabilities by Rs 4,500

(D) Increase in assets by Rs 4,500, decrease in assets by R 4s,000 and increase in capital by Rs 500

Ans. (D) Increase in assets by Rs 4,500, decrease in assets by Rs 4,000, and increase in capital by Rs 500

The rectifying entry for undercasting the purchases book by Rs 5,000 will be

(A) debit Purchases Account by R 5,000 and credit Suspense Account by Rs 5,000

(B) credit Purchases Account by R 5,000 and debit Suspense Account by Rs 5,000

(D) debit Purchases Account by R 10,000 and credit Suspense Account by Rs 10,000

Ans. (A) Debit Purchases Account by Rs 5,000 and Credit Suspense Account by Rs 5,000

Or

Goods of Rs 5,900 were sold on credit to Ashok but were debited to Ashok’s Account as Rs 5,090. Sales Account was correctly credited. Rectification of error will be

(A) Ashok’s A/c to be debited by Rs 5,090 and Sales A/c to be credited by Rs 810

(B) Ashok’s A/c to be debited by Rs 5,900 and Suspense A/c to be credited by Rs 810

(D) Ashok’s A/c to be debited by Rs 810 and Suspense A/c to be credited by Rs 810

Ans. (D) Ashok’s A/c to be debited by Rs 810 and Suspense A/c to be credited by Rs 810

Wages paid for construction of building were debited to Wages Account. It is a/an

(A) error of omission (B) error of commission

Ans. (D) Error of Principle

Or

Rs 5,00,000 paid to SS Construction Company towards the payment of office building purchased was not recorded in the cash book. It is a/an

(A) error of commission (B) error of omission

Ans. (B) Error of Omission

Which of the following is the correct formula for calculating cost of goods sold? 1

(A) Cost of Goods Sold = Net Sales – Gross Profit

(B) Cost of Goods Sold = Net Sales – Net Profit

(D) Cost of Goods Sold = Net Sales + Net Profit

Ans. (A) Cost of Goods Sold = Net Sales – Gross Profit

Or

Which is correct when cost of goods sold is subtracted from net sales?

(A) It is net profit (B) It is net loss

Ans. (C) It is Gross Profit/Gross Loss

Sundry Debtors, Closing Stock, Bills Receivable, Investments, Cash at Bank when put in liquidity order, it will be

(A) Bills Receivable, Sundry Debtors, Cash at Bank, Investments, Closing Stock

(B) Cash at Bank, Investments, Sundry Debtors, Bills Receivable, Closing Stock

(D) Cash at Bank, Bills Receivable, Sundry Debtors, Closing Stock, Investments 1

Ans. (C) Cash at Bank, Bills Receivable, Sundry Debtors, Investments, Closing Stock

Or

What will be the order of permanence for arranging the following in the Balance Sheet of an enterprise?

Creditors
Capital

III. Bills payable

Outstanding wages
Loan

(A) II, V, I, III, IV

(B) I, II, III, IV, V

(D) III, IV, V, I, II

Ans. (A) II, V, I, III, IV (Capital, Loan, Creditors, Bills Payable, Outstanding Wages)

Payment of wages for repair of furniture is an example of

(A) capital expenditure

(B) deferred revenue expenditure

(D) Both (A) and (B) 1

Ans. (C) Revenue Expenditure

Or

Machine purchased is an example of

(A) revenue expenditure (B) capital expenditure

Ans. (B) Capital Expenditure

To ascertain profit/loss by preparing Statement of Affairs and taking capital at the end of the year as base, drawings during the year

(A) will be subtracted from the capital balance

(B) will be added to the capital balance

(D) will neither be added to nor subtracted from the capital balance 1

Ans. (B) Will be added to the capital balance

On admission of a partner for revaluation of assets and liabilities, the account which is prepared is

(A) Profit and Loss Account

(B) Realization Account

(D) Profit and Loss Appropriation Account 1

Ans. (C) Revaluation Account

Which of the following is treated as unrecorded asset? 1

(A) Sale of old furniture

(B) Sale of investment

(D) Goodwill appearing in the Balance Sheet

Ans. (C) Bad debts recovered written off in the previous year

Or

On retirement of a partner, retiring partner’s share of goodwill will be written off between remaining partners in their

(A) sacrificing ratio (B) old profit-sharing ratio

Ans. (D) Gaining Ratio

To arrive at the super profit, which will be subtracted from actual profit? 1

(A) Simple profit (B) Normal profit

Ans. (B) Normal Profit

Or

Jain and Gupta are two partners sharing profits in the ratio of 4 : 3. Singh is admitted as a new partner for 2/

7th share which he acquires equally from Jain and Gupta. The new profit-loss ratio will be

(A) 4 : 3 : 2 (B) 3 : 3 : 2

Ans. (C) 3 : 2 : 2

Vee and Bee are partners sharing profits in the ratio of 3 : 2. Emm was admitted as a partner for 1/5th share from which he acquired 1/10th from Vee and 1/10th from Bee. New profit-sharing ratio will be

(A) 3 : 2 : 1 (B) 3 : 2 : 2

Ans. (D) 4 : 3 : 2

Or

On admission of a partner, profit of Revaluation A/c is distributed among old partners in their

(A) sacrificing ratio (B) gaining ratio

Ans. (C) Old Ratio

When company receives applications for subscription for more number of shares than offered to public, it is a case of

(A) full subscription (B) under-subscription

Ans. (C) Over-subscription

Or

When share money is to be received in two or more instalments, the first instalment is called

(A) share allotment (B) share application

Ans. (B) Share application

When 200 shares of R 100 each are forfeited for non-payment of first call of Rs 20 per share, final call of Rs 30 is not made Capital Account will be debited by

(A) Rs 20,000 (B) Rs 10,000

Ans. (B) Rs 10,000

Or

Company offered to public for subscription 5000 shares of Rs 100 each. It has received applications for 6000 shares. Company rejects 500 shares all together and allotment is made to the remaining applicants on pro rata

basis, excess money will be

(A) debited to Applicants Individual Account

(B) credited to Share Capital Account

(D) credited to Bank Account

Ans. (A) Debited to Applicants Individual Account

A company has forfeited its 100 shares of Rs 100 each issued at a discount of 10% on which final call of Rs 30 per share is not received. The Share Capital Account will be debited by

(A) Rs 7,000 (B) Rs 9,000

Ans. (B) Rs 9,000

Or

Subscribed share capital can never be more than

(A) authorized capital (B) nominal capital

Which one of the above is correct?

Ans. (A) Authorized capital

Fill in the blanks (any one ): 2

(a) A transaction is not recorded is an error of _____ and a transaction is recorded but an error is committed in the process of recording is an error of _____.

(b) An error should never be rectified by _____ but should be rectified by _____.

Ans. (a) A transaction is not recorded is an error of _ omission _ and a transaction is recorded but an error is committed in the process of recording is an error of _ commission.

(b) An error should never be rectified by _ reversing the entry _ but should be rectified by _ passing an adjusting entry.

Give one-word answer for the following (any two): 1×2=2

(a) A unit of CPU that controls the activities of all the components of the computer is called what?

Ans. Control Unit

(b) If the total of the debit side of the Trial Balance is more than the total of its credit side to which account the difference amount will be written?

Ans. Suspense Account

(c) Name the unit, a component of computer that controls the various input devices used for entering data into computer.

Ans. Input Unit

Complete the sentence given below (any one) : 2

(a) Wages paid to the workers for day-to-day work is an example of _____expenditure while paid to workers for construction of office building is example of _____ expenditure.

(b) In case of business organizations, if income is more than expenditure, it is termed as _____ while in case of not-for-profit organization it is called _____.

Ans. (a) Wages paid to the workers for day-to-day work is an example of _ revenue _ expenditure, while paid to workers for the construction of an office building is an example of _ capital _ expenditure.

(b) In the case of business organizations, if income is more than expenditure, it is termed as _ profit _, while in the case of not-for-profit organizations it is called _ surplus _.

Give one-word answer for the following (any two): 1×2=2

(a) In case of admission of a partner in which ratio will general reserve be distributed among old partners?

Ans. Old ratio

(b) While preparing Revaluation Account increase in the value of stock be debited or credited to it?

Ans. Credited

(c) To which account, the unpaid amount due to a retiring partner is transferred?

Ans. Retirement Account

Fill in the blanks (any two): 1×2=2

(a) In case of partnership at will the firm may be dissolved, if any one of the partners gives a _____ to the other partners.

(b) Settlement of a dispute against the firm is treated as _____ liability.

(c) Super profit is equal to actual profit – _____.

(d) Sacrificing ratio is calculated by deducting _____ share of profit from existing share of profit of the existing partners.

Ans. (a) In the case of a partnership at will, the firm may be dissolved if any one of the partners gives a _ notice _ to the other partners.

(b) Settlement of a dispute against the firm is treated as _ contingent _ liability.

(d) Sacrificing ratio is calculated by deducting _ new _ share of profit from the existing share of profit of the existing partners.

Give one-word answer for the following (any two): 1×2=2

(a) To which account, the issue price of shares issued to promoters will be debited?

Ans. Promoters Account

(b) While issuing shares at premium, how much maximum premium can be collected from the buyers of shares?

Ans. No limit (as per legal provisions, a company may charge any amount as premium on shares unless restricted by its Articles of Association)

(c) If some shares of Rs 100 each are forfeited for non-payment of final call of Rs 40, by how much amount per share will be credited to the Forfeited Shares Account?

Ans. Rs 40

NIOS Class 12 Question Paper Accountancy 320 with Solution Exam 2024

Name the type of vouchers to be made for the following transactions (any four ): 1×4=4

(a) Depreciation charged on machinery

(b) Purchased goods for cash

(c) Paid interest on bank loan

(d) Cash sales of goods

(e) Sold goods on credit

Ans. (a) Depreciation charged on machinery
✅ Journal Voucher

(b) Purchased goods for cash
✅ Cash Voucher

(d) Cash sales of goods
✅ Cash Voucher

(e) Sold goods on credit
✅ Sales Voucher

Name the accounting errors for the following errors (any four): 1×4=4

(a) Purchase book is under-caste by Rs 1,000.

Ans. Error of Omission

(b) Cash paid R 5,000 to Ashok was to correctly entered in the cash book but was posted to his debit as Rs 4,500.

Ans. Error of Commission

(c) Salary paid to office employees was not posted to Salary Account.

Ans. Error of Omission

(d) Repairs of building was debited to Building Account.

Ans. Error of Principle

(e) X’s Account was debited by Rs 3,200 instead of Rs 2,300 while Y’s Account was debited by R 2,300 instead of R 3,200.

Ans. Error of Commission

(f) Goods sold on credited was not entered in the sales book.

Ans. Error of Omission

Give one-word answer for the following (any four): 1×4=4

(a) Gross loss is transferred to which side of Profit and Loss Account?

Ans. Credit side

(b) If assets side and liabilities side of Balance Sheet do not tally, to which account difference amount is written?

Ans. Suspense Account

(c) Donation of R 60,000 received for construction of building of a sports club. Where will it be shown in Club’s Final Accounts?

Ans. Capital Fund

(d) If using statement of affair method to ascertain profit/loss of a business unit and taking closing capital as base, capital introduced during the year will be added to or deducted from it?

Ans. Added

(e) How will the bad debts shown in the adjustment be treated in Final Accounts of business firm?

Ans. Debited to Profit and Loss Account

(f) Expenditure incurred on purchase of machine is known as what?

Ans. Capital expenditure

Give one-word answer for the following (any four ): 1×4=4

(a) If goodwill is to be calculated by super profit method, how will super profit be calculated?

Ans. Actual profit – Normal profit

(b) How will a firm be dissolved when a partner’s conduct is likely to adversely affect the business of the firm?

Ans. By court order

(c) Alia, Keerti and Sara are partners sharing profits in the ratio of 4 : 3 : 2. Keerti retired and her share was taken by remaining partners in the ratio of 1 : 1. What will be the new ratio of Alia and Sara?

Ans. 5:4

(d) A loan of Happu Singh’s mother appears in the Balance Sheet of the firm in which he is a partner. Will her loan be settled through Realization Account or will be paid directly?

Ans. Paid directly

(e) Why goodwill tends to be high if the firm is located at a central place?

Ans. High visibility/footfall

(f) In case of increase in the value of stock, Revaluation Account will be debited or credited?

Ans. Credited

Explain the term ‘journal proper’. 2

Ans. The journal proper is a subsidiary book used for recording transactions that do not belong to any specific book of original entry, like purchases, sales, or cash receipts. It is used for miscellaneous or irregular transactions such as transfer of funds between accounts, adjustments, and corrections of errors. These transactions are then posted to the relevant ledger accounts.

Or

What is an outstanding expense? Give one example.

Ans. An outstanding expense is an expense that has been incurred but not yet paid. It is recognized as a liability in the Balance Sheet until it is paid.
Example: Salary payable to employees that has been earned but not yet paid by the end of the accounting period.

In single-entry system, why Balance Sheet cannot be prepared to ascertain the true financial position of the business on a particular date? 2

Ans. In the single-entry system, only cash receipts and payments or some other simple transactions are recorded, without maintaining both debit and credit aspects of each transaction. This results in incomplete financial records, making it impossible to ascertain the true financial position of the business. A Balance Sheet cannot be prepared because there is no double-entry system of accounting to provide a comprehensive view of both assets and liabilities.

Or

Explain the term ‘subscription’.

Ans. Subscription refers to the amount received or receivable from members or contributors for a service or a cause, often in the case of non-profit organizations or clubs. It represents income received for membership, services, or resources over a period of time.
Example: Subscription fee paid by members to a club or society.

What is the result of forfeiture of shares? 2

Ans. The forfeiture of shares occurs when a shareholder fails to pay the required calls (such as the initial or final call) on shares they have subscribed to. As a result, the company cancels the shares and forfeits the shareholder’s right to the paid-up amount. This reduces the share capital and any amounts paid on the forfeited shares are transferred to the Forfeited Shares Account, which can be used for reissuing the shares or adjusting with unpaid calls in the future.

Or

What is meant by shares issued at premium? Name the account to which premium amount will be transferred.

Ans. Shares issued at a premium refer to the situation where a company issues shares for an amount greater than their nominal (face) value. The difference between the issue price and the face value is known as the share premium. This premium amount is transferred to the Securities Premium Account.

200 shares of Rs 100 each are forfeited for non-payment of first and final call of Rs 40 each. Pass Journal Entry for forfeiture of shares. 2

Or

Pass Journal Entry in the above case for reissue of forfeited shares if 150 shares are reissued at Rs 60 per share.

Ans.

Why is ledger maintained by a business firm? Give any three reasons. 3

Ans. The ledger is maintained by a business firm for the following reasons:

Systematic Recording of Transactions: The ledger organizes all financial transactions in a systematic manner under different accounts (such as assets, liabilities, income, and expenses), making it easier to track and review financial data.
Preparation of Financial Statements: The ledger serves as the primary source for preparing financial statements like the Profit and Loss Account and Balance Sheet, as it provides detailed information about all the transactions recorded during the period.
Control and Accuracy: The ledger helps ensure the accuracy and completeness of transactions. It enables cross-referencing and tracking, minimizing errors and omissions, and ensures the Trial Balance tallies, providing control over financial records.

Or

Name the ledgers which will contain the following accounts :

(a) Building Account

(b) Bank Account

(c) Rent Paid Account

(d) Prepaid Insurance Account

(e) Trade Creditors

(f) Interest Received

Ans. (a) Building Account: Fixed Assets Ledger
(b) Bank Account: Cash/Bank Ledger
(c) Rent Paid Account: Expense Ledger
(d) Prepaid Insurance Account: Asset Ledger (Current Assets)
(e) Trade Creditors: Liabilities Ledger
(f) Interest Received: Income Ledger

Pass necessary Journal Entries for the following adjustments (any three): 1×3=3

(a) Closing stock

(b) Wages outstanding

(c) Rent paid in advance

(d) Depreciation on machinery

(e) Further bad debts

Ans…

From the following, calculate the amount of subscription for the year ending 31st March, 2024 for Income and Expenditure Account: 3

Subscription received in 2023–24 30,000

On 31st March, 2024, subscription outstanding 3,000

Subscription received in 2022–23 for 2023–24 1,800

Subscription received in 2023–24 for Subscription

outstanding in 2022–23 1,000

Subscription received in 2023–24 for 2024–25 1,200

Ans. To calculate the amount of subscription for the year ending 31st March, 2024, for the Income and Expenditure Account, we need to consider:

Subscription received in 2023–24 = Rs 30,000
Subscription outstanding on 31st March, 2024 = Rs 3,000 (this will be added)
Subscription received in 2022–23 for 2023–24 = Rs 1,800 (this will be added)
Subscription received in 2023–24 for Subscription outstanding in 2022–23 = Rs 1,000 (this will be subtracted, as it relates to the previous year)
Subscription received in 2023–24 for 2024–25 = Rs 1,200 (this will be subtracted, as it relates to the next year)

Calculation:

Subscription for 2023–24=30,000+3,000+1,800−1,000−1,200

Subscription for 2023–24=32,600

So, the subscription for the year ending 31st March, 2024, for the Income and Expenditure Account is Rs 32,600.

Enumerate any six items legal representatives of a deceased partner are entitled to. 3

Ans. Legal Representatives of a Deceased Partner are Entitled to:

Share of Profit: The legal representatives are entitled to receive the deceased partner’s share of profit up to the date of death, based on the profit-sharing ratio.
Share of Capital: They are entitled to the deceased partner’s capital balance as per the partnership agreement.
Share of Goodwill: The legal representatives may be entitled to a share of goodwill if there is any agreement or if it is calculated and agreed upon by the remaining partners.
Share of Reserves: Any accumulated reserves or undistributed profits in the firm belong to the deceased partner’s share.
Outstanding Drawings: If there are any outstanding drawings by the deceased partner, the legal representatives are entitled to the settlement of those amounts.
Payment for Forfeited Shares: If the deceased partner held any forfeited shares, the legal representatives are entitled to compensation for those shares.

Or

State any three factors affecting goodwill.

Ans. Three Factors Affecting Goodwill:

Profitability of the Business: The more profitable a business is, the higher its goodwill. Consistent profits over time enhance the business’s reputation and its ability to generate future income, which increases goodwill.
Reputation and Brand Image: The reputation of a business in the market, its customer loyalty, and brand image significantly affect its goodwill. A positive reputation and a strong brand lead to higher goodwill.
Market Conditions and Demand: The prevailing market conditions, including demand for the business’s products or services, competition, and economic stability, influence the value of goodwill. A business operating in a growing market with strong demand will have higher goodwill compared to one in a saturated or declining market.
Explain the terms ‘under-subscription’ and ‘over-subscription’. 3

Ans. Under-Subscription and Over-Subscription:

Under-Subscription: This occurs when the number of shares applied for by the public is less than the number of shares offered by the company. For example, if a company offers 10,000 shares but only 5,000 shares are applied for, it is an under-subscription. This situation may lead to a failure in raising the required capital.

Over-Subscription: This occurs when the number of shares applied for by the public exceeds the number of shares offered by the company. For example, if a company offers 10,000 shares but receives applications for 15,000 shares, it is an over-subscription. The company may allot shares on a pro-rata basis or through a lottery to manage the excess demand.

Or

Explain the term shares issued at discount. Give an example.

Ans. Shares Issued at Discount:

Shares Issued at Discount refers to the situation where a company issues its shares to the public at a price lower than the face value of the shares. This means the company sells the shares at a price below their nominal value.

Example:
If a company issues shares of Rs 100 each at a discount of 10%, the shares will be sold for Rs 90 each. The difference of Rs 10 per share is the discount offered by the company.

Explain in brief the procedure of forfeiture of shares. 3

Ans. Procedure for Forfeiture of Shares:

Non-Payment of Calls: When a shareholder fails to pay the amount due on shares (either the application, allotment, or call money), the company may initiate the forfeiture process after giving notice to the shareholder.
Board Resolution: The board of directors passes a resolution for the forfeiture of shares, specifying the details of the shares that are being forfeited and the reason (non-payment of call money).
Notice to Shareholder: The shareholder is sent a notice, informing them of the unpaid amount and the possibility of forfeiture if payment is not made.
Forfeiture of Shares: If the shareholder fails to pay the due amount even after the notice, the company forfeits the shares, meaning the shareholder loses all rights over those shares.
Recording the Forfeiture: The amount already paid on the forfeited shares (except the amount forfeited) is transferred to the “Share Capital” account, and the calls in arrears are written off.

Or

What Journal Entries will be passed on forfeiture of shares issued at discount and if the same are reissued?

Ans.

Journal Entries on Forfeiture of Shares Issued at Discount:

On Forfeiture:

When shares are forfeited for non-payment of calls (issued at a discount), the following journal entries are passed:

Forfeiture Entry:
Debit: Share Capital A/c (with the paid-up amount)
Debit: Discount on Issue of Shares A/c (for the discount on forfeited shares)
Credit: Shareholders’ Account (for the amount unpaid on the forfeited shares)

Example:
If 100 shares of Rs 100 each are issued at a 10% discount, and the shareholder fails to pay the call of Rs 30 per share, the entry would be:

(Debit:) To Bank A/c Rs 9,000

(Credit:) By Share Capital A/c Rs 10,000

(Credit:) By Forfeited Shares A/c Rs 1,000

From the following Trial Balance of Apoorva & Sisters as on 31st March, 2024, prepare Trading and Profit & Loss Account for the year ending 31st March, 2024 and Balance Sheet as on that date : 5

Adjustments :

(i) Stock on 31st March, 2024 was Rs 52,000

(ii) Prepaid insurance was Rs 1,200

(iii) Make a provision for Bad and Doubtful Debts @ 5% on Debtors

(iv) Depreciate computers @ 10%

Ans.

Trading Account for the year ending 31st March, 2024

Profit & Loss Account for the year ending 31st March, 2024

Balance Sheet as on 31st March, 2024

Adjustments:

Closing Stock: Rs 52,000 is added to the assets side of the Balance Sheet and credited in the Trading Account.
Prepaid Insurance: Rs 1,200 is deducted from the Insurance expense and added to the assets side of the Balance Sheet.
Provision for Bad Debts: 5% of Debtors (Rs 45,000) is Rs 2,250, which is deducted from Debtors and added to the Profit & Loss Account.
Depreciation on Computers: 10% of Rs 40,000 is Rs 4,000, which is deducted from the value of Office Computers and added to the Profit & Loss Account.

Or

Following is the Receipts and Payments Account of Rural Wellness Society (Regd) for the year ending 31st March, 2024. Prepare Income and Expenditure Account for the year ending 31st March, 2024 and Balance

Sheet as on that date:

Additional Information :

(i) On 31st March, 2023, the society had mobile van of Rs 60,000 and stock of medicines of Rs 8,000

(ii) On 31st March, 2024, subscription outstanding was Rs 3,000

Ans. Income and Expenditure Account and Balance Sheet for Rural Wellness Society (Regd) as of 31st March 2024

Income and Expenditure Account for the year ending 31st March 2024

Kaira and Rakhee are partners in a firm sharing profits in the ratio of 3 : 2. Their Balance Sheet as on 31st March, 2024 was as follows :

On the above date, Rashmi was admitted as a partner with 1/5th share in profits. The terms agreed upon were as follows :

(i) Rashmi will bring Rs 50,000 as her capital and Rs 25,000 as her share of goodwill premium

(ii) Stock was valued at Rs 52,000 and Building at Rs 68,000

(iii) Depreciation to be provided on Furniture @ 10%

Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm. 5

Ans.

Ranveer and Karan were partners in a firm sharing profits in the ratio of 3 : 2. Their Balance Sheet as on 31st March, 2024 was as follows :

On the above date, the firm was dissolved. The realization of assets and settlement of liabilities was as follows :

Realization from Assets:

(i) Sundry Debtors—Rs 36,000

(ii) Stock—Rs 48,000

(iii) Investments—Rs 40,000

(iv) Fixed Assets—Rs 52,000

Settlement of Liabilities :

(i) Creditors were paid in full settlement—Rs 40,000

(ii) Ranveer agreed to pay his Mother’s loan

Realization expenses were R 3,500

Prepare Realization Account, Partners’ Capital Accounts and Bank Account.

Ans.

VB Aeronautics Ltd. was registered with 10000 shares of Rs 100 each. The company offered to public for subscription its 5000 shares of Rs 100 each at par. The amount was payable as follows :

On Application—Rs 30 per share

Per Share On Allotment—Rs 40 per share

On First and Final Call—Rs 30 per share

Applications were received for 6000 shares. Shares were allotted to all applicants on pro rata basis. Excess application money was adjusted towards sum due on allotment. All calls were made and money was duly

received except on 400 shares held by Ammu Kabadi, on which call money was not received. All these shares were forfeited.

Pass Journal Entries in the books of the company for the above transactions. 5

Ans. Journal Entries in the books of VB Aeronautics Ltd.

Or

Pass Journal Entries in the following cases:

(i) Company issued its 200 shares of Rs 100 each at a premium of Rs 20 each to vendors

(ii) Company issued its 400 shares of Rs 100 each to promoters for their services

(iii) 150 shares of Rs 100 each forfeited for non-payment of first and final call of Rs 30 per share, 100 of these shares were reissued at a discount of Rs 40 per share

Ans.

Final Summary of Adjustments

Total forfeited amount = ₹10,500
Used in reissue (100 shares × ₹40) = ₹4,000
Remaining amount for 50 shares (₹70 per share) = ₹3,500 (Transferred to Capital Reserve)

SECTION—B

OPTION–I

( Analysis of Financial Statements )

Ratios are regarded as _____ of a business organization.

(A) test of earning capacity

(B) financial soundness

(D) accounts properly maintained

Which of the above is not correct? 1

Ans. (D) accounts properly maintained.

Or

What is correct regarding liquid ratio?

(A) It is a ratio between Current Assets and Current Liabilities

(B) It is a ratio between Liquid Assets and Sundry Creditors

(D) It is a ratio between Liquid Assets and Fixed Assets

Ans. (C) “It is a ratio between Quick Assets and Current Liabilities.”

Which of the following is an example of cash flow from operating activities? 1

(A) Interest received (B) Dividend received

Ans. (D) Cash sales

Or

Which of the following will increase outflow of financial activities?

(A) Cash purchase of goods

(B) Purchase of government bonds

(D) Cash paid to suppliers

Ans. (C) Payment of dividends to shareholders

Cash flow statement shows

(A) cash receipts only

(B) cash payments only

(D) None of the above 1

Ans. (C) Both cash receipts and cash payments

Or

To judge the short-term solvency of a firm, the ratio used is

(A) inventory turnover ratio (B) debt-equity ratio

Ans. (D) Current Ratio

Which of the following organizations prepares cash flow statement? 1

(A) Partnership firms (B) Not-for-profit organizations

Ans. (C) Listed Companies

Or

If provision for taxation for 2023–24 was Rs 30,000 and for 2022–23 was Rs 20,000, while provision for taxation charged to statement of profit and loss for 2023–24 was Rs 50,000, cash used is

(A) Rs 10,000 (B) Rs 30,000

Ans. (B) ₹30,000

Liquid Ratio is 1·5 : 1

Current Assets—Rs 54,000

Current Liabilities—Rs 30,000

Closing Stock will be

(A) Rs 4,000 (B) Rs 5,000

Ans. (C) ₹9,000

Or

Which will not increase the cash flow from investing activities?

(A) Dividend received (B) Profit on sale of fixed assets

Ans. (D) Issue of debentures

Cost of goods sold is Rs 4,20,000. Stock turnover ratio is 6 times. Closing stock is Rs 20,000 more than the opening stock, opening stock will be

(A) Rs 20,000 (B) Rs 30,000

Ans. (C) ₹40,000

Complete the following sentences (any two): 1×2=2

(a) Proprietary ratio is calculated dividing shareholders’ funds by _____.

(b) Effect of decrease in inventories on cash flow from operating activities is that it amounts to _____.

(c) Cash flows are classified into operating activities, investing activities and _____.

Ans. (a) Proprietary ratio is calculated by dividing shareholders’ funds by total assets.

(b) Effect of decrease in inventories on cash flow from operating activities is that it amounts to increase in cash flow.

What is meant by inventory turnover ratio? State its significance. 2

Ans. Definition: Inventory Turnover Ratio measures how efficiently a company sells and replaces inventory during a given period.

Significance:

Indicates inventory efficiency (higher ratio = faster sales).
Helps manage stock levels (avoid overstocking or understocking).
Evaluates working capital efficiency.

Or

What is meant by ‘inflow of cash’ and ‘outflow of cash’? Give one example of each, i.e., inflow and outflow of cash.

Ans. Inflow and Outflow of Cash

Inflow of Cash: Any transaction that increases cash balance.
Example: Sale of fixed assets.

Outflow of Cash: Any transaction that decreases cash balance.
Example: Payment of dividends.

Calculate Debt-Equity Ratio from the following information: 2

Share Capital—Rs 1,50,000

General Reserve—Rs 60,000

Accumulated Profit—Rs 40,000

Debentures—Rs 75,000

Creditors—Rs 25,000

Ans.

From the following information, calculate cash from financing activities:

Particulars 31st March, 2023 31st March, 2024

( Rs) ( Rs)

Equity Share Capital 4,00,000 5,00,000

10% Loan on Mortgage 2,50,000 2,00,000

Securities Premium 60,000 75,000

Additional Information :

Interest paid on loan—Rs 25,000

Ans. To calculate Cash from Financing Activities, we consider changes in equity, borrowings, and interest paid.

Step 1: Identify changes in financing items

Equity Share Capital Increase = ₹5,00,000 – ₹4,00,000 = ₹1,00,000 (Cash inflow)
Securities Premium Increase = ₹75,000 – ₹60,000 = ₹15,000 (Cash inflow)
Loan Repayment = ₹2,50,000 – ₹2,00,000 = ₹50,000 (Cash outflow)
Interest Paid on Loan = ₹25,000 (Cash outflow)

Step 2: Calculate Cash from Financing Activities

=(₹1,00,000+₹15,000)−(₹50,000+₹25,000

=₹1,15,000−₹75,000

=₹40,000 (Net Cash Inflow

Final Answer:

Cash from Financing Activities = ₹40,000 (Inflow)

What is meant by liquid ratio? Explain its significance. 3

Ans. Liquid Ratio (Quick Ratio)

The Liquid Ratio, also known as the Quick Ratio, measures a company’s ability to meet its short-term liabilities using its most liquid assets. It is calculated as:

Where Liquid Assets = Current Assets − Inventory − Prepaid Expenses.

Significance of Liquid Ratio

Measures Liquidity – Indicates the firm’s ability to pay off short-term liabilities without selling inventory.
Financial Stability – A higher ratio (above 1) suggests strong liquidity; a lower ratio may indicate financial risk.
Decision-Making Tool – Helps investors, creditors, and management assess short-term financial health.
Creditworthiness – Lenders use it to determine a company’s repayment ability.

An ideal liquid ratio is 1:1, meaning liquid assets are sufficient to cover current liabilities.

What is current ratio? Write any four items of current assets one of the two components of current ratio.

Ans. The Current Ratio measures a company’s ability to pay its short-term liabilities with its short-term assets. It is calculated as:

A higher ratio (above 1) indicates good short-term financial health, while a lower ratio (below 1) suggests liquidity issues.

Four Items of Current Assets

(Current assets are one of the two components of the Current Ratio.)

Cash and Cash Equivalents – Includes cash in hand and bank balances.
Accounts Receivable (Debtors) – Money owed by customers for goods sold on credit.
Inventory (Stock) – Raw materials, work-in-progress, and finished goods.
Prepaid Expenses – Payments made in advance for services (e.g., rent, insurance).
From the following Balance Sheets of SK Startups Ltd. as on 31^st March, 2023 and 31st March, 2024, prepare Cash Flow Statement : 5

Balance Sheets of SK Startups Ltd.

Particulars

Note

No.

31.3.2024

(Rs.)

31.3.2023

(Rs.)

I. Equity and Liabilities :

1. Shareholders’ Funds :

(a) Share Capital

(b) Reserves and Surplus

(as per statement of profit and loss)

2. Non-Current Liabilities :

Bank Loan

3. Current Liabilities :

Trade Payables

6,00,000

3,00,000

1,20,000

80,000

5,00,000

2,00,000

1,50,000

1,00,000

Total

11,00,000

9,50,000

Balance Sheets of SK Startups Ltd.

Particulars

Note

No.

31.3.2024

(Rs.)

31.3.2023

(Rs.)

II. Assets :

1. Non-Current Assets :

(a) Tangible

(b) Intangible Goodwill:

2. Current Assets :

(a) Trade Receivables

(b) Inventories

(c) Cash and Cash Equivalents

8,00,000

1,00,000

60,000

65,000

75,000

6,00,000

1,50,000

40,000

80,000

Total

11,00,000

9,50,000

Additional Information :

Depreciation provided on Fixed Assets was Rs 60,000

Ans. SK Startups Ltd.

Cash Flow Statement for the year ended 31st March 2024

Or

Explain any five advantages of accounting ratios.

Ans. Five Advantages of Accounting Ratios

Helps in Financial Analysis
- Accounting ratios simplify financial data, making it easier to evaluate a company’s performance and financial health.
Aids in Decision Making
- Managers and investors use ratios to make informed decisions about investments, lending, and business strategies.
Facilitates Comparison
- Ratios help compare a company’s performance with industry standards or past performance, identifying strengths and weaknesses.
Assesses Liquidity and Solvency
- Ratios like the Current Ratio and Debt-to-Equity Ratio determine a company’s ability to meet short-term and long-term obligations.
Detects Trends and Future Planning
- By analyzing trends in ratios over time, businesses can forecast future financial conditions and take corrective actions if needed.

NIOS Class 12 Question Paper Accountancy 320 with Solution Exam 2024

OPTION–II

(Application of Computers in Financial Accounting)

To change the location of a chart, right click the chart and select

(A) chart type (B) source data

Ans. (D) Move Here (Correct option should be “Move Chart,” but closest is D.)

Or

To arrive at net amount of salary, which of the following is deducted from gross salary?

(A) House Rent Allowance (B) Provident Fund

Ans. (B) Provident Fund

MS Access is a

(A) Word Processing Software

(B) Presentation Software

(D) Database Management Software 1

Ans. (D) Database Management Software

Or

Pie charts do not have more than _____ categories.

(A) 7 (B) 10

Ans. (A) 7 (More than 7 categories make a pie chart unclear.)

On how many tabs, chart tools are located? 1

(A) 2 (B) 3

Ans. (B) 3 (“Design,” “Layout,” and “Format” in older versions, “Chart Design” & “Format” in newer ones.)

The allowance paid to facilitate employee in acquiring residential accommodation is called

(A) Dearness Allowance

(B) House Loan Instalment Allowance

(D) Leasehold Rent Allowance 1

Ans. (C) House Rent Allowance

Or

Which is not a step to copy a chart to Word?

(A) Click copy on the Home tab

(B) Click the Chart title

(D) Click paste on the Home tab

Ans. (B) Click the Chart Title (This does not copy the chart itself.)

For tracking accounting data and critical information, what is the best solution? 1

(A) Use paper filing system

(B) Use text documents

(D) Use database management system

Ans. (D) Use Database Management System (It efficiently stores, retrieves, and manages accounting data.)

Or

Which may be used to retrieve select data from tables of access database?

(A) Table (B) Query

Ans. (B) Query (Queries help filter and retrieve specific data from a database.)

To determine if there is any relationship between India’s GNP and age, what will be easier? 1

(A) To go through the records of census

(B) To go through the data collected which is recorded in pages

(D) None of the above

Ans. (C) To prepare a chart (Charts visually represent data, making it easier to analyze trends and relationships.)

Complete the following sentences (any one) : 2

(a) Excel worksheet supports the functions of straight line, _____ and _____ methods.

(b) Graphs and _____ are pictorial representation of data which has at least _____ dimensional relationship.

Ans. (a) Excel worksheet supports the functions of straight-line, declining balance, and sum-of-years-digits methods.

(b) Graphs and charts are pictorial representations of data that have at least a two-dimensional relationship.

What is meant by Payroll Accounting? What objective does it serve? 2

Ans. Payroll Accounting & Its Objectives:

Payroll Accounting refers to recording and managing all financial aspects related to employee compensation, including salaries, wages, deductions, and benefits.

Objectives:

Accurate Salary Calculation – Ensures correct wages and deductions.
Compliance with Laws – Follows tax and labor laws.
Record-Keeping – Maintains employee payment history.
Budget Planning – Helps in financial planning for salaries and benefits.

Or

What steps are taken to modify the labels and titles?

Ans. Steps to Modify Labels and Titles in Excel Charts:

Click on the Chart – Select the chart where labels or titles need modification.
Edit Title – Click the chart title and type a new one.
Modify Axis Labels – Right-click the axis, choose “Select Data,” and edit labels.
Use Chart Tools – Go to “Chart Design” → “Add Chart Element” to edit titles or labels.
Format Labels – Use the “Format” tab to change font, size, and alignment.

How does use of Charts/Graphs help to explore? 2

Ans. Charts and graphs help in data exploration by:

Visual Representation – They present complex data in a clear and understandable format.
Trend Analysis – Help identify patterns, trends, and correlations in large datasets.
Comparison – Make it easier to compare different data points quickly.
Quick Decision-Making – Aid in faster interpretation of data, supporting informed decisions.

Or

Explain the role of the table and queries as components of MS Access.

Ans. Role of Tables and Queries in MS Access

Tables – Store raw data in a structured format with rows (records) and columns (fields). They serve as the foundation of a database.
Queries – Retrieve specific data from tables based on conditions. They help filter, sort, and analyze data efficiently for reports and decision-making.

Enumerate any six items of deductions to made from gross salary. 3

Ans. Six Items of Deductions from Gross Salary

Provident Fund (PF) – A mandatory retirement savings contribution.
Professional Tax (PT) – Tax levied by state governments on income.
Income Tax – Tax deducted based on income tax slabs and exemptions.
Employee State Insurance (ESI) – Deduction for healthcare and insurance benefits.
Loan Repayments – Deductions for personal or salary advances and loans.
Gratuity Fund – Contribution towards employee’s long-term benefit upon leaving the organization.

Or

Explain any two advantages of using graphs.

Ans. · Simplified Data Visualization – Graphs make complex data easier to understand by representing information visually, helping users quickly grasp trends and patterns.

Improved Comparisons – Graphs enable easy comparison of data points, making it possible to identify differences or similarities between multiple variables or categories.

State any three items to be added to basic pay and two items to be deducted from it to arrive at net

salary. 5

Ans. Three Items to Be Added to Basic Pay to Arrive at Net Salary

Dearness Allowance (DA) – A cost-of-living adjustment added to the basic salary to offset inflation.
House Rent Allowance (HRA) – An allowance provided to employees to cover housing expenses.
Special Allowance – Additional payments made for specific work-related needs or as per company policies.

Two Items to Be Deducted from Basic Pay to Arrive at Net Salary

Provident Fund (PF) – Employee contribution to the retirement savings scheme.
Professional Tax (PT) – Tax deducted based on the employee’s income and state regulations.

Or

Write the data requirements that are used as a source for database design.

Ans. Data Requirements for Database Design

Data Entities – Identification of different objects or entities like customers, products, or employees that need to be stored.
Relationships – Understanding how entities are related to each other (e.g., customers place orders, employees work in departments).
Attributes – Details about each entity, like name, age, or address, that define the entity.
Data Integrity Rules – Defining how the data should be consistent and valid across the database.
Data Volume and Scalability – Estimation of the amount of data that will be stored and how it will scale over time.

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NIOS Class 12 Question Paper Accountancy 320 with Solution Exam 2024

NIOS Class 12 Question Paper with Solution April 2024 Pdf

(1) Answers of all questions are to be given in the Answer-Book given to you.

(2) 15 minutes time has been allotted to read this question paper. The question paper will be distributed at 2:15 p.m. From 2:15 p.m. to 2:30 p.m., the students will read the question paper only and will not write any answer on the Answer-Book during this period.

SECTION – A

Or

The rectifying entry for undercasting the purchases book by Rs 5,000 will be

Or

Wages paid for construction of building were debited to Wages Account. It is a/an

Or

Which of the following is the correct formula for calculating cost of goods sold? 1

Or

Or

Payment of wages for repair of furniture is an example of

Or

To ascertain profit/loss by preparing Statement of Affairs and taking capital at the end of the year as base, drawings during the year

On admission of a partner for revaluation of assets and liabilities, the account which is prepared is

Which of the following is treated as unrecorded asset? 1

Or

Or

Or

Or

Or

A company has forfeited its 100 shares of Rs 100 each issued at a discount of 10% on which final call of Rs 30 per share is not received. The Share Capital Account will be debited by

Or

Fill in the blanks (any one ): 2

Give one-word answer for the following (any two): 1×2=2

Complete the sentence given below (any one) : 2

Give one-word answer for the following (any two): 1×2=2

Fill in the blanks (any two): 1×2=2

Give one-word answer for the following (any two): 1×2=2

Name the type of vouchers to be made for the following transactions (any four ): 1×4=4

Name the accounting errors for the following errors (any four): 1×4=4

Give one-word answer for the following (any four): 1×4=4

Give one-word answer for the following (any four ): 1×4=4

Explain the term ‘journal proper’. 2

Or

What is an outstanding expense? Give one example.

In single-entry system, why Balance Sheet cannot be prepared to ascertain the true financial position of the business on a particular date? 2

Or

Explain the term ‘subscription’.

What is the result of forfeiture of shares? 2

Or

200 shares of Rs 100 each are forfeited for non-payment of first and final call of Rs 40 each. Pass Journal Entry for forfeiture of shares. 2

Or

Why is ledger maintained by a business firm? Give any three reasons. 3

Or

Pass necessary Journal Entries for the following adjustments (any three): 1×3=3

From the following, calculate the amount of subscription for the year ending 31st March, 2024 for Income and Expenditure Account: 3

Ans. To calculate the amount of subscription for the year ending 31st March, 2024, for the Income and Expenditure Account, we need to consider:

Enumerate any six items legal representatives of a deceased partner are entitled to. 3

Ans. Legal Representatives of a Deceased Partner are Entitled to:

Or

State any three factors affecting goodwill.

Ans. Three Factors Affecting Goodwill:

Ans. Under-Subscription and Over-Subscription:

Or

Ans. Shares Issued at Discount:

Explain in brief the procedure of forfeiture of shares. 3

Ans. Procedure for Forfeiture of Shares:

Or

Ans.

Journal Entries on Forfeiture of Shares Issued at Discount:

From the following Trial Balance of Apoorva & Sisters as on 31st March, 2024, prepare Trading and Profit & Loss Account for the year ending 31st March, 2024 and Balance Sheet as on that date : 5

Ans.

Adjustments:

Or

Ans. Income and Expenditure Account and Balance Sheet for Rural Wellness Society (Regd) as of 31st March 2024

Kaira and Rakhee are partners in a firm sharing profits in the ratio of 3 : 2. Their Balance Sheet as on 31st March, 2024 was as follows :

Ans.

Settlement of Liabilities :

VB Aeronautics Ltd. was registered with 10000 shares of Rs 100 each. The company offered to public for subscription its 5000 shares of Rs 100 each at par. The amount was payable as follows :

Or

Ans.

SECTION—B

OPTION–I

( Analysis of Financial Statements )

Or

Ans. (C) “It is a ratio between Quick Assets and Current Liabilities.”

Or

From the following Balance Sheets of SK Startups Ltd. as on 31^st March, 2023 and 31st March, 2024, prepare Cash Flow Statement : 5