Practice Test

1) Partnership deed is an ______ of partnership.

2) Partnership deed may be ______.

3) Partnership deed contains rules & regulations relating to ______ working of a firm.

4) In case there is no deed, interest is allowed on partner's loan at ______ p.a.

5) Registration of Partnership is _____.

6) Liability of partnership is ______.

7) _______ is the base of partnership.

8) Partner's share profits & losses in _______ ratio.

9) Minimum ______ members are required to form a partnership.

10) Maximum number of members shallnot exceed _____ in case of ordinary business.

11) Maximum number of members shall not exceed ______ in case of banking business.

12) A partner who does not take active part in the business is called as ______ partner.

13) Commission to partners is ______ to firm.

14) Partner ______ transfer his interest to others without the consent of other partners.

15) The balance of Drawing Account of a partner is transferred to his ______ account under the fixed capital method.

16) When all adjustments regarding salary, commission, interest on capital, etc. are made to Capital Account only, this method is known as _______ capital method.

17) The Interest on capital of a partner is debited to ______ Account.

18) The liability of a partner is _____.

19) In the absence of partnership deed,profits are shares _______.

20) Debit balance on Current Account will be shown on the _____ side of the balance sheet.

21) When the balances of partners in a partnership change every year, it is known as ___________ capital method.

22) Goodwill is a _________ asset.

23) The interest on drawings of a partner is credited to __________.

24) Debit balance of current account of a partner will appear on the _______side of the balance sheet.

25) _____________is an intangible asset.

26) Gross profit is transferred to _____account.

27) Income received in advance is shown on ____________ side of balance sheet.

28) Closing balance of fixed capital account is transferred and shown to ____________side of the balance sheet.

29) Interest on capital account of the partners is credited to _______ account.

30) The withdrawal by a partner for personal use from the firm is ______ to his account.

31) The net profit of a partnership firm is brought forward on the ______ side of P/L appropriation account.

32) Salaries and interest on capital payable are debited to ________ account and _________ to partner's capital account.

33) When partner's capital is fixed, interest on capital is credited to ___________ accounts

34) If fixed capital method is adopted, Net profit transferred to ________ account.

35) The persons who form the partnership firm are individually called ______ and collectively called _________.

36) All indirect expenses are debited to _____________ account.

37) The interest on drawings of a partner is ________ to profit and loss account.

38) Partners are ___________ liable for the debts of the firm.

39) Prepaid expenses are shown on the ______________ side of the balance sheet.

40) Payment made in advance is shown on ____________ side of the balance sheet.

41) Debit balance of profit and loss suspense account is shown on _________side.

42) The partnership agreement, which is written and signed by the partners, is called _________.

43) The relation between partners is that of _______ and ________.

44) Commission payable to partner is ________ to the firm.

45) The Indian partnership Act is in force since_________.

46) The partner who contributes and takes active parts in the management of the partnership business is called ___________.

47) The person who permits the partnership firm to use his name for increasing goodwill of the firm is called ________.

48) Liability of every partner is ________ and _______.

49) Capital balance of partners goes on changing, when capital accounts are maintained on _______ method basis.

50) The balance of capital account remains constant under ________capital method.

51) When a partner takes over an asset, his capital account is _____________.

52) Current account is opened in _______ capital method.

53) The interest on capital is ______ to P/L account.

54) If deed is silent, partners share profit or losses in _______ ratio.

55) The interest on partner's drawings is transferred to __________ account.

56) Every person below the age group of 18 years is called _________ partner.

57) The Partner who is unable to pay his liabilities is called as _______ partner.

58) Bad debts is a _______.

59) Trading Account shows either gross profit or ______.

60) Net profit is divided between the partners in their ______ ratio.

61) Carriage Inward is debited to _______ Account.

62) Royalty on Production is debited to ______ Account.

63) Interest on capital is added to _______.

64) There is no maximum limit to the number of partners in a firm.

65) Each partner has a right to take part in the conduct of the business of firm.

66) Sleeping partner is one who takes active part in the conduct of the business.

67) Interest allowed on partner's capital is debited to profit and loss account and credited to partner's capital accounts.

68) Adjustments to partner's capital are passed through current accounts when the capitals are fluctuating.

69) According to Indian partnership Act, the partners are entitled to earn interest @ 6 %p.a. on their respective capitals.

70) Interest on drawings is an income to the partnership firm.

71) Bad debts appearing in the trial balance are deducted from the amount of sundry debtors in the balance sheet.

72) Balance sheet is a statement showing financial position of the concern on a particular date.

73) The agreement among the partners must be to do lawful business.

74) Balance sheet is an account of business result.

75) According to partnership Act partners are entitled to earn interest on capital.

76) Pre-paid expenses is a liability.

77) The capital accounts always show a credit balance.

78) Every adjustment is to be recorded at two places.

79) Registration of partnership firm is compulsory.

80) Total amount of cash contributed by the partners towards capital is debited to capital account of partners.

81) A Partnership firm has perpetual existence.

82) When partnership deed is silent partners share profits of the firm according to capital ratio.

83) Under fixed capital method separate capital accounts and current account are opened for each partner.

84) Partnership is non trading concern.

85) The liability of a partner is not restricted to the capital contributed by him.

86) Partnership deed sets rules and regulations for internal management of partnership firm.

87) Partnership deed must be written.

88) Under Fixed capital method, the amount of capital remains constant.

89) Liability of partners is limited.

90) No interest is to be paid on any loan given by a partner.

91) Partners must share profits and losses equally.

92) Minimum 7 members are required to form a partnership.

93) Profits are shared by the partners in the ratio of their capitals.

94) Each partner acts as an agent and also as a principal.

95) Current account is maintained under fluctuating capital method.

96) No interest is allowed on partner's capital in absence of deed.

97) A partner must be paid additional salary for the extra work done by him for the firm.

98) Interest on capital is calculated on the opening balance.

99) A partner can transfer his interest to other without the consent of the other partner.

100) Maximum members of partners in any type of business is twenty.

101) A partner can use the assets of the firm for his personal use.

102) Income earned but not received is a liability.

103) Interest on capital is not allowed as per partnership Act, 1932.

104) In absence of an agreement to the contrary partners share profits in proportion to capitals.

105) Partners are entitled to salary.

106) When a balance of capital account goes on changing every year, it is called fixed capital method.

107) Closing stock is valued at cost price or market price whichever is more.

108) Partner's current account always shows a debit balance.

109) In the fluctuating capital account method the balance in the capital account always remains the same.

110) Goodwill is the fixed asset.

111) Interest on drawing calculated with the help of Average due date.

112) Interest on capital is debited to profit and loss account.

113) The Indian Partnership Act is in force since 1932.

114) In the fixed capital account method the capital account of the partner will always show a credit balance.

115) The capital account of a partner is required to be opened in both the fixed capital account method and fluctuating capital account method.

116) Drawings made by partners are never entered in the profit and loss account.

117) Drawing account always shows credit balance.

118) Prepaid expenses are debited to profit and loss account.

119) There is restriction to the maximum number of parents in a firm.

120) The liability of partners is limited to the extent of their capital contributions.

121) The balance sheet is an account.

122) Z a partner withdraws the following sums during the year ended 31St March,2011 On 1st May,2010 Rs.1,000 On 1st August,2010 Rs.3,000 On 1st January,2011 Rs.2,000 On 1st March,2011 Rs.1,000 Calculate interest on his drawing @ 6% P.a

123) On 1st April,2010 A's capital account showed a balance of Rs.1,75,000 while B's capital account showed a balnce of Rs.35,000.In 2010-2011 the firm earned a proft of Rs.52,500 before adjustment for salary to B amounting to Rs.10,500 for the year and interest on capital @ 7% P.a.on final distribution of profit in profit sharing ratio of Rs.3:2 A an B will be get share of profit_____

124) N,S and Z are partners.They withdrawal fixed sum of Rs.2,000 per month as follows N draws at the beginning of each month,S withdraws at the middle of each month and Z withdraws at the end of each month.Rate of interest on drawings is 8% P.a interest on drawing for the three partners respectively will be_______

125) N and Z are two partners.During the year N withdraws Rs.37,000 on 1-05-2012 & Z withdraws Rs.45,000 on 15-08-2012.Accounts are closed on 31-12-2012.Rate of interest on drawings is 10% p.a. Interest on drawings for two partners respectively will be____

126) N,S and Z are three partners.They withdraw fixed sum of Rs.15,000 per quarter as follows: N draws at the beginning of each quarter,S with draws at the middle of each quarter and Z with draws at the end of each quarter.Rate of interest on drawings is 12% P.a.Interest on drawings for three partners respectively will be_____

127) X & Y are two partners with a capital of Rs.60,000 & 40,000 respectively.They are allowed interest @ 10% P.a on capital.Find the interest allowed to X and Y.

128) A has Rs.30,000 capital in the beginning of the year and introduces Rs.10,000 during the year.If rate of interest on capital is 20% P.a,interest on A's capital is Rs._____

129) R & S are partners with the capital of Rs.37,500 and Rs.22,500 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.3,600

130) X,Y and Z are partners in a firm.Profits before interest on partner's capital was Rs.12,000.Y demanded interest @ 15% p.a.on his loan of Rs.1,60,000.Partnership deed is silent on this point.Calculate the amount of interest payable to Y on his loan

131) R & S are partners with the capital of Rs.2,40,000 and Rs.1,20,000 respectively.Interest payable on capital is 10% p.a Profit before interest on partner's capital was Rs.12,000.Calculate the interest on capital for both the partners.

132) Accounting to the partnership deed of A & B, B is entitled to a salary of Rs.500 per month.Profit sharing ratio is 5:3.During the year the firm earned a profit,before charging salary to B Rs.25,000. Calculate share of profit of A & B.

133) A and B start business on 1st January,2009,with capitals of Rs.30,000 and Rs.20,000.According to the partnership deed,B is entitled to a salary of Rs.500 per month and interest is to be allowed on capitals at 6% p.a.profit sharing ratio is 5:3.during the year the firm earned a profit,before charging salary to B and interest on capital amounting to Rs.25,000.During the year A withdrew Rs.8,000 and B withdrew Rs.10,000 for domestic purpose.Closing balance of partners capital account for A= ? & B = ?

134) P & Q started business with capital of Rs.70,000 and Rs.42,000 on 1st january,2012.Q is entitled to a salary of Rs.560 P.m.Interest is allowed on capitals and is charged on drawings at 6% p.a.profits are to be in ratio of 3:2.During the middle of the year.P withdrew Rs.11,200 and Q withdrew Rs.14,000.The profits for the year before appropriation came to Rs.42,000.Calculate share of profit of P & Q.

135) B and M are partners sharing profits and losses in the ratio of 3:2 having the capital of Rs.40,000 and Rs.25,000 respectively.They are entitled to 9% p.a interest on capital before distribution the profits.During the year firm earned Rs.3,900 after allowing interest on capital.Profits apportioned among B and M is______

136) S and G are partners sharing profits and losses in the ratio of 4:1.M was manager who received the salary of Rs.1,000 p.m. in addition to a commission of 5% on net profits after charging such commission.Profits for the year is Rs.1,69,500 before charging salary.Find the total remuneration of M.

137) A,B and C had capitals of Rs.50,000,Rs.40,000 and Rs.30,000 respectively for carrying on business in partnership.The firm's reported profit for the year was Rs.80,000.Find out the share of profit of each partner after providing interest on an advance by A of Rs.20.000