MP BOARD 2026 – Class 12 Accountancy Important Questions with Answers.

MP BOARD 2026 – Class 12 Accountancy Important Questions and Answers

This post contains important questions from the Board of Secondary Education 2026 for Class 12 Accountancy. These important questions have also been asked in previous years’ exams. At the end of this post, you will also be able to solve objective-type self-tests useful for the 2026 exam.

Question 1- What is a partnership deed?
Answer – Partnership deed – A partnership arises from an agreement between the partners. This agreement can be written or oral. Whenever it is in writing and contains the details of the agreement, such a document is called a partnership deed.

Question 2- Write any two characteristics of a partnership.
Answer – Characteristics of a partnership:
(i) Two or more persons.
(ii) Contract or agreement.
(iii) Unlimited liability
(iv) Division of profits

Question 3- Mention any two circumstances that can lead to the dissolution of a firm by a court.
Answer –
(1) Permanent loss in business
(2) Transfer of interest of partners
(3) Acting contrary to the contract

Question 4- Mention any two circumstances that can lead to the compulsory dissolution of a firm.
Compulsory dissolution:
Answer –
(i) When one or all partners become insolvent.
(ii) When the business of the firm becomes unlawful.

Question 5- Anu, Vanu, and Tanu are partners in the ratio 4:3:2. Anu retires, and Vanu and Tanu decide to share future benefits in the ratio of 5:3. Find the bonus/return ratio.

Answer: Vanu’s bonus = 5/8 – 3/9 = (45 – 24)/72 = 21/72

Tanu’s bonus = 3/8 – 2/9 = (27 – 16)/72 = 11/72

The bonus ratio is 21:11.

Question 6- X, Y, and Z are partners in the ratio 3:2:1. X retires and his share is taken over by Y and Z in the ratio 3:2. Find the new profit sharing ratio.

Answer:
Y’s share = 3/6 x 3/5 = 9/30
Y’s new share = 2/6 x 9/30 = (10 + 9)/30 = 19/30

Z’s new share = 3/6 x 2/5 = 6/30

Z’s new share = 1/6 + 6/30 = (5 + 6)/30 = 11/30
New ratio: 19:11

Question 7 – Explain the types of debentures from the perspective of convertibility.
Answer – Debentures from the perspective of convertibility:
(i) Convertible debentures that can be converted into equity shares.
(ii) Non-convertible debentures that cannot be converted into equity shares.

Question 8 – Explain the types of debentures from the perspective of security.
Answer – Types of debentures from the perspective of security:
(i) Secured debentures that have a charge on the company’s assets.
(ii) Unsecured debentures that do not have a charge on the company’s assets.

Question 9 – What is meant by authorized capital?
Answer – Authorized capital is the share capital authorized to be issued by the company’s Board of Directors. It is also called authorized or natural capital. Shares exceeding this amount cannot be issued.

Question 10 – What is meant by uncalled capital?
Answer – Uncalled capital is the portion of subscribed capital that has yet to be called up. The company can raise this amount at any time, as needed.

Question 11 – Write two characteristics of preference shares.
Answer – Characteristics of preference shares:
(i) Fixed dividend rate. (Fixed dividend)
(ii) There is a pre-emptive right to receive the share capital back upon the company’s liquidation.

Question 12 – What is meant by share capital?
Answer – Share capital: Being an artificial entity, a company cannot generate its own capital. This capital is collected from a few individuals. These individuals are called shareholders, and the amount collected from them is called the company’s share capital.

Question 13 – What is meant by forfeiture of shares?
Answer – Forfeiture of shares may occur if some shareholders fail to pay the installments (allotment, call money) on their shares. The company may confiscate the proceeds of these shares, which is called forfeiture of shares.

Question 14 – What two options can a company adopt in case of over-subscription? Write them.

Answer – Options in case of over-subscription:
(i) Refund the over-subscription amount.
(ii) Adjust the over-subscription amount.
(iii) Choose both of the above options.

Question 15 – Shree Ltd. purchased a machine from Heavy Machines Ltd. for ₹380,000.
As per the purchase agreement, ₹20,000 will be paid in cash and the remaining amount will be paid by issuing shares of ₹100 each. Make the necessary entries in the books of Shree Ltd.

Answer – Journal of Shree Ltd.

Question 16 – ABC Ltd. purchased a building from XYZ Ltd. for ₹540,000 and paid for it by issuing shares of ₹100 each at a 20% premium. Make the necessary entries in the books of ABC Ltd.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 17 – Write two objectives of ratio analysis.
Answer – Objectives of ratio analysis:
(i) To identify areas of the business that need more attention.
(ii) To determine the level of profitability, liquidity, and solvency of the business.

Question 18 – Write two limitations of ratio analysis.
Answer – Limitations of ratio analysis:
(i) It is based solely on the application of accounting policies.
(ii) It ignores price level changes.
(iii) Different accounting treatments.

Question 19 – What is meant by ‘cash equivalents’?
Answer – Cash equivalents refer to short-term, highly liquid investments that can be readily converted into cash.

Question 20 – Write two examples of cash inflows from financing activities.
Answer – Examples of cash inflows from financing activities:
(i) Proceeds from the issue of equity or preference shares.
(ii) Proceeds from the issue of debentures/bonds.
(iii) Receipt of loans.

Question 21 – Define partnership.

Answer: Indian Partnership Act, 1932, Section 4: “A partnership is a relationship between persons who agree to share the profits of a business carried on by all or any of them together.”

Question 22 – What is a profit and loss appropriation account?
Answer: The profit and loss appropriation account is simply an extension of the firm’s profit and loss account. It shows how profits are divided among the partners. Adjustments for partners’ salaries, interest on capital, etc. are also made.

Question 23 – Write any two differences between the fixed capital method and the fluctuating capital method.
Answer: Basis for the difference between the fixed capital and fluctuating capital methods:
(1) Number of accounts
(2) Fixed balance
(3) Credit balance
(4) Document related items

Question 24 – Sonu withdraws ₹5,000 at the beginning of each month. The interest rate on withdrawals is 10% per annum. Calculate the interest on withdrawals.
Answer:
Total withdrawals = 5,000 x 12 = 60,000
Interest on drawings = 60,000 x 10/100 x 6.5/12
= 3250

Question 25 – A, V, and C are partners in the ratio 3:4:2. Q retires. The new profit-loss ratio of A and C is 5:3. Calculate the profit-loss ratio.
Answer –
A’s profit = 5/8 – 3/9 = (45 – 24)/72 = 21/72
C’s profit = 3/8 – 2/9 = (27 – 16)/72 = 11/72

Receiving ratio 21:11

Question 26 – P, Q, and R are partners in the ratio 5:4:3. Q retires, and P and R receive his share equally. Find the new profit-loss ratio of P and R.
Answer –
Half of Q’s share = 4/12 x 1/2 = 4/24
P’s new share = 5/12 + 4/24 = (10 + 4)/24 = 14/24
R’s new share = 3/12 + 4/24 = (6 + 4)/24 = 10/24

New profit-loss ratio: 14:10 = 7:5

Question 27 – Explain dissolution of a firm by notice.
Answer – Dissolution by notice: In the case of a voluntary partnership, a partner can dissolve the firm by giving written notice to the other partners.

Question 28 – State two circumstances for compulsory dissolution of a firm.
Answer – Compulsory dissolution:
(1) When the business becomes unlawful.
(2) When one or all partners become insolvent.

Question 29 – What is meant by ‘share’?
Answer – Share: The capital of a company is divided into several small parts of equal value. These parts are called shares.

Question 30 – “A company has perpetual succession.” Explain.
Answer – Perpetual succession A company is an artificial person created by law and continues to exist even if its members change. A company can only be dissolved by law.

Question 31 – Anil held 25 shares in TRS Ltd., each worth ₹100. Anil offered ₹20 for the allotment but failed to pay the ₹30 allotment and ₹20 first call. His shares were forfeited after the first call. Enter the entry for the forfeiture.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 32 – Y Ltd. issued 20,000 equity shares at ₹10 per share. The entire amount was received in one lump sum. Provide the necessary journal entries.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 33 – A company purchased a machine from XYZ Ltd. for ₹99,000. The purchase amount was paid by issuing 11% debentures, each ₹100, at par value. Make the necessary journal entries.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 34 – Explain the types of debentures from a registration perspective.

Answer – Debentures from a registration perspective
(1) Registered debentures
(2) Bearer debentures

Question 35 – Explain any two purposes of a company’s financial statements.

Answer – Objectives of financial statements:
(1) To provide information about the business’s financial resources and liabilities.
(2) To provide information about earning capacity.
(3) To provide information about cash flow.

Question 36 – Write any two points about the nature of financial statements.

Answer – Nature of financial statements:
(1) Recorded facts
(2) Personal judgments
(3) Accounting conventions

Question 37 – What is the net profit ratio?

Answer – Net profit ratio – It shows the relationship of revenue from operations to net profit after operating and non-operating expenses and income.
Net profit ratio = (Net profit)/(Revenue from operations) x 100

Question 38 – Calculate the current ratio from the following:
Bank balance ₹20,000; Cash ₹15,000; Outstanding expenses ₹10,000; Accrued income ₹5,000; Inventory ₹5,000; Prepaid expenses ₹5,000.
Answer –
Current assets = 15,000 + 5,000 + 5,000 + 5,000
= 30,000
Current liabilities = 20,000 + 10,000
= 30,000
Current ratio = Current assets / Current liabilities
= 30,000 / 30,000
= 1:1

Question 39 – What is a cash flow statement?
Answer: The cash flow statement shows the inflows and outflows of cash and cash equivalents. It provides information regarding changes in cash and cash equivalents by classifying cash flows into operating, investing, and financing activities.

Question 40 – State any two purposes of the cash flow statement.
Answer: Any two purposes of the cash flow statement:
(1) To show the inflows and outflows of cash from various activities.
(2) To provide useful information regarding cash flow.

Question 41 – Anshi and Ayushi are partners in the ratio of 3:2. They admit Aman to the firm for a 3/10 share, which Aman receives 2/10 from Anshi and 1/10 from Ayushi.Calculate the new profit sharing ratio.
Answer –
Aman’s share = 3/10
Anshi’s new share = 3/5 – 2/10 = (6-2)/10 = 4/10
Ayushi’s new share = 2/5 – 1/10 = (4-1)/10 = 3/10
New ratio 4: 3: 3

Question 42 – A business has earned an average profit of ₹100,000 over the past few years, and the normal rate of return for similar businesses is 10%. If the business has total assets of ₹1,000,000 and outside liabilities of ₹180,000, calculate goodwill using the capital gains method.
Answer –
Capital = Total Assets – External Liabilities
= 1,000,000 – 180,000
= 820,000
Normal Profit = 820,000 x 10/100 = 82,000
Surplus Profit = Average Profit – Normal Profit
= 100,000 – 82,000
= 18,000
Goodwill = 820,000 x 100/10 = 180,000

Question 43 – Vimal and Nirmal are partners in the ratio of 3:2. They admit Sushil into the partnership for a 1/3 share. Sushil contributes Rs. 30,000 as his capital and also brings the required amount of goodwill for his share in cash. The firm’s goodwill on the date of admission was valued at Rs. 24,000. Rs. 12,000. Goodwill of is already present in the books of the firm. Pass necessary entries in the books of the firm.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 44 – Sonu and Sandeep are partners in the ratio of 3:2. They admit Neeraj to share in the profits. Neeraj contributes ₹30,000 as capital but is unable to bring in his share of goodwill in cash. The firm’s goodwill is valued at ₹9,000.
Make the necessary entries.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 45 – What is meant by bearer debentures?
Answer – Debentures that can only be transferred by delivery, and the company does not maintain any records of them, are called bearer debentures.

Question 46 – Shreyas Ltd. issued 10,000 debentures at ₹100 per denomination. The public applied for 9,000 debentures, which were fully subscribed. The required amount was received in one lump sum.
Make the necessary entries in the books of Shreyas Ltd.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 47 – Under which heading and subheading (if any) would the following items be shown in a company’s balance sheet?
(i) Securities Premium
(ii) Bills Payable
(iii) Inventories
Answer –
(i) Securities Premium – Reserves and Surplus.
(ii) Bills Payable – Current Liabilities.
(iii) Inventories – Current Assets

Question 48 – Write any three limitations of financial analysis.
Answer – Limitations of Financial Analysis:
(i) It does not take into account price level changes.
(ii) It can be misleading if accounting procedures have changed.
(iii) It is a study of company reports only.
(iv) It focuses only on the economic aspect.

Question 49 – Describe any two methods of payment of the amount due to a retiring partner.
Answer – Methods of payment of the amount due to a retiring partner
(1) Lump sum payment of the entire amount.
(2) Payment in installments.

Question 50 – Write any three differences between shares and debentures.
Answer – Basis of difference between shares and debentures:
(1) Yield
(2) Owner/creditor
(3) Rate of return
(4) Ownership/debt

Question 51 – Explain any three characteristics of debentures.
Answer – Characteristics of debentures –
(1) Long-term debt
(2) Company’s creditors
(3) Fixed interest rate

Question 52 – Classify the following items into major headings and subheadings:
Patents, furniture, trade payables
Answer – (1) Patents – Intangible assets – Fixed assets.
(2) Furniture – Tangible assets – Fixed assets.
(3) Trade payables – Current liabilities

Question 53 – Write any three importance of financial analysis.
Answer – Three importance of financial analysis –
(1) Report on the safety of managers
(2) Basis of financial policies
(3) Basis for granting loans

Question 54 – Write any three examples of cash flow from financing activities.
Answer – Cash flow from financial activities

Example:
(1) Cash receipts from share issues
(2) Cash receipts from debentures, loans, and bonds
(3) Cash payments on borrowed funds.

Question 55 – Write any three advantages of a cash flow statement.
Answer – Advantages of a cash flow statement:
(1) Shows changes in a business’s net assets.
(2) Shows a business’s ability to generate cash and cash equivalents.
(3) Shows the business’s operating efficiency.

Question 56 – Akshay, Bhanu, and Chakrash established a partnership firm on April 1, 2016, with capital of ₹500,000, ₹400,000, and ₹300,000, respectively. The remaining information is as follows:
(i) The profit ratio is 3:2:1.
(ii) Interest is payable on capital at the rate of 6% per annum.
(iii) Akshay is paid an annual salary of Rs. 1,20,000.
(iv) Bhanu is paid a commission of Rs. 50,000 per annum.
(v) Drawings – Akshay is Rs. 60,000, Bhanu is Rs. 40,000, and Chakrash is Rs. 20,000.
(vi) Interest on drawings is Rs. 2,700 for Akshay, Rs. 1,800 for Bhanu, and Rs. 900.
According to the profit and loss account, the net profit on March 31, 2017 is Rs. 3,56,600.
Prepare the profit and loss appropriation account.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 57 – Amit and Babu are partners in the ratio of 3:2. They admit Charu for 1/6 of the profits. Interest on capital is payable at 10% per annum. Amit has personally guaranteed to Charu that his profit after interest on capital will not be less than Rs. 30,000. The partners’ capitals are Amit Rs. 250,000, Babu Rs. 200,000, and Charu Rs. 150,000. At the end of the year, the profit before interest on capital was Rs. 150,000. If the new profit sharing ratio is 3:2:1, prepare the profit and loss apportionment account.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 58 – Ajit, Mahesh, and Sujit are partners. Mahesh retires from the firm. On that date, he is owed ₹600,000. The amount due will be paid in four annual installments, with interest at 12% per annum on the outstanding amount.

Prepare Mahesh’s loan account.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 59 – Write journal entries for revaluation of assets and liabilities and for adjustment of profit/loss.
Answer – Journal entries for revaluation:

1. In case of increase in assets –
   Asset account (Dr.)
   From revaluation account
2. In case of decrease in value of assets –
   Revaluation account (Dr.)
   From asset account
3. In case of increase in liabilities –
   Revaluation account (Dr.)
   From liability account
4. In case of decrease in liabilities –
   Liability account (Dr.)
   From revaluation account
5. Gain on revaluation –
   Revaluation account (Dr.)
   From old partners’ capital account
6. Loss on revaluation –
   Old partners’ capital account (Dr.)
   From revaluation account

Question 60 – Write four uses of the premium received on shares.
Answer – Uses of premium:
(i) On the issue of bonus shares.
(ii) To write off the company’s preliminary expenses.
(iii) Redemption of preference shares.
(iv) To write off the company’s expenses, commissions, and discounts.

Question 61 – Write any four advantages of preparing a cash flow statement.
Answer – Advantages of a cash flow statement:
(i) Reveals changes in net assets.
(ii) Reveals the ability to generate cash and cash equivalents.
(iii) Reveals the operating efficiency of the enterprise.
(iv) Reconciles cash inflows and outflows.

Question 62 – Write examples of cash inflows and outflows from investing/investing activities.
Answer –
(i) Sale or purchase of assets, plant, tools, and equipment, long-term investment instruments.
(ii) Receipts from interests and dividends.

Question 63 – A company issued 25,000 equity shares at ₹10 per share, with the following amounts payable:
Application – ₹2, allotment – ₹4, and first and final calls – ₹4.
Application money was received for 30,000 shares. The excess amount received on application will be adjusted against the allotment.
Make journal entries in the company’s books.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 64 – X and Y are partners in the ratio of 2:1. They admit X as a 1/6 share, who brings in ₹30,000 capital and ₹9,000 in cash for goodwill. X and Y withdraw their shares of goodwill.
Make the necessary journal entries.

Answer: Please write your own answers. (They will be uploaded to the site as soon as they become available.)

Question 65 – Calculate goodwill using profit capitalization method.
Average Profit: ₹ 40,000, Total Assets ₹ 6,00,000, Current Liabilities ₹ 2,80,000, Normal Rate of Return 10%.
get down-

Answer:
Capital = 6,00,000 – 2,80,000 = 3,20,000.
Normal profit = 3,20,000 x 10/100
= 32,000
Margin = Actual (Average) Margin – Normal Margin
= 40,000 – 32,000
= 8,000
Goodwill = 8,000 × 100/10
= 80,000