Accounting for Partnership: Basic Concepts Test 54

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Accounting for Partnership: Basic Concepts Test 54

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SHARING IS CARING

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Weekly Quiz Competition

Question 1
1 / -0

What constitutes firm property ___________.

A
property belonging to a partner who enters into an existing partnership

B
any property used for the purpose of the business of the firm

C
fixed assets brought in by partner to the common stock of firm

D
the property acquired by partner out of money, withdrawn from the firm's bank account for personal use

Solution

Fixed assets brought in by the partner to the common stock of firm. The property of the firm is the basically the property brought in/pooled by the partners.
Question 2
1 / -0

Goodwill of the partnership business can be regarded as __________.

A
the property of the firm

B
the property of the firm, subject to a contract between the partners to this effect

C
the property of the firm, irrespective of a contract between the partners to this effect

D
the property of the firm, subject to order of the High Court to this effect

Solution

Goodwill of the partnership business can be regarded as the property of the firm, subject to contract between the partners to this effect.
Goodwill is an intangible asset.
Question 3
1 / -0

Unless otherwise agreed __________________.

A
a working partner is entitled to receive remuneration for taking part in the conduct of the business

B
where a partner is entitled to interest on capital, such interest shall be payable as a charge against the profits

C
a partner is entitled to claim interest on firm advances made by him to the firm @ 6% p.m

D
a partner is not entitled to interest on loan @ 6% p.a. after the date of the dissolving of a firm

Solution

If there exists on partnership deed or there is no specific rate given for charging interest on loan in the deed the interest on loan will be @ 6%. Also unless otherwise agreed a partner is not entitled to interest on loan @6% after the date of dissolving the firm.
Question 4
1 / -0

Implied authority means the capacity of a partner to bind ________.

A
third party by his acts

B
firm by his acts

C
none of these

D
both A and B

Solution

Implied authority means the capacity of a partner to bind firm by his acts. Implied authority means there no written authority but deemed/implied authority that the firm and the other partners are bind by the acts of the partners.
Question 5
1 / -0

Following are the essential elements of a partnership firm except ____________.

A
at least two persons

B
there is an agreement between all partners

C
equal share of profits and losses

D
partnership agreement is for some business

Solution

The essential elements of partnership firm are at least two persons, there is an agreement between all partners and partnership agreement is for some business. But its not necessary to that the partners have equal share of profits. They may have any profit sharing ratio as agreed or in the deed.
Question 6
1 / -0

Each of the partner is _________.

A
principal as well agents

B
only agents of the firm

C
only representative of the firm

D
only co-partners of the firm

Solution

Each of the partner is principal as well as an agent. This basically means one acting for all and all for one also known as mutual agency.
The decision of one partner has binding on the other.
Question 7
1 / -0

Which of the following is the difference between a partnership deed and partnership agreement?

A
Partnership deed is in writing and partnership agreement is oral.

B
Partnership deed is signed by all the partners but partnership agreement is signed by majority of the partners.

C
Partnership deed is registered in the court of law whereas partnership agreement is not registered.

D
Partnership deed is not subject to changes unless all partners to it. Partnership agreement can be amended with the consent of more than 50% partners.

Solution

Partnership agreement is not registered in the court of law, its an agreement between the partners whereas a partnership deed is a written agreement between the partners and is registered in the court of law.
Question 8
1 / -0

Features of a partnership firm are _________________.

A
two or more persons carrying common business under an agreement

B
sharing profits and losses in the fixed ratio

C
business carried by all or any of them acting for all

D
All of the above

Solution

Features of partnership firm are :-
1) Two or more persons carrying common business under an agreement.
2) Sharing profits and losses in the fixed ratio
3) Business carried by all or any of them acting for all.
Question 9
1 / -0

If a fixed amount is withdrawn on the last day of every month of a calendar year, the interest on the total amount of drawings will be calculated for _________.

A
4.5 months

B
5.5 months

C
6 months

D
6.5 months

Solution

If a fixed amount is withdrawn on last day of every month of the calendar year, the interest on the total amount of drawings will be calculated for 5.5 months. Average period will be calculated as:-
= Months left after first drawing + months left after last drawing
------------------------------------------------------------------------------------------
2
= 11 + 0
-------------
2
= 5.5 months.
Question 10
1 / -0

If a fixed amount is withdrawn on the first day of every month of a calendar year, the interest on the total amount of drawings will be calculated for ______.

A
4.5 months

B
5.5 months

C
6 months

D
6.5 months

Solution

If a fixed amount is withdrawn on first day of every month of the calendar year, the interest on the total amount of drawings will be calculated for 6.5 months. Average period will be calculated as:-
= Months left after first drawing + months left after last drawing
------------------------------------------------------------------------------------------
2
= 12 + 1
-----------
2
= 6.5 months

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Re-Attempt Weekly Quiz Competition

Accounting for Partnership: Basic Concepts Test 54

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Accounting for Partnership: Basic Concepts Test 54

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SHARING IS CARING

Question 1

property belonging to a partner who enters into an existing partnership

any property used for the purpose of the business of the firm

fixed assets brought in by partner to the common stock of firm

the property acquired by partner out of money, withdrawn from the firm's bank account for personal use

Solution

Question 2

the property of the firm

the property of the firm, subject to a contract between the partners to this effect

the property of the firm, irrespective of a contract between the partners to this effect

the property of the firm, subject to order of the High Court to this effect

Solution

Question 3

a working partner is entitled to receive remuneration for taking part in the conduct of the business

where a partner is entitled to interest on capital, such interest shall be payable as a charge against the profits

a partner is entitled to claim interest on firm advances made by him to the firm @ 6% p.m

a partner is not entitled to interest on loan @ 6% p.a. after the date of the dissolving of a firm

Solution

Question 4

third party by his acts

firm by his acts

none of these

both A and B

Solution

Question 5

at least two persons

there is an agreement between all partners

equal share of profits and losses

partnership agreement is for some business

Solution

Question 6

principal as well agents

only agents of the firm

only representative of the firm

only co-partners of the firm

Solution

Question 7

Partnership deed is in writing and partnership agreement is oral.

Partnership deed is signed by all the partners but partnership agreement is signed by majority of the partners.

Partnership deed is registered in the court of law whereas partnership agreement is not registered.

Partnership deed is not subject to changes unless all partners to it. Partnership agreement can be amended with the consent of more than 50% partners.

Solution

Question 8

two or more persons carrying common business under an agreement

sharing profits and losses in the fixed ratio

business carried by all or any of them acting for all

All of the above

Solution

Question 9

4.5 months

5.5 months

6 months

6.5 months

Solution

Question 10

4.5 months

5.5 months

6 months

6.5 months

Solution

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