CBSE Class 12th Accountancy Chapter 2 - Accounting for Companies Important Questions with Answers

You should focus on solving CBSE Class 12th Accountancy Chapter 2: Accounting for Companies important questions, especially to help you score high marks. By solving CBSE Class 12th Accountancy 2 questions, you will be solving exam-oriented questions only.

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Accounting for Companies is a fundamental chapter in Class 12 Accountancy that introduces students to corporate accounting principles. Unlike sole proprietorships and partnerships, companies operate as separate legal entities with a distinct financial structure, requiring systematic and standardized accounting methods. This chapter explores the basic concepts of share capital, debentures, and financial statements to familiarize students with how companies keep their accounts. One of the major subjects in this chapter is Share Capital, or the amount of money a company raises from issuing shares. The student is taught various types of shares, including equity shares and preference shares, and significant processes such as issue of shares at par, premium, and discount. The chapter also discusses the topic of forfeiture and reissue of shares, where the shareholders do not pay their financial dues. Students need to understand these concepts to be able to learn about corporate finance mechanisms. Another important topic discussed in this chapter is Debentures, which are long-term debt securities that firms issue to mobilize funds. Students study the concept, redemption, and calculation of interest on debentures so that they gain an understanding of the liabilities incurred by a company to carry out its business. Further, the chapter also emphasizes the significance of financial statements of a company, such as the Statement of Profit and Loss and the Balance Sheet, in accordance with laid-down accounting standards. These financial statements give a clear picture of the financial position and performance of a company.

For examination preparation, this page offers a series of significant questions with answers that are inclusive of all the crucial topics of Accounting for Companies. The questions consist of theoretical concepts, numerical questions, and case-based applications so that students could develop problem-solving and analytical skills necessary for board exams. By practicing these questions, students can strengthen their conceptual understanding and improve their ability to handle company-related financial transactions efficiently. This resource serves as a valuable study tool for Class 12 students looking to master corporate accounting and build a strong foundation for higher studies in commerce and finance. Prepare thoroughly with the most important questions of CBSE Class 12th Accountancy Chapter 2 - Accounting for Companies. You can first cover the CBSE Class 12th Accountancy syllabus to understand the key topics and then start solving the CBSE Class 12th Accountancy Chapter 2 - Accounting for Companies Important Question to get a better understanding of your preparation level. Start practicing now.

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Dev withdrew ? 10,000 on 15th day of every month. Interest on drawings was to be charged @ 12% per annum. Calculate interest on Dev’s drawings. (All India 2019)

Question 2.

How does nature of business affect the value of goodwill of a firm? (All India 2019:2011)

Question 3.

The firm of P, Q and R earned ? 4,00,000 average profits during the last three years. The capital employed in the business was ? 6,00,000. Normal rate of return of the industry is 8%.
Calculate the goodwill of the firm by capitalising the super profits. (All India 2019)

Question 4.

The capital of the firm of Anuj and Benu is ? 10,00,000 and the market rate of interest were is 15%. Annual salary to the partner is ? 60,000 each. The profit for the last three years ? 3,00,000, ? 3,60,000 and ? 4,20,000. Goodwill of the firm is to be valued on the basis of two years purchase of last three years average super profits. Calculate the goodwill of the firm. (Delhi 2019)

Question 5.

Ritesh and Hitesh are childhood friends. Ritesh is a consultant whereas Hitesh is an architect. They contributed equal Arts amounts and purchased a building for ? 2 crore. After a year, they sold it for ? 3 crore and shared the profits equally. Are they doing the business in partnership? Give reason in support of your answer. (CBSE 2018)

Question 6.

Give two items which may appear on the debit side of a Partner’s Current Account. (Comportment 2018)

Question 7.

Does partnership firm has a separate legal Ans. entity? Give reason in support of your answer. (Delhi 2017)

Question 8.

Distinguish between ‘fixed capital account’ and ‘fluctuating capital account, on the basis of credit balance. (All India 2017)

Question 9.

P and Q were partners in a firm sharing profits equally. Their fixed capitals were ? 1,00,000 and ? 50,000 respectively. The partnership deed provided for interest on capital at the rate of 10% per annum. For the year ended 31st March, 2016 the profits of the firm were distributed without providing interest on capital. Pass necessary adjustment entry to rectify the error. (Delhi 2017)

Question 10.

A group of 40 people wants to form a partnership firm. They want your advice regarding the maximum number of persons that can be there in a partnership firm and the name of the Act under whose provisions it is given. (All India 2016)
Or
What is the maximum number of partners that a partnership firm can have? Name the act that provides for the maximum number of partners in a partnership firm. (Delhi 2016)

Question 1.

Anna and Bobby were partners sharing profits and losses in the ratio of 5 : 3. On 1st April, 2014 their capital accounts showed balances of ? 3,00,000 and ? 2,00,000 respectively.
Calculate the amount of profit to be distributed between the partners if the partnership deed provided for interest on capital @ 10% per annum and the firm earned a profit of ? 45,000 for the year ended 31st March, 2015. (All India (C) 2016)

Question 2.

Question 3.

P and Q were partners in a firm sharing profits in the ratio of 5 : 3. On 1st April, 2014 they admitted R as a new partner for 1/8th share in the profits with a guaranteed profit of ? 75,000. The new profit sharing ratio between P and Q will remain the same but they agreed to bear any deficiency on account of guarantee to R in the ratio of 3 : 2. The profit of the firm for the year ended 31st March, 2015 was ? 4,00,000. Prepare profit and loss appropriation account of P, Q and R for the year ended 31st March, 2015. (Delhi 2016)

Question 4.

State any three circumstances other than (i) death of a partner (ii) admission of a partner and (iii) retirement of a partner when need for valuation of goodwill of a firm may arise. (Delhi; All India 2016)

Question 5.

State the provisions of Indian Partnership Act, 1932 regarding interest on partners capital and interest on partners loan when there is no partnership deed.(All India 2015,2010)

Question 6.

On 1st April, 2013, Jay and Vijay entered into partnership for supplying laboratory equipments to government schools situated in remote and backward areas. They contributed capitals of ? 80,000 and ? 50,000 respectively and agreed to share the profits in the ratio of 3 : 2. The partnership deed provided that interest on capital shall be allowed at 9% per annum. During the year the firm earned a profit of ? 7,800. Showing your calculations clearly, prepare profit and loss appropriation account of Jay and Vijay for the year ended 31st March, 2014. (Delhi 2015)

Question 7.

Jain, Gupta and Singh were partners in a firm. Their fixed capitals were : Jain ? 4,00,000, Gupta ? 6,00,000 and Singh ? 10,00,000. They were sharing profits in the ratio of then- capitals. The firm was engaged in the processing and distribution of flavoured milk. The partnership deed provided for interest on capital at 10% per annum. During the year ended 31st March, 2014 the firm earned a profit of ? 1,47,000.
Showing your working notes clearly, prepare profit and loss appropriation account of the firm. (Foreign 2015)

Question 8.

On 1st April, 2014 a firm had assets of ? 1,00,000 excluding stock of ? 20,000. Partners’ capital accounts showed a balance of ? 60,000. The current liabilities were ? 10,000 and the balance constituted the reserve. If the normal rate of return is 8% the ‘Goodwill’ of the firm is valued at ? 60,000 at four years’ purchase of super profit, find the average profit of the firm. (All India (C) 2015)

Question 9.

The average profit earned by a firm is ? 75,000 which includes undervaluation of stock of ? 5,000 on an average basis. The capital invested in the business is ? 7,00,000 and the normal rate of return is 7%. Calculate goodwill of the firm on the basis of 5 times the super profit. (Delhi (C) 2015)

Question 10.

The partnership deed is silent on payment of salary to partners. Anita, a partner, claimed that, since she managed the business, she should get a monthly salary of ?10,000. Is she entitled for the salary? Give reason. (Delhi (C) 2014)