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

X and Y are partners with the capital of Rs. 50,000 and Rs. 30,000 respectively. Interest payable on capital is 10% p.a. Find the interest on capital for both the partners when the profits earned by the firm is Rs. 4,800?

  1. Rs. 5,000 and Rs. 3,000.

  2. Rs. 3,000 and Rs. 1,800.

  3. No interest will be paid to the partners.

  4. None of the above.

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Interest on capital = capital x rate
X :-
= 50,000 x 10/100
= RS-5,000. 
Y:-
= 30,000 x 10/100
= RS-3,000.

Apportioned in the ratio of interest to be allowed to the extent of profits available:-
X:-
= 5,000
-------------- x 4,800
 8,000
= RS-3,000.
Y:-
= 3,000 
------------- x 4,800
  8,000
= RS-1,800.
Multiple choice book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

M and N are partners in a firm. M has given a loan of Rs. 8,000 to the firm on 1st July, 2017. The partnership deed is silent upon the question of provision of interest on partner's loan. Compute the amount of interest payable on the loan advanced by M to the firm, assuming the books are closed on 31st March each year.

  1. Rs. 460

  2. Rs. 360

  3. Rs. 560

  4. Rs. 480
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Amount of loan given by M to the firm (on 1st July, 2017) = Rs. 8,000
Period (from 1st July, 2017 to 31st March, 2018) = 9 months
Interest rate = 6% p.a.
Interest on M's loan = 8,000 x 6/100 x 9/12 = 360

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 having capital of Rs. 5,000 and Rs. 6,000 respectively. Interest on capital is given @ 5% p. a. Profits for the year before the appropriation is Rs. 4.600 provide interest on capital out of profits. Interest allocated to partners is:

  1. Rs. 3,000 and Rs. 2,500

  2. Rs. 2,090 and Rs. 2,509

  3. Rs. 2,500 and Rs. 2,091

  4. Rs. 600 and Rs. 300
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Interest on capital = capital x rate
A :-
= 50,000 x 5/100
= RS-2,500.
B:-
= 60,000 x 5/100
= RS-3,000.

Apportioned in the ratio of interest to be allowed to the extent of profits available:-
A:-
= 2,500
-------------- x 4,600
   5,500
= RS-2,090.
B:-
= 3,000 
------------- x 4,600
  5,500
= RS-2,509.
Multiple choice

How are the profits of an Agricultural Cooperative Society distributed among its members?

  1. Equally among all members

  2. In proportion to the share capital contributed by each member

  3. In proportion to the agricultural produce marketed by each member

  4. In proportion to the labor contributed by each member
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The profits of an Agricultural Cooperative Society are typically distributed among its members in proportion to the share capital contributed by each member.

Multiple choice

Which of the following is NOT a common revenue-sharing model used in Bollywood?

  1. 50-50 Split

  2. 70-30 Split

  3. 80-20 Split

  4. Fixed Rental Model
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The fixed rental model, where the distributor pays a fixed amount to the producer irrespective of the film's performance, is not a common revenue-sharing model in Bollywood.