Practice Test


1) Following are the essential elements of a partnership firm except ;


2) Following is the difference between partnership deed and partnership agreement


3) If the firm prefers Capital account to be shown as the amount introduced by the partners as capital in the firm then ,the entries for salary ,drawing ,interest on capital or drawing and profits are made in


4) In the absence of any agreement ,partners are liable to receive interest on their loans @


5) A partner acts as a ____for the firm


6) B and M are partners sharing profits and losses in the ratio of 3;2 having the capital of Rs.80,000 & Rs.50,000 respectively. They are entitle to 9 % p.a. interest on capital before distributing the profits. During the year firm earned Rs.7,800 after allowing interest on capital. Profits apportioned among B & M is


7) B and M are partners having the capital of Rs.25,000 & Rs.15,000 respectively. They are entitle to 10 % p.a.Find interest on capital for both partners when profits. earned by the firm is Rs.2,400


8) B and M are partners sharing profits and losses in the ratio of 4:1 D was manager who received the salary of Rs.4,000 p.m. in addition to a commission of 5% on net profit after charging such commission .Profits for the year is Rs.6,78,000 before charging salary.Find the total remuneration of D


9) The relationship between the partners who have agreed to share the profit of the business carried on by all or any one of them acting for all is known as


10) Features of a partnership firm are


11) Firm has earned exceptionally high profits from a contract which will not be renewed .In such a case the profit from this contract will not be included in


12) In the absence of any agreement ,partners are liable to


13) Interest on capital will be paid to the partners if provided for in the agreement but only from


14) Partners are suppose to pay interest on drawing only when ____by the___


15) When partners is given Guarantee by the other partner , losses on such guarantee will be borne by


16) Guarantee given to a partner A by the other partners B & C means


17) What would be the profit sharing ratio if the partnership acts is complied with ?


18) Would interest on loan be allowed in the absence of any agreement or when partnership deed is silent.


19) When is the profit & loss Appropriation account prepared ?


20) What time would be taken into consideration if equal monthly amount is drawn as drawing at the beginning of each month


21) Where will you record interest on drawing ?


22) What balance does a partner's Current account has?


23) Is rent paid to partner appropriation of profits ?


24) How would you close the Partner's Drawing account


25) A, B and C had capitals of Rs.50,000:Rs.40,000 & Rs.30,000 respectively for carrying on the business in the partnership. The firm's reported profit for the year was Rs.80,000. As per provision of the IPA,1932,find out the share of each partner in the above amount after taking into account that no interest has been provided on an advance by A of Rs.20,000 in addition to his capital contribution


26) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .profit before interest on partners ' capital was Rs.6,000 and X wanted interest on capital @ 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


27) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .profit before interest on partners capital was Rs.6,000 and Y wanted interest on capital @ 24% p.a.on his loan of Rs.80,000 .There was no agreement on this point .Calculate the amount payable to X ,Y & Z respectively


28) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .Profit before interest on partners capital was Rs.6,000 and Z demanded minimum profit of Rs.5,000 as his financial position was not good.There was no agreement on this point .Profit to be distributed to X ,Y & Z will be


29) Following are the difference between Capital or Current Account except


30) Following is the difference between partnership and Joint venture except


31) Every partner is bound to attend diligently to his___in the conduct of the business


32) MATCH THE PAIRS :-Partnership deed is mutual agreement between


33) The liability of all the partners is


34) In the absence of an agreement partners shares profit in


35) Profit and Loss Appropriation Account is prepared to


36) The law relating to partnership firm is contained in


37) The Indian partnership act came into force on


38) the Indian partnership act applies to


39) Partnership is the relation between two or more persons


40) the partnership can be formed


41) The partnership cannot be formed


42) For a valid partnership ,there must be


43) Agreement to share profits


44) Business of the firm must be carried on by


45) The essential elements of a partnership


46) which of the following is not essential features of partnership ? 1. Agreement , 2. Registration , 3.Test of mutual agency , 4. separate legal entity


47) The essential elements of a partnership include


48) The maximum number of partners is mentioned in


49) The partnership firm does not become an illegal association, when


50) The maximum number of partners in a firm carrying on banking business cannot exceed


51) the maximum number of partners in a firm carrying on general business is


52) The maximum limit on number of members of a joint Hindu family carrying on family banking business is


53) The maximum limit on number of members of a joint Hindu family carrying on family non- banking business is


54) A firm


55) Which of the following is correct ?


56) Which of the following is not correct ?


57) The real test of partnership is


58) The partnership relation exists when


59) Mutual Agency is


60) Sharing of profits is


61) The term laid down in the partnership deed may be varied by the consent of


62) Registration of a firm can be effected


63) Which of the following, about registration is not true


64) In case of non-registered partnership firm


65) An unregistered firm cannot claim


66) A partner of an unregistered firm cannot


67) A partnership at will is one 1.duration not fixed , 2 .duration fixed , 3. dissolved at any time , 4.can be dissolved only on the happening of an event


68) There is no provision in the partnership deed regarding the duration of partnership. this is


69) A partnership at will may be dissolved by any partner by giving


70) Types of partners includes


71) Who does not take active part in conduct of the business


72) Partner by holding out is known as


73) A minor can be admitted to the benefit of partnership with the consent of


74) A change in the nature of business of the firm may be made only with the consent of


75) Unless otherwise agreed.


76) unless otherwise agreed , every partner has right


77) unless otherwise agreed , every partner must account for & pay all profits earned to the firm


78) which of the following is not the right of a partner of a partner. ,which he cannot claim as a matter of right


79) the general rights of continuing partners include


80) in the absence of any agreement ,the partners are entitled to share profit


81) in the absence of any agreement interest on advance by a partner is


82) where a partner is entitled to interest on capital subscribed by him ,such interest will be payable


83) interest on capital subscribed by a partners may be provided for in the partnership deed is _


84) what constitutes firm's property


85) goodwill of partnership business can be regarded as


86) each of the partner is


87) every partner is


88) the relationship between persons who have agreed to share the profit of a business carried on by all or any of them acting for all is known as


89) following is the different between partnership deed & partnership agreement


90) in the absence of any provision in the partnership deed , interest on capital


91) in the absence of any provision in the partnership deed , interest on drawing of a partner


92) which of the following is provided even if there is no provision in the partnership deed & there are no profits


93) If a fixed amount is withdrawn on the first day of every month of a calendar year , the interest on total amount of drawing will be calculated for


94) If a fixed amount is withdrawn on the last day of every month of a calendar year , the interest on total amount of drawing will be calculated for


95) If a fixed amount is withdrawn on the middle day of every month of a calendar year , the interest on total amount of drawing will be calculated for


96) If a fixed amount is withdrawn on the first day of every quarter of a calendar year , the interest on total amount of drawing will be calculated for


97) If a fixed amount is withdrawn on the last day of every quarter of a calendar year , the interest on total amount of drawing will be calculated for


98) If a fixed amount is withdrawn on the middle day of every quarter of a calendar year , the interest on total amount of drawing will be calculated for


99) Which of the following does not appear in the profit & loss. Appropriation account


100) which of the following appear in the profit & loss Appropriation account


101) When the interest on capital is allowed to partners, interest on capital account is debited & Partner's Capital account credited it is called


102) When the interest on drawing is charged to partners, interest on drawing account is credited & Partner's Capital account debited, it is called


103) When interest on loan/advance is allowed to partners


104) In the absence of an agreement partners are entitled to


105) When Profit & loss appropriation account is prepared


106) When guarantee is given to a partner by the other partners, loss on such guarantee will be borne by


107) Guarantee given to a partner 'A ' by the other partners 'B & C' means


108) Following are the factors affecting goodwill except


109) Under average profit basis of goodwill is calculated by


110) Under super profit basis of goodwill is calculated by


111) Under annuity basis goodwill is calculated by


112) Under capitalization basis goodwill is calculated by


113) weighted average method of calculating goodwill should be followed when


114) X and Y are partners sharing profits and losses in the ratio of 3:2 having the capital of Rs.1,60,000 & Rs.1,00,000 respectively. They are entitle to 9 % p.a. interest on capital before distributing the profits. During the year firm earned Rs.15,600 after allowing interest on capital. Profits apportioned among X & Y is


115) X and Y are partners having the capital of Rs.50,000 & Rs.30,000 respectively. They are entitle to 10 % p.a.Find interest on capital for both partners when profits. earned by the firm is Rs.4,800


116) X and Y are partners sharing profits and losses in the ratio of 4:1 D was manager who received the salary of Rs.8,000 p.m. in addition to a commission of 5% on net profit after charging such commission .Profits for the year is Rs.13,56,000 before charging salary.Find the total remuneration of D


117) A, B and C had capitals of Rs.50,000:Rs.40,000 & Rs.30,000 respectively for carrying on the business in the partnership. The firm's reported profit for the year was Rs.79,200. As per provision of the IPA,1932,find out the share of each partner in the above amount after taking into account that no interest has been provided on an advance by A of Rs.20,000 in addition to his capital contribution


118) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .profit before interest on partners ' capital was Rs.12,000 and X wanted interest on capital @ 20% as his capital contribution was Rs.2,00,000 as compared to that of Y and Z which was Rs.1,50,000 and Rs.1,00,000 respectively


119) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .profit before interest on partners capital was Rs.12,,000 and Y wanted interest on capital @ 24% p.a.on his loan of Rs.1,60,000 .There was no agreement on this point .Calculate the amount payable to X ,Y & Z respectively


120) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .Profit before interest on partners capital was Rs.12,000 and Z demanded minimum profit of Rs.10,000 as his financial position was not good.There was no agreement on this point .Profit to be distributed to X ,Y & Z will be


121) the profits of last five are Rs.1,70,000 ; Rs.1,80,000 ; Rs.1,40,000 ; Rs.2,00,000 & Rs.1,60,000 .find the value of goodwill, if it is calculated on average profits of last 5 years on the basis of 3 year's purchase


122) the P&L account for the 4 years are losses Rs.20,000 ;losses Rs.5,000 ;profits Rs.1,96,000 ; Rs.1,52,000 .The average capital employed in the business is Rs.4,00,000 .the rate of interest expected from capital invested is 12% .the remuneration of partners is entitled to be Rs.2,000 p.m .the value of goodwill on the basis of two year's purchase of super profit based on there average of four years is


123) total capital employed in the firm Rs.16,00,000 ; reasonable rate of return 15% ; profits for the year Rs.24,00,000 .the value of goodwill using capitalization method is


124) The profits for 2003-04 are Rs 4,000: for 2004-05 is Rs 52,200:& for 2005-06 is Rs 62,400:.Closing stock for 04-05 and 2005-06 includes the defective items of Rs.4,400 & Rs.12,400 ,which were considered as having market value NIL. Calculate goodwill on average profit method


125) The profits and losses for the last years are 2001-02 losses Rs.20,000 ; 2002-03 losses Rs.5,000 ; 2003-04 Profits Rs.1,96,000 & 2004-05 Profits Rs.1,52,000.The average capital employed in the business is Rs.4,00,000 .The rate of interest expected from capital invested is 12% .The remuneration of the partners is estimated to be Rs.2,000 per month .Calculate the value of goodwill on the basis of 4 years purchase of super profits based on the annuity of 4 years Take discounting rate as 10%


126) The profits of last five years are Rs.85,000: Rs.90,000: Rs.70,000: Rs.1,00,000 & Rs.80,000.find the value of goodwill , if it is calculated on average profit of the last five years on the basis of 3 years of purchase


127) The profits of last 3 years are Rs 42,000: Rs 39,000: Rs 45,000:.find the value of goodwill of two years purchase


128) The capital of A and B sharing profits and losses equally are Rs.90,000 and Rs.30,000 respectively .They value the goodwill of the firm at Rs.84,000 , which was not recorded in the books .If the goodwill is raised now,by what amount each partner 's capital account will be debited


129) Find the goodwill of the firm using capitalization method from the following information Total capital employed in the firm Rs.8,00,000 Reasonable Rate of Return 15 % .Profit for the year Rs.12,00,000


130) The capital of B and D are Rs.90,000 and Rs.30,000 respectively with the profit sharing ratio 3:1.The new ratio ,admissible after 01.04.2006 is 5:3.Goodwill valued on 02.04.2006 as Rs.84,000 will be credited to B and D's capital By Rs.__and Rs.__


131) The capital of B and D are Rs.90,000 and Rs.30,000 respectively with the profit sharing ratio 3:1.The new ratio ,admissible after 01.04.2006 is 5:3.Goodwill valued at Rs.80,000 as on that date. Amount payable by gaining partner to a scarifying partner is


132) A,B & C are equal partners is admitted to the firm for 1/4th share .D brings Rs.20,000 capital and Rs.5,000 being half of the premium for goodwill. The value of goodwill of the firm is


133) B & C share profit & losses in the ratio 2:1.D is admitted to the firm and new profit sharing ratio is 3:2:1..D brings Rs.4,500 as the premium for goodwill. The value of goodwill will be


134) The profits and losses for the last years are 2001-02 losses Rs.10,000 ; 2002-03 losses Rs.2,500 ; 2003-04 Profits Rs.98,000 & 2004-05 Profits Rs.76,000.The average capital employed in the business is Rs.2,00,000 The rate of interest expected from capital invested is 12% .The remuneration of the partners is estimated to be Rs.1,000 per month .Calculate the value of goodwill on the basis of 4 years purchase of super profits based on the annuity of 4 years Take discounting rate as 10%


135) The profits for 1998-99 are Rs 2,000: for 1999-00 is Rs 26,100:& for 2000-01 is Rs 31,200:.Closing stock for 99-00 and 2000-01 includes the defective items of Rs.2,200 & Rs.6,200 ,which were considered as having market value NIL. Calculate goodwill on average profit method


136) Under average profit basis goodwill is calculated by


137) Under super profit basis goodwill is calculated by


138) The following particulars are available in respect of the business carried on by a partnership firm :- 2001--loss Rs.5,000 , 2002--loss Rs,10,000 , 2003 --profit Rs.75,000 , 2004--profit Rs.60,000.you are required to compute goodwill on the basis of 5 years purchase of average profit


139) The profits and losses for the last years are 2001-02 losses Rs.10,000 ; 2002-03 losses Rs.2,500 ; 2003-04 Profits Rs.98,000 & 2004-05 Profits Rs.76,000.The average capital employed in the business is Rs.2,00,000 The rate of interest expected from capital invested is 12% .The remuneration of the partners is estimated to be Rs.1,000 per month .Calculate the value of goodwill on the basis of two years purchase of super profits issued on the average of four years


140) A, B & C share profit & losses in the ratio 3: 2:1.they decide to change their profit sharing ratio to 2:2:1.To give effect to this new profit sharing ratio they decide to value goodwill at Rs.30,000.Pass necessary entries .If goodwill not appearing in the old balance sheet and should appear in the new balance sheet


141) Goodwill brought in by incoming partner in cash for joining in a partnership firm is taken away by the old partner in their ___ratio.


142) B & C share profit & losses in the ratio 5:3.D is admitted to the firm and brings Rs.70,000 cash and Rs.48,000 as goodwill. New profit sharing ratio is 7:5:4.Find the sacrificing ratio as B:C


143) The capital of B and D are Rs.50,000 and Rs.40,000 respectively with the profit sharing equal. J is admitted on bringing Rs.50,000 capital only and nothing in goodwill. Goodwill in the balance sheet of Rs.20,000 is revalued as Rs.35,000.What will be the value of goodwill in the books after the admission of C


144) In the absence of any provision in the partnership agreement ,profit & losses are shared


145) A, B & C share profit & losses in the ratio 5: 3:2.they decide to share their future profit ratio to 2:3:5 what will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information Available for the same


146) MATCH THE PAIRS :-Goodwill is the intangible asset of the concern which helps it to earn goodwill is expected to generate extra profits to the concern


147) Change in the profit sharing ratio means


148) Average profit method


149) LLP should have minimum


150) The maximum number of partners LLP can have is


151) Every limited liability partnership shall have at least _________ designated partners who are individuals


152) At least ________ of the designated partners of every limited liability partnership shall be a resident in India.


153) In absence of LLP Agreement, the mutual rights of Partners and in relation to LLP will be determined as per Schedule __________ of the LLP Act 2008.


154) A Limited Liability Partnership whose contribution exceeds Rs ________ is required to annually get its accounts audited by any Chartered Accountant in practice.


155) A Limited Liability Partnership whose turnover exceeds Rs ________ is required to annually get its accounts audited by any Chartered Accountant in practice


156) LLP is governed by


157) Following can become a partner in the LLP:


158) A partner of LLP has the following right, only if provided in the LLP agreement


159) Limited Liability Partnership Act, 2008 came into effect by way of notification dated________ DD-MM-YYYY


160) “Designated partner” means any partner designated as such pursuant to section _______of Limited Liability Partnership Act, 2008.


161) Every partner of a Limited Liability Partnership is, for the purpose of the business of the Limited Liability Partnership, the agent of the _________but not of the _______.


162) Partner’s ________ entitled to any remuneration for participating in the management of LLP unless otherwise provided in the LLP Agreement.


163) In case there is any change in name and address of partner he shall inform the same to LLP within__________ days of such change


164) If any partner desires to resign from the partnership he shall inform the same by giving a ________ days notice to other partners.


165) The Liability of partners in LLP is limited to the extent of their________.


166) Any partner of the LLP _________ be liable for the wrongful act or omission of any other partner of the limited liability partnership


167) Designated partners_________ entitled to any remuneration for their participation in management of LLP unless otherwise specifically provided in the LLP Agreement.


168) Any vacancy arising in the office of designated partner shall be filled within __________ days.


169) In case of conversion of Private Limited Company into LLP, all the __________ of the company must become partners in the LLP and no one else.


170) Limited Liability Partnership who mandatorily requires auditing of their accounts shall appoint an auditor within _____ days before the end of each financial year


171) In case if an auditor is unwilling to be re-appointed he shall give a notice in writing to that effect at the LLP’s registered office, not less than _________ days before the end of the time allowed for appointing the new auditor.


172) LLP should have minimum 7 partners.


173) LLP should have maximum 20 partners


174) Foreign Nationals cannot be a partner in LLP.


175) Insolvency of a partner of LLP automatically results in its dissolution


176) Company incorporated outside India can become a partner in a LLP


177) Company incorporated in India cannot become a partner in a LLP


178) LLP incorporated in India cannot become a partner in a LLP.


179) LLP incorporated outside India can become a partner in a LLP.


180) An individual resident outside India cannot become a partner in a LLP


181) Every partner of a Limited Liability Partnership is the agent of the Limited Liability Partnership.


182) A partner of a Limited Liability Partnership is an agent of the other partners.


183) The rights of a partner to a share of the profits and losses of the limited liability partnership in accordance with the Limited Liability Partnership agreement are transferable


184) The Liability of Partners in LLP is limited to the extent of their contribution.


185) Audit is not compulsory for all LLP’s.


186) A Limited Liability Partnership must have a minimum of contribution of Rs 1 Lakh


187) Every partner of a Limited Liability Partnership must have a share in the Contribution


188) Contribution by a partner to LLP must be in cash or cheque only.


189) LLP must maintain books of accounts on accrual basis only.


190) Partnership is defined "the relation between persons who have agreed to share the profits of a business carried on by________acting for all"


191) Persons who have entered into partnership with one another are individually known as_____


192) Persons who have entered into partnership with one another are collectively a called as_____


193) The name under which the business of partnership is carried on is called______


194) To form partnership there must be agreement between at least________


195) Maximum number of persons for a valid partnership for banking business is________


196) The maximum number of persons permissible for a valid partnership for doing any business other than banking business is______


197) Partnership can be formed for the purpose of carrying______


198) Which of the following is conclusive evidence of partnership______


199) The capital account of a partner may be a_______


200) If there is no partnership deed or if there is no provision in it indicating a contrary intention_______has a right to take part in the conduct of the business of the firm and also the right of free access to all records,books and accounts of the firm


201) If there is no partnership deed or if there is no provision in it indicating a contrary intention,partners share profits and losses______


202) If there is no partnership deed pr if there is no provision in it indicating a contrary intention and where a partner has advanced any loan to the firm and the agreement provides for interest,but does not specify any rate,the rate shall be______


203) If ther is no partnership deed or if there is no provision in it indicating a contrary intention_____is to be charged on drawings


204) In absence of specific provision in the partnership deed_______salary would be paid to the partners


205) ______is a very short duration special purpose partnership entered into by two or more persons jointly to carry out business with a view to earn profit and loss in an agreed ratio.


206) _____is limited to a specific venture.


207) The doctrine of implied authority is______to coventures whereas it_______to partnership.


208) _______may be described as the aggregate of those intangible attributes of a business which contribute to its superior earning capacity over a normal return on investment


209) Interest on partners capital is chargeable_____


210) Ram & Rahim partners sharing profits and losses in the ratio of their effective capital.They had Rs.2,00,000 and Rs.1,20,000. respectively in their capital accounts as on 1st january,2012.Ram introduced a further capital of Rs.20,000 on 1st April,2012 and another Rs.10,000 on 1st july,2012.on 30th September,2012 Ram withdrew Rs.80,000.On 1st july,2012,Rahim introduced further capital of Rs.60,000.Calculate the profit sharing ratio of the Ram & Rahim


211) Which of the following is/are essential feature of partnership ?


212) In partnership under fixed capital account method,which of the following account is opened ?


213) In partnership under fixed capital account method,recording the transaction relating to drawings interest on capital,commission,salary,share of profit or loss are made in_______


214) In partnership under fluctuating capital account method, recording the transaction relating to drawings interest on capital,commission,salary,share of profit or loss are made in_______