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Basics of Partnerships Test - 1

Chapter : Basics of Partnership Class : XII

20 Questions Published
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Questions

Question 1 Multiple Choice (Single Answer)

According to the Partnership Act 1932, what is the maximum limit of partners?

  1. It is 10 in case of General Business.
  2. It is 20 in case of Banking Business.
  3. It is 10 in case of Banking and 20 in case of General Business.
  4. No Maximum Limit is Fixed by Partnership Act 1932.
  5. Maximum Number can be 50.
Question 2 Multiple Choice (Single Answer)

Partnership comes into existence by

  1. an agreement
  2. status of partners
  3. process of Law
  4. without any agreement
  5. lawful business
Question 3 Multiple Choice (Single Answer)

Commission paid to a partner is shown in Profit and Loss Appropriation Account, but commission paid to manager is shown in Profit and Loss Account. What is the reason behind it?

  1. It is an Appropriation.
  2. Commission to manager is not compulsory.
  3. It is paid after the appropriations.
  4. It is a charge against the Profit.
  5. It is a Capital expenditure.
Question 4 Multiple Choice (Single Answer)

How much interest will be paid on a bank loan in the absence of a partnership deed?

  1. 6%
  2. 6% Per Annum
  3. 10.75%
  4. 12%
  5. As per the rate fixed by bank
Question 5 Multiple Choice (Single Answer)

The current account of a partner __________________.

  1. will always show a debit balance
  2. will never show a debit balance
  3. will show a credit balance
  4. will never show a credit balance
  5. may have a debit or a credit balance
Question 6 Multiple Choice (Single Answer)

A partnership firm may open apartner's current accounts when capitals are

  1. fixed
  2. fluctuating
  3. capitals are equal
  4. capitals are unequal
  5. capitals are fixed and fluctuating both
Question 7 Multiple Choice (Single Answer)

Ashok drew Rs. 2,000 at the end of every month for 6 months (ending 31st March 2014) @ 10% p.a. What is the interest on drawings?

  1. 250
  2. 200
  3. 100
  4. 417
  5. 150
Question 8 Multiple Choice (Single Answer)

What will be paid to the partners in the absence of partnership deed?

  1. Interest on Capital
  2. Salary to Partners
  3. Interest on Loan
  4. Commission to Partners
  5. Profit in ratio of their capitals
Question 9 Multiple Choice (Single Answer)

Where will a person record share of loss, when partners capital accounts are fixed?

  1. Debit side of partners capital account.
  2. Credit side of partners capital account.
  3. Debit side of partners current account.
  4. Credit side of partners current account.
  5. The Balance Sheet.
Question 10 Multiple Choice (Single Answer)

Which of the following is not a provision of partnership that is not followed in the absence of a partnership deed?

  1. Interest on Partner's Loan is paid @ 6%.
  2. Interest on Partner's Loan is paid @ 6% Per Annum.
  3. No Interest on capital to any partner.
  4. No salary or commission to any partner.
  5. No Interest on drawings.
Question 11 Multiple Choice (Single Answer)

Which of the following options can change the fixed capital of partners?

  1. Cash withdrawn for personal use
  2. Goods taken for personal use
  3. Asset taken for personal use
  4. Additional capital introduced
  5. Interest on capital provided to the partners
Question 12 Multiple Choice (Single Answer)

Debit balance of Current Account is shown in which of the following sheets?

  1. Liabilities side of Balance Sheet
  2. Assets side of Balance Sheet
  3. Debit side of Partners Capital A/c
  4. Credit side of Partners Capital A/c
  5. Profit and Loss Adjustment A/c
Question 13 Multiple Choice (Single Answer)

When interest on capital is treated as a charge against profit, it will be given in which of the following conditions?

  1. Whether there is a profit or loss
  2. When there is profit only
  3. In Capital Ratio
  4. Equally
  5. To the extent of profit
Question 14 Multiple Choice (Single Answer)

What journal entry will take place when interest on a partner's loan is closed?

  1. Profit and Loss A/c Dr. To Interest on Partner's Loan A/c
  2. Interest on Partner's Loan A/c Dr. To Profit and Loss A/c
  3. Interest on Partner's Loan A/c Dr. To Partner's Loan A/c
  4. Partner's Loan A/c Dr. To Interest on Partner's Loan A/c
  5. Profit and Loss A/c Dr. To Partner's Loan A/c
Question 15 Multiple Choice (Single Answer)

A partnership deed allows 10% p.a. interest on capital to the partners. A will get Rs. 12,000 and B will get Rs. 8,000. It was found that A could get only Rs. 7,200 and B could get only Rs. 4,800. What is the reason behind that?

  1. Because capital is fixed.
  2. Because capital is fluctuating.
  3. Some part of profit is kept as reserve.
  4. Appropriations are more than the profit.
  5. There was loss last year.
Question 16 Multiple Choice (Single Answer)

In the absence of a partnership deed, partners will share profits in which of the following manner?

  1. Capital Ratio
  2. Equally
  3. Partners are not entitled to profit
  4. In 5 : 3 : 2 Ratio
  5. In 3 : 2 : 1 Ratio
Question 17 Multiple Choice (Single Answer)

Rent paid to a partner will be charged against which of the following?

  1. Profit and loss account
  2. Profit and loss appropriation account
  3. Profit and loss adjustment account
  4. Realisation account
  5. The balance sheet
Question 18 Multiple Choice (Single Answer)

Which of the following is not shown in Profit and Loss Appropriation Account?

  1. Transfer to Reserve
  2. Commission to Partner
  3. Interest on Partner's Loan
  4. Salary to Partner
  5. Interest on capital
Question 19 Multiple Choice (Single Answer)

What type of closing balance is shown by the partner's current account?

  1. It never shows a debit balance.
  2. It never shows a credit balance.
  3. It may have a debit or credit balance.
  4. It always shows debit balance.
  5. It always shows credit balance.
Question 20 Multiple Choice (Single Answer)

In which of the following ways the interest on a partner's capital will be shown, if the capital of the partner isfixed?

  1. Partners Capital Account
  2. Partners Current Account
  3. Profit and Loss Account
  4. Profit and Loss Adjustment Account
  5. In Interest on Capital A/c only
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