Tag: book keeping and accountancy

Questions Related to book keeping and accountancy

X and Y are partners with the capital of Rs. 50,000 and Rs. 30,000 respectively. Interest payable on capital is 10% p.a. Find the interest on capital for both the partners when the profits earned by the firm is Rs. 4,800?

book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

  1. Rs. 5,000 and Rs. 3,000. 

  2. Rs. 3,000 and Rs. 1,800. 

  3. No interest will be paid to the partners.

  4. None of the above. 

Show answer
Correct Option: B
Explanation:
Interest on capital = capital x rate
X :-
= 50,000 x 10/100
= RS-5,000. 
Y:-
= 30,000 x 10/100
= RS-3,000.

Apportioned in the ratio of interest to be allowed to the extent of profits available:-
X:-
= 5,000
-------------- x 4,800
 8,000
= RS-3,000.
Y:-
= 3,000 
------------- x 4,800
  8,000
= RS-1,800.

M and N are partners in a firm. M has given a loan of Rs. 8,000 to the firm on 1st July, 2017. The partnership deed is silent upon the question of provision of interest on partner's loan. Compute the amount of interest payable on the loan advanced by M to the firm, assuming the books are closed on 31st March each year.

book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

  1. Rs. 460

  2. Rs. 360

  3. Rs. 560

  4. Rs. 480

Show answer
Correct Option: B
Explanation:

Amount of loan given by M to the firm (on 1st July, 2017) = Rs. 8,000
Period (from 1st July, 2017 to 31st March, 2018) = 9 months
Interest rate = 6% p.a.
Interest on M's loan = 8,000 x 6/100 x 9/12 = 360

A and B are partners having capital of Rs. 5,000 and Rs. 6,000 respectively. Interest on capital is given @ 5% p. a. Profits for the year before the appropriation is Rs. 4.600 provide interest on capital out of profits. Interest allocated to partners is:

book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

  1. Rs. 3,000 and Rs. 2,500

  2. Rs. 2,090 and Rs. 2,509

  3. Rs. 2,500 and Rs. 2,091

  4. Rs. 600 and Rs. 300

Show answer
Correct Option: B
Explanation:
Interest on capital = capital x rate
A :-
= 50,000 x 5/100
= RS-2,500.
B:-
= 60,000 x 5/100
= RS-3,000.

Apportioned in the ratio of interest to be allowed to the extent of profits available:-
A:-
= 2,500
-------------- x 4,600
   5,500
= RS-2,090.
B:-
= 3,000 
------------- x 4,600
  5,500
= RS-2,509.

Consider the following statements-Current ratio is increased by

    1. issue of redeemable preference shares.
    2. selling of old furniture for cash.
    3. cash realized from debtors.
    Which of the statements given ab

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. 1 and 2 only

    2. 2 and 3 only

    3. 1 and 3 only

    4. 1, 2 and 3

    Show answer
    Correct Option: A

    Discount on issue of debenture A/c is to be written off ___________.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. immediately

    2. within 3-4 years

    3. over the tenure of the debenture

    4. all the three alternatives are available to the company

    Show answer
    Correct Option: C

    The issue of debentures less than the face value is called_______.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. at par

    2. at premium

    3. at discount

    4. none of these

    Show answer
    Correct Option: C
    Explanation:

    When debentures are issued by the company at a price less than its nominal value (face value), it is said to be issued at discount.

    A debenture is said to be issued at discount when the issue price is _____ the face price.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. more than

    2. less than

    3. equal to

    4. double than

    Show answer
    Correct Option: B

    A company issued 12% debentures of Rs. 1000 each at Rs. 900 to be redeemable at Rs. 1050. The difference of Rs. 150 will be ___________.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. debited to loss on issue of Debenture A/ c

    2. credited to loss on issue of Debenture A/c

    3. preliminary expenses A/c

    4. capital loss A/c

    Show answer
    Correct Option: A

    Loss on issue of Debentures is generally written off in __________.

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. 10 years

    2. 8 years

    3. over the period of debentures

    4. 15 years

    Show answer
    Correct Option: C

    The document inviting offers from public to subscribe for the debenture or shares or deposits of a company is a

    book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

    1. Share certificate

    2. Articles of association

    3. Fixed deposit receipt

    4. Prospectus

    Show answer
    Correct Option: D