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CBSE Questions for Class 12 Commerce Accountancy Accounting For Partnership: Basic Concepts Quiz 8 - MCQExams.com
CBSE
Class 12 Commerce Accountancy
Accounting For Partnership: Basic Concepts
Quiz 8
Intimation regarding change in the firms name is signed by
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All the partners or their agents
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Active partner
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Legal advisor
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Manager of the firm
Explanation
As per the partnership act if any change in partnership then changes will be done with the consent of all partners.
Intimation regarding the change in the firm's name is signed by all the partners or their agents.
Hence a is the correct answer.
Partners are bound to carry on firms business
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To maximize Sales
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Maximize profit
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To the common advantage
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To maximize production
Explanation
A good partner may also bring knowledge and experience you may be lacking, or complementary skills to help you grow the business. Hence, the correct answer is option C.
X advanced Rs. 50,000 to Y to celebrate marriage ceremony of his minor daughter Z. Y refused to return the loan. X cannot legally recover the sun advanced to Y as
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Consideration being inadequate
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The agreement was not witnessed by the persons
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Object being illegal
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The agreement was not got registered
Which of the following is the real test of existence of partnership?
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Mutual agency relationship
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Agreement in writing
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Registration
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Profit sharing
Explanation
The existence of a Mutual Agency is the ultimate litmus test for a partnership. There are other cases where profit sharing exists but no partnership exists. However, if an agency exists between the parties who run a business together and share profits, it will be deemed that a partnership exists.
Hence a is the correct answer.
XY formed a joint venture to construct railway line for Metro Railway in Delhi and agreed to share profit and loss in the ratio of 2:X purchased goods worth Rs. 200000 and send the same to Y on payment of freight and insurance of Rs. 10,Y also purchased material worth Rs. 45000 and incurred Rs. 5000 as incidental expenses. Y sold the construction material to Railway for Rs. 3,20,What is the profit on Joint venture
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Rs.55,000
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Rs.60,000
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Rs.55,000
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Rs.65,000
Loss due to insolvency of a partner is dealt with in accordance with
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The provisions of Indian Partnership Act
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Decision of Garner v. Murray
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SEBI guidance S
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Provisions of Companies Act, 1956.
Explanation
According to Garner vs. Murray rule, if the partner becomes insolvent, he is unable to pay back the amount due to him. The amount not paid is a capital loss which should be borne by the solvent partner in the ratio of their capitals standing in the balance sheet on the date of dissolution of the firm.
Therefore, B is the correct option.
Where the notice of dissolution of the firm does not mention any date as the date of dissolution of the firm, dissolution takes place from the date.
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mutually decided by the partners
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when the notice is sent
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when notice is received
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as decided by senior partner
Explanation
Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm.
In this case, dissolution takes place from the date mutually decided by the partners.
Hence a is the correct answer.
ST Ltd. intends to revalue its good will on the basis of $$3$$ years purchase of weighted average of super profit of last four years. Estimate the goodwill of the firm.
Year $$2011$$ Profit Rs. $$17,000$$, year $$2012$$ Profit Rs. $$15,000$$
Year $$2013$$ Profit Rs. $$16,000$$, Year $$2014$$ profit Rs. $$20,000$$
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Rs. $$50,000$$
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Rs. $$48,000$$
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Rs. $$51,000$$
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Rs. $$56,000$$
Total annual wages bill of XYZ Associates for the year 09-10 amounted to Rs.12,00,00, however two workers remained on medical leave during the month of February and March, 2010, accordingly their two months wages amounting to Rs. 50,000 remained undisbursed till 1st May 2010,Which was paid in the month of MayThe unpaid wages of Rs.50,000 will be shown in the books of account as ....
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0%
Unclaimed wages
0%
Wages outstanding
0%
Pre-paid wages
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Wages
A management accountant is generally concerned with _________.
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timely providing information useful for managerial decision
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ensuring legal compliance
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ensuring arithmetic accuracy of all the financial information's
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all the three
A partner of an unregistered firm has a right to-sue
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for sale of the firm
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distribution of the property of the firm
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display of accounts of the dissolved firm
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for dissolution of the firm
Loss due to insolvency of a partner is born by
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All the partners
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High net worth partners
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Solvent partners only
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Senior partners only
Explanation
Solvent partner
is a partner whose personal assets are more than his personal liabilities.
Loss due to insolvency of a partner is born by solvent partners only. Hence, the correct option is C.
If a retiring partner does not give public notice of his retirement from the firm, he becomes a.......
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partner by holding out
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partner by estoppel
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sleeping partner
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dormant partner
Explanation
If a partner retires without giving necessary public notice, he continues to be liable as a partner by holding out.
Such a person is responsible for the person who has given a loan to the firm on his representation because the loan has been given by assuming that he/she is a member.
Hence a is the correct answer.
Register of firm is open to inspection by
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Partners only
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Income-tax authorities only
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Any person
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Bankers only
If a firm is declared insolvent, the share of minor partner in the firm vests in the.....
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Official receiver / assignee
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Other senior partner
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State Government
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In his legal representatives
Explanation
The Official Receiver is a public officer who may be appointed by the High Court to act as the liquidator of companies or limited liability partnerships. Hence the correct option is A.
Delivery under the Sale of Goods Act, includes voluntary transfer of
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Ownership
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Possession
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Risk
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Reward
Notice of intention to dissolve a partnership at will can be served by
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Dormant partner
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Any partner
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Senior partner
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Legal advisor
Explanation
Section 43 of the Partnership Act next provides that where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm.
Therefore, B is the correct option.
What is the maximum fee payable to the Registrar of firms at the time of giving Intimation under section $$61$$ of the Indian Partnership Act.
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Re. One only
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Rs.$$10$$ only
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Three Rupees.
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Rs. fifity
Words like Royal, Crown, Emperor, King, Queen etc. can be used as a part of firm's name only.....
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with the approval of State Government
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with the approval of Central Government
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after taking advice from a Jyotisi
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with the approval of Court
Mutual right and duties of partners are decided by-
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Partnership Act itself
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Mutual contract between the partners
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Contract Act
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CRPC
In case a partner has been promised guaranteed profit, then short fall in profit is met by ____________.
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all the partners necessarily
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senior partner
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partner giving guarantee only
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none
XY are two partners in a partnership firm. As per the terms of partnership deed partners are charged $$6\%$$ interest on the drawing made by them during the year. For the year ending $$31$$st. Dec. $$14$$. X draws money from the firm as per the details given.
$$31$$st March Rs. $$4,000$$
$$31$$st May Rs. $$2,000$$
$$31$$st August Rs. $$3,000$$
$$30$$th November $$2,000$$.
Calculate the interest on drawing to be charged from X.
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Rs. $$295$$
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Rs. $$320$$
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Rs. $$300$$
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Rs. $$275$$
A person is deemed to be in a position to dominate the will of another person by undue influence if the mental capacity of the aggrieved person is temporarily or permanently affected by which of these....
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Bodily illness or distress
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Mental distress or illness
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Ill health
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All the three
Explanation
According to Section 16(2), a person is deemed to be in a position to dominate the will of another in the following situations:
1. He holds a real or apparent relation to the other: For example, master and servant, parent and child, Income Tax Officer and assessee. principal and a temporary teacher.
2. He stands in a fiduciary relation to the other: This means that the relation is based on trust and confidence. It includes the relationship of trustee and beneficiary, spiritual adviser and his disciples, doctor and patient, solicitor and client. It should also be noted that undue influence cannot be presumed between husband and wife, landlord and tenant, and creditor and debtor.
3. He makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress: People of weak intelligence. old” age, indifferent health or those who are illiterate can be influenced.
Therefore, D is the correct option.
The disabilities for non-registration of a partnership firm are prescribed in... of the Partnership Act.
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$$69$$
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$$96$$
0%
$$70$$
0%
$$77$$
Explanation
The disabilities for non-registration of a partnership firm are prescribed in the Section 69 of the Partnership Act. Hence, the correct option is A.
Public Notice to a Registrar of firm is not required if it relates to the situation other than......
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Exclusion of a partner
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Retirement of a partner
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Minor partner electing to become or not to become partner after attaining age of majority.
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Nomination of a partner in Trade Association
Under section $$2$$ of the Indian Partnership Act, "an act of firms" means any act or commission by... which gives rise to right enforceable by or against the firm.
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all the partners
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any partner of the firm
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any agent of the firm
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any of the above three
Explanation
Under section 2 of the Indian Partnership Act, "an act of firms" means it can by enforced by the
1: All the partners.
2: It is done any all the partners
3: Any agent of the firm.
An “act of a firm” means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm.
Hence d is the correct answer.
Tick the correct statement.
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No public notice is required at the time of death of a partner.
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A firm is compulsory dissolved upon death of a partner.
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If no public notice is given, the estate of the deceased partner is liable for debts of the firm.
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A firm cannot carry on its business after death of a partner.
Explanation
When a partner retires, he must give public notice; otherwise, the retiring partner may not be released from his liability to third parties.
There are some situations in which public notice is not required:
1. On the death of a partner - the estate of a deceased partner or the legal representatives of a deceased partner cannot be held liable for any act of the firm performed or done after his death, even if the surviving partners carry on partnership business in the old name of the firm. The death of any partner is a notice.
2. Insolvency of a partner - When a partner is declared insolvent, his liability ceases immediately. When a person ceases to be a partner, he and his estate are no longer held liable for any act of the partnership firm done after his insolvency, whether or not notice of his insolvency was given.
3. Dormant or sleeping partner - Because a dormant partner does not participate in the firm's conduct or management, and his existence as a partner is not reflected in the firm's name, he is unknown to the person concerned, and he retires from a firm, no public notice is required to terminate his liability.
Hence a is the correct answer.
Expulsion of a partner is justified.....
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when power is conferred in the partnership deed.
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when it is done in goodfaith
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done by a majority decision
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all the three conditions to be satisfied.
Explanation
Partners can be removed or expelled only in exercise of good faith of powers conferred by contract between partners. The above proposition that the relationship between the partners in a partnership is that of principal to agent for one another is confirmed by a plethora of cases decided by various high courts.
Hence d is the correct answer.
As regard $$3rd$$ parties, a partner is.... of the firm for all purpose within the scope of the Partners Act
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Agent
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Principle
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Employee
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Manager
Explanation
.
Public notice in respect of partnership firm is required to be published in at least.....
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one vernacular newspaper
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one Hindi newspaper.
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one Hindi and one English newspaper.
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one local newspaper and one English newspaper.
ABC are three partners in a partnership firm sharing profit and loss equally. C retires from the firm on $$31.03.14$$. His share of profit is purchased by A and B in the ratio of $$2:1$$, what is the gaining ratio of the remaining partners.
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$$1:1$$
0%
$$2:1$$
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$$1:2$$
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$$5:4$$
Under the concept of Disclosure which of these would require proper disclosure in financial statements.
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Accounting policies adopted
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Change in Accounting policies and its effect on profitability
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All major events effecting the decision of users of financial statements
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All the three
An association of two or more persons created for which of these purposes is not a partnership.........
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Social
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Religious
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Charitable
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All the three
Explanation
When two or more people agree to build an enterprise and share its gains and losses, they are said to be in partnership.
It states partnership as the ‘association between an individual who has agreed to share the profits of an enterprise carried on by every partner.
Hence d is the correct answer.
...... is a conclusive evidence of existence of a partnership.
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Mutual agency
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Agreement
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Business
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Sharing of profit and loss
Shares can be forefeited for..........
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Non- payment of call money
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Absence from extinary raordinary meeting
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Not purchasing right issues
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Non-demating of shares
Explanation
If a member fails to pay a valid call within the stipulated time, the company may sue him for recovery of the amount of the call after waiting for a reasonable period or may forfeit the shares for non-payment of any call or instalment of a call. Thus, shares can be forfeited for non-payment of any call or instalment of a call if and only if special or clear power on the articles is given to the directors to do so.
Hence a is the correct answer.
Public notice in respect of partnership firm is required to be published in at least on vernacular newspaper circulated in the district where the firm to which relates, has its....
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Head office
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Place
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Principle place of business
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Place or principle place of business
Explanation
As per Section-72 of the Partnership Act, a public notice should be given by publication in the official gazette and in at least one vernacular newspaper circulating in the district where the firm to which it relates has its place of principal place of business.
Therefore, D is the correct option.
Which of the following statements is not true?
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It is not true that all partners can have limited liability in a limited partnership
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Capital contributions do not have to be equal from each partner
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A minor has a right to access and inspect books of accounts of partnership firm in which he is partner
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Interest on capital is a reward for the different amounts of work partners may perform
Explanation
Interest will be allowed to each partner on the capital contributed by him . Interest on capital of the partners is calculated for the relevant period for which the amount of capital has been used in the business. Capital introduced or withdrawn by a partner during the accounting year has to be taken for the purpose of calculation and definitely is not a reward for the partners.
Under fixed capital methods, profits will be credited to __________.
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capital account
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drawings
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current A/c
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profit and loss
Explanation
The account in a partnership firm can be kept in two ways- fixed capital and fluctuating capital.
Under the fixed nature of capital, the capital of each partner remains constant from the start of partnership till at the end of it. No adjustments like interest on capital, partner’s salary/commission, Drawings and profit or loss earned during the operation is made. To have record of all such adjustments each partner’s current account is opened, which is debited with Drawings, share of loss sustained during a period and credit is given for partner’s salary/commission, interest on capital and share of profit earned.
A and B are two partners in a partnership firm having capital Rs. $$10,000$$ and Rs. $$15,000$$. The firm intends to value its goodwill by capitalizing super profit of Rs. $$10,000$$ @$$8\%$$. Find the goodwill of the firm.
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$$150,000$$
0%
$$125,000$$
0%
$$100,000$$
0%
$$105,000$$
Explanation
.
Which of the following is not required to be mentioned in the partnership deed?
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Age of partners
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Name of partners
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Address of partners
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Firm name
Explanation
To become a partner it is not necessary to mention the age but to become a partner you need to be a major and should be of sound mind . However, a minor can also become a partner. In such a scenario, all the partners should give their consent in order to admit a minor.
ABC are three partners in a firm sharing profit and loss in the ratio of $$2:2:1$$, C retires from the firm. On his retirement C's capital a/c was credited by Rs. $$20,000$$ being his share of goodwill and A and B's Capital A/c was debited by Rs. $$12,000$$ and Rs. $$8000$$ respectively. Find the new profit sharing ratio of A and B.
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$$2:1$$
0%
$$1:1$$
0%
$$3:2$$
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$$13:12$$
Which of the following is not the requirement in Partnership deed?
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Capital contribution by each partner.
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Profit sharing.
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Total assets of the partner
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Method of dissolution
Explanation
According to the provisions of the Indian partnership act. 1932, a partnership deed is an agreement that consists of the rights and responsibilities of the partners in the firm.
It also includes capital contributed by the partner, profit sharing ratio, total assets of the partner. etc. It does not include the method of dissolution of the firm.
Hence, option D is correct.
A and B are two partners in a partnership firm having capital Rs. 10,000 and Rs. 15,000, C is admitted as third partner for 1/3 share of profit for which he brings Rs. 15,000 as his share of capital. Find the goodwill of the firm
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15,000
0%
5,000
0%
10,000
0%
45,000
Explanation
According to C's capital, capital of the firm= 15000 x 3/1 = Rs. 45000
Actual Capital of the firm = Rs. 10000 + 15000 + 15000
= Rs. 40000
Value of Goodwill = Rs. 45000 - 40000
= Rs. 5000
Therefore, B is the correct option.
Outgoing partner is compensated for parting with firm's future profits in favour of remaining partners.
In what ratio do the remaining partners contribute to such compensation amount?
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Gaining Ratio
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Capital Ratio
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Sacrificing Ratio
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Profit Sharing Ratio
Which of these would increase the net profit of a partnership firm.
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Charging interest on drawing of the partners
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Allowing interest on capital of the partners
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Distribution of goodwill
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Changing profit sharing ratio
Explanation
.
Unrecorded Asset realized at the time of dissolution of a firm is credited to which of these accounts
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Partners capital a/c
0%
Realization a/c
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Revaluation a/c
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Goodwill a/c
Explanation
Unrecorded assets are those assets that have been completely written off but are still physically present in the business. There is no requirement to show these assets in the books before they are sold off. Hence, these assets are directly credited to the Realisation account at the time of dissolution of the firm.
Therefore, B is the correct option.
P and Q are two partners sharing profit and loss equally. P draws Rs. 2000 at the end of each month for 6 months whereas Q draws Rs. 1,000 at the beginning of each month for six months. Assuming that interest on drawing is to be charged at 6% p.a. Interest on drawing of P will be __________.
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Rs. 150
0%
Rs. 80
0%
Rs. 86
0%
Rs. 90
As per Section $$37$$ of the Indian Partnership Act, $$1932$$, the executors would be entitled at their choice to the interest calculated from the date of death till the date of payment on the final amount due to the dead partner at _____________ percentage per annum.
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$$7$$
0%
$$4$$
0%
$$6$$
0%
$$12$$
P and Q are two partners sharing profit and loss equally. P draws Rs. 2,000 at the end of each month for 6 months whereas Q draws Rs. 1,000 at the beginning of each month for six months. Assuming that interest on drawing is to be charged at 6% p.a. Interest on drawing of Q will be.
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0%
Rs.105
0%
Rs.100
0%
Rs.110
0%
Rs.101
Features of a partnership firm are _____________________.
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Two or more persons are carrying common business under an agreement.
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They are sharing profits and losses in the fixed ratio.
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Business is carried by all or any of them acting for all as an agent
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All of the above
Explanation
All these are features of partnership. To form a partnership minimum two persons are required. A single person can not form partnership. Partnership is made to share profits and losses in the ratio mentioned in partnership deed. In partnership business is carried by all or any one of them can work for all.
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