CBSE Class 12 Accountancy Sure Shot Questions Worksheet Set 02

CBSE Class 12 Accountancy Sure Shot Questions (2). Students can download these worksheets and practice them. This will help them to get better marks in examinations. Also refer to other worksheets for the same chapter and other subjects too. Use them for better understanding of the subjects.

Please click the link below to download CBSE Class 12 Accountancy Sure Shot Questions (2)

1 Marks Questions

Question. How would you show the following two items in a company’s Balance Sheet as at 31st March, 2015 as per the requirement of Schedule VI: General Reserve(Since 31st March, 2014) Rs. 3,00,000, Statement of Profit and Loss(Debit Balance) for 2014-15 Rs. 2,00,000.
Answer: Balance Sheet as at 31st March, 2015

Notes to Accounts:

Question. Under Which main headings and sub-headings of Equity and Liabilities of the balance sheet as per the Revised Schedule III of a company will you classify the following items: Proposed dividend, Fixed Deposit from Public.
Answer:

Question. State any two items which are shown under the head ‘Non Current Investment’ in a company balance sheet.
Answer: (i) Government Securities.
(ii) Sinking Fund Investment.

Question. How is analysis of Financial statements suffered from the limitation of window dressing ?
Answer: Analysis of financial statements is affected from the limitation of window dressing as companies hide Some vital information or show items at incorrect value to portray better profitability and financial Position of the business, for example the company may overvalue closing stock to show higher profits.

Question. What is the interest of Shareholders in the analysis of Financial Statements?
Answer: (i) They want to judge the present and future earning capacity of the business.
(ii) They want to judge the safety of their investment.

Question. Name two tools of Financial Analysis?
Answer: (i) Comparative Financial Statements.
(ii) Ratio Analysis etc.

Question. What is Horizontal Analysis?
Answer: The analysis which is made to review and compare the financial statements of two or more then two Years is called Horizontal Analysis.

Question. Give the example of Horizontal Analysis.
Answer: Comparative Financial Statement.

Questions 03 Marks

Question. Give the Main Heading and Sub- Heading of Equity and Liabilities of the Balance sheet of a company as per the Revised Schedule III of the companies Act, 2013.
Answer:
EQUITY AND LIABILITIES

• Shareholders’ Funds
  • Share Capital
  • Reserves and Surplus
  • Money received against share warrants
• Share Application Money Pending Allotment
• Non-Current Liabilities
  • Long-term borrowings
  • Deferred tax liabilities (Net)
  • Other Long-term Liabilities
  • Long-term provisions
• Current Liabilities
  • Short-term borrowings
  • Trade payables
  • Other current liabilities
  • Short-term provisions

Question. Give the Main Heading and Sub- Heading of Assets of the Balance sheet of a company as per the Revised Schedule III of the companies Act, 2013.
Answer:
ASSETS

• Non-Current Assets
  • Fixed Assets
    • Tangible Assets
    • Intangible assets
    • Capital work-in progress
    • Intangible assets under development
  • Non-current investments
  • Deferred tax assets (net)
  • Long-term loans and advances
  • Other non-current assets
• Current Assets
  • Current investments
  • Inventories
  • Trade receivables
  • Cash and cash equivalents
  • Short-term loans and advances
  • Other current assets

Question. Rearrange the following items under assets according to Revised or New Schedule III:
Livestock
Loose Tools.
Goodwill
Trademarks
Bills Receivable
Debtors
Land
Leasehold
Stock-in-Trade
Stores and Spare Parts
Vehicles
Cash at Bank
Work in Progress(Machinery)
Interest accrued on Investment
Furniture
Advance to Subsidiaries
Cash in Hand
Plant
Deposits with electricity supply company.
Answer:

• Fixed Assets (Tangible): Livestock, Land, Leasehold, furniture, vehicles and plant
• Capital Work-in-progress: Work in progress (Machinery)
• Fixed Assets (Intangible): Goodwill and Trademarks
• Inventories: Loose Tools, Stock-in-Trade, Stores and Spare Parts.
• Trade Receivables: Bill Receivables, Debtors
• Cash and Cash Equivalents: Cash at Bank, Cash in Hand
• Long term Loans and Advances: Advance to Subsidiaries, Deposits with Electricity Supply Company.
• Other Current Assets: Interest Accrued on Investments.

Question. List any three items that can be shown as contingent Liabilities in a company’s Balance sheet.
Answer:
(i) Claims against the Company not acknowledged as debts.
(ii) Uncalled Liability on partly paid shares.
(iii) Arrears of Dividend on Cumulative preference shares.

Question. Under which head the following items of a financial company will be shown:
Dividend received
Interest earned
Profit on sale of fixed assets
Profit on sale of investment
Answer:

• Revenue from operation: dividend received, interest earned and profit on sale of investment
• Other incomes: profit on sale of fixed assets.

Questions 04 Marks

Question. Mention the sub-headings of share capital of a company.
Answer: i) share capital, ii) Reserves and surplus, iii) money received against share warrants.

Question. Prepare Comparative and Common Size income statement from the following information for the year’s ended march 31, 2008 and 2009.

Answer:
Comparative Income Statement:

Common Size Income Statement:

Question. From the following data, prepare a Statement of Profit and Loss in Common Size Form.

Answer:

Question. From the following data, prepare a Comparative statements

Answer:

Question. From the following data, prepare a comparative statements

Answer:

Question. From the following data, prepare a comparative balance sheet

Answer:

Question. From the following data, prepare a comparative balance sheet

Answer:

6 Marks Questions

Question. Enumerate the heading which are shown under the heading "non current assets" in balance sheet
Answer:
II. ASSETS
Non-Current Assets

• Fixed Assets
  • (a) Tangible assets
  • (b) Intangible assets
  • (c) Capital work in progress
  • Intangible asset under development
• Non current investment
• Deferred tax assets(net)
• Long term loans and advances
• Other non current assets

Question. Under what major and sub heading will you classify following items; (i)securities premium reserve,ii)stock of work in progress,iii) provision for tax,iv)mortgage loan,v) patents,vi),investments,vii)general reserve,viii)bills receivables.
Answer:

Question. Under what major and sub heading will you classify following items; i) unclaimed dividend,ii)loans repayable on demand,iii)sinking fund,iv)tax reserve,v) interest on calls in advance, vi) mining rights,vii) vehicles,viii)encashment of employees earned leave payable on retirement.
Answer:

Question. Under what major and sub heading will you classify following items; 1.)bills payables,2.debentures,3)interest accrued on investment,4)shares of XYZ Ltd.,5) shares options outstanding account,6) short term loans.
Answer:

Question. Mention any four items under the sub heading current assets and any four items under the sub heading current liabilities as per the provisions of schedule III,Part I of Companies Act,2013
Answer:
Current assets:
i) Current invts, ii) inventories, iii) trade receivables, iv) cash and cash equivalents
Current liabilities:
i) short term borrowings, ii) trade payables, iii) other current liabilities, iv) short term provisions

Question. Under what major and sub heading will you classify following items: i)goodwill, ii)preliminary expenses, iii)proposed dividend, iv)subsidy reserves, v)provision for doubtful debts, vi) accrued incomes
Answer:

Question. From the following data, prepare a COMPARATIVE statement

Additional information:
Other expenses include Provision for tax: Year I: 30000, Year II: 35000.

Answer:

Note :other expenses are net of provision for tax.

Question. Under which major headings the following items will be presented in the balance sheet of a company as per Schedule VI Part I of the Companies Act, 1956?
(a) Loans provided repayable on demand
(b) Goodwill
(c) Copyrights
(d) Loose tools
(e) Cheques
(f) General Reserve
(g) Stock of finished goods and
(h) 9% debentures repayable after three years
Answer:

Question. (i.)Quick ratio is \(1:8\), Current Assets ₹80,000, Current liabilities ₹30,000. Calculate the value of inventory.
(ii.) A company had Current assets of ₹4,00,000 and Current liabilities of ₹1,00,000. Afterwards it purchased goods for ₹50,000 on credit. Calculate the Current ratio after the purchase.
Answer:
(i.) ₹76,250
(ii.) \(3:1\)

Question. From the following details, calculate the liquidity ratios and comment on the short term financial position of the company:
Closing inventory: ₹2,00,000
Trade Receivables: ₹1,08,000 (Less: Prov. For DD -₹1,800): ₹1,00,000
Cash: ₹30,000
Marketable securities: ₹20,000
Income Tax paid in advance: ₹10,000
Share Issue Expenses: ₹15,000
Liab. For Current tax: ₹20,000
Liab. For future tax: ₹30,000
Trade Payables: ₹34,000
Outstanding salaries: ₹5,000
Bank Overdraft: ₹25,000
Dividends Payable: ₹36,000
Answer:
Current ratio = \(3:1\)
Quick ratio = \(1.25:1\)
Comments: The short term financial position of the company is sound because its current ratio is \(3:1\), which is more than the ideal ratio of \(2:1\). Liquid ratio of the company is \(1.25:1\), which is also more than the ideal ratio of \(1:1\). Therefore, it can be said that the company is in a position to pay its current liabilities instantly.

Question. The debt equity ratio of a company is \(1:2\). Will it increase, decrease or not change in the following cases:
(i.) Goods purchased on credit.
(ii.) Payment of final dividend of ₹20,000, already declared.
(iii.) Repayment of long term borrowings of ₹40,000.
Answer:
(i.) Goods purchased on credit will only affect the inventory and the trade payables. Hence, no change in debt-equity ratio.
(ii.) Payment of final dividend of ₹20,000, already declared means the payment of a current liability. Hence, no change in debt-equity ratio.
(iii.) Repayment of long term borrowings of ₹40,000 will reduce long term loans by ₹40,000. New ratio will be = \(0.3:1\). Hence, reduced.

Question. Calculate the interest coverage ratio from the following and also give the comments.
Net profit after interest and tax: ₹1,98,000
Rate of Income Tax: 40%
15% Debentures: ₹2,00,000
Answer:
PBIT = \(3,30,000 + 30,000 = 3,60,000\); ICR = 12 times.
Comments: It means that the profits of this company are 12 times in comparison to fixed interest charges. This indicates that the firm will be able to pay the interest on long term loans regularly. This ratio also indicates that the long-term solvency position of the company is quite satisfactory.

Question. Calculate inventory turnover ratio from the data given below:
Inventory at the beginning of the year: ₹20,000
Inventory at the end of the year: ₹10,000
Purchases: ₹50,000
Carriage Inwards: ₹5,000
Revenue from operations: ₹1,00,000
Answer:
ITR = \(65,000 / 15,000 = 4.33\) times.

Question. ₹2,00,000 is the cost of revenue from operations, inventory turnover ratio is 8 times. Inventory at the beginning of the year is 1.5 times more than the inventory at the end. Calculate the values of opening and closing Inventory.
Answer:
Opening inventory = ₹35,714
Closing Inventory = ₹14,286

Question. Calculate trade receivable turnover ratio from the following:
Credit revenue from operations: ₹2,00,000; opening trade receivables: ₹30,000 and closing trade receivables: ₹50,000.
State giving reason, which of the following will increase, decrease or not alter the ratio.
(i.) Credit purchases ₹50,000.
(ii.) Revenue from operations returns ₹4,000.
Answer:
TRTR = \(2,00,000 / 40,000 = 5\) times.
(i.) Will not alter as neither the credit revenue from operations nor the trade receivables are affected.
(ii.) Will increase as Revenue from operations returns will result in equal decrease in credit revenue from operations and closing trade receivables which will result in increase in trade receivables turnover ratio.
New TRTR = \(1,96,000 / 38,000 = 5.16\) times.

Question. Calculate working capital turnover ratio from the following:
Cost of Revenue from operations: ₹18,00,000
Inventory: ₹3,60,000
Trade Receivables: ₹1,70,000
Marketable securities: ₹50,000
Cash and Bank: ₹20,000
Trade Payables: ₹1,40,000
Provision for tax: ₹10,000
Answer:
Current assets = ₹6,00,000
Current Liabilities = ₹1,50,000
Working Capital = ₹4,50,000
WCTR = 4 times.

Question. Calculate the gross profit ratio from the following:
Credit revenue from operations: ₹3,00,000
Cash Revenue from operations (being 25% of total revenue from operations)
Purchases: ₹3,20,000
Excess of Closing inventory over Opening inventory: ₹40,000
Answer:
Total revenue from operations = ₹4,00,000
Cost of revenue from operations = ₹2,80,000
Gross profit = ₹1,20,000
GPR = 30%

Question. Opening inventory = ₹60,000, Closing inventory = ₹1,00,000. Inventory turnover ratio = 8 times, Selling price is 25% above cost. Calculate gross profit ratio.
Answer:
Average inventory = ₹80,000; Cost of revenue from operations = ₹6,40,000;
Revenue from operations = ₹8,00,000; Gross profit = ₹1,60,000, GPR = 20%.

Question. Calculate operating ratio from the following information:
Revenue from operations
Revenue from operations returns
Cost of Revenue from operations
Selling expenses
Administrative expenses
Answer:
Operating Expenses = ₹60,000
Operating ratio = 84%

Question. Calculate ROI:
Gross Profit = ₹1,00,000; Office and administrative expenses = ₹10,000; selling and distribution expenses = ₹25,000; Interest on long term debts = ₹8,00,000; tax = ₹12,000; Non-current assets = ₹3,00,000; Current Assets = ₹1,50,000 and Current Liabilities = ₹1,25,000.
Answer:
PBIT = ₹65,000; Capital employed = ₹3,25,000; ROI = 20%.

Question. (i.) Capital employed is ₹12,00,000; net fixed assets are of ₹8,00,000; CoGS ₹40,00,000; GP is 20% on cost. Calculate the working capital turnover ratio.
(ii.) Revenue from operations ₹8,20,000; Returns ₹10,000; CoGS ₹5,20,000; Operating Expenses ₹2,09,000; Interest on Debentures ₹40,500; Profit on sale of a fixed asset ₹81,000. Calculate the net profit ratio.
Answer:
(i.) WCTR = 12 times
(ii.) Net profit = 15%

Question. A limited company made credit sales of ₹4,00,000 during the financial year. If the collection period is 36 days and year is assumed to be of 360 days, calculate the:
(i.) Debtor’s turnover
(ii.) Average debtors
(iii.) Debtors at the end when debtors at the end are more than that in the beginning by ₹6,000.
Answer:
(i.) 10 times
(ii.) ₹40,000
(iii.) Debtors in the beginning = ₹37,000, Debtors at the end = ₹43,000.

Question. The ratio of current assets to current liabilities is \(1.5:1\). The accountant of the firm is interested in maintaining the ratio of \(2:1\) by paying off a part of the current liabilities. Compute the amount of the current liabilities that should be paid so that the current ratio at the level of \(2:1\) may be maintained.
Answer: Current liabilities of ₹1,00,000 should be paid to achieve the current ratio of \(2:1\).

Question. Is it correct that payment of dividend will be classified as financing activity for both non-finance and finance company? Why?
Answer: Yes because it is to the shareholder's who have financed the companies.

Question. Give an example of a transaction, a part of which is classified as an investing activity and another part is financing activity.
Answer: Purchase of a good on hire purchase system.

Question. Piyush finance Ltd. Is a company engaged in the business of financing fixed assets. In the CFS, it has depicted interest earned as investing activity. Do you think it is appropriate? Give reasons.
Answer: No, as the activity is the principal revenue producing activity for the business, it should be classified as an operating activity.

Question. D Ltd. Is engaged in trading of commodities. It had purchased a lottery ticket and won a prize of ₹2,00,000. In the CFS where will you depict it and why?
Answer: Under operating activity because it is an activity that is neither financing nor investing and hence to be included in operating as an extra ordinary item.

Question. ABC Pvt. Ltd. After complying with the provisions of the Companies Act, bought back equity shares at ₹50 each. In the CFS where will you depict it? Give your reasons.
Answer: As financing activity as it is changing the size and composition of owner’s capital.

Question. Define investing activity.
Answer: It relates to the acquisition and disposal of the long term assets and other investments, not included in cash equivalents.

Question. From the following Balance Sheets, prepare Cash Flow Statement:

Notes to Accounts:

Additional information:
1. During the year machine costing ₹80,000 was sold for ₹50,000.
2. Dividend paid ₹80,000.

Answer:
- Purchase of Fixed assets (bal.fig.): ₹2,80,000.
- Net cash used in operating activities: ₹(30,000)
- Net cash used in investing activities: ₹(2,30,000)
- Net cash from financing activities: ₹2,70,000
- C & C.E. during the year: ₹10,000

Question. Calculate cash from operating activities from the following:

In addition, an item of plant costing ₹30,000 having book value of ₹18,000 was sold for ₹20,000 during the year.
Answer:
- Current year’s depreciation: ₹21,000 (Prov. for dep. A/C)
- Net Cash from operating Activities: ₹40,500

Question. From the following Balance Sheets, prepare Cash Flow Statement:

Notes:

Additional Information:
Net profit for the year after providing ₹20,000 for depreciation was ₹60,000. During the year, the company declared the equity dividend @10% and paid ₹15,000 as income tax.

Answer:
- Net Profit before tax: ₹80,000
- Purchase of Fixed assets (bal.fig.): ₹60,000.
- This year’s provision for tax: ₹20,000
- Net cash from operating activities: ₹86,000
- Net cash used in investing activities: ₹(60,000)
- Net cash used in financing activities: ₹(26,000)
- C & C.E. during the year: nil

Question. From the following Balance Sheets, prepare Cash Flow Statement:

Notes:

Additional Information:
(i) Investments costing ₹3,000 were sold for ₹2,800 during the year 2012-13.
(ii) A new machine was purchased for ₹13,000. Depreciation of ₹4,000 has been charged on machinery.

Answer:
- Purchase of investments (bal.fig.): ₹8,000.
- Net cash from operating activities: ₹5,400
- Net cash used in investing activities: ₹(17,900)
- Net cash from financing activities: ₹(13,500)
- C & C.E. during the year: ₹1,000