Q. 5054516. The capital accounts of partners will always show a ______ balance under fixed capital account method
(A) Debit
(B) Credit
(C) Zero
(D) Negative
Answer: (B) Credit
Explanation: Under the fixed capital account method, all day-to-day fluctuations (drawings, interest, profits) are recorded in the Partners’ Current Accounts. The Capital Account remains fixed (only altered by permanent additions/withdrawals of capital) and will strictly show a credit balance.
Q. 5054517. Aman and Mohan, partners of a firm decided to dissolve the business on 31-03-22. The firm decided to pay realisation expenses of ₹ 1,000 on behalf of Mohan. ₹1000 will be debited to
(A) Realisation A/C
(B) Mohan’s capital A/C
(C) Bank A/C
(D) Aman’s capital A/C
Answer: (B) Mohan’s capital A/C
Explanation: “Paid on behalf of Mohan” means that Mohan was personally responsible for bearing these expenses, but the firm paid them out of its pocket. Therefore, the firm will recover this amount from Mohan by debiting his Capital Account. (Entry: Mohan’s Capital A/c Dr. To Cash/Bank A/c).
Q. 5054518. Common size analysis is also known as
(A) Horizontal Analysis
(B) Vertical Analysis
(C) Cash Flow Analysis
(D) Ratio Analysis
Answer: (B) Vertical Analysis
Explanation: Common size analysis evaluates financial statements by expressing each line item as a percentage of a base figure (like Total Assets or Total Sales) within a single period. This top-to-bottom method is known as Vertical Analysis.
Q. 5054519. Calculate the amount of yearly interest payable on 9% debentures (10,000 debentures of ₹100) issued as collateral security.
(A) No Interest payable
(B) ₹90,000
(C) ₹9000
(D) ₹99000
Answer: (A) No Interest payable
Explanation: Debentures issued strictly as collateral security do not carry any right to interest unless the principal borrower defaults on the main loan and the lender legally invokes the security to take ownership of the debentures. Until then, no interest is payable on them.