Accounting for Partnership: Basic Concepts Test 47

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Accounting for Partnership: Basic Concepts Test 47

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Weekly Quiz Competition

Question 1
1 / -0

Which is of relevance in case of partnership audit?

A
Partnership deed

B
Partnerships financial statement

C
Both a and b

D
None of the above

Solution

Partnership audit is a legal document which defines about any type of partnership firm.
When we talk about a partnership audit, the most common phrases associated with it are partnership deed and partnership.
Partnership deed is a legal document which specifies all the terms and conditions of any partnership firm whereas partnership is a mutual decision of two or more people to carry on with a single business together.
Partnership financial statement is required for audit, as auditor will give his opinion on those statements.
Question 2
1 / -0

One of the partner contributed Rs.30,000 in the firm-How much interest he will get on the capital contributed ________.

A
Nil, Unless it is mentioned in partnership deed.

B
6% of 30,000

C
5% of 30,000

D
Income of the above

Solution

Partners usually introduce some amount time to time as the capital in firm and the only reason behind it is to expand the business.
Since, the partner has introduced Rs30,000. The only situation when interest has to be paid is the time when it is mentioned in partnership deed.
Question 3
1 / -0

For interest in capital, _______________ a/c is to be debited under past adjustments through profit and loss adjustment account

A
Profit and loss

B
Profit and loss adjustment

C
Partner's capital

D
Partner's current

Solution

After the preparation of Profit and Loss Account and Balance Sheet, if any error or omission is noticed, then these errors or omissions are adjusted by opening a Profit and Loss Adjustment Account in the subsequent accounting period without altering the old Profit and Loss Account.
Question 4
1 / -0

In the absence of partnership deed partners are entitled to ________.

A
salary

B
interest on loan

C
Interest on capital

D
share of profits in capital ratio
Question 5
1 / -0

Which of the following is essential of partnership deed?

A
It should be made legally

B
It should be enforceable

C
It should be a written agreement between two or more persons

D
It should be forbidden by law
Question 6
1 / -0

Choose the correct answer from the alternatives given.
Which one is correct:

A
A minor himself can apply for fully paid shares

B
A minor himself can apply for partly paid shares

C
A minor can become transferee of fully paid shares

D
A minor can become transferee of partly paid shares.

Solution

Only a fully paid up share can transfer in the name of a minor. As there is no remaining liability on such share.
Question 7
1 / -0

Which of the following purpose is a form in which all the Partners are signed?

A
Pronote

B
Partnership Deed

C
MOA

D
None
Question 8
1 / -0

If current accounts are not being managed for a partnership firm, then partners are maintaining _______________ accounts.

A
Fixed capital account

B
Partnership account

C
Fluctuating capital account

D
Saving account

Solution

A partnership firm has to record entries which are related to various appropriations of profit.
Either these entries are recorded in current account or fluctuating capital account depending upon the capital system opted.
Since, current account is not used to record such entries, only option left is fluctuating capital system, and it has to considered for such appropriations.
Question 9
1 / -0

To form partnership there must be agreement between at least.

A
Three persons

B
Two persons

C
Four persons

D
None of the above

Solution

The word partnership only defines that it is a group of persons and a group can never have only a single member, there must be minimum two people to form a group.
Thus, to form a partnership at least two members are must, it is in firm's hand to raise the number of members after those two persons.
Question 10
1 / -0

P, Q and R as are in partnership Q dies on 15th June, which of the following statement is true?

A
Q's estate is not liable at all

B
Q's estate is not liable for any acts of the firm done after 15th June

C
Q's estate liable for all acts up to the end of the financial year when the death occurred.

D
Q's estate is liable only up to the previous financial year.

Solution

A partner Q has died on 15th June and this implies that his deed with the firm has been terminated, and he has no connection with the firm.
Hence, till the death of the partner, his estate was liable to the firm.

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Re-Attempt Weekly Quiz Competition

Accounting for Partnership: Basic Concepts Test 47

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Accounting for Partnership: Basic Concepts Test 47

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SHARING IS CARING

Question 1

Partnership deed

Partnerships financial statement

Both a and b

None of the above

Solution

Question 2

Nil, Unless it is mentioned in partnership deed.

6% of 30,000

5% of 30,000

Income of the above

Solution

Question 3

Profit and loss

Profit and loss adjustment

Partner's capital

Partner's current

Solution

Question 4

salary

interest on loan

Interest on capital

share of profits in capital ratio

Question 5

It should be made legally

It should be enforceable

It should be a written agreement between two or more persons

It should be forbidden by law

Question 6

A minor himself can apply for fully paid shares

A minor himself can apply for partly paid shares

A minor can become transferee of fully paid shares

A minor can become transferee of partly paid shares.

Solution

Question 7

Pronote

Partnership Deed

MOA

None

Question 8

Fixed capital account

Partnership account

Fluctuating capital account

Saving account

Solution

Question 9

Three persons

Two persons

Four persons

None of the above

Solution

Question 10

Q's estate is not liable at all

Q's estate is not liable for any acts of the firm done after 15th June

Q's estate liable for all acts up to the end of the financial year when the death occurred.

Q's estate is liable only up to the previous financial year.

Solution

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