CUET Accountancy MCQs Unit II Accounting for Partnership

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. Partners’ Current Account has ______.
(A) Credit Balance.
(B) Debit Balance or Credit Balance.
(C) Neither Debit Balance nor Credit Balance.
(D) Debit Balance.

Answer : B

Question. What is the responsibility of partners in a partnership organisation?
(A) Unlimited
(B) No Liability
(C) Limited to the capital of business
(D) Limited

Answer : A

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. Ostensible partners are those who _____.
(A) Contribute very little capital but get equal profit.
(B) Do not contribute any capital and without having any interest in the business, lend their name to the business.
(C) Contribute maximum capital of the business.
(D) Do not contribute any capital but get some share of profit for lending their name to the business.

Answer : B

Question. In the absence of a partnership agreement, how will the earnings be split among the partners?
(A) Equal
(B) Depending on the capital invested.
(C) Unequal
(D) Depending on the work experience.

Answer : A

Question. Liability of partner is :
(A) Limited
(B) Unlimited
(C) Determined by Court
(D) Determined by Partnership Act

Answer : B

Question. When a Goodwill Account is raised, the credit is given to the old partner’s capital account in _____.
(A) Old profit sharing ratio.
(B) Gaining ratio.
(C) New profit sharing ratio.
(D) None of the options are correct.

Answer : C

Question. To which loan account should the balance be transferred if a partner lends or advances money?
(A) Partner’s Liability Account
(B) Partners’ Capital Account
(C) Balance Sheet Assets Side
(D) Balance Sheet Liability Side

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. The decision in Garner versus Murray was given in _____.
(A) 1905
(B) 1933
(C) 1804
(D) 1904

Answer : D

Question. What form of relationship does not have a long-term partnership agreement?
(A) Limited Liability Partnership
(B) Particular Partnership
(C) Partnership At will
(D) General Partnership

Answer : C

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. In the absence of a partnership deed, partners are entitled to receive ______.
(A) Interest on loan.
(B) Salary.
(C) Commission.
(D) Interest on capital.

Answer : D

Question. Which of the following is not included in the Partnership Act of 1932?
(A) Interest has to be charged on all drawings.
(B) All of the loans given out will have a fixed interest rate.
(C) No interest can be earned on money that is invested.
(D) In business, profit and loss are to be split evenly.

Answer : A

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. When is the Partnership Act enforced?
(A) Where there is a partnership deed, but there are differences of opinion between the partners.
(B) When capital contribution by the partners varies.
(C) When the partner’s salary and interest on capital are not incorporated in the partnership deed.
(D) When there is no partnership deed.

Answer : D

Question. In a partnership firm, which of the following is not a feature?
(A) Mutual Consent
(B) Equal Profits
(C) Easy Formation
(D) Limited Liability

Answer : D

Question. A, B and C were Partners with capitals of ₹50,000; ₹40,000 and ? 30,000 respectively carrying on business in partnership. The firm’s reported profit for the year was ₹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 ₹20,000 in addition to his capital contribution.
(A) ₹26,267 for Partner B and C and ₹27,466 for Partner A.
(B) ₹26,667 each partner.
(C) ₹33,333 for A ₹26,667 for B and ₹20,000 for C.
(D) ₹30,000 each partner.

Answer : A

Question. Current Accounts are opened if capital is _____.
(A) Fluctuating.
(B) Not contributed.
(C) Fixed or fluctuating.
(D) Fixed.

Answer : D

Question. What is Partnership Firm Agreement?
(A) Partnership Act
(B) Partnership Deed
(C) Agreement
(D) Partnership Contract

Answer : B

Question. On 1st January 2019, a partner advanced a loan of ₹1,00,000 to the firm. In the absence of agreement, interest on loan on 31st March 2019 will be :
(A) Nil
(B) ₹1,500
(C) ₹3,000
(D) ₹6,000

Answer : B

Question. What do you mean by super profit?
(A) Total profit by the number of years.
(B) Average profit plus normal profit.
(C) Average profit minus normal profit.
(D) None of the options are correct.

Answer : C

Question. Collaborators in a company will still get Interested in Money if supplied in the partnership agreement, but just out of which account?
(A) Assets
(B) Reserves
(C) Profits
(D) Goodwill

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. In the absence of any provision in interest on capital will be calculated for _____.
(A) One year.
(B) One month.
(C) No interest.
(D) Six Months.

Answer : C

Question. When does the direct debit to partner’s capital a/c entry made in accounts?
(A) Interest on Drawings is charged.
(B) Investment is made
(C) Capital is withdrawn
(D) Drawings are made

Answer : A

Question. Sangeeta and Ankita are partners in a firm. Sangeeta’s capital is ₹70,000 and Ankita’s Capital is ₹50.000. Firm’s profit is ₹60,000. Ankita share in profit will be :
(A) ₹25,000
(B) ₹3 0,000
(C) ₹35,000
(D) ₹20,00

Answer : B

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 ₹42,000. Shyam’s share in profit will be :
(A) ₹16,000
(B) ₹24,000
(C) ₹26,000
(D) ₹16,400

Answer : A

Question. Which one of the following is NOT an essential feature of a partnership?
(A) There must be a business.
(B) The business must be carried on for profits.
(C) The business must be carried on by all the partners.
(D) There must be an agreement.

Answer : C

Question. What is a partner in profits only?
(A) A person who gives some money to a business but doesn’t play a big role in running it.
(B) A person who has a stake in the partnership and is involved in the day-to-day running.
(C) An 18-year-old partner
(D) A partner who gets into an agreement to share only the profits of the partnership firm and not the losses.

Answer : D

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

Question. When does the Partnership Act enters into force in a firm?
(A) Whenever there is a disagreement between the people who work for the company.
(B) if the money you put in isn’t equal
(C) When interest is charged on a drawing, it is called a drawing.
(D) In the absence of Partnership Deed

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. Inside a partnership, each member is linked to satisfying his/her __ in the company or organisation?
(A) Partnership Deed
(B) Meetings
(C) Rights
(D) Duties

Answer : D

Question. For the firm interest on drawings is
(A) Capital Payment
(B) Expenses
(C) Capital Receipt
(D) Income

Answer : D

Question. Contract in which form is required in a partnership firm?
(A) Oral
(B) Written
(C) A or B
(D) None

Answer : C

Question. A and B contribute ₹1,00,000 and ?₹60,000 respectively in a partnership firm by way of capital on which they agree to allow interest @ 8% p.a. Their profit or loss sharing ratio is 3 : 2. The profit at the end of the year was ₹2,800 before allowing interest on capital. If there is a clear agreement that interest on capital will be paid even in case of loss, then S’s share will be:
(A) Profit ₹6,000
(B) Profit ₹4,000
(C) Loss ₹6,000
(D) Loss ₹4,000

Answer : D

Question. What percentage of the partners’ capital is charged interest on without a partnership deed?
(A) 6 % Per annum
(B) 12 % Per annum
(C) 14 % Per annum
(D) No interest is levied

Answer : D

Question. On 1st April 2018, 2fs Capital was ₹2,00,000. On 1st October 2018, he introduces additional capital of ₹1,00,000. Interest on capital @ 6% p.a. on 31st March, 2019 will be :
(A) ₹9,000
(B) ₹18,000
(C) ₹10,500
(D) ₹15,000

Answer : D

Question. In what kind of relationship does one partner have known risk, and the other has limited obligation?
(A) Particular Partnership
(B) Limited Liability Partnership
(C) General Partnership
(D) Partnership At will provide no reason

Answer : B

Question. If a fixed amount is withdrawn by a partner on the first day of every month, interest on the total amount is charged for …………… months :
(A) 6
(B) 61/2
(C) 51/2
(D) 12

Answer : B

Question. Entering into a partnership deed in a Partnership Firm is?
(A) Necessary in Writing
(B) Necessary
(C) Verbal
(D) Not Necessary

Answer : D

Question. Sushil is a partner in a firm. He withdrew ₹4,000 per month in the middle of every month during the year ended 31st March, 2019. If interest on drawings is charged @ 8% p.a. the interest charged will be :
(A) ₹2,080
(B) ₹1,760
(C) ₹3,840
(D) ₹1,920

Answer : D

Question. In the lack of a partnership agreement, which of the following rules governs the partnership firm?
(A) Partner pay is determined by how much they make.
(B) Six per cent Interest on Drawings: The profit sharing ratio is the same.
(C) No interest shall be charged on capital
(D) All

Answer : C

Question. If equal amount is withdrawn by a partner in the beginning of each month during a period of 6 months, interest on the total amount will be charged for ……………… months
(A) 2.5
(B) 3
(C) 3.5
(D) 6

Answer : C

Question. Which of the partnership firm’s accounts cannot record rent paid to partners?
(A) Depreciation Account
(B) Expenses Account
(C) Profit & Loss Account
(D) Salary Account

Answer : C

Question. X is a partner in a firm. He withdrew regularly ₹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) ₹240
(B) ₹140
(C) ₹100
(D) ₹120

Answer : B

Question. In a partnership firm, what are some of the following features?
(A) They are sharing profits and losses in a fixed ratio.
(B) Two or more persons are carrying common business under an agreement.
(C) Business is carried by all or any of them acting as an agent.
(D) All of these.

Answer : D

Question. A partner withdraws from firm ₹7,000 at the end of each month. At the rate of 6% per annum total interest will be :
(A) ₹5,040
(B) ₹2,310
(C) ₹3,570
(D) ₹1,370

Answer : B

Question. Exactly what is a “Personal Partnership”?
(A) Partners can act like partnerships and corporations at the same time.
(B) Partnership wherein some or all are the same.
(C) A partnership was formed for a single transaction.
(D) This is how partnerships work under the law.

Answer : C

Question. P and Q sharing profits in the ratio of 2 : 1 have fixed capitals of ₹90,000 and f60,000 respectively. After closing the accounts for the year ending 31st March 2019 it was discovered that interest on capitals was provided @ 6% instead of 8% p.a. In the adjusting entry :
(A) P will be credited by ₹1,800 and Q will be credited by ₹1,200;
(B) P will be debited by ₹200 and Q will be credited by ₹200;
(C) P will be credited by ₹200 and Q will be debited by ₹200;
(D) P will be debited by ₹1,800 and Q will be debited by ₹1,200;

Answer : B

Question. X, 7and Z are equal partners with fixed capitals of ₹5,00,000, ?3,00,000 and ₹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 ₹2,000
(B) Cr. X and Dr. Z by ₹2,000
(C) Dr. X and Cr. Y by ₹2,000
(D) Cr. X and Dr. Y by ₹2,000

Answer : A

Question. Guarantee given to partner ‘A’ by the other partners ‘B & C’ means :
(A) In case of loss, ‘A’ will not contribute towards that loss.
(B) In case of insufficient profits, ‘A’ will receive only the minimum guarantee amount.
(C) In case of loss or insufficient profits, ‘A’ will withdraw the minimum guarantee amount.
(D) All of the above.

Answer : C

Question. A Y and Z are partners in 5 : 4 : 1. Z is guaranteed that his share of profit will not be less than ₹80,000. Any deficiency will be borne by A and Y in 3 : 2. Firm’s profit was ₹5,60,000. How much deficiency will be borne by Y :
(A) ₹2,14,400
(B) ₹14,400
(C) ₹2,09,600
(D) ₹9,600

Answer : D

Question. A and B are partners with a profit-sharing ratio of 2 : 1 and capitals of ₹3,00,000 and ₹2,00,000 respectively. They are allowed 6% p.a. interest on their capitals and are charged 10% p.a. interest on their drawings. Their drawings during the year were A ₹60,000 and B ₹40,000. B’s share of net profit as per profit and loss appropriation account amounted to ₹40,000. Net Profit of the firm before any appropriations was :
(A) ₹1,22,000
(B) ₹1,13,000
(C) ₹1,17,000
(D) ₹1,45,000

Answer : D

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. 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. 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 agreement, partners are not entitled to :
(A) Salary
(B) Commission
(C) Equal share in profit
(D) Both (a) and (b)

Answer : D

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 ₹6,000 and Y determined interest @24% p.a. on his loan of ₹80,000. There was no agreement on this point. Calculate the amount payable to X, Y, and Z respectively.
(A) ₹2,000 to each partner.
(B) Loss of ₹4,400 for X and Z; Twill take ₹14,800.
(C) ₹400 for A, ₹5,200 for Land ₹400 for Z.
(D) None of the above.

Answer : C

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. According to Profit and Loss Account, the net profit for the year is ₹1,50,000. The total interest on partner’s capital is ₹18,000 and interest on partner’s drawings is ₹2,000. The net profit as per Profit and Loss Appropriation Account will be :
(A) ₹1,66,000
(B) ₹1,70,000
(C) ₹1,30,000
(D) ₹1,34,000

Answer : D

Question. Net profit of a firm is ₹79,800. Manager is entitled to a commission of 5% of profits after charging his commission. Manager’s Commission will be :
(A) ₹4,200
(B) ₹380
(C) ₹3,990
(D) ₹3,800

Answer : C

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. 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. 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. X and Y are partners in the ratio of 3 : 2. Their capitals are ?2,00,000 and ₹1,00,000 respectively. Interest on capitals is allowed @ 8% p.a. Firm incurred a loss of ₹60,000 for the year ended 31st March 2019. Interest on Capital will be :
(A) X ₹16,000; Y ₹8,000
(B) A ₹8,000; Y ₹4,000
(C) X ₹14,400; Y ₹9,600
(D) No Interest will be allowed

Answer : D

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. Ajay is a partner in a firm. He withdrew ₹2,000 per month on the last day of every month during the year ended 31st March, 2019. If interest on drawings is charged @ 9% p.a. the interest charged will be :
(A) ₹990
(B) ₹1,080
(C) ₹1,170
(D) ₹2,160

Answer : A

Question. Bipasa is a partner in a firm. She withdrew ₹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) ₹900
(B) ₹600
(C) ₹1,500
(D) ₹1,200

Answer : A

Question. Z is a partner in a firm. He withdrew regularly ?2,000 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) ₹480
(B) ₹280
(C) ₹200
(D) ₹240

Answer : D

Question. Anu and Tanu are equal partners with fixed capitals of ₹2,00,000 and ₹1,00,000 respectively. After closing the accounts for the year ending 31st – March, 2019 it was discovered that interest on capitals @ 8% p.a. was omitted to be provided. In the adjusting entry :
(A) Anu will be credited by ₹16,000 and Tanu will be credited by ₹8,000
(B) Anu will be debited by ₹16,000 and Tanu will be debited by ₹8,000
(C) Anu will be credited by ₹4,000 and Tanu will be debited by ₹4,000
(D) Anu will be debited by ₹4,000 and Tanu will be credited by ₹4,000

Answer : C