CBSE Questions for Class 12 Commerce Accountancy Accounting For Partnership: Basic Concepts Quiz 10 - MCQExams.com

A new agreement of a partnership firm to replace the old one is formed only in following conditions_______.
  • Admission of new partner
  • Death of a partner
  • Change in profit sharing
  • All of the above
Amit and Varun are partners with capital balances of Rs. 60,000 and Rs. 20,000, respectively. Profits and losses are divided in the ratio of 60:Amit and Varun decided to form a new partnership with Amit, who invested land valued at Rs. 15,000 for a 20% capital interest in the new partnership. Amit's cost of the land was Rs. 12,The partnership elected to use the bonus method to record the admission of Amit into the partnership. Amit's capital account should be credited for________.
  • 12,000
  • 15,000
  • 16,000
  • 19,000
In a partnership firm one of the partner x had no capital account. What could be the reason__________________.
  • he is not a partner
  • he is employee
  • he did not contribute any money
  • all of the above
One advantage of operating as a partnership would include ____________.
  • Being able to raise capital through share issues
  • Limited liability for all partners
  • Access to knowledge, skills, experience and contacts at larger level
  • Greater power than a sole trader for decision-making
State with reasons whether the following statement is true or false:
The objective of taking a joint life policy by the partnership firm is to secure the lives of the existing partners of the firm.
  • True
  • False
A debit balance on a partner's current account must indicate that _________.
  • they have withdrawn more than they have earned in the partnership
  • they have a credit balance on their capital account
  • drawings are higher than the profit share for that year
  • they are insolvent
What is not common in a partnership firm.
  • Partnership deed
  • An agreement between partners
  • Some partners are major and some are minor
  • Carried on for doing business.
A partner was supposed to contribute Rs.50,000 in a partnership firm. He gave Rs.80,000 to the firm. How much interest he will get on the extra money we contributed to the firm above his agreed share in the firm __________.
  • Nill
  • 6% of 30,000
  • 6% of 80,000
  • 6% of 50,000
_______________ a/c is debited for loss on adjustment under past adjustments through profit and loss adjustment account.
  • Profit and Loss
  • Profit and Loss Adjustment
  • Partner's Capital
  • Partner's Current
When there is no agreement among the partners, the profit or loss of the firm will be shared in their capital ratio.
  • True
  • False
For adjustment _______________, a statement of accounts to ascertain the net effect of omission on partner's capital accounts is to be worked out at first.
  • Through profit and loss adjustment account
  • Profit and loss account
  • Directly in partner's capital accounts
  • Both a and b
Interest on capital is given from profit and loss appropriation account to a partner __________________.
  • Only if allowed as per agreement
  • Only if there are any profits in P&L appropriation account
  • Both a & b
  • None of the above
As per companies Act there can be _____no of partners.
  • 100
  • 10
  • Unlimited
  • 50
Which is of relevance in case of partnership audit?
  • Partnership deed
  • Partnerships financial statement
  • Both a and b
  • None of the above
One of the partner contributed Rs.30,000 in the firm-How much interest he will get on the capital contributed ________.
  • Nil, Unless it is mentioned in partnership deed.
  • 6% of 30,000
  • 5% of 30,000
  • Income of the above
For interest in capital, _______________ a/c is to be debited under past adjustments through profit and loss adjustment account
  • Profit and loss
  • Profit and loss adjustment
  • Partner's capital
  • Partner's current
A new agreement of a partnership firm to replace the old one is formed only in these conditions.
  • Admission of new partner
  • Death of a partner
  • Change in profit sharing
  • All the above
Which of the following is essential of partnership deed?
  • It should be made legally
  • It should be enforceable
  • It should be a written agreement between two or more persons
  • It should be forbidden by law
Choose the correct answer from the alternatives given.
Which one is correct:
  • A minor himself can apply for fully paid shares
  • A minor himself can apply for partly paid shares
  • A minor can become transferee of fully paid shares
  • A minor can become transferee of partly paid shares.
If current accounts are not being managed for a partnership firm, then partners are maintaining _______________ accounts.
  • Fixed capital account
  • Partnership account
  • Fluctuating capital account
  • Saving account
Which of the following purpose is a form in which all the Partners are signed?
  • Pronote
  • Partnership Deed
  • MOA
  • None
To form partnership there must be agreement between at least.
  • Three persons
  • Two persons
  • Four persons
  • None of the above
P, Q and R as are in partnership Q dies on 15th June, which of the following statement is true?
  • Q's estate is not liable at all
  • Q's estate is not liable for any acts of the firm done after 15th June
  • Q's estate liable for all acts up to the end of the financial year when the death occurred.
  • Q's estate is liable only up to the previous financial year.
In the absence of partnership deed partners are entitled to ________.
  • salary
  • interest on loan
  • Interest on capital
  • share of profits in capital ratio
The estate of a partner who dies, or who becomes insolvent, is not liable for partnership debts contracted _______________________.
  • After the date of the death or insolvency
  • Before the date of the death or insolvency
  • After the 1st day of the financial year in which he dies or becomes insolvent
  • All of above
Following are the essential elements of a partnership firm except.
  • At least two persons
  • There is an agreement between all partners
  • Equal share of profits and losses
  • Partnership agreement for some business
Partnership is defined as "the relation between persons who have agreed to share the profits of a business carried on by _________ acting for all".
  • All
  • Any of them
  • (A) or (B)
  • (A) and (B)
A partner claim interest on capital __________.
  • Even if there is loss
  • If there is profit
  • If there is profit and there is an agreement to pay it
  • Whether there is profit or loss to the firm
Joint Life Policy is taken by the firm on the life (s) ___________________.
  • All the partners jointly
  • All the partners severely
  • On the life of all the partners and employees of the firm
  • Both (A) and (B)
The estate of a deceased partner is liable for any act of the firm done after his death.
  • True
  • Partly true
  • False
  • None of the above
When a partner is given guarantee by the other partner, loss on such guarantee will be borne by -
  • All the other partners
  • Partnership firm
  • Partner with the highest ratio
  • Partner giving guarantee
In partnership under fluctuating capital account method, recording the transactions relating to drawings, interest on capital, commission, salary, share of profit or loss are made in ___________.
  • Partner's Capital Account
  • Partner's Current Account
  • A or B
  • A & B
_________ rule is applicable at the time of any partner becoming insolvent. 
  • Garner v. Murray
  • Derry v. Peek
  • Salomon v. A. Salomon & Co. Ltd.
  • Mohirri Bibi v. Dhamodas Ghose
X, Y & Z are partners sharing profits & losses in the ratio of $$3:3:2$$. Each partner withdraws as follows:
X had withdrawn Rs. $$15,000$$ on $$15-6-2015$$. Y had withdrawn Rs. $$8,500$$ on $$1-5-2015$$ & $$10,000$$ on $$15.10.2015$$. Z had withdrawn Rs. $$2,500$$ at the end of each month. Rate of interest on drawing is $$9\%$$. Accounting year ends on $$31$$st December each year. Calculate the interest on drawings.
  • $$731.25$$, $$697.5$$ & $$1,237.5$$
  • $$675$$, $$510$$ & $$1,327.5$$
  • $$657$$, $$679.5$$ & $$1,237.5$$
  • $$567$$, $$796.5$$ & $$1,732.5$$
Which of the following is/are essential feature of partnership?
  • Association of two or more persons
  • Agreement/contract
  • Carrying on business
  • All of the above
In partnership under fixed capital account method, which of the following account is opened?
  • Partner's Capital Account
  • Partner's Current Account
  • (A) or (B)
  • (A) & (B)
N & Z are two partners. During the year N withdraws Rs. $$37,000$$ on $$1-5-2012$$ & Z withdraws Rs. $$45,000$$ on $$15-8-2012$$. Accounts are closed on $$31-12-2012$$. Rate of interest on drawings is $$10\%$$ p.a. Interest on drawing for two partner respectively will be.
  • $$2,775$$ & $$2,063$$
  • $$2,063$$ & $$2,775$$
  • $$2,467$$ & $$1,688$$
  • $$1,688$$ & $$2,467$$
On $$1-1-2015$$ balance in capital account of partner was Rs. $$1,00,000$$. He introduced certain amount on $$1-5-2015$$. As per partnership deed interest on capital is to be provided @ $$12\%$$ p.a. If Profit & Loss Appropriation A/c is debited for Rs. $$18,000$$ as interest on capital, how much amount was introduced by the partner on $$1-5-2015$$?
  • Rs. $$18,000$$
  • Rs. $$60,000$$
  • Rs. $$75,000$$
  • Rs. $$1,00,000$$
The partners can share profit in ____________.
  • Capital ratio if no ratio is agreed between partners
  • Agreed ratio or in their current ratio or in their capital ratio
  • Last agreed capital ratio or if no ratio is agreed in equal proportions
  • Agreed ratio and if no ratio is agreed then in equal proportions
X, Y & Z commence a business in partnership. X puts in Rs. $$20,000$$ for the whole year. Y introduced Rs. $$30,000$$ and increases it Rs. $$40,000$$ at the end of four months but withdraws Rs. $$10,000$$ at the end of eight month. Z brings Rs. $$50,000$$ at first, but withdraws Rs. $$15,000$$ at the end of six months. Calculate the profit sharing ratio based on effective capital.
  • $$24:40:51$$
  • $$41:22:54$$
  • $$6:4:3$$
  • $$17:13:8$$
The capital account of a partner may be a ______________.
  • Fixed Capital A/c
  • Fluctuating Capital A/c
  • A or B
  • None of the above
Under fluctuation method of capital, what is the treatment of "interest on capital"?
  • Credited to capital account
  • Debited capital account
  • No treatment or adjustment is needed
  • Credited to current account
In which of the following case Garner v. Murray rule is NOT applicable?
1. Only one partner is solvent 
2. All partners are insolvent 
3. When partnership deed provides a specific method to be followed in case of insolvency of a partner 
Select the correct answer from the options giiven below :-
  • 1 Only
  • 1 & 2 only
  • 3 only
  • 1, 2 & 3
X, Y and Z are partners sharing profits & losses in the ratio of 5:3:From 1st April they decide to share profits and losses in the ratio of 2:5:The Partnership deed provides that in the event of any change in profit sharing ratio, the goodwill should be valued at two years' purchase of the average profits of the preceding 5 years. The profits and losses of the preceding years are:
i. Profit Rs 39,000,
ii. Profit Rs 57,000,
iii. Profit Rs 24,000,
iv. Profit Rs 27,000,
v. Loss Rs 12,000.
The necessary single adjusting entry will involve:
  • Debit Y by Rs 10,800 and Z by Rs 5,400 and Credit X by Rs 16,200.
  • Debit Z by Rs 10,800 and Y by Rs 5,400 and Credit X by Rs 16,200.
  • Debit X by Rs 10,800 and Z by Rs 5,400 and Credit Y by Rs 16,200.
  • Debit Z by Rs 10,800 and X by Rs 5,400 and Credit Y by Rs 16,200.
When the partners capital accounts are fixed, then as per the decision in the Garner vs. Murray case, any loss arising due to the capital deficiency in the insolvent partner's capital accounts is to be borne by solvent partners in the ratio of _______.
  • Profit sharing ratio
  • Scarifying ratio
  • Gaining ratio
  • Last agreed capital ratio
X, Y & Z are partners. X withdraws fixed some at the beginning of each month. Rate of interest of drawing is 10% p.a. Interest and drawing credited to Profit & Loss Appropriation A/c is Rs.Calculate the monthly drawing of partners X.
  • Rs. 1,550 per month
  • Rs. 1,200 per month
  • Rs. 1,000 per month
  • Rs. 1,150 per month
In which of the following cases there is NOT partnership? 
(I) A & B buy 100 bales of cotton agreeing to divide these between them.
(II) A & B buy 100 bales of cotton,which they agree to sell for their joint account and to share the profit or loss.
(III) A & B are joint owner of a house. They rent it out to C and divide the net rent equally.
(IV) A is a publisher. He agrees to publish at his own expense a book written by B, and to pay B half the net profits.
  • (I)
  • (III) & (IV)
  • (II), (III) & (IV)
  • (I), (II) & (IV)
A partner claims interest on capital _____________.
  • even if there is loss
  • if there is profit
  • if there is profit and there is an agreement to pay it
  • even if there loss and there is an agreement to pay it
Garner v. Murray requires ____________________________________.
  • That all praters should bring in cash equal to their respective shares of the loss on realization
  • That all partners should bring in cash equal to their respective shares of the loss on realization and deficiency of insolvent partner should be borne by solvent partners in their profit sharing ratio
  • That all partners including insolvent partner should bring in cash equal to their respective share of the loss on realization and deficiency of insolvent partner should be borne by solvent partner should be borne by solvent partners in their last agreed capital ratio
  • That the solvent partners should bring in cash equal to their respective shares of the loss on realization and that the solvent partners should bear the loss arising due to insolvency of a partner in their last agreed capital ratio and
X and Y are partners sharing profit and loss at the ratio of 1/3 and 2/3 respectively. The net income for this accounting period is Rs 10,000 while salary of X = Rs 2,000, interest on Y's drawings = Rs 3,000 and interest on X's capital = Rs 2,What is the X's share of profit or loss after the adjustment for partner's salary, interest on capital and interest on drawings?
  • 3,000
  • 6,000
  • 9,000
  • 2,000
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