Unit 3: Accounts of Partnership Firms – Fundamentals — Online MCQ Test
ACCOUNTANCY · CLASS 12th · Tamil Nadu State Board
Practice Unit 3: Accounts of Partnership Firms – Fundamentals with a free chapter-wise online MCQ test.
This chapter covers: This unit establishes the core accounting principles governing partnership businesses under the Indian Partnership Act 1932. It covers the preparation of the Profit and Loss Approp....
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Unit 3: Accounts of Partnership Firms – Fundamentals — Important Questions & Answers
Under the Indian Partnership Act, 1932, what is the default basis for sharing profits and losses among partners if there is no partnership deed?
- A. Equal sharing
- B. Sharing in capital ratio
- C. Sharing in profit ratio given verbally
- D. Sharing according to age of partners
Answer: A. Equal sharing
In the absence of an agreement, partners share profits and losses equally as per the Partnership Act, 1932.
In the absence of an agreement, partners share profits and losses equally as per the Partnership Act, 1932.
Which account is prepared to distribute net profit among partners after transferring items like interest on capital and partners' salary?
- A. Trading Account
- B. Profit and Loss Appropriation Account
- C. Revaluation Account
- D. Cash Account
Answer: B. Profit and Loss Appropriation Account
The Profit and Loss Appropriation Account is used to appropriate net profit among partners and adjust items such as interest, salary, and commission.
The Profit and Loss Appropriation Account is used to appropriate net profit among partners and adjust items such as interest, salary, and commission.
A partner is entitled to 10% commission on net profit after charging commission. If net profit before commission is ₹1,00,000, what is the commission?
- A. ₹10,000
- B. ₹9,090.91
- C. ₹11,000
- D. ₹1,00,000
Answer: B. ₹9,090.91
When commission is calculated as a percentage on net profit after charging commission, it is a 'percentage on grossing up' basis. So commission = 10/110 × 1,00,000 = ₹9,090.91.
When commission is calculated as a percentage on net profit after charging commission, it is a 'percentage on grossing up' basis. So commission = 10/110 × 1,00,000 = ₹9,090.91.
A, B and C are partners with capitals of ₹2,00,000, ₹1,50,000 and ₹1,00,000 respectively. If interest on capital is allowed at 5% p.a. and profits are shared equally, which partner receives the highest interest on capital?
- A. A
- B. B
- C. C
- D. All receive equal interest
Answer: A. A
Interest on capital is calculated on the amount of capital invested, so the partner with the highest capital receives the highest interest.
Interest on capital is calculated on the amount of capital invested, so the partner with the highest capital receives the highest interest.
A partnership deed provides that partner P gets a salary of ₹2,000 per month and 10% commission on net profit after charging commission. If the net profit before these appropriations is ₹1,20,000, what is the total amount payable to P?
- A. ₹24,000
- B. ₹27,272.73
- C. ₹26,000
- D. ₹28,000
Answer: B. ₹27,272.73
Salary for the year = ₹2,000 × 12 = ₹24,000. Commission = 10/110 × ₹1,20,000 = ₹10,909.09, so total payable = ₹34,909.09.
Salary for the year = ₹2,000 × 12 = ₹24,000. Commission = 10/110 × ₹1,20,000 = ₹10,909.09, so total payable = ₹34,909.09.