# MCQs for Class 12 Accounts

Multiple choice Questions for Class 12 Accountancy with solutions have been provided below for each chapter in NCERT Book for Class 12 Commerce Accountancy Book. Students can click on the link below for any chapter and refer to the questions and answers provided below. all MCQs for Class 12 Accounts have been provided with solutions so that the students can read the questions and assess their performance.

## MCQs for Class 12 Accountancy PDF

Since MCQs are gaining more importance in Class 12 Accountancy exam, its more important for students to go through the multiple choice questions with answers given below. We have the best collection of MCQs questions for Class 12 Accounts chapterwise which have been created based on the latest books issued by NCERT. You can click on the links below to check out chapter wise questions for your practice

### Solved Objective Questions Class 12 Accountancy

Question. Cash Flow Statement is based on
a) Accrual basis of Accounting
b) Cash basis of Accounting
c) Mixed basis of Accounting
d) Accounting Equation

B

Question. Quick Assets = ?
a) Current Assets – Prepaid Expenses
b) Current Assets – Inventory – Prepaid Expenses
c) Current Assets + Inventory – Prepaid Expenses
d) Current Assets – Inventory + Prepaid Expenses

B

Question. Partners Loan Account is:-
a) Personal Account
b) Real Account
c) Nominal Account
d) Expense Account

A

Question. A, B and C were partners sharing profits in the ratio of 4 : 5 : 3, C retired and continuing partners decided to share future profits in the ratio of 7:8. Gaining ratio will be:
a) 8 : 7
b) 4 : 5
c) 1 : 1
d) 2 : 1

A

Question. X is admitted into the partnership for 1/4th share. Total capital of the firm is Rs. 4,50,000, the amount that X will bring in
a) Rs. 1,50,000
b) Rs. 1,20,000
c) Rs. 1,12,500
d) Rs. 1,00,000

B

Question. Interest on Partner’s Capital Accounts is credited to:
a) Partners’ Capital Accounts
b) Revaluation Account
c) Interest Account
d) Goodwill Account

A

Question. Profit earned over the last 5 years are as follows: Rs.60,000; Rs.65,000 Rs.70,000 Rs.90,000 and Rs. 10,000 loss). Based on 2 years purchase of the last 5 years profits, value of Goodwill will be:
a) Rs.23,600
b) Rs.22,000
c) Rs.1,10,000
d) Rs.1,18,000

C

Question. Neha and Nisha shared Profits and Losses in the ratio of 5:4. With effect from 1st April, 2019 they decided to share profits equally. The goodwill of the firm was valued at Rs.36,000. The necessary single adjustment entry will be:
a) Dr. Nisha’s Capital A/c and Cr. Neha’s
Capital A/c with Rs.2,000
b) Dr. Neha’s Capital A/c and Cr. Nisha’s
Capital A/c with Rs.2,000
c) Dr. Neha’s Capital A/c and Cr. Nisha’s
Capital A/c with Rs.200
d) Dr. Nisha’s Capital A/c and Cr. Neha’s
Capital A/c with Rs.200

A

Question. X and Y are partners sharing profits and losses in the ratio 3 : 2, Z was admitted for the 1/5th share he brings Rs. 150,000, as his capital. If capitals are to be proportionate to profit – sharing ratio, the respective capitals of the partners will be:
a) Rs. 3,00,000 : 3,00,000 : 1,50,000
b) Rs. 3,60,000 : 2,40,000 : 1,50,000
c) Rs. 1,50,000 : 1,50,000 : 1,50,000
d) Rs. 1,50,000 : 2,00,000 : 4,00,000

B

Question. A NPO has following information: Prize Fund Opening) – Rs. 50,000, Donations received during the year Rs. 40,000 and Prizes awarded during the year Rs. 1,00,000. Identify which of the following statement is correct with respect to preparation of Balance Sheet.
a) Prizes awarded of Rs. 1,00,000 will be shown in Income and Expenditure Account while Rs. 90,000 will be shown in the Liabilities side of the Balance Sheet.
b) Rs. 1,00,000 Prize Awarded) will be shown as expense in the debit of Income and Expenditure Account while Rs. 90,000 will be shown as income in the credit of Income and Expenditure Account.
c) Rs. 10,000 Rs. 1,00,000 – Rs. 90,000) will be transferred to General Fund in the Balance Sheet.
d) Prizes awarded Rs. 1,00,000) is more than the Prize Fund Rs. 90,000), the difference Rs. 10,000) will be shown in the debit of Income and Expenditure

D

Question. If Revenue from Operations for current year is Rs. 10,00,000 and proportionate increase is 25%, Revenue from Operations of the previous year?
a) Rs. 9,00,000
b) Rs. 6,00,000
c) Rs. 8,00,000
d) Rs. 7,00,000

C

Question. The statement that shows percentage of items of profitability of a firm of the same period to a common base is called:-
a) Comparative Statement of Profit and Loss.
b) Comparative Balance Sheet.
c) Common Size Statement of Profit and Loss.
d) Common Size Balance Sheet.

C

Question. B and C were partners sharing profits in the ratio 2 : 2 : 1, having capital accounts as Rs. 50,000, Rs. 50,000 and Rs. 25,000, respectively. B retired. On that date, balance in General Reserve was Rs. 15,000. If firm’s Goodwill is valued at Rs. 30,000 and Gain profit) on Revaluation is Rs. 7,050, amount payable to B will be:
a) Rs. 50,820
b) Rs. 70,820
c) Rs. 8,820
d) Rs. 9,000

B

Question. A and B are partners sharing in the ratio 2 : 1. They decided to share in the ratio 3 : 2 in future. If the goodwill of the firm is valued at Rs. 60,000, how the adjustment in the profit will be affected?
a) B pays A Rs. 4,000
b) A pays B Rs. 4,000
c) A pays B Rs. 6,000
d) B pays A Rs. 6,000

A

Question. X is admitted into the partnership for 1/4th share. Total capital of the firm is Rs. 4,50,000, the amount that X will bring in
a) Rs. 1,50,000
b) Rs. 1,20,000
c) Rs. 1,12,500
d) Rs. 1,00,000

A

Question. The term Financial Analysis includes:
a) Analysis.
b) Interpretation.
c) Both analysis and interpretation.
d) Preparation of financial statements.

C

Question. On Dissolution Goodwill Account is transferred to:-
a) Credit side of Bank Account.
b) Debit side of Partners’ Capital Account
c) Debit side of Realisation Account
d) Credit side of Realisation Account

C

Question. A, B and C were partners sharing profits in the ratio 3 : 2 : 1. C retired, if A and B take share of retiring partner equally, New profit – sharing ratio will be:
a) 7 : 5
b) 3 : 2
c) 1 : 1
d) 2 : 1

A

Question. A member from whom Rs. 10,000 was due as subscription, resigned and did not pay the dues. Journal entry for writing off subscription will be:
a) Subscription written-off A/c ….Dr. 10,000
To Subscription A/c 10,000
b) Subscription A/c …Dr. 10,000
To Subscription written off A/c 10,000
c) Outstanding Subscription A/c …Dr. 10,000
To Subscription written off 10,000
d) Subscription Written Off A/c …Dr. 10,000
To Outstanding Subscription A/c 10,000

D

Question. Choose the correct option from the following statements:
Statement I – Suppliers of long-term funds are concerned with firm’s longterm solvency
Statement II – Investors are interested about the credit worthiness of the firm.
a) Only Statement II is true
b) Only Statement I is true
c) Both Statements are true
d) Both Statements are false

B

Fill in the Blank :

Question. A , B and C were partners, B retired from the firm. On the date of his retirement Stock, Sundry Debtors and Provisions for Doubtful Debts were Rs.50,000, Rs.45,000 and Rs.4,500 respectively. The partners decided to reduce the value of stock to 90%. The journal entry passed will be ………….. Dr. Rs. 5,000 To ……………. Rs.5,000 .

Revaluation A/c, Stock A/c

Question. A and B are partners sharing profits in the ratio of 7 : 3. C is admitted for 3/7th share in profits. If the new profit sharing ratio is 14 : 6 : 5, sacrificing ratio will be _____.

7 : 3

Question. In the event of death of a partner, the amount of General Reserve is transferred to Partners’ Capital Account, including deceased partner, in their ___ because it was set aside out of profits when ______ was also a partner.

Old profit – sharing ratio, deceased partner

Question. On the death of partner, the amount due to him will be credited to ______.

His Executor’s Account

Question. Amount paid by a person at the time of becoming a member of a Not-for-Profit Organisation is ______.

Entrance Fees

Question. On liability being paid by a partner on dissolution of the firm, , his ____ will be credited and _______will be debited.

Capital Account, Realisation Account

Question. Retiring partner is compensated for foregoing his share in future profits in favour of remaining partners or continuing partners. The compensation so paid is _____.

Gaining Ratio

Question. Liability of a partner is unlimited _____ and _____.

Joint, Several

Question. At the time of admission of a partner the balance of Profit and Loss Account is transferred to the capital account of _____ in their _____ ratio.

Old Partners, Old Profit-Sharing Ratio

Question. Partner’s Loan Account is not transferred to Realisation on _____.

dissolution

Question. If profit-sharing ratio changes and market value of investment is more than Book value, Investment Fluctuation Reserve appearing in the Balance Sheet is transferred to _____ of partners in their old profit sharing ratio.

Capital Account

Question. Government Grant, Endowment Fund, Annuity Fund, Sports Fund are examples of ______ Fund.

Restricted

Question. Manager’s commission is a _______ against profit.

charge

Question. A, B and C were partners sharing profits in the ratio of 2 : 2 : 1 respectively having Capital Accounts as Rs.50,000, Rs.50,000 and Rs.25,000 respectively. B retired from the firm and balance in General Reserve on that date was Rs.15,000. If the goodwill of the firm was valued at Rs.30,000, Profit on Revaluation was Rs.7,050. The amount payable to B will be______.

Rs. 70,820

Question. When the shares are issued at a price more that face value it is shares issued at ___.

Question. Capital invested in a firm is Rs. 5,00,000. Normal Rate of Return is 10%. Average profits of the firm are Rs. 64,000 after abnormal loss of Rs. 4,000). Value of Goodwill at four years purchase of Super Profits will be _____.

Rs. 72,000

Question. Amount transferred to General Reserve will be affecting ____ Activity of Cash Flow Statement.

Operating

Question. Income and Expenditure Account is based on ______ Basis of Accounting.

Accrual

Question. Amount received as donation by a NPO under will of a decreased person is termed as ______.

Legacy

True / False :

Question. Increase in the value of assets and unrecorded assets being recorded at the time of retirement or death of a partner is debited to Revaluation Account.

False

Question. A is drawing Rs.1,000 p.m. on the last day of every month. If the rate of interest is 5% p.a. then the total interest chargeable from him in the accounting year ending on March 31, 2020 will be Rs. Rs. 275.

True

Question. Revaluation Account is debited to transfer gainprofit) on Revaluation to old Partners’ Capital Accounts in their old profit sharing ratio.

True

Question. Notes to Accounts is not a technique of financial analysis.

True

Question. Dissolution of Partnership is different from Dissolution of partnership Firm.

True

Question. Decrease in the value of assets at the time of retirement of a partner is credited to Revaluation Account.

False

Question. Billiard Match Expenses of Rs. 50,000 incurred by a NPO will be shown in Liabilities side of Balance Sheet.

False

Question. In preparing Comparative Financial Statements, percentage change is based on current year values.

False

Question. The court can order the Dissolution of a Partnership Firm, if any of the partners becomes a person of unsound mind.

True

Question. The amount due to deceased partner is paid to his executor.

True

Question. Subscription received in advance during the current year is shown as a/an Income.

False

Question. If creditors are ₹ 20,000, loan credit) is ₹ 10,000, capital is of ₹ 1,50,000 and cash balance is ₹ 30,000, remaining assets will be ₹ 1,80,000.

False

Question. A, B and C are three partners B retires from the firm, on the date of retirement Stock Rs. 50,000. The partners decided to reduce of stock to 90%. The entry passed will be stock Stock A/c …Dr. Rs. 5,000 To Revaluation A/c Rs. 5,000.

False

Question. Cash Balance in Receipts and Payments account will show Debit or Nil balance.

True

Question. X & Y are partners sharing profits equally. Y draws Rs. 1,000 at the beginning of each month for six months.

True

Question. Gain on forfeited shares that have been reissued is transferred to Capital Reserve.

True

Question. At the time of retirement of a partner, gain profit) on revaluation is credited to capital Account of all partners in the old profit – sharing ratio.

True

Question. Deprecation is a non-cash item and this is added back to the net profit.

True

Question. The Current Ratio of a Company is 2 : 1. Bills Payable Rs. 5,000 discharged will result in increase in Current Ratio.

True

Question. Large Customer base results in higher valuation of Goodwill.

True

Multiple choice questions normally come in almost every class 12 accountancy examination.  It is basically a question is given with four choices and the students to select the best choice out of the four options which will basically be the answer of the question which has been provided above.  to make sure that the student is able to provide the correct answer there is a requirement to do a lot of practice of such kind of multiple-choice questions for class 12 accountancy as the student will get very limited time to solve these questions in the examination.

The best way to increase your speed and accuracy is by solving as many multiple choice questions as possible based on the collection of questions which have been provided on our website along with the solution.  students can refer to the questions which have been provided for each chapter as per Class 12 NCERT Accountancy book and also refer to the solutions which have been provided below each question. You can refer to more links to download more MCQs for Class 12 Accounts.

a) This year Grade 12th students will find MCQ questions in Accountancy Class 12 examinations, our teachers have provided here a lot of MCQs with answers so that they can practice all objective questions and refer to answers too.

b) The latest books issued for CBSE, NCERT and KVS have been used by our teachers for the development of the objective questions for all chapters in Accountancy Grade 12th.

c) We have also provided quick revision notes for Class 12 Accountancy as they will be really helpful to understand and easily solve all multiple choice questions and answers

d) Lot of MCQs for Accountancy Class 12 have been provided by our faculty for your practice.

Free MCQs in PDF of CBSE Class 12 Accountancy have been designed by our highly expert class 12th teachers as per CBSE NCERT guidelines and examination pattern issued this year.

https://dkgoelsolutions.com/ has the largest collection of MCQ questions with answers for Accountancy in Class 12.

Are the MCQs designed based on the current academic year curriculum?

We have used the latest syllabus and examination pattern for Accountancy Class 12th issued this year for the development of all MCQs.

How to get PDF files for MCQs for Grade 12 Accountancy?