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Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Commerce Guide Pdf Chapter 28 Company Secretary Text Book Back Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Commerce Solutions Chapter 28 Company Secretary

12th Commerce Guide Company Secretary Text Book Back Questions and Answers

I. Choose the Correct Answers

Question 1.
Mention the status of a Company Secretary in a company.
a) A member
b) A director
c) An independent contractor
d) An employee contractor
Answer:
d) An employee contractor

Question 2.
Who can become a secretary for a company?
a) Individual person
b) Partnership firm
c) Co-operative societies
d) Trade unions
Answer:
a) Individual person

Question 3.
Which meeting will be held only once in the life time of the company?
a) Statutory
b) Annual General .
c) Extra – ordinary
d) Class General
Answer:
a) Statutory

Question 4.
Board Meetings to be conducted minimum ________ times in a year.
a) 2
b) 3
c) 4
d) 5
Answer:
c) 4

Question 5.
Who is not entitled to speak at the annual general meeting of the company.
a) Auditor
b) Shareholder
c) Proxy
d) Directors
Answer:
c) Proxy

Question 6.
Mention the company which need not convene the Statutory Meeting.
a) Widely held public
b) Private Limited
c) Public Limited
d) Guarantee having a share capital
Answer:
b) Private Limited

Question 7.
From the date of its incorporation the First Annual General Meeting is to be conducted
with in …………….. months.
a) Twelve
b) Fifteen
c) Eighteen
d) Twenty one
Answer:
c) Eighteen

Question 8.
What percentage of shareholders is needed to pass special resolution?
a) It must be unanimous
b) Not less than 90%
c) Not less than 75%
d) More than 50%
Answer:
c) Not less than 75%

Question 9.
A special resolution must be filed with the Registrar within
a) 7 days
b) 14 days
c) 30 days
d) 60 days
Answer:
c) 30 days

Question 10.
A special resolution is required to .
a) redeem the debentures
b) declare dividend
c) appoint directors
d) appoint auditor
Answer:
d) appoint auditor

II. Very Short Answer Questions

Question 1.
Who is a Secretary?
Answer
The person who is responsible for the general performance of an organization is called the company secretary.

Question 2.
What is meant by Meeting?
Answer:
A meeting is a gathering of two or more person that has been convened for the purpose of achieving a common goal through verbal interaction such as sharing information or reaching agreement.

Question 3.
What is Resolution?
Answer:
As per the Companies Act 2013, for taking any decision or executing any transaction, the consent of the shareholders, the Board of Directors and other specified is required. The decisions taken at a meeting are called resolutions

Question 4.
Write a Short note on ‘Proxy’.
Answer:

• “Proxy” means a person is the representative of a shareholder at the meeting of the
• He may be described as the agent of a shareholder to carry out which he has himself decide upon.
• He can be present at the meeting and vote but cannot talk.

Question 5.
What is Vote?
Answer:
The word ‘Vote’ originated from Latin word ‘Votum’ indicating one’s wishes or desire. By casting his vote one formally declares his opinion or wish in favour of or against a proposal or a candidate to be elected for an office.

III. Short Answer Questions

Question 1.
What is Special Resolution?
Answer:

• “Special Resolution” is one which is passed by not less than 75% of majority. [3/4^th majority]
• The number of votes cast in favour of the resolution should be three times the number of votes cast against it.

Question 2.
What do you mean by Statutory Meeting?
Answer:

• The First Meeting of the Company.
• This is convened only once in the life time of the company.
• It should hold the meeting of shareholders with in 6 months but not earlier than one month from the date of commencement of business of the company.

Question 3.
Give any three cases in which an ordinary resolution need to be passed.
Answer:

• To change the name of a company.
• To alter the share capital.
• To redeem debentures.
• To declare dividends.
• To approve annual accounts and Balance Sheet.
• To appoint the Directors.

Question 4.
What resolution requires special notice?

• There are certain matters specified in the Companies Act 2013, which may be discussed at General Meeting only if a special notice is given at least 14 days before the meeting.
• The following matters require special notice.
• To remove the director before the expiry of his period.
• To appoint a director in the place of a director so removed.
• To reappoint the retiring Auditor.

IV. Long Answer Questions

Question 1.
Elaborate the Functions of the company secretary.
Answer:
The functions of the Company Secretary may be divided into two types. They are:

1. Statutory functions
2. Non-Statutory functions

Statutory Functions: As the principal officer of the company, the secretary must observe all the legal formalities in respect of the provisions of the Companies Act and other laws, for the activities of the company.
According to Companies Act 2013:

1. To sign document and proceedings requiring authentication by the company
2. To maintain share registers and register of directors and of contracts.
3. TO give notice to register for increase in the share capital
4. To send notice of general meeting to every member of the company
5. To prepare minutes of every general meeting and board meeting within 30 days

Non-Statutory Functions: The secretary has to discharge non-statutory functions in relation to directors, shareholders and office and staff.
Functions in Relation to Directors: A company secretary acts under the full control of the board of directors and carry out the instructions of the directors.

The secretary will arrange board meetings issuing notice, and preparing agenda of meetings, recording the attendance and minutes of meetings.

Functions in Relation to Shareholders: The company secretary must serve in the best interests of the shareholders.
He has to arrange the issue of allotment letters, call letters, letters of regret, share certificates, and share warrants to Shareholders.

Functions in Relation to Office and Staff: The secretary is responsible for the smooth functioning of the office work. He exercises overall supervision, control and co-ordination of all clerical activities in the office.

Question 2.
Briefly state different types of Company Meetings.
Answer:
I. Meeting of Shareholders :
a. Statuary Meeting.
b. Annual General Meeting.
c. Extra Ordinary [Special] General Meeting.

II. Meetings of Directors :
a. Board Meeting.
b. Committee Meeting.

III. Special Meetings:
a. Class Meeting.
b. Creditors Meeting.

I) Meetings of Shareholders :
a) Statutory Meeting:

• The First Meeting of the Company.
• This is convened only once in the life time of the company.
• It should hold the meeting of shareholder within 6 months but not earlier than 1 month from the date of commencement of business of the company.

b) Annual General Meeting:

• Usually it is convened once in a year.
• The first AGM convened within 18 months from the date of Registration.
• The time gap between two consecutive AGM should not exceed 15 months.
• It should be convened where the Registered office situated or in any other place.
• Every AGM shall be held during business hours, on a day which is not a public holiday.

c) Extra-Ordinary [Special] General Meeting:

• All other General Meetings other than Statutory Meeting and AGM are called “Extra – Ordinary [Special] General Meeting”.
• If any meeting convened in between two AGM to deal with some urgent or special nature it is called Extra Ordinary General Meeting.

II) Meetings of Directors :
a) Board Meeting:

• Meetings of the Directors are called “Board Meeting”.
• The First Board Meeting should be convened with in 30 days from the date of incorporation of the company.
• It should be conducted at least 4 times in a year. [Once in 3 months]

b) Committee Meeting:

• The Committee [Audit] meet at least four times in a year. [Listed Companies or public limited company having share capital of ₹ 10 crores or more]
• If the share capital less than ₹ 10 crores, a Director should be appointed by the Board to the “Audit Committee”.

III) Special Meeting:
a) Class Meeting:

•  Meetings, which are held by a particular class of (preference shareholder or Debenture holder) is known as class meeting.

b) Meeting of the Creditor:

• These are not the meetings of the company.
• A situation in which a company may with to arrive at a consensues with the creditor to avoid any crisis or to evolve compromise or to introduce any new proposals.

Question 3.
Explain different Types of Open and Secret Types of Voting.
Answer:
I) Open Procedure:
a) By Voice:

• Voice voting in which the chairman allows the members to raise their voice in favour or against an issue.
  “Yes” for Approval
  “No” for Rejection.
• The chairman announces the results of voice voting on the basis of strength of words shouted.

b) By Show of Hands :

• Under this method, the chairman requests the members to raise their hands of those who are in favour of the proposal or candidate and then requests those are against.
• He announces the result on the basis of hands counted.

II) Secret Procedure:
a) By Ballot:

• Under this method, Ballot Paper Bearing Serial Number a (Symbol) is given to the members to record their opinion by marking with a symbol [S], they have to cast their vote in a secret chamber and put the ballot paper into the ballot box.
• The votes are counted and the results are announced.

b) By Post [Postal Ballot]:

• Big Companies or Big Associations having members scattered all over the country follow this method of voting.
• The members or voters fill in the ballot papers and return them by post in sealed covers which are opened when the ballot box is opened for counting the votes.

c) By Electronic Voting Machine [EVM]:

• It is a new technique of voting.
• Instead of using Ballot paper this machine is used.
• Names and symbols are fixed in the machine.
• The voter has to press the button.
• If green light signal comes it is in favour.
• If red light signal comes it is unfavour.

12th Commerce Guide Company Secretary Additional Important Questions and Answers

I. Choose the Correct Answers

Question 1.
A statutory meeting can be held within _________ months.
(a) 10
(b) 5
(c) 6
(d) 3
Answer:
(c) 6

Question 2.
The Latin word ‘Secretariats’ means …………….
a) Secret
b) Open
c) Delegate
d) complete
Answer:
a) Secret

Question 3.
An ordinary resolution is one which can be passed by a _________ majority.
(a) simple
(b) special
(c) high
(d) low
Answer:
(a) simple

Question 4.
A notice must be sent to every member to attend meeting …………………. days before the meeting is to be held. .
a) 7
b) 14
c) 21
d) 28
Answer:
c) 21

Question 5.
……………. means a person being the representative of a shareholder to attend a meeting on behalf of him.
a) Proxy
b) Substitute
c) Alternate
d) NOTA
Answer:
a) Proxy

Question 6.
Requisite number of persons at the meeting is called ……………….
a) Quorum
b) Proxy
c) Vote
d) Poll
Answer:
a) Quorum

Question 7.
Quorum for private limited company is ………………….
a) 1
b) 2
c) 3
d) 4
Answer:
b) 2

Question 8.
Quorum for public limited company is …………………
a) 3
b) 4
c) 5
d) 6
Answer:
c) 5

Question 9.
Which meeting will be held only once in the lifetime of the company?
a) AGM
b) Class
c) Board
d) Statutory
Answer:
d) Statutory

Question 10.
A Company Secretary is appointed by …………….
a) Government
b) Institute of Company Secretary
c) Board of Directors
d) Shareholders
Answer:
c) Board of Directors

Question 11.
Statutory meeting hold within …………….. months but not earlier than …………….. month.
a) 6 and 1
b) 6 and 2
c) 1 and 6
d) 6 and 3
Answer:
a) 6 and 1

Question 12.
The AGM convened within …………….. months.
a) 15
b) 18
c) 21
d) 25
Answer:
b) 18

Question 13.
The time gap between two consecutive AGM is ……………… months.
a) 3
b) 6
c) 12
d) 15
Answer:
d) 15

Question 14.
Director is Acting as ………………….
a) Agent
b) Trustee
c) Officer
d) All of these
Answer:
d) All of these

Question 15.
Who can call Extraordinary General Meeting?
a) CLT
b) Board
c) Requisition, Requisitioriists
d) All of these
Answer:
d) All of these

Question 16.
The decisions taken at a meeting are called ………………
a) Resolution
b) Poll
c) Vote
d) NOTA
Answer:
a) Resolution

Question 17.
……………….. resolution is one can be passed by a simple majority.
a) Ordinary
b) Special
c) Requiring Special Notice
d) All of these
Answer:
a) Ordinary

Question 18.
……………….. resolution is one can be passed by three fourth majority.
a) Ordinary
b) Special
c) Requiring Special Notice
d) All of these
Answer:
b) Special

Question 19.
The word vote is derived from the Latin word ………….
a) Votum
b) Voter
c) Voted
d) NOTA
Answer:
a) Votum

Question 20.
An authenticated record of a meeting is known as ………………
a) Agenda
b) Minutes
c) Ledger
d) NOTA
Answer:
b) Minutes

Question 21.
Pick the odd one out:
a) By Ballot
b) By Postal Ballot
c) By EVM
d) By Voice
Answer:
b) By Voice

Question 22.
Pick the odd one out:
a) Statutory Meeting
b) ACM
c) Extra-Ordinary General Meeting
d) Class Meeting
Answer:
d) Class Meeting

Question 23.
Which one of the following not correctly matched?
a) Statutory Meeting – Statutory Report
b) AGM – To appoint directors
c) Class Meeting – Preference shareholders meeting
d) Committee Meeting – Shareholders meeting
Answer:
d) Committee Meeting – Shareholders meeting

Question 24.
Choose the correct statement.
i) Proxy is a person who participates in the meeting on behalf of a shareholder.
ii) He can attend and vote in the meeting.
iii) He cannot speak in the meeting.
a) (i) is correct
b) (ii) is correct
c) (iii) is correct
d) (i), (ii) and (iii) are correct
Answer:
d) (i), (ii) and (iii) are correct

II Match the following.

Question 1.

Answer:
a) (i) 4, (11) 1, (iii) 2, (iv) 3

Question 2.

Answer:
b) (i) 3, (n) 4, (iii) 1, (iv) 2

III. Assertion and Reason

Question 1.
Assertion (A): Special Resolution is passed by three fourth majority.
Reason (R): The number of votes cast in favour of the resolution should be three times, the number of votes cast against it.
a) (A) and (R) are True. (R) is the correct explanation of (A)
b) (A) and (R) are True. (R) is not the correct explanation of (A)
c) (A) is True (R) is False
d) (A) is False (R) is True
Answer:
a) (A) and (R) are True. (R) is the correct explanation of (A)

Question 2.
Assertion (A): Voice Voting in which the Chairman allows the members to raise their voice in favour or against an issue.
Reason (R): The chairman announces the results of voice voting on the basis of the strength of words shouted.
a) (A) and (R) are True. (R) is not the correct explanation of (A).
b) (A) and (R) are True. (R) is the correct explanation of (A).
c) (A) and (R) are False.
d) (A) is False (R) is True
Answer:
b) (A) and (R) are True. (R) is the correct explanation of (A)

IV. Very Short Answer Questions

Question 1.
Define Company Secretary.
Answer:
“Secretary means any individual possessing the prescribed qualifications, appointed to perform the duties which may be performed by a secretary under this Act and any other ministry or administrative duties”.
– Companies Act, 2013, Section 2 (24)

Question 2.
What do you understand by “Poll”?
Answer:

•  Poll means tendering or offering a vote by ballot to a specially appointed officer, called the polling officer.
• Under the Companies Act, poll means exercising the voting right in the proportion to shareholders contributions the paid-up capital of a limited company having a share capital.

V. Long Answer Questions 

Question 1.
What are the Qualifications of a Company Secretary?
Answer:
Statutory Qualifications:

• ACS – [Having Share Capital 5 crore or more] [Associates of the company secretary ship]
• B.L – Degree
• C.A. – [Member of Institute of Chartered Accountant]
• M.Com – Degree
• I.C.W.A – [Member of Institute of Cost and Works Accountant]

Other Qualifications:

• Thorough in Companies Act.
• Expertise in Business Laws.
• Know the Economic Laws.
• Having more knowledge of Accounting.
• Expertise in Labour Laws.
• Knowledge in Company Management and HRM.

Question 2.
How the company secretary is appointed?
Answer:
As per section 2 (247, 203, 204) of the companies Act 2013, the provisions are given for the appointment of the company secretary. Only an individual who is a member of the Institute of Company Secretaries of India can be „ appointed as a company secretary. There are two methods of appointment of the company secretary. They are given below:

1. By the Promoters: The first secretary of a company is appointed by the promoters at the pre-incorporation stage.
2. By the First board of Directors: After the company has been registered, the first board of directors appoints the secretary at the first board meeting.

Question 3.
What are the powers and Rights of the Company Secretary?
Answer:

• Excercising Power : He has the right to exercise powers as granted by Board.
• Claiming Salary : As per contract, he has the right to claim his salary and other allowances.
• Preferential Creditor : During winding up of a company, he can claim his legal dues on a preferential basis.
• Attending Meeting : He has the right to be physically present in the meeting of shareholders and Directors.
• Supervision and Control : As a head, he has a right to supervise, direct and control all office activities of the subordinates.
• Signing authority : Being a principal officer he can sign contracts

Question 4.
Discuss the Liabilities of Company Secretary.
Answer:
I. Statutory Liabilities:

• Register all files and documents of the company.
• Arrange AGM in due time.
• Sending notice of meeting to all the participants.
• Maintaining Minute Books.
• Issuing share certificate, share warrant to the shareholders.

II. Contractual Liabilities:

• Abide by all terms and conditions of service contract.
• Act as per the directions of Board.
• Maintain secretary of the company affairs.
• Perform duties with due care and skills.
• Never act beyond his authority.
• Not to earn secret profit through illegal activity.

Question 5.
Describe the different types of Resolutions which company may pass with suitable matters required for each type of resolution.
Answer:
Ordinary Resolution:

• An ordinary resolution is one which can be passed by a simple majority. [Not less than 51 %]
• The votes cast in favour of resolution is more than the votes cast against the resolution.

Ordinary Resolution is required for the following matters :

• To change the name of a company.
• To alter the share capital.
• To redeem debentures.
• To declare dividends.
• To approve annual accounts and Balance Sheet.
• To appoint the directors.

Special Resolution:

• “Special Resolution” is one which is passed by not less than 75% of majority. [3/4th majority]
• The number of votes cast in favour of the resolution should be three times the number of votes cast against it.

Special Resolution is required for the following matters:

• To change the Registered office from one state to another.
• To change the objectives of the company.
• To alter the AOA.
• To commence any new business.
• To appoint auditor.

Resolution requiring special notice :

•  There are certain matters specified in the Companies Act 2013, which may be discussed at meeting only if a special notice is given at least 14 days before the meeting.
• The following matters require special notice.
• To remove the director before the expiry of his period.
• To appoint a director in the place of a director so removed.
• To re-appoint the retiring Auditor.

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Commerce Guide Pdf Chapter 2 Functions of Management Text Book Back Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Commerce Solutions Chapter 2 Functions of Management

12th Commerce Guide Functions of Management Text Book Back Questions and Answers

I. Choose the correct answer

Question 1.
Which is the primary function of management?
a) Innovating
b) Controlling
c) Planning
d) Decision-making
Answer:
c) Planning

Question 2.
Which of the following is not a main function?
a) Decision-making
b) Planning
c) Organising
d) Staffing
Answer:
a) Decision making

Question 3.
………………. is included in every managerial function.
a) Co-ordinating
b) Controlling
c) Staffing
d) Organising
Answer:
a) Co-ordinating

Question 4.
Which of the following is verification function?
a) Planning
b) Organising
c) Staffing
d) Controlling
Answer:
d) Controlling

II. Very short answer

Question 1.
Write a short note about planning.
Answer:
Planning is the primary function of management. Nothing can be performed without planning. Planning is a constructive review of future needs so that present actions can be adjusted in view of the established goal.

Question 2.
What is meant by Motivation?
Answer:

• The goals are achieved with the help of motivation.
• It includes increasing the speed of performance of a work and developing a willingness on the part of workers.
• It may be monetary (cash) or non-monetary (kind).

Question 3.
What is meant by Controlling?
Answer:
Controlling is performed to evaluate the performance of employees and deciding increments and promotion decisions. The control function helps in identifying underperformers and arranging remedial training for them. It is the control function that facilitates synchronization of actual performance with predetermined standards.

Question 4.
List the subsidiary functions of management.
Answer:

• Innovation
• Representation
• Decision – making
• Communication

Question 5.
What is the Traditional Proverb used in planning?
Answer:
“Thinking before doing” or “Look Before you Leap” are some of the usual traditional proverbs.

III. Short answer questions.

Question 1.
List out the main functions of management?

• Planning
• Organising
• Staffing
• Directing
• Motivation
• Controlling
• Co-ordination

Question 2.
State the importance of staffing.
Answer:
Staffing refers to the placement of the right persons in the right jobs. Staffing includes a selection of right persons, training to those needy persons, promotion of best persons, the retirement of old persons, performance appraisal of all the personnel, and adequate remuneration of personnel. The success of any enterprise depends upon the successful performance of the staffing function.

Question 3.
What is meant by Innovation?
Answer:

• Innovation refers to the preparation of personal and organization to face the changes made in the business world.
• Continuous changes are being made in the business.
• It includes developing new products, new materials, new’ techniques in production, new package, the new design of a product, and cost and reduction.

Question 4.
What is meant by co-ordination?
Answer:
Coordination is the synchronization of the actions of all individuals, working in the enterprise in different capacities. So as Lo leads the most successful attainment of the common objectives.
Co-ordination is included in every managerial function.

Eg:

• Planning and co-ordination
• Organisation and Co-ordination
• Staffing and co-ordination
• Directing and Co-ordination
• Motivation and co-ordination and
• controlling and co-ordination.

Question 5.
How the employees are informed about important matters in a company?
Answer:
Employees are kept informed of all necessary matters by circulars, instructions manuals, newsletters, notice – boards, meetings, participative mechanisms, etc.

IV. Long answer questions.

Explain the various functions of management.
Answer:
Main Functions:

1. Planning:- Planning is the primary function of management. Planning is a constructive review of future needs so that present actions can be adjusted in view of the established goal.
2. Organising:- Organising is the process of establishing harmonious relationships among the members of an organization and the creation of a network of relationships among them.
3. Staffing:- Staffing function comprises the activities of selection and placement of competent personnel.
4. Directing:- Directing denotes motivating, leading, guiding, and communicating with subordinates on an ongoing basis in order to accomplish pre-set goals.
5. Controlling:- Controlling is performed to evaluate the performance of employees and deciding increments and promotion decisions.
6. Co-ordination:- Co-ordination is the synchronization of the actions of all individuals, working in the enterprise in different capacities.
7. Motivating: The goals are achieved with the help of motivation. Motivation includes increasing the speed of performance of a work and developing a willingness on the part of workers.

Subsidiary Functions:

1. Innovation:- Innovation includes developing new material, new products, new techniques in production, new package, the new design of a product, and cost reduction.
2. Representation:- A manager has to act as a representative of a company. It is the duty of every manager to have good relations with others.
3. Decision-making:- Every employee of an organization has to take a number of decisions every day. Decision-making helps in the smooth functioning of an organization.
4. Communication:- Communication is the transmission of human thoughts, views or opinions from one person to another person. Communication helps the regulation of the job and co-ordinates the activities.

12th Commerce Guide Functions of Management Additional Important Questions and Answers

I. Choose the correct answer.

Question 1.
Which is the Secondary Function of Management?
a) Innovation
b) Planning
c) Motivation
d) Controlling
Answer:
a) Innovation

Question 2.
“Look Before you Leap” is a usual traditional proverb which provides a basis or logic for
a) Organising
b) Planning
c) Controlling
d) Decision Making
Answer:
b) Planning

Question 3.
Choose the odd one out.
(a) Directing
(b) Motivating
(c) Staffing
(d) Decision-making
Answer:
(d) Decision-making

Question 4.
Selection and placement of competent personnel is known as …………..
a) Communicating
b) Innovating
c) Motivating
d) Staffing
Answer:
d) Staffing

Question 5.
……………….. is performed to evaluate the performance of employees.
a) Staffing
b) Controlling
c) Selecting
d) Training
Answer:
b) Controlling

Question 6.
There are ______ subsidiary functions of management.
(a) Four
(b) Three
(c) Seven
(d) Six
Answer:
(a) Four

Question 7.
Nothing can be performed without………….
a) Planning
b) Motivating
c) Controlling
d) Co-ordination
Answer:
a) Planning

Question 8.
Which one of the following is correctly matched?
a) Planning – Work assigned
b) Representation – Right man for the right job
c) Motivation – Fair treatment
d) Co-ordination – Communication
Answer:
c) Motivation – Fair treatment

Question 9.
Which one of the following is correctly matched?
a) Controlling – Remedial Training
b) Innovation – New Techniques
c) Communication – Representative
d) Staffing – Selection
Answer:
c) Communication – Representative

Question 10.
Distribution of work in GroupWise or sections is called as …………………..
a) Co-ordinating
b) Controlling
c) Staffing
d) Organising
Answer:
d) Organising

Question 11.
Find the odd one out:
a) Primary Function
b) Harmonious Relationship
c) Evaluate the performance
d) Developing new materials
Answer:
d) Developing new materials

Question 12.
Find the odd one out:
a) Representative of a company
b) Opinion from one person to another
c) Synchronization of the actions of all individuals
d) Decision makings
Answer:
c) Synchronization of the actions of all individuals

II. Match the following

1. Match List I with List II

a) i-4, ii-3, iii-2, iv-1
b) i-4, ii-1, iii-3, iv-2
c) i-4, ii-2, iii-1, iv-3
d) i-4, ii-3, iii-2, iv-1
Answer:
a) i-4, ii-3, iii-2, iv-1

2. Match List I with List II

a) i-4, ii-3, iii-2, iv-1
b) i-1, ii-2, iii-4, iv-2
c) i-2, ii-3, iii-4, iv-1
d) i-3, ii-4, iii-1, iv-2
Answer:
a) i-4, ii-3, iii-2, iv-1

3. Match List I with List II

a) i-1, ii-4, iii-2, iv-4
b) i-4, ii-3, iii-2, iv-1
a) i-1, ii-3, iii-2, iv-4
c) i-4, ii-2, iii-1, iv-3
Answer:
b) i-4, ii-3, iii-2, iv-1

III. Assertion and Reason

Question 1.
Assertion (A): Placement of the right person in the right jobs.
Reason (R): The success of any enterprise
depends on the performance of staffing,
a) (A) is true (R) is False
b) (A) is False (R) is True
c) Both (A) and (R) are True
d) Both (A) and (R) are False
Answer:
c) Both (A) and (R) are True

Question 2.
Assertion (A) : Planning is a function of management.
Reason (R) : Anything can be performed
without planning.
a) (A) is true (R) is False
b) (A) is False (R) is True
c) Both (A) and (R) are True
d) Both (A) and (R) are False
Answer:
a) (A) is true (R) is False

IV. Very Short Answer

Question 1.
How the functions of management can be classified?
Answer:
The functions of management can be classified into two categories. They are as follows:

• Main functions of Management
• Subsidiary functions of Management

V. Short Answer

Question 1.
State the importance of Motivation.
Answer:

• The goals are achieved with the help of motivation.
• It includes the speed of performance of a work and developing a willingness on the part of workers.
• It may be monetary [cash] or non-monetary [kind]
• This is done by a resourceful leader.
• The workers expect favorable climate conditions to work, fair treatment, incentive, effective communication, and a gentlemanly approach.

Question 2.
Bring out the subsidiary functions of management.
Answer:

Question 1.
What do you mean by communication?
Answer:
Communication is the transmission of human thoughts, views, or opinions from one person to another person. Workers are informed about what should be done, where it is to be done, how it is to be done, and when it is to be done. Communication helps the regulation of the job and co-ordinates the activities.

We hope the information prevailed in this article is helpful for all the students of Class 12th. The Tamilnadu State Board Solutions for Class 12th Chapter 2 Functions of Management Questions and Answers And Pdf enhance your skills and score good marks in the exams. Stay tuned to get the latest information about the Samacheer Kalvi Class 12th Chapter 2 Functions of Management Solutions.

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Commerce Guide Pdf Chapter 1 Principles of Management Text Book Back Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Commerce Solutions Chapter 1 Principles of Management

12th Commerce Guide Principles of Management Text Book Back Questions and Answers

I. Choose the correct answer.

Question 1.
Management is what a……………..does?
a) Manager
b) Subordinate
c) Supervisor
d) Superior
Answer:
a) Manager

Question 2.
Management is an …………………
a) Art
b) Science
c) Art and Science
d) Art or Science
Answer:
c) Art and Science

Question 3.
Scientific management is developed by
a) Fayol
b) Taylor
c) Mayo
d) Jcob
Answer:
b) Taylor

Question 4.
Dividing the work into small tasks is known as
a) Discipline
b) Unity
c) Division of work
d) Equity
Answer:
c) Division of work

Question 5.
With a wider span, there will be …………… hierarchical levels.
a) More
b) Less
c) Multiple
d) Additional
Answer:
b) Less

II. Very short answer questions.

Question 1.
What is Management?
Answer:
Management is part and parcel of our day to day life. So management is goal oriented and it is an art of getting things done with and through others.

Question 2.
List out the management tools. (BASED)
Answer:

1. Business Law
2. Accounting
3. Statistics
4. Economics
5. Data processing

Question 3.
Who is a manager?
Answer:
A manager is a dynamic and life giving element in every business. Without efficient management it cannot be possible to secure the best allocation and utilisation of human, material and financial resources.

Question 4.
State the meaning of Authority.
Answer:
“Authority” means the right of a superior given to his subordinate to get work from him.

Question 5.
What do you mean by the span of management?
Answer:
The Span of Management refers to the number of subordinates who can be managed efficiently by a superior. Simply, the manager having the group of subordinates who report him directly is called as the span of management.

III. Short Answer Questions.

Question 1.
Define the term management.
Answer:
“Management is a multi-purpose organ that manages a business, and manages manager and manages workers and work”. – PETER F. DRUCKER.

Question 2.
Is management an Art or Science?
Answer:
Management is neither a science nor an art, but a combination of both requiring people holding managerial positions to apply the scientific management principles and displaying popular managerial skills to accomplish the organizational goals as efficiently and as quickly as possible so as to be competitive in the globalized environment of business.

Question 3.
Differentiate management from Administration. MA CARD
Answer:

Question 4.
What are the principles of Taylor?
Answer:

• Science, not a Rule of Thumb.
• Harmony, not Discord.
• Mental Revolution
• Cooperation, not Individualism
• Development of each and every person to his or her greatest efficiency and prosperity.

Question 5.
What determines the span of management?
Answer:
The Span of Management has two implications:

1. Influences the complexities of the individual manager’s job.
2. Determine the shape or configuration of the organization.
3. There is a wide and a narrow span of management.

IV. Long answer questions

Question 1.
Explain the concept of management.
Answer:

The substance of management should be identified as a process. A process is something that what a person does in the context of his individual duties and responsibilities assigned by his or her immediate higher authority.
There are twin purposes of the management process:

1. Maximum productivity or profitability
2. Maximum human welfare and satisfaction.

There are five parts of management as a process:

1. Co-ordination of resources: The manager of an enterprise must effectively coordinate all activities and resources of the organization, namely, men, machines, materials, and money, the four M’s of management.
2. Management is a Process: The manager achieves proper coordination of resources by means of the managerial functions of planning, organizing, staffing, directing (or leading and motivating), and controlling.
3. Management is a Purposive Process: It is directed toward the achievement of predetermined goals or objectives. Without an objective, we have no destination to reach or a path to follow to arrive at our destination, i.e., a goal, both management, and organization must be purposive or goal-oriented.
4. Management is a Social Process: It is the art of getting things done through other people.
5. Management is a Cyclical Process: It represents a planning-action-control-replanning cycle, i.e., an ongoing process to attain the planned goals.

Question 2.
Explain the management process in detail.

Question 3.
Describe the principles of scientific management. (S) (HM) (CD)
Answer:
Science, not Rule of Thumb:

• Rule of thumb means decisions taken by managers as per their personal judgements.
• Taylor says, even a small production activity like loading – iron sheets into box cars can be scientifically planned.
• It saves time and energy of human.

Harmony, not Discard:

• Taylor emphasized that there should be complete harmony between the workers and the management.
• If there is any conflict between the two, it will not be beneficial either for workers or for management.

Mental Revolution:

• Taylor suggested complete mental revolution on the part of both workers and Management.
• It means that there should be complete change in the attitude and out look of both workers and management.
• It becomes possible – Teamwork – Sharing profits – Division of work etc.

Co-operation, not Individualism:

• It is an extension of principle of “Harmony, not discord”.
• It lays stress on mutual co-operation between workers and the management.
• Both workers and management should realize the importance of each other.

Development of Each and Every person:

• Efficiency of any organisation also depends on the skills and capabilities of its employees to a great extent.
• Thus, providing to the workers was considered essential in order to learn the best method.
• It helps to attain the efficiency and property for both workers and management.

Question 4.
Explain the principles of modern management.
Answer:
The Father of Modem Management is Mr.Henry Fayol, and according to him, there are 14 major principles of management which every manager has to practice for the success of the organization.

1. Division of Work: According to this principle the whole work is divided into small tasks. This leads to specialization which increases the efficiency of labour.
2. Authority and Responsibility: This is the issue of commands followed by responsibility for their consequences.
3. Discipline: It is obedience, proper conduct in relation to others, respect of authority, etc. It is essential for the smooth functioning of all organizations.
4. Unity of Command: This principle states that each subordinate should receive orders and be accountable to one and only one superior.
5. Unity of Direction: All related activities should be put under one group, there should be one plan of action for them, and they should be under the control of one manager.
6. Subordination of Individual Interest to Mutual Interest: The management must put aside personal considerations and put company objectives firstly.
7. Remuneration: Workers must be paid sufficiently as this is a chief motivation of employees and therefore greatly influences productivity.
8. The Degree of Centralization: The amount of power wielded with the central management depends on company size.
9. Line of Authority/Scalar Chain: This refers to the chain of superiors ranging from top management to the lowest rank.
10. Order: Social order ensures the fluid operation of a company through the authoritative procedure.
11. Equity: Employees must be treated kindly, and justice must be enacted to ensure a just workplace.
12. Stability of Tenure of Personnel: Stability of tenure of personnel is a principle stating that in order for an organization to run smoothly, personnel (especially managerial personnel) must not frequently enter and exit the organization.
13. Initiative: Using the initiative of employees can add strength and new ideas to an organization.
14. Esprit de Corps/Team Spirit: This refers to the need of managers to ensure and develop morale in the Workplace; individually and communally.

12th Commerce Guide Principles of Management Additional Important Questions and Answers

I. Choose the correct answer.

Question 1
_______ is a global and universal concept.
(a) Management
(b) Process
(c) Art
(d) Science
Answer:
(a) Management

Question 2.
To manage is to forecast, to plan, to organize, to command, to co-ordinate and to control said by ……………………
a) Henry Fayol
b) Peter F. Drucker
c) Taylor
d) NOTA
Answer:
a) Henry Fayol

Question 3.
“To manage is to forecast, to plan, to organise, to command, to co-ordinate and to control.” said by _______
(a) Henry Fayol
(b) Peter F. Drucker
(c) Walker
(d) Carter
Answer:
(a) Henry Fayol

Question 4.
What should be done? and when is should be done decided by ……………
a) Management
b) Supervisor
c) Director
d) Administrator
Answer:
d) Administrator

Question 5.
Executive and governing functions are done by ……………..
a) Manager
b) Supervisor
c) Worker
d) Administrator
Answer:
a) Manager

Question 6.
The father of Modem Management is _______
(a) F.W. Taylor
(b) Henry Fayol
(c) Peter F. Drucker
(d) Louis A. Allen
Answer:
(b) Henry Fayol

Question 7.
The Authority of Top-level is ………………
a) Management
b) Administration
c) Both
d) NOTA
Answer:
b) Administration

Question 8.
One employee should receive an order from only one boss is known as ………………
a) Unity of command
b) Unity of objective
c) Unity of direction
d) Unity of strength
Answer:
a) Unity of command

Question 9.
Superiors ranging from top management to the lowest rank is called …………….
a) Responsibility
b) Authority
c) Remuneration
d) Scalar chain
Answer:
d) Scalar chain

Question 10.
With the narrow span, the hierarchical levels……………..
a) Decreases
b) Increases
c) Ups and downs
d) Stagnant
Answer:
b) Increases

Question 11.
Find the odd one out:
a) Harmony, Not Discord
b) Mental Revaluation
c) Cooperation, not individualization
d) Order
Answer:
d) Order

Question 12.
Find the odd one out:
a) Division of work
b) Scalar chain
c) Equity
d) Science not thum of Rule
Answer:
d) Science not thum of Rule

Question 13.
Which one of the following is not correctly matched?
a) Business law – Management Tool
b) Specialisation – Highly qualified
c) Code of conduct – Social conscience
d) Behavioural school – Process of planning
Answer:
d) Behavioural school – Process of planning

Question 14.
Which one of the following is correctly matched?
a) Cyclical process – Ongoing process
b) Purposive process – Co-ordinate
c) Social process – Goal-oriented
d) Not Individualisation – Separation
Answer:
a) Cyclical process – Ongoing process

Question 15.
Which is the correct statement?
i) Division of work is whole work divided into small tasks.
ii) Discipline is obedience and respect for authority.
iii) Unity of direction is related activities put under many groups.
a) (i) is correct
b) (i) and (ii) are correct
c) All are correct
d) All are wrong
Answer:
b) (i) and (ii) are correct

II. Match the following.

Question 1.
Match List I with List II

a) iv-1, iii-2, ii-3, i-4
b) iv-2, iii-1, ii-3, i-4
c) iv-3, iii-4, ii-1, i-1
d) iv-4, iii-3, ii-2, i-1
Answer:
a) iv-1, iii-2, ii-3, i-4

Question 2.
Match List I with List II

a) i-1, ii-3, iii-2, iv-4
b) i-1, ii-2, iii-4, iv-3
c) i-1, ii-4, iii-3, iv-2
d) i-1, ii-2, iii-3, iv-4
Answer:
a) i-1, ii-3, iii-2, iv-4

III. Assertion and Reason

Question 1.
Assertion (A): line employees should recei\e orders from one superior.
Reason (R): If the receives orders from more superiors, it creates confusion and conflict,
a) both (A) and (R) are true. (R) is the correct explanation of (A)
b) both (A) and (R) are false. (R) is the correct explanation of (A)
c) Roth (A) and (R) are I rue. (R) is not the correct explanation of (A)
d) (A) is true (R) is False
Answer:
a) both (A) and (R) are true. (R) is the correct explanation of (A)

Question 2.
Assertion (A) : All related activities should be put under one group.
Reason (R) : There should be under the control of one manager.
a) (A) is true (R) is False
b) (A) is False (R) is True
s) Both tA) and (R) are True
d) Moth (A) and iR) are False
Answer:
c) Both (A) and (R) arc True.

Question 3.
Assertion (A): Equity must be treated kindly and justice.
Reason (R): Managers should be fair and partial.
a) (A) is true (R) is False
b) (A) is False (R) is True
c) t A) and (R) are I rue
d) (A) and (R’ are False
Answer:
a) (A) is True (R) is False

IV. Very Short Answer Questions:

Question 1.
What is a Scalar chain or Line of Authority?
Answer:
This refers to the chain of superiors ranging from top management to the lowest rank. The principle suggests that there should be a clear line of authority from top to bottom linking all managers at all levels.

V. Short Answer Questions:

Question 1.
Who is a Professional Manager?
Answer:
“A professional manager is one who specializes in the work of planning, organising, leading and controlling the efforts of others and does so through the systematic use of classified knowledge, a common vocabulary, and principles and who subscribes to the standards of practice and code of ethics established by a recognized body.” – Louis A. Allen.

VI. Long Answer Questions:

Question 1.
Formulate a new policy relating to the timing of employees.
Answer:
It has always been a struggle for people to maintain a work-life balance. Working excessive hours poses a danger to workers’ health and to their families. Earlier all the work was done manually. However, with the help of machinery and computers, in modem times certain industries don’t require as many working hours anymore. Technology has introduced new ways to increase productivity. More recently, the global trend leans toward a four-day workweek (counting one workday as eight hours).

Even the ILO standards on working time provide the framework for regulated hours of work, daily and weekly rest periods, and annual holidays. These instruments ensure high productivity while safeguarding workers’ physical and mental health. If the workers earn enough to pay for their necessities, they may opt to spend more time at home or in leisure. Countries around the globe are already experimenting and implementing shorter workweeks in varying degrees. So, in my opinion, the new policy relating to the timing of employees should be a four-day workweek.

We hope the information prevailed in this article is helpful for all the students of Class 12th. The Tamilnadu State Board Solutions for Class 12th Chapter 1 Principles of Management Questions and Answers And Pdf enhance your skills and score good marks in the exams. Stay tuned to get the latest information about the Samacheer Kalvi Class 12th Chapter 1 Principles of Management Solutions.

Question 2.
Discuss the implications of the span of management.
Answer:
Can a superior effectively manage, supervise and control how many subordinates.
It is known as “Span of Control” or “Span of Management” or “Span of Supervision”.

The span of management has two implications:

1. Influences the complexities of the individual Manager’s job.
2. Determine the shape or configuration of the organization.

It has two horizontal levels of span of management.

1. Wider-Span
2. Narrow Span

Wider-Span:

• Wider-Span-Less hierarchical levels – More subordinates – Less expensive.
• It imposes more challenges.
• It is very difficult for a superior to manage a large number of subordinates.
• In this structure, managers get reduced and remuneration saved.

Narrow Span:

• Narrow Span- more hierarchical levels – fewer subordinates – more expensive.
• With more levels of hierarchy the communication sutlers drastically.
• It takes a lot of time to reach the appropriate points and hence the actions delayed.
• In this structure, less number of subordinates under one superior requires more managers to be employed

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Maths Guide Pdf Chapter 10 Ordinary Differential Equations Ex 10.2 Textbook Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Maths Solutions Chapter 10 Ordinary Differential Equations Ex 10.2

Question 1.
Express each of the following physical statements in the form of differential equation.
(i) Radium decays at a rate proportional to the amount Q present.
(ii) The population P of a city increases at a rate propotional to the product of population and to the difference between 5,00,000 and the population.
(iii) For a certain substance, the rate of change of vapor pressure P with respect to temperature T is proportional to the vapor pressure and inversely proportional to the square of the temperature.
(iv) A saving amount pays 8% interest per year compound continuously. In addition, the income from another investment is credited to the amount continuously at the rate of Rs 400 per year.
Solution:
(i) If at anytime t, The amount of Radium present is Q. The rate at which Q is decreasing is \(\frac { dQ }{ dt }\) and this is negative. This rate of decrease or decay is found to be proportional to Q itself. Hence we have the law, \(\frac { dQ }{ dt }\) = -kQ where k is a positive constant. Therefore \(\frac { dQ }{ dt }\) + kQ = 0 which is a differential equation.

(ii) The rate of change of population increases with respect to time t, is \(\frac { dP }{ dt }\) & the rate of population is proportional to the product of population is \(\frac { dP }{ dt }\) = kP & the also the difference between 5,00,000 & the population is \(\frac { dP }{ dt }\) = kP(5,00,000 – P) is required differential equation.

(iii) The rate of change of vapor pressure P with respect to time t is \(\frac { dP }{ dt }\) & the rate of increase vapor pressure is P at time T is proportibnal to the vapor pressure and also is inversely proportional to the square of the temperature is \(\frac { dP }{ dt }\) = \(\frac { kP }{ T^2 }\)
since \(\frac { k }{ T^2 }\) = α
\(\frac { dP }{ dt }\) = α P ⇒ \(\frac { dP }{ dt }\) – α P = 0 is a required differential equation.

(iv) Let x be the amount. Amount varies from every year, (ie) Amount varies with respect to time t is \(\frac { dx }{ dt }\) & in addition the income from other source credited Rs.400 continuously for every year.
∴ \(\frac { dx }{ dt }\) = \(\frac { 8 }{ 100 }\) × x + 400
⇒ \(\frac { dx }{ dt }\) = \(\frac { 2x }{ 25 }\) + 400
⇒ ⇒ \(\frac { dx }{ dt }\) – \(\frac { 2 }{ 25 }\)x – 400 = 0 is a required differential equation.

Question 2.
Assume that a spherical rain drop evaporates at a rate proportional to its surface area. Form a differential equation involving the rate of change of the radius of the rain drop.
Solution:
The rate of change of the radius of the rain drop evaporates with respect to time t is \(\frac { dx }{ dt }\) = -k i.e The drop is decreasing so put negative sign. Therefore \(\frac { dx }{ dt }\) = -k is a required differential equation.

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Maths Guide Pdf Chapter 10 Ordinary Differential Equations Ex 10.1 Textbook Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Maths Solutions Chapter 10 Ordinary Differential Equations Ex 10.1

Question 1.
For each of the following equations, determine its order, degree (if exists)
(i) \(\frac { dy }{ dx }\) + xy = cot x
(ii) (\(\frac { d^3y }{ dx^3 }\))^2/3 – 3 \(\frac { d^2y }{ dx^2 }\) + 5\(\frac { dy }{ dx }\) + 4 = 0
(iii) (\(\frac { d^2y }{ dx^2 }\))² + (\(\frac { dy }{ dx }\))² = x sin (\(\frac { d^2y }{ dx^2 }\))
(iv) \(\sqrt{\frac { dy }{ dx }}\) – 4 \(\frac { dy }{ dx }\) – 7x = 0
(v) y(\(\frac { dy }{ dx }\)) = \(\frac { x }{ (\frac { dy }{ dx })+(\frac { dy }{ dx })^3 }\)
(vi) x²\(\frac { d^2y }{ dx^2 }\) + [1 + (\(\frac { dy }{ dx }\))²]^1/2 = 0
(vii) (\(\frac { d^2y }{ dx^2 }\))³ = \(\sqrt{1+(\frac { dy }{ dx })}\)
(viii) \(\frac { d^2y }{ dx^2 }\) = xy + cos (\(\frac { dy }{ dx }\))
(ix) \(\frac { d^2y }{ dx^2 }\) + 5 \(\frac { dy }{ dx }\) + ∫ ydx = x³
(x) x = e^{xy(\(\frac { dy }{ dx }\))}
Solution:
(i) \(\frac { dy }{ dx }\) + xy = cot x
In the given equation, the highest order derivative is \(\frac { dy }{ dx }\) only its power is 1
∴ Its order = 1 & degree = 1

(ii) (\(\frac { d^3y }{ dx^3 }\))^2/3 – 3 \(\frac { d^2y }{ dx^2 }\) + 5\(\frac { dy }{ dx }\) + 4 = 0
Taking power 3 on both sides, we get
(\(\frac { d^3y }{ dx^3 }\))² = (3 \(\frac { d^2y }{ dx^2 }\) – 5\(\frac { dy }{ dx }\) – 4)³
In the equation (1), the highest order derivative is \(\frac { d^3y }{ dx^3 }\) and its power is 2.
∴ Its order = 3 & degree = 2

(iii) (\(\frac { d^2y }{ dx^2 }\))² + (\(\frac { dy }{ dx }\))² = x sin (\(\frac { d^2y }{ dx^2 }\))
In the equation, the highest order derivative is \(\frac { d^2y }{ dx^2 }\) and its order is 2.
It has a term sin (\(\frac { d^2y }{ dx^2 }\)), so its degree is not defined or degree does not exist.

on squaring both sides,
\(\frac { dy }{ dx }\) = 16 (\(\frac { dy }{ dx }\))² + 49 x² + 56x \(\frac { dy }{ dx }\)
clearly, it is a differential equation of order = 1 & degree = 2.

In this equation, the highest order derivative is \(\frac { dy }{ dx }\) & its power is 4.
∴ Its order = 1 & degree = 4

In this equation, the highest order derivative is \(\frac { d^2y }{ dx^2 }\) & its power is 2.
∴ Its order = 2 & degree = 2

In this equation, the highest order derivative is \(\frac { d^2y }{ dx^2 }\) & its power is 6.
∴ Its order = 2 & degree = 6

(viii) \(\frac { d^2y }{ dx^2 }\) = xy + cos (\(\frac { dy }{ dx }\))
In this equation, the highest order derivative is \(\frac { d^2y }{ dx^2 }\) & its power is 2.
It has a term cos(\(\frac { dy }{ dx }\)), so its degree is not defined or degree does not exist.

(ix) \(\frac { d^2y }{ dx^2 }\) + 5 \(\frac { dy }{ dx }\) + ∫ ydx = x³
differentiating with respect to x, we get
\(\frac { d^3y }{ dx^3 }\) + 5 \(\frac { d^2y }{ dx^2 }\) + y = 3x²
In this equation the highest order derivative is \(\frac { d^3y }{ dx^3 }\) & its power is 1
∴ Its order = 3 & degree = 1

(x) x = e^{xy(\(\frac { dy }{ dx }\))}
In this equation the highest order derivative is \(\frac { dy }{ dx }\) & its order is 1
It has the term e^{xy(\(\frac { dy }{ dx }\))}
So its degree is not defined or degree does not exist.

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Samacheer Kalvi 12th Commerce Book Solutions Answers Guide

Samacheer Kalvi 12th Commerce Book Back Answers

Tamilnadu State Board Samacheer Kalvi 12th Commerce Book Back Answers Solutions Guide.

• Chapter 1 Principles of Management
• Chapter 2 Functions of Management
• Chapter 3 Management By Objectives (MBO) and Management By Exception (MBE)
• Chapter 4 Introduction to Financial Markets
• Chapter 5 Capital Market
• Chapter 6 Money Market
• Chapter 7 Stock Exchange
• Chapter 8 Securities Exchange Board of India (SEBI)
• Chapter 9 Human Resource Management
• Chapter 10 Recruitment Methods
• Chapter 11 Employee Selection Process
• Chapter 12 Employee Training Method
• Chapter 13 Concept of Market and Marketer
• Chapter 14 Marketing and Marketing Mix
• Chapter 15 Recent Trends in Marketing
• Chapter 16 Consumerism
• Chapter 17 Rights, Duties & Responsibilities of Consumers
• Chapter 18 Grievance Redressal Mechanism
• Chapter 19 Environmental Factors
• Chapter 20 Liberalization, Privatization and Globalization
• Chapter 21 The Sale of Goods Act, 1930
• Chapter 22 The Negotiable Instruments Act, 1881
• Chapter 23 Elements of Entrepreneurship
• Chapter 24 Types of Entrepreneurs
• Chapter 25 Government Schemes for Entrepreneurial Development
• Chapter 26 Companies Act, 2013
• Chapter 27 Company Management
• Chapter 28 Company Secretary

We have also created Samacheer Kalvi 12th Commerce Notes for students to help them prepare for the exam like scenario.

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Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Accountancy Guide Pdf Chapter 7 Company Accounts Text Book Back Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Accountancy Solutions Chapter 7 Company Accounts

12th Accountancy Guide Company Accounts Text Book Back Questions and Answers

I Multiple Choice Questions

Choose the correct answer

Question 1.
A preference share is one
(i) which carries preferential right with respect to payment of dividend at fixed rate
(ii) which carries preferential right with respect to payment of capital on winding up
(a) Only (i) is correct
(b) Only (ii) is correct
(c) Both (i) and (ii) are correct
(d) Both (i) and (ii) are incorrect
Answer:
(c) Both (i) and (ii) are correct

Question 2.
That part of share capital which can be called up only on the winding up of a company is called:
(a) Authorised capital
(b) Called up capital
(c) Capital reserve
(d) Reserve capital
Answer:
(d) Reserve capital

Question 3.
At the time of forfeiture, share capital account is debited with
(a) Face value
(b) Nominal value
(c) Paid up amount
(d) Called up amount
Answer:
(d) Called up amount

Question 4.
After the forfeited shares are reissued, the balance in the forfeited shares account should be transferred to
(a) General reserve account
(b) Capital reserve account
(c) Securities premium account
(d) Surplus account
Answer:
(b) Capital reserve account

Question 5.
The amount received over and above the par value is credited to
(a) Securities premium account
(b) Calls in advance account
(c) Share capital account
(d) Forfeited shares account
Answer:
(a) Securities premium account

Question 6.
Which of the following statement is false?
(a) Issued capital can never be more than the authorised capital
(b) In case of under subscription, issued capital will be less than the subscription capital
(c) Reserve capital can be called at the time of.winding up
(d) Paid up capital is part of called up capital
Answer:
(b) In case of under subscription, issued capital will be less than the subscription capital

Question 7.
When shares are issued for purchase of assets, the amount should be credited to
(a) Vendors A/c
(b) Sundry assets A/c
(c) Share capital A/c
(d) Bank A/c
Answer:
(c) Share capital A/c

Question Match the pair and identify the correct option
(1) Under subscription – (i) Amount prepaid for calls
(2) Over subscription – (ii) Subscription above the offered shares
(3) Calls in arrear – (iii) Subscription below the offered shares
(4) Calls in advance -(iv) Amount unpaid on calls

Answer:
C

Question 9.
If a share ₹ 10 on the which ₹ 8 has been paid up is forfeited. Minimum reissue price is
(a) ₹ 10 per share
(b) ₹ 8 per share
(c) ₹ 5 per share
(d) ₹ 2 per share
Answer:
(d) ₹ 2 per share
Hint:
One share Rs. 10
(-) Paid up value Rs. 8 Each
Minimum Reissue Price 2 Each

Question 10.
Supreme Ltd. forfeited 100 shares of ₹ 10 each for non-payment of final call of ₹ 2 per share. All these shares were re-issued at ₹ 9 per share. What amount will be transferred to capital reserve account?
(a) ₹ 700
(b) ₹ 800
(c) ₹ 900
(d) ₹ 1,000
Answer:
(a) ₹ 700

II Very Short Answer Questions

Question 1.
What is a share?
Answer:
The capital of a company is divided into small units of a fixed amount. These units are called shares. There are two types

1. Preference shares and
2. Equity shares.

Question 2.
What is Over-Subscription?
Answer:
When the number of shares applied for is more than the number of shares offered for subscription, it is said to be oversubscription.

Question 3.
What is meant by calls in arrears?
Answer:
When a shareholder fails to pay the amount due on the allotment or on calls, the amount remaining unpaid is known as calls in arrears.

Question 4.
Write a short note on the securities premium account.
Answer:
When a company issues shares at a price more than the face value (nominal value), the shares are said to be issued at a premium. The excess is called a premium amount and is transferred to a securities premium account.
Securities premium account is shown under reserves and surplus as a separate head in the Note to Account to the balance sheet.

Question 5.
Why are the shares forfeited?
Answer:
When a shareholder defaults in making payment of allotment/call money, the shares may be forfeited. On forfeiture, the share allotment is cancelled and to that extent, paid-up share capital reduced.

III Short Answer Questions

Question 1.
State the differences between preference shares and equity shares.
Answer:
(i) Preference shares
Preference shares are the shares which have the following two preferential right over, the equity shares:

• Preference towards the payment of dividend at a fixed rate during the lifetime of the company and.
• Preference towards the repayment of capital on winding up of the company.

(ii) Equity shares
Equity shares are those shares which do not preference shares. These shares do not enjoy any preferential rights. The rate of dividend is not fixed on equity shares and it depends upon the profits earned by the company. In case of winding up of a company equity shareholders are paid after the payment are made to preference shareholders. Equity shares are also known as ordinary shares.

Question 2.
Write a brief note on calls in advance.
Answer:
The excess amount paid over the called up value of a share is known as calls in advance. It is the excess money paid on application or allotment or calls. Such excess amounts can be returned or adjusted towards future payments. If the company decides to adjust such amount towards future payment, the excess amount is transferred to a separate account called a calls-in advance account.

Question 3.
What is a reissue of forfeited shares?
Answer:
Shares forfeited can be reissued by the company. The shares can be reissued at any price.
But, the reissue price cannot be less than the amount unpaid on forfeited shares.
When forfeited shares are reissued at a loss, such loss is to be debited to the forfeited shares account.
when forfeited shares are reissued at a premium, the amount of such premium will be credited to the securities premium account.

Question 4.
Write a short note on

1. Authorized capital
2. Reserve capital

Answer:

1. Authorised Capital: According to Sec 2(8) of the Companies Act, “It means such capital as is authorized by the memorandum of a company to be the maximum amount of share capital of the company”.

2. Reserve Capital: Sec 65 of Companies Act 2013, only an unlimited company having share capital while converting into a limited company, may have a reserve capital. The company reserve a part of its subscribed capital to be called up only at the time of winding up. It is called reserve capital.

Question 5.
What is meant by the issue of shares for consideration other than cash?
Answer:
A company may issue shares for consideration other than cash when the company acquires fixed assets such as land and buildings, machinery, etc.

IV Exercises

Question 1.
Progress Ltd. issued 50,000 ordinary shares of ₹ 10 each, payable ₹ 2 on the application, ₹ 4 on allotment ₹ 2 on first call and ₹ 2 on final call. All the shares are subscribed and the amount was duly received. Pass journal entries.
Solution :

Under Subscription

Question 2.
Sampath company issued 25,000 shares at ₹ 10 per share payable ₹ 3 on the application, ₹ 4 on allotment; ₹ 3 on first and final call. The public subscribed for 24,000 shares. The directors allotted all the 24,000 shares and received the money duly. Pass necessary journal entries.
Solution:

Over Subscription

Question 3.
Saranya Ltd. issued 20,000 equity shares of ₹ 10 each to the public at par. The details of the amount payable on the shares are as follows:
On application – ₹ 3 per share
On allotment – ₹ 4 per share
On first and final call – ₹ 3 per share
Application money was received on 30,000 shares. Excess application money was refunded immediately. Pass journal entries are as follows:
Solution:

Question 4.
Gaja Lid issued 40,000 shares of ₹ 10 each of the public payable ₹ 2 on the application, ₹ 5 on the allotment, and ₹ 3 on the first and final call. The application was received for 50,000 shares. The Directors decided to allot 40,000 shares on a pro-rata basis and a surplus of application money was utilized for allotment. Pass journal entries assuming that the amount due was received.
Solution :

Question 5.
Lalitha Ltd. offered 30,000 equity shares ₹10 each to the public payable ₹ 2 per share on the application, ₹ 3 on share allotment, and the balance when required. Applications for 50,0 shares were received on which directors allotted as:
Applicants for 10,000 shares Full
Applicants for 35,000 shares 20,000 shares (excess money will be utilized for allotment
Applicants for 5,000 shares Nil
All the money due was received. Pass journal entries upto the receipt of allotment.
Solution :

Calls In advance

Question 6.
Das Ltd, offered 50,000 equity shares of ₹ 1 0 each to the public payable as follows: On applications were ₹ 4; on allotment ₹ 3; on first call 1 and on second and final call ₹ 2. Applications were received for 1,00,000 shares. All the applicants were allotted 1 share for every two shares applied. Excess application money was used for the amount due on allotment and call. Pass necessary journal entries.
Solution :

Question 7.
Anjali Flour Ltd. with a registered capital of ₹ 4,00,000 in equity shares of ₹ 10 each, issued 30,0 of such shares; payable ₹ 2 per share on the application, ₹ 5 per share on the allotment, and ₹ 3 shares on the first call. The issue was duly subscribed.
All the money payable was duly received but on the allotment, one shareholder paid the entire balance on his holding of 500 shares. Give journal entries to record the I transactions.
Solution :

Calls in Advance

Question 8.
Muthu Ltd. issued 50,000 shares of ₹ 10 each payable as follows; ₹ 2 on the application; ₹ 4 on allotment; ₹ 4 on first and final, call.
All money payable was duly received except one shareholder holding 1,000 shares failed to pay the call money. Pass the necessary journal entries for calls by using calls in the arear account.
Solution :

Answer:
Calls in arrear: ₹ 4,000

Forfeiture os Shares

Question 9.
Arjun was holding 1,000 shares ₹ 10 each of Vanavill Electronics Ltd, issued at par. He paid ₹ 3 on the application, ₹ 4 on the allotment but could not pay the first and final call of ₹ 3. The directors forfeited the shares for nonpayment of call money. Give Journal entry for forfeiture of shares.
Solution :

Answer:
Forfeited shares account: ₹ 7,000

Question 10.
Lakshmi was holding 50 hares of ₹ 10 each on which he paid ₹ 2 on application but could not pay ₹ 4 on the allotment and ₹ 2 on first call. Directors forfeited the shares after the first call. Give journal entry for recording the forfeiture of shares.
Solution :

Answer:
Forfeited shares account: ₹ 100

Reissue of shares

Question 11.
Goutham Ltd. forfeited 500 equity shares of ₹ 10 each issued at par held by Ragav for nonpayment of the final call of ₹ 2 per share. The shares were forfeited and reissued to Madhan at ₹ 8 per share. Show the journal entries for forfeiture and reissue.
Solution :

Answer:
Capital reserve account: ₹ 3,000

Question 12.
Nivetha Ltd. forfeited 1,000 equity shares of ₹ 10 each for non-payament of call of ₹ 4 per share. Of these 800 shares were reissued @ ₹ 7 per share. Pass journal entries for forfeiture and reissue?
Solution :

Answer:
Capital reserve account: ₹ 2,400

Question 13.
Nathiya Textiles Ltd. forfeited 100 shares of ₹ 10 each, ₹ 8 called up, on which Mayuri had paid application and allotment money of 6 per share. Of these 75 shares were reissued to soundayya by receiving ₹ 7 per share. Pass journal entries for forfeiture and reissue?
Solution :

Answer:
Capital reserve account ₹ 375.

Question 14.
Simon Ltd issued 50,000 equity shares of ₹ 10 each at par payable on-application ₹ 1 per share, on allotment ₹ 5 per share, on first call ₹ 2 per share, and on second and final call ₹ 2 per share. The issue was fully subscribed and all the amounts were duly received with exception of 2,000 shares held by chezhian, who failed to pay the second and final call. His shares were forfeited and reissued to Elango at ₹ 8 per share. Journalise the above transactions?
Solution

Answer:
Capital reserve account: ₹ 12,000

Question 15.
Kanchana Ltd. issued 50,000 shares ₹ 10 each payable as under?
On application ₹ 1
On allotment ₹ 5
On first call ₹ 2
On final call ₹ 2
Applications were received for 70,000 shares. Applications for 8,000 shares were rejected and allotment was made proportionately towards the remaining applications. The directories made both the calls and all the amounts were received except the final call on 1,500 shares which were subsequently forfeited. Later 1.200 forfeited shares were reissued by receiving ₹ 8 per share. Give journal entries.
Solution :

Answer:
Capital reserve account: ₹ 7,200

Shares issued premium

Question 16.
Viswanath Furniture Ltd. invited applications for 20,000 shares of ₹ 10 each at a premium of 2 per share payable?
₹ 2 On application
₹ 5 (including premium) on the allotment
₹ 5 On the first and final call
There were oversubscription and applications were received for 30,000 shares and the excess applications were rejected by the directors. Pass the journal entries.
Solution :

Question 17.
United Industries Ltd. issued shares of ₹ 10 each at 10% premium payable ₹ 3 on the application, ₹ 4 on the allotment (including premium), ₹ 2 on the first call, and ₹ 2 on the final call.
Journalise the transections relating to forfeiture of shares for the following situations: Manoj who holds 250 shares failed to pay the second and final call and his shares were forfeited.
Manoj who holds 250 shares field to pay the allotment money and first call and second and final call and his shares were forfeited.
Manoj who holds 250 shares failed to pay the allotment money and first call money and his shares were forfeited after the first call.
Solution:

Answer:
Forfeited shares account: (i) ₹ 2,000; (ii) ₹ 750; (iii) ₹ 750

Question 18.
Kasthuri Ltd. had allotted 20,000 shares to applicants of 30,000 shares on a pro-rata basis. The amount payable was ₹ 1 on the application, ₹ 5 on the allotment (including a premium of ₹ 2 each), and ₹ 2 on the first call and ₹ 2 on final calls, Subin, a shareholder failed to pay the first call and final call on his 500 shares. All the shares were forfeited and out of the 400 shares were re-issued @ ₹ 8 per share. Pass necessary journal entries.
Solution :

Answer:
Capital reserve account: ₹ 1,600

Question 19.
Vairam Ltd. issued 60,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as follows:
On application ₹ 6
On allotment ₹ 4 (including premium)
On the first and final call ₹ 2
The issue was fully subscribed and the amount due was received except Saritha to whom 1,000 shares were allotted who failed to pay the allotment money and first and final call money. Her shares were forfeited. All the forfeited shares were reissued to Parimala at ₹ 7 per share.
Solution :

Answer:
Capital reserve account: ₹ 3,000

Issue of shares for cash in lumpsum

Question 20.
Abdul Ltd. issue 50,000 shares of ₹ 10 each at a premium of ₹ 2 per share. Pass journal entry if the amount is fully received along with a premium amount of ₹ 2 per share.
Solution :

Answer:
Share capital account ₹ 5,00,000; Securities premium account ₹ 1,00,000

Issue of shares for consideration other than cash

Question 21.
Paradise Ltd. purchased assets of ₹ 4,40,000 from Suguna Furniture Ltd. It issued equity shares of ₹ 10 each fully paid in satisfaction of their claim. What entries will be made if such issue is: (a) at par and (b) a premium of 10%.’
Solution :
Calculation of the number of shares to be issued

Answer:
(a) Share capital account: ₹ 4,40,000;
(b) Share capital account ₹ 4,00,000; Securities premium account ₹ 40,000

12th Accountancy Guide Company Accounts Additional Important Questions and Answers

I Multiple Choice Questions

Question 1.
A company issued 3,00,000 shares of Rs.10 each to the public but only 1,50,000 shares were subscribed. It’s subscribed capital is
(a) Rs. 30,00,000
(b) Rs. 15,00,000
(c) Rs. 10,00,000
Hint:
issued No. of share = 3,00,000
Subscribed No. of share = 1,50,000
Each share Rs. 10
Now ask the Question
No. of Subscribed Capital × Each Share
= 1,50,000 × 10 = ₹ 15,00,000
Answer:
(b) Rs. 15,00,000

Question 2.
The directors of a company forfeited 100 shares of Rs.10 each on which the final call, money of Rs.3 was not paid Later these shares were reissued of Rs.800 capital reserve will be
(a) Rs. 700
(b) Rs.500
(c) Rs. 500

Answer:
(b) Rs.500

Question 3.
When more applications are received than that are offered to the public it is called.
(a) Under subscription
(b) Full subscription
(c) Oversubscription
Answer:
(c) Oversubscription

Question 4.
Captial reserve is shown on the ………….. ride of the B/s
(a) Liability
(b) Assets
(c) Both
Answer:
(a) Liability

Question 5.
The balance of forfeited shares A/c is ……………. is in the B/s
(a) Added to paid-up capital
(b) Added to the authorized capital
(c) deducted from paid to capital
Answer:
(a) Added to paid-up capital

Question 6.
Calls-in-arrears are shown in the B/s as
(a) Deduction from called up capital
(b) Addition to paid-up capital
(c) Addition to issued capital
Answer:
(a) Deduction from called up capital

Question 7.
A company issued 20,000 Es of Rs.100 each to the public, but only 18,000 shares were subscribed, its subscribed capital is Rs.
(a) Rs. 20,00,000
(b) Rs. 18,00,000
(c) Rs. 21,00,000
Hint:
issued No. of share = 20,000
Paid up No. of share = 18,000
Each share = ₹ 10
∴ Now
Paid up Capital is
= 18,000 x 100
= ₹ 18,00,000 .
Answer:
(b) Rs. 18,00,000

Question 8.
A company issued 50,000 shares of Rs. 10 each at a premium of Rs. 2 each …………… is the securities premium amount
(a) Rs. 50,000
(b) Rs. 1,00,000
(c) Rs. 1,50,000
Hint:
Premium – ₹ 2 Each
Securities premium = 50,000 × 2 = ₹ 1,00,000
Answer:
(b) Rs. 1,00,000

Question 9.
Securities premium will appear in the _
(a) Assets
(b) Liability
(c) Assets & Liability
Answer:
(b) Liability

Question 10.
A Company is an association of
(a) workers
(b) merchants
(c) persons
Answer:
(c) persons

III Short Answer Questions

Question 1.
Define Company.
Answer:
According to Lord Justice Lindsey, “A Company is an association of many persons who contribute money or money’s worth to common stock and employ it in some trade or business and who share the profit and loss arising therefrom. The common stock so contributed is denoted in money and is the capital of the company. The persons who contributed in it or from it, or to whom it belongs, are members. The proportion of capital to which each member is entitled is his share”.

Question 2.
What are the characteristic features of the company?
Answer:
Following are the characteristics of a company:

• Voluntary association: A Company is a voluntary association of persons. No law can compel persons to form a company.
• Separate legal entity: Company is an artificial person. It has a separate legal entity which is separate and distinct from its members.
• Common seal: A company may have a common seal which can be affixed on the documents.
• Perpetual succession: A company continues forever. Its continuity is not affected by the changes in its members. It can be wound up only by law.
• Limited liability: The liability of the shareholders of the company is limited to the extent of the face value of the shares held by the shareholders.
• Transferability of shares: The shares of a company are freely transferable except in case of a private company.

Question 3.
Write short notes on

1. Issued capital
2. Subscribed capital
3. Called up capital
4. Paid-up capital

Answer:

1. Issued capital: This represents that part of authorized capital which is offered for subscription.
2. Subscribed capital: It refers to that part of issued capital which has been applied for and also allotted by the company.
3. Called up capital: It refers to that part of subscription capital which has been called up by the company for payment.
4. Paid-up capital: It is that part of called up capital which has been actually paid by the shareholders.

Question 4.
What do you mean by under subscription?
Answer:
All the shares offered to the public may not be subscribed in full. When the number of shares subscribed is less than the number of shares offered, it is known as under subscription.

Question 5.
What are the journal entries passed when shares are issued for cash in lumpsum?
Answer:

IV Exercises

Question 1.
A company issued 20,000 shares of ₹ 10 each payable as follows:
₹ 3 on Application,
₹ 3 on Allotment,
₹ 4 on First and Final call.
All the shares were subscribed and duly paid for. Pass journal entries.
Solution :

Question 2.
Preeti Ltd. invited applications for 5,000 shares of ₹ 10 each payable as follows:
₹ 3 on Application,
₹ 2 on Allotment,
₹ 2 on First call and
₹ 3 Final call
All these shares were subscribed and paid. Pass journal entries.
Solution:
 

Question 3.
A Joint Stock Company had a Nominal Capital of 5,00,000 divided into 5,000 shares ₹ 100 each payable:
₹ 30 per share on Application,
₹ 20 per share on Allotment,
₹ 30 on First call and
₹ 20 Final call
All the shares were subscribed and fully paid for by the public. Pass journal entries.
Solution :

Question 4.
Mary Ltd. Issued 1,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as follows:
₹ 4 on Application,
₹ 4 on Allotment, (including premium
and the balance when required. All the shares were subscribed for and duly paid. Pass necessary Journal entries.
Solution :

Question 5.
Global Ltd. issued 6,000 shares on ₹ 100 each at a premium of ₹ 20 per share payable as follows:
₹ 30 on Application,
₹ 50 Oon Allotment, (including premium)
₹ 30 on First call and
₹ 10 Final call
All shares were duly subscribed and money due was fully received. Pass journal entries.
Solution :
Journal Entries in the Books of Global Ltd

Question 6.
On 1.1.98 Alpha Ltd issued 1,00,000 shares of ₹ 10 each payable ₹ 2 on application. The company received applications for 1,20,000 shares. The excess applications were rejected. and money refunded Pass necessary entries.
Solution :
Journal Entries in the Books of Alpha Ltd

Question 7.
Good Luck Co. Ltd issued 1,00,000 shares @ 10 each payable:
₹ on Application,
₹ on Allotment,
and the balance when required. 1,50,000 shares were, applied for. The directors rejected the excess applications and refunded the application money. All money was received. Pass entries to record the transactions.
Solution :

Question 8.
Bhagavathi Ltd. issued 10,000 shares of ₹ 10 each at a discount of 10% payable as follows:
on Application, ₹2.50
on Allotment, ₹ 3.00
On the First and Final call ₹ 3.50
All money due was received except the final call on 100 shares which were forfeited by the company after giving due notice. Pass the forfeited entry.
Solution :

Question 9.
Ganthimathi Ltd. was registered with a nominal capital of ₹ 1,00,000 in equity shares of ₹ 10 each. It offered to the public 6,000 shares for subscripted The application was, however, received for 8,000 shares. The directors had to reject the application for 1,000 shares and to return the money received by Theron. The application money received on the other 1,000 shares was adjusted to the allotment account. The amount payable on shares was
₹ 3 per share on Application,
₹ 3 per share on Allotment and the balance on the first and final call
On shareholder holding, 100 shares failed to pay the call money and as a result, his shares were forfeited. Pass the necessary journal entries.
Solution :
Journal Entries in the Books of Ghandhimathi Ltd

Question 10.
Gani Ltd. forfeited 20 shares of ₹ 10 each fully called up, held by Santha for nonpayment of final call of 4 per sháre. These shares were re-issued to Josephin for ₹ 8 per share as fully paid up. Give journal entries for the forfeited and re-issue of shares.
Solution :

Question 11.
A Company forfeited 100 equity shares of ₹ 100 each issued at a premium of 10% (to be paid at the time of allotment) on which first call money of ₹ 30 per share and final call of ₹ 20 were not received. These shares were forfeited and subsequently re-issued at 90 per share. Give necessary journal entries regarding forfeited and re-issue of shares.
Solution :

Question 12.
The Directors of a company forfeited 200 Equity shares of ₹ 10 each fully called upon which the final call of ₹ 2 has not been paid. The shares were re-issued upon payment of ₹ 1,500. Journalise the above transactions.
Solution :

Question 13.
The Director of a company forfeited 100 shares of ₹ 10.each fully called up for non-payment of the First call of ₹ 2 per share and Final call of ₹ 3 per share. 60 of these shares were subsequently re-issued at 6 per share fully paid up. Pass necessary Journal entries to record the above.
Solution :

Question 14.
The directors of Sheeia Ltd. forfeited 2,000 shares ₹ 10 each for non-payment of final call of ₹ 2.50. 1,800 of these shares were re-issued for ₹ 6 per share fully paid up. Give the necessary Journal entries.
Solution :

Amount to be transferred to Capital reserve A/c = Profile on reissue × No.of share reissued
= 3.50 × 1,800
= Rs.6,300

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Accountancy Guide Pdf Chapter 8 Financial Statement Analysis Text Book Back Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Accountancy Solutions Chapter 8 Financial Statement Analysis

12th Accountancy Guide Financial Statement Analysis Text Book Back Questions and Answers

I Multiple Choice Questions

Choose the correct answer

Question 1.
Which of the following statements is not true?
(a) Notes and schedules also form part of financial statements.
(b) The tools of financial statement analysis include common -size statement
(c) Trend analysis refers to the study of movement of figures for one years
(d) The common-size statements show the relationship of various items with some common base, expressed as percentage of the common base.
Answer:
(c) Trend analysis refers to the study of movement of figures for one years

Question 2.
Balance sheet provides information about the financial position of a business concern
(a) Over a period of time
(b) As on a particular date
(c) For a period of time
(d) For the accounting period
Answer:
(b) As on a particular date

Question 3.
Which of the following tools of financial statement analysis is suitable when data relating to several years are to be analysed?
(a) Cash flow statement
(b) Common size statement
(c) Comparative statement
Answer:
(d) Trend analysis

Question 4.
The financial statements do not exhibit
(a) Non-monetary data
(b) Past data
(c) Comparative statement
(d) Standard costing
Answer:
(a) Non-monetary data

Question 5.
Which of the following is not a tool of financial statement analysis?
(a) Trend analysis
(b) Common size statement
(c) Comparative statement
Answer:
(d) Standard costing

Question 6.
The term fund’ refers to
(a) Current liabilities
(b) Working capital
(c) Fixed assets
(d) Non-current assets.
Answer:
(b) Working capital

Question 7.
Which of the following statement is not true?
(a) All the limitations of financial statements are applicable to financial statement analysis also.
(b) Financial statement analysis is only the means and not an end.
(c) Expert knowledge is not required in analyzing the financial statements
(d) Interpretation of the analysed data involves personal judgment.
Answer:
(c) Expert knowledge is not required in analyzing the financial statements

Question 8.
A limited company’s sales have increased from ‘ 1,25,000 to 1,50,000. How does this appear in the comparative income statement?
(a) +20%
(b) +120%
(c) -120%
(d) -20%
Hint:
Percentage increase or Decrease = \(\frac{\text { Absolute amount of increase or decrease }}{\text { Year } 1 \text { amount }}\) × 100
Sales increase = ₹ 1,25,000 – ₹ 1,50,000 = ₹ 25,000
\(\frac{25,000}{1,25,000}\) × 100 = +20% = 1,25,000
Answer:
(a) +20%

Question 9.
In a common-size balance sheet, if the percentage of non-current assets is 75, what would be the percentage of current assets?
(a) 175
(b) 125
(c) 25
(d) 100
Hint:
Let Assets = ₹ 100
Non current assets = ₹ 75
∴ Current assets = 100 – 75 = 25
Answer:
(c) 25

Question 10.
Expenses for a business for the first year were ₹ 80,000. In the second year, it was increased to ₹ 88,000. What is the trend percentage in the second year?
(a) 10%
(b) 110%
(c) 90%
(d) 11%
Hint:
Computation of trend percentage = \(\frac{\text { Other year }}{\text { Earliest base year }}\) × 100
Earliest base year x 100
For second year = \(\frac{88,000}{80,000}\) × 100 = 110%
Answer:
(b) 110%

II Very Short Answer Questions

Question 1.
What are the financial statements?
Answer:
Financial statements are the statements prepared by the business concerns at the end of the accounting period to ascertain the operating results and the financial position.

Question 2.
List the tools of financial statement analysis.
Answer:

• Comparative statement
• Common size statements
• Trend analysis
• Funds flow statement
• Cash flow analysis

Question 3.
What is working capital?
Answer:
The term ’fund’ refers to working capital. Working capital refers to the excess of current assets over current liabilities.

Question 4.
When is trend analysis preferred to other tools?
Answer:
Trend analysis discloses the changes in financial and operating data between specific periods when data for more than two years are to be analyzed. It may be difficult to use a comparative statement.

III Short Answer Questions

Question 1.
‘Financial statements are prepared based on past data’. Explain how this is a limitation.
Answer:
The nature of the financial statement is historical. Past cannot be the index of the future and cannot be cent percent basis for future estimation, forecasting, budgeting, and planning.

Question 2.
Write a short note on cash flow analysis?
Answer:
Cash flow analysis is concerned with the preparation of a cash flow statement which shows * the inflow and outflow of cash and cash equivalents in a given period of time. Cash includes cash in hand and demand deposits with banks. Cash equivalents denote short term investments which can be realized easily within a short period of time, without much loss in value. Cash flow analysis helps in assessing the liquidity and solvency of a business concern.

Question 3.
Briefly explain any three limitations of financial statements.
Answer:

1. Lack of qualitative information: Qualitative information, that is non – monetary information is also important for business decisions. For example Efficiency of the employees and efficiency of the management. But this is ignored in financial statements.
2. Record of historical data: Financial statement are prepared based on historical data. They may not reflect the current position.
3. Ignores price level changes: Adjustments for price level changes are not made in the financial statements. Hence financial statements may not reveal the current position.

Question 4.
Explain the steps involved in preparing comparative statements?
Answer:
Following are the steps to be followed in preparation of the comparative statement:

1. Column 1: In this column, particulars of items of income statement or balance sheet are written.
2. Column 2: Enter absolute amount of year 1.
3. Column 3: Enter absolute amount of year 2.
4. Column 4: Show the difference in amounts between year 1 and year 2. If there is an increase in year 2, put plus sign and if there is decrease put minus sign.
5. Column 5: Show percentage increase or decrease of the difference amount shown in column 4 by dividing the amount shown in column 4 (absolute amount of increase or decrease) by column 2 (year 1 amount).

That is,
Percentage increase or decrease = \(\frac{\text { Absolute amount of increase or decrease }}{\text { Year } 1 \text { amount }}\) × 100

Question 5.
Explain the procedure for preparing a common – Size statement.
Answer:
Common-size statements can be prepared with three columns. Following are the steps to be followed in the preparation of the common – size statement.

1. Column 1. In this column, the particulars of items of the income statement or balance sheet are written.
2. Column 2. Enter the absolute amount.
3. Column 3. Choose a common base as 100.

For example Revenue from operations can be taken as the base for income statement and total of the balance sheet can be taken as the base for the balance sheet. Work out the percentage for all the items of column 2 in terms of the common base and enter them in column 3.

IV Exercises

Comparative statement analysis

Question 1.
From the following particulars, prepare a comparative income statement of Arul Ltd.

Solution:
The comparative income statement of Arul Ltd for the year ended 31.3.16 & 31.3.17

Answer :
Revenue from operation: 20 %;
Other income: 200%;
Total revenue: 50%;
Expenses: 25%;
Profit before tax: 100%

Question 2.
From the following particulars, prepare a comparative income statement of Barani Ltd.

Solution:
Computation of % increase for revenue from operation
Percentage increase = \(\frac{15,000}{30,000}\) × 100 = 50%
Comparative Income statement of Barani Ltd. for the year ended 31.3.17 & 31.3.18


Answer :
Revenue from operations: 50%
Other income: 50%
Total revenue: 50%
Expenses: 50%;
Profit before tax: 50%;
Profit after tax: 50%

Question 3.
From the following Particulars, prepare comparative income ‘statement of Daniel Ltd.

Solution:
The comparative Income statement of Daniel Ltd. for the year ended 31.3.16 & 31.3.17

Answer :
Revenue from operations: 25%
Expenses: 10%
Tax: 50%;
Profit before tax: 50%;
Profit after tax: 50%

Question 4.
From the following particulars, prepare a comparative .statement of the financial position of Muthu Ltd.

Solution:
Comparative B/s of Muthu Ltd. As on 31.3.17 & 31.3.18

Answer :
Shareholder’s fund: 10%;
Non-current liabilities: 10%
current liabilities: 10%
Total equity and liabilities: 10%;
Non -current assets: 20%;
Current assets: 30%
Total Assets: 10%

Question 5.
From the following particulars, prepare a comparative statement of the financial position of Kala Ltd.


Solution:



Answer :
Share capital: 20%;
Reserves and surplus: Nil.
Non-Current liabilities: -20%;
Current liabilities: -40%;
Total equity and liabilities: 10%;
Fixed assets: 16%;
Non-current investments: -20%;
Inventories: 25%;
Cash and cash equivalents: 20%;
total assets: 10%

Question 6.
Prepare a common-size income statement for the following particulars Raja Ltd. for the year ended 31st March 2017.

Solution:

Answer :
2016-2017:
Other income: 15%
total revenue: 115%
Expenses: 30%
Profit before tax: 85%

Question 7.
From the following particulars of Maria ltd and Kala Ltd. Prepare a common-Size income statement for the year ended 31st March 2019.

Solution:


Answer :
Maria Ltd: Other Income: 10%; total revenue: 110%; Expenses: 70%; Profit before tax:40%
Kala Ltd: Other income: 15%; Total revenue: 115% Expenses: 60%; Profit before tax:55%

Question 8.
Prepare a common-size income statement for the following particulars of Sam Ltd. table

Solution:

Answer :
2015-16: Other income:20%; Total revenue: 120% Expenses:60%; Profit before tax:60%: Tax: 18%; Profit after tax:42%;
2016-17: Other income: 10%; total revenue: 110%; Expenses:50%; Profit before tax: 60%: Tax:18%;
Profit after tax:42%

Question 9.
Prepare Common-size balance sheet of Meena Ltd. as of 31st March 2018.

Solution:
Common size B/s Meena Ltd as on 31.3.18


Answer :
Shareholder’s fund:50%; Non-current liabilities: 40%; Current liabilities: 10%; Non-current assets:75%; current assets:25%

Question 10.
Prepare a common-size statement of financial position for the following particulars of Rani Ltd.

Solution:


Answer :
2015-16 Shareholder’s fund:60%; Non-current liabilities: 30%; Current liabilities: 10%; Non-current assets:80%; current assets:20%
2016-17 Shareholder’s fund:60%;Non-current liabilities: 25%; Current liabilities: 15%; Non-current assets:80%; Current assets:20%

Question 11.
Prepare a common-size statement of financial position for the following particulars of Yasmin Ltd. and Sakthi Ltd.


Solution:


Answer:
Yasmin Ltd: Share capital 40%; Reserves and surplus: 10%; Noncurrent liabilities:30%; current liabilities:20%. Fixed assets:40%; Non -Current investments: 10% Inventories:40%; Cash & cash equivalents: 10% Sakthi Ltd: Share „ capital: 50%; Reserves and surplus: 10%; Non-current liabilities:30%; Current liabilities: 10%; Fixed assets:50% Non-current investmesits:20%; Inventories: 15% cash & cash equivalents: 15%
Trend Analysis:

Question 12.
From the following particulars, calculate the trend percentages of Kala Ltd.

Solution:

Answer:
2016-17: Revenue from operations: 125%; Other income: 150%; Total revenue: 130% Expenses:145% Profit before tax: 120%
2017-18: Revenue from operations: 150%; Other income 200%; Total revenue: 160% Expenses:175%; Profit before tax: 150%

Question13.
From the following particulars, calculate the Trend percentages of Kavitha Ltd.

Solution:

Answer:
2016-17: Revenue from operations: 125%; Other income: 125%; total revenue:125%; Expenses: 120%; Profit before tax:150%; Tax :150%; Profit after tax: 150%;
2017-2018; Revenue from operations: 150%; Other income:150%; total revenue:150% Expenses:80%; Profit before tax: 500% Tax:500%; Profit after tax:500%

Question 14.
From the following particulars, calculate the trend percentage of Kumar Ltd.

Solution:

Answer :
2016-17: Revenue from operations:90%; Other income: 160%; total revenue: 100%; Expenses:80%; Profit before tax: 150%; Tax: 150%; Profit after tax:150%;
2017-18: Revenue from operations:50%; Other income: 120%; total revenue:60%; Expenses:50%; Profit before tax: 85%; Tax:85%; Profit after tax:85%

Question 15.
From the following particulars, calculate the trend percentages of Anu Ltd.

Solution:


Answer :
year 2: Shareholder’s Fund: 110%, Non-current liabilities: 125%; Current liabilities:80%; Total equity and liabilities: 110%; Non-Current assets: 120%, Current assets:80%; total assets: 10%;
year 3: Shareholder’s fund: 120%; Non- current liabilities: 120%; Current liabilities: 120% Total equity and liabilities: 120%; Non-current assets: 130% Current assets:90%; total assets: 120%

Question 16.
From the following particulars, calculate the trend percentages of Babu Ltd.

Solution:



Answer:
Year 2: Share capital: 127%; Reserves and surplus: 100%; Non-current liabilities: 110%; Current liabilities: 150% Total equity and liabilities: 120%; Fixed assets:118%; Non-current investments: 125%; Inventories:! 10%; Cash & cash equivalents: 150%; total assets:120%;
Year 3: Share capital: 106%; Reserves and surplus :150%; Non-current liabilities: 120%; Current liabilities: 200%; total equity and liabilities: 125%; Fixed assets:103%; Non – Current investments: 150%; Inventories: 120%; Cash & cash equivalents:200%; total assets: 125%

12th Accountancy Guide Financial Statement Analysis Additional Important Questions and Answers

Other Important questions & Answers

Question 1.
…………………………. are the tools of financial analaysis
(a) Comparative statements
(b) Trend analysis
(c) Common size statement
(d) all the above
Answer:
(d) all the above

Question 2.
Analysis of financial statements involves
(a) B/S
(b) Trading A/c
(c) All the above
Answer:

III Short Answer Questions

Question 1.
What are the features of a financial statement?
Answer:
Following are the features of financial statements:

• Financial statements are generally prepared at the end of an accounting period based on transactions recorded in the books of accounts.
• These statements are prepared for the organization as a whole.
• Information is presented in a meaningful way by grouping items of similar nature such as fixed assets.
• Financial statements are prepared based on historical cost.
• Financial statements are prepared based on accounting principle and Accounting Standards, which make financial statements comparable and realistic.
• Financial statements involve personal judgment in a certain case. For example, the selection of the method of depreciation, percentage of reserve, etc.

Question 2.
Explain the significance of financial statements.
Answer:
Financial statements reveal the operating results and financial position of the business concern. The significance of financial statements to various stakeholders is as follows:

• To Management: Financial statements provide information to the management to take decision and to have control over business activities, in various areas.
• To shareholders: Financial statements help the shareholders to know whether the business has potential for growth and to decide to continue their shareholding.
• To potential investors: Financial statements help to value the securities and compare it with those of other business concerns before making their investment decisions.
• To creditors: Creditors can get information about the ability of the business to repay the debts from financial statements.
• To bankers: Information given in the financial statements is significant to the bankers to assess whether there is adequate security to cover the amount of the loan or overdraft.
• To the government: Financial statements involve personal judgment in a certain case. For example, the selection of the method of depreciation, percentage of reserve, etc.
• To employees: Through the financial statements, the employees can assess the ability of the business to pay salaries and whether they have future growth in the concern.

Question 3.
Explain the provisions of the Indian Companies Act 2013 to be followed while preparing the financial statement of or company.
Answer:
Following provisions of the Indian Companies Act, 2013 have to be followed while preparing the financial statements of a company:

• As per Section 2(40), financial statements include balance sheet, profit and loss account/income and expenditure account, cash flow statement, statement of changes in equity and any explanatory note annexed to the above.
• Section 129 (1) of the Indian Companies Act, 2013 states that the financial statements shall give a true and fair view of the state of affairs of the company and shall comply with the Accounting Standards notified under section 133.
• Section 129 (1) also states that the financial statements shall be prepared in the form provided in schedule III of the Indian Companies Act, 2013.

Question 4.
What do you mean by financial statement analysis?
Answer:
Financial statement analysis is a comparison of the various items in the financial statement by establishing and evaluating relationships among them so that, it gives a better understanding of the performance and financial status of the business concern.

Question 5.
What are the objectives of financial statement analysis?
Answer:
Financial statement analysis may be done with any of the following objectives:

• To analyze profitability and earning capacity.
• To study the long term and short term solvency of the business.
• To determine the efficiency in operations and use of assets.
• To determine the efficiency of management and employees.
• To determine the trend in sales, production, etc.
• To forecast for the future and prepare budgets.
• To make inter-firm and intra-firm comparisons.

Question 6.
What are the limitations of fin. State analysis.
Answer:
Following are the limitations of financial statement analysis:
1. All the limitations of financial statements such as ignoring non-monetary information, ignoring price level changes, etc., are applicable to financial statement analysis also.

2. Financial statement analysis is only the means and not an end, that is, it is only a tool in the hands of management and other shareholders. Interpretation of the results has to be done only by the financial analysts with due regard to the internal and external environmental factors.

3. Expert knowledge is required in analyzing the financial statements.
4. Interpretation of the analyzed data involves personal judgments as different experts may give different views.

Question 7.
What do you mean by Horizontal analysis?
Answer:
Horizontal analysis
When figures relating to several years are considered for the purpose of analysis, the analysis is called horizontal analysis. Generally, one year is taken as the base year and the figures relating to the other years are compared with that of the base year. Comparative statements and trend percentages are examples of horizontal analysis.

Question 8.
What do you mean by vertical analysis?
Answer:
Vertical analysis
When figures relating to one accounting year alone are considered for the purpose of analysis, the analysis is called vertical analysis. Here, the relationship is established among items from various financial statements relating to the same accounting period. Preparation of common size statements and computation of ratios are examples of vertical analysis.

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Maths Guide Pdf Chapter 9 Applications of Integration Ex 9.10 Textbook Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Maths Solutions Chapter 9 Applications of Integration Ex 9.10

Choose the most suitable answer from the given four alternatives:

Question 1.
The value of \(\int_{0}^{2/3}\) \(\frac { dx }{ \sqrt{4-9x^2} }\)
(a) \(\frac { π }{ 6 }\)
(b) \(\frac { π }{ 2 }\)
(c) \(\frac { π }{ 4 }\)
(d) π
Solution:
(a) \(\frac { π }{ 6 }\)
Hint:

Question 2.
The value of \(\int_{-1}^{2}\) |x| dx
(a) \(\frac { 1 }{ 2 }\)
(b) \(\frac { 3 }{ 2 }\)
(c) \(\frac { 5 }{ 2 }\)
(d) \(\frac { 7 }{ 2 }\)
Solution:
(c) \(\frac { 5 }{ 2 }\)
Hint:
|x| = x if x > 0
= -x if x < 0

Question 3.
For any value of n ∈ Z \(\int_{0}^{π}\) e^cos²x cos3 [(2n + 1) x] dx
(a) \(\frac { π }{ 2 }\)
(b) π
(c) 0
(d) 2
Solution:
(c) 0
Hint:

Question 4.
The value of \(\int_{-π/2}^{π/2}\) sin² x cos x dx
(a) \(\frac { 3 }{ 2 }\)
(b) \(\frac { 1 }{ 2 }\)
(c) 0
(d) \(\frac { 2 }{ 3 }\)
Solution:
(d) \(\frac { 2 }{ 3 }\)
Hint:
f(x) = sin²x cos x
f(-x) = sin²(-x) cos(-x) = sin²x cos x
f(x) = f(-x)
f is an even function

Question 5.
The value of \(\int_{-4}^{4}\)[tan^-1(\(\frac { x^2 }{ x^4+1 }\)) + tan^-1(\(\frac { x^4+1 }{ x^2 }\))] dx
(a) π
(b) 2π
(c) 3π
(d) 4π
Solution:
(d) 4π
Hint:

Question 6.
The value of \(\int_{-π/4}^{π/4}\) (\(\frac { 2x^7-3x^5+7x^3-x+1 }{ cos^2x }\)) dx is
(a) 4
(b) 3
(c) 2
(d) 0
Solution:
(c) 2
Hint:

Odd function – 3 Odd function + 7 Odd function – Odd function + even function
= 0 + 2 \(\int_{0}^{π/4}\) sec² x dx
= 2 [tan x]\(_{0}^{π/4}\)
= 2(1 – 0)
= 2

Question 7.
If f(x) = \(\int_{0}^{x}\) cos t dt, then \(\frac { df }{ dx }\) =
(a) cos x – x sin x
(b) sin x + x cos x
(c) x cos x
(d) x sin x
Solution:
(c) x cos x
Hint:
f(x) = \(\int_{0}^{x}\) cos t dt
u = t, dv = cos t dt
u’ = 1, v = sin t
v₁ = -cos t
f(x) = [t sin t + cos t]\(_{0}^{x}\)
f(x) = x sin x + cos x – 1
\(\frac { df }{ dx }\) = x cos + sin x – sin x
\(\frac { df }{ dx }\) = x cos x

Question 8.
The area between y² = 4x and its latus rectum is
(a) \(\frac { 2 }{ 3 }\)
(b) \(\frac { 4 }{ 3 }\)
(c) \(\frac { 8 }{ 3 }\)
(d) \(\frac { 5 }{ 3 }\)
Solution:
(c) \(\frac { 8 }{ 3 }\)
Hint:
y² = 4x
y = 2√x

Question 9.
The value of \(\int_{0}^{1}\) x (1 – x)⁹⁹ dx is
(a) \(\frac { 1 }{ 11000 }\)
(b) \(\frac { 1 }{ 10100}\)
(c) \(\frac { 1 }{ 10010 }\)
(d) \(\frac { 1 }{ 10001 }\)
Solution:
(b) \(\frac { 1 }{ 10100}\)
Hint:

Question 10.
The value of \(\int_{0}^{π}\) \(\frac { dx }{ 1+5^{cosx} }\) is
(a) \(\frac { π }{ 2 }\)
(b) π
(c) \(\frac { 3π }{ 2 }\)
(d) 2π
Solution:
(a) \(\frac { π }{ 2 }\)
Hint:

Adding (1) and (2)

Question 11.
If \(\frac { Γ(n+2) }{ Γn }\) = 90 then n is
(a) 10
(b) 5
(c) 8
(d) 9
Solution:
(d) 9
Hint:

n² + n = 90
n² + n – 90 = 0
(n + 10) (n – 9) = 0
n = 9

Question 12.
The value of \(\int_{0}^{π/6}\) cos³ 3x dx is
(a) \(\frac { 2 }{ 3 }\)
(b) \(\frac { 2 }{ 9}\)
(c) \(\frac { 1 }{ 9 }\)
(d) \(\frac { 1 }{ 3 }\)
Solution:
(b) \(\frac { 1 }{ 10100}\)
Hint:
\(\int_{0}^{π/6}\) cos³ 3xdx = \(\frac { 1 }{ 3 }\) × \(\frac { 2 }{ 3 }\) × 1
= \(\frac { 2 }{ 9 }\)

Question 13.
The value of \(\int_{0}^{π}\) sin⁴ x dx
(a) \(\frac { 3π }{ 10 }\)
(b) \(\frac { 3π }{ 8}\)
(c) \(\frac { 3π }{ 4 }\)
(d) \(\frac { 3π }{ 2 }\)
Solution:
(b) \(\frac { 3π }{ 8}\)
Hint:
(x) = sin⁴x dx
f(π – x) = sin⁴ (π – x) = sin⁴x

Question 14.
The value of \(\int_{0}^{∞}\) e^-3x x² dx
(a) \(\frac { 7 }{ 27 }\)
(b) \(\frac { 5 }{ 27 }\)
(c) \(\frac { 4 }{ 27 }\)
(d) \(\frac { 2 }{ 27 }\)
Solution:
(d) \(\frac { 2 }{ 27 }\)
Hint:

Question 15.
If \(\int_{0}^{a}\) \(\frac { 1 }{ 4+x^2 }\) dx = \(\frac { π }{ 8 }\) then a is
(a) 4
(b) 1
(c) 3
(d) 2
Solution:
(d) 2
Hint:

Question 16.
The volume of solid of revolution of the region bounded by y² = x(a – x) about the x-axis is
(a) πa³
(b) \(\frac { πa^3 }{ 4 }\)
(c) \(\frac { πa^3 }{ 5 }\)
(d) \(\frac { πa^3 }{ 6 }\)
Solution:
(d) \(\frac { πa^3 }{ 6 }\)
Hint:
y² = x(a – x)
To find limit put y = 0
x (a – x) = 0
x = 0, x = a

Question 17.
If f(x) = \(\int_{1}^{x}\) \(\frac { e^{sinx} }{ u }\) du, x > 1 and \(\int_{1}^{3}\) \(\frac { e^{sinx^2} }{ x }\) dx = \(\frac { πa^3 }{ 6 }\) [f(a) – f(1)] then one of the possible value of a is
(a) 3
(b) 6
(c) 9
(d) 5
Solution:
(c) 9
Hint:

Question 18.
The value of \(\int_{0}^{1}\) (sin^-1 x)² dx is
(a) \(\frac { π^2 }{ 4 }\) – 1
(b) \(\frac { π^2 }{ 4 }\) + 2
(c) \(\frac { π^2 }{ 4 }\) + 1
(d) \(\frac { π^2 }{ 4 }\) – 2
Solution:
(d) \(\frac { π^2 }{ 4 }\) – 2
Hint:

Question 19.
The value of \(\int_{0}^{a}\) (\(\sqrt{a^2-x^2}\))³ dx is
(a) \(\frac { πa^3 }{ 16 }\)
(b) \(\frac { 3πa^4 }{ 16 }\)
(c) \(\frac { 3πa^2 }{ 8 }\)
(d) \(\frac { 3πa^4 }{ 8 }\)
Solution:
(b) \(\frac { 3πa^4 }{ 16 }\)
Hint:

Question 20.
If \(\int_{0}^{x}\) f(t) dt = x + \(\int_{x}^{1}\) f(t) dt, then the value of f(1) is
(a) \(\frac { 1 }{ 2 }\)
(b) 2
(c) 1
(d) \(\frac { 3 }{ 4 }\)
Solution:
(a) \(\frac { 1 }{ 2 }\)
Hint:

= 1 + 0 – x f(x)
f(x) + x f(x) = 1
f(x)[1 + x] = 1
when x = 1,
f(1)(2) = 1
f(1) = \(\frac { 1 }{ 2 }\)

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Accountancy Guide Pdf Chapter 6 Retirement and Death of a Partner Text Book Back Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Accountancy Solutions Chapter 6 Retirement and Death of a Partner

12th Accountancy Guide Retirement and Death of a Partner Text Book Back Questions and Answers

I Multiple Choice Questions

Choose the correct answer

Question 1.
A partner retires from the partnership firm on 30th June. He is liable for all the acts of the firm up to the
(a) End of the current accounting period
(b) End of the previous accounting period
(c) Date of his retirement
(d) Date of his final settlement
Answer:
(c) Date of his retirement

Question 2.
On the retirement of a partner from a partnership firm, accumulated profits and losses are distributed to the partners on the basis of
(a) New profit sharing ratio
(b) Old profit sharing ratio
(c) Gaming ratio
(d) Sacrificing ratio
Answer:
(b) Old profit sharing ratio

Question 3.
On the retirement of a partner, general reserve will be transferred to the
(a) Capital account of all the partners
(b) Revaluation account
(c) Capital account of the continuing partners
(d) Memorandum revaluation account
Answer:
(a) Capital account of all the partners

Question 4.
On revaluation, the increase in liabilities leads to ……………….
(a) Gain
(b) Loss
(c) Profit
(d) None of these
Answer:
(b) Loss

Question 5.
At the time of retirement of a partner, determination of gaining ratio is required
(a) To transfer revaluation profit or loss
(b) To distribute accumulated profits and losses .
(c) To adjust goodwill
(d) None of these
Answer:
(c) To adjust goodwill

Question 6.
The final amount due to a retiring partner is not paid immediately,it is transferred to
(a) BankA/c
(b) Retiring partners capital A/c
(c) Retiring partner s loan A/c
(d) Other partner s capital A/c
Answer:
(c) Retiring partner s loan A/c

Question 7.
‘A’was a partner in a partnership firm. He died on 31st March 2019. The final amount due to him is ? 24,000 which is not paid immediately. It will be.transferred to
(a) As capital account
(b) A’s loan account
(c) As Executors account
(d) As Executors loan account
Answer:
(d) As Executors loan account

Question 8.
A, B and C are partners sharingprofits in the ratio of 2:2:1. On retirement of B, goodwill of the firm was valued as ₹ 30,000. Find the contribution of A and C to compensate B:
(a) ₹ 20,000 and ₹ 10,000
(b) ₹ 8,000 and ₹ 4,000
(c) ₹ 10,000 and ₹ 20,000
(d) ₹ 15,000 and ₹ 15,000
Hint:

∴ Retire partner share will be compensate of‘A’ and ‘Copartners
’A’ Goodwill value = 30,000 x \(\frac{2}{5}\) = 5 12,000
‘B’ Goodwill Value = 30,000 x \(\frac{2}{5}\) = 5 12,000
‘C’ Goodwill Value = 30,000 x \(\frac{1}{5}\) = 5 6,000
Now Compensate A& C
‘B’ Share good will – 12,000 x \(\frac{2}{3}\) = 8,000
12,000 x \(\frac{1}{3}\) = 4,000
Answer:
(b) ₹ 8,000 and ₹ 4,000

Question 9.
A, B and C are partners sharing profits in the ratio of 4:2:3. C retires. The new profit sharing ratio between A and B will be
(a) 4:3
(b) 3:4
(c) 2:1
(d) 1:2
Hint:
OldPartnersABC

Answer:
(c) 2:1

Question 10.
X, Y and Z were partners sharing profits and losses equally. X died on 1st April 2019. Find out the share of X in the profit of 2019 based on the profit of 2018 which showed ₹ 36,000.
(a) ₹ 1,000
(b) ₹ 3,000
(c) ₹ 12,000
(d) ₹ 36,000
Hint:
Partner’s X: Y: Z
Sharing ratio = equally =\(\frac{1}{3}: \frac{1}{3}: \frac{1}{3}\)
Profit = ₹ 36,000
Share of ‘X’
36,000 x \(\frac{1}{3}\) = ₹ 12,000
Answer:
(c) ₹ 12,000

II Very Short Answer Questions

Question 1.
What is meant by the retirement of a partner?
Answer:
When a partner leaves from partnership firm it is known as retirement. The reasons for the retirement of a partner may be illness, old age, and disagreement with other partners, etc.

Question 2.
What is the gaining ratio?
Answer:
The continuing partners may gain a portion of the share of profit of the retiring partner. The gain may be shared by all the partners or some of the partners. The gaining ratio is the proportion of the profit which is gained by the continuing partners.

Question 3.
What is the purpose of calculating the gaining ratio?
Answer:
The purpose of finding the gaining ratio is to bear the goodwill to be paid to the retiring partner.

Question 4.
What Is the journal entry to be passed to transfer the amount due to the deceased partner to the executor of the deceased partner?
Answer:
To transfer the amount due to the deceased partner to the executor or legal representative of the deceased partner.

III. Short Answer Questions

Question 1.
List out the adjustments made at the time of retirement.
Answer:
The Following adjustments are necessary at the time of retirement of a partner:

• Distribution of accumulated profits, reserves, and losses
• Revaluation of assets and liabilities
• Determination of new profit sharing ratio and gaining ratio
• Adjustment for goodwill
• Adjustment for current year’s profit or loss up to the date of retirement
• Settlement of the amount due to the retiring partner

Question 2.
Distinguish between sacrificing ratio and gaining ratio.
Answer:

Question 3.
What are the ways in which the final amount to an outgoing partner can be settled?
Answer:
The amount due to the retiring partner may be settled one of the following ways:

1. Paying the entire amount due immediately in cash
2. Transfer the entire amount due to the loan account of the partner
3. Paying part of the amount immediately in cash and transferring the balance to the loan account of the partner.

IV Exercise

Distribution of accumulated profits, reserves, and losses

Question 1.
Dheena, Surya, and Jankai are partners sharing profits and losses in the ratio of 5:3:2. on 31.3.2018, Dheena retired. On the date of retirement, the books of the firm showed a reserve fund of ₹ 50,000. The pass journal entry to transfer the reserve fund.
Solution:

Answer:
Reserves fund: dheena: ? 25,000(Cr); Surya: ₹ 15,000(Cr.); Janaki: ₹ 10,000(Cr.);

Question 2.
Rosi, Rathi, and Rani are partners of firms sharing profits and losses equally. Rathi retired from the partnership on 1.1.2018. On the date, their balance sheet showed an accumulated loss of ₹ 45,000 on the asset side of the balance sheet. Give the journal [ entry to distribute the accumulated loss.
Solution:

Answer:
Rosi: ₹ 15,000(Dr.); Rathi: ₹ 15,000(Dr.);Rani: ₹ 15,000(Dr.);

Question 3.
Akash, Mukesh, and Sanjay are partners in firm sharing profits and losses in the ratio of 3:2:1. Their balance sheet as on 31st March 2017 is as follows:

Pass journal entry to transfer the accumulated profit and prepare the capital account of the partners
Solution:


Answer:
Akash capital: ₹ 67,000(Cr.); Mugesh Capital: ₹ 78,000(Cr.); Sanjay’s Capital:₹ 39,000(Cr.);

Question 4.
Roja, Neeia ‘and Kanaga are partners, sharing profit and losses in the ratio of 4:3:3. On 1st April 2017, Roja retires and on retirement, the following adjustments are agreed upon.
(i) Increase the value of the Building by ₹ 30,000.
(ii) Depreciate stock by ₹ 5,000, and furniture by ₹ 12,000.
(iii) Provide for an outstanding liability of ₹ 1,000.
Pass journal entries and prepare revaluation account.
Solution:

Answer:
Revaluation profit : ₹ 12,000

Question 5.
Vinoth, Karthi, and Pranav are partners sharing profits and. losses’ in the ratio of 2:2:1 Pranav retires from the partnership on 1st April 2018. The following adjustments are to be made.
(i) increase the value of the land building by ₹ 18,000.
(ii) Reduce the value of machinery by ₹ 15,000.
(iii) A provision would also be made for outstanding expenses for ₹ 8,000.
Give journal entries and prepare a revaluation account.
Solution:

Question 6
Chandru, Vishal, and Ramanan are partners in firms sharing profits and losses equally. Their balance sheet as of 31st March 2018 is as follows.

Ramanan retired on 31st March 2019 subject to the following conditions:
(i) Machinery is valued at ₹ 1,50,000
(ii) Value of furniture brought down by ₹ 10,000
(iii) Provision for doubtful debts should be increased to ₹ 5,000. ,
(iv) investment of ₹ 30,000 not recorded in the books is to be recorded now.
Pass necessary journal entries and prepare revaluation account and capital account of partners.
Solution:

Answer:
Revaluation profit: ₹ 48,000;
Capital account:)
Chandru :₹ 76,000(Cr);
Vishal: ₹ 86,000(Cr);
Ramanan’s loan account: ₹ 86,000 (a))

Question 7.
Kayal, Mala and Neela are partners sharing profits in the ratio of 2:2:1. kayal retires and the new profit sharing ratio between Mala and Neela is 3:2. Calculate the gaining ratio.
Solution:
New Profit Sharing Ratio and Gaining Ratio
Gain Ratio = New Ratio – Old Ratio
Kayal –
Mala = \(\frac { 3 }{ 2 }\) – \(\frac { 2 }{ 5 }\) – \(\frac { 1 }{ 5 }\)
Neela = \(\frac { 2 }{ 5 }\) – \(\frac { 1 }{ 5}\) = \(\frac { 1 }{ 5 }\)
Gaining Ratio = 1:1

Question 8.
Sunil, Sumathi and Sundari are partners sharing profits in the ratio of 3:3:4. Sundari retires and her share is taken up entirely by Sunil. Calculate the new profit sharing ratio and gaining ratio.
Solution:
old ratio = 3:3:4 (Sunil:sumathi:sundar)
New Ratio = old ratio + gaining ratio

Answer:
Gaining ratio:4:0;
New ratio:7:3

Question 9.
Ramu, Somu and Gopu are partners sharing profits in the ratio of 3:5:7. Gopu retires and the share is purchased by Ramu and Somu in the ratio of 3:1. Find the new profit sharing ratio and gaining ratio.
Solution:

Question 10.
Navin, Ravi and Kumar are partners sharing profits in the ratio of 1/2, 1/4 and 1/4 respectively. Kumar retires and his share is taken up by Navin and Ravi equally. Calculate the new profit sharing ratio and gaining ratio.
Solution :

Answer:
New ratio:5:3;
Gaining ratio: 1:1

Question 11.
Mani, Gani and Soni are partners sharing the profits and losses in the ratio of 4:5:6. Mani retires from the firm. Calculate the new profit sharing ratio and gaining ratio.
Mani: Gani: Soni → 4:5:6
[If nothing is mentioned about the new ratio, old ratio of the continuing partners is equal to their new ratio.]
Solution:
Old ratio = 4:5:6
New ratio – 5:6

Answer:
New profit shaving ratio and gaining ratio is 5:6

Question 12.
Rajan, Suman and jegan were partners in firm sharing profits and losses in the ratio of 4:3:2 Suman retired from partnership. The goodwill of the firm on the date of retirement was valued at ₹ 45,000. Pass necessary journal entries for goodwill on the assumption that the fluctuating capital method is followed.
Solution :

Answer:
Suman’s share of goodwill: ₹ 15,000;
Rajan’s capital: ₹ 10,000(Dr);Jegan’s capital: ₹ 5,000(Dr);

Question 13.
Balu, Chandru and Nirmal are partners in a firm sharing profits and losses in the ratio of 5:3:2 on 31st March 2018, Nirmal retires from the firm. On the date of Nirmal’s retirement, goodwill appeared in the books of the firm at ₹ 60,000 By assuming thuctuating capital account, pass the necessary journal entry if the partners decide to
(a) Write off the entire amount of existing goodwill
(b) Write off half of the existing goodwill.
Solution :

Answer:
(a) Balu’s capital: ₹ 30,000(Dr.); Chandru’s capital: ₹ 18,000(Dr.)
Nirmala’s capital: ₹ 12,000(Dr);(b)balu’s capital: ₹ 15,000(Dr);
Chandru’s capital: ₹ 9,000(Dr);Nirmala’s capital: ₹ 6,000(Dr);

Question 14.
Rani, Jaya and Rathi are partners sharing profits and losses in the ratio of 2:2:1. On 31.3.2018, Rathi retired from the partnership. Profit of the preceding years is as follows: 2014: ₹ 10,000; 2015; ₹ 20,000; 2016; ₹ 18,000 and 2017; ₹ 32,000
Find out the share of profit of Rathi for the year 2018 till the date of retirement if
(a) profit is to be distributed on the basis of the previous year’s profit
(b) Profit is to be distributed on the basis of the average profit of the past 4 years.
Also pass necessary journal entries by assuming partners’ capitals are fluctuating.
Solution:
(a) on the basis of previous years profit
Profit of 2017 = Rs.32,000
Date of retirement = 31.3.2018
share of profit of Rathi for 3 months = \(32,000 \times \frac{3}{12} \times \frac{1}{5}\)
= Rs. 1600

Answer:
(a) Rathi’s share of profit: ₹ 1,600; (b) Rathi’s share of profit: ₹ 1,000;
Settlement of amount due to the retiring partner.

Question 15.
Kavin, Madhan, and Ranjith are partners sharing profits and losses in the ratio of 4:3:3 respectively. Kavin retires from the firm on 31st December 2018. On the date of retirement, his capital account shows a credit balance of ₹ 1,50,000. Pass journal entries if:
(a) The amount due is paid off immediately.
(b) The amount due is not paid immediately.
(c) ₹ 1,00,000 is paid and the balance in the future.
Solution:

Answer:
(a) Kavin’s loan:Nil;
(b) Kavin’s loan: ₹ 1,50,000;
(c) Kavin’s loan: ₹ 50,000;

Question 16.
Manju, Chara’and Lavanya are partners in firm sharing profits and losses in the ratio of 5:3:2. The balance sheet as of 31st March, 2018 was as follows:

Manju retired from the partnership firm on 31.3.2018 subject to the following adjustments:
(i) Stock to be depreciated by ₹ 10,000
(ii) Provision for doubtful debts to be created for ₹ 3,000
(iii) Buildings to be appreciated by ₹ 28,000.
Prepare revaluation account and capital accounts of partners after retirement.
Solution:

Answer:
Revaluation profit: ₹ 15,000; Manju’s loan account:
₹ 1,02,000(Cr).Capital account: Charu ₹ 89,OO0(Cr); Lavanya: ₹ 83,000(Cr))

Question 17.
Kannan, Rahim, and John are partners in a firm sharing profits and losses in the ratio of 5:3:2. The balance sheet as of 31st December 2017 was as follows:

John retires on 1st January 2018, subject to the following conditions :
(i) To appreciate building by 10%
(ii) Stock to be depreciated by 5%
(iii) To provide ₹ 1,000 for bad debts
(iv) An unrecorded liability of ₹ 8,000 has been noticed.
(v) The retiring partner shall be paid immediately.
prepare revaluation account, partner’s capital account, and the balance sheet of the firm after retirement.
Solution :

Answer:
Revaluation loss: ₹ 1,000; capital Account; Kannan: ₹ 1,04,500
Rahim: ₹ 82,700 Amount paid to John ₹ 41,800; Balance sheet total: ₹ 2,15,000

Question 18.
Saran, Arun, and Karan are partners in firms sharing profits and losses in the ratio of 4:3:3. The balance sheet as of 31.12.2016 was as follows:

Karan retires on 1.1.2017, subject to the following conditions:
(i) Goodwill of the firm is valued at ₹ 21,000 %
(ii) Machinery to be appreciated by 10%
(iii) Building to be valued at ₹ 80,000
(iv) provision for bad debts to be raised to ₹ 2,000
(v) Stock to be depreciated by ₹ 2,000
(vi) The final amount due to Karan is not paid immediately.
prepare the necessary ledger accounts and show the balance sheet of the firm after retirement. *
Solution:

Gaining ratio
Old ratio = 4:3:3
New ratio = 4:3
Gaining ratio = Saran = New ratio – old ratio

GR = 12:9 or 4:3
Karan’s share of G/w = 21,000 x \(\frac{3}{10}\) = Rs.6,300
K’s g/w In GR = Rs. 6,300
Saran’s share = 6300 x \(\frac{3}{10}\) = Rs.3,600
Aruns share = 6,300 x \(\frac{3}{7}\) = Rs.2,700
Answer:
Revaluation profit: ₹ 21,000; capital A/c: Saran: ₹ 70,800, Arun: ₹ 58,100
Karan’s loan Account ₹ 57,100; Balance sheet total: ₹ 2,21,000

Question 19.
Rajesh, Sathish and Mathan are partners sharing profits and losses in the ratio of 3:2:1. respectively. Their balance sheet as on 31.3.2017 is given below:

Mathan retires on 31st March, 2017 subject to the following conditions :
(i) Rajesh and Sathis will share profits and losses in the ratio of 3:2
(ii) Assets are to be revalued as follows;
Machinery ₹ 4,50,000, Stock ₹ 2,90,000 , Debtors ₹ 1,52,000
(iii) Goodwill of the firm is valued at ₹ 1,20,000
prepare the necessary ledger accounts and the balance sheet immediately after the retirement of Mathan.
Solution:

Gaining ratio = New ratio – old ratio
Rajesh = \(\frac{3}{5}-\frac{3}{6}=\frac{18-15}{30}=\frac{3}{30}\)
Sathish = \(\frac{2}{5}-\frac{2}{6}=\frac{12-10}{30}=\frac{2}{30}\)
GR = 3:2
Mathans share of G/w = 12,000 x \(\frac{1}{6}\) = Rs.20,000
In gaining ratio
Rajeshs share = 20,000 x \(\frac{3}{5}\) = Rs. 12,000
Sathishs share = 12,000 x \(\frac{2}{5}\) = Rs. 8,000

Answer:
Revaluation Profit: ₹ 12,000; Mathan loan: A/c: ₹ 2,92,000 Rajesh’s capital A/c ₹ 4,54,000; Sathish capital A/c: ₹ 3,36,000
Balance sheet total ₹ 13,10,000

Question 20.
Janani and Jamuna are partners sharing profits and losses in the ratio of 3:3:1. respectively. Janaki died on 31st December 2017. The final amount due to her showed a credit balance of ₹ 1,40,000. Pass Journal Entry if
(i) The amount due is paid off immediately.
(ii) The amount due is not paid immediately.
(iii) ₹ 75,000 is paid and the balance in the future.
Solution:

Question 21.
Varsha, Shanthi, and Madhuri are partners in a firm sharing profits in the ratio of 5:4:3. Their balance sheet as of 31st December 2017 is as under:

on 1st January 2018, Madhuri died and on her death, the following arrangements are made:
(i) Stock to be depreciated by ₹ 5,000
(ii) Premises is to be appreciated by 20%
(iii) To provide ₹ 4,000 for bad debts
(iv) The final amount due to Madhuri was not paid.
prepare revaluation account, partners capital account, and the balance sheet of the firm after death.
Solution:

Answer: Revaluation Profit ₹ 15,000;
Varsha’s capital A/c ₹ 1,01,250; Sathish capital A/c: ₹ 77,000
Madhuri’s executors account ₹ 32,750; Balance sheet total: ₹ 2,43,000

Question 22.
Vijayan, Sudhan, and Suman are partners who share profits and losses; in the capital ratio. Their balance sheet as of 31st December 2018 is as follows:

Suman died on 31.3.2019. On the death of Suman, the following adjustments are made:
(i) Building is to be valued at ₹ 1,00,000
(ii) Stock to be depreciated by ₹ 5,000
(iii) Goodwill of the firm is valued at ₹ 36,000
(iv) Share of profit from the closing of the last financial year to the date of death on the basis of the average of the three completed year’s profit before death.
profit for 2016, 2017 and 2018 were ₹ 40,000,₹ 50,000 and ₹ 30,000 respectively.
Prepare the necessary ledger accounts and the balance sheet immediately after the death of Suman.
Solution:

Suman share of G/w
Vijayan : Sudhan : suman
Old ratio = 7:5:3
New ratio = 7:5
Gaining ratio New ratio – old ratio

Answer:
Revaluation Profit: ₹ 15,000; Vijayan’s capital A/c: ₹ 81,200;
Sudhan’s capital A/c ₹ 58,000; Suman’s Executor’s A/c: ₹ 45,800
Balance sheet total: ₹ 2,02,000

12th Accountancy Guide Retirement and Death of a Partner Additional Important Questions and Answers

I. Choose the best answer

Question 1.
In the absence of any specific agreement, between the partners, partners loan to the firms will carry an inters at the rate of …………… %
(a) 5%
(b) 6%
(c) 4%
Answer:
(b) 6%

Question 2.
A,B & C shares profit as 1/2 to A, 1/3 to B, and 1/6 to C. If B retries, then the new profit sharing ratio ………..
(a) 3:1
(b) 3:2
(c) 1:3
Hint:
Old Partner’s A, B, C
Old ratio = \(\frac{1}{2}: \frac{1}{3}: \frac{1}{6}\)
‘B’ Retire Partner
In order to equalise the denomination
\(\frac{3}{6}: \frac{2}{3}: \frac{1}{6}\)
Now profit sharing ration = \(\frac{3}{4}: \frac{1}{4}\). or 3 :1
Answer:
(a) 3:1

Question 3.
At the time of retirement, the revelation profits of the business will be shared by ……………… partners.
(a) all the partners
(b) Continuing partners
(c) Old partners
Answer:
(a) all the partners

Question 4.
At the time of retirement, of partners, the existing partners stand to
(a) gain
(b) loss
(c) no change
Answer:
(a) gain

Question 5.
A,B & C are sharing profits in the ratio of \(\frac{2}{5}\) , \(\frac{2}{5}\) \(\frac{1}{5}\) C retired from business and his share was purchased equally by A and B, Then new profit sharing ratio shall be

Hint:

Answer:
a

Question 6.
If the amount due to the outgoing partner is transferred to loan A/c then he is entitled to interest at ……………….. until it is paid out.
(a) 6%
(b) 5%
(c) 8%
Answer:
(a) 6%

Question 7.
At the time of retirement of a partner calculation of new profit, ratio is
(a) not necessary
(b) necessary
(c) optional
Answer:
(b) necessary

III Short Answer Questions

Question 1.
What are the journal entries to be passed to transfer the accumulated profits, losses & reserves?
Answer:

Question 2.
Write the format of Revaluation A/c.
Answer:
New profit sharing ratio is the agreed proportion in which future profit will be distributed to the continuing partners. If the new profit sharing ratio is not agreed, the continuing partners will share the profits and losses equally.

Question 3.
How will you adjust the share of profits loss of the retaining partner if he retires in between in an accounting year?
Answer:
When a partner retires in between in an accounting year, his share of the current year’s profit or loss upto the date of retirement has to be distributed to the retiring partner. It may be estimated based on the current year’s turnover. The previous year’s profit or the average of the past year’s profit may also be taken as the base to estimate the current year’s profit. The following journal entry is passed

Question 4.
What are the adjustments to be made on the death of a partner?
Answer:
The following adjustments are made on the death of a partner.

• Distribution of accumulated profits, reserves, and losses
• Revaluation of assets and liabilities
• Determination of new profit sharing ratio and gaining ratio
• Adjustment for goodwill
• Adjustment for current year’s profit or loss upto the date of death
• Settlement of the amount due to the deceased partner.

Question 5.
What are the journal entries to be passed for settlement of the amount due to the deceased partner
Answer:
To transfer the amount due to the deceased partner to the executor or legal representative of the deceased partner.

IV Additional Problems:

Question 1.
A, B, and C sharing profits in the ratio of 5:3:2. C retires. Find out the new profit sharing ratio and gaining ratio.
Solution:

Question 2.
G, H, and I are partners sharing profits in the ratio of 5:3:2.1 taken up by G and H equally. Find out the new profit sharing ratio of G and H.
Solution:

Question 3.
J, K and L are partners sharing profits in the ratio of 5:3:2. retires and his share was taken up entirely by K. Find out the new profit sharing ratio and gaining ratio of continuing partners
Solution:

Question 4.
X,Y and Z are partners sharing profits in- the ratio of 5:3:2 Z retires and the ratio between X and Y is 3:2. Find out the gaining ratio
Solution :

Question 5.
Prabha,Kavitha and Meena were partners of a firm sharing profit and loss in the ratio of 3:2:1 Meena Wanted to retire. They decided to revalue the assets and liabilities of the firm as indicated below:
To write down Machinery by Rs 10,000 and Stock by Rs. 4,000
To bring into books as unrecorded investments Rs. 5,000
To Write off Rs.3,000 from sundry creditors as it was no longer liable.
Pass entries to give effect to the above adjustments. Show also Revaluation account.
Solution:

Question 6.
Banumathi, Bharafhi and Shanthi are partners sharing, profits in the ratio of 5:3:2. On April 1, 2005 Shanthi decided to retire. On that date, there was a credit balance of Rs. 60,000 in their profit and loss account. Pass entry.
Solution:

Question 7.
Thangamuthu, Anaimuthu and Vairamuthu are partners sharing profit and loss in the ratio of 3:3:2. Thangamuthu wanted to retire on 1st June 2005, the firms books showed a general reserve of Rs. 40,000. Pass entry.
Solution:

Question 8.
Lalitha, Jothi and Kanaga were partners of a sharing profit and losses in the ratio of 3:2:3, Set out below was their balance sheet as on 31st March 2003.

Lalitha retired from the partnership on 1st April 2004 on the following terms:
Goodwill of the firm was to be valued at Rs.30,000
The assets are to be valued as under Stock Rs. 1,00,000; Furniture Rs.15,000; Plant and Machinery Rs.45,000; Building Rs.1,00,000.
A provision for doubtful debts is created at Rs.4,250.
Lalitha was to be paid off immediately.
Show the journal entries, prepare a revaluation account, capital account, Bank account, and balance sheet of the reconstituted partnership.
Solution:

Question 9.
‘9. A, B and C are partners sharing profits and losses in the ration of 5:3:2 respectively. Retries from the firm on 1st April 2005. After his retirement, his capital account shows a credit balance of Rs.1,35,000 after the necessary adjustment made. Give journal entries, if.
the amount due is paid off immediately.
When the amount due is not paid immediately.
Rs. 45,000 is paid and the balance In the future.
Solution :

Question 10.
Pallavan, Pandian and Chozhan were carrying on partnership business sharing profits in the ratio of 3:2:1. On March 31, 2005, the balance sheet of the firm stood as follows:

Chozhan retried on April 1, 2005 on the following terms:
Building to be appreciated by Rs. 15,000
Provision for doubtful debts to be made at 6% on debtors
Goodwill of the firm is valued at Rs. 18,000
Rs.50,000 to be paid to chozhan immediately and the balance transferred to his loan account.
Prepare Revaluation Account, Capital Accounts, Bank Account and the Balance Sheet after Chozhan’s retirement.
Solution :