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Model Test Paper 9

Time Allowed: 3 Hours Max. Marks: 80

General Instructions:
As per Model Test Paper 1

PART A

ACCOUNTING FOR NOT-FOR-PROFIT ORGANISATIONS,
PARTNERSHIP FIRMS AND COMPANIES
1. State the accounting treatment of Interest earned during the year on General Fund
Investments in case of a Not-for-Profit Organisation.
Or
Distinguish between Income and Expenditure Account and Profit and Loss Account
on the basis of preparation. (1)
2. List any two circumstances under which fixed capital of a partner may change. (1)

3. Why Investment Fluctuation Reserve is created by a firm? (1)
4. Differentiate between Profit and Loss Appropriation Account and Profit and Loss
Suspense Account.
Or
Distinguish between Profit and Loss Account and Profit and Loss Appropriation
Account. (1)
5. Give the Journal entry to distribute ‘General Reserve’ of ` 40,000 at the time of
admission of Z, when 25% of General Reserve is to be transferred to Investment
Fluctuation Reserve. The firm has two partners X and Y.
Or
Ram and Shyam are in partnership with ` 3,00,000 and ` 2,00,000 as their respective
capitals. They admitted Mohan as a partner for 1/6th share in profits. You are required
to calculate the amount of Mohan’s share in the capital of the firm if he is asked to
bring in capital in proportion to his profit share. (1)
6. State any two items of deduction, other than drawings, that may have to be deducted
from the amount payable to a retiring partner. (1)
7. X, Y and Z are partners sharing profits in the ratio of 3 : 2 : 1 respectively. From
1st April, 2018, they decide to share profits in the ratio of 2 : 3 : 1 as Y is facing financial
problems. For this purpose the goodwill of the firm is to be valued at 3 years’ purchase
of average profit of last 5 years. The profits and losses of the preceding five years are:

Year 2013–14 2014–15 2015–16 2016–17 2017–18
Profit/Loss (`) ? 6,00,000 (Profit) 6,80,000 (Profit) 7,60,000 (Profit) 2,80,000 (Loss)