The Indian Partnership Act, 1932 oversees organisation types of business in India. Segment 4 of this Act characterises an organisation as the connection between partners who have consented to share the association’s benefits carried on by all or any of them, representing all.
Below is a list of multiple-choice questions and answers on Accounting for Partnership to help students understand the topic better.
1. Partners’ Current Account has ______.
a) Credit Balance.
b) Debit Balance or Credit Balance.
c) Neither Debit Balance nor Credit Balance.
d) Debit Balance.
Answer b) Debit Balance or Credit Balance.
2. In the absence of a partnership deed, partners are entitled to receive ______.
a) Interest on loan.
b) Salary.
c) Commission.
d) Interest on capital.
Answer d) Interest on capital.
3. Current Accounts are opened if capital is _____.
a) Fluctuating.
b) Not contributed.
c) Fixed or fluctuating.
d) Fixed.
Answer d) Fixed.
4. In the absence of any provision in interest on capital will be calculated for _____.
a) One year.
b) One month.
c) No interest.
d) Six Months.
Answer c) No interest.
5. Ostensible partners are those who _____.
a) Contribute very little capital but get equal profit.
b) Do not contribute any capital and without having any interest in the business, lend their name to the business.
c) Contribute maximum capital of the business.
d) Do not contribute any capital but get some share of profit for lending their name to the business.
Answer b) Do not contribute any capital and without having any interest in the business, lend their name to the business.
6. Which one of the following is NOT an essential feature of a partnership?
a) There must be a business.
b) The business must be carried on for profits.
c) The business must be carried on by all the partners.
d) There must be an agreement.
Answer c) The business must be carried on by all the partners.
7. When is the Partnership Act enforced?
a) Where there is a partnership deed, but there are differences of opinion between the partners.
b) When capital contribution by the partners varies.
c) When the partner’s salary and interest on capital are not incorporated in the partnership deed.
d) When there is no partnership deed.
Answer d) When there is no partnership deed.
8. When a Goodwill Account is raised, the credit is given to the old partner’s capital account in _____.
a) Old profit sharing ratio.
b) Gaining ratio.
c) New profit sharing ratio.
d) None of the options are correct.
Answer c) New profit sharing ratio.
9. What do you mean by super profit?
a) Total profit by the number of years.
b) Average profit plus normal profit.
c) Average profit minus normal profit.
d) None of the options are correct.
Answer c) Average profit minus normal profit.
10. The decision in Garner versus Murray was given in _____.
a) 1905
b) 1933
c) 1804
d) 1904
Answer d) 1904.
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