Fundamentals of partnership and Goodwill Test

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Fundamentals of partnership and Goodwill Test - 4

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Weekly Quiz Competition

Question 1
1 / -0

A and B are partners sharing profit and losses in the ratio of 3:5. On 1st July, 2012 A and B advanced loan to the business of Rs. 40,000 and Rs.20,000 respectively at the agreed @ 5% p.a. Calculate Interest on loan. When accounting books are closed on 31st December every year and partnership deed allows interest on loan to the partners.

A
A= ₹1,000 and B= ₹1500

B
A= ₹2,000 and B= ₹500

C
A= ₹1,500 and B=₹500

D
A= Rs.1,000 and B= Rs. 500

Solution

Calculation of Interest on loan:
Interest on A’s Loan = 40,000 × 5/100 × 6/12 = 1,000
Interest on B’s Loan = 20,000 × 5/100 × 6/12 = 500
Question 2
1 / -0

Money withdrawn by a partner on 1st July Rs. 20,000 and interest on drawings is fixed @ 6% (Books are closed on 31st March.) The amount of interest will be Rupees:

A
900

B
600

C
1,200

D
No interest will be charged.

Solution

When rate of interest on drawings is fixed, interest will be calculated for the full year i.e. Interest on drawings = 20,000 × 6/100 = 1,200.
Question 3
1 / -0

Rent paid to a partner comes under:

A
Partners current Account

B
Profit and Loss Account

C
Profit and Loss appropriation Account

D
Partners capital Account

Solution

Rent paid to a partner is a charge against the profit. It means it will reduce the profit. That’s why it is shown in Profit and Loss Account instead of Profit and Loss Appropriation Account.
Question 4
1 / -0

When a partner withdraws Rs.4000 at the beginning of each quarter, the interest on his drawings @ 6% p.a. will be Rs.:

A
600

B
480

C
960

D
240

Solution

When drawing is made in the beginning of each quarter and per annum word is given with the rate of interest, in such a case, first step is to find out the average period and then interest. In this question time period is 7.5 months and total drawings are 16,000 (4,000 × 4 quarters) Hence, Interest on drawings will be = 16,000 ×7.5/12 × 6/100 = Rs. 600.
Question 5
1 / -0

Interest on capital to be given to X & Y when Profits shown by P/L A/C Rs. 1500 and capitals invested by X & Y are Rs. 30,000 and 20,000 (rate of interest is 10% p.a.).

A
3000 and 2000

B
600 and 900

C
300 and 200

D
900 and 600

Solution

Interest due to X and Y is Rs. 3,000 and Rs. 2,000 (total Rs.5,000) but profit is only Rs. 1,500. In this case Ratio of appropriation will be 3 : 2 (3,000 : 2,000). Now divide profit Rs. 1,500 in Ratio of appropriation i.e. 3:2.
Question 6
1 / -0

Salary paid to the manager will be shown in:

A
Profit and loss appropriation account

B
Profit and loss account

C
Partners capital account only

D
Partners current account only

Solution

Salary paid to manager is a charge against the profit. It means this transaction will reduce the profit of the firm. All charge items are shown in profit and loss account only. That’s why salary paid to manager is shown in profit and loss account.
Question 7
1 / -0

Salary paid to a partner will be shown in:

A
Partners current account only

B
Partners capital account only

C
Profit and loss account

D
Profit and loss appropriation account

Solution

Salary paid to partner is an appropriation of profit. All appropriation items are shown in the Profit and loss appropriation account.
Question 8
1 / -0

If Rs. 3,000 withdrawn by a partner on the first day of every quarter, interest on drawings will be calculated for:

A
6 months

B
7.5 months

C
5.5 months

D
4.5 months

Solution

When a partner draws a fixed amount in the beginning of each quarter for his personal use then average period will be calculated as : Time after first drawing 12 months + Time after last drawing 3 months, and average period will be = 15/2 = 7.5.
Question 9
1 / -0

Under fluctuating Capital method how many accounts of each partner is maintained

A
4

B
1

C
3

D
2

Solution

When accounts are prepared under fluctuating capital method, only one account is prepared for the partners i.e. partners capital account. All items related to partners i.e. capital, interest on capital, interest on drawings, salary, commission etc. are shown in partners capital account.

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Re-Attempt Weekly Quiz Competition

Fundamentals of partnership and Goodwill Test - 4

Result

Fundamentals of partnership and Goodwill Test - 4

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Rank

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SHARING IS CARING

Question 1

A= ₹1,000 and B= ₹1500

A= ₹2,000 and B= ₹500

A= ₹1,500 and B=₹500

A= Rs.1,000 and B= Rs. 500

Solution

Question 2

900

600

1,200

No interest will be charged.

Solution

Question 3

Partners current Account

Profit and Loss Account

Profit and Loss appropriation Account

Partners capital Account

Solution

Question 4

600

480

960

240

Solution

Question 5

3000 and 2000

600 and 900

300 and 200

900 and 600

Solution

Question 6

Profit and loss appropriation account

Profit and loss account

Partners capital account only

Partners current account only

Solution

Question 7

Partners current account only

Partners capital account only

Profit and loss account

Profit and loss appropriation account

Solution

Question 8

6 months

7.5 months

5.5 months

4.5 months

Solution

Question 9

4

1

3

2

Solution

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