MCQ Questions for Class 12 Accountancy

Please refer to MCQ Questions for Class 12 Accountancy with answers provided below for all subjects. The following subject-wise multiple-choice questions with solutions have been designed for all chapters in Accountancy in standard 12. All objective questions have been designed based on the latest syllabus and examination guidelines issued by CBSE, NCERT, and KVS.

MCQ Questions with Answers for Accountancy Class 12

Please click on the subject-wise links below to access free multiple-choice questions for Accountancy in Class 12. These MCQs are expected to come in standard 12th examinations. Students should learn all these MCQ with answers to score better marks in examinations. Our expert faculty has designed these important questions and answers based on NCERT books for Class 12 Accountancy issued for the current academic year.

Subjectwise MCQ with Answers for Class 12 Accountancy

MCQs for Class 12 Accountancy Part 1

Chapter 1 Accounting for Not-for-Profit Organisation

Chapter 2 Accounting for Partnership Basic Concepts

Chapter 3 Reconstitution of a Partnership Firm – Admission of a Partner

Chapter 4 Reconstitution of a Partnership Firm – Retirement/Death of a Partner

Chapter 5 Dissolution of Partnership Firm

MCQs for Class 12 Accountancy Part 2

Chapter 1 Accounting for Share Capital

Chapter 2 Issue and Redemption of Debentures

Chapter 3 Financial Statements of a Company

Chapter 4 Analysis of Financial Statement

Chapter 5 Accounting Ratios

Chapter 6 Cash Flow Statement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

True / False :

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Fill in the Blank :

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

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

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

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

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

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

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

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

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

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

Question. If there is no partnership deed or agreement the provisions of the ____ are applicable.

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

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

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

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

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

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

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

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

Our expert faculty have designed these MCQ questions for all chapters in Class 12 Accountancy and has made sure that all the important topics which can come in Accountancy Grade 12 examinations are covered. All MCQ questions for class 12th have been provided with answers so that you check your understanding. You can download all MCQ questions in Pdf for Accountancy grade 12. All students should learn these objective questions so that they are able to score better rank this year.

Students should also read all notes provided by our teachers so that they are able to learn all concepts which will help them to solve all MCQ easily. The above NCERT based MCQs for Class 12 Accountancy have been developed based on the latest books for the current academic year. Our teachers of Class 12 have done a thorough analysis of current examination guidelines and have designed these questions to help students gain more marks.

Advantages of MCQ Questions for Class 12 Accountancy with Answers

a) MCQs will be asked in the upcoming Accountancy examination. By practicing these questions for Accountancy Class 12 you will be able to improve marks in the class tests and exams.

b) Multiple Choice Questions for Accountancy Class 12 have been designed as per the latest examination style to help you understand the exam pattern.

c) You should go through these questions and answers for grade 12th for Accountancy on daily basis to properly understand all topics given in your books.

d) You will be able to download the MCQ questions for Accountancy Class 12 in Pdf so that you can read them later.

Free Printable MCQs in PDF of CBSE Class 12 Accountancy is developed by our expert faculty and provide the best study material as per CBSE NCERT standards.