PSEB Class 12 Accountancy 2025 Question Paper with Solutions PDF Set B

Step 1: Understanding the terms.

In partnership accounting, rent paid to a partner is considered an appropriation against the profits of the partnership. This means the rent is treated as a distribution of profit to the partner. In contrast, a charge against profit is an expense that reduces the net income of the partnership.


Step 2: Analyzing the options.

(charge): A charge against profit refers to an expense, and it would reduce the profit. However, rent paid to a partner is typically treated as an appropriation rather than a charge.

(appropriation): Correct — Rent paid to a partner is treated as an appropriation of profit, as it is a share of the partnership’s profit that is distributed to the partner.


Step 3: Conclusion.

The correct answer is appropriation, as rent paid to a partner is considered an appropriation against profit in partnership accounting.
Quick Tip: In partnership accounting, appropriation refers to distributions of profit to partners, while a charge against profit refers to expenses that reduce profit.

Step 1: Understanding the term.

The Revaluation Account is used to record the changes in the value of assets and liabilities during a partnership revaluation. As it deals with the adjustments of asset values, it is classified as a nominal account.


Step 2: Conclusion.

The correct answer is nominal, as the Revaluation Account is a nominal account used to adjust values.
Quick Tip: Revaluation accounts are used for temporary adjustments in asset values and are always treated as nominal accounts.

Step 1: Understanding the term.

The Gaining Ratio refers to the proportion in which the remaining partners acquire the share of a retiring partner. This ratio reflects how the remaining partners' shares increase when a partner retires or exits the firm.


Step 2: Conclusion.

The correct answer is Gaining Ratio, as it indicates how the remaining partners share the retiring partner’s portion.
Quick Tip: When a partner retires, the Gaining Ratio shows the new distribution of the retiring partner's share among the remaining partners.

Step 1: Understanding the term.

During the dissolution of a partnership, all assets and liabilities are transferred to the Realization Account. The values of these assets and liabilities are recorded at their book values, which are the original values at which the assets were recorded in the firm’s books, rather than their market values.


Step 2: Conclusion.

The correct answer is book, as dissolution of the firm uses book values for transferring assets and liabilities.
Quick Tip: During dissolution, assets and liabilities are transferred to the Realization Account at their book values, not their current market value.

Step 1: Formula for calculating interest on drawings.

The formula to calculate interest on drawings is: \[ I = \dfrac{P \times R \times T}{100} \]
Where: \( P \) = Amount withdrawn \( R \) = Rate of interest \( T \) = Time period for which the amount was withdrawn (in years)


Step 2: Calculating interest for each quarter.

Mohan withdraws ₹ 4,000 at the beginning of each quarter. The rate of interest is 6% p.a. Since interest is calculated on quarterly withdrawals, the time for which interest is calculated varies for each withdrawal.


For the first withdrawal (₹ 4,000 for 3 months): \[ I_1 = \dfrac{4,000 \times 6 \times \dfrac{3}{12}}{100} = ₹ 60 \]
For the second withdrawal (₹ 4,000 for 2 months): \[ I_2 = \dfrac{4,000 \times 6 \times \dfrac{2}{12}}{100} = ₹ 40 \]
For the third withdrawal (₹ 4,000 for 1 month): \[ I_3 = \dfrac{4,000 \times 6 \times \dfrac{1}{12}}{100} = ₹ 20 \]

Step 3: Total interest.

Total interest = \( I_1 + I_2 + I_3 = ₹ 60 + ₹ 40 + ₹ 20 = ₹ 120 \).

Thus, the total interest on drawings for the quarter is ₹ 180.
Quick Tip: To calculate interest on drawings made at different times, calculate interest separately for each withdrawal and then sum them up.

Step 1: Understanding Goodwill.

Goodwill refers to the value of a company’s brand, customer loyalty, employee relations, and other non-physical assets that cannot be easily quantified but add value to the company. It is typically considered as an intangible asset.


Step 2: Conclusion.

Goodwill is recorded when a company acquires another company for more than the fair market value of its identifiable assets. It reflects the premium paid for the company’s intangible assets.
Quick Tip: Goodwill is an intangible asset that arises from a business’s reputation and relationships, often evaluated during mergers or acquisitions.

Step 1: Understanding Sacrifice Ratio.

The Sacrifice Ratio is used when a partner sacrifices a portion of their share in favor of a new or retiring partner. It is calculated by finding the difference between the old share and the new share and dividing it by the old share.


Step 2: Formula.

The formula for Sacrifice Ratio is: \[ Sacrifice Ratio = \dfrac{Old Share - New Share}{Old Share} \]

Step 3: Conclusion.

This formula is used to determine how much of their share the existing partners are giving up to accommodate a new or retiring partner.
Quick Tip: The Sacrifice Ratio helps in calculating the proportion in which the existing partners give up their share for the benefit of the new partner.

Step 1: Understanding Realisation Account.

The Realisation Account is used during the dissolution of a partnership firm to account for the realization of assets and the settlement of liabilities. All assets are transferred to this account at their book values, and liabilities are credited.


Step 2: Function of Realisation Account.

The purpose of the Realisation Account is to record the sale of assets and the payment of liabilities, and any gain or loss on the sale of assets is transferred to the partners’ capital accounts.


Step 3: Conclusion.

The Realisation Account is used to settle the accounts during the dissolution of a partnership firm, ensuring that all assets and liabilities are accounted for appropriately.
Quick Tip: During the dissolution of a firm, the Realisation Account helps in transferring assets and liabilities and determining any gain or loss from the sale of assets.

Step 1: Understanding the methods of valuation of Goodwill.

Goodwill can be valued using various methods, including:

- Capitalization Method: In this method, goodwill is valued based on the capitalized value of the average profits or future earnings. The normal rate of return is not required in this method because it directly capitalizes the profits or the earning capacity of the business.

- Super Profit Method: This method requires the calculation of the normal rate of return, as it considers the excess profits earned by the business above the normal rate.

- Average Profit Method: This method also typically requires the normal rate of return to calculate the goodwill based on average profits.


Step 2: Conclusion.

The correct answer is (a) Capitalization Method, as it does not require the normal rate of return.
Quick Tip: In the Capitalization Method, goodwill is calculated by capitalizing the average profits without needing a normal rate of return.

Step 1: Understanding the Revaluation Account.

The Revaluation Account is prepared during the revaluation of assets and liabilities in a partnership. This account is used to record increases or decreases in the value of assets and liabilities.

- Increase in the value of assets is recorded on the Debit side of the Revaluation Account. This is because it represents an addition to the assets of the firm, which increases the value of the business.

- Decrease in the value of assets is recorded on the Credit side of the Revaluation Account.


Step 2: Conclusion.

The correct answer is (b) Debit side, as increases in asset values are recorded on the debit side of the Revaluation Account.
Quick Tip: In the Revaluation Account, increases in the value of assets are recorded on the Debit side, while decreases are recorded on the Credit side.

Step 1: Understanding the question.

J, K, L, and M originally share profits in the ratio of 9 : 6 : 5 : 5. When N joins with a 20% share, the total share in the partnership increases to 120%. The remaining share (80%) is divided among J, K, L, and M as 3 : 4 : 2 : 1, respectively.


Step 2: Calculation.

The 20% share will be distributed among J, K, L, and M according to their original ratio of 9 : 6 : 5 : 5. So, we calculate each partner's new share as follows: \[ Total share for J, K, L, M = 3 + 4 + 2 + 1 = 10 \] \[ J's share = \dfrac{3}{10} \times 80 = 24% \] \[ K's share = \dfrac{4}{10} \times 80 = 32% \] \[ L's share = \dfrac{2}{10} \times 80 = 16% \] \[ M's share = \dfrac{1}{10} \times 80 = 8% \]
Now, N's 20% share is added. The new profit-sharing ratio is: \[ J : K : L : M : N = 24 : 32 : 16 : 8 : 20 \]
Simplifying, the new ratio is: \[ 8 : 6 : 4 : 2 : 5 \]

Step 3: Conclusion.

The correct answer is (c) 8 : 6 : 4 : 2 : 5.
Quick Tip: When a new partner joins a partnership, the existing partners’ shares are adjusted according to the agreed ratio and the new partner’s share.

Step 1: Understanding the change in profit-sharing ratio.

Initially, the profit-sharing ratio among X, Y, and Z is 10 : 7 : 5. When Z retires, X and Y decide to share profits equally. The gain from Z’s share is distributed between X and Y in the ratio of their existing shares.


Step 2: Calculation of Gaining Ratio.

The total share of Z is 5, which is given up between X and Y. The existing ratio between X and Y is 10 : 7, so the gaining ratio between X and Y will be: \[ X's gain = \dfrac{10}{10 + 7} \times 5 = \dfrac{10}{17} \times 5 = \dfrac{50}{17} \] \[ Y's gain = \dfrac{7}{10 + 7} \times 5 = \dfrac{7}{17} \times 5 = \dfrac{35}{17} \]
The gaining ratio between X and Y is \( \dfrac{50}{17} : \dfrac{35}{17} = 4 : 1 \).

Step 3: Conclusion.

The correct answer is (d) 4 : 1, as X and Y share the gains in the ratio of 4 : 1.
Quick Tip: In cases where a partner retires, the remaining partners share the retiring partner’s share in the ratio of their original profit-sharing ratio.

Step 1: Understanding the problem.

X and Y are already partners in the firm, and they admit Z as a new partner. Z will receive a 20% share in the profits, so the total capital of the firm should be in proportion to the partners' shares. The total capital of the firm will include the capital of X, Y, and the capital Z will bring. We are asked to calculate the capital Z must bring to have a 20% share in the profits.


Step 2: Calculating the total capital of the firm.

The total capital of the firm should be the sum of the capitals of X, Y, and Z. Given that X and Y’s capital is ₹ 2,50,000 and ₹ 3,50,000 respectively, the total capital of X and Y is: \[ Total Capital of X and Y = ₹ 2,50,000 + ₹ 3,50,000 = ₹ 6,00,000 \]

Step 3: Determining Z's capital.

Z will get 20% of the total capital, and X and Y will share 80% of the total capital. Therefore, the total capital of the firm, \( C \), can be calculated as follows: \[ Z's share = 20% \times C \quad and \quad X and Y's share = 80% \times C \]
Since X and Y’s combined capital is ₹ 6,00,000, we can equate: \[ 80% \times C = ₹ 6,00,000 \] \[ C = \dfrac{₹ 6,00,000}{0.80} = ₹ 7,50,000 \]

Step 4: Calculating Z’s capital.

Z’s capital = 20% of ₹ 7,50,000 \[ Z's capital = \dfrac{20}{100} \times ₹ 7,50,000 = ₹ 1,50,000 \]

Thus, the amount of capital to be brought by Z is ₹ 1,50,000.
Quick Tip: When a new partner is admitted, the total capital of the firm must be adjusted in accordance with the new profit-sharing ratio, and the new partner's capital is calculated proportionally.

Step 1: Calculate M's share in the profit.

The total profit for the year was ₹ 3,00,000. M’s share in the profits is calculated based on the ratio of the partners, which is 3 : 2 : 1. M’s share is \( \dfrac{2}{6} \) of the total profit. So, M’s share in the profits till his death is: \[ M's \, share in profit = \dfrac{2}{6} \times 3,00,000 = ₹ 1,00,000 \]

However, M died on 12th June, so the profits need to be calculated for the time M was alive. From 1st April to 12th June, M was alive for 72 days. So, the calculation of M's share of profit is as follows: \[ M’s \, share of profit = \dfrac{72}{365} \times ₹ 1,00,000 = ₹ 19,726.03 \]

Therefore, M’s share of profit till his death is ₹ 19,726.03.


Step 2: Treatment of Goodwill.

Goodwill at the time of M’s death is ₹ 1,80,000. M’s share of Goodwill is calculated as: \[ M's \, share of Goodwill = \dfrac{2}{6} \times ₹ 1,80,000 = ₹ 60,000 \]

Step 3: Journal entries for the treatment of Goodwill and M's share of profit.


1. To record M’s share of profit: \[ Profit and Loss Appropriation A/c \, Dr. ₹ 19,726.03 \quad To \quad M’s Capital A/c ₹ 19,726.03 \]

2. To record M’s share of Goodwill: \[ Goodwill A/c \, Dr. ₹ 60,000 \quad To \quad M’s Capital A/c ₹ 60,000 \]

Step 4: Conclusion.

M’s share in the profits until his death is ₹ 19,726.03, and his share of Goodwill is ₹ 60,000. The necessary journal entries have been passed for both the treatment of Goodwill and M’s share of profit.
Quick Tip: When a partner dies, their share of profit and Goodwill is calculated based on the time they remained in the firm. The profit-sharing ratio is used to calculate their share of profits.

Step 1: Understanding the details.

The total debtors are ₹ 4,00,000. Bad debts of ₹ 40,000 are written off, and the remaining debtors are realised at a 5% discount. So, the amount to be realised is calculated as follows: \[ Remaining debtors = ₹ 4,00,000 - ₹ 40,000 = ₹ 3,60,000 \]

Step 2: Applying the 5% discount.

The remaining debtors are realised at a 5% discount, so the amount realised will be: \[ Amount realised = 95% \times ₹ 3,60,000 = ₹ 3,42,000 \]

Step 3: Total amount realised.

The total amount realised from the debtors is ₹ 3,42,000. Adding this to the bad debts written off (₹ 40,000), the total amount realised is: \[ Total amount realised = ₹ 3,72,000 \]

Step 4: Conclusion.

The amount realised from debtors is ₹ 3,72,000.
Quick Tip: When calculating the amount realised from debtors, first subtract bad debts and then apply the discount on the remaining amount.

Step 1: Understanding the differences.

The two main differences are:
- In Fixed Capital Accounts, capital remains unchanged unless specifically altered by new capital or withdrawals, and a current account is maintained for each partner to record other transactions.
- In Fluctuating Capital Accounts, the capital account is adjusted for profits, losses, and withdrawals, and no separate current account is needed. Quick Tip: In fixed capital systems, current accounts are maintained for day-to-day transactions, while in fluctuating capital systems, the capital account itself is updated with all transactions.

Step 1: Understanding the factors.

Goodwill is an intangible asset that is influenced by various factors. Two of the main factors include:
- The nature of the business, such as the type of products or services it offers, its reputation, and how well it is positioned in the market.
- The profitability and reputation of the business, which affects its ability to generate future earnings and build a customer base. Quick Tip: Goodwill is not just based on past earnings; the reputation, customer loyalty, and overall market position also play significant roles.

Step 1: Understanding Reserves and Surplus.

Reserves and surplus refer to the accumulated profits of the firm that have not been distributed. These amounts are shared among the partners when the firm undergoes reconstitution, as they represent the partners' share of retained earnings.


Step 2: Distribution during reconstitution.

When a firm undergoes reconstitution, such as the admission or retirement of a partner, the reserves and surplus need to be redistributed based on the new profit-sharing ratio to reflect the changes in the partnership.


Step 3: Conclusion.

This ensures that each partner receives a fair share of the accumulated reserves according to their new profit-sharing ratio.
Quick Tip: During reconstitution, accumulated reserves and surpluses are distributed among the partners to reflect changes in their share of profits.

Step 1: Notice of retirement.

The partner must inform the other partners about their intention to retire as per the terms mentioned in the partnership deed. If not mentioned, the notice period is typically as agreed by the partners.


Step 2: Settlement of capital accounts.

The capital account of the retiring partner is settled, and their share in profits or losses is calculated. This could involve paying the partner’s share in cash or transferring assets in kind.


Step 3: Adjusting reserves.

Any accumulated reserves such as the general reserve and profit-sharing ratios are adjusted.
Quick Tip: The retirement of a partner involves calculating their share of profits, goodwill, and reserves, which must be settled with the remaining partners.

Step 1: Calculation of P’s commission.

P’s commission is 10% of the net profit before commission. Therefore, we can calculate P's commission by setting up the following equation: \[ P's \, commission = 10% \times (₹ 2,20,000 + P's \, commission) \] \[ P's \, commission = ₹ 1,25,000 \]

Step 2: Calculation of Q’s commission.

Q's commission is 10% of the net profit after charging Q's commission. Let’s calculate Q's commission: \[ Q's \, commission = 10% \times (₹ 2,20,000 - P's \, commission) = 10% \times (₹ 2,20,000 - ₹ 1,25,000) \] \[ Q's \, commission = ₹ 16,363.64 \]

Step 3: Remaining Profit Distribution.

After paying the commissions, the remaining profit is: \[ Remaining profit = ₹ 2,20,000 - ₹ 1,25,000 - ₹ 16,363.64 = ₹ 78,636.36 \]
The remaining profit is shared equally between P and Q.

Step 4: Conclusion.

P’s total share = ₹ 1,25,000 (commission) + ₹ 39,318.18 (share of remaining profit) = ₹ 1,64,318.18.
Q’s total share = ₹ 16,363.64 (commission) + ₹ 39,318.18 (share of remaining profit) = ₹ 55,681.82. Quick Tip: When calculating commission, ensure that it is based on the net profit before or after the commission, as specified in the agreement.

Step 1: General Reserves and Workmen Compensation Reserve.

The reserves need to be distributed among the partners based on their profit-sharing ratio. The new profit-sharing ratio is 1 : 1 : 1, so the reserves will be shared equally.

1. General Reserves: \[ General Reserves = ₹ 1,80,000 \]
Distribution of general reserves (4:3:2 to 1:1:1): \[ Sita's share = ₹ 1,80,000 \times \dfrac{4}{9} = ₹ 80,000 \] \[ Gita's share = ₹ 1,80,000 \times \dfrac{3}{9} = ₹ 60,000 \] \[ Rita's share = ₹ 1,80,000 \times \dfrac{2}{9} = ₹ 40,000 \]
Then, journal entry for the general reserve adjustment: \[ General Reserves A/c \, Dr. ₹ 1,80,000 \quad To \quad Sita's Capital A/c ₹ 80,000 \quad To \quad Gita's Capital A/c ₹ 60,000 \quad To \quad Rita's Capital A/c ₹ 40,000 \]

2. Workmen Compensation Reserve:
Similar calculation as general reserves for the Workmen Compensation Reserve of ₹ 2,25,000.

3. Profit & Loss Account (Dr.):
The balance of ₹ 4,50,000 is transferred based on the ratio of 4:3:2 for the old sharing arrangement. The entries for this would follow similar patterns. Quick Tip: When changing the profit-sharing ratio, all accumulated reserves, including General Reserves and Workmen Compensation Reserves, should be adjusted based on the new profit-sharing ratio.

Step 1: Revaluation of assets and liabilities.

We need to adjust the assets and liabilities according to the agreement. The new partner, Sun, will bring ₹ 6,00,000 for their capital share. The goodwill and other reserves are adjusted accordingly.


The necessary journal entries and capital adjustments will include:
- Adjustments for goodwill, reserves, and liabilities like provisions and the bank loan interest.
- Distribution of reserves and stock adjustments as per the changes in the partnership.


Step 2: Revaluation Account.


Revaluation Account is prepared to account for changes in the value of assets and liabilities:
- Goodwill of ₹ 4,00,000 should be recorded in the revaluation account.
- Any adjustments for debtors and stock should be reflected accordingly.
- For unrecorded stock, ₹ 40,000 is adjusted. Quick Tip: In partnership reconstitution, it is essential to adjust for any changes in capital, goodwill, and reserves to reflect the new profit-sharing ratio and to make proper entries for revaluation.

Step 1: Calculate P’s commission.

P’s commission is 10% of the net profit before commission. Therefore, we can calculate P's commission by setting up the following equation: \[ P's \, commission = 10% \times (₹ 2,20,000 + P's \, commission) \] \[ P's \, commission = ₹ 1,25,000 \]

Step 2: Calculate Q’s commission.

Q's commission is 10% of the net profit after charging Q's commission. Let’s calculate Q's commission: \[ Q's \, commission = 10% \times (₹ 2,20,000 - P's \, commission) = 10% \times (₹ 2,20,000 - ₹ 1,25,000) \] \[ Q's \, commission = ₹ 16,363.64 \]

Step 3: Remaining Profit Distribution.

After paying the commissions, the remaining profit is: \[ Remaining profit = ₹ 2,20,000 - ₹ 1,25,000 - ₹ 16,363.64 = ₹ 78,636.36 \]
The remaining profit is shared equally between P and Q.

Step 4: Conclusion.

P’s total share = ₹ 1,25,000 (commission) + ₹ 39,318.18 (share of remaining profit) = ₹ 1,64,318.18.
Q’s total share = ₹ 16,363.64 (commission) + ₹ 39,318.18 (share of remaining profit) = ₹ 55,681.82. Quick Tip: When calculating commission, ensure that it is based on the net profit before or after the commission, as specified in the agreement.

Step 1: General Reserves and Workmen Compensation Reserve.

The reserves need to be distributed among the partners based on their profit-sharing ratio. The new profit-sharing ratio is 1 : 1 : 1, so the reserves will be shared equally.

1. General Reserves: \[ General Reserves = ₹ 1,80,000 \]
Distribution of general reserves (4:3:2 to 1:1:1): \[ Sita's share = ₹ 1,80,000 \times \dfrac{4}{9} = ₹ 80,000 \] \[ Gita's share = ₹ 1,80,000 \times \dfrac{3}{9} = ₹ 60,000 \] \[ Rita's share = ₹ 1,80,000 \times \dfrac{2}{9} = ₹ 40,000 \]
Then, journal entry for the general reserve adjustment: \[ General Reserves A/c \, Dr. ₹ 1,80,000 \quad To \quad Sita's Capital A/c ₹ 80,000 \quad To \quad Gita's Capital A/c ₹ 60,000 \quad To \quad Rita's Capital A/c ₹ 40,000 \]

2. Workmen Compensation Reserve:
Similar calculation as general reserves for the Workmen Compensation Reserve of ₹ 2,25,000.

3. Profit \& Loss Account (Dr.):
The balance of ₹ 4,50,000 is transferred based on the ratio of 4:3:2 for the old sharing arrangement. The entries for this would follow similar patterns. Quick Tip: During reconstitution, accumulated reserves and surpluses are distributed among the partners to reflect changes in their share of profits.

Step 1: Realisation Account Preparation.

We need to account for the assets and liabilities at their realizable values and adjust for any expenses incurred during the dissolution. The following entries will be made in the Realisation Account:

1. Land and Building taken by Creditors:
Since the creditors took over Land and Building for full and final settlement, we remove the value of Land and Building from the assets side. The entry is: \[ Sundry Creditors A/c \, Dr. ₹ 4,80,000 \quad To \quad Realisation A/c ₹ 4,80,000 \]

2. Ekam’s loan settlement:
Ekam's loan of ₹ 40,000 is settled with the unrecorded asset of ₹ 50,000. This will be adjusted as follows: \[ Realisation A/c \, Dr. ₹ 40,000 \quad To \quad Ekam’s Loan A/c ₹ 40,000 \]

3. Furniture taken by Akash:
Furniture is taken by Akash for cash payment at 5% less than the book value. The value of Furniture is ₹ 3,50,000, and the payment made by Akash is 95% of the value: \[ Realisation A/c \, Dr. ₹ 3,50,000 \quad To \quad Akash’s Capital A/c ₹ 3,32,500 \quad To \quad Realisation A/c ₹ 17,500 \, (Discount on Furniture) \]

4. Debtors collected by a debt collection agency:
Debtors are collected by a debt collection agency at a cost of ₹ 10,000. The amount collected from Debtors is ₹ 1,60,000, but ₹ 10,000 is deducted as collection expenses: \[ Debtors A/c \, Dr. ₹ 1,60,000 \quad To \quad Realisation A/c ₹ 1,50,000 \quad To \quad Realisation Expenses A/c ₹ 10,000 \]

5. Bills Receivable realised:
Bills Receivable is realized for ₹ 1,41,000: \[ Bills Receivable A/c \, Dr. ₹ 1,50,000 \quad To \quad Realisation A/c ₹ 1,41,000 \]

6. Akash’s share of realization expenses:
Akash agrees to bear the realization expenses, with ₹ 1,000 allowed to him. The total expense is ₹ 2,000. Therefore, Akash pays ₹ 2,000: \[ Akash’s Capital A/c \, Dr. ₹ 1,000 \quad To \quad Realisation Expenses A/c ₹ 2,000 \]

Step 2: Realisation Account Finalization.

Now, all adjustments are made, and we can finalize the Realisation Account by summing the total of the Dr. and Cr. sides. Quick Tip: When preparing a Realisation Account, ensure all assets are revalued and liabilities settled. Any profit or loss from realization will be transferred to the partners' capital accounts.

Step 1: Profit Sharing Ratio.

In the absence of a partnership deed, the partners are assumed to share profits and losses equally, unless a different agreement is reached between the partners.

Step 2: Interest on Capital.

No interest is payable on capital unless specified in the partnership deed. The partners will not receive interest on their capital contributions if the partnership deed is silent on this matter.

Step 3: Interest on Drawings.

No interest is charged on the drawings made by the partners unless the deed specifies otherwise. In the absence of such a clause, partners are not penalized for withdrawing funds from the firm.

Step 4: Partner’s Salary.

No salary is paid to the partners unless the partnership deed mentions it. If the deed does not provide for a salary, each partner works without a fixed remuneration.

Step 5: Loss Sharing.

In the absence of a partnership deed, losses are shared in the same ratio as profits, i.e., equally among the partners. Quick Tip: Having a partnership deed in place helps in clearly defining the roles and expectations of the partners, preventing future conflicts and misunderstandings.

Step 1: Settlement of Capital Account.

The first step in the retirement of a partner is to settle their capital account. The retiring partner is entitled to their share of the firm’s capital, adjusted for any profits, losses, or changes in the value of assets or liabilities. This process involves calculating the retiring partner's share in the firm's assets and liabilities.

Step 2: Revaluation of Assets and Liabilities.

The assets and liabilities of the firm need to be revalued to reflect their current market values. This adjustment ensures that the retiring partner receives a fair share of the firm’s assets. Any resulting profit or loss from revaluation is allocated among the remaining partners based on their profit-sharing ratio.

Step 3: Adjusting for Goodwill.

Goodwill is an intangible asset, and when a partner retires, their share of the firm’s goodwill needs to be adjusted. This involves calculating the goodwill of the firm and then distributing it between the remaining partners and the retiring partner, based on their agreed share of profits. The amount of goodwill due to the retiring partner is debited from the remaining partners' capital accounts.

Step 4: Share of Reserves.

Any reserves, such as the general reserve or workmen compensation reserve, that have been accumulated during the firm’s existence must also be shared among the partners. The retiring partner's share of the reserves should be paid out or transferred to their capital account based on the firm’s agreement.

Step 5: Profit or Loss Up to the Date of Retirement.

The retiring partner is entitled to their share of the firm’s profits or losses up until the date of retirement. This amount should be calculated and added to the retiring partner’s capital account.

Step 6: Conclusion.

Once all adjustments have been made, the retiring partner’s capital account is settled. Any remaining balance is either paid out to the retiring partner in cash or transferred to their designated account. Quick Tip: Ensure that all adjustments for goodwill, revaluation, and reserves are made accurately to reflect the retiring partner’s fair share.

Step 1: Calculation of Average Profit.

The net profits for the last three years are:
- 2021 - 22: ₹ 3,80,000
- 2022 - 23: ₹ 4,40,000
- 2023 - 24: ₹ 5,00,000

The average profit is calculated as: \[ Average Profit = \dfrac{3,80,000 + 4,40,000 + 5,00,000}{3} = ₹ 4,40,000 \]

Step 2: Calculation of Normal Profit.

The normal profit is calculated by applying the fair return (15%) on the capital employed: \[ Normal Profit = 15% \times 8,00,000 = ₹ 1,20,000 \]

Step 3: Calculation of Super Profit.

Super profit is the difference between the average profit and the normal profit: \[ Super Profit = Average Profit - Normal Profit = ₹ 4,40,000 - ₹ 1,20,000 = ₹ 3,20,000 \]

Step 4: Calculation of Goodwill using Two Years' Purchase of Super Profit.

Goodwill is calculated by multiplying the super profit by 2 years' purchase: \[ Goodwill = 2 \times ₹ 3,20,000 = ₹ 6,40,000 \]

Step 5: Calculation of Goodwill using Capitalisation of Average Profit Method.

Under this method, goodwill is calculated by capitalising the average profit after deducting the normal profit at a fair return. The formula is: \[ Goodwill = \dfrac{Super Profit \times 100}{Rate of Return} = \dfrac{3,20,000 \times 100}{15} = ₹ 21,33,333.33 \]

Step 6: Conclusion.

- The value of goodwill using the two years' purchase of super profit method is ₹ 6,40,000.
- The value of goodwill using the capitalisation of average profit method is ₹ 21,33,333.33. Quick Tip: Goodwill can be valued using different methods such as the super profit method or the capitalisation of average profit method. Always ensure that the method used aligns with the agreement between partners.

Step 1: Understanding the term "Debenture holders."

Debenture holders are creditors of the company, and they are entitled to receive interest payments on the debentures they hold. This is because debentures are a type of debt instrument issued by a company.


Step 2: Conclusion.

The correct term is interest. Debenture holders receive interest, not dividends. Dividends are distributed to equity shareholders, not debenture holders.
Quick Tip: Debenture holders are creditors and entitled to receive interest, whereas shareholders receive dividends, which are paid out of profits.

Step 1: Understanding Capital Reserve.

Capital reserve refers to the amount set aside by a company from its profits for specific purposes, such as for the future expansion, contingencies, or other non-operational uses. It is not meant to be used for the distribution of dividends or for any regular operational expenditure.

Step 2: Features of Capital Reserve.

- It arises from capital profits, which are the profits that are not earned through normal business operations.
- It is typically created when a company issues shares at a premium, sells assets for more than their book value, or earns profit through non-recurring activities.
- It is not available for distribution as dividends and is generally used for long-term business needs.

Step 3: Conclusion.

Capital reserves are essential for strengthening a company's financial base and can be used for specific future needs that are not related to day-to-day operations. Quick Tip: Capital reserves are created from non-operational profits and cannot be used for paying dividends. They are kept aside for long-term goals or business expansion.

Step 1: Understanding Redemption of Debentures.

The redemption of debentures refers to the process in which the issuing company repays the amount to the debenture holders at the end of the term. The redemption can be done in various ways, one of which is by a draw of lots.

Step 2: Redemption by Draw of Lots.

- Draw of lots is a random selection process where a certain number of debentures are selected for redemption.
- The debenture holders whose debentures are drawn are repaid the face value of their debentures, and the selected debentures are cancelled.
- This method is typically used when the company wants to redeem debentures but doesn’t have sufficient funds to redeem all debentures at once.

Step 3: Procedure.

1. The company determines the number of debentures to be redeemed.
2. A random selection process (i.e., drawing lots) is conducted to choose the debenture holders whose debentures will be redeemed.
3. The face value of the redeemed debentures is paid back to the selected debenture holders, and their debentures are cancelled.

Step 4: Conclusion.

Redemption of debentures by draw of lots provides a fair and transparent method for selecting which debentures will be redeemed when the company has limited funds for redemption. Quick Tip: In redemption by draw of lots, a random selection of debenture holders is made for redemption, ensuring fairness when funds are limited.

Step 1: Understanding Cash Flow Activities.

Cash flow statements are divided into three activities:
- Operating Activities: These relate to the primary revenue-generating activities of the company.
- Investing Activities: These include activities related to the acquisition or disposal of long-term assets.
- Financing Activities: These involve transactions related to the company’s funding, such as issuing shares, borrowing, and repaying loans.

Step 2: Loan Transaction and Cash Flow.

The loan obtained by Harsh Ltd. is related to the financing of the company. Since loans and advances are related to how the company is financed, this would be classified under Financing Activities in the cash flow statement.

Step 3: Conclusion.

The transaction of obtaining loans and advances of ₹ 10,00,000 will be included under Financing Activities in the cash flow statement. Quick Tip: Loans received by a company are classified under financing activities in the cash flow statement, as they represent a source of external funding.

Step 1: Understanding the Premium.

The company purchased machinery for ₹ 18,00,000 and issued shares at 20% premium. The premium is the additional amount paid over the face value of shares. Let the face value of shares be \( X \). The total value of shares issued can be calculated as: \[ Total Value of Shares = X + 20% of X = 1.2X \]
So, the total value of shares issued should equal ₹ 18,00,000.

Step 2: Calculation.

We have the equation: \[ 1.2X = 18,00,000 \]
Solving for \( X \): \[ X = \dfrac{18,00,000}{1.2} = ₹ 15,00,000 \]

Step 3: Conclusion.

The face value of the shares issued is ₹ 15,00,000, so the correct answer is option (d). Quick Tip: When shares are issued at a premium, the total value of the shares includes the face value plus the premium amount. Always calculate the face value first when given the total issue price and premium.

Step 1: Understanding the Relevance of Financial Statements.

Financial statements are primarily used by stakeholders to assess the financial health and performance of a company. These stakeholders typically include investors, creditors, the government, and company employees.

Step 2: Analyzing the Options.

- (a) Investors: Investors use financial statements to make informed decisions about investing in a company.
- (b) Government: The government uses financial statements for regulatory and tax purposes.
- (c) Ambassador of India: An ambassador does not typically need to analyze the financial statements of a company, as they are not directly involved in the company’s financial or business operations.
- (d) Company’s Employees: Employees may analyze financial statements to understand the company’s profitability and stability, especially if it impacts their job security or salary.

Step 3: Conclusion.

The correct answer is (c) Ambassador of India, as an ambassador is generally not concerned with analyzing a company's financial statements. Quick Tip: Financial statements are primarily useful to those who have a financial stake or regulatory interest in the company, such as investors, government, and employees.

Step 1: Receiving Applications.

When applications are received, the amount payable on application is ₹ 100 per debenture, and the premium is ₹ 50, so the total amount per debenture is ₹ 150. The application money for 50,000 debentures is: \[ 50,000 \times 150 = ₹ 75,00,000 \]
The journal entry for receiving applications is: \[ Bank A/c \, Dr. ₹ 75,00,000 \quad To \quad Debenture Application A/c ₹ 75,00,000 \]

Step 2: Rejecting Applications for 10,000 Debentures.

Applications for 10,000 debentures are rejected, and the application money for these debentures is refunded. The refund of application money is: \[ 10,000 \times 150 = ₹ 15,00,000 \]
The journal entry for the refund is: \[ Debenture Application A/c \, Dr. ₹ 15,00,000 \quad To \quad Bank A/c ₹ 15,00,000 \]

Step 3: Allotting Debentures to Remaining Applicants on Pro-Rata Basis.

Applications for 40,000 debentures are considered, and 30,000 debentures are allotted to the applicants. The ratio of allotment is: \[ Allotment Ratio = \dfrac{30,000}{40,000} = 3:4 \]
The allotment money for 30,000 debentures is: \[ 30,000 \times 150 = ₹ 45,00,000 \]
The journal entry for the allotment is: \[ Debenture Application A/c \, Dr. ₹ 60,00,000 \quad To \quad Debenture Allotment A/c ₹ 60,00,000 \] Quick Tip: When applications for debentures are received, the company must account for the total application money, reject applications as needed, and make appropriate journal entries for the allotment and refund.

Step 1: Understanding the Ratios.

- Current Ratio = \( \dfrac{Current Assets}{Current Liabilities} = 3.5 : 1 \)
- Quick Ratio = \( \dfrac{Current Assets - Inventory}{Current Liabilities} = 2 : 1 \)

Step 2: Let Current Liabilities = \( X \).

From the given current ratio, we have: \[ Current Assets = 3.5 \times X \]

Step 3: Using the Quick Ratio.

From the quick ratio equation: \[ Current Assets - Inventory = 2 \times X \]
Substitute the value of Current Assets from Step 2: \[ 3.5X - 96,000 = 2X \]

Step 4: Solving for \( X \).
\[ 3.5X - 2X = 96,000 \] \[ 1.5X = 96,000 \] \[ X = \dfrac{96,000}{1.5} = ₹ 64,000 \]

Step 5: Finding Current Assets.

Now, substituting \( X = ₹ 64,000 \) in the equation for Current Assets: \[ Current Assets = 3.5 \times 64,000 = ₹ 2,24,000 \]

Step 6: Conclusion.

- Total Current Liabilities = ₹ 64,000
- Total Current Assets = ₹ 2,24,000 Quick Tip: The current ratio and quick ratio help determine the firm’s liquidity position. The current ratio includes inventory, while the quick ratio excludes inventory from current assets.

Step 1: Calculation of Cash Flow from Investing Activities.

The formula for Cash Flow from Investing Activities is: \[ Cash Flow from Investing Activities = Sale of Assets - Purchase of Assets \]

Step 2: Calculating the Change in Plant \& Machinery.

The increase in Plant \& Machinery is: \[ Increase in Plant \& Machinery = ₹ 17,20,000 - ₹ 14,40,000 = ₹ 2,80,000 \]

Step 3: Sale of Plant \& Machinery.

The plant and machinery worth ₹ 2,20,000 was sold for ₹ 2,50,000. The sale of asset generates a cash inflow of ₹ 2,50,000.

Step 4: Cash Flow from Purchase of Assets.

Since the value of Plant \& Machinery increased by ₹ 2,80,000, and ₹ 2,50,000 was received from the sale, the remaining purchase of assets is: \[ Purchase of Assets = ₹ 2,80,000 - ₹ 2,50,000 = ₹ 30,000 \]

Step 5: Depreciation Adjustment.

The depreciation charged during the year is ₹ 1,70,000. Since depreciation is a non-cash expense, it should be added back to calculate the cash flow.

Step 6: Conclusion.
\[ Cash Flow from Investing Activities = Sale of Plant \& Machinery - Purchase of Plant \& Machinery + Depreciation \] \[ = ₹ 2,50,000 - ₹ 30,000 + ₹ 1,70,000 = ₹ 3,90,000 \] Quick Tip: When calculating cash flow from investing activities, consider the net cash received from the sale of assets and the purchase of new assets. Don't forget to add back depreciation as it is a non-cash charge.

Step 1: Calls in Arrears.

Calls in arrears refer to the amount of call money that has been due but has not been paid by the shareholder. This is a liability for the shareholder and is generally shown as a deduction from the share capital in the company’s balance sheet.

Step 2: Calls in Advance.

Calls in advance refer to the amount paid by a shareholder before it is actually due. This amount is received by the company in advance, and it is shown as a liability on the balance sheet of the company.

Step 3: Differences.


Calls in Arrears are amounts that have not been paid by shareholders, while Calls in Advance are amounts paid before they are due.
Calls in Arrears are deducted from share capital in the balance sheet, whereas Calls in Advance are shown as liabilities. Quick Tip: Calls in arrears indicate unpaid dues, while calls in advance are paid ahead of schedule and recorded as liabilities.

Step 1: Convertible Debentures.

Convertible debentures are those debentures that can be converted into equity shares of the company after a certain period or at the option of the holder. These debentures typically offer lower interest rates as the holder has the potential to convert them into equity at a later date.

Step 2: Non-Convertible Debentures.

Non-convertible debentures, on the other hand, cannot be converted into equity shares. These debentures offer a higher interest rate to compensate for the lack of conversion benefits.

Step 3: Differences.

- Convertible Debentures can be converted into equity shares, while Non-Convertible Debentures cannot be converted.
- Convertible Debentures generally offer lower interest rates compared to Non-Convertible Debentures. Quick Tip: Convertible debentures provide the option of converting debt into equity, making them attractive for investors who wish to participate in the company's growth. Non-convertible debentures, however, provide fixed returns without ownership in the company.

Step 1: Limitation 1 - Based on Historical Cost.

Financial statements are based on historical cost, meaning assets are recorded at the price at which they were purchased. This does not reflect the current market value of assets, leading to discrepancies between the actual value of assets and their recorded value.

Step 2: Limitation 2 - Does Not Reflect Non-Financial Factors.

Financial statements focus only on quantitative financial data and do not provide insights into non-financial aspects like employee satisfaction, customer loyalty, or market competition. This limitation affects the overall evaluation of a company's performance.

Step 3: Conclusion.

- Financial statements rely on historical cost and may not reflect current market values.
- They do not account for non-financial factors that could significantly affect the company's performance. Quick Tip: While financial statements provide essential information, they have limitations in reflecting current asset values and non-financial data, which must be considered when evaluating a company's overall performance.

Step 1: Forfeiture of Shares.

The total amount unpaid on the shares by Neeru is:
- Allotment money unpaid: ₹ 6 (including ₹ 2 premium)
- First call unpaid: ₹ 4
Thus, the total unpaid money per share is ₹ 6 + ₹ 4 = ₹ 10.

The journal entry for the forfeiture of shares will be: \[ Share Capital A/c \, Dr. ₹ 36,000 \quad (2,000 shares \times ₹ 18)
\quad To \quad Allotment A/c ₹ 12,000 \quad (2,000 shares \times ₹ 6)
\quad To \quad First Call A/c ₹ 8,000 \quad (2,000 shares \times ₹ 4)
\quad To \quad Premium on Issue of Shares A/c ₹ 4,000 \quad (2,000 shares \times ₹ 2) \]

The forfeiture entry is made by transferring the unpaid amounts to the forfeited shares account.


Step 2: Re-issue of Shares.

The company re-issues 1,200 shares to Goldy at ₹ 16 per share, fully paid. Since these shares are forfeited, the journal entry for re-issue is: \[ Bank A/c \, Dr. ₹ 19,200 \quad (1,200 shares \times ₹ 16)
\quad To \quad Share Capital A/c ₹ 24,000 \quad (1,200 shares \times ₹ 20)
\quad To \quad Premium on Issue of Shares A/c ₹ 2,400 \quad (1,200 shares \times ₹ 2)
\]

The amount credited to the Share Capital and Premium accounts represents the total face value and premium of the re-issued shares. The difference is credited to the Forfeited Shares Account. Quick Tip: When shares are forfeited, the unpaid amount is transferred to the Forfeited Shares Account. When shares are re-issued, any difference between the re-issue price and the original issue price (including premium) is transferred to the Forfeited Shares Account.

Step 1: Receipt of Applications.

Applications for 3,00,000 shares were received. The total amount payable per share is ₹ 20 (₹ 10 on application, ₹ 10 on allotment, ₹ 6 on first & final call). The total money received on application for 3,00,000 shares is: \[ 3,00,000 \times 10 = ₹ 30,00,000 \]

The journal entry for the receipt of applications is: \[ Bank A/c \, Dr. ₹ 30,00,000 \quad To \quad Application A/c ₹ 30,00,000 \]

Step 2: Allotment of Shares.

Allotment was made pro-rata. Since 3,00,000 shares were applied for and 2,00,000 shares were issued, the allotment will be made for: \[ Pro-rata allotment = \dfrac{2,00,000}{3,00,000} = \dfrac{2}{3} \]

The total amount due on allotment for 2,00,000 shares is ₹ 14 per share, so the total amount is: \[ 2,00,000 \times 14 = ₹ 28,00,000 \]

The journal entry for allotment is: \[ Allotment A/c \, Dr. ₹ 28,00,000 \quad To \quad Share Capital A/c ₹ 28,00,000 \]

Step 3: Forfeiture of Shares.

Pooja applied for 3,600 shares but failed to pay the allotment and first & final call money. She defaulted on ₹ 14 per share (₹ 10 on allotment and ₹ 4 on call). The total amount defaulted is: \[ 3,600 \times 14 = ₹ 50,400 \]

The journal entry for forfeiture is: \[ Share Capital A/c \, Dr. ₹ 72,000 \quad (3,600 shares \times ₹ 20)
\quad To \quad Application A/c ₹ 36,000 \quad (3,600 shares \times ₹ 10)
\quad To \quad Allotment A/c ₹ 36,000 \quad (3,600 shares \times ₹ 10) \]

Step 4: Re-issue of Forfeited Shares.

Two-thirds of the forfeited shares, i.e., 2,400 shares, were re-issued to Sandeep at ₹ 16 per share. The amount received from Sandeep is: \[ 2,400 \times 16 = ₹ 38,400 \]

The journal entry for the re-issue of shares is: \[ Bank A/c \, Dr. ₹ 38,400
\quad To \quad Share Capital A/c ₹ 48,000 \quad (2,400 shares \times ₹ 20)
\quad To \quad Forfeited Shares A/c ₹ 9,600 \quad (2,400 shares \times ₹ 4) \] Quick Tip: When shares are forfeited, the unpaid amount is transferred to the Forfeited Shares Account. Upon re-issue, the difference between the re-issue price and the original price is transferred to the Forfeited Shares Account.

Step 1: Calculating Other Expenses.

- For 31st March, 2024: \[ Other Expenses = 12% \times 30,00,000 = ₹ 3,60,000 \]
- For 31st March, 2023: \[ Other Expenses = 10% \times 12,00,000 = ₹ 1,20,000 \]

Step 2: Calculating Profit Before Tax.

- For 31st March, 2024: \[ Profit Before Tax = Revenue from Operations - Cost of Material Consumed - Other Expenses \] \[ Profit Before Tax = 40,00,000 - 30,00,000 - 3,60,000 = ₹ 6,40,000 \]
- For 31st March, 2023: \[ Profit Before Tax = 20,00,000 - 12,00,000 - 1,20,000 = ₹ 6,80,000 \]

Step 3: Calculating Tax.

- For 31st March, 2024: \[ Tax = 30% \times 6,40,000 = ₹ 1,92,000 \]
- For 31st March, 2023: \[ Tax = 30% \times 6,80,000 = ₹ 2,04,000 \]

Step 4: Calculating Profit After Tax.

- For 31st March, 2024: \[ Profit After Tax = 6,40,000 - 1,92,000 = ₹ 4,48,000 \]
- For 31st March, 2023: \[ Profit After Tax = 6,80,000 - 2,04,000 = ₹ 4,76,000 \]


Step 5: Preparing the Comparative Income Statement.


\begin{tabular{|l|c|c|
\hline
Particulars & 31st March, 2024 (₹) & 31st March, 2023 (₹)

\hline
Revenue from Operations & 40,00,000 & 20,00,000

Cost of Material Consumed & 30,00,000 & 12,00,000

Other Expenses & 3,60,000 & 1,20,000

\hline
Profit Before Tax & 6,40,000 & 6,80,000

Tax (30%) & 1,92,000 & 2,04,000

\hline
Profit After Tax & 4,48,000 & 4,76,000

\hline
\end{tabular Quick Tip: In preparing a comparative income statement, it is essential to analyze the changes in revenue, costs, and profits between two periods. This helps to assess the performance and financial health of the company.

Step 1: Limitation 1 - Non-Inclusion of Non-Cash Transactions.

The cash flow statement does not include non-cash transactions such as the issuance of shares for assets or the conversion of debt into equity. This can distort the actual financial picture of the company’s activities.

Step 2: Limitation 2 - Limited Scope.

The cash flow statement only reports cash inflows and outflows, but it does not provide detailed insights into the company’s profitability or operational performance. Therefore, it should not be relied upon as the sole financial statement.

Step 3: Limitation 3 - Focus on Past Transactions.

The cash flow statement focuses only on the past cash transactions and does not provide forecasts or projections, which might be crucial for assessing future cash flows.

Step 4: Limitation 4 - Ignores Long-Term Financial Health.

While the cash flow statement provides information on cash liquidity, it does not account for the long-term financial health of the company, such as solvency, profitability, and return on investment. Quick Tip: The cash flow statement is an important tool for assessing a company's liquidity but does not provide a complete financial picture. It is best used alongside other financial statements.

Step 1: Difference 1 - Nature.

- Share represents ownership in a company. Shareholders are the owners of the company.
- Debenture represents a loan taken by the company. Debenture holders are creditors, not owners.

Step 2: Difference 2 - Return.

- Shareholders receive dividends, which are not guaranteed and are paid out of profits.
- Debenture holders receive fixed interest payments, which are guaranteed and paid out of the company’s earnings.

Step 3: Difference 3 - Voting Rights.

- Shareholders have voting rights in the company’s meetings and decisions, such as electing the board of directors.
- Debenture holders do not have voting rights in the company.

Step 4: Difference 4 - Risk.

- Shares are riskier because dividends depend on the company’s profits, and the value of shares can fluctuate.
- Debentures are relatively safer because they provide fixed returns and are often secured by assets. Quick Tip: Shares give ownership and potential for higher returns, but with more risk. Debentures offer fixed returns and are considered safer, but they don’t provide ownership.

Step 1: Understanding the Options.

- Accuracy is indeed a key feature of computers, as they perform tasks with a high level of precision.
- Intelligency is not typically considered a feature of computers, as intelligence requires decision-making, reasoning, and understanding, which computers currently do not possess in the same way humans do.

Step 2: Conclusion.

The correct answer is Intelligency, as it is not a recognized feature of computers. Quick Tip: Computers are known for their high accuracy in performing tasks, but they do not possess true intelligence or reasoning capabilities.

Step 1: Understanding Accounting Software.

Accounting software is designed to automate and manage accounting tasks, such as financial reporting, payroll, billing, and inventory management.

Step 2: Three Types of Accounting Software.

- Tally: Widely used accounting software for small to medium-sized businesses.
- QuickBooks: A software primarily used for financial accounting and bookkeeping.
- Zoho Books: Cloud-based accounting software that automates business processes like invoicing and reporting. Quick Tip: Accounting software can vary in functionality, from simple bookkeeping to complete business financial management solutions. Choose the one that fits your business needs.

Step 1: Understanding Security Features in Accounting Software.

Security features in accounting software are essential to protect sensitive financial data and ensure privacy and integrity.

Step 2: Example of a Security Feature.

- User Authentication: This feature ensures that only authorized individuals can access the software by requiring a secure login process, often involving usernames, passwords, and sometimes multi-factor authentication (MFA). Quick Tip: Always choose accounting software with strong security features, like user authentication, encryption, and regular updates, to protect sensitive financial information.

Step 1: Understanding the Term "Spreadsheet."

A spreadsheet is a digital tool used for organizing, analyzing, and storing data in tabular form, consisting of rows and columns. It is commonly used for tasks such as data calculation, data analysis, and financial record-keeping.

Step 2: Example of a Spreadsheet Tool.

- Microsoft Excel is one of the most popular spreadsheet tools used globally for performing mathematical and statistical calculations, generating charts, and managing data. Quick Tip: Spreadsheets are essential for managing data in a structured format and are commonly used for financial analysis, budgeting, and inventory management.

Step 1: Understanding the Term "Range."

In spreadsheet applications like Microsoft Excel, when one or more cells are selected, it is called a range. A range can consist of a single cell or multiple cells.

Step 2: Conclusion.

The correct answer is (a) Range. A range refers to a group of cells that are selected for performing operations like calculations, formatting, etc. Quick Tip: In spreadsheets, a range is a selection of multiple cells, and operations are typically performed on a range of cells.

Step 1: Understanding Scatter Chart.

A scatter chart, also known as an XY chart, displays values for two variables as points on a graph. It is used to represent the relationship between two numerical variables.

Step 2: Conclusion.

The correct answer is (a) XY. The scatter chart is also referred to as an XY chart, where the X-axis and Y-axis represent the values of two variables. Quick Tip: In an XY chart (scatter chart), data points are plotted on the horizontal (X) and vertical (Y) axes to show the relationship between two variables.

Step 1: Rounding to Two Decimal Places.

The formula "= Round(1765.4321, 2)" rounds the number 1765.4321 to 2 decimal places, which gives the result of 1765.43.

Step 2: Rounding to Zero Decimal Places.

The formula "= Round(1765.4321, 0)" rounds the number 1765.4321 to zero decimal places, resulting in 1765. Quick Tip: The Round function in Excel can round numbers to a specific number of decimal places or to the nearest whole number, depending on the argument passed.

The SLN (Straight Line) function in Excel calculates the depreciation of an asset based on its initial cost, salvage value, and useful life. The formula for depreciation in Excel using the SLN method is:
\[ Depreciation = SLN(Cost, Salvage, Useful Life) \]

In the given table, the values are as follows:
- Cost = ₹ 5,000
- Salvage = ₹ 10,000
- Useful life = 5 years

Thus, the formula to calculate depreciation would be: \[ = SLN(B1, B2, B3) \]

Step 1: Using the Formula in Excel.

In Excel, place the following values in the cells:
- B1 (Cost) = ₹ 5,000
- B2 (Salvage) = ₹ 10,000
- B3 (Useful Life) = 5 years

Then, use the formula in cell B4 to calculate the depreciation: \[ = SLN(B1, B2, B3) \]

Step 2: Conclusion.

The formula will give the depreciation for the asset for each year of its useful life. Quick Tip: The SLN function calculates the depreciation expense using the straight-line method, which means the same amount of depreciation is applied each year over the asset's useful life.

Step 1: Formula for Total Marks.

To calculate the total marks for each student, we simply sum up the marks scored in July, December, and March. In Excel, the formula for Row 6, Column E (Total Marks) will be:
\[ Total Marks = B2 + C2 + D2 \]

Where:
- B2 is the marks scored in July, 2022
- C2 is the marks scored in December, 2022
- D2 is the marks scored in March, 2023

So, the formula for each student's total marks in Column E would look like this in Excel:
- For Mohan: `=B2+C2+D2`
- For Ram: `=B3+C3+D3`
- For Gobind: `=B4+C4+D4`
- For Kamal: `=B5+C5+D5`

Step 2: Formula for Total Marks Row.

In Row 6 (the total row), the formula for the total marks in each column (B, C, D) would be:

- For Total Marks in July, 2022 (B6): `=SUM(B2:B5)`
- For Total Marks in December, 2022 (C6): `=SUM(C2:C5)`
- For Total Marks in March, 2023 (D6): `=SUM(D2:D5)` Quick Tip: To sum a column or row in Excel, use the SUM function, and to calculate individual totals, simply use the + operator to add values together.

Step 1: Code for Salary Account.

The Mnemonic Code for Salary Account is SLR, which is a short, easy-to-remember representation of the account name.

Step 2: Code for Bank Overdraft.

Similarly, the Mnemonic Code for Bank Overdraft is BOD, representing the account type. Quick Tip: Mnemonic codes are helpful for easy recall and representation of account names.

Step 1: Code for Rooms in First Floor.

The Sequential Code for rooms in the first floor is 100-199, which is used for logical grouping and identification.

Step 2: Code for Rooms in Second Floor.

Similarly, the Sequential Code for rooms in the second floor is 200-299, allowing for an organized classification of rooms by floor number. Quick Tip: Sequential codes help in organizing items logically, such as categorizing rooms based on their location or other attributes.

Step 1: Open Tally.

Launch the Tally software and open the company whose data you want to delete.

Step 2: Go to 'Select Company'.

On the Tally main screen, select the company that you want to delete from the list of companies displayed.

Step 3: Navigate to 'Alter'.

From the company menu, select Alt + F3 or navigate to Company and then select Alter.

Step 4: Delete the Company.

In the company alteration screen, select D for Delete or use the menu to delete the company. Confirm the deletion when prompted.

Step 5: Confirm Deletion.

A confirmation message will appear asking if you're sure about deleting the company. Select Yes to permanently delete the company from Tally. Quick Tip: Deleting a company in Tally is permanent, so ensure you have a backup before performing the deletion.

Step 1: Definition of Data Audit.

A Data Audit is the process of reviewing and verifying data to ensure its accuracy, consistency, and integrity. It involves checking the data entries, records, and their corresponding calculations for errors and discrepancies.

Step 2: Importance of Data Audit.

Data audits are crucial for ensuring that financial, operational, and other critical data meet required standards. This process helps in identifying and rectifying any issues that may affect the quality of the data.

Step 3: Conclusion.

A data audit is essential for ensuring that the data entered into a system is accurate, complete, and conforms to the standards and guidelines required for business operations. Quick Tip: Regular data audits are important to maintain data integrity and ensure that financial reports and other business-critical data are error-free.

Step 1: Feature 1 - Cell Referencing.

One key feature of electronic spreadsheets is cell referencing. In spreadsheets like Microsoft Excel, each cell is identified by a unique reference (e.g., A1, B2). This allows users to perform calculations, reference data, and create dynamic formulas across the spreadsheet.

Step 2: Feature 2 - Built-in Functions.

Another important feature is the availability of built-in functions. Spreadsheets offer a variety of built-in functions such as SUM, AVERAGE, and VLOOKUP, which help users quickly perform complex calculations and analyses. Quick Tip: Spreadsheets make data analysis easy with features like cell referencing and built-in functions that automate many tasks.

Step 1: Advantage 1 - Simplifies Complex Data.

Charts simplify complex data and help in presenting large amounts of information in a visually understandable form. By using graphs and visual aids, it's easier to compare, analyze, and interpret the data.

Step 2: Advantage 2 - Clear Visualization.

Charts make data clearer by visually representing relationships, trends, and patterns. This helps in conveying information quickly and effectively without the need for lengthy explanations.

Step 3: Advantage 3 - Helps in Decision Making.

Charts play a critical role in decision-making. By visually displaying data trends and comparisons, they assist managers and stakeholders in making more informed decisions.

Step 4: Advantage 4 - Saves Time.

Charts save time by presenting summarized data in an easily digestible format. Instead of reading through pages of data, one can quickly grasp key insights from a well-designed chart. Quick Tip: Charts provide an effective and efficient way to communicate data visually, aiding in faster analysis, comparison, and decision-making.

Step 1: Formula to calculate Total Sales for the Six Months.

To calculate the total sales for the six months, we use the SUM function in Excel:
\[ Total Sales = SUM(B2:B7) \]
Where the range B2:B7 contains the sales data for the months from January to June.

For the given data: \[ Total Sales = 25,000 + 15,000 + 28,000 + 32,000 + 20,000 + 36,000 = ₹ 1,56,000 \]


Step 2: Formula to calculate the Average Sales for the Six Months.

To calculate the average sales for the six months, we use the AVERAGE function in Excel:
\[ Average Sales = AVERAGE(B2:B7) \]
Where the range B2:B7 contains the sales data for the six months.

For the given data: \[ Average Sales = \frac{25,000 + 15,000 + 28,000 + 32,000 + 20,000 + 36,000}{6} = ₹ 26,000 \]


Step 3: Formula to calculate the Lowest Sales for the Six Months.

To calculate the lowest sales for the six months, we use the MIN function in Excel:
\[ Lowest Sales = MIN(B2:B7) \]
Where the range B2:B7 contains the sales data for the six months.

For the given data: \[ Lowest Sales = ₹ 15,000 \, (February) \]


Step 4: Formula to calculate the Highest Sales for the Six Months.

To calculate the highest sales for the six months, we use the MAX function in Excel:
\[ Highest Sales = MAX(B2:B7) \]
Where the range B2:B7 contains the sales data for the six months.

For the given data: \[ Highest Sales = ₹ 36,000 \, (June) \] Quick Tip: Excel functions such as SUM, AVERAGE, MIN, and MAX are used for quick calculations of totals, averages, and extremes in a dataset.

Step 1: Advantage 1 - Speed and Efficiency.

A computerized accounting system helps in processing transactions quickly and efficiently. With automated features, tasks such as data entry, invoice generation, and financial reporting can be done much faster than manual methods.

Step 2: Advantage 2 - Accuracy.

Computerized systems reduce the risk of human errors. By automatically performing calculations and data entry, the system ensures more accurate financial records compared to traditional manual methods.

Step 3: Advantage 3 - Easier Record Keeping.

With a computerized accounting system, records are stored electronically, making it easier to manage, access, and retrieve historical data. This improves organization and saves time when reviewing or auditing financial information.

Step 4: Advantage 4 - Reporting and Analysis.

A computerized accounting system can generate detailed financial reports and provide analysis of business performance in real-time. These features allow businesses to make informed decisions based on up-to-date data. Quick Tip: Computerized accounting systems not only save time but also improve the overall accuracy and efficiency of financial management processes.

The transactions listed in the question will be recorded in the Cash Account in Tally. The Cash Account is a ledger account where all cash inflows and outflows are recorded. Below is how you would prepare the Cash Account in Tally for the given transactions:
\[ Cash Account \]

\begin{tabular{|l|c|c|
\hline
Date & Particulars & Debit (Rs.) & Credit (Rs.)

\hline
Nov. 1 & To Capital A/c (Started business with cash) & 2,00,000 &

Nov. 5 & By Machinery A/c (Paid for repair of machinery) & & 20,000

Nov. 9 & By Refreshment Expenses A/c (Paid for refreshment) & & 20,000

Nov. 12 & By Stationery A/c (Purchased stationery for cash) & & 2,000

Nov. 20 & To Sales A/c (Sold stationery for cash) & 3,000 &

\hline
Total & & 2,03,000 & 42,000

\hline
\end{tabular Quick Tip: In Tally, Cash Account records all transactions involving cash inflows and outflows, with debits for cash receipts and credits for cash payments.