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Forms of Business Organisations Test - 26

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Forms of Business Organisations Test - 26
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  • Question 1
    1 / -0
    Which property will be considered as the property of a firm?
    Solution
    Subject to contract between the partners, the property of the firm includes all movable and immovable property, rights, and interests in a property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm or for the purposes and in the course of business of the firm, and includes also the goodwill of the business. And any property brought in by a partner and vested in the firm will be considered as the property of the firm.
    Hence, option D is correct.
  • Question 2
    1 / -0
    In a partnership firm of $$5$$, four became insolvent. Therefore, the firm  ___________.
    Solution
    Dissolution of the firm means to discontinue all the business activities within the firm. A firm is compulsorily dissolved by operation of law when all the partners except one become insolvent. As for partnership there should be 2 minimum number of member if all the 4 become insolvent then there will be no partnership left.
  • Question 3
    1 / -0
    The members of partnership firm are individually called as ________.
    Solution
    Persons who have entered into partnership with one another to carry on a business are individually called "partners". But the liability of partners with regard to its business is just like a proprietorship, is not limited to their share in business but also personal properties of the partners are at stake.
  • Question 4
    1 / -0
    Partnership is formed with an object to ________.
    Solution
    In all the business undertakings in the private sector, the main motive is to earn profit. Profit is the driving force before and after entering into the business field. In fact profit is the oil which drives the wheels of a business. Members in a partnership firm enters a business with a expectation of high profit. Profit is the total revenue from sales minus the total cost of resources employed by the partners.
  • Question 5
    1 / -0
    Investments in partnership is made by introducing ________.
    Solution
    When a partnership is formed or a partner is added and contributes assets other than cash , the partnership establishes the net realisable or fair market value for the assets . For example - if the walking partners company adds a partner who contributes accounts receivable and equipment the partnership evaluates the collectibility of the account receivable and records them at their net realisable value.
  • Question 6
    1 / -0
    Changes in the partnership firm mean  ___________________.
    Solution
    When a new partner is admitted in the partnership and in the consideration of a new partner towards the capital of the partnership of the partners. From the date new partner subject to the terms and conditions of the partnership deed, the profit and loss sharing ratio changes, the old partnership shall be liable for all the old debts and liabilities they shall be indemnity and also all the assets and rights of partnership firm against such debts and liabilities and against all proceedings cost, claims in respect thereof.
    Where a partner in a firm is adjudicated insolvent he ceases to be a partner on the date on which the order of adjudication is made whether or not the firm is thereby dissolved.
    Hence, option C is correct.
  • Question 7
    1 / -0
    For a minor to be admitted to benefits of partnership ________.
    Solution
    If a minor become a partner, all the members should give their consent as the minor won't be able to participate in the workings. However, he will be entitled to the benefits. In order to make a minor a partner, there should be  at least two major member as a partner. A minor is also not liable for any debts.
  • Question 8
    1 / -0
    Good will of the business of a partnership firm is the property of _________.
    Solution
    A business builds up some reputation after it has continued for some time . If the reputation is good, the firm will come to acquire a fixed clientele in the sense that a number of customers will automatically make their purchases from the firm . This is a very valuable asset even if one can not touch or see it. The asset is known as goodwill.
  • Question 9
    1 / -0
    Which of the following are the rights of a partner in a partnership firm?
    X. To take part in the conduct and management of the business.
    Y. To receive remuneration for active working in the firm.
    Z. To receive interest on the capital invested in the firm W. To receive share in the profit.
    Which of the following is/are the correct options?
    Solution
    X)Section $$12$$(b) - Every partner is bound to attend diligently to his duties in the conduct of the busines-section.
    Y)Section $$13$$(a) A partner is not entitled to receive remuneration for taking part in the conduct of the business.
    Z)Section $$13$$(c) Where a partner is entitled to interest on the capital subscribed by him, such interest shall be payable only out of profits.
    W)Section $$13$$(b) The partners are entitled to share equally in the profits earned and shall contribute equally to the losses sustained by the firm.
  • Question 10
    1 / -0
    The relationship of partnership arises out of ________________.
    Solution
    The relationship of partnership arises out of an agreement, a Partnership Agreement is a contract between two or more individuals who decides to manage and operate a business together for profit-making. The Agreement defines the management roles and once the Partnership Agreement is completed, all of the Partners will sign and date the Agreement and keep copies of the Agreement for their records. 
    Thus the correct answer is A.
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