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Practice Test Papers

Practice Test Paper 1

1. ABC Ltd. implemented Voluntary Retirement Scheme which was accepted by
100 employees. The company paid ` 20 lakhs to these employees as compensation. Under
which activity and how will this payment be shown in the Cash Flow Statement? (1)
2. Amrit Securities Ltd., a company dealing in shares and other financial instruments made
strategic investment of ` 50 lakhs in Rathi Securities Ltd., a company having membership
of BSE. Under which head ` 50 lakhs will be shown in Cash Flow Statement? (1)
3. Under which head of the Statement of Profit & Loss will the following items be shown?
(i) Loss on Issue of Debentures written off (ii) Share Issue Expenses written off
(iii) Goodwill written off (iv) Bad Debts Recovered (4)
4. (a) Ratio of Current Assets (` 12,50,000) to Current Liabilities (` 5,00,000) of a company
is 2.5 : 1. The management decided to maintain a current ratio of 2 : 1, by acquiring
some current assets on credit. By what amount should it increase its current assets to
maintain the ratio?
(b) A company has Debt to Equity Ratio of 3 : 1, total Debts ` 15,00,000 and Equities
` 5,00,000. If company wants to maintain Debt to Equity Ratio of 2 : 1, how much
amount should be paid? (4)
5. ABC Ltd. is in the business of manufacturing and selling FMCG, decided to set up a new
manufacturing unit in economically backward area of Chhattisgarh. It decided to employ
factory staff from the local population. But before that it imparted training to them for
six months and gave each trainee a stipend of ` 5,000 per month. Its Comparative Statement
of Profit & Loss for the years ended 31st March, 2023 and 2024 was as follows:

Particulars Note 31st March, 31st March, Absolute Change Percentage Change
No. 2023 2024 (Increase or (Increase or
` ` Decrease) (`) Decrease) (%)
I. Revenue from Operations 12,50,000 15,00,000 2,50,000 20.00
II. Other Income 40,000 50,000 10,000 25.00
III. Total Revenue (I + II) 12,90,000 15,50,000 2,60,000 20.16
IV. Expenses
(a) Cost of Materials Consumed 7,00,000 8,00,000 1,00,000 14.29
(b) Employees Benefit Expenses 1,80,000 2,00,000 20,000 11.11
(c) Other Expenses 75,000 1,00,000 25,000 33.33
Total Expenses 9,55,000 11,00,000 1,45,000 15.18
V. Profit before Tax (III – IV) 3,35,000 4,50,000 1,15,000 34.33
VI. Less: Tax 95,000 1,50,000 55,000 52.63
VII. Profit after Tax (V – VI) 2,40,000 3,00,000 60,000 25.00