Free Printable partnership fundamentals

1.

It is mandatory to have a written partnership aggreement.

a)

True

b)

False

2.

In the absence of proper agreement, representatives of deceased partner are entitled to receive

a)

(a) Profit till date, Goodwill, Joint Life Policy, Interest on Capital and Share in revalued assets and liabilities.

b)

(b) Profit till date, Goodwill, Joint Life Policy, Capital and Share in revalued assets and liabilities.

c)

(c) Capital, Goodwill, Joint Life Policy, Interest on Capital and Share in revalued assets and liabilities.

d)

(d) Profits till date, Goodwill, Capital, Interest on Capital and share in revalued assets and liabilities

3.

When partnership deed is not registered a partnership firm is

a)

(a) Deemed to be an illegal association and is disallowed to carry on business

b)

(b) Allowed to carry on business subject to payment of penalty.

c)

(c) Allowed to carry on business subject to certain disabilities.

d)

(d) Allowed to carry on business only with the special permission of the registrar of firm

4.

A, B and C are partners sharing profit and losses equally and A paid liability of ₹ 10,000 out of his private funds. How will you record this in the books of the firm?

a)

(a) No entry will be made in the books to the firm.

b)

(b) A’s capital A/c Dr. ₹ 10,000

To Cash A/c ₹ 10,000

c)

(c) Liability A/c Dr. ₹ 10,000

To A’s Capital A/c ₹ 10,000

d)

(d) Liability A/c Dr. ₹ 10,000

To Cash A/c ₹ 10,000

5.

Subject to contract between the partners, interest on capital is to be provided out of profits only. In case of insufficient profits (i.e. net profit less than the amount of interest on capital), the amount of profit is distributed:

a)

(a) In equal ratio

b)

(b) In profit sharing ratio

c)

(c) In capital ratio

d)

(d) Restricted to 6% of partner’s capital

6.

In the absence of any deed of partnership –

a)

(a) Only working partners are entitled to Salary.

b)

(b) Partners are entitled for commission @ 6% of the net profit of the firm

c)

(c) Partners contributing highest capital is entitled for interest on capital @ 6% p.a.

d)

(d) Interest at the rate of 6% is to be allowed on a partner’s loan to the firm.

7.

In the presence of an agreement, interest on capital is to be provided from ............?

a)

(a) Profits

b)

(b) Capital

c)

(c) Partner’s personally

d)

(d) None of these.

8.

As per Section 37 of the Indian Partnership Act, 1932, the executors would be entitled at their choice to the interest calculated from the date of death till the date of payment on the final amount due to the deceased partner at ............ % p.a.:

a)

(a) 7

b)

(b) 4

c)

(c) 6

d)

(d) 12

9.

Ram is a partner. He made drawings as follows:

July 1 ₹ 200, August 1 ₹ 200, September 1 ₹ 300 , November 1 ₹ 50, February 1 ₹100.

If the rate of interest on drawing is 6% and accounts are closed on March 31 the interest on drawing is:

a)

(a) ₹ 29.75

b)

(b) ₹ 35

c)

(c) ₹ 30

d)

(d) ₹ 40

10.

A and B are partners A’s capital is ₹ 10,000 and B’s Capital is ₹ 6,000. Interest is payable @ 6% p.a.. B is entitled to a salary of ₹ 300 per month. Profit to the year before interest and salary to B is ₹ 8,000. Profit between A and B will be divided:

a)

(a) ₹ 1720 to A and ₹ 1720 to B.

b)

(b) ₹ 2000 to A and ₹ 1440 to B

c)

(c) ₹ 1440 to A and ₹ 2000 to B

d)

(d) None

11.

A and B are partners sharing profits and losses in the ratio of 4 : 1. C was a manager who received the salary of ₹ 2,000 p.m. in addition to a commission of 5% on net profits after charging such commission. Profits for the year is ₹ 3,39,000 before charging salary. Find total remuneration of C:

a)

(a) ₹ 39,000

b)

(b) ₹ 44,000

c)

(c) ₹ 43,500

d)

(d) ₹ 38,000

12.

a)

Z’s Capital A/c Dr. 2,500

To Y’s Capital A/c 2,400

To X’s Capital A/c 100

b)

X’s Capital A/c Dr. 2,500

To Y’s Capital A/c 2,400

To Z’s Capital A/c 100

c)

Y's Capital A/c Dr. 2,500

To X’s Capital A/c 2,400

To Z’s Capital A/c 100

d)

X’s Capital A/c Dr. 3,400

To Y’s Capital A/c 2,400

To Z’s Capital A/c 1000

13.

A minor partner can be admitted

a)

with the consent of any one partner

b)

with the consent of more than one partners

c)

with the consent of all partners

d)

can not be admitted

14.

L, M, and N were partners in firm sharing profit in the ratio of 3 : 4 : 5. Their fixed capitals were L Rs 4,00,000 , M Rs 5,00,000 and N Rs 6,00,000 respectively.

The partnership deed provided for the following:

i. Interest on capital @ 6% p.a.

ii. Salary of Rs 30,000 p.a. to N.

iii. Interest on partner’s drawings will be charged @ 12% p.a.

During the year ended 31.3.2009, the firm earned a profit of Rs 2,70,000. L withdrew Rs 10,000 on 1.4.2008. M withdrew Rs 12,000 on 30.09.2008. and N withdrew Rs 15,000 on 31.12.2008.

Prepare profit and loss appropriation account for the year ended 31.3.2009 and tell What is final profit distributed to each partner ?

a)

L's Current A/c 38,092.50

M's Current A/c 50,790.00

N's Current A/c 63,487.50

b)

L's Current A/c 32,370

M's Current A/c 52000

N's Current A/c 70000

c)

L's Current A/c 27000

M's Current A/c 60000

N's Current A/c 65000

d)

L's Current A/c 38,870

M's Current A/c 50,000

N's Current A/c 63,500

15.

From the following, identify a situation when fixed capitals of the partners may change?

a)

a. When drawings are made by the partners

b)

b. When current accounts are opened

c)

c. When there is loss in the business

d)

d. When additional capital is introduced

16.

Which Section of the Partnership Act defines Partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all?

a)

a. Section 61

b)

b. Section 48

c)

c. Section 13

d)

d. Section 4

17.

A partner draws rupees 2000 each on 1st April 2016, 1st July 2016, 1st October 2016and 1st January 2017. Interest on drawing @ 8% per annum will be

a)

540

b)

320

c)

960

d)

400

18.

Z is a partner firm. he withdrew regularly rupees 2000 per month for six months ending 31st March 2016 if interest on drawing is charge @ 8% per annum the interest charged will be

a)

480

b)

280

c)

200

d)

240

19.

Y is a partner in a Firm. He withdrew regularly 3,000 rupees at the end every month for six months ending 31st March 2016 if interest on drawing is charged @ 10% per annum the interest charged will be

a)

375

b)

450

c)

525

d)

900

20.

X is a partner in a firm .he withdrew regularly Rupees 1000 at the beginning of every month for 6 months ending 31st March 2016 if interest on drawing is charge @ 8% per annum the interest charged will be

a)

240

b)

140

c)

Hundred

d)

120

21.

Rs. 700 is divided among A, B and C so that A receives half as much as B and B receives half as much as

C. Then C’s share is :

a)

Rs. 200

b)

Rs. 300

c)

Rs. 400

d)

Rs. 500

22.

In a business, A and B invested amounts in the ratio of 2 : 1, whereas the ratio between and B was 3 : 2. If

the firm earned a profit of Rs. 1,20,000, how much amount did B receive?

a)

48000

b)

24000

c)

12000

d)

96000

23.

In which year was the Partnership Act passed?

a)

1932

b)

1956

c)

1947

d)

1956

24.

Which of the following is an appropriation of profit?

a)

Interest on loan

b)

Interest on Capital

c)

Employees’ salary

d)

Rent

25.

In the absence of an agreement to the contrary, the partners are

a)

Entitled for 6% interest on their capitals, only when there are profits

b)

Entitled for 9% interest on their capitals, only when there are profits

c)

Entitled for interest on capital on the bank rate, only when there are profits

d)

Not entitled for any interest in their capitals

26.

The interest on capital accounts of partners under the fluctuating capital account method is credited to

a)

Interest Account

b)

Profit and Loss Account

c)

Partners’ Capital Accounts

d)

Partners’ Current Accounts

27.

In the absence of an agreement to the contrary, the partners are

a)

Entitled for 6% interest on their capitals, only when there are profits

b)

Entitled for 9% interest on their capitals, only when there are profits

c)

Entitled for interest on capital on the bank rate, only when there are profits

d)

Not entitled for any interest in their capitals

28.

Vinod had withdrawn the following amounts during the year and Interest on Drawings is to be charged @12% P. a. The amount withdrawn are on 1.4.2020 - 10,000 ; 20.6.2020 - 16,000 ; 1.10.2020 - 20,000 ; 31.3.2021 - 4,000. Interest on Drawings is rs. (a)

29.

Shyam a partner, in a partnership firm withdrew rs. 8,000 at the end of every month. The interest on drawings is to be charged for (a) months

30.

A Partner Gaurav, withdrew rs. 12,000 in the beginning of each quarter during the year. Interest on drawings @8% chargeable to him will be :

a)

1,440

b)

2,400

c)

2,080

d)

1,760

31.

The balances of Partner's Current Account can be :

a)

Debit Balance

b)

Credit Balance

c)

Always debit

d)

Either Debit or Credit

32.

Which accounts are opened when partners have fluctuating capitals?

a)

Capital A/C

b)

Current A/C

c)

Both

33.

Rent paid to a partner is debited to :

a)

Partner's Capital A/C

b)

Profit and Loss A/C

c)

Profit and Loss Appropriation A/C

d)

Partner's Current A/C

34.

Which of the following items is not recorded in Profit and Loss Appropriation A/C?

a)

Interest on Partner's Capital

b)

Amount of Partner's drawings

c)

Profit as per Profit and Loss Account

d)

Commission to a Partner

35.

Rs. 700 is divided among A, B and C so that A receives half as much as B and B receives half as much as

C. Then C’s share is :

a)

Rs. 200

b)

Rs. 300

c)

Rs. 400

d)

Rs. 500

partnership fundamentals

Total questions: 35

Worksheet time: 19mins

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