Get ready for Accountancy with these CBSE Class 12 MCQs, organized chapter by chapter for 2026-27. They help you master the current exam pattern, and build sharper problem-solving skills.
What Class 12 Students Gain From Accountancy MCQs
- Every Accountancy MCQ comes with a correct, explained answer - not just the right option.
- Matched closely to the 2026 CBSE Accountancy textbook and current guidelines.
- Includes Class 12 Assertion-Reasoning, Case-based, and Fill-in-the-blanks formats, all built for Accountancy.
- Each Accountancy chapter has its own set, so you can check your understanding topic by topic.
Class 12 Accountancy Chapter-wise MCQ Question Bank
Find the newest Accountancy question sets for 2026-27 below. A good way to check your own progress, and catch weak areas early, before exams.
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Quick Practice - Try a Few Questions First Pick a chapter below, answer a few questions instantly, then jump to the full set list for more. Q1.In the absence of a partnership deed, partners share profits and losses in the ratio of: Answer: (b) Equal ratio. In the absence of a deed, the Indian Partnership Act, 1932 applies by default, and it requires profits and losses to be shared equally regardless of capital or effort put in.
Q2.Interest on partners' capital, in the absence of a partnership deed, is: Answer: (b) Not allowed. Under the Act's default provisions, no interest on capital is given unless the partnership deed specifically provides for it.
Q3.Interest on a partner's loan to the firm, in the absence of an agreement, is payable at: Answer: (a) 6% per annum. The Act sets this default rate specifically for partner loans, which is different from capital, where no interest applies by default.
Q4.Under the fixed capital method, partners' drawings, interest, salary, and share of profit are recorded in the: Answer: (b) Current Account. When capitals are kept fixed, capital accounts stay unchanged, and all such adjustments flow through partners' current accounts instead.
Q5.A partnership deed usually does NOT specify: Answer: (c) Government tax rates. A partnership deed governs the internal agreement between partners; tax rates are set by law, not by mutual agreement between partners.
Q1.On admission of a new partner, the profit-sharing ratio of the old partners: Answer: (b) Changes as per the new agreement. Admission requires a fresh agreement on how profits will be shared going forward, since the incoming partner acquires a share from the existing partners.
Q2.The ratio in which old partners give up their share of profit in favour of a new partner is called: Answer: (b) Sacrificing ratio. This measures how much of their old share each existing partner gives up to accommodate the incoming partner.
Q3.Goodwill brought in by a new partner in cash is shared by the old partners in their: Answer: (b) Sacrificing ratio. Goodwill specifically compensates old partners for the share of future profits they are giving up to the new partner.
Q4.At the time of admission, an increase in the value of an asset is: Answer: (b) Credited to the Revaluation Account. A Revaluation Account records such adjustments, and any resulting profit is shared among the old partners in their old profit-sharing ratio.
Q5.A new partner's capital contribution is usually determined based on: Answer: (a) Share in profits and adjusted net worth. The new partner's capital is typically calculated in proportion to the share of profit they are being given, based on the firm's revalued net worth.
Q1.The ratio in which the remaining partners acquire a retiring or deceased partner's share is called: Answer: (b) Gaining ratio. This shows how much extra share each remaining partner gains as a result of the other partner leaving the firm.
Q2.On retirement of a partner, goodwill is generally adjusted through the capital accounts of: Answer: (b) Remaining partners, in their gaining ratio. Since remaining partners benefit from the retiring partner's share, they compensate that partner through their own capital accounts, in proportion to what they gained.
Q3.The amount finally due to a deceased partner is transferred to: Answer: (b) Their Executor's Account. Since the partner has passed away, amounts owed become payable to their legal representative, so the balance moves from the capital account to an executor's account.
Q4.Profit or loss up to the date of a partner's death is generally estimated using: Answer: (a) Time basis or turnover basis. A full year's accounts aren't available up to the exact date of death, so profit is estimated proportionally using either time elapsed or sales achieved in that period.
Q5.On retirement, the retiring partner's share of goodwill is credited to their capital account and debited to: Answer: (b) Remaining partners' capital accounts, in gaining ratio. This follows the same compensation logic as goodwill treatment elsewhere - funded by whoever gains from the retiring partner's exit.
Q1.Dissolution of a partnership firm means: Answer: (b) Complete closure of the firm's business. Unlike reconstitution, which changes the agreement while keeping the firm running, dissolution ends the firm's existence entirely.
Q2.On dissolution, which account is opened to close all asset and liability accounts? Answer: (b) Realisation Account. This account records the sale of assets and the settlement of liabilities as the firm winds up.
Q3.An asset not taken over by any partner and not specifically otherwise accounted for is generally: Answer: (c) Sold, with proceeds credited to Realisation Account. All amounts realised from selling the firm's assets flow through the Realisation Account.
Q4.Unrecorded liabilities discovered at the time of dissolution are: Answer: (b) Debited to Realisation Account when paid. Even liabilities not appearing in the books must still be settled, and their payment is recorded through the Realisation Account.
Q5.On dissolution, the firm's books are finally closed by settling: Answer: (b) Partners' capital accounts as per final balances. The last step is paying out to (or collecting from) partners based on what remains in their capital accounts after assets are realised and liabilities settled.
Q1.The portion of subscribed capital not yet called up by the company is known as: Answer: (b) Uncalled capital. This is the part of subscribed capital that shareholders haven't yet been asked to pay.
Q2.When shares are issued at a price higher than their face value, the excess is credited to: Answer: (b) Securities Premium Account. The premium amount is kept separate from share capital and has restricted uses defined by the Companies Act.
Q3.Forfeiture of shares means: Answer: (b) Cancellation of shares due to non-payment. When a shareholder fails to pay a call, the company can cancel - forfeit - those shares as per its Articles of Association.
Q4.On forfeiture, the amount already received on those shares is transferred to: Answer: (b) Forfeited Shares Account. This temporarily holds the amount received, before it's later moved to Capital Reserve once the shares are reissued.
Q5.Shares can be issued for consideration other than cash, for example: Answer: (b) To promoters or for assets purchased. Companies can allot shares as payment for assets acquired, or to promoters for services rendered, without cash actually changing hands.
Q1.A debenture represents: Answer: (b) A loan to the company. Debenture holders are creditors of the company, not owners, and are entitled to fixed interest regardless of whether the company makes a profit.
Q2.Interest on debentures is: Answer: (b) A charge against profit. Unlike dividends, debenture interest must be paid whether or not the company earns a profit, since it's a legal obligation to creditors.
Q3.Debentures issued as collateral security are shown in the Balance Sheet: Answer: (b) As a note, under Contingent Liabilities. Since the primary loan remains the real liability, collateral debentures are just disclosed as additional security, not double-counted as a separate liability.
Q4.Redemption of debentures means: Answer: (b) Repayment of the debenture amount. Redemption is when the company repays the borrowed amount to debenture holders as per the terms of issue.
Q5.A Debenture Redemption Reserve is created mainly to ensure: Answer: (a) Funds set aside for redemption. This reserve protects debenture holders by ensuring the company doesn't distribute away all its profits before repayment falls due.
Q1.As per Schedule III of the Companies Act, the Balance Sheet of a company is presented in: Answer: (b) Vertical form. Schedule III mandates the vertical format for company financial statements, unlike the traditional T-format used for sole proprietorships or partnerships.
Q2.Which of these is classified as a Current Asset under Schedule III? Answer: (b) Trade Receivables. Amounts expected to be realised within 12 months (or the operating cycle) are classified as current assets, unlike fixed or long-term items like land or goodwill.
Q3."Reserves and Surplus" appears under which major head in a company's Balance Sheet? Answer: (c) Shareholders' Funds. Reserves and surplus belong to shareholders and form part of the equity section, alongside share capital.
Q4.Financial statements primarily help users to: Answer: (a) Assess financial position and performance. That's the core purpose of financial statements, serving investors, creditors, and other stakeholders in decision-making.
Q5.Contingent liabilities are shown in a company's financial statements: Answer: (a) As a note, not included in the total. Since they are only possible obligations depending on a future event, they're disclosed for information but not included in the liability total.
Q1.Comparative statements show financial data of: Answer: (b) Two or more years, side by side. This allows a direct comparison of changes in figures across accounting periods.
Q2.Common-size statements express each item as a percentage of: Answer: (b) A common base. Expressing items as a percentage of a common base makes it possible to compare companies of different sizes on a relative footing.
Q3.Which of these is a genuine limitation of financial statement analysis? Answer: (d) All of these. Financial analysis carries several inherent limitations at once - reliance on past data, ignoring non-financial factors, and sensitivity to accounting choices.
Q4.Trend analysis is mainly useful for: Answer: (a) Studying direction of change over years. It helps identify whether a company's performance is improving, declining, or holding steady over time.
Q5.Vertical analysis of financial statements is also known as: Answer: (b) Common-size analysis. Both terms refer to expressing each line item as a percentage of a base figure within the same statement.
Q1.The Current Ratio is calculated as: Answer: (a) Current Assets ÷ Current Liabilities. This measures a firm's short-term ability to pay off its immediate obligations.
Q2.The ideal Current Ratio is generally considered to be: Answer: (b) 2:1. This is the traditionally accepted benchmark, suggesting adequate short-term liquidity without excessive idle current assets.
Q3.The Debt-Equity Ratio measures: Answer: (a) Proportion of debt to equity. It's a key solvency ratio, showing how much of the company is financed by borrowed funds versus owners' funds.
Q4.Gross Profit Ratio is calculated as: Answer: (a) Gross Profit ÷ Net Sales × 100. This shows what percentage of revenue remains after covering the direct cost of goods sold.
Q5.The Inventory Turnover Ratio indicates: Answer: (a) Efficiency of converting inventory into sales. A higher ratio generally means inventory is being sold and replenished more quickly.
Q1.A Cash Flow Statement classifies cash flows into: Answer: (a) Operating, Investing, and Financing. This three-way classification, as per AS-3, helps users understand where cash came from and how it was used.
Q2.Purchase of fixed assets is classified under which activity in the Cash Flow Statement? Answer: (b) Investing Activities. Cash flows related to acquiring or disposing of long-term assets fall under investing activities.
Q3.Issue of equity shares for cash is classified under: Answer: (c) Financing Activities. Cash flows relating to changes in the company's capital structure - issuing shares or debentures, or repaying loans - fall under financing activities.
Q4.Under the indirect method, the Cash Flow Statement starts with: Answer: (b) Net Profit before Tax and Extraordinary Items. This figure is then adjusted for non-cash items and changes in working capital to arrive at cash from operations.
Q5.Depreciation is added back to Net Profit while calculating cash from operations because: Answer: (b) It's a non-cash expense. Depreciation was deducted in arriving at net profit but involves no actual cash outflow, so it must be added back to find real cash generated.
Practice questions for this section are coming soon.
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| Chapter 2 Admission Of A Partner MCQs Set 01 |
| Chapter 2 Admission Of A Partner MCQs Set 02 |
| Chapter 2 Admission Of A Partner MCQs Set 03 |
| Chapter 2 Admission Of A Partner MCQs Set 04 |
| Chapter 2 Admission Of A Partner MCQs Set 05 |
| Chapter 2 Admission Of A Partner MCQs |
| Chapter 2 Reconstitution Of Firm MCQs |
| Chapter 3 Retirement or Death of a Partner MCQs Set 01 |
| Chapter 3 Retirement or Death of a Partner MCQs Set 02 |
| Chapter 3 Retirement or Death of a Partner MCQs Set 03 |
| Chapter 3 Retirement or Death of a Partner MCQs Set 04 |
| Chapter 2 Issue Of Debentures MCQs |
| Chapter 2 Issue Of Debentures MCQs Set 02 |
| Chapter 2 Issue Of Debentures MCQs Set 03 |
| Chapter 2 Redemption Of Debentures MCQs Set 01 |
| Chapter 2 Redemption Of Debentures MCQs Set 02 |
Free study material for Accountancy
FAQs
For the 2026-27 session, MCQs and objective-type questions carry around 20% weightage. CBSE has introduced 30% competency based questions as MCQs and they are important part of the Class 12 Accountancy paper.
You can access the latest chapter-wise MCQs for Class 12 Accountancy for free from StudiesToday.com. All questions are based on the latest syllabus and current academic year.
Yes, our Accountancy practice bank includes the new pattern of Assertion Reasoning and Case Study based MCQs. They have been designed to test the analytical skills of Class 12 students.
Solving Class 12 Accountancy MCQs regularly improves speed and accuracy as these are objective questions can get you 100% marks if your understanding of the topic is clear.
Yes, all Class 12 Accountancy MCQs and answers are accessible on any device at your convenience.
No, all Accountancy Multiple Choice Questions (MCQs), practice papers, and solutions for Class 12 are available for free for students to get more marks school exams.