CBSE Class 12 Accountancy Accounting For Partnership Firms MCQs Set I

Question. Features of a partnership firm are :
(a) Two or more persons are carrying common business under an agreement.
(b) They are sharing profits and losses in the fixed ratio.
(c) Business is carried by all or any of them acting tor all as an agent.
(d) All of the above.
Answer: D

Question. Following are essential elements of a partnership firm except:
(a) At least two persons
(b) There is an agreement between all partners
(c) Equal share of profits and losses
(d) Partnership agreement is for some business.
Answer: C

Question. In case of partnership the act of any partner is :
(a) Binding on all partners
(b) Binding on that partner only
(c) Binding on all partners except that particular partner
(d) None of the above
Answer: A

Question. Which of the following statement is true?
(a) a minor cannot be admitted as a partner
(b) a minor can be admitted as a partner, only into the benefits of the partnership
(c) a minor can be admitted as a partner but his rights and liabilities are same of adult partner
(d) none of the above
Answer: B

Question. Oustensible partners are those who
(a) do not contribute any capital but get some share of profit for lending their name to the business
(b) contribute very less capital but get equal profit
(c) do not contribute any capital and without having any interest in the business, lend their name to the business
(d) contribute maximum capital of the business
Answer: C

Question. Sleeping partners are those who
(a) take active part in the conduct of the business but provide no capital. However, salary is paid to them.
(b) do not take any part in the conduct of the business but provide capital and share profits and losses in the agreed ratio
(c) take active part in the conduct of the business but provide no capital. However, share profits and losses in the agreed ratio.
(d) do not take any part in the conduct of the business and contribute no capital. However, share profits and losses in the agreed ratio.
Answer: B

Question. The relation of partner with the firm is that of:
(a) An Owner
(b) An Agent
(c) An Owner and an Agent
(d) Manager
Answer: C

Question. What should be the minimum number of persons to form a Partnership :
(a) 2
(b) 7
(c) 10
(d) 20
Answer: A

Question. Number of partners in a partnership firm may be :
(a) Maximum Two
(b) Maximum Ten
(c) Maximum One Hundred
(d) Maximum Fifty
Answer: D

Question. Liability of partner is :
(a) Limited
(b) Unlimited
(c) Determined by Court
(d) Determined by Partnership Act
Answer: B

Question. Which one of the following is NOT an essential feature of a partnership?
(a) There must be an agreement
(b) There must be a business
(c) The business must be carried on for profits
(d) The business must be carried on by all the partners
Answer: D

Question. X, Y and Z are partners sharing profits and losses equally. Their capital balances on March, 31, 2012 are \( Rs80,000 \), \( Rs60,000 \) and \( Rs40,000 \) respectively. Their personal assets are worth as follows : X — \( Rs20,000 \), Y — \( Rs15,000 \) and Z— \( Rs10,000 \). The extent of their liability in the firm would be : (C.S. Foundation; June 2013)
(a) X — \( Rs80,000 \) : Y — \( Rs60,000 \) : and Z — \( Rs40,000 \)
(b) X — \( Rs20,000 \) : Y — \( Rs15,000 \) : and Z — \( Rs10,000 \)
(c) X — \( Rs1,00,000 \) : Y — \( Rs75,000 \) : and Z — \( Rs50,000 \)
(d) Equal
Answer: B

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

(ii) Partnership Deed

Question. Forming a Partnership Deed is :
(a) Mandatory
(b) Mandatory in Writing
(c) Not Mandatory
(d) None of the Above
Answer: C

Question. Partnership Deed is also called
(a) Prospectus
(b) Articles of Association
(c) Principles of Partnership
(d) Articles of Partnership
Answer: D

Question. Which of the following is not incorporated in the Partnership Act?
(a) profit and loss are to be shared equally
(b) no interest is to be charged on capital
(c) all loans are to be charged interest @6% p.a.
(d) all drawings are to be charged interest
Answer: D

Question. When is the Partnership Act enforced?
(a) when there is no partnership deed
(b) where there is a partnership deed but there are differences of opinion between the partners
(c) when capital contribution by the partners varies
(d) when the partner’s salary and interest on capital are not incorporated in the partnership deed
Answer: A

Question. In the absence of Partnership Deed, the interest is allowed on partner’s capital: (CPT; June 2011)
(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 \( Rs50,000 \) 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. A and B are partners in a pertnership firm without any agreement. A has withdrawn ?50,000 out of his Capital as drawings. Interest on drawings may be charged from A by the firm :
(a) @ 5% Per Annum
(b) @ 6% Per Annum
(c) @ 6% Per Month
(d) No interest can be charged
Answer: D

Question. A and B are partners in a partnership firm without any agreement. A devotes more time for the firm as compare to B. A will get the following commission in addition to profit in the firm’s profit:
(a) 6% of profit
(b) 4% of profit
(c) 5% of profit
(d) None of the above
Answer: D

Question. In the absence of partnership deed, the following rule will apply :
(a) No interest on capital
(b) Profit sharing in capital ratio
(c) Profit based salary to working partner
(d) 9% p.a. interest on drawings
Answer: A

Question. In the absence of agreement, partners are not entitled to :
(a) Salary
(b) Commission
(c) Equal share in profit
(d) Both (a) and (b)
Answer: D

Question. Interest on capital will be paid to the partners if provided for in the partnership deed but only out of: (C.S. Foundation; December, 2012)
(a) Profits
(b) Reserves
(c) Accumulated Profits
(d) Goodwill
Answer: A

Question. Which one of the following items cannot be recorded in the profit and loss appropriation account?
(a) Interest on capital
(b) Interest on drawings
(c) Rent paid to partners
(d) Partner’s salary
Answer: C

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 \( Rs50,000 \); \( Rs40,000 \) and ?30,000 respectively carrying on business in partnership. The firm’s reported profit for the year was \( Rs80,000 \). 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 \( Rs20,000 \) in addition to his capital contribution.
(a) \( Rs26,267 \) for Partner B and C and \( Rs27,466 \) for Partner A.
(b) \( Rs26,667 \) each partner.
(c) \( Rs33,333 \) for A \( Rs26,667 \) for B and \( Rs20,000 \) for C.
(d) \( Rs30,000 \) each partner.
Answer: A

Question. X, Y, and Z are partners in a firm. At the time of division of profit for the year, there was dispute between the partners. .Profit before interest on partner’s capital was \( Rs6,000 \) and Y determined interest @24% p.a. on his loan of \( Rs80,000 \). There was no agreement on this point. Calculate the amount payable to X, Y, and Z respectively.
(a) \( Rs2,000 \) to each partner.
(b) Loss of \( Rs4,400 \) for X and Z; Twill take \( Rs14,800 \).
(c) \( Rs400 \) for A, \( Rs5,200 \) for Y and \( Rs400 \) for Z.
(d) None of the above.
Answer: C

Question. X, Y, and Z are partners in a firm. At the time of division of profit for the year, there was dispute between the partners. Profit before interest on partner’s capital was \( Rs6,00,000 \) and Z demanded minimum profit of \( Rs5,00,000 \) as his financial position was not good. However, there was no written agreement on this point.
(a) Other partners will pay Z the minimum profit and will share the loss equally.
(b) Other partners will pay Z the minimum profit and will share the loss in capital ratio.
(c) Xand T will take \( Rs50,000 \) each and Z will take \( Rs5,00,000 \).
(d) \( Rs2,00,000 \) to each of the partners.
Answer: D

Question. On 1st June 2018 a partner introduced in the firm additional capital \( Rs50,000 \). In the absence of partnership deed, on 31st March 2019 he will receive interest :
(a) \( Rs3,000 \)
(b) Zero
(c) \( Rs2,500 \)
(d) \( Rs1,800 \)
Answer: B

Question. On 1st January 2019, a partner advanced a loan of \( Rs1,00,000 \) to the firm. In the absence of agreement, interest on loan on 31st March 2019 will be :
(a) Nil
(b) \( Rs1,500 \)
(c) \( Rs3,000 \)
(d) \( Rs6,000 \)
Answer: B

Question. A partner introduced additional capital of \( Rs30,000 \) and advanced a loan of \( Rs40,000 \) to the firm at the beginning of the year. Partner will receive year’s interest:
(a) \( Rs4,200 \)
(b) \( Rs2,400 \)
(c) Nil
(d) \( Rs1,800 \)
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 Partnership Deed :
(a) Interest will not be charged on partner’s drawings
(b) Interest will be charged @. 5% p.a. on partner’s drawings
(c) Interest will be charged @ 6% p.a. on partner’s drawings
(d) Interest will be charged @ 12% p.a. on partner’s drawings
Answer: A

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

(iii) Calculation of Profit and Division of Profit among partners

Question. According to Profit and Loss Account, the net profit for the year is \( Rs1,50,000 \). The total interest on partner’s capital is \( Rs18,000 \) and interest on partner’s drawings is \( Rs2,00,000 \). The net profit as per Profit and Loss Appropriation Account will be :
(a) \( Rs1,66,000 \)
(b) \( Rs1,70,000 \)
(c) \( Rs1,30,000 \)
(d) \( Rs1,34,000 \)
Answer: D

Question. According to Profit and Loss Account, the net profit for the year is \( Rs4,20,000 \). Salary of a partner is \( Rs5,000 \) per month and the commission of another partner is \( Rs10,000 \). The interest on drawings of partners is \( Rs4,000 \). The net profitas per Profit and Loss Appropriation Account will be :
(a) \( Rs3,54,000 \)
(b) \( Rs3,46,000 \)
(c) \( Rs4,09,000 \)
(d) \( Rs4,01,000 \)
Answer: A

Question. A and B are partners. According to Profit and Loss Account, the net profit for the year is \( Rs2,00,000 \). The total interest on partner’s drawings is \( Rs1,000 \). As salary is \( Rs40,000 \) per year and B’s salary is \( Rs3,000 \) per month. The net profit as per Profit and Loss Appropriation Account will be :
(a) \( Rs1,23,000 \)
(b) \( Rs1,25,000 \)
(c) \( Rs1,56,000 \)
(d) \( Rs1,58,000 \)
Answer: B

Question. According to Profit and Loss Account, the net profit for the year is \( Rs1,40,000 \). The total interest on partner’s capital is? 8,000 and a partner is to be allowed commission of \( Rs5,000 \). The total interest on partner’s drawings is \( Rs1,200 \). The net profit as per Profit and Loss Appropriation Account will be :
(a) \( Rs1,28,200 \)
(b) \( Rs1,44,200 \)
(c) \( Rs1,25,800 \)
(d) \( Rs1,41,800 \)
Answer: A

Question. Sangeeta and Ankita are partners in a firm. Sangeeta’s capital is \( Rs70,000 \) and Ankita’s Capital is \( Rs50.000 \). Firm’s profit is \( Rs60,000 \). Ankita share in profit will be :
(a) \( Rs25,000 \)
(b) \( Rs3 0,000 \)
(c) \( Rs35,000 \)
(d) \( Rs20,00 \)
Answer: B

Question. A, B and C are partners. A’s capital is \( Rs3,00,000 \) and B’s capital is \( Rs1,00,000 \). C has not invested any amount as capital but he alone manages the whole business. C wants ?30,000 p.a. as salary. Firm earned a profit of \( Rs1,50,000 \). How much will be each partner’s share of profit:
(a) A \( Rs60,000 \); B \( Rs60,000 \); C \( RsNil \)
(b) A \( Rs90,000 \); B \( Rs30,000 \); C \( RsNil \)
(c) A \( Rs40,000 \); B \( Rs40,000 \) and C \( Rs40,000 \)
(d) A \( Rs50,000 \); B \( Rs50,000 \) and C \( Rs50,000 \).
Answer: D

Question. Net profit of a firm is \( Rs49,500 \). Manager is entitled to a commission of 10% on profits before charging his commission. Manager’s Commission will be :
(a) \( Rs4,950 \)
(b) \( Rs4,500 \)
(c) \( Rs5,500 \)
(d) \( Rs495 \)
Answer: A

Question. Net profit of a firm is \( Rs79,800 \). Manager is entitled to a commission of 5% on profits after charging his commission. Manager’s Commission will be :
(a) \( Rs4,200 \)
(b) \( Rs380 \)
(c) \( Rs3,990 \)
(d) \( Rs3,800 \)
Answer: D

Question. Ram and Shyam 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 \( Rs42,000 \). Shyam’s share in profit will be :
(a) \( Rs16,000 \)
(b) \( Rs24,000 \)
(c) \( Rs26,000 \)
(d) \( Rs16,400 \)
Answer: A

Question. A, B and C are partners in the ratio of 5 : 3 : 2. Before B’s salary of \( Rs17,000 \) firm’s profit is \( Rs97,000 \). How much in total B will receive from the firm?
(a) \( Rs17,000 \)
(b) \( Rs40,000 \)
(c) \( Rs24,000 \)
(d) \( Rs41,000 \)
Answer: D

Hint: Total amount received by die partner will be Salary + Share of Profit

Question. A, B and C are partners in a firm without any agreement. They have contributed 750,000, 730,000 and 720,000 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 pro lit of 7 15,000. A’s share in the profit will be :
(a) 77.500
(b) 73,750
(c) 75,000
(d) 72,500
Answer: C

Question. In a partnership lirm, partner A is entitled a monthly salary of \( Rs7,500 \). At the end of the year, firm earned a profit of \( Rs75,000 \) after charging T’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) \( Rs7,500 \)
(b) \( Rs16,500 \)
(c) \( Rs8,250 \)
(d) \( Rs15,000 \)
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 \( Rs4,000 \) p.m. in addition to a commission of 5% on net profits after charging such commission. Profit for the year is \( Rs6,78,000 \) before charging salary. Find the total remuneration of Meeta.
(a) \( Rs78,000 \)
(b) \( Rs88,000 \)
(c) \( Rs87,000 \)
(d) \( Rs76,000 \)
Answer: A

Question. Which of the following statement is true?
(a) Fixed capital account will always have a credit balance
(b) Current account can have a positive or a negative balance
(c) Fluctuating capital account can have a positive or a negative balance
(d) All of the above
Answer: D

(iv) Capital Accounts of Partners

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. Which accounts are opened when the capitals are fluctuating?
(a) Only Capital Accounts
(b) Only Current Accounts
(c) Capital Accounts as well as Current Accounts
(d) Either Capital Accounts or Current Accounts
Answer: A

Question. Balance of partner’s current accounts are :
(a) Debit balance
(b) Credit balances
(c) Debit or Credit balances
(d) Neither Debit nor credit balances
Answer: C

Question. Which item is recorded on the credit side of partner’s current accounts :
(a) Interest on Fanner’s Capitals
(b) Salaries of Partners
(c) Share of profits of Partners
(d) All of the Above
Answer: D

Question. If the Partners’ Capital Accounts are fixed ‘salary payable to partner’ will be recorded :
(a) On the debit side of Partners’ Current Account
(b) On the debit side of Partners’ Capital Account
(c) On the credit side of Partners’ Current Account
(d) None of the above
Answer: C

Question. It the Partner’s Capital Accounts are fixed, interest on capital will be recorded:
(a) On the credit side of Current Account
(b) On the credit side of Capital Account
(c) On the debit side of Current Account
(d) On the debit side of Capital Account
Answer: A

Question. If the Partner’s Capital Accounts are fluctuating, in that case following item/items will be recorded in the credit side of capital accounts :
(a) Interest on capital
(b) Salary of partners
(c) Commission of partners
(d) All of the above
Answer: D

Question. Interest on partner’s capitals will be debited to :
(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 capitals will be credited to :
(a) Profit and Loss Account
(b) Profit and Loss Appropriation Account
(c) Interest Account
(d) Partner’s Capital Accounts
Answer: D

Question. For the firm interest on drawings is
(a) Capital Payment
(b) Expenses
(c) Capital Receipt
(d) Income
Answer: D

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 activ e partners
Answer: D

Question. When partners’ capital accounts are fixed, which one of the following items will be written in the partner’s capital account? :
(a) Partner’s Drawings
(b) Additional capital introduced by the partner in the firm
(c) Loan taken by partner from the firm
(d) Loan Advanced by partner to the firm
Answer: B

Question. Interest on partner’s drawings will be credited to
(a) Profit and Loss Account
(b) Profit and Loss Appropriation Account
(c) Partner’s Capital Accounts
(d) None of the Above
Answer: B