Accounting for Partnership: Basic Concepts Test 53

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Accounting for Partnership: Basic Concepts Test 53

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Question 1
1 / -0

A partnership at will is one:
1. Duration not fixed
2. Duration fixed
3. Dissolved at any time
4. Can be dissolved only on the happening of an event.

A
1 & 2

B
2 & 3

C
3 & 4

D
1 & 3

Solution

A partnership at will is one which does not provide for how long the business will continue. It is basically a partnership where partners have not agreed to remain in partnership until a definite fixed term.
The partnership can be dissolved at any time without any liability on the partners.
Question 2
1 / -0

A partnership at will is one ________.

A
which does not have any deed

B
which does not have any partner

C
which does not provide for how long the business will continue

D
which cannot be dissolved

Solution

A partnership at will is one which does not provide for how long the business will continue. It is basically a partnership where partners have not agreed to remain in partnership until a definite fixed term. The partnership can be dissolved at any time without any liability on the partners.
Question 3
1 / -0

An unregistered firm cannot claim __________.

A
set on

B
set off in excess of Rs. 100

C
set on and set off

D
none of the above

Solution

Registration of a firm is not compulsory under law. An unregistered firm has a lot of disadvantages like it cannot sue third parties or its partners, cannot claim any set off in excess of RS-100, the partners cannot claim any right against the firm.
Question 4
1 / -0

A partner of an unregistered firm cannot ________.

A
claim set-off if its value does not exceed Rs. 100

B
file a suit for the dissolution of the firm

C
file a suit for the accounts of a dissolved firm

D
file a suit for claiming share of assets of a dissolved firm

E
file a suit for the recovery of share of profits.

Solution

A partnership is a voluntary association of 2 or more persons who come together to do business and earn profits. Registration of a firm is not compulsory but the partners of a unregistered firm cannot file a suit against the firm or third parties and thereby cannot file a suit for the recovery of share of profits.
Question 5
1 / -0

Which of the following statements, about the registration of the firm, is not true?

A
It must be done at the time of its formation.

B
It may be done at the time of formation.

C
It may be done before filing a suit against third party.

D
It may be done at any time after its formation.

Solution

STATEMENT A.
It is not mandatory to register a firm. The registration of a firm can be done at any time on or after the formation of the firm. Hence, the statement that registration must be done at the time of formation of the firm is incorrect.
Question 6
1 / -0

In case of non-registered partnership firm ___________.

A
a partner can file a suit against the firm

B
a partner can file a suit against any partner of the firm

C
the firm can file a suit against third parties

D
third party can file a suit against the firm

Solution

Registration of a firm is not compulsory under law. The firm cannot sue its partners, the partners cannot sue the firm or third party, but the third parties can sue the firm in the court of law.
Question 7
1 / -0

Suppose you have entered into a partnership agreement with me and the partnership-deed provides neither for the duration nor for the determination of our partnership. What is the technical expression for this kind of partnership?

A
Partnership for a fixed term.

B
Partnership at will.

C
Particular Partnership.

D
Any of these.

Solution

A partnership at will is one which does not provide for how long the business will continue. It is basically a partnership where partners have not agreed to remain in partnership until a definite fixed term. The partnership can be dissolved at any time without any liability on the partners.
Question 8
1 / -0

Registration of firm can be effected ________.

A
at the time of its formation

B
at any time after its formation

C
on or after formation of firm

D
None of these

Solution

It is not mandatory to register a firm.
Hence, the registration of a firm can be done at any time on or after the formation of the firm.
Question 9
1 / -0

Which of the following is correct?

A
The liability of partners of a firm is unlimited.

B
Generally the liability of a member of a company is limited but it can be unlimited.

C
All of the above.

D
The liability of partner of the firm is same a member of any company.

Solution

The liability of the partners of a firm is unlimited whereas the liability of the member of a company is generally limited but can be unlimited. By unlimited liability they mean that the personal assets of the partners can also be attached if needed.
Question 10
1 / -0

Where a partner is entitled to interest on capital subscribed by him, such interest will be payable ___________.

A
only out of profit

B
only out of capital

C
out of profits or out of capital

D
none of these

Solution

Where a partner is entitled to interest on capital subscribed by him, such interest will be payable only out of profit. Interest on capital is an appropriation and hence will be provided only out of profits.

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Re-Attempt Weekly Quiz Competition

Accounting for Partnership: Basic Concepts Test 53

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Accounting for Partnership: Basic Concepts Test 53

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SHARING IS CARING

Question 1

1 & 2

2 & 3

3 & 4

1 & 3

Solution

Question 2

which does not have any deed

which does not have any partner

which does not provide for how long the business will continue

which cannot be dissolved

Solution

Question 3

set on

set off in excess of Rs. 100

set on and set off

none of the above

Solution

Question 4

claim set-off if its value does not exceed Rs. 100

file a suit for the dissolution of the firm

file a suit for the accounts of a dissolved firm

file a suit for claiming share of assets of a dissolved firm

file a suit for the recovery of share of profits.

Solution

Question 5

It must be done at the time of its formation.

It may be done at the time of formation.

It may be done before filing a suit against third party.

It may be done at any time after its formation.

Solution

Question 6

a partner can file a suit against the firm

a partner can file a suit against any partner of the firm

the firm can file a suit against third parties

third party can file a suit against the firm

Solution

Question 7

Partnership for a fixed term.

Partnership at will.

Particular Partnership.

Any of these.

Solution

Question 8

at the time of its formation

at any time after its formation

on or after formation of firm

None of these

Solution

Question 9

The liability of partners of a firm is unlimited.

Generally the liability of a member of a company is limited but it can be unlimited.

All of the above.

The liability of partner of the firm is same a member of any company.

Solution

Question 10

only out of profit

only out of capital

out of profits or out of capital

none of these

Solution

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