Q. 5054531. When debentures are issued at premium with the term of redeeming them at par. The amount of premium received at the time of issue will be:
(A) Debited to premium on Redemption of Debenture A/C
(B) Credited to Premium on Redemption of Debentures A/C
(C) Debited to Securities Premium Reserve A/C
(D) Credited to securities premium Reserve A/C
Answer: (D) Credited to securities premium Reserve A/C
Explanation: If debentures are issued at a premium, the extra amount received over the face value is a capital profit and is credited to the Securities Premium Reserve Account. Redemption at par requires no special premium provision.
Q. 5054532. While preparing common-size Balance sheet, each item of Balance sheet is expressed as % of
(A) Non-current assets
(B) Current assets
(C) Non-current liabilities
(D) Total assets or total liability
Answer: (D) Total assets or total liability
Explanation: In a common-size Balance Sheet, every asset is expressed as a percentage of Total Assets, and every liability/equity item is expressed as a percentage of Total Liabilities + Equity.
Q. 5054533. It is the amount-paid to the person who is not the regular employee of the institution.
(A) Wages
(B) Honorarium
(C) Salary
(D) Donation
Answer: (B) Honorarium
Explanation: Honorarium is a voluntary payment given to a professional or an invited guest (who is not a regular salaried employee of the institution) for services rendered, such as giving a special lecture.
Q. 5054534. When the total amount withdrawn is given but the date of withdrawal is not given then interest on drawings is charged for a period of:
(A) 3 months
(B) 6 months
(C) 9 months
(D) 12 months
Answer: (B) 6 months
Explanation: According to partnership accounting rules, if total drawings during the year are given but the exact dates of withdrawal are missing, it is assumed the drawings were made evenly throughout the year. Therefore, interest is charged for an average period of 6 months.
Q. 5054535. At the time of admission of partner if goodwill exist in the books of account it will be written off among:
(A) Old partners in sacrificing ratio
(B) All the partners in new ratio
(C) New partners in gaining ratio
(D) Old partners in old profit sharing ratio
Answer: (D) Old partners in old profit sharing ratio
Explanation: According to AS-26, self-generated goodwill cannot be recognized as an asset. Thus, any existing goodwill in the balance sheet prior to a new partner’s admission must be written off entirely to the Old Partners’ Capital Accounts in their old profit-sharing ratio.