Questions for Chapter-Accounting for Partnership Firms-Basic Concepts 

MCQ-Based Questions for CUET Accountancy chapter-Accounting for Partnership Firms-Basic Concepts 

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Practice Questions for CUET Accountancy chapter-Accounting for Partnership Firms-Basic Concepts SET-1

Accounts - MCQ on Accounting for Partnership Firms-Basic Concepts

Class XII

Q.1 Minimum number of persons in Partnership business-

a. Two b. Six

c. Forty d. One

Answer:

(a)Two

Explanation- In order to from Partnership business, there should be at least two or more persons.

Q.2 Name the agreement which is being made while doing Partnership Business.

a. Mutual agreement b. Written agreement

c. Partnership deed d. Oath taking agreement

Answer:

(c)Partnership deed

Explanation- Partnership is the result of an agreement between two or more persons to do business and share its profit and losses and the agreement for the same purpose is known as Partnership Deed.

Q.3 Partnership act is defined under which act ?

a. 1956 b. 1932

c. 1947 d. 1999

Answer:

b. 1932

Explanation- Partnership act is defined under Indian Partnership Act,1932

Q.4 How many capital accounts are there ?
a. Twenty b. Six

c. Four d. Two

Ans. d. Two

Explanation- Capital accounts are of two types – Capital account and Current Account.

Q.5 Which account has fixed balance ?

a. Fixed Capital Account b. Fluctuating Capital Account

c. Ram’s capital Account d. Rita’s Capital Account

Answer:

(a)Fixed Capital Account

Explanation- The capital account balance remain unchanged unless there is addition to or withdrawal of capital.

Q.6 Interest on Drawings is credited to –

a. Balance sheet b. Profit and Loss account

c. Profit and loss appropriation account d. Capital accounts

Answer:

(c)Profit and loss appropriation account

Explanation- Interest on Drawings is a gain to the firm and hence is credited to the Profit and loss Appropriation Account.

Q.7 Interest on Drawings is debited to –

a. Balance sheet b. Profit and Loss account

c. Trial balance d. Capital account(in case of Fluctuating Capital)

Answer:

(d)Capital account (in case of Fluctuating Capital)

Explanation- Interest on Drawings is a loss to the partner and hence is debited to the Capital account (in case of Fluctuating Capital)

Q.8 The partnership deed does not provide for :

a. Interest on drawing b. Profit

c. Loss d. Interest on Capital

Answer:

(a)Interest on drawing

Explanation- The partnership deed does not provide for charging Interest on drawing.

Q.9 If the partner has made a withdrawal to the capital during the year, the interest on capital is calculated on :

a. Closing balance in the capital a/c

b. Opening balance in the capital a/c

c. Zero balance in the capital a/c

d. Half-yearly balance in the capital a/c

Answer:

(b)Opening balance in the capital a/c

Explanation- If the partner has made a withdrawal to the capital during the year, the interest on capital is calculated on Opening balance in the capital a/c.

Q.10 Amount payable to a partner towards interest on capital, salary, commission etc, is treated as –

a. profit b. revenue

c. appropriation d. loss

Answer:

(c)appropriation

Explanation- Amount payable to a partner towards interest on capital, salary, commission etc, is treated as appropriation and it should not be charged against profits.

Q.11 All the omission and commission are adjusted under :

a. Past adjustments b. Present adjustments

c. Future adjustments d. None of them

Answer:

(a)Past adjustments

Explanation- All the omission and commission are adjusted under Past adjustments for correction of their impact.

Q.12 If we talk about providing interest on Partner’s Loan then which account will be credited-

a. Bank A/c b. Cash A/c

c. Partner’s Loan A/c d. Interest on Partner’s Loan a/c

Answer:

(c)Partner’s Loan A/c

Explanation- Interest on loan being a charge against the profits, is transferred to the debit of the Profit and Loss Account and not to the debit of the Profit and Loss Appropriation Account.

Q.13 In the absence of any agreement, partners are entitled to get –

a. 20% interest p.a. b. 4% interest p.a.

c. 6% interest p.a. d. 10% interest p.a.

Answer:

(c)6% interest p.a.

Explanation- In the absence of any agreement, partners are entitled to get 6% interest p.a. on loan whereas they are not entitled to interest on capital.

Q.14 Guarantee to the incoming partner is given by-

a. Old partners b. new partner

c. Diseased partner d. none of them

Answer:

(c)Diseased partner

Explanation- Guarantee to the incoming partner is given by some of the old partners.

Q.15 Guarantee is given by firm as well as

a. Companies b. MNCs

c. Friends d. Partners

Answer:

(d)Partners

Explanation- Guarantee is given by firm as well as partners just like guarantee to the incoming partner is given by old partners.

Q.16 At the time of calculation of Opening Capital, how many figures will appear at a time?

a. One b. Ten

c. Four d. Two

Answer:

(a)One

Explanation- At the time of calculation of Opening Capital one figure will appear at a time.

Q.17 If the interest on capital is transferred to P&L appropriation A/c, then which account will be credited –

a. Interest on Capital A/c b. Interest on Drawings A/c

c. Interest on Loan A/c d. Interest on Current A/c

Answer:

(a)Interest on Loan A/c

Explanation- If the interest on capital is transferred to P&L appropriation A/c, then Interest on Loan A/c will be credited.

Q.18 What will be the provision for interest on Capital if the case is ‘When the partnership agreement is silent as to interest on capital?’

a. Interest on capital is allowed.

b. Interest on capital is not allowed.

c. Both of them.

d. None of them

Answer:

b. Interest on capital is not allowed.

Explanation- The provision in this case will be Interest on capital is not allowed.

Q.19 Which section of Partnership is there in Indian Partnership Act, 1932 ?

a. Section 6 b. Section 27

c. Section 105 d. Section 4

Answer:

(d)Section 4

Explanation- According to section-4 of the Indian partnership Act, 1932, “Partnership is the relation between two or more persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”

Q.20 Which one of them is the duty of a partner?

a. To take part in the management of the business

b. To devote time and attention to the business of the partnership.

c. To be consulted about the affairs of the partnership business.

d. to allow the admission of a new partner.

Answer:

b. To devote time and attention to the business of the partnership.

Explanation- . To devote time and attention to the business of the partnership is one of the duty of a partner.

Practice Questions for CUET Accountancy chapter-Accounting for Partnership Firms-Basic Concepts SET-2

Q.21 Which one of them is the right of a partner

a. To hold and use the property of the firm only for the firm

b. To act within the authority

c. To make good the loss that may have been caused by his willful neglect or

breach of trust.

d. to inspect the books of a account and have a copy of the same.

Answer:

d. To inspect the books of a account and have a copy of the same.

Explanation- To inspect the books of a account and have a copy of the same is one of the right of a partner.

Q.22 What do you mean by Partnership Deed

a. The document, containing the agreement in writing amongst partners.

b. The document, containing the names in writing amongst partners.

c. The document, containing the addresses in writing amongst partners.

d. The document, containing the wealth in writing amongst partners.

Answer:

a. The document, containing the agreement in writing amongst partners.

Explanation- The document, containing the agreement in writing amongst partners is called partnership deed.

Q.23 How many accounts are maintained in Fixed Capital Account

a. Two b. Six

c. Four d. Eight

Answer:

a. Two

Explanation- Two accounts are maintained fixed capital account and current account.

Q.24 How many accounts are maintained in Fluctuating Capital

a. Seven b. Five

c. One d. Three

Answer:

c. One

Explanation- Only one account (viz. capital account) is maintained for each partner.

Q.25 Which account shows credit or positive balance

a. Fluctuating Capital b. Fixed Capital

c. Shyam’s Capital d. Abhishek’s Capital

Answer:

b. Fixed capital

Explanation- It always shows credit or positive balance in capital account.

Q.26 Which of the following is known as a part of Capital

a. Interest b. Profit

c. Capital d. Drawings

Answer:

d. Drawings

Explanation- The drawing is made out of capital. It may be known as a part of capital.

Q.27 Guarantee by a firm to a partner is a classification of :

a. Guarantee

b. Warranty

c. Investments

d. Admission

Answer:

a. Guarantee

Explanation- Guarantee by a firm to a partner is a classification of Guarantee.

Q.28 Which of the following is known as prospective capital

a. Interest b. Profit

c. Capital d. Drawings

Answer:

d. Drawings

Explanation- The drawing is made out of profit. It may be known as the part of prospective profit.