Q.A and B are partners sharing profits and losses in the ratio 3:2. From the following Trial Balance and additional information, prepare the Trading Account and Profit and Loss Account for the year ended 31st March 2024, and the Profit and Loss Appropriation Account for the same year. Trial Balance as on 31st March 2024:
Debit balances — Opening Stock ₹24,000; Purchases ₹1,60,000; Wages ₹10,000; Carriage Inwards ₹4,000; Salaries ₹20,000; Rent, Rates and Taxes ₹8,000; Printing and Stationery ₹2,000; Bad Debts ₹1,000; Insurance ₹3,000; Sundry Debtors ₹70,000; Furniture ₹30,000; Machinery ₹1,20,000; Cash at Bank ₹22,000; Cash in Hand ₹6,000; Drawings — A ₹12,000, B ₹8,000.
Credit balances — Sales ₹2,50,000; Sundry Creditors ₹40,000; Purchases Return ₹5,000; Bank Loan (taken on 1st October 2023 @10% p.a.) ₹20,000; Reserve for Doubtful Debts ₹5,000; Capital A/cs — A ₹1,00,000, B ₹80,000. Adjustments:

Showing the 12 most recent of 18 on this concept.

1. CBSE 2026Set ANNUAL1 mark
   Q.Complete the table: Cost of goods sold = Opening Stock + Purchases − .........

   ›Reveal solutionSolution

   The missing term is Closing Stock. Cost of goods sold measures only the goods actually sold, so the stock still on hand at the year end must be removed from the goods available for sale.

   Method

   Goods available for sale during the year = Opening Stock + Purchases (plus any direct expenses). The stock that remains unsold at the close of the year has not yet been sold, so it is deducted to arrive at the cost of the goods that were actually sold.

   Item	Amount
   Opening Stock	xxx
   Add: Purchases	xxx
   Less: Closing Stock	(xxx)
   Cost of Goods Sold	xxx

   ✓Final answer

   Cost of goods sold = Opening Stock + Purchases − Closing Stock

2. CBSE 2026Set ANNUAL1 mark
   Q.Complete the table:

   Sales	Purchases	Gross Profit
   ........	1,80,000	20,000

   ›Reveal solutionSolution

   Sales = ₹2,00,000. Gross Profit = Sales − Cost of goods sold, so Sales = Cost of goods sold + Gross Profit. With only purchases given (no opening/closing stock), purchases stand for the cost of goods sold.

   Method

   In the Trading Account, Gross Profit = Sales − Cost of goods sold. Re-arranging gives Sales = Cost of goods sold + Gross Profit. As no opening or closing stock is stated, purchases (₹1,80,000) are taken as the cost of goods sold.

   Item	Amount (₹)
   Cost of goods sold (Purchases)	1,80,000
   Add: Gross Profit	20,000
   Sales	2,00,000

   ✓Final answer

   Sales = ₹1,80,000 + ₹20,000 = ₹2,00,000

3. CBSE 2026Set ANNUAL1 mark
   Q.Expenses which are paid before due date are called as _____.

   ›Reveal solutionSolution

   Expenses paid before their due date are called Prepaid Expenses (expenses paid in advance).

   Under the accrual/matching principle, only the expense relating to the current accounting year is charged to the Profit and Loss Account. When an expense is paid before it becomes due — i.e. its benefit will be received in the next period — the amount paid in advance is a Prepaid Expense.

   • It is deducted from the concerned expense in the Trading / Profit and Loss Account.

   • It is shown on the assets side of the Balance Sheet as a current asset, because it represents a benefit still to be received.

   ✓Final answer

   Prepaid Expenses.

4. CBSE 2025Set ANNUAL1 mark
   Q.Trading Account is prepared on the basis of ______ expenses.

   ›Reveal solutionSolution

   The missing word is Direct.

   Final accounts split expenses into two groups:

   Expense type	Where recorded	Examples
   Direct (incurred to bring goods to saleable condition)	Trading Account	Wages, carriage inward, freight, import duty, factory power
   Indirect (running the business)	Profit & Loss Account	Salary, rent, advertising, office expenses

   The Trading Account computes gross profit = Net Sales − Cost of goods sold, and cost of goods sold includes only direct expenses. Therefore the Trading Account is prepared on the basis of direct expenses.

   ✓Final answer

   Trading Account is prepared on the basis of direct expenses.

5. CBSE 2025Set ANNUAL1 markMCQ
   Q.Find the odd one:

   (a) Wages account

   (b) Salary account

   (c) Royalty account

   (d) Import duty account

   ›Reveal solutionSolution

   The odd one is the Salary account.

   Group the four items by where they are recorded in final accounts:

   Item	Nature	Recorded in
   Wages account	Direct expense	Trading A/c
   Royalty account	Direct expense	Trading A/c
   Import duty account	Direct expense	Trading A/c
   Salary account	Indirect expense	Profit & Loss A/c

   Wages, royalty and import duty are all incurred directly on purchasing/producing goods and go to the Trading Account. Salary is an office/administrative expense debited to the Profit and Loss Account, so it is the odd one out.

   ✓Final answer

   Odd one: Salary account (an indirect expense, unlike the direct expenses wages, royalty and import duty).

6. CBSE 2025Set ANNUAL1 markMCQ
   Q.Find the odd one:

   (a) Machinery account

   (b) Furniture account

   (c) Computer account

   (d) Rent account

   ›Reveal solutionSolution

   The odd one is the Rent account.

   Group the four items by their nature:

   Item	Nature	Shown in
   Machinery account	Fixed asset	Balance Sheet (Assets)
   Furniture account	Fixed asset	Balance Sheet (Assets)
   Computer account	Fixed asset	Balance Sheet (Assets)
   Rent account	Expense (nominal)	Profit & Loss A/c

   Machinery, furniture and computer are all tangible fixed assets owned by the business, while rent is a running expense of the period. Therefore the rent account is the odd one out.

   ✓Final answer

   Odd one: Rent account (an expense, unlike the fixed assets machinery, furniture and computer).

7. CBSE 2025Set ANNUAL1 markMCQ
   Q.Find the odd one:

   (a) General reserve account

   (b) Creditors account

   (c) Machinery account

   (d) Capital account

   ›Reveal solutionSolution

   Group the four accounts by where they appear in the books. Three of them are liabilities/owners' claims; only Machinery account is an asset, so it is the odd one out.

   Classifying each item

   Item	Nature	Side of Balance Sheet
   General Reserve account	Accumulated profit (owners' fund)	Liabilities side
   Creditors account	Liability (amount owed to suppliers)	Liabilities side
   Machinery account	Fixed / real asset	Assets side
   Capital account	Owners' fund	Liabilities side

   Three of the four are claims against the firm's assets (liabilities and owners' funds) and appear on the liabilities side. Machinery is the only asset in the list, so it does not fit the common feature shared by the rest.

   ✓Final answer

   Machinery account — it is an asset (real account) while General Reserve, Creditors and Capital all appear on the liabilities side of the Balance Sheet.

   This kind of question tests whether you can read a Balance Sheet the way it appears in NCERT/CBSE-aligned Class 12 accountancy questions and answers and quickly tell an asset apart from a liability or an owners' fund.

8. CBSE 2024Set ANNUAL1 markMCQ
   Q.Find odd one.

   (a) Building

   (b) Machinery

   (c) Furniture

   (d) Bills payable.

   ›Reveal solutionSolution

   Three of the items are assets; one is a liability. The liability is the odd one.

   When the items are placed in a Balance Sheet they split cleanly:

   Item	Nature	Balance Sheet side
   Building	Fixed asset	Assets
   Machinery	Fixed asset	Assets
   Furniture	Fixed asset	Assets
   Bills Payable	Current liability	Liabilities

   Building, Machinery and Furniture are things the firm owns (fixed/tangible assets). Bills Payable is an amount the firm owes to others (a current liability). It therefore sits on the opposite side of the Balance Sheet and is the odd one.

   ✓Final answer

   Bills Payable is the odd one — the other three are assets, while Bills Payable is a liability.

9. CBSE 2024Set ANNUAL1 markMCQ
   Q.Find the odd one:

   (a) General Reserve

   (b) Creditors

   (c) Investments

   (d) Capital

   ›Reveal solutionSolution

   Three items appear on the liabilities side of the Balance Sheet; one is an asset. The asset is the odd one.

   Sorting the four items into a Balance Sheet:

   Item	Nature	Balance Sheet side
   General Reserve	Accumulated profit (owners' fund)	Liabilities
   Creditors	Current liability	Liabilities
   Capital	Owners' fund	Liabilities
   Investments	Asset	Assets

   General Reserve, Creditors and Capital are all credit-balance items shown on the liabilities/funds side. Investments is something the firm owns — an asset with a debit balance shown on the assets side. It is therefore the odd one.

   ✓Final answer

   Investments is the odd one — the other three are liabilities/owners' funds, while Investments is an asset.

10. CBSE 2023Set ANNUAL1 mark
    Q.Write the word/phrase/term, which can substitute the following sentence. Credit balance of Profit and Loss Account.

    ›Reveal solutionSolution

    A credit balance in the Profit and Loss Account means the total of the credit side (incomes/gains) is greater than the debit side (expenses/losses) — the term for it is Net Profit.

    Why: The Profit and Loss Account is a nominal account. Following the rule "debit all expenses and losses, credit all incomes and gains," a credit balance shows that gains have exceeded losses. This surplus is the firm's Net Profit, which is then carried to the Balance Sheet / capital accounts as undistributed profit.

    ✓Final answer

    Net Profit — the term substituting "credit balance of Profit and Loss Account."

11. CBSE 2023Set ANNUAL1 mark
    Q.Calculate 12.5% P.A. depreciation on Furniture: on ₹ 2,20,000 for 1 year on ₹ 10,000 for 6 months

    ›Reveal solutionSolution

    Charge 12.5% p.a. on each amount for its own period: ₹2,20,000 for a full year and ₹10,000 for 6 months. Total depreciation = ₹28,125.

    Method: Depreciation = Value × Rate × (Months ÷ 12).

    Amount (₹)	Rate	Period	Depreciation (₹)
    2,20,000	12.5% p.a.	1 year (12/12)	27,500
    10,000	12.5% p.a.	6 months (6/12)	625
    Total			28,125

    Working notes:

    • 2,20,000 × 12.5/100 = ₹27,500

    • 10,000 × 12.5/100 × 6/12 = ₹625

    ✓Final answer

    Depreciation on furniture = ₹27,500 + ₹625 = ₹28,125.

12. CBSE 2022Set ANNUAL1 markMCQ
    Q.To find out Net Profit or Net Loss of the business __________ account is prepared.

    (a) Trading

    (b) Capital

    (c) Current

    (d) Profit & Loss

    ›Reveal solutionSolution

    The Profit & Loss Account is the account prepared to ascertain the Net Profit or Net Loss.

    The question tests where the net result of a business is determined among the final accounts.

    • Trading Account deals only with direct items (opening/closing stock, purchases, sales, direct expenses) and gives the Gross Profit or Gross Loss.
    • The Profit & Loss Account then takes that gross result and adjusts all indirect expenses (salaries, rent, depreciation, etc.) and indirect incomes to arrive at the Net Profit or Net Loss.
    • Capital and Current accounts merely record partners' investments and drawings/adjustments; they do not compute profit.

    So the account that reveals the net result is the Profit & Loss Account. This is standard HSC Book-Keeping & Accountancy partnership final accounts theory.

    ✓Final answer

    Profit & Loss