Chapter 4: Partnership Accounts — Online MCQ Test
ACCOUNTANCY · CLASS 12 INTERMEDIATE 2 YEAR · Telangana State Board
Practice Chapter 4: Partnership Accounts with a free chapter-wise online MCQ test.
This chapter covers: This chapter details partnership fundamentals deed provisions profit and loss appropriation account capital accounts fixed fluctuating systems interest on capital and drawings..
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Chapter 4: Partnership Accounts — Important Questions & Answers
In a partnership firm, the document that contains the terms and conditions of the partnership is called:
- A. Partnership deed
- B. Profit and Loss Account
- C. Balance Sheet
- D. Cash Book
Answer: A. Partnership deed
A partnership deed is the written agreement that defines the rights, duties, and terms of the partners. It is the basic document governing the firm.
A partnership deed is the written agreement that defines the rights, duties, and terms of the partners. It is the basic document governing the firm.
If the partnership deed is silent about sharing of profits and losses, profits and losses are shared:
- A. In the ratio of capital
- B. Equally
- C. According to drawings
- D. According to age
Answer: B. Equally
In the absence of an agreement, the Indian Partnership Act provides that profits and losses should be shared equally by all partners.
In the absence of an agreement, the Indian Partnership Act provides that profits and losses should be shared equally by all partners.
If a partnership deed provides for interest on capital, it is usually calculated on:
- A. Opening capital only
- B. Average capital or capital balance as per agreement
- C. Closing capital only
- D. Drawings only
Answer: B. Average capital or capital balance as per agreement
Interest on capital is calculated according to the terms of the partnership deed, commonly on the capital balance for the relevant period or on average capital if so agreed.
Interest on capital is calculated according to the terms of the partnership deed, commonly on the capital balance for the relevant period or on average capital if so agreed.
A and B are partners sharing profits equally. A is entitled to Rs. 4,000 as salary and interest on capital is Rs. 2,000 each. Firm’s net profit before appropriation is Rs. 18,000. The divisible profit after appropriation items is:
- A. Rs. 10,000
- B. Rs. 12,000
- C. Rs. 14,000
- D. Rs. 16,000
Answer: A. Rs. 10,000
Net profit of Rs. 18,000 less A's salary of Rs. 4,000 and interest on capital of Rs. 4,000 total gives Rs. 10,000 as the divisible profit.
Net profit of Rs. 18,000 less A's salary of Rs. 4,000 and interest on capital of Rs. 4,000 total gives Rs. 10,000 as the divisible profit.
A partner's salary is allowed only if:
- A. The partner has invested more capital
- B. The partnership deed provides for it
- C. The firm earns loss
- D. The partner works part-time
Answer: B. The partnership deed provides for it
A partner is not entitled to salary merely by being a partner. It can be paid only when the partnership deed specifically allows it.
A partner is not entitled to salary merely by being a partner. It can be paid only when the partnership deed specifically allows it.