Tag: elements of accounts

Questions Related to elements of accounts

Port Trust dues are payable by _________________.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. The forwarding agent

  2. Importer

  3. Exporter

  4. Shipping company

Show answer
Correct Option: B
Explanation:

The 'Landing and Shipping DuesOffice' levies a charge for services of dock authorities which has to be borne by the importer. After payment of dock charges, the importer is given back one copy of the application as a receipt. This receipt is is known as 'port trust dues receipt'.

Import procedure begins with _____________.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. Indent

  2. Marine insurance

  3. Mate's certificate

  4. Shipping order

Show answer
Correct Option: A
Explanation:

 Indent orders are orders that are placed for products produced offshore. It generally is for a large quantity of standard or custom made products manufactured overseas and due to the higher volumes, the price per unit is lower.


After the initial formalities are over and the importer has obtained the licence quota and the necessary amount of foreign exchange, the next step in the import of goods is that of placing the order. This order is known as Indent.

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 ______________ .

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

  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

Show answer
Correct Option: A

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

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

  1. old profit sharing ratio

  2. profit sharing ratio

  3. new profit sharing ratio

  4. both a and c

Show answer
Correct Option: B

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 :

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

  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

Show answer
Correct Option: A
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. 

 New profit sharing ratio is calculated at the time of _________ .

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

  1. Admission of a partner

  2. Retirement of a partner

  3. Death of a partner

  4. All of the above

Show answer
Correct Option: D
Explanation:

Partnership - The relation between persons who have agrred to share the profit of a business carried on by all or any of them acting for all is known as partnership. 

Partnership can be reconstituted at any time during the accounting year in any of the following ways :-
1. Admission of a partner
2. Retirement of a partner
3. Death of a partner
In any of the above instances new profit sharing ration must be calculated to allocate the income and expenditure to partners in a reconstituted firm.

In partnership, a minor _______________ .

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

  1. Cannot be a partner

  2. Can be a partner

  3. Can be admitted only to the benefits of a partnership

  4. None of the above

Show answer
Correct Option: C
Explanation:

A partnership is a contract between the partners. Hence a minor cannot be a partner in a partnership firm. However, according to the Partnership Act, a minor may be admitted to the benefits of a partnership. So while the minor will not be a partner he will enjoy all the benefits of a partnership.

On the dissolution of a firm, an amount realized from the unrecorded asset is credited to:

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

  1. Revaluation account

  2. Realisation account

  3. Cash account

  4. Capital Account.

Show answer
Correct Option: B
Explanation:

At the time of dissolution, all the assets are transferred to realisation account. Journal entry is:
Realisation A/c Dr. 
    To assets A/c 
When assets are sold, entry is:   
Bank A/c Dr. 
    To Realisation A/c
Because bank balance increased.

When is a claim of retiring partner transferred to Loan account which accounts it is credited to?

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

  1. Retiring Partner Loan A/c

  2. Cash A/c

  3. Bank Loan A/c

  4. None of the above

Show answer
Correct Option: A
Explanation:

Journal Entry for settlement to Retiring Partner against Loan:

Retiring Partner Capital A/c Dr         To Retiring Partner Loan A/c


Cash paid on settlement of retiring partners claim is credited to _____.

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

  1. Cash A/c

  2. Partners Capital A/c

  3. Retiring Partner Capital A/c

  4. None of the above

Show answer
Correct Option: A
Explanation:

Cash is a real account. Rule for the real account is as under:

Debit what comes in 
Credit what goes out

Cash paid to partner at the time of retirement. Accordingly journal entry will be passed as:
Partner's Capital A/c                 Dr.
          To Cash A/c