Key Questions and Solutions for Class 12 Accountancy Part I (2025-26)

1. Define Partnership as per the Indian Partnership Act, 1932.

Answer: According to the Indian Partnership Act, 1932, partnership is the relation between two or more persons who have agreed to share the profits of a business carried on by all or any of them acting for all. This relationship forms a partnership firm.

2. State two differences between Fixed and Fluctuating Capital Accounts.

Answer: In the fixed capital method, capital remains unchanged except for additional capital or withdrawal, while in fluctuating capital, capital balance changes with every transaction such as drawing, interest, or profit. Fixed capital has two accounts: capital and current, whereas fluctuating uses only the capital account.

3. What is Sacrificing Ratio? When is it calculated?

Answer: Sacrificing ratio is the ratio in which old partners forego their share of profit in favour of the new partner. It is calculated at the time of admission of a new partner when profit-sharing ratios change.

4. Explain the treatment of goodwill when a new partner is admitted.

Answer: On admission of a new partner, goodwill is calculated, and the new partner compensates existing partners for their sacrifice, usually by bringing cash or through adjustment in capital accounts. The amount brought is generally shared by old partners in their sacrificing ratio.

5. Give two points on the difference between Revaluation Account and Realisation Account.

Answer: Revaluation Account is prepared at the time of admission or retirement to ascertain profit or loss on revaluation of assets and liabilities, whereas Realisation Account is made only at the time of dissolution to calculate gain or loss on sale of assets and payment of liabilities.

6. Why is it necessary to calculate Interest on Drawings? How is it treated in accounts?

Answer: Interest on drawings is charged to discourage partners from withdrawing frequently and to compensate the firm for loss of funds. It is debited to the partner’s capital or current account and credited to the firm’s Profit and Loss Appropriation Account.

7. A and B are partners sharing profits in the ratio 3:2. C joins the partnership. Calculate the new profit-sharing ratio if the new ratio is agreed to be equal among all three partners.

Answer: When the new ratio is equal, each of A, B, and C will get 1/3 share. The old ratio of A and B was 3:2. After C’s admission, the ratio becomes 1:1:1 for A, B, and C.

8. Discuss the purpose of a Partnership Deed and one consequence if it is absent.

Answer: A Partnership Deed outlines the terms, duties, and rights among partners, preventing disputes. If absent, provisions of the Indian Partnership Act, 1932, apply by default; for instance, profits are shared equally regardless of capital contributions.

9. Explain the need for Revaluation of Assets and Liabilities at the time of admission of a new partner.

Answer: Assets and liabilities are revalued at the time of admission to assess current values, ensuring old partners receive proper share of accumulated gains or losses. This avoids unfair benefit or loss to the new partner.

10. Give an example of an item that is shown on the credit side of the Profit and Loss Appropriation Account.

Answer: Interest on capital allowed to partners is shown on the credit side of the Profit and Loss Appropriation Account, as it is a benefit given to partners before profits are distributed.

How Does Class 12 Accountancy Important Questions Help You with Exams?

Practising these chapter-wise Class 12 Accountancy Important Questions sharpens your conceptual understanding and aligns your preparation with CBSE exam demands. You learn to answer in clear, concise steps using appropriate command words such as define, explain, and justify. Solving them helps improve accuracy, better manage time during the exam, and develop writing skills that match marking schemes. These questions ensure you can handle varied question types and avoid common mistakes in presentation or calculations.

Advantages of Vedantu Important Questions

• All questions are strictly based on CBSE exam trends and updated marking schemes.
• Answers use simple language and logical stepwise explanations for easy understanding.
• Covers a mix of 1-mark, 2-mark, and 3-mark questions to reflect the actual exam paper.
• Includes examples, formulas, or formats where required for better scoring.
• Highlights typical errors and how to avoid them in answers.
• Supports systematic and thorough revision before the board exams.

By thoughtfully practising these Important Questions, you can revise the chapter Accountancy Part I Class 12 Important Questions efficiently. You stay focused on CBSE requirements, reinforce key concepts, prevent common mistakes, and approach your exam with greater confidence and clarity.