Quantitative Aptitude

Partnership

842 Questions
All Capital changes, admission, and withdrawal 249 Compound partnership and time-weighted capital 186 Absolute profit or percentage difference to ratio 126 Simple partnership 100 Working and sleeping partners 79 Retirement and gaining ratio 63 Interest on capital and fixed allowances 39

Partnership Questions

Multiple choice investement and financial planning banking compound interest comparing quantity maths

Ajay and Anil start a business in partnership. Anil invested $Rs.300$ more that Ajay for half the number of months that Ajay did. If, out of the total profit of $Rs.375$ of the one year, Ajay got $Rs.25$ more than Anil, what was the investment made by Anil?  

  1. $Rs.800$
  2. $Rs.350$
  3. $Rs.700$
  4. $Rs.400$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let Ajay's investment be x and his time be 12 months. Anil's investment is x + 300 and his time is 6 months. Ratio of their profits: Ajay's share = Rs. (200 + 25) = Rs. 200, Anil's share = Rs. (200 - 25) = Rs. 175 since total profit is 375 and Ajay got 25 more than Anil. Ratio of profits = Ajay / Anil = 200 / 175 = 8 / 7. Also, ratio of profits equals ratio of (investment * time): (x * 12) / ((x + 300) * 6) = 2x / (x + 300). Equating these gives 2x / (x + 300) = 8 / 7, meaning 14x = 8x + 2400, so 6x = 2400, x = 400. Anil's investment is x + 300 = 700.

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

On the death of a partner, credit balance of Profit and Loss Account appearing in, the Balance sheet, should be credited to the Capital Accounts of ______________ .

  1. all partners including the deceased partner in their profit-sharing ratio

  2. the remaining partners in the new profit-sharing ratio

  3. neither the deceased partner nor the remaining partners.

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

When a partner dies, the accumulated profits in the Profit and Loss Account belong to all partners based on their profit-sharing ratio, as it was earned during their tenure.

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

At the time of retirement or death of a partner, the remaining partners decide to adjust their capital contributions in their _________.

  1. old profit sharing ratio

  2. profit sharing ratio

  3. new profit sharing ratio

  4. both a and c
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When a partner retires or dies, the continuing partners typically take over the remaining share and adjust their capitals to reflect their new profit-sharing ratio to maintain proportionality between capital and profit shares.

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

X and Y have capitals of Rs. 20,000 and Rs. 10,000 respectively and share profits and losses equally. On dissolution of firm all creditors are paid off and a balance of cash left is Rs. 5,000. It will be distributed as follows :

  1. Rs. 5,000 to X

  2. Rs. 5,000 to Y

  3. Rs. 2,500 each to X and Y

  4. Rs. 3,333 to A and Rs. 1,667 to B
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to piecemeal distribution of cash, partners whose capitals are more than proportionate to other partner's capital should first be refunded to bring down their capitals to proportionate levels. After that amount left unpaid be shared in profit sharing ratio. In this, X and Y share profits and losses equally. So their capitals should also be equal. To make capital equal X will be paid first. So Rs. 5000 will be paid to X. 

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

A draws an accommodation bill on B. The proceeds are to be shared by A and B in the ratio of 3:1. The amount of bill is Rs. 6,000, discounting charges Rs. 100. Discount borne by A will be ________.

  1. Rs. 75

  2. Rs. 100

  3. Rs. 83

  4. none of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The discount charges are shared in the ratio of the proceeds. Since the ratio is 3:1, A bears 3/4 of the discount. 100 * (3/4) = 75.

Multiple choice elements of book keeping and accountancy commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

A drew a bill on B for Rs. $50,000$ for $3$ months. Proceeds are to be shared equally. A got the bill discounted at $12\%$ p.a. and remits required proceeds to B. The amount of such remittance will be.

  1. $24,250$
  2. $25,000$
  3. $16,167$
  4. $32,333$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Discount = 50,000 * 0.12 * (3/12) = 1,500. Net proceeds = 50,000 - 1,500 = 48,500. Since proceeds are shared equally, B receives 48,500 / 2 = 24,250.

Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

A and B entered into a joint venture contract. They opened a joint bank account by contributing Rs. 1,00,000 each. The expenses incurred on contract were Rs. 1,00,000. Contract money received by cheque was Rs. 2,00.000 and in shares Rs. 50,000. The shares are sold for Rs. 40,000. What will be the profit on venture ?

  1. Rs. 1,50,000

  2. Rs. 1,40,000

  3. Rs. 2,40,000

  4. Rs. 2,00,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

A and B enter into a joint venture sharing profit and losses in the ratio 2:3. Goods were purchased by A for Rs. 55,000. Expenses incurred by A Rs. 3,500 and by B Rs. 5.200. B sold the goods for Rs. 80,000. Remaining stock was taken over by B at Rs. 12,200. What will be the final remittance to be made by B to A?

  1. Rs. 69,900

  2. Rs. 92 200

  3. Rs. 28,500

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

Total cost incurred by A is 55,000 + 3,500 = 58,500. Total cost incurred by B is 5,200. Total cost of the venture is 63,700. Total revenue is 80,000 (sales) + 12,200 (stock) = 92,200. Profit is 92,200 - 63,700 = 28,500. A's share (2/5) is 11,400 and B's share (3/5) is 17,100. A should receive 58,500 + 11,400 = 69,900 from B.

Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

The interest on partner's capital accounts is to be credited to_________. 

  1. partner's capital Accounts

  2. profits and loss Accounts

  3. interest account

  4. all of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Interest on capital is an appropriation of profit paid to partners. It is credited to the partner's capital account (or current account) to increase their equity in the firm.

Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

Where a partner is entitled to interest on capital contributed by him, such interest will be payable: 

  1. Only out of profits

  2. Only out of capital

  3. Either (a) or (b)

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

Interest on capital is generally treated as an appropriation of profits, meaning it is only payable if the firm earns a profit. It is not a charge against profits unless specifically agreed upon in the partnership deed.

Multiple choice book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

A and B enter into a joint venture sharing profits and losses equally. A purchased 5000 kg of rice @ Rs. 25/kg. B purchased 1000 kg of wheat @Rs. 30/kg. A sold 1000 kg of wheat @ Rs. 35/kg and B sold 5000 kg of rice @ Rs. 30/kg. The profit on venture will be :

  1. Rs. 55,000

  2. Rs. 50,000

  3. Rs. 60,000

  4. Rs. 30,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Total cost: (5000 kg * 25) + (1000 kg * 30) = 125,000 + 30,000 = 155,000. Total revenue: (1000 kg * 35) + (5000 kg * 30) = 35,000 + 150,000 = 185,000. Profit = 185,000 - 155,000 = 30,000.

Multiple choice book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

X, Y and Z are partners in a firm.At the time of division of profit for the year there was dispute among the partners.Profits before interest on partner's capital was Rs.10,000 and X wanted interest on capital at 20% as his capital contribution was Rs.1,00,000 as compared to that of Y and Z which was Rs.75,000 and Rs.50,000 respectively. Find the solution ______________________________.

  1. Profits of Rs.10,000 will be distributed equally.

  2. X will get the interest of Rs.20,000 and the loss of Rs.10,000 will be shared equally

  3. All the partners will get interest on their capital and the loss will be shared equally.

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

According to the Indian Partnership Act, in the absence of an agreement, interest on capital is not allowed, and profits are shared equally.

Multiple choice book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

A and B are partners sharing profits and losses in the ratio of 3 : 2 having the capital of Rs.80,000 and Rs.50,000 respectively. They are entitled to 10% p.a interest on capital before distributing the profits.During the year firm earned Rs.17,800 before allowing any interest on capital.Profits appointed among them excluding interest will be ____________________.

  1. Rs.2,880 and 1,920

  2. Rs.8,800 and 8,800

  3. Rs. 8,000 and 5,000

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

Total interest on capital = 10% of (80,000 + 50,000) = 13,000. Available profit is 17,800. Since profit exceeds interest, interest is paid fully. Remaining profit = 17,800 - 13,000 = 4,800. Distributed in 3:2 ratio: A gets 4,800 * 3/5 = 2,880; B gets 4,800 * 2/5 = 1,920.

Multiple choice book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

A and B are partners with the capital of Rs.20,000 and Rs.10,000 respectively. Interest payable of capital out of profit is 10% p.a. Find the interest on capital for both the partners when the profits earned by the firm is Rs.2,400.

  1. Rs.2,000 and Rs.1,000

  2. Rs.1,600 and Rs. 800

  3. No interest will be paid to the partners

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

Total interest on capital = 10% of (20,000 + 10,000) = 3,000. Since the profit (2,400) is less than the interest (3,000), interest is restricted to the available profit in the ratio of capitals (2:1). A gets 2,400 * 2/3 = 1,600; B gets 2,400 * 1/3 = 800.