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Punjab (PTB) · Quarter book test · Free

2nd Year Principles of Accounting 2nd Quarter Book Paper

40 marks · 1 hour · 28 questions. Covers: CHAP 4: Accounts of Joint Stock Companies, CHAP 5: Depreciation, Provisions and Reserves, CHAP 6: Partnership Accounts Profit Distribution.

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2nd Year Principles of Accounting 2nd Quarter Book Paper

2nd Year · Principles of Accounting · Punjab (PTB)

Name: ____________Roll No: ________Class/Section: ________Date: ________Total marks: 40Time: 1 hour

Q1. Multiple choice questions (Attempt all · 12 × 1 = 12)

  1. The remuneration which is paid by company to underwriter is called:

    1. Commission

    2. Del-Credit commission

    3. Overriding commission

    4. Under-writing commission

  2. The journal entry for depreciation will be:

    1. Depreciation account …Dr To asset account

    2. Depreciation account …Dr To cash account

    3. Depreciation account …Dr To bank account

    4. Asset account …Dr To depreciation account

  3. In the absence of an agreement, interest on loan advanced by a partner to the firm is allowed at the rate of:

    1. Six per cent

    2. Five per cent

    3. Twelve per cent

    4. Seven per cent

  4. It is that portion of subscribed capital which has been called up by the company:

    1. Called up capital

    2. Paid up capital

    3. Subscribed capital

    4. Issued capital

  5. What will be entry when profit is earned on sale of asset:

    1. Cash account …Dr To profit and loss account

    2. Profit and loss account …Dr To cash account

    3. Asset account …Dr To profit and loss account

    4. Profit and loss account …Dr To asset account

  6. The essential element of partnership is:

    1. There must be an agreement entered into by all the persons concerned

    2. The agreement must be to share the profits of a business

    3. The business must be carried on by all or any of them acting for all

    4. All of the above

  7. Premium on issue of shares is shown on:

    1. Debit side of trading account

    2. Debit side of profit and loss account

    3. Asset side of balance sheet

    4. Liability side of balance sheet

  8. Which one is the merit of fixed installment method:

    1. Simplicity

    2. Asset can be written of to zero

    3. Useful for providing depreciation on leasehold property, patents and other like assets

    4. All of above

  9. The current account of a partner:

    1. Will always have a credit balance

    2. Will always have a debit balance

    3. May have a debit balance or a credit balance

    4. None of these

  10. Shareholders are the:

    1. Owners

    2. Debtors

    3. Creditors

    4. Promoters

  11. The term depreciation is used with reference to:

    1. Tangible assets

    2. Intangible assets

    3. Current assets

    4. Fixed assets

  12. The interest on capital account in partnership is to credited to:

    1. Interest on capital a/c

    2. Profit & loss a/c

    3. Partner’s capital account

    4. Cash a/c

Q2. Short questions (Attempt any 8 of 12 · 8 × 2 = 16)

  1. Under what conditions a company can issue its shares at discount.

  2. What do you mean by the term depletion?

  3. Write three duties of partners in partnership.

  4. Define the following:       Directors, Promoters, Underwriters, shareholders

  5. What is obsolescence?

  6. What will be the closing entry for interest on capital in partnership?

  7. What is memorandum of association?

  8. What is meant by efflux of time in depreciation?

  9. Write the three rights of partners in partnership.

  10. Define the following different kinds of debentures:  (a) Redeemable  (b) Irredeemable  (c) Simple or naked debentures  (d) Registered debentures  (e) Bearer debentures (f) Mortgage debentures  (g) Debenture stock

  11. What is meant by market price of an asset?

  12. Write the four points of partnership agreement.

Q3. Long questions (Attempt any 3 of 4 · 3 × 4 = 12)

  1. Calculate the interest payable to A and B for the year ending 31.12.2022.
    A and B started business on 1.1.2022 with capitals of Rs. 120,000 and 80,000 respectively. During the year A introduced Rs. 20,000 as additional capital on 1.7.2022. They withdrew Rs. 1000 p.m. for household expenses in lieu of profits. Interest on capital is to be allowed @ 10%.

  2. A firm purchased a machine for Rs. 420,000 on 1st July, 2019 and spent Rs. 48,000 as wages and installation charges. Prepare the machine account for the first four years under diminishing balance method of depreciation assuming that the accounting year of the firm ends on 31st December every year. Rate of deprecation is 10% per annum.

  3. Pass the following entries of debentures in each case:
    (i) Debentures issued at Rs. 90 and redeemable at Rs. 100.
    (ii) Debentures issued at Rs. 100 and redeemable at Rs. 110.
    (iii) Debentures issued at Rs. 110 and redeemable at Rs. 100.
    (iv) Debentures issued at Rs. 90 and redeemable at Rs. 110.
    (v) Debentures issued at Rs. 100 and redeemable at Rs. 100.

  4. A and B are partners from 1st January, 2022 without any partnership agreement and they introduced capital of Rs. 70,000 and Rs. 40,000 respectively.  On 1st July, 2022 A advances Rs. 15000 by way of loan to the firm without any agreement as to interest. The profit and loss accounts for the year 2022 discloses a profit of Rs. 16,450; but the partners cannot agree upon question of interest or upon the basis of division of profits. You are providing to divide the profits between them giving reasons for your methods.