CBSE Class 12 Accountancy Accounting For Partnership Firms MCQs Set A

Question: Partnership deed is also called

(a) Articles of partnership

(b) Articles of association

(c) Principals of partnership

(d) None of the options

Answer: Articles of partnership

Question: The relationship of partners with the firm is

(a) As Agent

(b) As Manager

(c) As Servant

(d) None of the options

Answer: As Agent

Question: In which year did the partnership act passed

(a) 1932

(b) 1956

(c) 1947

(d) 1952

Answer: 1932

Question: Partnership agreement can be

(a) Oral or Written

(b) Oral

(c) Written

(d) None of the options

Answer: Oral or Written

Question: The Interest on partners capital account is to be credited to

(a) Partners Capital A/c

(b) Profit & loss A/c

(c) Interest A/c

(d) None of the options

Answer: Partners Capital A/c

Question: In the partnership firm, profit and losses are shared

(a) As per agreement

(b) Equally

(c) 25% Each

(d) None of the options

Answer: As per agreement

Question: In the absence of an agreement in partnership, the partnership act provides for

(a) Interest on Loan

(b) Interest on Capital

(c) Interest on Drawing

(d) None of the options

Answer: Interest on Loan

Question: In the absence of partnership deed remuneration or salary to the partners

(a) Not allowed

(b) Allowed

(c) 25% of profit

(d) None of the options

Answer: Not allowed

Question: Which accounts prepared for partners under Fixed Fluctuating Capital Accounts method

(a) Capital Account

(b) Current Account

(c) Salary A/c

(d) None of the options

Answer: Capital Account

Question: What should be the minimum number of persons to form a Partnership :

(a) 2

(b) 7

(c) 10

(d) 20

Answer: A

Question: Every partner is bound to attend diligently to his ______ in the conduct of the business.

(a) Rights

(b) Meetings

(c) Capital

(d) Duties

Answer: D

Question: Forming a Partnership Deed is :

(a) Mandatory

(b) Mandatory in Writing

(c) Not Mandatory

(d) None of the Above

Answer: C

Question: In the absence of Partnership Deed, the interest is allowed on partner’s capital:

(a) @ 5% p.a.

(b) @ 6% p.a.

(c) @ 12% p.a.

(d) No interest is allowed

Answer: D

Question: In the absence of a partnership deed, the allowable rate of interest on partner’s loan account will be :

(a) 6% Simple Interest

(b) 6% p.a. Simple Interest

(c) 12% Simple Interest

(d) 12% Compounded Annually

Answer: B

Question: A and B are partners in partnership firm without any agreement. A has given a loan of Rs.50,000 to the firm. At the end of year loss was incurred in the business. Following interest may be paid to A by the firm :

(a) @5% Per Annum

(b) @ 6% Per Annum

(c) @ 6% Per Month

(d) As there is a loss in the business, interest can’t be paid

Answer: B

Question: If any loan or advance is provided by partner then, balance of such Loan Account should be transferred to :

(a) B/S Assets side

(b) B/S Liability Side

(c) Partner’s Capital A/c

(d) Partner’s Current A/c

Answer: B

Question: A, B and C were Partners with capitals of Rs.50,000; Rs.40,000 and Rs.30,000 respectively carrying on business in partnership. The firm’s reported profit for the year was Rs. 80,000. As per provision of the Indian Partnership Act, 1932, find out the share of each partner in the above amount after taking into account that no interest has been provided on an advance by A of Rs.20,000 in addition to his capital contribution.

(a) Rs.26,267 for Partner B and C and Rs.27,466 for Partner A.

(b) Rs.26,667 each partner.

(c) Rs.33,333 for A Rs.26,667 for B and Rs.20,000 for C.

(d) Rs.30,000 each partner.

Answer: A

Question: A partner introduced additional capital of Rs. 30,000 and advanced a loan of Rs.40,000 to the firm at the beginning of the year. Partner will receive year’s interest :

(a) Rs.4,200

(b) Rs.2,400

(c) Nil

(d) Rs. 1,800

Answer: B

Question: In the absence of partnership deed, partners share profits or losses :

(a) In the ratio of their Capitals

(b) In the ratio decided by the court

(c) Equally

(d) In the ratio of time devoted

Answer: C

Question: In the absence of express agreement, interest @ 6% p.a. is provided:

(a) On opening balance of partner’s capital accounts

(b) On closing balance of partner’s capital accounts

(c) On loan given by partners to the firm

(d) On opening balance of partner’s current accounts

Answer: C

Question: Which of the following items are recorded in the Profit & Loss Appropriation Account of a partnership firm?

(a) Interest on Capital

(b) Salary to Partner

(c) Transfer to Reserve

(d) All of the above

Answer: D

Question: Is rent paid to a partner appropriation of profits?

(a) It is appropriation of profit

(b) It is not appropriation of profit

(c) If partner’s contribution as capital is maximum

(d) If partner is a working partner.

Answer: B

Question: According to Profit and Loss Account, the net profit for the year is Rs. 1,40,000. The total interest on partner’s capital is Rs. 8,000 and a partner is to be allowed commission of Rs.5,000. The total interest on partner’s drawings is Rs.1,200. The net profit as per Profit and Loss Appropriation Account will be :

(a) Rs.1,28,200

(b) Rs.1,44,200

(c) Rs.1,25,800

(d) Rs.1,41,800

Answer: A

Question: Ram and Shy am are partners in the ratio of 3: 2. Before profit distribution, Ram is entitled to 5% commission of the net profit (after charging such commission). Before charging commission, firm’s profit was Rs.42,000. Shyam’s share in profit will be:

(a) Rs. 16,000

(b) Rs.24,000

(c) Rs.26,000

(d) Rs. 16,400

Answer: A

Question: A, B and C are partners in a firm without any agreement. They have contributed Rs.50,000, Rs.30,000 and Rs.20,000 by way of capital in the firm. A was unable to work for six months in a year due to illness. At the end of year, firm earned a profit of Rs. 15,000. A’s share in the profit will be :

(a) Rs.7,500

(b) Rs.3,750

(c) Rs.5,000

(d) Rs.2,500

Answer: C

Question: In a partnership firm, partner A is entitled a monthly salary of Rs.7,500. At the end of the year, firm earned a profit of Rs.75,000 after charging A’s salary. If the manager is entitled a commission of 10% on the net profit after charging his commission, Manager’s commission will be :

(a) Rs.7,500

(b) Rs. 16,500

(c) Rs.8,250

(d) Rs. 15,000

Answer: D

Question: Seeta and Geeta are partners sharing profits and losses in the ratio 4:1. Meeta was manager who received the salary of Rs.4,000 p.m. in addition to a commission of 5% on net profits after charging such commission. Profit for the year is Rs. 6,78,000 before charging salary. Find the total remuneration of Meeta.

(a) Rs.78,000

(b) Rs.88,000

(c) Rs.87,000

(d) Rs.76,000

Answer: A

Question: Which accounts are opened when the capitals are fixed?

(a) Only Capital Accounts

(b) Only Current Accounts

(c) Capital Accounts as well as Current Accounts

(d) Either Capital Accounts or Current Accounts

Answer: C

Question: If the Partner’s Capital Accounts are fluctuating, in that case “transfer to reserves” will be recorded in the

(a) Profit and Loss Account

(b) Profit and Loss Appropriation Account

(c) Partner’s Capital Accounts

(d) None of the Above

Answer: B

Question: Interest on Partner’s drawings will be debited to :

(a) Profit and Loss Account

(b) Profit and Loss Appropriation Account

(c) Partner’s Current Account

(d) Interest Account

Answer: C

Question: When partners’ capital accounts are floating, which one of the following items will be written on the credit side of the partners’ capital accounts? :

(a) Interest on drawings

(b) Loan advanced by partner to the firm

(c) Partner’s share in the firm’s loss

(d) Salary to the active partners

Answer: D

Question: On 1st April 2018, Ts Capital was Rs.2,00,000. On 1st October 2018, he introduces additional capital of Rs. 1,00,000. Interest on capital @ 6% p.a. on 31 st March, 2019 will be:

(a) Rs.9,000

(b) Rs. 18,000

(c) Rs. 10,500

(d) Rs.15,000

Answer: D

Question: X and Y are partners in the ratio of 3: 2. Their capitals are Rs.2,00,000 and 1 Rs. 1,00,000 respectively. Interest on capitals is allowed @ 8% p.a. Firm earned a profit of Rs. 60,000 for the year ended 31st March 2019. Interest on Capital will be:

(a) X Rs. 16,000; Y Rs.8,000

(b) X Rs.8,000; Y Rs.4,000

(c) X Rs. 14,400; Y Rs.9,600

(d) No Interest will be allowed

Answer: A

Question: Where will you record interest on drawings:

(a) Debit Side of Profit & Loss Appropriation Account

(b) Credit Side of Profit & Loss Appropriation Account

(c) Credit Side of Profit & Loss Account

(d) Debit Side of Capital/Current Account only.

Answer: B

Question: How would you close the Partner’s Drawing Account:

(a) By transfer to Capital or Current Account Debit Side.

(b) By transfer to Capital Account Credit Side.

(c) By transfer to Current Account Credit Side.

(d) Either ‘B’ or ‘C

Answer: A

Question: If date of drawings of the partner’s is not given in the question, interest is charged for how much time (a) 1 month

(b) 3 months

(c) 6 months

(d) 12 months

Answer: C

Question: If a fixed amount is withdrawn by a partner on the last day of every month, interest on the total amount is charged for ___ months:

(a) 12

(b) 6 ½

(c) 5 ½

(d) 6

Answer: A

Question: If a fixed amount is withdrawn by a partner in the middle of every month, interest on the total amount is charged for ____ months

(a) 6

(b) 6 ½

(c) 5 ½

(d) 12

Answer: B

Question: Bipasa is a partner in a firm. She withdrew Rs.6,000 at the end of each quarter during the year ended 31st March, 2019. Interest on her drawings @ 10% p.a. will be :

(a) Rs.900

(b) Rs.600

(c) Rs. 1,500

(d) Rs. 1,200

Answer: A

Question: Charulata is a partner in a firm. She withdrew Rs. 10,000 in each quarter during the year ended 31st March, 2019. Interest on her drawings @ 9% p.a. will be:

(a) Rs. 1,350

(b) Rs.2,250

(c) Rs.900

(d) Rs. 1,800

Answer: D

Question: If equal amount is withdrawn by a partner in each month during a period of 6 months, interest on the total amount will be charged for ........... months

(a) 6

(b) 3

(c) 2.5

(d) 3.5

Answer: B

Question: X is a partner in a firm. He withdrew regularly Rs. 1,000 at the beginning of every month for the six months ending 31st March, 2019. If interest on drawings is charged @ 8% p.a. the interest charged will be :

(a) Rs.240

(b) Rs.140

(c) Rs.100

(d) Rs.120

Answer: B

Question: A partner withdraws Rs. 8,000 each on 1st April and 1st Oct. Interest on his drawings @ 6% p.a. on 31st March will be:

(a) Rs.480

(b) Rs.720

(c) Rs.240

(d) Rs.960

Answer: B

Question: A partner draws Rs.2,000 each on 1st April 2018, 1st July 2018, 1st October, 2018 and 1st January 2019. For the year ended 31st March, 2019 interest on drawings @ 8% per annum will be:

(a) Rs.540

(b) Rs.320

(c) Rs.960

(d) Rs.400

Answer: D

Question: A partner withdraws from firm Rs.7,000 at the end of each month. At the rate of 6% per annum total interest will be:

(a) Rs.5,040

(b) Rs.2,310

(c) Rs.3,570

(d) Rs. 1,370

Answer: B

Question: Sony and Romy are equal partners with fixed capitals of Rs.4,00,000 and Rs.3,00,000 respectively. After closing the accounts for the year ending 31st March, 2019 it was discovered that interest on capitals was provided @ 8% instead of 10% p.a. In the adjusting entry:

(a) Sony will be credited by Rs.8,000 and Romy will be credited by Rs.6,000.

(b) Sony will be debited by Rs.8,000 and Romy will be debited by Rs.6,000.

(c) Sony will be debited by Rs. 1,000 and Romy will be credited by Rs. 1,000.

(d) Sony will be credited by Rs. 1,000 and Romy will be debited by Rs. 1,000.

Answer: D

Question: X and Yare partners in the ratio of 3: 2. Their fixed capitals are Rs.2,00,000 and Rs. 1,00,000 respectively. After closing the accounts for the year ending 31st March, 2019, it was discovered that interest on capital was allowed @ 12% instead of 10% per annum. By how much amount X will be debited/credited in the adjustment entry: .

(a) Rs.600 (Debit)

(b) Rs.400 (Credit)

(c) Rs.400 (Debit)

(d) Rs.600 (Credit)

Answer: C

Question: A, Y and Z are equal partners with fixed capitals of Rs.5,00,000, Rs.3,00,000 and Rs. 1,00,000 respectively. After closing the accounts for the year ending 31st March, 2019 it was discovered that interest on capitals was provided @ 6% instead of 5% p.a. In the adjusting entry:

(a) Dr. X and Cr. Z by Rs.2,000

(b) Cr. Z and Dr. Z by Rs.2,000

(c) Dr. Z and Cr. Y by Rs.2,000

(d) Cr. Z and Dr. Y by Rs.2,000

Answer: A

ASSERTION –REASON BASED QUESTIONS

Question. Read the following Assertion (a) and Reason(R) . Choose one of the correct alternatives given below.
Assertion (a) : In a specified situation, interest on the Partners’ Capital is shown in the Profit and Loss Account.
Reason(R) : Interest on capital is transferred to the debit of the Profit and Loss Account if it is specified to be a charge.
Alternatives:
(a) Both Assertion (a) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (a) .
(b) Both Assertion (a) and Reason (R) are true and Reason (R) is not the correct explanation Assertion (a) .
(c) Assertion (a) is true but the Reason (R) is false
(d) Assertion (a) is false but the Reason (R) is true
Answer : B

Question. Read the following Assertion (a) and Reason(R) . Choose one of the correct alternatives given below.
Assertion (a) : Adith, a partner in the firm gave a loan of ₹. 50,000 to the firm without an agreement to rate of interest. Interest on Loan by Adith is to be allowed at @6% p.(a)
Reason (R) : In the absence of the Partnership Deed, Provisions of the Partnership act 1932, apply. Thus interest on a loan to a Partner should be charged @6% p.a
Alternatives:
(a) Both Assertion (a) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (a) .
(b) Both Assertion (a) and Reason (R) are true and Reason (R) is not the correct explanation for Assertion (a) .
(c) Assertion (a) is true but the Reason (R) is false
(d) Assertion (a) is false but the Reason (R) is true
Answer : C

Question. Read the following Assertion (a) and Reason(R) . Choose one of the correct alternatives given below.
Assertion (a) : Ankur, Bhaskar and Rakesh are partners with capitals of ₹. 3, 00,000, 4, 00,000 and 5, 00,000 respectively. The partnership deed provided to allow remuneration to each partner of ₹, 50,000 p.(a) and interest on capital @5% p.(a) Profit for the year ended 31st March 2021 of ₹. 2, 10,000 was distributed without allowing remuneration and interest on capital. Rectifying entry for the above will be Dr. Ankur and Cr Rakesh by ₹. 5000.
Reason (R) : Remuneration and Interest to Ankur, Bhaskar and Rakesh are ₹. 65000, 70,000 and 75000 respectively. Each partner was credited by ₹. 70000. As a result Ankur was ex-cess credited by 5000 and Rakesh was short credited by 5000. Thus Ankur will be debited and Rakesh will be credited by ₹. 5000.
Alternatives:
(a) Both Assertion (a) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (a) .
(b) Both Assertion (a) and Reason (R) are true and Reason (R) is not the correct explanation Assertion (a) .
(c) Assertion (a) is true but the Reason (R) is false
(d) Assertion (a) is false but the Reason (R) is true
Answer : A

Question. Read the following Assertion (a) and Reason(R) . Choose one of the correct alternatives given below.
Assertion (a) : If drawings by a partner are on the different dates and/or amounts of draw-ings is not the same interest on drawings is calculated using the product metho(d)
Reason (R) : Interest on drawings is charged for the period it is drawn by a partner, in case the amount of drawings and/or period for which is drawn is not uniform, average method cannot be applied to determine interest on capital.
Alternatives:
(a) Both Assertion (a) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (a) .
(b) Both Assertion (a) and Reason (R) are true and Reason (R) is not the correct explanation Assertion (a) .
(c) Assertion (a) is true but the Reason (R) is false
(d) Assertion (a) is false but the Reason (R) is true
Answer : B

Question. Read the following Assertion (a) and Reason(R) . Choose one of the correct alternatives given below.
Assertion (a) Sandhya, Sudheer, and Namitha are partners sharing profits in the ratio of 3:2:1, Sandhya is guaranteed a minimum profit share of ₹. 75000 p.a after appropriations. Profit for the year after all adjustments were ₹. 1, 80,000. The profit share of Sandhya and Namitha will be Rs.90000, 30000 respectively.
Reason (R) : The profit share of Sudheer is ₹. 75000 since her actual share is ₹. 60000(1, 80000*2/6) . Balance profit ₹, 105000 will be distributed between Sandhya and Namitha in the ratio of 3:1. Thus Sandhya will get ₹. 78750, and Namitha ₹. 26,250.
Alternatives:
(a) Both Assertion (a) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (a) .
(b) Both Assertion (a) and Reason (R) are true and Reason (R) is not the correct explanation Assertion (a) .
(c) Assertion (a) is true but the Reason (R) is false
(d) Assertion (a) is false but the Reason (R) is true
Answer : D

Question. Read the hypothetical text and answer the following questions.
A B and C are partners in a firm. Their capitals are ₹ 30,000, ₹ 20,000 and ₹ 10,000 re-spectively. As per the partnership deed,
i) C is to be allowed remuneration of ₹ 3,000 p.(a)
ii) Interest on capital @ 5% p.(a)
iii) Profits should be distributed in the ratio of 2:2:1.
Ignoring the above terms, a net profit of ₹ 18,000 was distributed among the partners equally.

Question. How much interest on capital is to be credited to partner A?
(a) ₹ 1,500
(b) ₹ 1,000
(c) ₹ 900
(d) ₹ 800
Answer : A

Question. How much profit is to be credited to Partner B after all adjustments?
(a) ₹ 2,400
(b) ₹ 4,800
(c) ₹ 1,000
(d) ₹ 1,200
Answer : B

Question. What is the total profit to be credited to A, B, and C after all adjustments?
(a) ₹ 12,000
(b) ₹ 8,000
(c) ₹ 9,000
(d) ₹ 10,000
Answer : A

Question. What is the amount of the past adjustment entry?
(a) ₹ 350
(b) ₹ 450
(c) ₹ 250
(d) ₹ 55
Answer : B

Question. Read the hypothetical text and answer the following questions.
A, B and C are partners in a firm sharing profits and losses in the ratio of 2:2:1. Their capitals (Fixe(d) are ₹ 1, 00,000, ₹ 80,000, and ₹ 70,000 respectively. For the year 2018-19, interest on capital was to be credited to them @ 9% p.(a) instead of 12%

Question. What was the net amount that should be credited to partner B?
(a) ₹ 1,500
(b) ₹ 2,400
(c) ₹ 1,800
(d) ₹1,200
Answer : B

Question. What is the total amount of salary to be credited to the Partners’ capital account?
(a) ₹ 1,20,000
(b) ₹ 2,40,000
(c) ₹ 1,80,000
(d) No salary will be given
Answer : D

Question. What was the net amount that should be credited to partner C?
(a) ₹ 1,800
(b) ₹ 2,000
(d) ₹ 2,100
(d) ₹ 1,700
Answer : D

Question. What was the amount that was debited to partner B?
(a) ₹ 1,500
(b) ₹ 2,000
(c) ₹ 3,000
(d) ₹ 4,000
Answer : A

Question. What was the number of past adjustment entries?
(a) ₹ 400
(b) ₹ 300
(c) ₹ 600
(d) ₹ 500
Answer : B