List of top Accountancy Questions

Pass necessary journal entries for forfeiture and reissue of forfeited shares in the following cases:

(i) Diksha Ltd. forfeited 3,000 shares of Rs 10 each for non-payment of final call of Rs 2 per share. Out of these, 600 shares were reissued as fully paid up in such a way that Rs 4,200 was transferred to capital reserve.

(ii) Ashoka Ltd. forfeited 2,000 equity shares of Rs 100 each issued at a premium of 10% for non-payment of allotment money of Rs 60 per share (including premium). The first and final call of Rs 20 per share was not yet made. The forfeited shares were re-issued at Rs 70 per share fully paid up.

Sanjay and Vijay were partners in a firm sharing profits and losses in the ratio of 4:3. On 1st April, 2025 they admitted Babul as a new partner for 2/5th share in the profits of the firm. On Babul's admission, the following was agreed upon:

(i) The new profit sharing ratio of Sanjay, Vijay and Babul will be 3:3:4.

(ii) The goodwill of the firm will be valued at four years purchase of the average profits of the last three years. The profits of the previous three years were:

(iii) Babul will bring his share of goodwill premium in cash, half of which will be withdrawn by Sanjay and Vijay.

(iv) On Babul's admission, revaluation of assets and reassessment of liabilities resulted in a loss of Rs 70,000.

(v) At the time of Babul's admission, the firm had a General Reserve of Rs 28,000.

(vi) After making necessary adjustments relating to goodwill, loss on revaluation and general reserve, the capital accounts of Sanjay and Vijay showed balances of Rs 3,50,000 and Rs 2,50,000 respectively. Babul brought proportionate capital for his 2/5th share in the profits of the firm.

Showing your workings clearly pass necessary journal entries for the above transactions in the books of the firm on Babul's admission.

Kiran, Raveena and Hina were partners in a firm sharing profits and losses in the ratio of 5:3:2. The firm closes its books on 31st March every year. As per the terms of the partnership deed, on the death of any partner, the goodwill of the firm will be calculated on the basis of four times the average profits of the last three years. Hina died on 1st July 2025. The Profits for the last three years were:

2022-23 Rs 4,75,000
2023-24 Rs 4,05,000
2024-25 Rs 3,20,000

Hina's share of profit upto the date of death was to be calculated on the basis of previous year's profit.

(i) Calculate goodwill of the firm and Hina's share of goodwill.
(ii) Calculate Hina's share in the profits of the firm till the date of her death.
(iii) Pass necessary journal entries for the treatment of goodwill without opening goodwill account and for Hina's share of profit at the time of her death.

On 1st April, 2024 Bhumika Ltd. issued 500, 9% debentures of Rs 500 each at a discount of 10% redeemable at a premium of 6% after five years. On 31st March, 2025 the company had a balance of Rs 30,000 in its Securities Premium Account.

Pass necessary journal entries for issue of 9% Debentures and writing off Loss on issue of Debentures. Also prepare 'Loss on Issue of Debentures Account'.

Shree and Hari were partners in a firm sharing profits and losses in the ratio of 2:3. Their fixed capitals were Rs 4,00,000 and Rs 3,00,000 respectively. The partnership deed provided that Hari is to be allowed a commission of 5% of net profit.

The net profit of the firm for the year ended 31st March, 2025 was Rs 1,00,000.

Pass the following journal entries in the books of the firm:

(i) For crediting Hari's commission to his current account.
(ii) For transferring the commission to Profit and Loss Appropriation Account.

Generic Pharma Ltd. invited applications for using 3,00,000 equity shares of Rs 10 each at a premium of Rs 6 per share. The amount was payable as follows:

on Application and Allotment - Rs 4 per share (including premium of Rs 2 per share)
on First and Final Call - Balance

Applications for 4,00,000 shares were received. Applications for 40,000 shares were rejected and the application money was refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received on applications was adjusted towards sums due on first and final call. Jain, an applicant for 3,600 shares failed to pay the first and final call. His shares were forfeited.

Pass necessary journal entries in the books of Generic Pharma Ltd. for the above transactions. Open 'calls in arrears account' and 'calls in advance account', wherever necessary.

Ravneet and Manmeet were partners in a firm sharing profits and losses in the ratio of 7:3. On 31st March, 2025, their Balance Sheet was as follows:

Balance Sheet of Ravneet and Manmeet as on 31st March, 2025

On the above date, the firm was dissolved. The plant and machinery was sold at Rs 4,87,000 and stock at 20% less than the book value. Debtors realised Rs 1,40,000.

Ravneet agreed to bear all realisation expenses for which he was allowed a commission of Rs 9,000. Actual realisation expenses amounted to Rs 7,500.

Prepare Realisation Account and Partners' Capital Accounts.

Neo Ltd. took over assets of Rs 25,00,000 and liabilities of Rs 12,00,000 of Madura Ltd. for a purchase consideration of Rs 18,00,000. Neo Ltd. issued 11% debentures of Rs 100 each at a discount of 10% in full satisfaction of the purchase consideration.

Pass necessary journal entries for the above transactions in the books of Neo Ltd.

Raunak Cotton Ltd. purchased machinery of Rs 6,80,000 from Heavy Machines Ltd. The Payment to Heavy Machines Ltd. was made by issuing 10,500 equity shares of Rs 50 each at a premium of 20% and the balance through a cheque.

Pass necessary journal entries for the above transactions in the books of Raunak Cotton Ltd.

Chaman and Vatika were partners in a firm sharing profits and losses in the ratio of 4:5. They admitted Mohan as a new partner for 1/5th share in the profits of the firm. Mohan acquired his share equally from Chaman and Vatika. The new profit sharing ratio of Chaman, Vatika and Mohan will be:

Sameer and Manveer were partners in a firm sharing profits and losses in the ratio of 5:3. On 1st April, 2024, they admitted Sandeep as a new partner for 1/5th share in the profits with a guaranteed minimum amount of Rs 80,000. Sameer and Manveer continue to share profits as before but agreed to bear any deficiency on account of guarantee to Sandeep in the ratio of 3:5. The net profit of the firm for the year ended 31st March, 2025 was Rs 3,20,000.

Prepare Profit and Loss Appropriation Account of Sameer, Manveer and Sandeep for the year ended 31st March, 2025.

Lalita, Shivani and Madhuri were partners in a firm sharing profits and losses in the ratio of 3:2:1. Madhuri retired from the firm on 31st March, 2025. The balance in her capital account on the date of her retirement was Rs 1,80,000. Lalita and Shivani agreed to pay her Rs 2,25,000 in full settlement of her claim.

The goodwill of the firm on Madhuri's retirement was:

Sultan, Singh and Tulsi were partners in a firm sharing profits and losses in the ratio of 9:7:4. Their fixed capitals were Rs 6,00,000, Rs 5,00,000 and Rs 4,00,000. The partnership deed provided that interest on partners capital accounts will be allowed at 10% per annum. After the final accounts for the year were prepared, it was found that interest on capital was allowed @ 12% per annum.

Pass the necessary adjusting journal entry.

Average profit of a firm during the last few years is Rs 8,00,000. In similar business, the normal rate of return is 10% of the capital employed. Assets of the business were Rs 60,00,000 and its external liabilities were Rs 20,00,000.

Calculate the value of goodwill by:

(i) Capitalisation of super profits method

(ii) Super profit method if the goodwill is valued at four years' purchase of super profits.

Sidhi, Gyan and Gayatri were partners in a firm sharing profits and losses in the ratio of 3:2:2. On 31st March, 2025 their firm was dissolved. At the time of dissolution a debtor amounting to Rs 25,000 whose debt had been previously written off as bad debt paid 40% of the amount. The accounting treatment for the above transaction will be:

Nidhi and Kunal were partners in a firm sharing profits and losses in the ratio of 4:1. Their capitals were Rs 3,00,000 and Rs 2,00,000 respectively. They were entitled to interest on capital @ 6% p.a. The firm earned a profit of Rs 15,000 during the year.

Interest on partners' capitals will be:

Sakshi Ltd. forfeited 500 equity shares of Rs 10 each, issued at a premium of Rs 2 per share for non-payment of second and final call of Rs 4 per share (including premium).

The maximum amount of discount at which these shares can be reissued is:

On 1st April, 2024, Dina Ltd. issued 8,000, 9% debentures of Rs 100 each at a discount of 6%. The total amount of interest due on debentures for the year ended 31st March, 2025 will be:

Surya Ltd. issued 50,000 equity shares of Rs 10 each. The amount was payable as follows:

on Application - Rs 3 per share
on Allotment - Rs 2 per share
on First and Final Call - the balance

Usha, to whom 700 shares were allotted, paid her entire share money on allotment. Raj, to whom 300 shares were allotted did not pay the first and final call. The amount to be debited to Bank Account for first and final call after it becomes due will be:

Chandan, Ravi and Mahesh were partners in a firm sharing profits and losses in the ratio of 5:4:1. From 1st April, 2025 they decided to share the future profits in the ratio of 3:2:1. On that date there existed a general reserve of Rs 7,00,000 in the books of the firm which they decided to distribute among themselves.

In which ratio will the general reserve be distributed among the partners?

Deen, Raju and Hari were partners in a firm sharing profit and losses in the ratio of 7:6:7. On 31st March, 2025 Raju died. Deen and Hari decided to take over Raju's share equally. The new profit sharing ratio between Deen and Hari will be:

Dharam, Karam and Raman were partners in a firm sharing profits and losses in the ratio of 7:8:5. On 31st March, 2025, Raman retired from the firm. Dharam and Karam decided to share profits in future in the ratio of 11:9. Their gaining ratio will be:

Suman and Tanya were partners in a firm sharing profits and losses in the ratio of 2:1. With effect from 1st April, 2025, they decided to share the profits equally. On that date furniture was appearing in the books of the firm at Rs 4,50,000. At the time of change in the profit sharing ratio, it was found to be undervalued by 10%. In the new balance sheet, furniture will be shown at:

Tula, Ram and Madhvi were partners in a firm. The partnership deed provided for interest on partners drawings @ 12% p.a. The firm closes its books on 31st March every year. Starting from 31st December, 2025 Madhvi withdrew Rs 40,000 at the end of every month for her personal use. Interest on Madhvi's drawings will be:

Which of the following is not correct about collateral security?