Accounting for Partnership: Basic Concepts Test 51

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Accounting for Partnership: Basic Concepts Test 51

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SHARING IS CARING

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Weekly Quiz Competition

Question 1
1 / -0

The partnership can be formed ______________________.

A
Two brothers Y (age 17 years), Z (age 16 years) decide to form partnership

B
Two brothers X (age 18 years), Y (age 17 years) decide to form partnership with provision that Y will share the profits only

C
Three brother W (age 19 years), X (age 18 years), Y (age 17 years) decide to form a partnership with a provision that Y will share the profits only

D
None of these
Question 2
1 / -0

Partnership is the relation between two or more persons _______.

A
who are sharing profits & losses equally of a business carried on by all or any them acting for all

B
who have agreed to share the profits of a business carried on by all.

C
who have agreed to share the profits & losses equally of a business carried on by all or any them acting for all

D
none of these

Solution

All of the statements are incorrect for a partnership firm because:
The first statement is not meant for partnership as it the profit sharing cannot always be equal, it is mutual decision of partners to decide the ratio.
Again the second is also incorrect it is ot mandatory that partnership must be run by every partner. A single partner can also run the business as per the consent of partners.
The third statement is again incorrect. As stated above, it is not a compulsion to share profits equally. It canbe any ratio as decided by partners.
Question 3
1 / -0

Business of the firm must be carried on by _______.

A
majority of the partner only

B
all the partners

C
one of the partners only

D
senior partners only

E
none of these

Solution

A partnership firm has several partners running a business. It is not mandatory that all partners must take part in business or a majority of partner run the firm.
Only a single partner doesn't have to look after the business or any senior partner is not liable for business.
It is a combination of either a single partner or all the partners run the partnership firm and it is the mutual decision of all the partners.
Question 4
1 / -0

Which of the following is not an essential feature of partnership?
1. Agreement
2. Registration
3. Test of Mutual Agency
4. Separate Legal Entity

A
1 & 2

B
2 & 3

C
2 & 4

D
1 & 4

Solution

Partnership firm is all about a mutual agreement between various persons to carry out a business.
Agreement is must for any kind of partnership since it defines all the terms and conditions to be applied. Along with it mutual agency test must be there so that the compatibilityof every partner can be checked for future benefits.
It is not mandatory for any partnership to get registered since small business find it costly to register themselves. And separate legal entity is not possible with a partnerrship because the business and the owner are same in this case.
Question 5
1 / -0

The Indian Partnership Act applies to ___________.

A
whole of India including the State of Jammu & Kashmir

B
whole of India except the State of Jammu & Kashmir

C
whole of India except Goa, Daman, Diu

D
whole of India including Goa, Daman, Diu.
Question 6
1 / -0

The partnership firm does not become an illegal association when _________.

A
The number of partners in a banking business exceeds 10

B
The number of partners in a non-banking business exceeds 10

C
The number of partners in a banking business exceeds 20

D
The number of partners in a non-banking business exceeds 20

Solution

Companies Act 2013 has clearly stated that maximum of 50 partners must be there for any non-banking partnership firm. So, if the members of a partnership firm exceeds 10, it doesn't becomes an illegal association.
In other options there is a chance of partnership being called an illegal association because more than 20 partners in banking or non-banking firm can be a problem for rivals and they may file a case against it.
Question 7
1 / -0

The maximum number of partners is mentioned in _________.

A
the Partnership Act

B
the General Clauses Act

C
the Companies Act

D
the Societies Registration Act

Solution

There are many acts which were passed to define the accouting of various types of firms and partnership is one of them.
But the only act which defined the maximum number of partners in the firm is companies act. In the year 1956 companies act limited partnership to 20 members but in year 2013 a new companies came into force and maximised number of partners.
Question 8
1 / -0

The essential elements of partnership include ________.

A
there must be an association of three or more persons

B
there must be an agreement to share profits and losses equally

C
there must be mutual agreement among partners

D
the relationship must be registered

Solution

Any partnership is based on various features and elements but the most important or essential is an agreement defining the partnership.
An agreement is must because it lays down all the important information regarding partnership like sharing ratio, liability limit and many more.
The other options are not that essential because it's not necessary to have at least three partners and agreement need to be written along with the firm being registered.
Question 9
1 / -0

The maximum limit on the number of members of a Joint Hindu family carrying on family non-banking business is ________.

A
10

B
20

C
50

D
no limit

Solution

Family non-banking business is the one which is done by a single family for their own need and are far away from providing any banking facility.
Again companies act 2013 has stated about such partnerships that there is no limit for partner when talked about partnership firms carrying on such business. This is all because a family business is separate from businesses meant for society and profit earners and thus government has no rights on them.
Question 10
1 / -0

Which of the following is not correct?

A
Partner of firm cannot enter into a contract with the partnership firm.

B
A member of a company can enter into a contract with the company.

C
Partner of a firm can enter into a contract with the partnership firm.

D
All of the above.

Solution

The first option is incorrect of amongst all other options. This is because any individual cannot be called as a partner if he is not included in partnership agrrement. Thus, the partner needs to enter into contract of partnership firm.
The other two options are correct because a member or a partner is free to enter into contract of partnership firm and without an agreement he or she won't be called as a partner.

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Re-Attempt Weekly Quiz Competition

Accounting for Partnership: Basic Concepts Test 51

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Accounting for Partnership: Basic Concepts Test 51

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Rank

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SHARING IS CARING

Question 1

Two brothers Y (age 17 years), Z (age 16 years) decide to form partnership

Two brothers X (age 18 years), Y (age 17 years) decide to form partnership with provision that Y will share the profits only

Three brother W (age 19 years), X (age 18 years), Y (age 17 years) decide to form a partnership with a provision that Y will share the profits only

None of these

Question 2

who are sharing profits & losses equally of a business carried on by all or any them acting for all

who have agreed to share the profits of a business carried on by all.

who have agreed to share the profits & losses equally of a business carried on by all or any them acting for all

none of these

Solution

Question 3

majority of the partner only

all the partners

one of the partners only

senior partners only

none of these

Solution

Question 4

1 & 2

2 & 3

2 & 4

1 & 4

Solution

Question 5

whole of India including the State of Jammu & Kashmir

whole of India except the State of Jammu & Kashmir

whole of India except Goa, Daman, Diu

whole of India including Goa, Daman, Diu.

Question 6

The number of partners in a banking business exceeds 10

The number of partners in a non-banking business exceeds 10

The number of partners in a banking business exceeds 20

The number of partners in a non-banking business exceeds 20

Solution

Question 7

the Partnership Act

the General Clauses Act

the Companies Act

the Societies Registration Act

Solution

Question 8

there must be an association of three or more persons

there must be an agreement to share profits and losses equally

there must be mutual agreement among partners

the relationship must be registered

Solution

Question 9

10

20

50

no limit

Solution

Question 10

Partner of firm cannot enter into a contract with the partnership firm.

A member of a company can enter into a contract with the company.

Partner of a firm can enter into a contract with the partnership firm.

All of the above.

Solution

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