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This a MCQ (Multiple Choice Question) based practice test of Chapter 1 - Fundamentals of partnership and Goodwill of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinations
Q Which Section of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all?
- a)Section 61
- b)Section 13
- c)Section 48
- d)Section 4
Correct answer is option 'D'. Can you explain this answer?
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This a MCQ (Multiple Choice Question) based practice test of Chapter 1...
Section 4 of the Indian Partnership Act, 1932 defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
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This a MCQ (Multiple Choice Question) based practice test of Chapter 1...
Partnership Firms in India are governed by the Indian Partnership Act, 1932. As per Section 4 of the Indian Partnership Act:-
“Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all”
Thus as per the above definition, there are 5 elements which constitute of a partnership namely: (1) There must be a contract; (2) between two or more persons; (3) who agree to carry on a business; (4) with the object of sharing profits and (5) the business must be carried on by all or any of them acting for all.
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This a MCQ (Multiple Choice Question) based practice test of Chapter 1...
Explanation:
Section 4 of the Partnership Act:
- Section 4 of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
- This section lays down the essential elements of a partnership, which include an agreement to carry on a business, sharing of profits, mutual agency, and having a common goal.
Understanding the Definition:
- The definition of partnership provided in Section 4 is crucial in determining whether a particular relationship qualifies as a partnership or not.
- It emphasizes the importance of mutual consent, profit-sharing, and a joint business venture in establishing a partnership.
Legal Implications:
- Understanding the definition of partnership as per Section 4 is essential for individuals entering into a partnership agreement.
- It helps in clarifying the rights and responsibilities of partners, the sharing of profits and losses, and other legal aspects of a partnership.
Importance in Accounting:
- In accounting, the definition of partnership provided in Section 4 influences the treatment of partnership transactions, distribution of profits, calculation of goodwill, etc.
- Accountants need to adhere to the legal definition while preparing financial statements and reporting partnership-related transactions.
Conclusion:
- Section 4 of the Partnership Act plays a significant role in defining and regulating partnerships in India.
- It serves as a guiding principle for individuals and businesses entering into partnership agreements, ensuring clarity and legal compliance in their dealings.
Section 4 of the Partnership Act:
- Section 4 of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
- This section lays down the essential elements of a partnership, which include an agreement to carry on a business, sharing of profits, mutual agency, and having a common goal.
Understanding the Definition:
- The definition of partnership provided in Section 4 is crucial in determining whether a particular relationship qualifies as a partnership or not.
- It emphasizes the importance of mutual consent, profit-sharing, and a joint business venture in establishing a partnership.
Legal Implications:
- Understanding the definition of partnership as per Section 4 is essential for individuals entering into a partnership agreement.
- It helps in clarifying the rights and responsibilities of partners, the sharing of profits and losses, and other legal aspects of a partnership.
Importance in Accounting:
- In accounting, the definition of partnership provided in Section 4 influences the treatment of partnership transactions, distribution of profits, calculation of goodwill, etc.
- Accountants need to adhere to the legal definition while preparing financial statements and reporting partnership-related transactions.
Conclusion:
- Section 4 of the Partnership Act plays a significant role in defining and regulating partnerships in India.
- It serves as a guiding principle for individuals and businesses entering into partnership agreements, ensuring clarity and legal compliance in their dealings.
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This a MCQ (Multiple Choice Question) based practice test of Chapter 1- Fundamentals of partnership and Goodwill of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinationsQ Which Section of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all?a)Section 61b)Section 13c)Section 48d)Section 4Correct answer is option 'D'. Can you explain this answer?
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This a MCQ (Multiple Choice Question) based practice test of Chapter 1- Fundamentals of partnership and Goodwill of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinationsQ Which Section of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all?a)Section 61b)Section 13c)Section 48d)Section 4Correct answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about This a MCQ (Multiple Choice Question) based practice test of Chapter 1- Fundamentals of partnership and Goodwill of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinationsQ Which Section of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all?a)Section 61b)Section 13c)Section 48d)Section 4Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for This a MCQ (Multiple Choice Question) based practice test of Chapter 1- Fundamentals of partnership and Goodwill of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinationsQ Which Section of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all?a)Section 61b)Section 13c)Section 48d)Section 4Correct answer is option 'D'. Can you explain this answer?.
This a MCQ (Multiple Choice Question) based practice test of Chapter 1- Fundamentals of partnership and Goodwill of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinationsQ Which Section of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all?a)Section 61b)Section 13c)Section 48d)Section 4Correct answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about This a MCQ (Multiple Choice Question) based practice test of Chapter 1- Fundamentals of partnership and Goodwill of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinationsQ Which Section of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all?a)Section 61b)Section 13c)Section 48d)Section 4Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for This a MCQ (Multiple Choice Question) based practice test of Chapter 1- Fundamentals of partnership and Goodwill of Accountancy of Class XII (12) for the quick revision/preparation of School Board examinationsQ Which Section of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all?a)Section 61b)Section 13c)Section 48d)Section 4Correct answer is option 'D'. Can you explain this answer?.
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