Accountancy Part II Class 12: Important Questions & Answers (2025-26)

1. Define Partnership and explain two essential features of a partnership firm as per CBSE guidelines.

Answer: A partnership is an agreement between two or more persons who share profits and losses of a business. Essential features include sharing profit and losses, and business carried on by all or any of them acting for all. Registration is not mandatory.

2. Distinguish between Fixed Capital Account and Fluctuating Capital Account with suitable examples.

Answer: In a Fixed Capital Account, only capital changes due to additional capital or withdrawal; adjustments like interest or salary are shown in a separate current account. Fluctuating Capital Account records all transactions, so its balance keeps changing.

3. Explain the meaning of Goodwill and state one method to value goodwill in partnership accounts.

Answer: Goodwill is the reputation of a business, earning above-average profits. One method to value goodwill is the Average Profit Method, which calculates average profits of previous years and multiplies by the agreed number of years.

4. A, B, and C are partners sharing profits in the ratio 3:2:1. C retires. Calculate the new profit sharing ratio between A and B.

Answer: The combined share of A and B after C retires = 3 + 2 = 5. The new ratio between A and B will be 3:2.

5. What is Sacrificing Ratio? Give its formula and a case when it is calculated.

Answer: Sacrificing Ratio is the proportion of profit surrendered by old partners to a new partner. Formula: Sacrificing Ratio = Old Ratio – New Ratio. It is calculated when a new partner is admitted.

6. State two differences between Revaluation Account and Realisation Account in partnership dissolution.

Answer: Revaluation Account is prepared to find profit or loss on revaluing assets and liabilities during admission, retirement, or death. Realisation Account is prepared at the time of dissolution, to ascertain profit or loss from closing the firm.

7. Why is Reserve Capital not shown in the balance sheet of a company? Explain briefly.

Answer: Reserve Capital is part of uncalled capital, to be called only during winding up of a company. It is not shown in the balance sheet because it does not exist until such a situation arises. It is a contingent liability.

8. Prepare the opening journal entry when a partnership firm is converted into a company and assets are taken over at book value.

Answer: The journal entry is: “Company’s Account Dr. to Realisation Account”. This records the company taking over the assets and liabilities of the partnership firm at the agreed values.

9. Explain the concept of ‘Forfeiture of Shares’ and why companies do it as per CBSE policy.

Answer: Forfeiture of shares means cancelling shares when shareholders fail to pay call amounts. Companies do this to recover unpaid amounts and reissue forfeited shares, following CBSE and company guidelines.

10. Discuss the purpose of issuing Debentures as Collateral Security in companies.

Answer: Debentures as collateral security are issued to serve as an additional security against a loan. If the borrower fails to repay, the lender can sell the debentures to recover the loan amount.

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

Practising these Important Questions helps you recognise CBSE exam patterns and likely question types. By regularly answering them, you clarify core concepts and improve your application skills. Using command words such as define, explain, or justify trains you to write to-the-point, scoring answers. You also learn to manage your time better and avoid common errors during revision and exams.

Advantages of Vedantu Important Questions

• Questions are aligned with recent CBSE trends and examination patterns for accuracy.
• All answers use clear, simple language and stepwise explanations suited for students.
• Coverage includes all relevant marks distribution: 1, 2, 3 marks, and conceptual variations.
• Where needed, answers use diagrams, formulas, or calculations to help with scoring methods.
• Explanations address and correct usual mistakes students make in CBSE exams.
• The set supports systematic, focused revision of the chapter before your final exams.

By working through these Accountancy Part II Class 12 Important Questions, you prepare yourself for CBSE exams in a structured way. You can avoid common mistakes, strengthen your revision, and build confidence to score better in the final exams. Let your understanding grow with each practice session.