Fundamental 2

The written agreement among the partners is called

• Partnership deed

• Partnership buy laws

• Partnership constitution

• Contract

The liability of the partners in a partnership form under Indian partnership act, 1932 is

• Limited

• Unlimited

• No liability

• Depending on the situation

Interest on capital is allowed

• The opening capital

• The capital are the year end

• Average capital of the year

• The capital in the middle of the year

In the absence of the partnership deed, interest on capital

• Is allowed @ 6% per annum

• Is allowed @ 10% per annum

• Is allowed at the borrowing rate

• Is not allowed

In case of fixed capitals, partners will have

• Credit balances in the capital accounts

• Debit balances in their capital accounts

• May have credit or debit balances in the capital accounts

• Credit balance or nil balance in the capital accounts

In case of fixed capitals, interest on capital

• Is credited to partner's capital account

• Is credited to partner's current account

• May be credited to partner's capital or current account

• Is debited to partner's capital account

In case of fluctuating capitals, interest on capital

• Is credited to partner's capital account

• Is credited to partner's current account

• May be credited to partner's capital of current account

• Interest payable account

Current accounts of partners are maintained if

• Capitals are fixed

• Capitals are fluctuating

• Whether capitals are fixed or fluctuating

• As is decided by the partners

In the absence of partnership deed, profit of a firm is divided among the partners

• In the ratio of capital

• Equally

• In the ratio of time devoted for the firm's business

• According to the managerial abilities of the partners

Interest on capitals of partners under the fluctuating capital accounts method is credited to

• Interest payable account

• Profit and loss account

• Partner's capital account

• Partner's current account