Charge against Profits

Q.

In general, interest on capital is ___________

1. None of them

2. Charge against the profits

3. Appropriation of profits

4. Both

Q. Interest on capital is an appropriation of .

1. drawings
2. capital
3. profit
4. interest

Q. Rent payment to partner is a/an against profits.

1. income
2. discharge
3. expense
4. charge

Q.

The appropriation of profits can be done, in case _____________.

1. The partnership firm either earns a profit or incur losses

2. None of the above

3. The partnership firm incur losses

4. The partnership firm earn profits

Q.

Charge and appropriation of profits are ____________.

1. Both same as well as different

2. Neither same nor different

3. Different

4. Same

Q. Where will you record interest on drawings?

1. Debit side of Profit & Loss Appropriation Account.
2. Credit side of Profit & Loss Appropriation Account.
3. Credit side of Profit & Loss Account.
4. Debit side of Capital/Current Account only.

Q.

Charge is a ___________ from the amount of profits. Appropriation is ____________ of profits.

1. reduction, distribution

2. reduction, reduction

3. distribution, distribution

4. distribution, reduction

Q. A charge is a from the amount of profits.

An appropriation is the of profits.

1. reduction
2. ignorance
3. distribution
4. increment

Q. Interest on capital the overall capital.

1. reduces
2. does not reduce
3. ignores
4. changes

Q.

Appropriations are the transactions that happen between firm and partners in the capacity of ___________

1. none of the above

2. both of them

3. partner

4. firm

Q. If the rent received in advance 2, 000. The adjustment entry will be ________.

1. debit profit and loss account and credit rent account
2. debit rent account credit rent received in advance account
3. debit rent received in advance account and credit rent account
4. none of the above

Q. State the two situations in which interest on Partners' Capital is generally provided.

Q. Rs.1500 received from sub-tenant for rent, entered correctly in the cash book and posted to the debit of the rent account. In the trial balance ____________.

1. none of the above
2. the debit total will be greater by Rs. $3,000$ than the credit total
3. the debit total will be greater by Rs. $1,500$ than the credit total
4. subject to other entries being correct, the total will agree

Q. Providing Interest on Capital _______ net profit.

1. Reduces
2. Increases
3. No effect
4. None

Q. State whether the following statement are True or False.

The interest on drawings is an income of the firm.

Q.

Rent is a __________

1. Appropriation of profit

2. None of them

3. Both

4. Charge against profit

Q. Interest on capital is ________ on business.

1. profit
2. income
3. expense
4. loss

Q. Interest on loans taken to acquire fixed assets only for the period before the asset becomes operational is___________.

1. Capital expenditure
2. Revenue expenditure
3. Deferred revenue expenditure
4. None of the above

Q. Rent paid to a partner is charged to ______.

1. Profit and loss adjustment A/c
2. Revaluation A/c
3. Profit and loss appropriation A/c
4. Profit and loss A/c

Q. Interest on capital will be ________.

1. debited to trading account
2. credited to trading account
3. debited to profit & loss account
4. credited to profit & loss account

Q. Interest on capital is calculated on _____________.

1. Closing capital
2. Opening capital
3. Additional Capital
4. Both A & B