Commerce Accountancy · Quantitative Aptitude

Partnership Accounting

181 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 elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

P and Q enter into a Joint Venture sharing profits and losses in the ratio 3:2. P purchased goods costing Rs. 2,00,000. Other expenses of P Rs. 20,000. Q, sold the goods for Rs. 2,00,000. Remaining goods were taken over by Q at Rs. 10,000. The amount of final remittance to be paid by Q to P will be ______________.

  1. Rs. 2,10,000

  2. Rs. 2,14,000

  3. Rs. 2,20,000

  4. None
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

P's total investment = 2,00,000 + 20,000 = 2,20,000. Total sales = 2,00,000 + 10,000 (goods taken by Q) = 2,10,000. Loss = 2,20,000 - 2,10,000 = 10,000. P's share of loss (3/5) = 6,000. Q's share of loss (2/5) = 4,000. Q owes P for goods taken (10,000) and must pay P's net claim. Actually, P spent 2,20,000 and Q collected 2,00,000 cash. Q owes P 2,20,000 - 6,000 (P's loss) = 2,14,000.

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

X, Y and Z are partners in the ratio of 2: 1 : 1. After distribution of realisation loss, Z's capital has a debit balance of Rs. 6,000. If Z is personally insolvent, his capital balance will cancelled by:

  1. X and Y contributing equally

  2. X and Y contributing in the ratio of 2:1

  3. X and Y contributing in the ratio of their capitals

  4. Writing off to Profit and Loss account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When a partner is unable to contribute towards deficiency of his capital account,he/she is said to be insolvent,and the sum not recoverable is treated as capital loss. In the absence of any agreement, such capital loss is to be borne by the solvent partners in accordance with the principle laid down in Garner vs. Murray case, which states that the solvent partners have to bear such loss in the ratio of their capitals on the date of dissolution.

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

A company makes a profit of $Rs.\,9,00,000$. $20\%$ of which is paid as taxes. If the rest is divided among the partners $P,Q\,and\,R$ in the ratio $1\,\colon\,1\displaystyle\frac{1}{2}\colon2$, then the share of $P,Q$ and $R$ are respectively.

  1. $\;2,40,000;\,3,20,000;\,1,60,000$
  2. $\;3,20,000;\,2,40,000;\,1,60,000$
  3. $\;1,60,000;\,3,20,000;\,2,40,000$
  4. $\;1,60,000;\,2,40,000;\,3,20,000$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Amount to be paid in taxes $=20\%$ of $Rs.\,9,00,000=Rs.\,1,80,000$
$\;\;\;\;\;\;\;$ Amount to be distributed among $P,Q\,and\,R=9,00,000-1,80,000=7,20,000$.
$\;\;\;\;\;\;\;\therefore\;Let\;the\;shares\;of\;P,Q\,and\,R\;be\,x,\displaystyle\frac{3x}{2}$ and $2x$ respectively. 

Then,
$\;\;\;\;\;\;\;\;x+\displaystyle\frac{3x}{2}+2x=7,20,000\;\Rightarrow\;\;x=Rs.\,1,60,000$.
$\;\;\;\;\;\;\;\;The\;share\;of\;P,Q\,and\,R\;are\;Rs.\,1,60,000,Rs.\,2,40,000\,and\,Rs.\,3,20,000$.

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 business organisation and correspondence partnership 3 - registration of a partnership firm partnership deed registration of partnership registration of partnership firm

Non-registration of the Firm does not affect the right of the Firm to institute a suit or claim of set-off not exceeding ________.

  1. Rs. 100

  2. Rs. 1,000

  3. Rs. 10,000

  4. Rs. 50,000.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The law provides an exception for small claims; an unregistered firm can still institute a suit or claim of set-off if the value does not exceed Rs. 100.

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 elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

Upon dissolution of Firm, the Surplus left after settlement of the debts and liabilities of the Firm shall be ______________.

  1. credited to the Reserve Account

  2. credited to the Government of India A/c

  3. distributed among the Partners equally

  4. distributed among the Partners according to their rights.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

According to the Indian Partnership Act, after settling all debts and liabilities, any remaining surplus must be distributed among the partners in accordance with their rights as defined in the partnership agreement.

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 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.