CA Foundation Exam > CA Foundation Questions > Which of the following statement in false?a)P...
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Which of the following statement in false?
- a)Partnership deed in the mutual agreement between partners.
- b)The liability of all the partners is jointly and severally unlimited
- c)In the absence of partnership agreement, partners share profits in capital ratio.
- d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.
Correct answer is option 'C'. Can you explain this answer?
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Which of the following statement in false?a)Partnership deed in the mu...
False Statement in Partnership:
Partnership is a type of business organization in which two or more persons come together to carry on a business for profit. The partnership is governed by the Indian Partnership Act, 1932. The partnership deed is a legal document that governs the rights and obligations of partners and lays down the terms and conditions of the partnership. In this question, we are asked to identify the false statement regarding the partnership.
False Statement: In the absence of the partnership agreement, partners share profits in the capital ratio.
Explanation:
• Partnership Deed: It is a legal document that contains all the terms and conditions of the partnership, such as the name of the firm, the nature of the business, the capital contribution of each partner, the rights and duties of partners, profit-sharing ratio, etc. It is prepared and signed by all the partners.
• Jointly and Severally Unlimited Liability: In a partnership, the liability of partners is jointly and severally unlimited, which means that each partner is liable for the debts and obligations of the firm to the full extent of his personal assets.
• Profit and Loss Appropriation Account: It is prepared to show the distribution of profits among partners. It contains all the items of income and expenditure of the firm, such as sales, purchases, expenses, etc. It also shows the interest on capital, salary, commission, and share of profit of each partner.
• Profit-Sharing Ratio: It is the ratio in which partners share the profits and losses of the firm. The profit-sharing ratio may be equal or unequal, depending upon the terms of the partnership deed.
In the absence of the partnership agreement, partners share profits and losses equally, and the capital ratio is not considered. However, this statement is false because in the absence of the partnership agreement, the partnership is governed by the Indian Partnership Act, 1932, which provides that the profits and losses of the firm shall be shared equally among partners, irrespective of their capital contribution. Therefore, option C is the false statement.
Partnership is a type of business organization in which two or more persons come together to carry on a business for profit. The partnership is governed by the Indian Partnership Act, 1932. The partnership deed is a legal document that governs the rights and obligations of partners and lays down the terms and conditions of the partnership. In this question, we are asked to identify the false statement regarding the partnership.
False Statement: In the absence of the partnership agreement, partners share profits in the capital ratio.
Explanation:
• Partnership Deed: It is a legal document that contains all the terms and conditions of the partnership, such as the name of the firm, the nature of the business, the capital contribution of each partner, the rights and duties of partners, profit-sharing ratio, etc. It is prepared and signed by all the partners.
• Jointly and Severally Unlimited Liability: In a partnership, the liability of partners is jointly and severally unlimited, which means that each partner is liable for the debts and obligations of the firm to the full extent of his personal assets.
• Profit and Loss Appropriation Account: It is prepared to show the distribution of profits among partners. It contains all the items of income and expenditure of the firm, such as sales, purchases, expenses, etc. It also shows the interest on capital, salary, commission, and share of profit of each partner.
• Profit-Sharing Ratio: It is the ratio in which partners share the profits and losses of the firm. The profit-sharing ratio may be equal or unequal, depending upon the terms of the partnership deed.
In the absence of the partnership agreement, partners share profits and losses equally, and the capital ratio is not considered. However, this statement is false because in the absence of the partnership agreement, the partnership is governed by the Indian Partnership Act, 1932, which provides that the profits and losses of the firm shall be shared equally among partners, irrespective of their capital contribution. Therefore, option C is the false statement.
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Which of the following statement in false?a)Partnership deed in the mu...
In the absence of deed the partners share profit qually not in capital ratio
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Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer?
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Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer?.
Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer?.
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Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Which of the following statement in false?a)Partnership deed in the mutual agreement between partners.b)The liability of all the partners is jointly and severally unlimitedc)In the absence of partnership agreement, partners share profits in capital ratio.d)Profit and loss appropriation account is prepared to show the distribution of profits among partners.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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