Fundamentals of partnership and Goodwill Test

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Fundamentals of partnership and Goodwill Test - 1

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Weekly Quiz Competition

Question 1
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Which Section of the Partnership Act defines Partnership as 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?

A
Section 61

B
Section 48

C
Section 13

D
Section 4

Solution

Explanation:

Section 4 of the Indian Partnership Act, 1932 defines Partnership as 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.
Question 2
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If partners are running a business without a partnership deed how much interest on their capitals will be given?

A
Only for 6 months @ 6% p.a.

B
6% p.a. on capital

C
No interest on capital

D
10 % p.a. on capital

Solution

Explanation:

Partners are entitled to interest on capital only if rate of interest is mentioned in the partnership deed. But in this case business is continued without partnership deed. As per the Partnership Act, 1932, partners are entitled to interest on capital only when there is partnership deed and rate of interest is mentioned in it.
Question 3
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In the absence of Partnership deed profit sharing ratio will be:

A
Capital Ratio

B
Profits will not be distributed

C
Equal ratio irrespective of partners capitals.

D
Senior partner will get more profit

Solution

Explanation:

When there is no Partnership deed or Partnership deed is prepared but it is silent on profit sharing ratio, in such a case rules of Partnership Act, 1932 will be applicable. According to which, profits or losses will be shared by the partners equally irrespective of their capitals.
Question 4
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Partners collectively are called :

A
Firm’s name

B
Firm

C
Business

D
Company

Solution

Explanation:

A person who joins a partnership business, individually called a partner. The group of partners is called Firm and the name under which all business activities going on is known as firm’s name.
Question 5
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It is better to have the agreement in writing to avoid any ___

A
Audit

B
Case

C
Loss

D
Dispute

Solution

Explanation:

Partnership deed plays important role in regulating the duties and responsibilities of each partner. A written partnership deed is useful to resolve disputes and misunderstanding among partners because everything is in written form.
Question 6
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Which of the following is not a content of partnership deed?

A
Interest on Capital

B
Interest on Partner’s Loan

C
Interest on Drawings

D
Interest on Bank Loan

Solution

Explanation:

Interest on bank loan will be fixed by the bank and not by the partners or partnership deed. A partnership deed can show only those contents which are concerned with partners or firm. Interest on bank loan is a charge against the profit. It means it will be paid in all conditions whether there is profit or loss in the business.
Question 7
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Partnership is established by ___________

A
Agreement

B
Section 4

C
Lawful Business

D
Law

Solution

Explanation:

The beginning of partnership is always because of an agreement. There should be an agreement among the partners to start a partnership business. Agreement can be written or oral that does not matter.
Question 8
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Registration of partnership firm is _________-

A
Optional

B
Not Allowed

C
Under Companies Act 2013

D
Compulsory

Solution

Explanation:

Registration of a partnership firm is optional. It means there is no need for the registration of a partnership firm. As per the Partnership Act, 1932, it is an option for a partnership firm to get registered or not. But it is always advisable to get registered.
Question 9
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The persons who have entered into a partnership business with one another are individually called

A
Co-operatives

B
Partner

C
Company

D
Firm

Solution

Explanation:

A person who joins a partnership business, individually called a partner. The group of partners is called Firm and the name under which all business activities going on is known as firm’s name.
Question 10
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Indian Partnership Act year is

A
1933

B
1932

C
1935

D
1934

Solution

Explanation:

In India, Partnership Act, 1932 is followed by all the partnership firms. Specially in the absence of partnership deed, all provisions of Partnership Act, 1932 will be applicable.

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Re-Attempt Weekly Quiz Competition

Fundamentals of partnership and Goodwill Test - 1

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Fundamentals of partnership and Goodwill Test - 1

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SHARING IS CARING

Question 1

Section 61

Section 48

Section 13

Section 4

Solution

Question 2

Only for 6 months @ 6% p.a.

6% p.a. on capital

No interest on capital

10 % p.a. on capital

Solution

Question 3

Capital Ratio

Profits will not be distributed

Equal ratio irrespective of partners capitals.

Senior partner will get more profit

Solution

Question 4

Firm’s name

Firm

Business

Company

Solution

Question 5

Audit

Case

Loss

Dispute

Solution

Question 6

Interest on Capital

Interest on Partner’s Loan

Interest on Drawings

Interest on Bank Loan

Solution

Question 7

Agreement

Section 4

Lawful Business

Law

Solution

Question 8

Optional

Not Allowed

Under Companies Act 2013

Compulsory

Solution

Question 9

Co-operatives

Partner

Company

Firm

Solution

Question 10

1933

1932

1935

1934

Solution

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