CBSE Class 12 Accountancy Accounting For Partnership Firms MCQs Set B

Question: E, F and G are partners sharing profits in the ratio of 3:3:2. As per the partnership agreement, G is to get a minimum amount of ₹80,000 as his share of profits every year and any deficiency on this account is to be personally borne by E. The net profit for the year ended 31st March, 2020 amounted to ₹3,12 ,000. Calculate the amount of deficiency to be borne by E?

(a) ₹1,000 

(b) ₹4,000 

(c) ₹8,000 

(d) ₹2,000

Question: Pick the odd one out: 

(a) Rent to partner 

(b) Manager’s Commission

(c) Interest on Partner’s Loan 

(d) Interest on Partner’s capital

Question: Vidit and Seema were partners in a firm sharing profits and losses in the ratio of 3 : 2. Their capitals were ₹1,20,000 and ₹2,40,000, respectively. They were entitled to interest on capital @ 10% p.a. The firm earned a profit of `18,000 during the year. The interest on Vidit’s capital will be:

(a) ₹12,000 

(b) ₹10,000 

(c) ₹7,200 

(d) ₹6,000

Question: Asha and Deepti were partners in a firm sharing profits and losses in the ratio of 3 : 1. Their fixed capitals were ₹3,00,000 and ₹2,00,000 respectively. They were entitled to interest on capital @10% p.a. The firm earned a profit of ₹20,000 during the year. The amount of interest on capital credited to Deepti will be:

(a) ₹12,000 

(b) ₹8,000 

(c) ₹20,000 

(d) ₹5,000

Question: Manu and Kanu were partners in a firm, sharing profits and losses in the ratio of 2 : 3. Their fixed capitals were ₹10,00,000 and ₹5,00,000, respectively. They were entitled to an interest on capital @10% p.a. The firm earned a profit of ₹60,000 during the year. The amount of interest on capital credited to Kanu will be:

(a) ₹20,000 

(b) ₹40,000 

(c) ₹36, 000 

(d) ₹24,000

Question: Mohit and Rohit were partners in a firm with capital of ₹80,000 and ₹40,000 respectively. The firm earned a profit of ₹30,000 during the year Mohit’s share in the profit will be:

(a) ₹2,000 

(b) ₹10,000 

(c) ₹15,000 

((d) ₹18,000

Question: X, Y and Z are partners in a firm sharing profits and losses in the ratio of 6:4:1.X guaranteed a profit of ₹15,000 to Z. The net profit for the year ending 31 March, 2020 was `99,000. X’s share in the profit of the firm will be:

(a) ₹30,000 

(b) ₹15,000 

(c) ₹48,000 

(d) ₹45,000

Question: By virtue of Section 464 of the Companies Act, 2013 the Central Government is empowered to prescribe maximum number of partners in a firm but the number of partners cannot be more than __________ 

(a) 50 

(b) 100 

(c) 20

(d) 10

Question: A partnership deed provides for the payment of interest on capital but there was a loss instead of profits during the year 2019-20 .At what rate will the interest on capital be allowed?

(a) 9% p.a. 

(b) 6% p.a.

(c) The rate specified in the partnership deed 

(d) No interest on capital will be allowed

Question: ________ capital accounts always show a credit balance.
Answer:  Fixed

Question: Give the average period, in months, for charging interest on drawings of a fixed amount, withdrawn at the end of each quarter.
Answer:  4.5 months

Question: Give the average period, in months, for charging interest on drawings of a fixed amount withdrawn at the beginning of each quarter.
Answer:  7.5 months

Question: Give the average period, in months, for charging interest on drawings of a fixed amount withdrawn at the beginning of each half-year.
Answer: 9 months

Question: In case the partners’ capitals are Fixed, in which account will withdrawal of capital be recorded?
Answer:  Partners’ capital accounts

Question: Why does the Fixed Capital Account of partners show credit balance even when the firm suffers losses year after year?
Answer:  Because the losses are adjusted through Partners’ current accounts.

Question: Give the meaning of ‘Liability of Partnership’ as a feature of partnership.
Answer: The liability of partnership is unlimited – jointly and severally.

Question: The business of a partnership firm may be carried on by all the partners or any one of them acting for all. One of the important implications of this statement is that every partner is entitled to participate in the conduct of the affairs of its business. State the second important implication of this statement.
Answer: Second implication of this statement is that there exists a relation of mutual agency among the partners.

Question: Mohit, Shobhit and Rohit are partners sharing profits and losses in the ratio 2:1:1. Rohit is guaranteed a profit of ₹14,000.
The firm incurred a profit of ₹20,000 during the year. Calculate the amount of deficiency borne by Mohit and Shobhit.
Answer: Mohit ₹6,000 and Shobhit ₹3,000.

Question: Akshat, Bilal and Charu are partners dealing in the sale of sports equipment. Akshat, without the knowledge of Bilal and Charu, is also running the business of supplying sports equipment to a few sports clubs in which his son is a member. He is earning good profits from this business but did not inform Bilal and Charu about this. Was Akshat correct in doing so? 
Answer: No, Akshat was not correct in doing so. Reason: If a partner carries on any business of the same nature as and competing with that of the firm, he shall account for and pay to the firm, all profit made by him in that business.

Question: The partnership deed should be properly drafted and prepared as per the provisions of the __________ and preferably registered with the __________. 
Answer: Stamp Act, Registrar of firms. 

Question: Can a partner be exempted from sharing the losses in a firm? If yes, under what circumstances? 
Answer: Yes, if partnership deed so provides. For example, in case of guarantee of minimum profit to a partner.

Question: Ritesh and Hitesh are childhood friends. Ritesh is a consultant whereas Hitesh is an architect. They contributed equal amounts and purchased a building for ₹2 crores. After a year, they sold it for ₹3 crores and shared the profits equally. Are they doing the business in partnership ? Give reason in support of your answer. 
Answer: No, they are not doing business in partnership because they are not involved in doing sale and purchase of land/plot on a regular basis/Mere co-ownership of a property does not amount to partnership.

Question: A partnership firm has 50 members. All the partners have agreed to admit Ram and Mohan as new partners. Can Ram and Mohan be admitted? Give reason in support of your answer. 
Answer: No, Ram and Mohan can’t be admitted as partners.Reason: As per the Companies Miscellaneous Rules, 2014 the Maximum number of partners in a partnership firm can be 50.

Question: A, B and C decided that interest on capitals will be provided to each partner @ 5% p.a. But after one year C wants that no interest on capital is to be provided to any partner. State how `C’ can do this? 
Answer: Yes, C can do so by altering the provisions of partnership deed, i.e., redrafting the deed, provided all the partners unanimously agree for it.

Question: Ram and Mohan are partners in a firm without any partnership deed. Their capitals are: Ram ₹8,00,000 and Mohan ₹6,00,000. Ram is an active partner and looks after the business. Ram wants that profit should be shared in proportion of capitals. State with reason whether his claim is valid or not. 
Answer: His claim is not valid because in the absence of a partnership deed, profits and losses should be shared equally.

Question: Kanha, Neeraj and Asha were partners in a firm. They admitted Raghav their Landlord as a partner in the firm.
Raghav brings sufficient amount of capital and goodwill premium for his share in the profits. Raghav had given a loan of ₹1,00,000 @ 10% p.a. interest to the partnership firm before he became the partner. Now the accountant of the firm is emphasizing that the interest on loan should be paid @ 6% p.a. Is he right in doing so ? Give reason in support of your answer.
Answer: No, he is not correct. Reason: He will get interest @10% p.a. because of the agreement between Raghav and the firm.

Question: You and your friends Amit and Vinod are partners in a firm sharing profits and losses equally. State, who is correct in the following case? Give reasons also.
Amit has provided a capital of ₹50,000 whereas Vinod provided ₹10,000 only as capital. Vinod, however, has provided ₹20,000 as loan to the firm. There is no partnership agreement. Vinod claims interest of ₹1,200, whereas you and Amit do not want to give any interest.
Answer: Vinod is correct. Since there is no partnership agreement, interest on Vinod’s loan @ 6% p.a. = 20,000 × 6/100 = ₹1,200.

Question: Interest on money advanced by a partner to the firm beyond the amount of his capital for the purpose of business is paid @ 6% p.a. True/False? Give reason.
Answer: False: Interest on partner’s loan is paid at the rate specified in the partnership deed. It is paid @ 6% p.a. if there is no express agreement between the parters regarding the rate of interest on partner’s loan.

Question: Partner’s capital account will not show a debit balance in spite of losses year after year when _______ because ______. 
Answer: Partners’ capitals are fixed; because partner’s capital remains fixed unless there is addition or withdrawal of capital. Under this method, the ‘share of loss’ is debited to the partner’s current account.

Question: Partner’s capital account always shows a credit balance. True/False? Give reasons. 
Answer: False: Under fluctuating capital method, partner’s capital account may sometimes show a debit balance. It is only under fixed capital method that the partner’s capital account will always show a credit balance.