Test: Introduction To Partnership Accounts - 1


30 Questions MCQ Test Accountancy Class 12 | Test: Introduction To Partnership Accounts - 1


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QUESTION: 1

A partner acts as ……………for a firm. 

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QUESTION: 2

Ram and Shyam are partners with the capital of Rs. 25,000 and Rs.15,000 respectively. Interest payable on capital is 10% p.a. Find the interest on capital for both the partners when the profits earned by the firm is Rs. 2,400.

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QUESTION: 3

Interest on Drawings is: 

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QUESTION: 4

Fluctuating Capital account is credited with: 

Solution:

Fluctuating Capital Method

Under this method as is apparent from the name, capital of each partner goes on changing from time to time. Each partner will have his separate capital account, which will be credited by his initial investment and any additional capital introduced during the year will also be credited to his capital account.

All the adjustments, which result decrease in capital will be debited to partner’s capital, such as drawing made by each partner, interest on drawings and share of loss. On the other hand, adjustments resulting increase in capital will be credited to partner’s capital, like interest on capital, partners salary if any, partner’s share of profit etc.

Balance of each partner’s capital account will be shown in the balance sheet. Debit balance of partner’s capital account is shown on the asset side and credit balance is shown on the liability side.

Explanatory Note: It should be noted that where nothing is specifically mentioned the capital method to be adopted will be the fluctuating capital method.

QUESTION: 5

Firm has earned exceptionally high profits from a contract which will not be renewed. In such a cash the profit from this contract will not be included in …

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QUESTION: 6

In the absence of an agreement, partners are entitled to:

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QUESTION: 7

A draws Rs. 1000 per month on the last day of every month. If the rate of interest is 5% k.p.a. then the total interest

chargeable from him to accounting year ending on 31-12-1985 will be

Solution:

There is a formula for calculating interest on drawings at the end of every month.

amount*12*rate*11/24

1000*12*(5/100)*(11/24)

= Rs. 275

QUESTION: 8

Interest on capital will be paid to the partners if provided for in the agreement but only from ………..

Solution:

 

Interest on capital will be paid to the partners if provided for in the agreement but only from Accumulated Profits.

QUESTION: 9

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 deceased partner at ______% p.a.:

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QUESTION: 10

If a firm prefers Partners Capital Accounts to be shown at the amount introduced by the partners as capital in firm then, the entries for salary, drawings, interest on capital or drawings and profits are made in

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QUESTION: 11

If there is no partnership deed then interest on capital will be charged at ______________p.a.

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QUESTION: 12

Following are the essential elements of a partnership firm except:

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QUESTION: 13

A and B are partners A’s capital is Rs. 10,000 and B’s Capital is Rs. 6,000. Interest is payable @ 6% p.a. B is entitled to a salary of Rs. 300 per month. Profit to the year before interest and salary to B is R.s 8,000. Profits between A and B will be divided as:

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QUESTION: 14

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 …………..

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QUESTION: 15

A and B are partners having capital of Rs. 50,000 and Rs. 60,000 respectively. Interest on capital is given @ 5% p.a. Profits for the year before appropriation is Rs. 4,600 provide interest on capital out of profits. Increase allocated to partners is :

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QUESTION: 16

Every partner is bound to attend diligently to his……….. in the conduct of the business.

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QUESTION: 17

 A, B and C had capitals of Rs. 50,000; Rs. 40,000 and Rs. 30,000 respectively for carrying on business in partnership. The firm’s reported profit for the year was Rs. 80,000. As per provisions of the Indian Partnership Act, 1932, find out the share of each partner in the above amount after taking into account that no interest has been provided on an advance by A of Rs. 20,000, in addition to his capital contribution. 

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QUESTION: 18

‘Salary Rs. 5,000 paid to partner’ The above item will appear in _________.

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QUESTION: 19

 When is Profit & Loss Appropriation Account prepared?

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QUESTION: 20

 Interest on drawings is treated as:

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QUESTION: 21

 When a partner is given Guarantee by the other partner, loss on such guarantee will be borne by 

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QUESTION: 22

Three partners A , B , C start a business . B's Capital is four times C's capital and twice A's capital is equal to thrice B's capital . If the total profit is Rs 16500 at the end of a year ,Find out B's share in it.

Solution:

Suppose C's capital = x then
B's capital = 4x (Since B's Capital is four times C's capital)
A's capital = 6x ( Since twice A's capital is equal to thrice B's capital)
A:B:C =6 x : 4x : x
= 6 : 4 : 1
B's share = 16500 * (4/11) = 1500*4 = 6000.

QUESTION: 23

 In the presence of an agreement, interest on capital is to be provided from _______?

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QUESTION: 24

What would be the profit sharing ratio if the partnership act is complied with?

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QUESTION: 25

If opening capital of a partner in the firm is Rs. 1,00,000 and closing capital is Rs. 2,00,000. Interest on capital allowed during the year Rs. 10,000 and interest on drawings charged during the year Rs. 2,000. If total drawings were Rs. 20,000, the amount of profit transferred to his capital account by the firm would be:

Solution:

Profit = closing capital -opening capital +drawings -interest on capital + interst on drawings
= 200000 - 100000 + 20000 -10000 + 2000 = 112000 Ans.

QUESTION: 26

 Is rent paid to a partner is appropriation of profits?

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QUESTION: 27

Where will you record interest on drawings?

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QUESTION: 28

Insurance Premium paid by the firm on the life Insurance policy of a partner is

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QUESTION: 29

In the absence of any deed of partnership---

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QUESTION: 30

 Following are the differences between Capital Account and Current Account except:

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