CBSE Class 12 Accountancy Fundamentals Of Partnership Worksheet

Read and download free pdf of CBSE Class 12 Accountancy Fundamentals Of Partnership Worksheet. Students and teachers of Class 12 Accountancy can get free printable Worksheets for Class 12 Accountancy in PDF format prepared as per the latest syllabus and examination pattern in your schools. Standard 12 students should practice questions and answers given here for Accountancy in Grade 12 which will help them to improve your knowledge of all important chapters and its topics. Students should also download free pdf of Class 12 Accountancy Worksheets prepared by school teachers as per the latest NCERT, CBSE, KVS books and syllabus issued this academic year and solve important problems provided here with solutions on daily basis to get more score in school exams and tests

Fundamentals Of Partnership Class 12 Accountancy Worksheet Pdf

Class 12 Accountancy students should refer to the following printable worksheet in Pdf for Fundamentals Of Partnership in standard 12. This test paper with questions and answers for Grade 12 Accountancy will be very useful for exams and help you to score good marks

Class 12 Accountancy Worksheet for Fundamentals Of Partnership

According to Section -4 of the Indian Partnership Act, 1932:
“Partnership is the relations between two or more persons who have agreed to share the profits of a business carried on by all or any one of them acting for all”
Features of Partnership
1. Two or more persons: There must be at least two persons to form a valid partnership.
The maximum number of partners cannot exceed the number of partners prescribed by companies Act, 2013 which is 50 in any business whether banking or non- banking.
2. Agreement : Partnership comes into existence by an agreement (either written or oral among the partners. The written agreement among the partners is called Partnership Deed. 
3. Existence of business and profit motive :A partnership can be formed for the purpose of carrying on legal business with the intention of earning profits. A joint ownership of some property by itself cannot be called a partnership.
4. Sharing of Profits : An agreement between the partners must be aimed at sharing the profits. If some persons join hands to run some charitable activity, it will not be called partnership. Futher, if a partner is deprived of his right to share the profits of the business, he cannot be called as partner.
5. Buiness carried on by all or any of them acting for all : It means that each partner can participate in the conduct of business and each partner is bound by the acts of other partners in respect to the business of the firm. 
6. Relationship of Principal and Agent : Each partner is an agent ad well as a partner of the firm. An agent, because he can bind the other partners by his acts and principal, because he himself can be bound by the acts of the other partners.
 
Partnership Deed
Since partnership is the outcome of an agreement, it is essential that there must be some terms and conditions agreed upon by all the partners. Such terms and conditions mat be either written or oral. The law doesnot make it compulsory to have a written agreement.
However, in order to avoid all misunderstandings and disputes, it is always the best course to
have a written agreement duly signed and registered under the Act.
 
The partnership deed is a written agreement among the partners which contains the terms of agreement. It is also called ' Articles of Partnership' . A partnership deed should contain the following points:
1. Name and address of the firm as well as partners.
2. Name and addresses of the partners.
3. Nature and place of the business.
4. Duration, if any of partnership.
5. Capital contribution by each partner.
6. Interest on capital.
7. Drawings and interest on drawings.
8. Profit sharing ratio.
9. Interest on loan.
10. Partner’s Salary/commission etc.
11. Method for valuation of goodwill and assets.
12. Accounting period of the firm and duration of partnership
13. Rights and duties of partners how disputes will be settled.
14. Decisions taken if some partner becomes insolvent.
15. Opening of Bank Account – whereas it will be in the name of firm or partners.
16. Rules to be followed in case of admission & Settlement of accounts or retirement or death of partner.
17. Revaluation of assets & liabilities, if any to be done.
18. Method of recording of firm's accounts
19. Auditing
20. Date of commencement of partnership

Benefits of Partnership Deed
(1) It regulates the rights, duties and liabilites of each partner.
(2) It helps to avoid any misunderstanding amongst the partners because all the terms and conditins of partnership have been laid down before hand in the deed.
(3) Any dispute amongst the partners may be settled easily as the partnership deed may be readiy referred to.
Hence, it is always best course to have a written partnership deed duly signed by all the partners and registered under the Act. 
 
Rules applicable in the absence of partnership deed

Acco

Distribution of Profits among Partners
Transactiions of the partnerhsip firm are recorded according to the principles of Doubleentry book keeping system, and as in the case of a sole proprietorship concern a partnership firm will also prepare Trading account, Profit & Loss account and Balance Sheet at the end of every year. The only difference between accounting of a sole trader and partnership firm is that the profits of the partnership firm ar divided amongst the partners.
A Profit and Loss Appropriation Account is prepared to show the distribution of profits among partners as per the provision of Partnership Deed (or as per the provision of Indian Partnership Act, 1932 in the absence of Partnership Deed). It is an extension of profit and Loss Account. It is nominal account. It records entries for interest on capital, Interest on Drawings, Salary to the partner, and division of profits among the partners.
The Journal Entries regarding Profit and Loss Appropriation Account are as follows:
 
1.For transfer of balance of Profit and Loss Account
Profit and Loss A/cDr.
To Profit and Loss Appropriation A/c

2.For Interest on Capital
For allowing Interest on capital
1. Interest on Capital A/c
To Partner’s Capital/Current A/cs
(Being interest on capital allowed @ % p.a.)
2. For transferring Interest on Capital to p&L appropriation A/c.
Profit and Loss Appropriation A/cDr.
To Interest on Capital A/c.
(Being interest on capital transferred to p&L Appropriation A/c)

3. For Salary or Commission payable to a partner
i. For allowing Salary or Commission to a partner:
Partners Salary/Commission A/cDr.
To Partner’s Capital/Current A/cs
(Being salary/commission payable to a partner)
ii. For transferring Partner’s Salary/Commission A/c to Profit and Loss
Appropriation A/s:
Profit and Loss Appropriation A/cDr.
To Partner’s Salary/Commission A/c

4. For transfer of Reserves:
Profit and Loss Appropriation A/cDr.
To Reserve A/c
(Being reserve created)

5. For Interest on Drawings:
1.For charging interest on a partner’s drawings:
Partner’s Capital/Current A/c.Dr.
To Interest on Drawings A/c
(Being interest on drawings charged @ % p.a.)
2. For transferring interest on drawings to Profit and Loss Appropriation A/c
Interest on Drawings A/cDr.
To Profit and Loss Appropriation A/c
(Being interest on drawings transferred to P&L appropriation A/c)

6. For transfer to Profit (i.e. Credit Balance of Profit and Loss Appropriation Account
Profit and Loss Appropriation A/cDr.
To Partners Capital/Current A/cs
(Being profits distributed among partners)
 
SPECIMEN OF PROFIT AND LOSS APPROPRIATION ACCOUNT
Profit and Loss Appropriation Account
For the year ending on ___________________

Acco1

Parter’s Capital Accounts
Parter’s Capital Accounts : It is an account which represents the partners interest in the business.
In case of partnership business, a separate capital account is mainted for each partner. The capital accounts of partners may be maintained by any of the following two methods.
1. Fixed Capital Accounts
2. Fluctuating Capital Accounts
 
1. Fixed Capital Accounts
Under this method the original capitals invested by the partners remain constant, unless additional capital is introduced by an agreement. All entries relating to drawings, interest on capitals, interest on drawings, salary to partner, share of profits/losses are made in separate account whihc is called as Current Account. Thus the following two accounts are maintained when capitals are fixed.
 
(i) Capital Account
This account will always show a credit balance: Balance of Capital account remains fixed, it does not change every year that is why it is called fixed capital method and only the following two transactions are recorded in the Fixed Capital Accounts:
Permanent·Additional Capital Introduced
·Permanent Capital Withdrawn or Drawings out of Capital only
Partner’s Capital A/Cs

Acco-
 
(ii) Current Account 
The Current account may show a debit or credit balance. All the usual adjustments such as interest on Capital, partner’s salary/commission, drawings (out of profits), interest on drawings and share in profits or losses etc. are recorded in this account.All the Current Year's adjustments are recorded in this account, that is why it is called Current account.
 
Partner’s Current A/Cs
Acco-1
Acco-2

Note :
1. Debit balance of Current Account is shown in Assets side of Balance Sheet.
2. Credits balance of Current Account A/c is shown in Liabilities side of balance Sheet.
3. Balance of Fixed Capital Accounts are always shown in Liabilities side of Balance Sheet as it will be always be credit balance.
 
2. Fluctuating Capital Accounts
In this method only one account i.e., Capital Account of each and every partner is prepared and all the adjustment such as interest on capital interest on drawings etc, are recorded in this account under this method, Capital account may show a debit or credit balance and the balance of this account changes frequently from time to time therefore it is called fluctuating Capital Account.In this method the capitals are not fixed. In the absence of information, the Capital Accounts should be prepared by this method.
 
Partner’s Capital
Acco-3
Acco-4

 
INTEREST ON CAPITAL
Interest on partners capital will be allowed only when it has been specifically mentioned in the partnership deed. If interest on capital is to be allowed as per the agreement, it should be calculated with respect to the time, rate of interest and the amount of capital. Interest on Capital can be treated as either:
a. An Appropriation of profit; or 
b. A charge against profit.
 
A. Interest on Capital: An Appropriation of Profits:
Acco-5

B. Interest on Capital: As a Charge against Profits:
Interest on Capital is always allowed in full irrespective of amount of profits of losses.

Note:
Interest on Capital is always calculated on the OPENING CAPITAL.
Il’ Opening Capital is not given in the question, it should be ascertained as follows:
Acco-6
 
INTEREST ON DRAWINGS
Interest on drawing is charged by the firm only when it is clearly mentioned in Partnership Deed. It is calculated with reference to the time period for which the money was withdrawn. There are two cases in which calulation of interest on drawings may arise:
 
Case 1: When Rate of Interest on Drawings is given in %
Interest on Drawings is calculated on flat rate irrespective of period.
Case 2: When Rate of Interest on Drawings is given in % p.a.

1. When date of Drawing is not given
Acco-7

2. When date of Drawings is given

Acco-8

Case 3: When different amount are withdrawn on different dates:
We have the following two methods to calculate the amount of interest on Drawing:
 
1. Simple Interest Method
In this method, interest on drawing is calculated for each amount of drawing individually on the basis of periods for which it remained withdrawn till the close of accounting period.
 
2. Product Method
In this method, the amounts of drawings are multiplied by the period for which it remained withdrawn during the period;Thereafter the products are added and interest is calculated on the total of products so arrived at for one month. The advantage of this system is that separate calculations are not required each time.
We can explain the above mentioned two methods with the help of an example.

Acco-9

Interest on drawings is to be charged @ 9% p.a
 
SIMPLE METHOD

Acco-10
Acco-11

Acco-12

Interest = Total of products * 9/100* 1/12= 306000*9/100*1/12 = Rs 2295/-.

Case 4: When an equal amount is withdrawn regularly
Interest on Drawing can be calculated using either Product Method or Direct Method (i.e. Short Cut Method)
Direct Method will be used only if all the following three conditions are satisfied:
1. Amount should be same throughout the period
2. Date of Drawings should be same throughout the period
3. Drawings should be made regularly without any gap.
 
Acco-13
 
Value of T under Different circumstances will be as under:
Acco-14
Acco-15

INTEREST ON PARTNERS LOAN
If a partner has given loan to the firm, he is entittled to receive interest on such loan at an agreed rate.

It is a charge against profits. It is provided irrespective of profits or loss. It will also be provided in the absence of Partnership Deed @ 6% per annum.
 
The following entries are passed to record the interest on partner’s loan
1. For allowing Interest on loan:
Interest on Partner’s Loan A/cDr.
To Partner’s Loan A/c
(Being interest on loan allowed @ % p.a.)
2. For transferring Interest on Loan to Profit and Loss A/c:
Profit and Loss A/cDr.
 
To Interest on Loan A/c
(Being Interest on loan transferred to P & L A/c)
It is always DEBITED to Profit and Loss A/c
Rent Paid to Partner.
Rent paid to a partner is also a charge against profits and it will also be
 
DEBITED to Profit and Loss A/c
Acco-16

PAST ADJUSTMENTS
If, after preparation of Final Accounts of firm, it is found that some errors or commission in accounts has occurred than such errors or omissions are rectified in the next year by passing an adjustment entry.
A statement is prepared to ascertain the net effect of such errors or omissions on partner’s capital/current accounts in the following manner.
 
Statement showing adjustment
Acco-17
Acco-18
 
+ Indicates Amount to be Credited to Partner’s Capital Account – Indicates Amount to be Debited to Partners Capital Account
Acco-19
During Past Adjustment it is not compulsory that capital accounts of all partners are affected.
More than one partners Capital Account may be debited or credited but amount of debit & credit should be equal.

GUARANTEE OF PROFITS TO A PARTNER

Guarantee is an assurance given to the partner of the firm that at least a fixed amount shall be given to him/her irrespective of his/her actual share in profits of the firm. If actual share in profits is less than the guaranteed amount in that case the deficit amount shall be borne either by the firm or by any partner as the case may be or as may have been decided bya na agreement.

Note: Guarantee to a partner is given for minimum share in profits. If the actual share in profits is more than the minimum share in profits, then the actual profits will be allowed to the partner.

Case: 1. When guarantee is given by FIRM (i.e. by all the Partners of the firm)
1. If share in actual profits is less than the guaranteed amount then. Guaranteed amount to a partner is first written off against the profits and then,
2. Remaining profits are distributed among the remaining partners in the remaining ratio.

Case: 2. When guarantee is given by a partner or partners to another partner.
1. Calculate the share in profits for the partner to whom guarantee is given.
2. If share in profits is more than the guaranteed amount, distribute the profit as per the profit and loss sharing ratio in usual manner.
3. If share in profits is less than the guaranteed amount, find the difference between the share in profits and the guaranteed amount and the difference known as deficiency.
Deficiency is contributed by the partner or partners who guaranteed in certain ratio and subtracted from his or their respective shares.

 

Q.1 X is a partner who used the stock of the firm worth ` 10,000 and suffered a loss of` 2,000. He went the firm to bear the loss. How much ‘X’ is liable to pay to firm.

Q.2 Rajesh and Rakesh two partners draw for private use ` 1,28,000 and ` 86000 .Interest is chargeable at 6% per annum on drawings .What is the interest?

Q.3 A and B contribute ` 80,000 and ` 40,000 respectively by way of capital on which they agree to pay interest @ 6% p.a. Their respective share of profit is 2:3 and the business profit (before interest) for the year is 6,000. Show the relevant account to allocate interest about the treatment of interest on capital.

Q.4 It was discovered that in arriving at the profit for 2014, the following two items have been ignored. (i) Outstanding expenses of ` 3500 and (ii) Accurate interest on investment of ` 2,000 Make journal entries relevant to adjustments.

Q.5 A, B and C shared the profit of ` 9,00,000 in the ratio of 2:2:1 without providing for interest on B’s loan, B granted a loan of ` 4,00,000 in the beginning of accounting year. Whereas the partnership deed is silent on the interest on loan and the profit sharing ratio. Give adjusting entry.

Q.6 Calculate interest on X’s drawings @ 12% if he withdraws ` 2,000 per month during the year.

Q.7. Calculate interest on X’s drawings @ 12% p.a if he withdraws ` 2,000 per month during the year.

Q.8. Is a partner entitled to salary if he works more than others if partnership deed is silent?

 

 

Please click the link below to download full pdf file for CBSE Class 12 Accountancy Fundamentals of Partnership.

Tags: 

 


Click to View or Download pdf file
Click for more Accountancy Study Material
More Worksheets for Class 12 Accountancy
CBSE Class 12 Accountancy Fundamentals Of Partnership Worksheet
CBSE Class 12 Accountancy Goodwill Nature And Valuation Worksheet
CBSE Class 12 Accountancy Revision Worksheet Set A
CBSE Class 12 Accountancy Revision Worksheet Set B
CBSE Class 12 Accountancy Revision Worksheet Set C
CBSE Class 12 Accountancy Revision Worksheet Set D
CBSE Class 12 Accountancy Revision Worksheet Set E
CBSE Class 12 Accountancy Revision Worksheet Set F
CBSE Class 12 Accountancy Sure Shot Questions Worksheet Set A
CBSE Class 12 Accountancy Sure Shot Questions Worksheet Set B
CBSE Class 12 Accountancy Sure Shot Questions Worksheet Set C
CBSE Class 12 Accountancy Valuation Of Goodwill Worksheet Set A
CBSE Class 12 Accountancy Valuation Of Goodwill Worksheet Set B
Part 1 Chapter 2 Accounting for Partnership Basic Concepts
CBSE Class 12 Accountancy Accounting For Partnership Firms Worksheet Set A
CBSE Class 12 Accountancy Accounting For Partnership Firms Worksheet Set B
CBSE Class 12 Accountancy Accounting For Partnership Firms Worksheet Set C
Part 1 Chapter 3 Reconstitution of a Partnership Firm – Admission of a Partner
CBSE Class 12 Accountancy Admission Of Partner Worksheet Set A
CBSE Class 12 Accountancy Admission Of Partner Worksheet Set B
CBSE Class 12 Accountancy Admission Of Partner Worksheet Set C
CBSE Class 12 Accountancy Admission Of Partner Worksheet Set D
CBSE Class 12 Accountancy Change In Profit Sharing Ratio Worksheet Set A
CBSE Class 12 Accountancy Change In Profit Sharing Ratio Worksheet Set B
Part 1 Chapter 4 Reconstitution of a Partnership Firm – Retirement/Death of a Partner
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set A
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set B
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set C
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set D
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set E
CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set F
Part 1 Chapter 5 Dissolution of Partnership Firm
CBSE Class 12 Accountancy Dissolution Of Partnership Firm Worksheet Set A
CBSE Class 12 Accountancy Dissolution Of Partnership Firm Worksheet Set B
CBSE Class 12 Accountancy Dissolution Of Partnership Firm Worksheet Set C
Part 2 Chapter 1 Accounting for Share Capital
CBSE Class 12 Accountancy Company Accounts Worksheet Set A
CBSE Class 12 Accountancy Company Accounts Worksheet Set B
CBSE Class 12 Accountancy Company Accounts Worksheet Set C
CBSE Class 12 Accountancy Share Capital Worksheet Set A
CBSE Class 12 Accountancy Share Capital Worksheet Set B
Part 2 Chapter 2 Issue and Redemption of Debentures
CBSE Class 12 Accountancy Debentures Worksheet
Part 2 Chapter 3 Financial Statements of a Company
CBSE Class 12 Accountancy Financial Statements Of Company Worksheet Set A
CBSE Class 12 Accountancy Financial Statements Of Company Worksheet Set B
Part 2 Chapter 4 Analysis of Financial Statements
CBSE Class 12 Accountancy Analysis Of Financial Statements Worksheet
CBSE Class 12 Accountancy Financial Analysis And Tools For Financial Analysis Worksheet
Part 2 Chapter 5 Accounting Ratios
CBSE Class 12 Accountancy Ratio Analysis Worksheet
Part 2 Chapter 6 Cash Flow Statement
CBSE Class 12 Accountancy Cash Flow Statement Worksheet Set A
CBSE Class 12 Accountancy Cash Flow Statement Worksheet Set B
CBSE Class 12 Accountancy Cash Flow Statement Worksheet Set C

Latest NCERT & CBSE News

Read the latest news and announcements from NCERT and CBSE below. Important updates relating to your studies which will help you to keep yourself updated with latest happenings in school level education. Keep yourself updated with all latest news and also read articles from teachers which will help you to improve your studies, increase motivation level and promote faster learning

All India Children Educational Audio Video Festival

The Central Institute of Educational Technology (CIET), a constituent unit of National Council of Educational Research and Training (NCERT), is inviting entries for the 26th All India Children’s Educational Audio Video Festival (AICEAVF). This festival showcases the...

Pariksha Pe Charcha 2022

The 5th edition of Pariskhas Pe Charcha the unique interactive program of Hon’ble Prime Minister with students teaches and parents will be held through virtual mode in February, 2022. In order to select participants who will be featured in Pariksha Pe Charcha programme...

Heritage India Quiz 2021 2022

CBSE Heritage India Quiz is conducted every year to raise the awareness about the preserving human heritage, diversity and vulnerability of the India's built monuments and heritage sites. It is an attempt of the Board to motivate the future generations of this country...

National Youth Day and Birth Anniversary of Swami Vivekananda

Ministry of Education, Govt. of India vide D.O No. 12-4/2021-IS.4 dated 04.01.2022 intimated that 12 January 2022 will be celebrated as “National Youth Day” and “Birth Anniversary of Swami Vivekananda”.   All Schools affiliated to CBSE may celebrate 12 January 2022 as...

Online courses for classes XI and XII offered by NCERT

Ministry of Education (MoE), Government of India has launched a platform for offering Massive Open Online Courses (MOOCs) that is popularly known as SWAYAM (Study Webs of Active learning for Young Aspiring Minds) on 9 th July, 2017. NCERT now offers online courses for...

CBSE Science Challenge 2021 22

Science is inexplicably linked with our lives and helps us to understand the world around us better. Scientific and technological developments contribute to progress and help improve our standards of living. By engaging with this subject, students learn to think, solve...