PREFACE

With a growing emphasis on competency-based education globally, the educational landscape

in India has also steered towards high-quality learning experiences that allow learners to
incorporate critical thinking and problem-solving approaches. This approach goes beyond rote
memorisation and focuses on developing the skills and knowledge that students need to apply
in their real-world scenarios.
The Council for the Indian School Certificate Examinations (CISCE), as a national-level
progressive examination board, has taken several steps to infuse competency-based education
in CISCE schools through teacher capacity-building on item development for competency-
based assessments and the incorporation of competency-focused questions at the ICSE and ISC
levels from the examination year 2024.
To further facilitate the adoption of competency-based assessment practices in schools and to
support teachers and students towards the preparation for attempting higher-order thinking
questions in future board examinations, Item Banks of Competency-Focused Practice
Questions for selected subjects at the ICSE and ISC levels have been developed. This Item
Bank consists of a rich variety of questions, both objective and subjective in categories, aimed
at enhancing the subject-specific critical and analytical thinking skills of the students.
In this Item Bank, each question is accompanied by the topic and cognitive learning domain/s
that it intends to capture. The cognitive domains reflected in these questions include
understanding, analysis, application, evaluation and creativity, along with some questions of
the higher-order recall domain. The Answer Key at the end presents the possible answers to a
given question, but it is neither limiting nor exhaustive.
These practice questions are also meant to serve as teacher resources for classroom assignments
and as samplers to develop their own repository of competency-focused questions. Apart from
offering a good practice of higher-order thinking skills, engaging with these questions would
allow students to gauge their own subject competencies and use these assessments for learning
to develop individual learning pathways.
During the development of this Item Bank, a large pool of questions was prepared by a team
of experienced CISCE teachers. The questions that were finalised by the internal and external
reviewers as being higher-order competency-focused questions have been collated in this item
bank.
I acknowledge and appreciate all the ICSE and the ISC subject matter experts who have
contributed to the development and review of these high-quality competency-focused questions
for CISCE students.
We are hopeful that teachers and students will utilise these questions to support their
teaching-learning processes.

October 2024 Dr. Joseph Emmanuel

Chief Executive & Secretary
CISCE
Accounts ISC-Class XII

Table of Contents

S.No. Type of Questions Page Nos.

I. Multiple Choice Questions (MCQs) 1-9

II. Assertion-Reason Questions 10-11

III. Very Short Answer Questions 12-16

IV. Short Answer Questions 17-21

V. Long Answer Questions 22-25

VI. Very Long Answer Questions 26-28

Answer Key 29-48

ISC Competency-Focused Practice Questions

Accounts ISC-Class XII

COMPETENCY-FOCUSED PRACTICE QUESTIONS

ISC-CLASS XII

Accounts

I: Multiple Choice Questions (1 Mark Each)

S.No. Questions

1. [Partnership Accounts (Reconstitution of Partnership)]

Raju, Farhan and Rancho are partners sharing profits and losses equally. Rancho’s Capital
Account is shown below :
Rancho’s Capital A/c
Date Particulars (₹) Date Particulars (₹)
31/3/24 To Furniture 14,000 1/4/23 By Balance b/d 28,000
31/3/24 To Bank 16,000 31/3/24 By Rancho’s Current A/c 2,000
30,000 30,000

Which statement is CORRECT regarding the above postings in Rancho’s Capital Account?
(a) Rancho increased his Capital by introducing Furniture and Cash at bank.
(b) Rancho retired and took the amount due to him from the firm in kind by way of Furniture
and the rest through cheque.
(c) Rancho purchased Furniture from the business by paying ₹ 2,000 more than its book value.
(d) Rancho’s Capital Account shows his share of loss in the sale of Furniture.
(Application)

2. [Partnership Accounts (Reconstitution of Partnership)]

Aman and Ankita are in partnership sharing profits and losses equally. Their combined capital
account balance is ₹ 2,00,000.
John is admitted as a partner. At the time of his admission:
(a) The value of non-current assets are to be increased by ₹ 30,000.
(b) John brings his share of Goodwill ₹ 20,000 which is distributed to the sacrificing partners
and it is withdrawn by them.
After John’s admission, the total of all the partners’ capital accounts (including John’s capital)
is ₹ 2,70,000.
What is John’s capital contribution?
(a) ₹ 20,000
(b) ₹ 40,000
(c) ₹ 50,000
(d) ₹ 70,000
(Application)

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3. [Joint Stock Company Accounts (Issue of Debentures)]

Sky Ltd. took a loan of ₹ 4,00,000 from Next Bank for which the company placed 10%
Debentures of ₹ 4,50,000 as collateral security with the bank. It also purchased a machine
worth ₹ 2,70,000 and made payment to the vendors by issuing 3000, 8% debentures of ₹ 100
each. What will be total amount of Long-term borrowings in the Company’s Balance Sheet?

(a) ₹ 7,50,000
(b) ₹ 7,00,000
(c) ₹ 8,50,000
(d) ₹ 11,50,000 (Application)

4. [Joint Stock Company Accounts (Final Accounts of Companies)]

Shapoorji Pallonji group and Wilson Renewable Energy Ltd. is considering an Equity Share
sale to raise up to ₹ 1,500 crore to repay its debts maturing this financial year.
(Source: The Economic Times, 6 September, 2023)
This repayment of debt would have been shown by the company in the Balance Sheet of 2023-
24 as:
(a) long-term borrowings.
(b) short-term borrowings.
(c) other current liabilities.
(d) trade payables. (Application)

5. [Accounting Application of Electronic Spreadsheet]

In accounting, what does the term ‘cell referencing’ refer to in an electronic spreadsheet?
(a) To lock the cells to prevent editing.
(b) To link cells from different worksheets.
(c) To delete cells that have sensitive information.
(d) To indicate the location of a cell within a spreadsheet. (Recall)

6. [Partnership Accounts (Goodwill)]

Which of the following are CORRECT formulas for the calculation of capital employed?
P : Capital + Reserves + Non-current Liabilities less Goodwill (existing in the Balance
Sheet) less non-trade investment less fictitious assets.
Q : Capital + Reserves less Goodwill (existing in the balance sheet) less trade investments
less Fictitious assets.
R : Total assets less Goodwill (existing in the balance sheet) less Non-trade investments
less Fictitious assets less Outside Liabilities (Current and non-current).
S : Total assets less Goodwill (existing in the balance sheet) less Non-trade investments
less Fictitious assets less Outside Liabilities (only Current).
Choose the MOST appropriate option based on the above statements.
(a) P and Q
(b) P and R
(c) Q and S
(d) R and S (Understanding)

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7. [Partnership Accounts]
Which of the following statement is INCORRECT in the context of the dissolution of a
partnership firm?
(a) The realisable assets and third-party liabilities to be settled, are closed and transferred to
the realisation account.
(b) The loan given by the partner to the firm is closed and transferred to the partner’s capital
account.
(c) The free reserves and accumulated losses are directly recorded in partners’ capital accounts.
(d) Any asset against which a provision is created is transferred at the gross value to the
realization account.
(Understanding)

8. [Joint Stock Company Accounts (Redemption of Debentures)]

Read the following article and answer the question that follows.

Kochi-based NBFC Indel Money to raise up to ₹200 crore through NCDs (Non-
Convertible Debentures)

Kochi-based gold loan NBFC Indel Money plans to raise up to ₹ 200 crore through non-
convertible debentures (NCDs) to shore up its capital and diversify lend-able resources at a
coupon rate of 12.25%.

Source:https://economictimes.indiatimes.com/markets/bonds/kochi-based-nbfc-indel-money-
to-raise-upto-rs-200-crore-through-ncds/articleshow/106935741.cms
Dated: Jan 17, 2024

To comply with the Companies Act 2013, what is the amount of Debenture Redemption
Reserve to be created and Debenture Redemption Investment to be made by the company, if
these debentures are redeemed in lumpsum.?

(a) Debenture Redemption Reserve of ₹ 20 Crore, and Debenture Redemption Investment of

₹ 30 Crore.
(b) Debenture Redemption Reserve of ₹ 20 Crore but no Debenture Redemption Investment
is required.
(c) Debenture Redemption Reserve of ₹ 30 Crore, but no Debenture Redemption Investment
is required.
(d) Debenture Redemption Reserve and Debenture Redemption Investment both are not
required. (Understanding)

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9. [Cash Flow Statement (Only for Manufacturing Companies)]

Which of the following is considered as a Cash Flow from Financing Activity?
P : Calls in Arrears received on partly paid up shares.
Q: Dividend received on Equity Shares of other company.
R: Interest on Calls in Arrears received from shareholders.
S: Bonus shares Issued to the existing shareholders.
Choose the MOST appropriate option based on the above statements.
(a) P and R
(b) P, Q and R
(c) Q and S
(d) Q, R and S
(Application)

10. [Database Management System]

A Database Management System (DBMS) provides tools for enforcing constraints, such as
constraints on the values of data and access controls, that restrict who can access the data.
Which feature of DBMS is highlighted in the above statement?
(a) Concurrence Control
(b) Date Storage and Retrieval
(c) Data integrity and security
(d) Data modelling
(Recall)

11. [Partnership Accounts (Reconstitution of Partnership-Dissolution of a Partnership Firm.)]

Amit, Ronald and Charan dissolved their partnership firm. Dissolution expenses were ₹
10,000; out of the said expenses, ₹4,000 were to be borne by Ronald and the balance was to
be paid by the firm. ₹ 8,000 was paid by Ronald and the balance by the firm.

What is the entry to record the above transaction?

(a) Debit Realisation A/c ₹ 10,000; Credit Bank A/c ₹ 2,000; Credit Ronald A/c ₹ 8,000.
(b) Debit Realisation A/c ₹ 6,000; Debit Bank A/c ₹ 2,000; Credit Ronald A/c ₹ 8,000.
(c) Debit Realisation A/c ₹ 6,000; Credit Bank A/c ₹ 2,000; Credit Ronald A/c ₹ 4,000.
(d) Debit Realisation A/c ₹10,000; Credit Bank A/c ₹6,000; Credit Ronald A/c
₹ 4,000.
(Application)

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12. [Joint Stock Company Accounts (Redemption of Debentures)]

Sarita Ltd. (an unlisted company) redeems its 10,000, 9% Debentures of ₹ 100 each in
instalments as follows:
Date of redemption Debentures to be redeemed
31st March, 2024 3,000
31st March, 2025 2,000
31st March, 2026 5,000
Choose the correct option regarding the treatment of Debenture Redemption
Investment by Sarita Ltd.
(a) Invest as Debenture Redemption Investment ₹30,000 on1st April, 2024.
(b) Invest as Debenture Redemption Investment ₹15,000 on1st April, 2024.
(c) Encash Debenture Redemption Investment of ₹45,000 on 31st March, 2024.
(d) Encash Debenture Redemption Investment of ₹15,000 on 31st March, 2024.
(Analysis)

13. [Joint Stock Company Accounts (Issue of Shares-Over and undersubscription and pro-rata
allotment)]
Nikhil Ltd. forfeited 1,000 shares of Akash of the face value of ₹ 10 each for non-payment
of allotment and call money. Akash had applied for 1,600 shares and was allotted 1,000
shares on pro-rata basis. His excess application money was adjusted with sum due on
allotment. Amount payable on allotment was ₹ 5 (including premium of ₹ 3) per share and
on First & final call ₹ 3 per share.

On forfeiture, the Securities Premium A/c was debited with:

(a) ₹ 3,000
(b) ₹ 2,000
(c) ₹ 1,000
(d) ₹ 5,000 (Analysis)

14. [Accounting Application of Electronic Spread Sheet-Features offered by Electronic

Spreadsheet]
What feature allows to freeze of specific rows or columns in an electronic spreadsheet?
(a) Autofill
(b) Freezing panes
(c) Date functions
(d) Print titles
(Understanding)

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S.No. Questions

15. [Ratio Analysis (Profitability Ratios- Earning per share)]

Loews corporation reported net income of $ 364 million or $1.53 per share in the fourth quarter
of 2022, compared to $ 343 million or $ 1.36 per share in the fourth quarter of 2021.
(Source: PR Newswire)
On 30th, December, 2022 the market price of its share was $58.33 per share.
(Source: ir.loews.com>historical price lookup)
What was the Price Earning Ratio of the company on 30th December, 2022?
(a) 42.89 times
(b) 42.58 times
(c) 38.12 times
(d) 38.13 times
(Application)

16. [Partnership Accounts (Reconstitution of Partnership-Admission)]

Pijush and Harjeet are partners sharing profits in the ratio 3:2. They admit Arun, a new
partner, who acquires 1/25th share from Harjeet and rest from Pijush to make his share 1/3rd
of Harjeet’s share.
What is the new profit-sharing ratio of all the partners?
(a) 5:3:1
(b) 8:9:3
(c) 13:9:3
(d) 9:12:4 (Application)

17. [Accounting Application of Electronic Spread Sheet (ii) Feature offered by Electronic
Spreadsheet]
What does the “if-then-else” function in an electronic spreadsheet allow?
(a) Perform conditional calculations based on specified criteria.
(b) Sort data alphabetically.
(c) Change the font size.
(d) Insert hyperlinks. (Understanding)

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S.No. Questions

18. [Joint Stock Company Accounts (Issue of Shares)]

November 10, 2021, was the record date to decide holders of the Reliance Partly Paid-up
shares, who need to pay the Second and Final Call.
On payment of the Second and Final Call amount, the partly paid-up shares will transition into
fully paid-up shares of Reliance Industries, which are traded under the symbol RELIANCE on
both NSE and BSE.
Source:Economictimes.indiatimes.com, Nov 13, 2021

What would be the minimum time period RELIANCE would have taken after the first
call to call for the second and final call, as per the Companies Act, 2013?
(a) 15 days
(b) 2 months
(c) 1 month
(d) 45 days (Recall)

19. [Joint Stock Company Accounts (Issue of Debentures)]

Mars Ltd. issued 30,000, 10% Debentures of ₹100 each at par on 1.04.2018. The terms of
redemption were:
Date of Redemption No. of Debentures to be redeemed
31.03.21 10,000
31.03.22 8,000
31.03.23 6,000
31.03.24 Balance

What will be the amount of interest on debentures for the financial year 2022-23?
(a) ₹ 3,00,000
(b) ₹ 2,40,000
(c) ₹ 1,20,000
(d) ₹ 60,000 (Analysis)

20. [Joint Stock Company Accounts (Final Accounts of Companies)]

Venus Ltd. provides you with the following information:
(1) ₹2,00,000 10% Debentures of ₹100 each issued at par on 1.07.2022 to be redeemed in a
lump-sum on 30.06.2026
(2) Interest is payable half-yearly, on 31st Dec and 30th June every year.
(3) Interest on Debentures paid till 31.3.2023 is ₹ 3,000.
How will the interest on Debentures be shown under Other Current Liabilities in the
notes to accounts accompanying the Balance Sheet of Venus Ltd. as at 31st March,
2023?
(a) Interest accrued and due ₹17000.
(b) Interest accrued but not due ₹5000; interest accrued and due ₹7000.
(c) Interest accrued but not due ₹10000; interest accrued and due ₹2000.
(d) Interest accrued but not due ₹17000. (Evaluate)

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S.No. Questions

21. [Financial Statement Analysis]

Below is the pie chart showing the composition of a company's Balance Sheet.

Source(edited): Balance sheet- templates- Someka

On analysing the composition of liabilities given above, calculate the absolute and percentage
change of Current Liabilities.
(a) 50, 2.56
(b) (50), (2.56)
(c) 50, 2.50
(d) (50), (2.50)
(Application)

22. [Ratio Analysis]

Sterling Ltd. has provided the following information:
Trade Payables Turnover Ratio = Net Credit Purchases / Average Trade Payables
Trade creditors as on 1st April, 2023 ₹9000
Advance paid to trade creditors on 31st March, 2024 ₹16000
Cash paid to trade creditors during the year 2023-24 ₹220000
Trade creditors as on 31st March, 2024 ₹15000

What will be the Trade Payables Turnover Ratio?

(a) 18.33 times.

(b) 17.5 times.
(c) 18.25 times.
(d) 4.26 times.
(Application)

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23. [Database Management System]

How can the elements in a chart be formatted in Excel using the dialog box?
(a) Format, Layout, Label
(b) Design, layout, Format
(c) Legends, Design, Layout
(d) Data market, Radar, Layout (Application)

24. [Joint Stock Company Accounts (Issue of Debentures)]

Praxier Ltd. issued ₹25,00,000 debentures to the public, of ₹100 each. The company appointed
Axel as their underwriter for the issue. Commission can be paid to underwriters as per
companies act 2013, for the purpose of issue of debentures are:
(a) 2.5%
(b) 5%
(c) 7.5%
(d) 10%
(Recall)

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II. Assertion-Reason Questions (1 Mark Each)

The questions in this section have two statements marked Assertion and Reason. Read both the
statements carefully and choose the correct option.

S.No. Questions

25. [Joint Stock Company (Redemption of Debentures)]

Assertion (A): If the debentures are issued at a premium and are redeemable at a premium,
the premium payable on redemption is credited to the premium on redemption of the
debentures account.
Reason (R): Premium payable on redemption of debentures is a loss for the company and
so it is credited to loss on the issue of debentures account.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, and R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true. (Application)

26. [Joint Stock Company Accounts (Issue of Shares)]

Assertion (A): Interest on calls in the advance account is closed by debiting it to Statement
of P&L.
Reason (R): Interest on calls in advance is an income for the company.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) (A) is true, but (R) is false.
(d) (A) is false, but (R) is true.
(Understanding)
27. [Partnership Accounts (Reconstitution of Partnership-Retirement and Death of a
Partner)]
Assertion (A): At the time of the death of a partner, the profit-sharing ratio among the
remaining (continuing) partners always changes.
Reason (R): Unless otherwise agreed, the deceased partner’s share of profit is taken up by
the continuing partners in their old profit-sharing ratio.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true. (Understanding)

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28. [Cash Flow Statement(Only for Manufacturing Companies)]

Assertion (A): The dividend received by a company on Investment in Shares of another
company is shown in the Cash Flow Statement.
Reason (R): This dividend received is an Operating Activity.
(a) Both A and R are true, and R is the correct explanation of A.
(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true. (Understanding)

29. [Accounting Application of Electronic Spread Sheet]

Assertion (A): In an Excel spreadsheet there is a formula toolbar (fx).
Reason (R): This function offers assistance and useful prompts into a spreadsheet cell.

(a) Both A and R are true, and R is the correct explanation of A.

(b) Both A and R are true, but R is not the correct explanation of A.
(c) A is true, but R is false.
(d) A is false, but R is true. (Recall)

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III. Very Short Answer Questions (1 Mark Each)

S.No. Questions

30. [Cash Flow Statement(Only for Manufacturing Companies)]

The following are the extracts of the Balance Sheets of Mediquity Ltd.
Assets 31st March, 2024 (₹) 31st March, 2023 (₹)
Debtors 20,000 50,000

While preparing the Cash Flow Statement of Mediquity Ltd. for the year 2023-24, state with
reason the effect of changes in the amount of debtors on the cash from operating activities of
the company vis-a-vie its net operations before working capital changes.
(Application)
31. [Ratio Analysis]
‘The Revenue from Operations of Marico marginally reduced to ₹ 2,476 crores from ₹ 2,496
crores.’
(Source: The Economic Times (Edited), 31 October, 2023)

Which Activity Ratio of the Company will get affected by this (assuming Revenue from
Operations is all in cash)? (Understanding)

32. [Joint Stock Company Accounts (Issue of Shares)]

Woodcraft Ltd. purchased machinery for ₹ 90,000 from Moons Ltd. As per the agreement,
the payment is to be made by issuing shares of ₹ 100 each. While recording this transaction,
Share Capital A/c was credited by ₹ 72,000.
State whether the shares were issued at Par or Premium and also calculate the number
of shares issued to Moons Ltd.
(Application)

33. [Partnership Account (Dissolution of a Partnership Firm)]

In the process of dissolution of the firm, ______(Furniture/ Goodwill) will be shown as
realised at book value, if there is no information regarding the realised value of that asset.
(Application)

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S.No. Questions

34. [Cash Flow Statement(Only for Manufacturing Companies)]

Divya Tubes Ltd. has the following Accounts in its books.
Dr Accumulated Depreciation A/c Cr
Particulars (₹) Particulars (₹)
To Machinery A/c 14,000 By Balance b/d 74,000
To Balance c/d 85,000 By depreciation A/c 25,000
99,000 99,000

Machinery A/c
Dr Cr
Particulars (₹) Particulars (₹)
To Balance b/d 2,80,000 By Bank A/c 53,500
To Gain on sale of Machinery 7,500 By Accumulated depreciation 14,000
A/c 1,20,000 A/c 3,40,000
To Bank A/c By Balance c/d
4,07,500 4,07,500
On the basis of the above accounts, answer the question given below:
By how much amount the cash from operating activities will get affected?
(Application)

35. [Database Management System]

What is the purpose of a foreign key in a database? (Recall)

36. [Joint Stock Company (Issue of Debentures]

In the books of Black Ltd.
Balance of Securities Premium on 1st April 2023 was ₹ 2,00,000.
Balance of Securities Premium on 31st March 2024 was ₹ 1,60,000.
In that year, Black Ltd. had to pay an underwriting commission of ₹ 4,60,000 to underwriters
of the company.
The payment was done by the issue of 8% Debentures of ₹100 each at a discount.
The discount was written off from the Securities Premium.
You are required to calculate the discount per debenture. (Application)

37. [Financial Statement Analysis]

Rectify the errors in the given extract of common size statement and redraw it again
Common size Income Statement of Sia Ltd.
for the year ended 31st March 2023
Particulars Note Current Year % of Total
no. Absolute Income
amounts
I. Revenue from operations 4,00,000 97.56
II. Other Income 10,000 2.44
III. Total Revenue 4,10,000 100
(Application)

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38. [Accounting Application of Electronic Spreadsheet]

When we open an Excel sheet the cursor points at cell A1. What is this cell called? (Recall)

39. [Joint Stock Company (Final Accounts of Companies-Preparation of Balance Sheet)]

SRCC Ltd has 10,000, 12% Debentures of ₹100 each due to be redeemed on 31st May
2024.
Mention the heading and the sub-heading under which this item would have been shown
in the Balance Sheet of SRCC Ltd. prepared as at 31st March, 2024? (Understanding)

40. [Joint Stock Company (Issue of Debenture)]

Satya Ltd. issued 8,000, 12% Debentures of ₹ 100 each at a premium of 5%. Mr. Sharma had
underwritten the Debentures and received ₹ 68 in cash and 178, 12% Debentures at a discount
of 6% as underwriting commission.

At what rate percentage, Underwriting Commission was received by Mr. Sharma?

(Analysis)

41. [Partnership Accounts (Goodwill)]

Kaul and Moin are partners sharing profits and losses in the ratio of 5:4. On 1.04.2024, they
want to admit Cora as a partner for 1/5th share in the business. Goodwill at the time of Cora’s
admission on the basis of Capitalisation of Average Profits of the last three years is valued at
₹60,000.
Firm, as on that date, has a Capital Employed of ₹4,40,000. The Normal Rate of Return
expected from this kind of business is 13%. What will be the value of goodwill under
Capitalisation of Super Profits Method? (Analysis)

42. [Partnership Accounts (Reconstitution of Partnership-Retirement and Death of a Partner)]

Archana, Babita and Chitra are partners sharing profits and losses in the ratio of 3:2:1. Chitra
decides to retire on 30th June, 2023. On this date, the goodwill of the firm is valued at ₹36,000.
Given below is the extract of Chitra’s capital account:

Chitra’s Capital Account (Extract)

Date Particulars ₹ Date Particulars ₹
1.04.23 By Balance b/d 2,00,000
30.6.23 By General Reserve A/c 2,500
30.6.23 By Revaluation a/c 2,000
30.6.23 By Archana’s Capital A/c
(share of profits) 1,000
30.6.23 By Babita’s Capital A/c
(share of profits) 2,000
You are required to give the Journal entry for the treatment of goodwill on Chitra’s
retirement.
(Analysis & Evaluate)

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S.No. Questions

43. (Joint Stock Company Accounts-Redemption of Debentures)

Government removes Debenture Redemption Reserve requirement for Listed
Companies, NBFCs and HFCs
Debenture Redemption Reserve for unlisted companies reduced to 10% of outstanding
Debentures from the present level of 25%
The Ministry of Corporate Affairs has amended the Companies (Share Capital & Debentures)
Rules by removing Debenture Redemption Reserve requirement for Listed Companies,
NBFCs and HFCs.
(Source: Business Standard, Aug 19 2019)

How are the unlisted companies supposed to fund the Debenture Redemption Reserve?
(Recall)

44. (Cash Flow Statement (Only for Manufacturing Companies))

Give any one possible reason with relevant figures for the difference in the following amounts
while preparing the Cash Flow Statement:
Profit made during the year 2022-23 amounted to ₹1,00,000 and the Net Profit before Tax is
shown as ₹1,50,000. (Evaluate)

45. (Ratio Analysis)

The pie chart shows the Equity and Liabilities of Moonside Ltd.

Calculate the Debt Equity Ratio of Moonside Ltd., when the total of the Equity and
Liabilities side is ₹10,00,000.
(Understanding)

ISC Competency-Focused Practice Questions 15

Accounts ISC-Class XII

S.No. Questions

46. [Fundamentals of Partnership]

There are three partners in a partnership firm. The total of their current accounts at the start of
the year was ₹18,000 and at the end of the year was ₹32,000.
Total drawings for the year amount to ₹22,000 and total of partners salaries are ₹13,000.

What is the profit for the year distributed between the partners?
(Evaluate)

ISC Competency-Focused Practice Questions 16

Accounts ISC-Class XII

IV: Short Answer Questions (3 Marks Each)

S.No. Questions

47. [Partnership Accounts (Reconstitution of Partnership -Admission of Partners)]

Partners’ Capital Account
Dr Cr
Particulars Ram George Om Ram George Om
To By Balance 5,00,000 6,00,000 -
Revaluation 32,000 24,000 - b/d - - 8,00,000
By Bank A/c
A/c 9,48,000 8,36,000 - By Premium -
To Balance for Goodwill
c/d A/c 2,40,000 80,000 -
By General
Reserve A/c
2,40,000 1,80,000 -

9,80,000 8,60,000 8,00,000 9,80,000 8,60,000 8,00,000

On the basis of the above Partners’ Capital Account, answer the questions.
(a) What is the old profit-sharing ratio and sacrificing ratio?
(b) The firm incurred a _____ (profit/loss) of ₹ ______in the Revaluation A/c.
(c) Pass the Journal entry if Om is admitted for 1/4th share and the partners decide to
retain the General Reserve in the new Balance Sheet? (Application)
48. [Joint Stock Company Accounts- Redemption of Debentures]
Navya Steels Ltd. (an unlisted company) had issued 8% Debentures of ₹100 each to be
redeemed at a premium of 5%. The company followed the rules of Companies Act 2013
for redemption. On 31st March, 2022 and 2023, the accountant of the company transferred
an amount of ₹ 50,000 and ₹ 70,000 respectively to the General Reserve from the
Debenture Redemption Reserve Account.
From the above information answer the questions.
(a) How much amount was paid to the debenture-holders in the year 2022-23?
(b) How many numbers of debentures were redeemed in the year 2023-24?
(c) Write the journal entries for the amount due, and payment made to debenture-holders
in the year 2023-24. (Application)

ISC Competency-Focused Practice Questions 17

Accounts ISC-Class XII

S.No. Questions

49. [Partnership Accounts-Goodwill]

The Goodwill of a firm is valued at ₹ 2,02,500 at 3 years purchase of Super profit.
Determine the missing values:
Average Profit = ₹5,40,000 = ₹ 1,80,000
3
Normal Profit = ₹ ___(c)___ x 15 = ₹ _______
100
Super Profit = Average Profit – Normal Profit

₹1,80,000 - ₹ __(b)___ = ₹ __(a)____

Goodwill = Super Profit x No. of years’ purchase

(Application)

50. [Partnership Accounts(Reconstitution of Partnership-Admission of a Partner)]

Balram and Chris are partners in a firm sharing profits and losses in the ratio of 3:2.
They admitted Ahmed on 1st April 2023.
Balram gifted 1/5th of his share to Ahmed and Chris gave 2/5th of his share to Ahmed.
The goodwill of the firm is ₹10,000.
You are required to:
(a) Find out the new profit-sharing ratio among the partners.
(b) Pass the journal entry for premium for goodwill, if Ahmed is unable to bring his
share of goodwill in cash.
(Understanding)

51. [Joint Stock Company Accounts (Redemption of Debentures)]

Royal Blue Ltd. (a listed manufacturing company) issued 5,000, 10% Debentures of
₹ 100 each on 1st April 2016, to be redeemed in installments beginning from 31st March,
2022.
The company had to redeem 3,000 debentures on 31st March, 2023.
It purchased a Debenture Redemption Investment of ₹10,000 on 1st April 2021 and
₹ 30,000 on 1st April 2022, to comply with the requirements of the Companies Act 2013.
You are required to:
(a) Find out the number of debentures which were redeemed on 31st March 2022.
(b) Pass Journal entries only for redemption of debentures for the year 2021-22.
(Journal entries for Debenture Redemption Investment are not required.)
(Application)

ISC Competency-Focused Practice Questions 18

Accounts ISC-Class XII

S.No. Questions

52. [Partnership (Reconstitution of Partnership-Admission of a Partner)]

Aadish and Pratham are partners sharing profits and losses in the ratio of 2:1.
They admitted Tanay as a partner and the new PSR was 2:1:1.
Tanay contributed ₹ 1,50,000 as Capital.
It was decided to readjust the capitals on the basis of Tanay’s Capital.

The capitals of Aadish and Pratham after all adjustments for goodwill and revaluation
were ₹ 2,50,000 and ₹ 1,00,000 respectively,
However, at the time of admission, they realise that the profit for the previous year ₹
90,000 was distributed equally instead of the profit-sharing ratio.

You are required to calculate the amount to be introduced or withdrawn by Aadish

and Pratham, so that the capitals are in proportion to the new profit-sharing ratio.
(Understanding)

53. [Joint Stock Company (Redemption of Debentures-Redemption in Annual

installments)]
Akash Enterprises Ltd. (an unlisted company) had 13,000, 8% Debentures of ₹ 100 each
outstanding for redemption as follows:
On March 31, 2021 5,000 Debentures
On March 31, 2022 3,000 Debentures
On March 31, 2023 5,000 Debentures
Required amount to Debenture Redemption Reserve was created and Investment as
required by law was made and Debentures were redeemed on time.
You are required to prepare:
(a) The Debenture Redemption Reserve Account for the year 2021-22.
(b) The Debenture Redemption Investment Account for the year 2022-23.
(Analysis)

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Accounts ISC-Class XII

S.No. Questions

54. [Partnership Accounts (Reconstitution of Partnership-Retirement and Death of a

Partner)]
John, Sunita and Deepali are partners in a firm sharing profits and losses in the ratio of
3:2:1. Deepali retired on 30th June, 2023.
The retiring partner is entitled to:
(a) Her share of profit from the date of Balance Sheet to the date of retirement which
was estimated to be ₹24,000.
(b) Her share of goodwill.
The firm’s goodwill calculated on the basis of three years’ purchase of average
profits amounted to ₹60,000.
(c) Interest on her capital @8% per annum.

Deepali’s capital which on 1st April 2023 was ₹2,00,000.

John and Sunita after Deepali’s retirement decided that their profits be shared in the ratio
of 7:5. Balance of Deepali’s capital is to be transferred to her loan a/c.
You are required to pass journal entries to record Deepali’s retirement in the books
of the firm.
(Analysis)

55. [Joint Stock Company Accounts (Issue of Debentures)]

Pluto Ltd. had issued two different classes of Debentures of ₹100 each during the year
2023-24. The details of the issue are:
(a) 10,000 8% Debentures were issued to the public at 20% premium to be redeemed
after 6 years at a premium of 5%.
(b) Promoters of the company were issued 5,000 12% Debentures of ₹100 each at a
discount of 20%, redeemable at par after 8 years, to reimburse them for the costs
incurred to incorporate the company.

You are required to pass journal entries in the books of Pluto Ltd. for the year 2023-
24. (Ignore interest on Debentures). (Application)

56. [Joint Stock Company Accounts (Redemption of Debentures)]

On 1st April, 2019, Snowline Ltd. (an unlisted Company) issued ₹12,00,000, 10%
Debentures of ₹100 each, at a premium of 10%, redeemable at 5% premium. The
Debentures were to be redeemed in three equal annual instalments starting from 31st
March, 2024.
Snowline Ltd. decided to transfer to Debenture Redemption Reserve on 31.03.2024
₹ 50,000, which fulfilled the conditions/ provisions of the Companies Act, 2013
regarding Debenture Redemption Reserve.
You are required to prepare:
(a) Debenture Holders A/c.
(b) Debenture Redemption Reserve A/c. for the year ending 31.03.2024.
(Ignore interest on Debentures). (Evaluate)

ISC Competency-Focused Practice Questions 20

Accounts ISC-Class XII

S.No. Questions

57. [Financial Statement Analysis]

Ariel Ltd. provides you with the following information as at 31.03.2024:
Capital Employed ₹3,50,000
Statement of P/L ₹(1,00,000)
General Reserve ₹1,50,000
Bank Loan ₹1,00,000
Working Capital ₹50,000
Total Assets ₹6,00,000 (2/3rd of which are Non-Current in nature)
You are required to prepare a Common Size Balance Sheet of Ariel Ltd. as at
31.03.2024.
(Application)

58. [Database Management System]

What do these basic functions of SQL do?
(a) SUM
(b) MAX
(c) COUNT (Recall)

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Accounts ISC-Class XII

V. Long Answer Questions (6 Marks Each)

S.No. Questions
59. [Joint Stock Company Accounts (Final accounts of Companies)]
Royal Ltd. has Authorized Capital of ₹ 40,00,000 Equity Shares of ₹ 10 each. The company
allotted 5,000 Equity Shares of ₹ 10 each fully paid to the promoters of the company. The
company purchased machinery from Roshan Traders and paid 2,500 fully paid Equity Shares of
₹ 10 each at par.
The company offered 2,50,000 Equity Shares of ₹ 10 each at a premium of 10% to the public.
The amount is payable as follows:
On Application ₹5
Allotment ₹ 4 (including premium)
Balance on First and Final Call.
The company did not make the final call till the date of the Balance Sheet. The public subscribed
for all the shares. All money was duly received except the allotment money on 500 shares, which
were forfeited.
Prepare Balance Sheet of Royal Ltd. as at 31st March, 2023.
(Application)

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Accounts ISC-Class XII

S.No. Questions
60. [Partnership Accounts(Reconstitution of Partnership- Retirement and Death of a Partner)]
Pawan, Qamar and Raj were partners sharing profits and losses in the ratio of 5: 3: 2 respectively.
On 31st March, 2023, the Balance Sheet of the firm stood as follows:
Liabilities Amount (₹) Assets Amount
(₹)
Sundry creditors 8,000 Plant 30,000
Bills payable 2,000 furniture 20,000
General Reserve 6,000 Stock 22,000
Debtors 18,000
Capitals: Cash at bank 4,000
Pawan - 40,000
Qamar - 20,000
Raj - 18,000

Total 94,000 Total 94,000

On this date Qamar decided to retire and for this purpose:

(a) Goodwill was valued at ₹ 40,000;
(b) Plant was valued at ₹ 36,000;
(c) Furniture was valued at ₹ 24,000
(c) Stock was considered as worth ₹ 20,000.
Qamar was paid through an amount, brought in by Pawan and Raj, in such a way, which made
their capitals proportionate to their new profit-sharing ratio of 3:2 and left a balance of ₹ 12,000
in the Bank Account.

You are required to prepare Balance sheet of the new firm immediately after retirement of
Qamar.
(Analysis)

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Accounts ISC-Class XII

S.No. Questions
61. [Partnership Accounts (Reconstitution of Partnership-Death of a Partner)]
The Balance Sheet of Dia, Zia, Tia who were sharing profits and losses in the ratio of 1:1:2 stood
as follows. Tia died on 31st December 2023.
Balance sheet as at 1st January 2024
Liabilities ₹ Assets ₹
Creditors 92,000 Goodwill 8,000
Reserves 52,000 Cash at Bank 2,54,000
Capital Accounts Stock 2,36,000
Dia 3,00,000 Fixed Assets 5,42,000
Zia 3,00,000 Deferred Advertisement 1,04,000
Expenditure
Tia 4,00,000 10,00,000

11,44,000 11,44,000

The above Balance sheet, though made after Tia’s Death, is incorrect.
The following things have not been accounted for:
1. The adjustment in respect of reserves and accumulated profit hasn’t been made.
2. The goodwill of the firm is valued at ₹ 80,000.
3. The share of her profit for the current year is determined at ₹ 42,000.
You are required to make the Partners’ Capital A/c.
(Application)

62. [Joint Stock Company (Final Accounts of Companies: Preparation of Balance Sheet)]
Ratnakar Ltd. was formed on 1st April, 2021, with an authorized capital of ₹ 20,00,000 divided
into equity shares of ₹10 each. It invited applications for 30,000 shares in the year of its
formation, all of which were subscribed for and amount due on them fully received. On 1st April,
2022, the company invited applications for another 80,000 shares at premium of ₹2 (payable ₹1
on allotment and ₹ 1 on 1st call) per share. Applications for 78,000 shares were received. All calls
were made. One shareholder holding 2,000 shares didn’t pay the 1st call of ₹ 4(including
premium) per share and final call ₹ 2 per share. Another shareholder holding 1,000 didn’t pay
final call money. Out of these shares on which both the calls were not received, were forfeited.
1,200 of the forfeited share were reissued @ ₹ 13 per share fully paid. On 1st April, 2022, the
company also issued 5,000, 7% Debentures of ₹ 100 each at a discount of 5% redeemable at par.
You are required to show the items under the heading Equity and Liabilities in the Balance
Sheet of the company as at 31st March, 2023 as per Schedule III of the Companies Act,
2013 showing clearly Notes to Accounts. Ignore interest on Debentures.
(Application)

63. [Database Management System]

(a) What does a split form show?
(b) What is a key field? Give examples.
(c) What are fields and actual data in a Database table?
(Recall)

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Accounts ISC-Class XII

S.No. Questions
64. [Accounting Application of Electronic Spreadsheet]
Skyline Enterprises provides you with the following information and a spreadsheet showing its
payroll of its employees for the month of March, 2024.

Skyline Enterprises
Pay roll for the month of March, 2024
DA rates for the month of March,2024 35%
HRA rates for the supervisory staff 30%
HRA rates for the non-supervisory staff 20%
CCA for the Supervisory staff (Sup) ₹ 1,000
CCA for the non-supervisory staff (N Sup) ₹ 500
PF rate 10%
A B C D E F G H I J K L

Name of
Emp. Emp. the Basic Total Total Net
1 No. Type employee pay D.A. HRA CCA Earnings PF TDS deduction salary
N
2 201 Sup Sanjay 16500 5775 3300 500 26075 1650 1155 2805 23270
3 105 Sup Irfan 30000 10500 9000 1000 50500 3000 2,100 ?(a)? 45400
4 108 Sup Shweta 34000 11900 ?(b)? 1000 57100 3400 2,380 5780 51320
N
5 245 Sup Rajesh 15000 5250 3000 500 ?(c)? 1500 1,050 2550 21200
N
6 289 Sup Motilal 12500 4375 2500 500 19875 1250 875 2125 ?(d)?

Based on the information and transaction given in the spreadsheet, answer any three of the
following questions:
(a) Write the formula to calculate the total deduction of Irfan in cell K3.
(b) Give the formula to calculate the HRA of Shweta in cell F4.
(c) Write the formula to calculate the total earnings of Rajesh in cell H5.
(d) Give the formula to calculate the net salary of Motilal in cell L6. (Analysis)

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Accounts ISC-Class XII

VI: Very Long Answer Questions (10 Marks Each)

S.No. Questions

65. [Joint Stock Company Accounts (Issue of Shares)]

Zenith Ltd. invited applications for 1,00,000 Equity shares of ₹10 each to the public payable
as follows:
Application ₹3
Allotment ₹4
First and Final Call ₹ 3
Applications were received for 1,50,000 shares and pro rata allotment was made as under:
Applicants for 80,000 shares were allotted 60,000 shares on a pro-rata basis.
Applicants for 70,000 shares were allotted 40,000 shares on a pro-rata basis.
It was decided to utilise the excess application money towards allotment.

Maneesh, to whom 2,400 shares were allotted, out of the group applying for 80,000 shares did
not pay the allotment money. His shares were immediately forfeited after allotment. These
shares were reissued for ₹ 6 per share as ₹ 7 paid up.
Sunder who had applied for 1400 shares out of the group applying for 70000 shares, did not
pay the first and final call. His shares were also forfeited.
Out of the forfeited shares of Sunder, 600 shares were sold at ₹11 per share as fully paid.
Pass necessary journal entries to record the above transactions in the books of the
company.

(Understanding)

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Accounts ISC-Class XII

66. [Joint Stock Company Accounts (Issue of shares)]

Computer Ltd. issued 1,00,000 equity shares of ₹ 10 each at par. The issue was over subscribed
and the excess application money was refunded.
The company had called the application and allotment money till the date of Balance sheet.
The first and final call is yet to be made.

You are required to complete the ledger accounts and pass the journal entries.
Dr Equity Share Application A/c Cr
Date Particulars J/F Amt Date Particulars J/F amt

10/1/22 To Share 3,00,000 10/1/22 By Bank 3,60,000

Capital A/c

10/1/22 To Bank A/c 60,000

3,60,000 3,60,000

Dr Share Allotment A/c Cr

Date Particulars J/F Amt Date Particulars J/F Amt

1/3/22 To Share 3,00,000 1/3/22 By Bank A/c 2,98,500

Capital

1/3/22 By Calls in
Arrears A/c 1,500

3,00,000 3,00,000

Dr Calls in arrears A/c Cr

Date Particulars J/F Amt Date Particulars J/F Amt

____ ____________ _____ ____ ____________ _____

1,500 1,500

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Accounts ISC-Class XII

S.No. Questions

Dr Share Capital A/c Cr

Date Particulars J/F Amt Date Particulars J/F Amt

___ _________ ___ ___ __________ ____

___ _________ __

6,00,000 6,00,000

(Application)

67. [Joint Stock Company Accounts (Issue of Shares)]

Sargam Ltd. invited applications for 10,000 Equity shares of ₹ 10 each, payable as follows:
₹2 on Application
₹3 on Allotment
₹2 on First Call
Balance on Second & Final Call;
The shares were oversubscribed and all the excess applications received were rejected and
the amount duly refunded to the applicants.
There were a certain number of shares on which allotment and first call was not received.
All the shares on which both allotment and call money was in arrears, were forfeited, and
these shares were reissued immediately.
Final call is yet to be made.
An extract of the Cash Book of the company is given below:
Cash Book of Sargam Ltd. (Extract)
Date Receipts L.F. Amount Date Payments L.F. Amount
(₹) (₹)
To Equity Share By Equity Share
Application A/c 30,000 Application A/c 10,000
To Equity Share
Allotment A/c 28,500
To Equity Share
First Call A/c 18,400
To Equity Share
Capital A/c 3000

Pass journal entries to record the above transactions (including bank transactions) in the
books of Sargam Ltd. and prepare Calls in Arrears Account.
(Application)

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Accounts ISC-Class XII

ANSWER KEY

Q. Expected Answers
No

1. (b) Rancho retired and took the amount due to him from the firm in kind by way of Furniture
and the rest through cheque.

2. (b)₹ 40,000
Total capital of the new firm (including new partner) 2,70,000
Less Adjusted capital of old partners (200000 +30000) 2,30,000
40,000

3. 7,00,000 (400000+3,00,000)

4. (b) short term borrowings.

5. (d) To indicate the location of a cell within a spreadsheet.

6. (b) P and R

7. (b) The loan given by the partner to the firm is closed and transferred to the partner’s capital
account.

8. (d) Debenture Redemption Reserve and Debenture Redemption Investment both are not
required.

9. (a) P and R

10. (c) Data integrity and security

11. (c) Debit Realisation A/c ₹ 6,000; Credit Bank A/c ₹ 2,000; Credit Ronald A/c ₹ 4,000.

12. (d) Encash Debenture Redemption Investment of ₹ 15,000 on 31st March, 2024.

13. (b) ₹ 2,000

14. (b) Freezing panes

15. (c) 38.12 times

16. (c) 13:9:3

17. (a) Perform conditional calculations based on specified criteria.

18. (c) 1 month

19. (c) ₹ 1,20,000

ISC Competency-Focused Practice Questions 29

Accounts ISC-Class XII

Q. Expected Answers
No

20. (b) Interest accrued but not due ₹5000; interest accrued and due ₹7000.

21. (d) (50), (2.50)

Opening is ₹ 2,000
Closing is ₹ 1,950
Absolute change 1,950 less 2,000 = (50)
50
% change= 2,000×100 = 2.50

22. Cash paid to trade creditors ₹2,20,000, includes advance paid to trade creditors on 31st
March 2023 ₹16,000
Net credit purchases = 2,20,000+15,000-9,000 – 16,000 = 2,10,000
Average trade payable = (9,000+15,000)/2 = 12,000
TPTR = 2,10,000/12,000 = 17.5 times.

23. (a) Format, Layout, Label

24. (a) 2.5%

25. (c) A is true, but R is false.

26. (c) (A) is true, but (R) is false.

27. (d) A is false, but R is true.

28. (c) (A) is true, but (R) is false.

29. (a) Both A and R are true, and R is the correct explanation of A.

30. The current year Balance Sheet shows a decrease in debtors by ₹ 30,000 which means that
the company must have received ₹30,000 cash from the debtors. Hence, cash from operating
activities of the company will increase by ₹ 30,000.

31. Working capital turnover ratio

32. Shares were issued at Premium.

Calculation of number of Shares:

Amount of Premium (₹ 90,000- ₹ 72,000= ₹ 18,000)
₹ 72,000 100 %
₹ 18000 18000/72000 x100 = 25%
Therefore premium per share 100+25= ₹ 125
Number of shares issued – 90000/125 = 720 shares

33. Furniture

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Accounts ISC-Class XII

Q. Expected Answers
No

34. Cash from operating activities

Depreciation 25,000
Less: Gain on sale of machinery (7,500)
17,500

35. The foreign key is a field that matches the primary key column of another table, thereby
establishing a link between the tables.

36. The company issued debentures at a discount of ₹ 8 per debenture.

Common size Income Statement of Sia Ltd.
37.
for the year ended 31st March 2023

Particulars Note Current Year % of Revenue

no. Absolute from
amounts operations
II. Revenue from operations 4,00,000 100
II. Other Income 10,000 2.5
III. Total Revenue 4,10,000 102.5
38. Active Cell

39. Heading: Current Liabilities

Sub-Heading: Short term borrowings

40. 2%

Working Notes
Commission received in cash = ₹68
Discounted Price of Debentures received as commission = 178 x ₹94 =
₹16,732 Therefore, total commission = ₹68 + ₹16,732 = ₹16,800
Total price of the debenture underwritten = 8,000 x ₹105 = ₹8,40,000. Therefore
commission% = (₹16,800 x 100)/₹8,40,000 = 2%

41. ₹60,000

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Accounts ISC-Class XII

Q. Expected Answers
No

42. Journal
Date Particulars L.F. Amount Amount
(₹) (₹)
Archana’s Capital A/c... Dr. 2,000
Babita’s Capital A/c... Dr. 4,000
To Chitra’s Capital A/c 6,000
(Being share of goodwill transferred to the
retiring partner in the gaining ratio by the
remaining partners)

43. From funds marked for paying dividends to the shareholders. / From Surplus in Statement of
P/L.

44. Transfer to General Reserve, Provision for tax of the current year, interim dividend paid
during the year, proposed dividend of the previous year. [Any one or a combination of the
above items, amounting to ₹50,000 together].
Example: Profit for the year ₹1,00,000
+ transfer to general reserve ₹ 50,000
= Net Profit Before Tax ₹1,50,000

Or Profit for the year ₹1,00,000

+ transfer to general reserve ₹40,000
+ Provision for tax ₹10,000
= Net Profit Before Tax ₹1,50,000
Or
Profit for the year ₹1,00,000
+ transfer to general reserve ₹30,000
+ Interim dividend paid during the year ₹10,000
+ Provision for tax ₹10,000
= Net Profit Before Tax ₹1,50,000

45. Debt Equity Ratio= 0.59:1

Working notes:
𝐷𝑒𝑏𝑡 8% 𝐷𝑒𝑏𝑒𝑛𝑡𝑢𝑟𝑒𝑠+𝐵𝑎𝑛𝑘 𝐿𝑜𝑎𝑛
=
𝐸𝑞𝑢𝑖𝑡𝑦 𝑆ℎ𝑎𝑟𝑒 𝐶𝑎𝑝𝑖𝑡𝑎𝑙+𝑅𝑒𝑠𝑒𝑟𝑣𝑒𝑠/𝑆𝑢𝑟𝑝𝑙𝑢𝑠

18+8 26
=38+6 =44= 0.59:1
Or
26% 𝑜𝑓 10,00,000 2,60,000
= = 0.59:1
44% 𝑜𝑓 10,00,000 4,40,000

46. ₹23,000

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Accounts ISC-Class XII

Q. Expected Answers
No

47. (a) Old ratio - 32:24 i.e. 4:3

Sacrificing Ratio – 24: 8 i.e 3:1

(b) Loss, 56.000

(c) 2,40,000+1,80,000 = 4,20,000
4,20000 x1/4= 1,05,000
Journal
Date Particular L.F. Dr Cr
Om’s Current A/c Dr 1,05,000
To Ram’s Capital/Current A/c 78,750
To George’s Capital/Current A/c
(Being adjustment made for General 26250
Reserve)

48. (a) 50,000 x 100/10 = 5,00,000

5,00,000+(5,00,000 x5/100)
5,00,000+50,000 =5,50,000

(b) 70,000 x 100/10 = 7,00,000

7,00,000/100 = 7,000 debentures

(c)
Date Particulars Dr ( ₹) Cr ( ₹)
1 8% Debentures A/c Dr 7,00,000
Premium on Redemption of Debentures A/c
Dr. 35,000
To debenture holders A/c 7,35,000
(Being 7,000 debentures due to be redeemed at
a premium of 5%)

2 Debenture holders A/c Dr 7,35,000

To Bank A/c 7,35,000
(Being payment made to debenture holders)

ISC Competency-Focused Practice Questions 33

Accounts ISC-Class XII

Q. Expected Answers
No

49. Goodwill = Super Profit x No. of years’ purchase

₹ 2,02,500 = Super Profit x 3
Super Profit = ₹ 2,02,500 = ₹67,500 (a)
3
Super Profit = Average Profit – Normal Profit
₹67,500 = ₹ 1,80,000 – Normal Profit
Normal Profit = ₹ 1,80,000 – ₹67,500
= ₹ 1,12,500 (b)

₹ 1,12,500 (Normal Profit) = Capital Employed x 15

100

Capital Employed = ₹ 1,12,500 x 100 = ₹ 7,50,000 (c)

15

50. (a) New Profit sharing ratio: 12 : 6 : 7

(b)
Date Particulars l/f Dr. Cr.
Ahmed’s current A/c Dr 1,600
To Chris’s Capital A/c 1,600
(Being Journal entry passed for
adjustment of premium for
goodwill when the partner is unable
to get the premium in cash)
Working Note:
Balram’s Gift = 3x1 = 3
5 5 25
Balram’s New share = 3 - 3 = 12
5 25 25

Chris’s Sacrifice = 2 x 2 = 4
5 5 25

Chris’s New Share = 2 - 4 = 6

5 25 25

Ahmed’s share = 3 + 4 = 7
25 25

ISC Competency-Focused Practice Questions 34

Accounts ISC-Class XII

Q. Expected Answers
No

51. (a) The number of debentures redeemed by the company on 31st March 2022 was 1,000.
(b) Journal of Royal Blue Ltd.
Date Particulars l/f Debit (₹) Credit(₹)
31/03/2022 10% Debentures A/c Dr 1,00,000
To Debenture holders A/c 1,00,000
(Being Amount due to debenture holders)

31/03/2022 Debenture holders A/c Dr 1,00,000

To Bank A/c 1,00,000
(Being amount paid to debenture holders)

52. Contribution of Aadish : ₹ 35,000

Contribution of Pratham : ₹ 65,000

Working:
Capital according to new PSR : Aadish : 2,50,000 and Pratham : 1,00,000
Final adjusted capital of both partners:
Aadish 2,50,000 + 15,000 (past adjustment) = 2,65,000 and
Pratham 1,00,000 – 15000 (past adjustment) = 85,000

ISC Competency-Focused Practice Questions 35

Accounts ISC-Class XII

Q. Expected Answers
No

53. (a) Debenture Redemption Reserve Account

Date Particulars LF ₹ Date Particulars LF ₹
31.3.22 To General 30,000 1.4.21 By Balance 80,000
Reserve A/c b/d

31.3.22 To Balance c/d 50,000

80,000 80,000

(b) Debenture Redemption Investment Account

Date Particulars LF ₹ Date LF ₹
Particulars

1.4.22 To Balance b/d 45,000 31.3.23 By Bank 75,000

A/c

1.4.22 To Bank A/c 30,000

75,000 75,000

54. Journal
Date Particulars LF Debit (₹) Credit(₹)
John’s Capital A/c..
12,000
Dr.
Sunita’s Capital A/c.. Dr. 12,000
To Deepali’s Capital A/c 24,000
(Being share of profit of Deepali adjusted
through remaining partners’ capital a/c in the
gaining ratio )
John’s Capital A/c.. Dr. 5,000
Sunita’s Capital A/c.. Dr. 5,000
To Deepali’s Capital A/c 10,000
(Being share of goodwill of Deepali adjusted
through remaining partners’ capital a/c in the
gaining ratio )
John’s Capital A/c..
2,000
Dr.
Sunita’s Capital A/c.. Dr. 2,000
To Deepali’s Capital A/c 4,000

ISC Competency-Focused Practice Questions 36

Accounts ISC-Class XII

Q. Expected Answers
No
(Being Deepali’s interest on capital adjusted
through remaining partners’ capital a/c in the
gaining ratio )
Or
Interest on capital A/c… Dr. 4,000
To Deepali’s Capital A/c 4,000
(Being Deepali’s interest on capital allowed)
John’s Capital A/c.. Dr. 2,000
Sunita’s Capital A/c.. Dr. 2,000
To Interest on capital A/c 4,000
(Being Deepali’s interest on capital adjusted
through remaining partners’ capital a/c in the
gaining ratio )
Deepali’s Capital a/c … Dr. 2,38,000
To Deepali’s Loan A/c 2,38,000
(Being Deepali’s capital Balance transferred to
her loan A/c)
55. Journal of Pluto Ltd.
Date Particulars L.F. Amount Amount
(₹) (₹)
Bank A/c... 12,00,000
Dr. 12,00,00
To 8% Debenture Application & Allotment
A/c
(Being Application & Allotment money
received )
8% Debenture Application & Allot A/c.. 12,00,000
Dr. 50,000
Loss on issue of Debentures A/c 10,00,000
Dr. 2,00,000
To 8% Debentures A/c
To Securities Premium A/c 50,000
To Premium on Redemption of
Debentures A/c
(Being Application & Allotment money
transferred to Debentures account and
Securities Premium A/c )
Incorporation costs A/c… 4,00,000
Dr. 4,00,000
To Promoters
(Being amount due to promoters for
incorporation costs)

ISC Competency-Focused Practice Questions 37

Accounts ISC-Class XII

Q. Expected Answers
No
Promoters… 4,00,000
Dr. 1,00,000
Loss on issue of Debentures A/c 5,00,000
Dr.
To 8% Debentures A/c
(Being Debentures issued to promoters)
Securities Premium … 2,00,000
Dr. 3,50,000
Statement of P/L …. 1,50,000
Dr. 4,00,000
To Loss on issue of debentures A/c
To Incorporation costs A/c
(Being Incorporation costs and Loss on issue
of Debentures account closed)

56. (a) Debenture Holders A/c

Date Particulars ₹ Date Particulars ₹
31.3.24 To Bank A/c 4,20,000 31.3.24 By 10% Debentures A/c 4,00,000
31.3.24 By Premium on
Redemption of 20,000
Debentures A/c
4,20,000 4,20,000
(b) Debenture Redemption Reserve A/c
Date Particulars ₹ Date Particulars ₹
31.3.24 To General 40,000 31.3.23 By Balance b/d 70,000
Reserve A/c
31.3.24 To Balance c/d 80,000 31.3.24 By Statement of P/L 50,000
A/c
1,20,000 1,20,000

ISC Competency-Focused Practice Questions 38

Accounts ISC-Class XII

Q. Expected Answers
No

57. Common Size Balance Sheet of Ariel Ltd. as at 31.03.2024.

Particulars As at % of
31.03.2024 (₹) Balance
Sheet
Total
Equity and Liabilities
Share Capital 3,00,000 50
Reserves / Surplus 50,000 8.33
Long Term Borrowings 1,00,000 16.67
Current Liabilities 1,50,000 25
Total 6,00,000 100
Assets
Non-Current Assets
Property Plant and Equipment and Intangible Assets: 4,00,000 66.67
Current Assets 2,00,000 33.33
Total 6,00,000 100
58. (a) SUM- It calculates the sum/ total of the values in a specified column.
(b) MAX- It retrieves or identifies the maximum value of a specified column.
(c) COUNT- It returns the number of rows that matches a specified criterion. It allows the
user to count all rows or only some rows of the table that match with a specified condition.

ISC Competency-Focused Practice Questions 39

Accounts ISC-Class XII

Q. Expected Answers
No
Balancee Sheet of Royal Ltd.
59.
As at 31st March, 2023
Particulars Note no. ₹
I. EQUITY AND LIABILITIES
1. Shareholder’s Funds
(a) Share Capital 1 20,73,500
(b) Reserves & Surplus 2 2,49,500

Notes to Accounts
Share Capital ₹
Authorized Capital
400,000 equity shares of ₹ 10 each
Issued Capital 4,0,00,000
2,57,500 equity shares of ₹ 10 each
(Out of the above 5,000 Equity shares have been issued to 25,75,000
promoters and 2,500 Equity shares for purchase of machinery for
consideration other than cash pursuant to a contract)
Subscribed Capital:
Subscribed and fully paid up :
7,500 Equity shares of ₹ 10 each
(5,000 Equity shares have been issued to promoters and 2,500
Equity shares for purchase of machinery for consideration other
than cash pursuant to a contract) 75,000
Subscribed but not fully paid up :
2,49,500 Equity shares of ₹ 10 each, ₹8 paid-up
19,96,000
Shares Forfeited Account (500 x ₹5)
2,500
20,73,500

Reserves & Surplus

Securities Premium Reserve
2,49,500

ISC Competency-Focused Practice Questions 40

Accounts ISC-Class XII

Q. Expected Answers
No

60. Balance Sheet as at 1st April, 2023

Liabilities Amount Assets Amount

(₹) (₹)

Sundry creditors 8,000 Plant 36,000

Bills payable 2,000 24,000

furnit
Capitals A/cs: (balancing figure ure 20,000
1,00,000
Pawan - 60,000 (1,00,000 x 3/5) Stock 18,000
Raj - 40,000 (1,00,000 x 2/5)
12,000
Debto
rs

Cash at
bank

Total Total
1,10,000 1,10,000

61. Dr Partners Capital A/c Cr

Particulars Dia Zia Tia Particulars Dia Zia Tia
To 2,000 2,000 4,000 By Balance 3,00,000 3,00,000 4,00,000
Goodwill b/d
To 26,000 26,000 52,000 By 13,000 13,000 26,000
Deferred Reserves
Advt.Exp.
To Tia’s 20,000 20,000 By Dia’s 20,000
Capital A/c capital A/c
To 4,52,000 By Zia’s 20,000
Executor’s Capital A/c
Loan A/c
To balance 2,65,000 2,65,000 By P&L 42,000
c/d Suspense
A/c

3,13,000 3,13,000 5,08,000 3,13,000 3,13,000 5,08,000

ISC Competency-Focused Practice Questions 41

Accounts ISC-Class XII
BALANCE SHEET OF RATNAKAR LTD
62.
As at 31st March 2023
Particulars Note ₹
No.
I. EQUITY AND LIABILITIES
1. Shareholder Funds
1 10,74,000
(a) Share Capital
2 1,38,600
(b) Reserves and Surplus

2. Non-Current Liabilities
(a) Long term borrowing (7% Debentures)
5,00,000
Total
17,12,600

Notes to Accounts
1. Share Capital ₹
Authorised Capital
200,000 Equity Shares of ₹ 10 each 20,00,000
Issued Capital
1,10,000 Equity Shares of ₹ 10 each 11,00,000
Subscribed Capital:
Subscribed and fully paid up :
1,06,200 Equity Shares of ₹ 10 each 10,62,000
Subscribed but not fully paid up :
1,000 Equity Shares of ₹ 10 each ₹10,000
Less: Calls in arrear (1000 x₹2) ₹ 2,000
8,000
Shares Forfeited Account (800 x ₹5)
4,000

10,74,000
2. Reserves & Surplus
Securities Premium
On non-forfeited shares ( 76,000 x₹2) = ₹ 1,52,000
On forfeited shares (2,000 x ₹1) = ₹ 4,000
On reissued shares ( 1,200 x ₹3) = ₹ 3,600

1,57,600
(-) Discount on issue of Debentures 25,000
Capital Reserve (1,200 x5)
1,32,600

6,000

1,38,600

63. (a) A split form gives two views of the data at the same time — a Form view and a
Datasheet view.
ISC Competency-Focused Practice Questions 42
Accounts ISC-Class XII

Q. Expected Answers
No

(b) A field in a record that holds unique data. It’s a field which identifies/separates that
record from all the other records in the file or database.
Examples: Account number, product code, customer name.
(c) Fields are columns and actual data are the rows in a Database table.

64. (a) = [I3+J3]

(b) = [.3*D4] or =D4*(30/100) or = D4*30%
(c) =[D5+E5+F5+G5] or =SUM(D5:G5)
(d) =[H6-K6] or =SUM(D6:G6) – SUM(I6+J6)

65. Journal
Particulars Dr ( ₹) Cr ( ₹)
1 Bank A/c Dr 4,50,000
To Equity Share Application A/c 4,50,000
(Being Application money received on 1,50,000
shares)

2 Equity Share Application A/c Dr 4,50,000

To Equity Share Capital A/c 3,00,000
To Equity Share Allotment A/c 1,50,000
(Being Application money adjusted )

3 Equity Share Allotment A/c Dr 4,00,000

To Equity Share Capital A/c 4,00,000
(Being Allotment money due on 1,00,000 shares
@ 4 per share)

4 Bank A/c Dr 2,42,800

Calls-in-Arrears A/c Dr 7,200
To Equity Share Allotment A/c 2,50,000
(Being Allotment money received )

5 Equity Share Capital A/c Dr 16,800

To Calls-in-Arrears A/c 7,200
To Share Forfeiture A/c 9,600
(Being 2,400 shares forfeited for non-payment of
allotment money)

6 Bank A/c (2400 x6) Dr 14400

Share Forfeiture A/c (2400 x 1) Dr 2,400
To Share Capital A/c (2400 x 7) 16800
(Being 2400 Shares reissued at ₹ 6 per share as
₹7 paid up)

7 Equity Share First and Final Call A/c Dr 3,00,000

ISC Competency-Focused Practice Questions 43
Accounts ISC-Class XII

Q. Expected Answers
No
To Equity Share Capital A/c 3,00,000
(Being First and Final Call money due on
1,00,000 shares)

8 Bank A/c (99200 x 3) Dr 2,97,600

Calls-in-Arrears A/c (800 x 3) Dr 2,400
To Equity Share First and Final Call A/c 3,00,000
(Being First and Final Call money received on
99200 shares and money not received transferred
to Calls in Arrears A/c)

9 Equity Share Capital A/c (800 x10) Dr 8,000

To Calls-in-Arrears A/c(800x3) 2,400
To Share Forfeiture A/c(800 x 7) 5,600
(Being 800 shares forfeited for non-payment of
final call money )

10 Bank A/c (600 x 11) Dr 6,600

To Equity Shares Capital A/c (600 x 10) 6,000
To Security Premium A/c (600 x1) 600
( Being 600 shares reissued at 11 per share as
fully paid)

11 Shares Forfeiture A/c (7200 +4200) Dr 11,400

To Capital Reserve A/c 11,400
(Being net gain on forfeited shares transferred to
capital reserve )
Working Note :
1. Calculation of the amount due but not paid on allotment by Maneesh :
Number of shares applied by Maneesh = 2,400 x 80,000 = 3,200 Shares
60,000

Application money received on Shares Applied ( 3,200 x ₹3 ) 9,600

Less: Application money due on Allotted Shares ( 2,400 x ₹3 ) (7,200)
Excess Application money to be adjusted on allotment 2,400
Amount due on allotment (2,400 x ₹4 ) 9,600
Less: Application money to be adjusted (2,400)
Amount due but not paid on allotment 7,200

2. Allotment money received later: ₹

Allotment money due 4,00,000
Less: Application money to be adjusted on allotment (1,50,000)
2,50,000
Less: Amount due but not paid on allotment by Maneesh (7,200)
2,42,800
3. Sunder applied for = 1,400 shares
ISC Competency-Focused Practice Questions 44
Accounts ISC-Class XII

Q. Expected Answers
No
Shares allotted to Sunder = 1,400 x 40,000 = 800 shares
70,000
Amount not paid on First and Final Call = 800 x ₹3 = ₹2,400
Share Forfeiture
4. For 2,400 shares : 9,600
Used for reissue : (2,400)
Net profit on reissue transferred to Capital Reserve: 7,200

5. For 800 shares : 5,600

For 600 shares : (5600 x 6/8) 4,200
Total Capital Reserve : 7,200+4,200= 11,400

ISC Competency-Focused Practice Questions 45

Accounts ISC-Class XII
Dr Equity Share Application A/c Cr
66.
Date Particulars J/F Amt Date Particulars J/F Amt

10/1/22 To Share 3,00,000 10/1/22 By Bank 3,60,000

Capital A/c

10/1/22 To Bank A/c

3,60,000 3,60,000
Dr Share Allotment A/c Cr
Date Particulars J/F Amt Date Particulars J/F Amt

1/3/22 To Share 3,00,000 1/3/22 By Bank A/c 2,98,500

Capital A/c

1/3/22 By Calls in
Arrears A/c 1,500

3,00,000 3,00,000

Dr Calls in arrears A/c Cr

Date Particulars J/F Amt Date Particulars J/F Amt

1/3/22 To Equity Share 1,500 31/3/22 By Balance c/d 1,500

Allotment A/c

1,500 1,500
Dr Share Capital A/c Cr
Date Particulars J/F Amt Date Particulars J/F Amt

31/03/22 To 6,00,000 10/01/22 By Equity Share 3,00,000

Balance Application A/c
c/d

01/03/22 By Equity Share 3,00,000

Allotment A/c

6,00,000 6,00,000

ISC Competency-Focused Practice Questions 46

Accounts ISC-Class XII

Q. Expected Answers
No
Journal of Computer Ltd.
Date Particulars L/f Debit Credit
BankA/c Dr. 3,60,000
To Equity Share Application A/c 3,60,000
(Being Application money received on
1,20,000 Equity Shares)

Equity Share Application A/c Dr. 3,60,000

To Equity Share Capital A/c 3,00,000
To Bank A/c 60,000
(Being Application money of ₹ 3 Per share on
1,00,000 Equity Shares transferred to the
Capital A/c and the balance amount refunded)

Equity Share Allotment A/c Dr. 3,00,000

To Equity share capital A/c 3,00,000
(Being allotment money of ₹ 3 due on
1,00,000 Equity shares)

Bank A/c Dr. 2,98,500

Calls in Arrears A/c Dr. 1,500
To Equity Share Allotment A/c 3,00,000
(Being Calls in arrears recorded on 500 Shares
and the remaining amount received)

ISC Competency-Focused Practice Questions 47

Accounts ISC-Class XII

Q. Expected Answers
No

67. Journal of Sargam Ltd.

Date Particulars L.F. Amount Amount
(₹) (₹)
Bank A/c….. Dr. 30,000
To Equity Share Application A/c 30,000
(Being application money received)
Equity Share Application A/c….. Dr. 30,000
To Equity Share Capital A/c 20,000
To Bank A/c 10,000
(Being application money transferred to share
capital and excess money refunded)
Equity Share Allotment A/c….. Dr. 30,000
To Equity Share Capital A/c 30,000
(Being share allotment due )
Bank A/c….. Dr. 28,500
Calls in Arrears A/c…. Dr. 1,500
To Equity Share Allotment A/c 30,000
(Being application money received)
Equity Share First call A/c….. Dr. 20,000
To Equity Share Capital A/c 20,000
(Being share first call made due )
Bank A/c….. Dr. 18,400
Calls in Arrears A/c…. Dr. 1,600
To Equity Share First call A/c 20,000
(Being first call money received)
Equity Share Capital A/c….. Dr. 3500
To Share Forfeiture A/c 1000
To Calls in Arrears A/c 2500
(Being 500 shares on which both allot. and first
call was not received forfeited)
Bank A/c Dr. 3000
Share Forfeiture A/c Dr. 500
To Equity Share Capital A/c 3500
(Being 500 shares reissued)
Share forfeiture A/c Dr. 500
To Capital Reserve A/c 500
(Being net gain/profit on reissued shares
transferred to capital reserve)

Calls in Arrears account

Particulars Amount (₹) Particulars Amount (₹)
To Share Allotment A/c 1,500 By Equity Share Capital A/c 2,500
To Share First Call A/c 1,600 By Balance c/d 600
3,100 3,100

ISC Competency-Focused Practice Questions 48