Accounting Ratios Class 12 Questions and Answers - Free PDF Download
FAQs on NCERT Solutions For Class 12 Accountancy Chapter 5 Accounting Ratios - 2025-26
1. How should I solve accounting ratio problems from Chapter 5 to align with the CBSE board marking scheme?
To solve accounting ratio problems correctly as per the CBSE 2025-26 pattern, you should follow the method demonstrated in the NCERT solutions:
- State the Formula: Always begin by writing the correct formula for the ratio being calculated (e.g., Current Ratio = Current Assets / Current Liabilities).
- Identify Components: Clearly list the items from the financial statements that constitute the numerator and denominator.
- Show Calculations: Present all calculations step-by-step. Avoid using shortcuts for arriving at the final values of assets or liabilities.
- Present the Final Answer: State the final ratio clearly, ensuring it is expressed in the correct format (e.g., pure ratio, percentage, or times).
2. What is the correct format for preparing a Balance Sheet as per Schedule III of the Companies Act, 2013, as shown in the Chapter 5 solutions?
The NCERT solutions for Class 12 Accountancy demonstrate the vertical format of the Balance Sheet as prescribed by Schedule III (Division I) of the Companies Act, 2013. The main headings are:
- EQUITY AND LIABILITIES
- Shareholders' Funds (Share Capital, Reserves and Surplus)
- Non-Current Liabilities (Long-term Borrowings, etc.)
- Current Liabilities (Short-term Borrowings, Trade Payables, etc.)
- ASSETS
- Non-Current Assets (Property, Plant and Equipment, Intangible Assets, etc.)
- Current Assets (Inventories, Trade Receivables, Cash and Cash Equivalents, etc.)
Following this precise structure with all relevant sub-heads is crucial for scoring full marks.
3. How do the step-by-step NCERT Solutions for Chapter 5 help in avoiding common mistakes in Company Accounts?
These solutions help prevent common errors by emphasising a structured approach. For instance, they show how to:
- Use correct terminology as per the Companies Act, like 'Statement of Profit and Loss' instead of 'P&L Account'.
- Prepare detailed working notes for complex calculations like goodwill or capital reserve, which is a mandatory requirement.
- Adhere to the exact format of the Balance Sheet and other statements, preventing loss of marks for incorrect presentation.
- Properly record journal entries for forfeiture and re-issue of shares, a frequent area of confusion.
4. What is the step-by-step method for recording journal entries for the issue of shares at a premium?
The NCERT solutions illustrate the correct method for journalising the issue of shares at a premium:
- On Application: Debit Bank A/c and credit Share Application A/c.
- On Allotment: Debit Share Allotment A/c. Credit Share Capital A/c with the face value and credit Securities Premium A/c with the premium amount.
- Receiving Allotment Money: Debit Bank A/c and credit Share Allotment A/c.
This systematic process ensures that the share capital and premium amounts are recorded accurately as per legal requirements.
5. Why is it important to show detailed working notes for calculations, and how do the NCERT solutions guide this?
Showing detailed working notes is not just for clarity; it is a mandatory part of the CBSE marking scheme. They carry separate marks. The NCERT solutions model this by providing clear, step-by-step working notes for complex items like:
- Calculation of goodwill on amalgamation.
- Determining the amount transferred to the Capital Reserve on the re-issue of forfeited shares.
- Computing various accounting ratios where multiple components are involved.
Following this practice ensures transparency and helps you secure full marks for the question.
6. How do the solved problems in NCERT solutions clarify the accounting treatment for Calls-in-Arrears and Calls-in-Advance?
The solutions provide clear, distinct journal entries for each scenario. For Calls-in-Arrears, they show how to debit a separate Calls-in-Arrears A/c to track unpaid amounts, which is then shown as a deduction from the called-up capital in the Balance Sheet. For Calls-in-Advance, a separate liability account is credited, and it is presented under 'Other Current Liabilities' in the Balance Sheet. This helps students understand both the journal entry and its presentation impact.
7. Are the problem-solving methods in these NCERT Solutions also applicable to questions from reference books like T.S. Grewal?
Yes, absolutely. The fundamental principles, journal entries, and formats for company accounts prescribed by the Companies Act, 2013 and CBSE are universal. While reference books may offer a wider variety of problems, the core solving methodology for topics like issue of shares, debentures, and financial statement preparation remains the same. Using NCERT solutions builds the correct foundation for tackling any problem.
8. What is the underlying logic for classifying items under 'Current' and 'Non-Current' in the Balance Sheet, as explained through the solved examples?
The logic, as demonstrated in the solutions, is based on the company's operating cycle or a period of 12 months, whichever is longer. An asset or liability is classified as 'Current' if it is expected to be realised, sold, consumed, or settled within this period. If the settlement or realisation is expected to occur after this period, it is classified as 'Non-Current'. The solved examples help you practice applying this rule to various items like trade receivables, long-term borrowings, and inventories.
9. What makes these NCERT Solutions for Class 12 Accountancy Chapter 5 a reliable resource for the CBSE 2025-26 exam?
These solutions are reliable because they are meticulously aligned with the latest CBSE syllabus and exam pattern for 2025-26. They provide:
- Step-by-step answers that match the CBSE marking scheme.
- Accurate formats for financial statements as per Schedule III of the Companies Act.
- Clear explanations for complex adjustments, helping build strong conceptual understanding for solving any type of board question.
