50 READYMADE QUESTION for accountancy Q1 What are partners collectively called ? Ans.Partners are collectively called 'firm'. Q2.What can be the minimum no. of partner in a firm ? Ans. Two Q3.is a sleeping partner liable to the acts of other partner ? Ans. Yes, sleeping partner is liable to the acts of other partner. Q4.What is partnership deed ? Ans. Partnership deed is a written agreement containing the terms and condition agreed by the partner. Q5.Write two items of credit side of current account. Ans. 1) Interest on capital. 2) Share of profit. Q6.What is the formula for calculating sacrificing ratio ? Ans. Sacrificing ratio = old ratio - new ratio. Q7.Give the formula for calculating gaining ratio of a partner in a partnership firm ? Ans. Gaining ratio = New ratio - Old ratio. Q8.What is meant by super profit ? Ans. Super profit is the excess of actual average profit over normal profit. Q9.How the goodwill is valued under the capitalization of super profit method ? Ans. Goodwill = super profit x 100/normal rate of return. Q10.Name any two factors affecting goodwill of a partnership firm ? Ans. 1) Favorable location of the business. 2) Efficiency of management. Q11.Give the two main rights acquired by the new partner. Ans. 1) Right to share future profit of the firm. 2) Right to share the assets of the firm. Q12.State any one purpose for admitting a new partner in a firm. Ans. When a firm requires more capital to expand its business, it may admit a new partner. Q13. State the need for treatment of goodwill on admission of partner. Ans. To compensate the old partner for their sacrifice. Q14.Why is sacrifice ratio calculated ? Ans. Sacrifice ratio is calculated because the premium for goodwill brought in by the incoming partner is divided among old partners in their sacrificing ratio. Q15.How can a new partner be admitted ? Ans. According to section 31 of Indian partnership act,1932, a person can be admitted as a new partner only with the consent of all the existing partners. Q16.For which share of goodwill a partner is entitled at the time of his retirement? Ans. Retiring partner is entitled to goodwill according to his share of profit in the firm. Q17.At what rate interest is payable on the amount remaining unpaid to the executor of deceased partner ? Ans.6 % p.a. Q18.Name two items which are credited to the capital account of a partner upon his death. Ans.1)His share of life policy. 2)His share of undistributed profits or reserves. Q19.State two basis of determination of profits from the date of last balance sheet to the date of death/retirement . Ans.1)On time basis. 2)On sales basis. Q20.Name the account which is opened to credit the share of profit of the deceased partner,till the time of his death to his capital account. Ans.Profit and loss suspense account. Q21.On dissolution of a firm, out of the proceeds received from the sale of assets who will be paid last of all? Ans. Partner's capital. Q22.On dissolution of a firm, where is cash in hand transferred? Ans. On debit side of cash account. Q23.On dissolution, what entry is passed if a partner undertakes to make payment of a liability? Ans. Realization a/c dr To cash/bank a/c Q24. On firm's dissolution, which account should be prepared at the last? Ans. cash/bank a/c. Q25.On dissolution of a partnership firm, where is profit or loss on realization transferred? Ans. In the partner's capital accounts in their profit sharing ratio. Q26. State any two essential features of private company? Ans.1)It restricted the right to transfer its share. 2)It limits the no. of its members to 200. Q27. State two essential feature of a public company. Ans.1)There is no restriction on the transfer of its shares. 2)Minimum number of its members is 7. Q28.What are two types of share which company can issue Ans.1) Preference share. 2) Equity share. Q29 What is meant by 'capital reserve'? Ans. Capital reserve is that reserve which is created out of capital profits. Q30.What is subscribed capital? Ans. Is that part of issued capital which is subscribed for by the public. Q31. Name any two financial statements of a company? Ans.1) Statement of profit and loss. 2) Balance sheet. Q32. What is the financial year of a company? Ans. From 1st April to 31st march. Q33. What is the number of major heads of the assets side of a company’s balance sheet? Ans. Two. Q34. What is the number of major heads of equity and liabilities side of a companies balance sheet ? Ans . Four. Q35.How are the assets and liability of a company usually marshalled? Ans .In the order of permanence. Q36. Name two tools of financial analysis? Ans.1) Coparative financial statement. 2)Common size financial statement. Q37.What are comparative financial statement ? Ans . When financial statements figures for two or more years are placed side by side to facilitate comparison, these are called 'comparative financial statements’. Such statements provide for columns to indicate the increase or decrease in this figures from one year to another in absolute figures and in percentage form. Q38.What is a comparative balance sheet? Ans. A comparative balance sheet shows the increase and decrease in various assets and liabilities and capital in two or more balance sheet of the same business enterprise on different dates . Q 39. What is the advantage of comparative balance sheet ? Ans. It throws light on nature , size and direction of change in respect of each item of balance sheet. Q 40. What is a comparative statement of profit and loss? Ans. A comparative statement of profit and loss shows the figures of revenue from operation,expensive,income and net profit and loss for a number of year so that changes in absolute data in terms of money as well as in term of percentage may be know. Q 41. What is ‘ratio analysis’? Ans. According to myers , ratio analysis is the study of relationship between various items or group of items in financial statement . Q 42. Give two uses of ratio analysis? Ans . (1)Helpful in judging the profitability of the business. (2)Helpful in judging the liquidity of the business. Q 43. Give one limitation of ratio analysis. Ans. Ratio analysis becomes less effective due to price level changes . Q 44. What is an ideal current ratio? Ans. An ideal current ratio is 2 :1. Q 45. What is the ideal quick ratio? Ans. Ideal quick ratio is 1:1. Q 46 What is meant by cash flow statement ? Ans . It is statement of inflow (sources) and outflow(uses)of cash and cash equivalent during a particular period of time. Q 47. Under which accounting standard , cash flow statement is prepared? Ans. Under accounting standard-3 (revised). Q 48. Give any two objectives of cash flow statement? Ans. (1)To provide information regarding sources and uses of cash from operating activities and financing activities separately (2)To highlight change in cash position. Q 49. What is meant by cash equivalent ? Ans . These are short -terms highly liquid investments that are readily convertible into known amount of cash and which present insignificant risk of change in their values. Q 50. What is meant by operating activities? Ans. Operating activities are the main revenue generating activities of an enterprise.