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Test: Partnership Accounts-I - B Com MCQ


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10 Questions MCQ Test - Test: Partnership Accounts-I

Test: Partnership Accounts-I for B Com 2024 is part of B Com preparation. The Test: Partnership Accounts-I questions and answers have been prepared according to the B Com exam syllabus.The Test: Partnership Accounts-I MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Partnership Accounts-I below.
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Test: Partnership Accounts-I - Question 1
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Which of the following transactions involves a credit to the cash account and a credit to a separate capital account in a partnership?

Detailed Solution for Test: Partnership Accounts-I - Question 1
In a partnership, when a partner invests funds, the transaction involves a debit to the cash account and a credit to a separate capital account. This capital account records the partner's investments and distributions, and it is essential to maintain separate capital accounts for each partner to avoid commingling of information.
Test: Partnership Accounts-I - Question 2
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Which type of partnership is characterized by having limited partners who do not engage in day-to-day decision making, and a general partner who manages the business?

Detailed Solution for Test: Partnership Accounts-I - Question 2
A limited partnership is a type of partnership where there are both limited partners and a general partner. Limited partners have limited liability and do not participate in the business's management, while a general partner assumes full management responsibility.
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Test: Partnership Accounts-I - Question 3
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What is the purpose of issuing a Schedule K-1 in a partnership in the United States?

Detailed Solution for Test: Partnership Accounts-I - Question 3
In the United States, a partnership issues a Schedule K-1 to each partner at the end of the tax year. This schedule outlines the allocation of profits and losses among partners, which each partner uses for reporting their personal income earned from the partnership.
Test: Partnership Accounts-I - Question 4
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In the event of admitting a new partner, what is the purpose of adjusting the profit sharing ratio?
Detailed Solution for Test: Partnership Accounts-I - Question 4
When a new partner is admitted to a partnership, adjusting the profit sharing ratio is essential to allocate future profits fairly among the existing partners and the new partner based on their contributions and roles in the business.
Test: Partnership Accounts-I - Question 5
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Under which method of maintaining capital accounts in a partnership, is there a separate capital account and current account for each partner?
Detailed Solution for Test: Partnership Accounts-I - Question 5
Under the Fixed Capital Method in a partnership, each partner has a separate capital account and a separate current account. The capital accounts remain fixed unless there are additional capital contributions or withdrawals, while the current accounts record all transactional adjustments.
Test: Partnership Accounts-I - Question 6
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What is the primary reason for not using words like "Crown," "Emperor," or "Empire" in a partnership's name?
Detailed Solution for Test: Partnership Accounts-I - Question 6
Using words like "Crown," "Emperor," or "Empire" in a partnership's name can lead to confusion with other existing firms and may injure the reputation or goodwill of the firm. Therefore, it's important to avoid such words to prevent confusion in the market.
Test: Partnership Accounts-I - Question 7
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Which method of maintaining capital accounts involves recording all adjustments in a single capital account for each partner?
Detailed Solution for Test: Partnership Accounts-I - Question 7
The Fluctuating Capital Method involves maintaining a single capital account for each partner. All adjustments related to capital introduction, profit sharing, interest, and other transactions are recorded in this single capital account.
Test: Partnership Accounts-I - Question 8
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In a partnership, what is the purpose of the income summary account?
Detailed Solution for Test: Partnership Accounts-I - Question 8
In a partnership, the income summary account is used to summarize the net profit or loss for a specific accounting period. This summary is then used to allocate the profit or loss among the partners based on their ownership interests.
Test: Partnership Accounts-I - Question 9
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What is the purpose of registering a partnership firm with the Registrar of Firms in India?
Detailed Solution for Test: Partnership Accounts-I - Question 9
Registering a partnership firm with the Registrar of Firms in India provides the firm with a Certificate of Registration, which confirms its legal status and ensures compliance with the Partnership Act. It's a necessary step to establish the firm's authenticity.
Test: Partnership Accounts-I - Question 10
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What is the significance of the Partnership Deed in a partnership firm?
Detailed Solution for Test: Partnership Accounts-I - Question 10
The Partnership Deed is a crucial document that outlines the rights, obligations, and responsibilities of each partner in a partnership firm. It includes important details like the nature of business, capital contributions, profit-sharing ratio, division of tasks, and procedures for various scenarios such as retirement or admission of partners.
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