Accounting for Partnership: Basic Concepts Test 41

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Accounting for Partnership: Basic Concepts Test 41

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Weekly Quiz Competition

Question 1
1 / -0

In the absence of specific provision in the partnership deed at what rate interest on drawing of the partners would be allowed ______ .

A
8%

B
10%

C
6%

D
Nil
Question 2
1 / -0

In the absence of specific provision in the partnership deed rate interest on capital of the partners would be allowed ______ .

A
8%

B
10%

C
6%

D
Nil

Solution

Where there is neither partnership deed nor express agreement or partnership deed is there but silent on any matter, then the relevant provisions of the Indian partnership act, 1932, would be applicable. As per these provisions, no interest is to be allowed on capital.
Question 3
1 / -0

Which of the following statements is true ?

A
When separate set of books is maintained, expenses paid by venturer will be credited to joint bank account.

B
When separate set of books is maintained, expenses paid by venturer will be credited to venturer's capital account.

C
When separate set of books is maintained, expenses paid by venturer will be credited to Jt. Venture account.

D
When separate set of book is maintained, expenses paid by venturer will be credited to Outstanding Expenses Account.
Question 4
1 / -0

A and B entered into a joint venture contract. They opened a joint bank account by contributing Rs. 1,00,000 each. The expenses incurred on contract were Rs. 1,00,000. Contract money received by cheque was Rs. 2,00.000 and in shares Rs. 50,000. The shares are sold for Rs. 40,000. What will be the profit on venture ?

A
Rs. 1,50,000

B
Rs. 1,40,000

C
Rs. 2,40,000

D
Rs. 2,00,000
Question 5
1 / -0

A and B enter into a joint venture sharing profit and losses in the ratio 2:3. Goods were purchased by A for Rs. 55,000. Expenses incurred by A Rs. 3,500 and by B Rs. 5.200. B sold the goods for Rs. 80,000. Remaining stock was taken over by B at Rs. 12,200. What will be the final remittance to be made by B to A?

A
Rs. 69,900

B
Rs. 92 200

C
Rs. 28,500

D
None
Question 6
1 / -0

In the absence of specific provision in the partnership deed at what rate interest on advances given by the partners would be allowed _______ .

A
8% p.a.

B
10 % p.a.

C
6% p.a.

D
Nil

Solution

In the absence of a specific provision in the partnership deed, a partner making, for the purposes of the business, any payment or advance beyond the amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of six per cent per annum.
Question 7
1 / -0

Interest on capital will be paid to the partners if provided for in the agreement but only from following _______________.

A
Profits

B
Reserves

C
Accumulated Profits

D
Goodwill

Solution

Interest on Capital: If the partnership deed is silent on interest on partner's capital, then according to the Partnership Act of 1932, no interest on capital should be given to the partners of the firm. However, interest on capital is given only out of the profits, if mutually agreed by all the partners.
Question 8
1 / -0

Bill and Monica are partners sharing profits and losses in the ratio of $3:2$ having the capital of Rs. $80,000$ and Rs. $50,000$ respectively. They are entitled to $9\%$ p.a. interest on capital before distributing the profits. During the year firm earned Rs. $7,800$ before allowing any interest on capital. Profits apportioned among Bill and Monica is?

A
$4,680$ and $3,120$

B
$4,800$ and $3,000$

C
$5,000$ and $2,800$

D
None of these
Question 9
1 / -0

A partner acts as _________ for a firm.

A
Agent

B
Third Party

C
Employee

D
None of these
Question 10
1 / -0

X, Y and Z are partners in a firm.At the time of division of profit for the year there was dispute between the partners.Profits before interest on partner's capital was Rs.15,000 and Y demands interest at 24%p.a. on his loan of Rs.80,000. There was no agreement on this point.Calculate the amount payable to X, Y and Z respectively.

A
Rs. 5,000 to each partner

B
Loss of Rs. 4,200 for X and Z & Y will take home Rs.15,000

C
Rs.3,400 for X, Rs. 8,200 for Y and Rs. 3,400 for Z

D
Rs. 5,000 to each partner.

Solution

In the absence of partnership deed, Interest on loan at 6% will be calculated and also profit will be shared equally.
Interest on loan = 80000*6/100 = 4800.
Profit available for distribution = 15000 - 4800 = 10200
Profit distributed = 10200/ 3 = 3400.
Share of X = 3400.
Share of Y = 3400+4800 = 8200
share of Z = 3400.

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Re-Attempt Weekly Quiz Competition

Accounting for Partnership: Basic Concepts Test 41

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Accounting for Partnership: Basic Concepts Test 41

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SHARING IS CARING

Question 1

8%

10%

6%

Nil

Question 2

8%

10%

6%

Nil

Solution

Question 3

When separate set of books is maintained, expenses paid by venturer will be credited to joint bank account.

When separate set of books is maintained, expenses paid by venturer will be credited to venturer's capital account.

When separate set of books is maintained, expenses paid by venturer will be credited to Jt. Venture account.

When separate set of book is maintained, expenses paid by venturer will be credited to Outstanding Expenses Account.

Question 4

Rs. 1,50,000

Rs. 1,40,000

Rs. 2,40,000

Rs. 2,00,000

Question 5

Rs. 69,900

Rs. 92 200

Rs. 28,500

None

Question 6

8% p.a.

10 % p.a.

6% p.a.

Nil

Solution

Question 7

Profits

Reserves

Accumulated Profits

Goodwill

Solution

Question 8

4,6804,6804,680 and 3,1203,1203,120

4,8004,8004,800 and 3,0003,0003,000

5,0005,0005,000 and 2,8002,8002,800

None of these

Question 9

Agent

Third Party

Employee

None of these

Question 10

Rs. 5,000 to each partner

Loss of Rs. 4,200 for X and Z & Y will take home Rs.15,000

Rs.3,400 for X, Rs. 8,200 for Y and Rs. 3,400 for Z

Rs. 5,000 to each partner.

Solution

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$4,680$ and $3,120$

$4,800$ and $3,000$

$5,000$ and $2,800$