Forms of Business Organisations Test

Result

Forms of Business Organisations Test - 27

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SHARING IS CARING

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Question 1
1 / -0

Agreement to share profits in a partnership firm ___________.

A
must be coupled with an agreement to share losses

B
is same as agreement to share losses

C
implies an agreement to share losses

D
does not necessarily mean an agreement to share losses

Solution

As per Section $$4$$ of The Indian Partnership Act, $$1932$$ "Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Each person contributes money, property, labour or skill and expects to share in the profits and losses of the business.
Question 2
1 / -0

Partnership must arise from _______.

A
an agreement

B
operation of law

C
status

D
all of the above

Solution

Partnership agreement are written documents that explicitly detail the relationship between the business partners and their individual obligations and contributions to the partnership . Since partnership agreements should cover all possible business situations that could arise during the partnership's life, the documents are often complex.
legal counsel in drafting and reviewing the finished contract is generally recommended. If a partnership does not have a partnership agreement in place when it dissolves, the guidelines of the Uniform Partnership Act and various state laws will determine how the assets and debts of the partners distributed.
Question 3
1 / -0

S a partner in AB and Sons has transferred his interest in the firm to D. Is the transfer correct?

A
No

B
Yes

C
D will decide

D
Court will decide

Solution

According to Section $$29$$ of the Indian Partnership Act, $$1932$$ a partner may transfer his interest in the firm by sale, mortgage or change. The transfer may be absolute or partial. The transfer donot provide transfree to interfere in the working of the organization, he has the right to share of profit only.
Question 4
1 / -0

Each partner is __________.

A
required to contribute capital in the partnership firm

B
not required to necessarily contribute capital in the partnership firm

C
required to work in the partnership firm

D
none of the above

Solution

In partnership business, partners are to contribute capital to the firm, and the individual amount of such capital is determined by an agreement. However, it is not necessary for the partners to contribute capital in the partnership firm it is also not necessary that they are to contribute capital equally or in the profit-sharing ratio.
There are instances where partners contribute capital equally though they share profits unequally. It is also found that partners contribute capital unequally though they share profits equally.
Hence, option B is correct.
Question 5
1 / -0

A partner who is entitled to share in the profits of a partnership firm without being liable to the losses, is called _________.

A
partner of profits only

B
sleeping partner

C
active partner

D
dummy partner

Solution

A person who becomes a partner for sharing profits only is known as a partner in profits.
He contributes capital to the firm but does not take part in the management of the business. He is liable to third parties like other partners.
Hence, option A is correct.
Question 6
1 / -0

In which of the following cases a partnership firm is re-constituted?

A
Admission

B
Retirement

C
Death

D
All of the above

Solution

When the firm needs additional capital or managerial skills or both, the firm admits a new person as a partner of the firm. However, he is admitted into the firm with the consent of all the partners unless otherwise stated in the partnership deed. So in the admission of a partner, it brings change infirm.

On the retirement of a partner, there be withdrawal from the firm will bring about a change in the composition of partners along with a change in their relationship.

When a partner dies, like the retirement of a partner, it brings about a change in the composition of partners and in their mutual relationship because the remaining partners continue to run the firm with a new profit sharing ratio.
Hence, option D is correct.
Question 7
1 / -0

The written agreement of partnership is called ________________.

A
partnership deed

B
articles of association

C
memorandum of association

D
certificate of incorporation

Solution

Partnership is created by an agreement between the parties. The agreement may be in writing or by words of mouth or implied by the conduct of the parties. However, it is always desirable for the partners to have the agreement in writing.
The document in writing should contain the important terms of the partnership as agreed upon by the partners themselves to avoid any future dispute. So the document in writing containing the terms and conditions as agreed between the partners is called a partnership deed.
Hence, option A is correct.
Question 8
1 / -0

True Test of existence of partnership is ____________.

A
mutual agency

B
sharing of profits

C
sharing of losses

D
all of the above

Solution

The true test of partnership is the existence of Mutual Agency relationship which means the capacity of a partner to bind other partners by his acts done in firm’s name and also bound by the acts of other partners. The main element of the partnership is sharing of profit but it is not a conclusive proof of partnership.
Thus the correct answer is A.
Question 9
1 / -0

Which property will be the property of a firm?

A
The movable and immovable property of the firm

B
Property brought in by a partner and is vested in the firm

C
Property brought in by a partner and is being used in partnership business

D
Both a and b

Solution

Option d is the correct answer .
Question 10
1 / -0

The written agreement of partnership is called ___________.

A
partnership deed

B
article of association

C
memorandum of association

D
certificate of incorporation

Solution

The written agreement of partnership is called a partnership deed. It is a contract between two or more individuals who decide to manage and operate a business together for profit-making. The deed defines the management roles and once the Partnership deed is completed, all of the Partners will sign and date the deed and keep copies of the deed for their records.
Thus the correct answer is A.

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Re-Attempt Weekly Quiz Competition

Forms of Business Organisations Test - 27

Result

Forms of Business Organisations Test - 27

Score

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SHARING IS CARING

Question 1

must be coupled with an agreement to share losses

is same as agreement to share losses

implies an agreement to share losses

does not necessarily mean an agreement to share losses

Solution

Question 2

an agreement

operation of law

status

all of the above

Solution

Question 3

No

Yes

D will decide

Court will decide

Solution

Question 4

required to contribute capital in the partnership firm

not required to necessarily contribute capital in the partnership firm

required to work in the partnership firm

none of the above

Solution

Question 5

partner of profits only

sleeping partner

active partner

dummy partner

Solution

Question 6

Admission

Retirement

Death

All of the above

Solution

Question 7

partnership deed

articles of association

memorandum of association

certificate of incorporation

Solution

Question 8

mutual agency

sharing of profits

sharing of losses

all of the above

Solution

Question 9

The movable and immovable property of the firm

Property brought in by a partner and is vested in the firm

Property brought in by a partner and is being used in partnership business

Both a and b

Solution

Question 10

partnership deed

article of association

memorandum of association

certificate of incorporation

Solution

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