CBSE Questions for Class 12 Commerce Accountancy Accounting For Partnership: Basic Concepts Quiz 1 - MCQExams.com

Which of the following is NOT required to be maintained in the partnership deed? 
  • Age of partners
  • Name of partners
  • Address of partners
  • Firm name
Where will you record interest on drawings in the final accounts of the firm ? 
  • Debit side of Profit & Loss Appropriation Account
  • Credit side of Profit & Loss Appropriation Account
  • Credit side of Profit & Loss Account
  • Debit side of Capital/ Current Account only
How would you close the Partner's Drawing Account?
  • By transfer to the debit of Capital or Current Account
  • By transfer to the credit of Capital Account
  • By transfer to the credit of Current Account
  • Either b or c
Following is the difference between partnership deed and partnership agreement.
  • Partnership deed is in writing and partnership agreement may be oral
  • Partnership deed is signed by all the partners but partnership agreement is signed by majority of the partners.
  • Partnership deed is registered in the court of law whereas partnership agreement is not registered.
  • Partnership deed is not subject to changes unless all partners agree to it. Partnership agreement can be amended with the consent of more than 50% partners.
The relationship between persons who have agreed to share the profit of a business carried on by all or any of them acting for all is known as :
  • Partnership
  • Joint Venture
  • Association of Persons
  • Body of Individuals
Partners are supposed to pay interest on drawing only when provided by the ______________.
  • Partnership Act
  • None of these
  • Agreement
  • Both a and c
Which Section of the Partnership Act,1932 defines the term 'Partnership'?
  • Section 1
  • Section 2
  • Section 3
  • Section 4
X, Y and Z are partners in a firm.At the time of division of profit for the year there was dispute among the partners.Profits before interest on partner's capital was Rs.10,000 and X wanted interest on capital at 20% as his capital contribution was Rs.1,00,000 as compared to that of Y and Z which was Rs.75,000 and Rs.50,000 respectively. Find the solution ______________________________.
  • Profits of Rs.10,000 will be distributed equally.
  • X will get the interest of Rs.20,000 and the loss of Rs.10,000 will be shared equally
  • All the partners will get interest on their capital and the loss will be shared equally.
  • None of the above.
A and B enter into a joint venture sharing profits and losses equally. A purchased 5000 kg of rice @ Rs. 25/kg. B purchased 1000 kg of wheat @Rs. 30/kg. A sold 1000 kg of wheat @ Rs. 35/kg and B sold 5000 kg of rice @ Rs. 30/kg. The profit on venture will be :
  • Rs. 55,000
  • Rs. 50,000
  • Rs. 60,000
  • Rs. 30,000
A Ltd. has allotted $$20,000$$ shares to the applicants of $$28,000$$ shares on pro-rata basis. The amount payable on application is $$Rs. 2$$. M applied for $$420$$ shares. The number of shares allotted and the amount carried forward for adjustment against allotment money due from Mr. X will be ______________.
  • $$60$$ shares; $$Rs. 120$$
  • $$340$$ shares; $$Rs. 160$$
  • $$300$$ shares; $$Rs. 200$$
  • $$300$$ shares; $$Rs. 240$$
C, D and E are partners sharing profits and losses in the proportion of 3 :2 :D retired and the new profit sharing ratio between C and E is 3 :2 and the Reserve of Rs. 24,000 will be divided among the partners.
  • 4,000, 8,000 12,0000
  • 10,000, 10,000 4,000
  • 8,000 12,000 4,000
  • 12,000 8,000 4,000
A, B and C were partners in a firm sharing profits and losses in the ratio of 2 :2 :1 respectively with the capital balance of Rs. 50,000 for A, Rs. 70,000 for B,for C Rs. 35,B declared to retire from the firm and balance in reserve on the date was Rs. 25,If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,500, then what amount will be payable to B?
  • Rs. 70,820
  • Rs. 76,000
  • Rs. 75,000
  • Rs. 95,000
A and B are partners sharing profits and losses in the ratio 4 :C was manager who received the salary of Rs.2,000 p.m. in addition to a commission of 5% on net profits after charging such commission.Profit for the year is Rs.3,39,000 before charging salary. Find the total remuneration of C.
  • Rs.39,000
  • Rs.44,000
  • Rs.43,500
  • Rs.38,000
A and B are partners sharing profits and losses in the ratio of 3 : 2 having the capital of Rs.80,000 and Rs.50,000 respectively. They are entitled to 10% p.a interest on capital before distributing the profits.During the year firm earned Rs.17,800 before allowing any interest on capital.Profits appointed among them excluding interest will be ____________________.
  • Rs.2,880 and 1,920
  • Rs.8,800 and 8,800
  • Rs. 8,000 and 5,000
  • None of these
A and B are partners with the capital of Rs.20,000 and Rs.10,000 respectively. Interest payable of capital out of profit is 10% p.a. Find the interest on capital for both the partners when the profits earned by the firm is Rs.2,400.
  • Rs.2,000 and Rs.1,000
  • Rs.1,600 and Rs. 800
  • No interest will be paid to the partners
  • None of these
Rent paid on 1 October, 2004, for the year to 30 September, 2005, was Rs.2,400, rent paid on 1 October, 2005 for the year to 30 September, 2006, was Rs.3,Rent payable, as shown in the profit and loss account for the year ended 31 December 2005, would be : 
  • Rs. 6,000
  • Rs. 3,200
  • Rs. 2,600
  • Rs. 3,000
X and Y agree to form a partnership. X contributes 50,000 in assets and devotes one-half time to partnership while Y contributes 20,000 in cash and devotes full time to the firm. How will the partners share the profit?
  • 1:4
  • 1:3
  • 1:2
  • 1:1
A, B and C are the partners sharing profits and losses in the ratio 2 :1 :Firm has a joint life policy of Rs.1,40,000 and in the balance sheet it is appearing at the surrender value i. e.Rs. 40,000 On the death of A, how this JLP will be shared among the partners?
  • 50,000 :25,000 :25,000
  • 60,000 :30,000 :30,000
  • 40,000 :35,000 :25,000
  • Whole of Rs. 1,20,000 will be paid to A.
A, B and C are partners sharing profit in the ratio 7 :5 :C died on 30th JuneIt was decided to value the goodwill on the basis of three years' purchase of last five years' average profits. If the profits are Rs. 30,000; Rs. 28,300; Rs. 29,000, Rs. 24,000 and Rs. 26,700, what will be C's share of goodwill?  
  • Rs. 20,700
  • Rs. 27,600
  • Rs. 82,800
  • Rs. 27,000
The profits of last five years are Ra.75,000, Rs.90,000; Rs.80,000; Rs.1,00,000 and Rs.80,000.Find the value of goodwill, if it is calculated on average profits of last five years on the basis of 3 years of purchase.
  • Rs.85,000
  • Rs.2,55,000
  • Rs.2,75,000
  • Rs.2,85,000
The relationship between persons who have agreed to share the profit of a business carried on by all or any of them acting for all is known as.
  • Partnership
  • Joint Venture
  • Association of Persons
  • Body of Individuals
Partnership can be formed for the purpose of carrying.
  • Charitable activities
  • Social activities
  • Business
  • All of the above
Choose the correct answer from the alternatives given.
Which one is correct
  • A minor can act as a principal
  • A minor cannot act as an agent
  • A minor can act as an agent
  • None of these
A partnership can be formed ____________________.
  • only with a written agreement
  • only with an oral agreement
  • only with an express agreement
  • only with an implied agreement
  • none of these
A firm is the name of ________. 
  • the partners
  • the minors in the firm
  • the business under which the firm carries on business
  • the collective name under which it carries on business
The law relating to partnership firms is contained in ________. 
  • the Partnership Act, 1930 
  • the Partnership Act, 1932
  • the Indian Partnership Act, 1930
  • the Indian Partnership Act, 1932
Interest on partners capital is___________.
  • An Expenditure
  • An appropriation
  • A Gain
  • None of these
Under _______ there have been made rules regarding the dissolution of him.
  • Indian partnership Act section 35
  • Indian partnership Act section 39
  • Companies Act section 48
  • Companies Act section 45
Persons who have entered  into partnership with one another are called individually "______________" and collectively "_____________", and the name under which their business is carried on is called the "_____________".
  • co-owner; firm name; a firm
  • partners; firm name; a firm
  • partners; a firm; firm name
  • co-owner; a firm; firm name
A change in the nature of the business can only be brought about by the consent of ____________.
  • majority partners
  • all the partners
  • two partners
  • five partners
  • Both Assertion and Reason are correct and Reason is the correct explanation for Assertion
  • Both Assertion and Reason are correct but Reason is not the correct explanation for Assertion
  • Assertion is correct but Reason is incorrect
  • Assertion is incorrect but Reason is correct
Interest on drawings is ______________.
  • Debited to P/L A/C
  • Credited to P/L A/C
  • Debited to capital A/C
  • None
A nominal partner is ________________.
  • Not liable to third parties
  • Not liable for the other partners acts
  • Entitled to equal share in the business
  • Not entitled to share in the profits
Which of the following is correct in respect of partnership accounts?
In the absence of any provision in the partnership agreement to the contrary partners can charge interest at 6% p.a. on loans given by them to the partnership firm.
2. An ordinary partnership firm can have not more than 50 partners
3. A banking partnership firm can have not more than 50 partners
4. In the absence of an agreed ratio in the agreement, partners will share profits and losses in the ratio their capitals.
Select the correct answer using the codes given below.
  • 1 and 2
  • 1 and 3
  • 1, 3 and 4
  • 2, 3 and 4
If there is no partnership deed then interest on capital will be charged at ______p.a.
  • 6%
  • 8%
  • 9%
  • NIL
______ is limited exposure to financial risk by investors of a company or a partnership.
  • Unlimited liability
  • Limited liability
  • Corporate authority
  • Corporate responsibility
The balance in the investments Fluctuation Fund, after meeting the loss on revaluation of investment at the time of admission of a partner will be transferred to _____________ .
  • The old Partners Capital Accounts
  • The Revaluation Account
  • The general Reserve
  • None of the above
The Agreement of Partnership ________________.
  • Must be oral
  • Must be in writing
  • Can be either oral or in writing
  • Must be in writing on a stamp paper
The Advance Ruling Authority shall comprise of
  • One member from amongst the officers of Central tax.
  • One member from amongst the officers of State tax or Union Territory tax as the case may be.
  • (a) & (b)
  • None of the above
In the absence of an agreement to the contrary, the partners _________________.
  • Are entitled for 6% interest on loans to the firm, only when there is profit
  • Are entitled for 6% interest on loans to the firm, whether there is profit or not
  • Are not entitled for any interest on loans to the firm
  • Are entitled for 9% interest on loans, only when there are profits
Interest on drawings is _________.
  • Expenditure for the business
  • Expense for the business
  • Gain for the business
  • Loss for the business
Match List-I with List-II and select the correct answer using the codes given the lists.
List-IList-II
I. Partner's current accounts(a) Dissolution of partnership
II. Goodwill account(b) Admission of a partner
III. Partner's drawing account(c) Fixed capital of partners
IV. Realisation account(d) Goods taken by a partner for self-consumption
  • I-(a), II-(d), III-(b), IV-(c)
  • I-(c), II-(b), III-(d), IV-(a)
  • I-(a), II-(b), III-(d), IV-(c)
  • I-(c), II-(d), III-(b), IV-(a)
Which of the following is not an example of Partnership ?
  • Sonu and Charu, co-owners, agrees to conduct the business in common for profits
  • Four Bus operators each having 10 buses combine by an agreement into one firm
  • Kalpna and Vandna jointly own a boat which they use for rowing as business on Sundays and holidays and equally divide the earnings
  • Chandrika and Arpana from an association to which each contributes Rs. 1000 annually. The purpose is to produce cloth for distributing free to war-widows
Partners current accounts are opened when their capital accounts are ___________ .
  • Fixed
  • Fluctuating
  • Semi permanent
  • None of these
Nature of Revaluation Account is ___________.
  • Real
  • Personal
  • Nominal
  • None
A partner can be added to share ___________.
  • Only Profits
  • Only Losses
  • Both
  • None
_____________________ undergoes Revaluation and Reassessment during Reconstruction of Firm.
  • Assets and Liabilities
  • Capital of partners
  • Expenses and Losses
  • None of above
Consider the following statements :
1.Sharing profits is a conclusive evidence of a partnership.
2.A partner of a partnership firm is treated as an agent of the other partners.
3.A third party cannot file a suit against as unregistered firm or its partners.
Which of the above statement/s is/are true?
  • Only 1
  • Only 3
  • 1,2 and 3
  • 2 and 3
a) From legal point of view, a joint stock company is recognised as separate legal entity from the shareholders.
b) Partnership firms and sole trading businesses do not have legal entity, but they have business entity for accounting purposes.
Of these
  • Both (a) and (b) are true
  • Both (a) is true, (b) is false
  • (a) is false, but (b) is true
  • Both (a) and (b) are false
The balance of joint life policy account of partners represents ____________________.
  • Total premium paid up to the date or balance
  • Annual instalment of premium payable each year
  • Surrender value of the policy
  • Amount receivable on the maturity of the policy
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