Partnership Act Quiz

Assertion (A): Rent to partner is not shown in Profit and Loss Appropriation Account.

Reason(R): Rent to a partner is a charge against profit.

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, but (R) is false

• (A) is false, but (R) is true.

Assertion (A): Interest on Partner's capital may be shown in Profit and Loss Account. Reason(R): If Partners treat interest on capital as a charge.

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, but (R) is false

• (A) is false, but (R) is true.

Assertion (A): A partnership deed covers all matters relating to mutual relationship among the partners. Reason(R): But in the absence of partnership deed, provisions of the Indian partnership Act, 1932 shall apply for accounting purposes. Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, but (R) is false

• (A) is false, but (R) is true.

Assertion (A): Partnership firm is a form of organisation where two or more persons carry on business activity on the basis of agreement among them. Reason(R): The profit or loss arising from the partnership business is shared by the partners in the agreed ratio. Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, but (R) is false

• (A) is false, but (R) is true.

Assertion (A): Rent payable to partner is credited to Partner's Capital account. Reason(R): Rent is payable to partner for letting the firm use his personal property for business. Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, but (R) is false

• (A) is false, but (R) is true.

Assertion (A): Personal properties of a partner may also be used to pay off the firm's debts. Reason(R): All partners have limited liability in the firm. Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, but (R) is fals

• (A) is false, but (R) is true.

Assertion (A): Maximum number of partners in a partnership firm is 50. Reason(R): Maximum number of partners in a partnership firm is prescribed in Companies Act, 2013. Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, but (R) is false

• (A) is false, but (R) is true.

Assertion (A): Guarantee of minimum profit may be given to a partner. Reason(R): It is compulsory as per Indian Partnership Act, 1932. Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, but (R) is false

• (A) is false, but (R) is true.

Assertion (A): In the absence of Partnership deed profits and losses are divided equally among the partners. Reason(R): This rule is applicable according to Indian partnership Act, 1932. Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, bur (R) is false

• (A) is false, but (R) is true.

Assertion (A): For calculating Interest on Drawings, product method is used. Reason(R): Partners withdraw different amounts of money at different intervals of time. Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is the correct explanation of (A)

• Both (A) and (R) are true and (R) is not the correct explanation of (A)

• (A) is true, but (R) is false

• (A) is false, but (R) is true.