Commerce Accountancy · Quantitative Aptitude

Partnership Accounting

170 Questions

Partnership accounting involves calculating profit and loss sharing ratios among business partners. It covers topics like interest on capital, joint life policies, and capital balances. These questions are a staple in commerce exams and test core accountancy principles.

Profit sharing ratiosInterest on capitalJoint venture accountingCapital balance calculationsPartner retirement policies

Partnership Accounting Questions

Multiple choice maths fundamental concept of ratio and proportion division problem dividing a quantity in a given ratio problems on ratios

A amount of $Rs.735$ was divided between A,B and C. If each of them had received $Rs.25$ less, their shares would have been in the ratio $1:3:2$. The money received by C was

  1. Rs. $195$
  2. Rs. $200$
  3. Rs. $225$
  4. Rs. $245$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

As per the given data,

$(A+25)+(B+25)+(C+25)=735$
$\implies A+B+C=735-75=660$ ....... $(1)$
$A:B:C=1:3:2$
$\implies A=x, B=3x, C=2x$
$\implies x+3x+2x=660$  ...... (From (1))
$\implies x=110$
Money received by C $=2 \times 110 +25=Rs.245$
Hence, option D is correct.

Multiple choice maths fundamental concept of ratio and proportion division problem dividing a quantity in a given ratio problems on ratios

A, B and C enter into a partnership investing Rs.$35000$, Rs.$45000$ and Rs.$55000$. Find their respective shares in annual profit of $40,500$.

  1. $Rs.10,500,\,Rs.13,500,\,Rs.16,500$
  2. $Rs.11,500,\,Rs.13,500,\,Rs.16,500$
  3. $Rs.10500,\,Rs.12500,\,Rs.16,500$
  4. $Rs.10,500,\,Rs.13,500,\,Rs.14,500$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

$A:B:C=35000:45000:55000=7:9:11$
A"s share $=\dfrac{7}{27}\times40500=Rs.10,500$


B"s share $=\dfrac{9}{27}\times40500=Rs.13,500$

C"s share $=\dfrac{11}{27}\times40500=Rs.16,500$

Multiple choice maths fundamental concept of ratio and proportion division problem dividing a quantity in a given ratio problems on ratios

Anand and Deepak started a business investing Rs.$22,500$ and Rs.$35,000$ respectively. Out of a total profit of Rs.$13,800$. Deepak"s share is

  1. $Rs.8450$
  2. $Rs.9400$
  3. $Rs.8500$
  4. $Rs.8400$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Ratio of their shares $=22500:35000$
$=9:14$
Deepak"s share $=Rs.\begin{pmatrix}13800\times \dfrac{14}{23}\end{pmatrix}=Rs.8400$

Multiple choice maths fundamental concept of ratio and proportion division problem dividing a quantity in a given ratio problems on ratios

Kamal started a business investing Rs.$9000$. After five months, Sameer joined with a capital of $Rs.8000$. If at the end of the year, they earn a profit of $Rs.6970$, then what will be the share of Sameer in the profit?

  1. $Rs.2370$
  2. $Rs.2380$
  3. $Rs.2390$
  4. $Rs.2280$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Now as per question, Kamal invested for $12$ months and Sameer invested for $7$ months.
So, Kamal:Sameer=$\begin{pmatrix}9000\times12\end{pmatrix}:\begin{pmatrix}8000\times7\end{pmatrix}$
$=108.56=27:14$
Sameer ratio in profit will be $=6970\times \dfrac{14}{41}=Rs.2380$

Multiple choice maths fundamental concept of ratio and proportion division problem dividing a quantity in a given ratio problems on ratios

A sum of Rs. 9,000 is to be distributed among A, B and C in the ratio of 4 : 5 : 6. What will be the difference between As and Cs shares?

  1. Rs. 600

  2. Rs. 1,000

  3. Rs. 900

  4. Rs. 1,200
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Given that,
Total money = Rs. 9000 
A: B: C = 4 :5:6 
As share= $\cfrac{4}{(4 + 5 + 6)} \times 9000 = 2400$
Bs share = $\cfrac{5}{(4 + 5 + 6)} \times 9000 = 3000$
Cs share = $\cfrac{6}{(4 + 5 + 6)}\times 9000=3600$

Total money = Rs. 9000 
Hence, difference between As share and Cs share
= 3600 - 2400 = 1200

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

Gopal Sons starts a business by investing Rs. 15 lakh and purchases goods worth Rs.12.5 lakh. At the end of the year he is left with a profit of Rs.1,50,000. The surplus profit of Rs.1,50,000 is a /an_________.

  1. event

  2. transaction

  3. dealing

  4. operations
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Every economic activity is performed through transactions and events. An event is the happening, consequence or result of the transaction. Hence in our example the surplus profit is an event which is result of transaction.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

Closing Stocks with X and Y are 26400 & 60000 respectively. In the books of Y, what will be the treatment of closing stock in joint venture?

  1. Stock of 60000 will be shown as closing credit balance in Y's Account as 'To Balance c/d'.

  2. Stock of 26400 will be shown as closing debit balance in Y's Account as 'By Balance c\d'.

  3. Closing stock of 60000 will not appear in Y's Account.

  4. None of these.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In joint venture accounting, when a co-venturer retains stock, it is treated as a closing balance in the joint venture account. The stock is debited to the co-venturer's account, and since it is an asset for the venture, it appears as a credit balance in the venture ledger.

Multiple choice mathematics and statistics banks and simple interest introduction to interests introduction to interest introduction to interest payments

Anil invests Rs 3,000 for a year and Sunil joins him with Rs 2,000 after 4 months. After the year they receive a return of Rs 2,600. Sunil's share is

  1. Rs 800

  2. Rs 1,000

  3. Rs 750

  4. Rs 900
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

$Ratio\quad in\quad which\quad they\quad should\quad share\quad their\quad profits=Raio\quad of\quad investments\times \quad Time\quad period$

$=\frac { 3000\times 12 }{ 2000\times 8 } =\frac { 3\times 3 }{ 2\times 2 } =\frac { 9 }{ 4 } $
Sunils share will be$=\frac { 4 }{ 13 } \times 2600=800$
Sunils share will be Rs800,

Multiple choice organisation of commerce and management concept of market and marketer marketing environment meaning and definition of marketer role of marketing

Price earning ratio is 83.33% and E.P.S. is Rs. 30. The market price of equity share will be _____________.

  1. Rs. 33.33

  2. Rs. 66.67

  3. Rs. 20

  4. Rs. 25
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The market price of an equity share can be calculated by multiplying the Earnings Per Share (EPS) by the Price-Earnings (P/E) ratio. Here, 30 * 83.33% (or 5/6) equals Rs. 25.

Multiple choice maths ratio, proportion and unitary method converting to ratios finding ratios other quantities

When Rs. $4572$ is divided among $A, B$ and $C$ such that three times of $A'$s share is equal to $4$ times of $B'$s share is equal to $6$ times $C'$s share . What is $A'$s share ?

  1. Rs. $4689$
  2. Rs. $2689$
  3. Rs. $4032$
  4. Rs. $2032$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Given, $3A = 4B = 6C$ 

$ \displaystyle \Rightarrow \dfrac {A}{B} = \dfrac {4}{3}$ and$  \dfrac {B}{C} = \dfrac {6}{4} = \dfrac {3}{2}$
Therefore, $ \displaystyle A:B:C = 4:3:2$

$ \Rightarrow A = 4k, B = 3k, C =2K$
Thus $\displaystyle 4k + 3k + 2K = 4572$
$ \Rightarrow 9k = 4572 $
$\Rightarrow k = 508$
Hence, $ \displaystyle A's$ share $= 4 \times 508 =$ Rs. $2032.$

Multiple choice book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

A, B and C are partners in a firm. Though there is no provision in the partnership deed for interest on capital, this has been provided in the account @ 10% p.a. for the two years ended on 31 Dec., 2013. Their fixed capitals on which interest was calculated were throughout A Rs. 15,000, B Rs. 12,000 and C Rs. 9,000. Their profit sharing ratios were 2007 - 5:3:2 and 2008 - 2: 2: 1. The necessary adjustment entry will be made as:

  1. C's current a/c Dr. 360

    To A's current a/c 240

    To B's current a/c 120

  2. A's current a/c Dr. 240

    B's current a/c Dr. 120

    To C's current a/c 360

  3. A's current a/c Dr. 120

    B's current a/c Dr. 240

    To C's current a/c 360

  4. C's current a/c Dr. 360

    To A's current a/c 120

    To B's current a/c 240
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Interest on capital (10%) for 2 years: A=3000, B=2400, C=1800. Total=7200. Profit sharing 2007 (5:3:2) and 2008 (2:2:1). Calculating the net effect of wrongly credited interest versus the profit adjustment shows C should be debited 360, while A and B are credited.

Multiple choice book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

X and Y are two partners sharing profit and loss in the ratio 2:1. They decided to share profit and loss in future in the ratio of 3:2 If the goodwill of the firm is valued Rs. 60,000, how the adjustment in profit sharing ratio will be affected?

  1. Y pay X Rs. 4,000

  2. X pay Y Rs. 4,000

  3. X pay Y Rs. 6,000

  4. Y pay X Rs. 6,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Earlier goodwill was distributed in ratio 2:1 between X and Y

i.e. 60000  as  40000 - X & 20000 - Y.
Now , X = 60000 * 3/5 = 36000 ; Y = 60000 * 2/5 = 24000.
hence, X will pay 4000 to Y.

Multiple choice book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

One of the partner contributed Rs.30,000 in the firm-How much interest he will get on the capital contributed ________.

  1. Nill

  2. 6% of 30,000

  3. 5% of 30,000

  4. Income of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Partners usually introduce some amount time to time as the capital in firm and the only reaosn behind it is to expand the business.

Since the partner has introduced Rs30,000 as additonal capital and firms does not pays interest on such amounts. The only situation when interest has to be paid is the time when a loan has been taken by the firm from any of its partner.
 

Multiple choice book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

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

  1. Rs. 1,720 to A and Rs.1,720 to B

  2. Rs. 2000 to A and Rs.1440 to B

  3. Rs. 1440 to A and Rs.2000 to B

  4. None
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Profit after interest and remuneration :-
= Profit before interest and remuneration - Interest - remuneration
= Rs-8,000 - (600 + 360) - (3,600)
= Rs-3,440.

Distributing profit is equal ratio among partners = Rs-3,440 / 2
                                                                                = Rs-1,720 to each partner. 
Working notes:-
Interest on capital = Capital x rate of interest 
A:-
= 10,000 x 6/100
= Rs-600
B:-
= 6,000 x 6/100
= Rs-360. 
B's remuneration = Rs-300 x 12
                             = Rs-3,600