CUET Accountancy Sample Paper Set A

Question: Which account in replace of profit and loss account for not for profit organisation?
a) Profit and loss adjustment account
b) Profit and loss appropriation account
c) Income and expenditure account
d) Profit and loss (NPO) account

Answer: c

Question: Why are books of accounts required to be maintained by NPO when they do not even make profits?
a) It is a statutory requirement
b) To compare information
c) To submit to the trustees of NPO
d) Prepared for getting insights of NPO

Answer: a

Question: Where is the subscription received from members accounted by NPO?
a) Receipt side of Receipts and Payments account
b) Payment side of Receipts and Payments account
c) Expense side of Income and Expenditure account
d) In the bank reconciliation statement

Answer: a

Question: What is not a feature of Receipt and Payments account?
a) Honorarium
b) Subscription of perodicals
c) Municipal taxes
d) Legacies

Answer: d

Question: Which of the following accounts will not include any non cash expenses?
a) Income and expenditure account
b) Receipts and payments account
c) Fixed assets account
d) Goodwill account

Answer: b

Question: In case of NPO, what is the amount received as will of a deceased person?
a) Specific Donation
b) Legacies
c) Entrance fee
d) Endowment fund

Answer: b

Question: NPO paid Rs. 8000 as fee to an artist for giving performance at the club. What is this payment called?
a) Payment of endowment fund
b) Payment of subscription fee
c) Payment of entrance fee
d) Payment of honorarium

Answer: d

Question: ABC Club received Rs. 20,000 as subscriptions during the year 2016-17 of which Rs.3,000 relate to year 2015-16 and Rs.2,000 to 2017-18, and at the end of the year 2016-17 Rs.6,000 are still receivable. What will be recorded in the income and expenditure account for the year ended 2016-17?
a) 20000
b) 15000
c) 21000
d) 31000

Answer: c

Question: Which fund arises from a bequest or gift, the income of which is devoted to for a specific purpose in case of NPO?
a) Endowment fund
b) Provident fund
c) Super annuation fund
d) Reserve fund

Answer: a

Question: Which of the following shall be included while preparing income and expenditure account?
a) Closing bank balance
b) Purchase of govt. securities
c) Capitalised Life membership fee
d) Entrance Fee

Answer: d

Question: How many maximum partners can be admitted in a firm as per central govt.?
a) 100
b) 50
c) 10
d) 20

Answer: b

Question: The partnership deed is silent about shares of profits. How will the losses distributed between A and B for the year ended 31 March 2019?
a) Equally
b) In the ratio of capital
c) Will not be distributed as deed is silent
d) According to court’s verdict

Answer: a

Question: In which of the following methods, the share of profit of a partner is transferred to a separate account other than capital account?
a) Goodwill method
b) Variable capital method
c) Fixed capital method
d) Fluctuating capital method

Answer: c

Question:A and B are partners and A is entitled to salary of Rs. 100000 being working partner. How will this be recorded in the books when year ended 31 March 2021 shows net loss of Rs. 75000 before recording such salary?
a) Rs. 25000 will be paid
b) Rs. 75000 will be paid
c) Entire Rs. 100000 will be paid as it is charge against profits
d) No salary shall be paid

Answer: d

Question: A and B are partners in a firm with PSR 3:1. The capital balances of A and B are 100000 and 150000 respectively. The loss of the firm is 10000 for the year. Calculate the interest on capital when partnership deed provides interest on capital @2%?
a) Interest shall be paid @2%
b) Interest shall be paid in ratio of 3:1
c) Interest shall be paid in equal ratio
d) No interest shall be paid

Answer: d

Question: Ram, Mohan and Shubham are partners in a firm. Ram has contributed 100000, Mohan 2500000 and Shubham 1000. They have a profit of Rs. 500. How will it be shared when no PSR is defined in partnership deed?
a) Equally
b) In the ratio of capital
c) Since it is a small amount, only working partner is entitled
d) Not to be distributed as business requires profits for growth

Answer: a

Question: Mr. Shivam, partner of M/s XYZ Company, has made drawings of Rs. 1000000 on 01/04/2021 from the firm. The partnership deed is silent on the interest on drawings by partner. How will be the interest on such drawings accounted for the year ended 31/03/2022?
a) Nominal interest as per RBI repo rate is to be charged
b) Interest on such drawings shall be Rs. 6000 charged from Shivam’s capital account
c) Interest shall be borne by the firm
d) No interest shall be charged as partnership deed is silent

Answer: d

Question: What are the necessary adjustments to arrive at closing balance of partner’s capital account?
a) Addition to the capital
b) Drawings made in kind
c) All of the options given
d) share of profits/loss

Answer: c

Question: What shall be the average months when Mr. A has made drawings of Rs. 10000 in the middle of every quarter for 4 quarters?
a) 3.5 months
b) 6 months
c) 4.5 months
d) 4 months

Answer: b

Question: Which of the following is mere an extension of P&L account?
a) P&L adjustment account
b) P&L appropriation account
c) Trial Balance
d) Partner’s current account

Answer: b

Question: ABC & Co. shows Partners Capital Account at the fixed amount brought in by the partners which is Rs. 100000 by A, B and C. Where will adjustments like salary, drawings and interest on capital be made?
a) Partner’s capital account
b) Partner’s current account
c) Profit and loss account
d) None of these as partners are not eligible for this

Answer: b

Question: A and B are partners with PSR 4:1. The profit of the firm for 31 March 2021 is Rs. 678000 before charging salary. What is total remuneration of B if he is entitled to salary of Rs. 4000 p.m and 5% commission on profits after charging such commission?
a) Rs. 78000
b) Rs. 75000
c) Rs. 70000
d) Rs. 48000 salary and commission is not allowed

Answer: a

Question: ABC and Co. got an exceptional high profit from a one time contract offered by the Govt of India. Such profit earned from the contract shall not be included in?
a) Calculation of the salaries to the staff involved
b) Calculation of goodwill
c) Both a and b
d) Calculation of interest on capital

Answer: b

Question: In what situation the interest on drawings is charged from the partners generally?
a) When the order of the court is made
b) When permitted by the investors
c) When agreed by the partners
d) When there is loss in the business

Answer: c

Question: For whom of the following is the P&L appropriation account is prepared for?
a) Divgun Enterprises, a partnership firm
b) Vazeera Limited
c) Sunil Body of Indiviuals
d) Andheri Co Op Housing Society

Answer: a

Question: Which of the following is not an appropriation of profit?
a) Interest on capital to partner
b) Salary to partner
c) Commission to partner
d) Rent to partner

Answer: d

Question: Ramesh, Mahesh and Sohesh are partners. Profits before interest on capital was Rs. 6000 and Mahesh determined interest at 18% on his loan of Rs. 100000 but there was no agreement signed as on year end. How will be the profits distributed?
a) Profits to be divided equally getting Rs. 2000 each
b) Nil profits
c) Loss to be distributed after charging interest on loan @18%
d) Rs. 100000 is to be treated as capital as there is no agreement signed and accordingly profits shall be distributed equally.

Answer: b

Question: Which of the following is difference between Capital and Current account?
a) Current account records only capital introduced and withdrawn and all other transactions are recorded in capital account
b) Current account is for fluctuating capital and capital account is for fixed capital
c) Interest is paid on capital account and no interest is paid on current account
d) All of the above

Answer: b

Question: Which of the following points are not considered at the time of admission of a partner?
a) Profit sharing ratio
b) Valuation of goodwill
c) Distribution of workmen fund
d) Revaluation of assets & liabilities

Answer: c

Question: A and B are partners in a firm in ratio 3:2. They admitted C for 30% share in profits and losses which he gets 20% from A and 10% from B. What shall be the new PSR?
a) 5:3:2
b) 4:3:3
c) 6:5:4
d) 10:7:3

Answer: b

Question: What is termed as value of the firm in respect of profits expected in future?
a) Salvage Value
b) Goodwill
c) Amortized Value
d) Discounted value of the firm

Answer: b

Question: Under which method is the goodwill valued based upon agreed no. of years purchase of average profits of the business?
a) Average Profits method
b) Super Profits method
c) Normal Profits method
d) Capitalisation method

Answer: a

Question: Which method calculates goodwill on excess profits and not actual profits?
a) Average Profits method
b) Super Profits method
c) Normal Profits method
d) Capitalisation method

Answer: b

Question: How are firm’s net assets calculated under capitalization method of goodwill?
a) Total assets (excluding goodwill) – Outside Liabilities
b) Total assets (excluding goodwill) – Equity & Reserves
c) Total assets (including goodwill) – Outside Liabilities
d) Total assets (including goodwill) – Equity & Reserves

Answer: a

Question: What is the maximum time period in which goodwill is required to be written off as per accounting standard 26?
a) 5 years
b) 10 years
c) 20 years
d) To be continued forever

Answer: b

Question: The amount of premium brought in by new partner is shared amongst existing partners in which ratio?
a) New profit sharing ratio
b) Old profit sharing ratio
c) Gaining ratio
d) Sacrificing ratio

Answer: d

Question: Which of the following assets, when internally generated, cannot be recognized in the books of accounts?
a) Goodwill
b) Publishing titles
c) Mastheads
d) All of these

Answer: d

Question: What is the treatment of balance of revaluation account at the time of admission of partner?
a) Old partners to share in old ratio
b) New partners to share in new ratio
c) Old partners to share in sacrificing ratio
d) New partners to share in gaining ratio

Answer: a

Question: The accountant of the business failed to record building in the books of accounts. At the time of admission, how shall the same be recorded?
a) Debited to revaluation account
b) Credited to revaluation account
c) Adjusted in old partners capital account
d) Adjusted through goodwill account

Answer: b

Question: Which of the following right in the firm is available to new partner?
a) Right to remuneration
b) Right to change the nature of business of firm ) Right to be working partner of the firm
d) Right to share assets of the firm

Answer: d

Question: What are the events when goodwill is adjusted?
a) At the time of admission of partner
b) At the time of retirement/ death of the partner
c) At the time of change in profit sharing ratio
d) Any of these

Answer: d

Question: The profits of business are Rs. 8500, 9000, 7000, 10000 and 8000. What is the goodwill for 3 years purchase?
a) 18500
b) 25500
c) 37500
d) 22500

Answer: b

Question: Sharma and Verma are equal partners with capital Rs. 1 lac and Rs. 2 lac respectively. Kapoor is admitted for 25% share and brings in Rs. 1.2 lac as capital. What is the amount of hidden goodwill?
a) Rs. 50000
b) Rs. 100000
c) Rs. 60000
d) Rs. 120000

Answer: c

Question: Weighted average method of calculating goodwill should be used when?
a) Profits are very low
b) Increase in the decreasing trend of profits
c) Profits exclude non cash expenses
d) Either b or c

Answer: b

Question: Chetan was admitted with 25% share in profits contributing 150000 as capital and Abhay and Beena sharing profits in 3:2. How much capital is required to be brought in by old partners taking into account as base capital of Chetan for profit sharing?
a) Abhay 200000 and Beena 175000
b) Abhay 180000 and Beena 100000
c) Abhay 270000 and Beena 180000
d) Abhay 300000 and Beena 270000

Answer: c

Question: Chetan was admitted with equal share in profits contributing 25000 as capital and 10000 as goodwill and Abhay and Beena’s old profit sharing profits in 3:2. New PSR shall be 1:1:1. Chetan has brought in Rs. 30000 only. How will this be treated in the books of accounts?
a) Abhay and Beena will share goodwill brought in
b) Goodwill not bought to be adjusted with Chetan’s current account
c) Both a and b
d) The firm shall forego goodwill amount

Answer: c

Question: A and B are partners in ratio 3:2. They admitted C as partner and new profit sharing ratio is 3:2:1. How will profits on revaluation distributed if the profits are of Rs. 6000?
a) A: 3000 and B: 3000
b) A: 3600 and B: 2400
c) A: 3000, B: 2000 and C: 1000
d) A: 2000, B: 2000 and C:2000

Answer: b

Question: Mohun and Sohun shares profit and losses equally. They admitted Ramesh as an equal partner. The goodwill is valued at Rs. 30000 (book value 0) and it will not remain in the books. Ramesh brings in capital as Rs. 20000 and necessary share of goodwill. What shall be the treatment of goodwill?
a) Final effect is nil for each partner
b) Mohun and Sohun’s account shall be credited
c) Ramesh’s account shall be credited
d) Since it will not remain in books of accounts; it will be done through out of firm adjustment

Answer: b

Question: A and B are partners in ratio 2:1. They admitted X as partner for 25% for which he brings in Rs. 90000 goodwill; half of which is withdrawn by existing partners. What is the amount withdrawn?
a) Rs. 60000, Rs. 30000
b) Rs. 30000, Rs. 15000
c) Rs. 45000, Rs. 45000
d) Rs. 22500, Rs. 22500

Answer: b

Question: Abhay and Beena share profits in ratio 3:1. They admitted Chetan and new PSR is 2:1:1 and he brings in Rs. 16000 as his share of goodwill. How will the goodwill allocated amongst the partners?
a) Abhay: 16000
b) Abhay: 12000, Beena 4000
c) Abhay: 8000, Beena: 4000 and Chetan: 4000
d) Abhay: 8000, Beena: 8000

Answer: a