DK Goel Solutions Class 12 Accountancy Chapter 2 Accounting for Partnership Firms Fundamentals

Short Answer Questions

Question 1. 

Solution 1.

1.) Sharing of Profit/Losses:- Profit/Losses are shared equally by the partners.

2.) Interest on Capital:- Interest on capital is not paid to partners.

3.) Interest on Drawings:- Interest on drawings in not charged from partners.

4.) Interest on Loan:- Interest at the rate of 6% p.a. is to be allowed on a partner’s loan to the firm. Such interest shall be paid even if there are losses to the firm.

Question 2.  

Solution 2.

Below are the provisions of the partnership Act, in the absence of Partnership Deed:-

1.) If all the partners agree, a minor may be admitted for the benefit of partnership.

2.) A person may be admitted as a partner either with the consent of all the existing partners or in accordance with an express agreement among the partners.

3.) Registration of the firm is optional and not compulsory.

4.) A partner may retire from the firm either with the consent of all the other partners or in accordance with an express agreement among the partners.

Question 3.

Solution 3.

1.) Salaries of Partners

2.) Commission of Partners

3.) Interest on Partners Capital

4.) Interest on Partners Drawings

5.) Profit transferred to Capital account

6.) Net Profit transferred from P&L account

Question 4. 

Solution 4.

 (a) Fixed Capitals and Fluctuating Capitals

(b) Partner’s Capital Accounts and Current Accounts

Question 5. 

Solution 5.

(a) Salaries of Partners:- No partner is entitled to any salary or commission for taking part in running the firm’s business.

(b) Interest on Partner’s Capital:- No interest on Capital shall be allowed to the partners.

(c) Interest on Loan:- Interest at the rate of 6% p.a. is to be allowed on a partner’s loan to the firm. Such interest shall be paid even if there are losses to the firm.

(d) Profit sharing ratio:- Profit and losses are to be shared equally irrespective of their capital contribution.

(e) Interest on Partner’s drawings:- No interest is to be charged on drawings.

Question 6. 

Solution 6.

(a) Debit of Current A/c

(b) Credit of Current A/c

(c) Credit of Capital A/c

(d) Credit of Current A/c

(e) Debit to Current A/c

Question 7. 

Solution 7.    Below are the items appears on the debit side of the Capital Account of partner when the capitals are fluctuating:-

(1) Drawings

(2) Interest on Drawings

(3) Share of loss

(4) Loss on revolution

(5) Any assets taken by partner

(6) Closing Cr. Balance of the Capital

Question 8. 

Solution 8.   Below are the items that may appear on the credit side of the Capital Account of a partner when the capitals are fluctuating:-

(1) Opening credit balance of Capital

(2) Additional Capital introduced

(3) Share of profit

(4) Interest on capital

(5) Salary to a partner

Question 9. 

Solution 9.   In the absence of a partnership deed, the under mentioned provisions of the Partnership Act, 1932 will be applicable:-

(1) Profit and losses are to be shared equally.

(2) No interest is to be allowed on capitals.

(3) No interest is to be charged on drawings.

(4) No partner is entitled to any salary of commission for taking part in running the firm’s business.

(5) A partner is entitled to interest at the rate of 6% per annum on the loan given by him to the firm.

(6) Each partner can participate in the conduct of business.

Question 10.  

Solution 10.    When drawings of equal amounts are made on the first day of every month, interest would be calculated on the total amount of drawings for 6 ¹/₂ months. Thus,

Question 11. 

Solution 11.    When drawings of equal amounts are made on the last day of every month, interest would be calculated on the total amount of drawings for 5 ¹/₂  months. Thus, 

Question 12. 

Solution 12.     When drawings of equal amounts are made in the middle of every month, interest would be calculated on the total amount of drawings for 6 months. Thus,

Question 13 (new). 

Solution 13 (new). In the absence of partnership deed, the provision of partnership act 1932 will apply according to which:

1. No interest is payable on capitals.

2. Interest on loan by partner will be paid @ 6% p.a.

3. Profit will be shared equally.

4. No salary is payable to any partner.

Question 13.   

Solution 13.

(i) Profit will be shared equally.

(ii) B will not get the salary.

Question 14.   

Solution 14.

(i) Anuj will be given interest on his loan @ 6% p.a.

(ii) In the absence of any agreement of the contrary, profit will be shared equally, irrespective of their capitals.

Question 15. 

Solution 15.

(a) No interest on capital will be allowed.

(b) Amit is not entitled to any salary

(c) Amit’s son cannot be admitted as a partner, if Y objects it.

(d) Amit is entitled to claim interest on his loan @ 6% p.a.

Question 16.  

Solution 16.

(a) Amit must return Rs. 1,75,000

(b) Amit must return Rs. 50,000;

(c) Mohanlal cannot be admitted

(d) Goods may be purchased from Ragh.