Test: Accounting for Partnerships: Basic Concepts- Assertion & Reason Type Questions - Commerce MCQ

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): The interest on capital is recorded in the debit side of the Current Account when fixed capital is maintained.

Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Profit and Loss Appropriation Account shows the correct profit earned by the firm.

Reason (R): The net profit is adjusted after taking into account the interest on capital, interest on drawings, salaries/commissions paid to the partner in the Profit and Loss Appropriation Account.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Profit and Loss Appropriation Account is only prepared when there are certain adjustments related to partnership.

Reason (R): Profit and Loss Appropriation is prepared to ascertain the profit earned by the firm and distribution among the partners.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): If percent of interest on drawings is not mentioned in partnership deed, firm would not charge any interest on drawings of partners.

Reason (R): Interest on drawings is charged only when there is profit.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): When the items are omitted it is necessary to prepare Profit and Loss Adjustment Account only.

Reason (R): For the purpose of correcting these omissions or mistakes, adjustment entries are passed through Profit and Loss Adjustment Account in which adjustments in respect of each and every omission are to be made.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): The interest on drawings omitted is shown on the credit side of the Profit and Loss Adjustment Account.

Reason (R): Profit and Loss Adjustment Account is prepared when there is an omission of items.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): The profit is guaranteed only to a partner.

Reason (R): The guaranteed profit is to be paid by the other partner in the specific ratio as agreed upon to the partner who has been agreed to be paid if the profit falls short.