Interest on Capital and Drawings at the Time of Death

Q.

Q.

Raj and Neeraj are partners in a firm. Their capitals as on April 01, 2017 were Rs 2, 50, 000 and Rs 1, 50, 000, respectively. They share profits equally. On July 01, 2017, they decided that their capitals should be Rs 1, 00, 000 each. The necessary adjustment in the capitals were made by introducing or withdrawing cash by the partners’. Interest on capital is allowed @ 8% p.a. Compute interest on capital for both the partners for the year ending on March 31, 2018.

Q.

Bharam is a partner in a firm. He withdraws Rs 3, 000 at the starting of each month for 12 months. The books of the firm closes on March 31 every year. Calculate interest on drawings if the rate of interest is 10% p.a.

Q.

In case of death of a partner, interest on capital is entitled to him up to ___________

1. 31st Dec 20XX

2. the time his balance is returned.

3. 31st March 20XX

4. the end of the year

Q. On 1st April, the capital of M is Rs. 50, 000, and the rate of interest is 10% p.a. The capital is returned on 31st December. is the interest amount.

1. Rs. 3, 700
2. Rs. 3, 750
3. Rs. 3, 800
4. Rs. 3, 705

Q.

In case of death of partner, interest on drawings is charged up to the ____________

1. 31st December 20XX

2. 31st March 20XX

3. death of the partner

4. end of the year

Q.

Sunflower and Pink Rose started partnership business on April 01, 2016 with capitals of Rs 2, 50, 000 and Rs 1, 50, 000, respectively. On October 01, 2016, they decided that their capitals should be Rs 2, 00, 000 each. The necessary adjustments in the capitals are made by introducing or withdrawing cash. Interest on capital is to be allowed @ 10% p.a. Calculate interest on capital as on March 31, 2017.

Q.

In case of interest on drawings charged on deceased partner's capital account, what will be the journal entry?

1. Bank A/c Dr.

   To Deceased partner's capital A/c

2. Interest on Drawings A/c Dr.

   To Bank A/c

3. Interest on Drawings A/c Dr.

   To Deceased partner's capital A/c

4. Deceased partner's capital A/c Dr.

   To Interest on Drawings A/c

Q.

Q. When we adjust interest on drawing with the capital account balance, then account will be debited, and account will be credited.

1. partner's capital
2. interest on capital
3. revaluation
4. interest on drawing

Q. account will be debited when interest on capital is paid on capital of deceased partner.

1. Bank
2. Partner's capital
3. Interest on Capital
4. Realisation

Q.

Illustrate how interest on drawings will be calculated under various situations.

Q. Ram and Mohan, two partners, drew for their personal use Rs. 1, 20, 000 and Rs. 80, 000. Interest is chargeable @ 6% p.a. on the drawings. What is the amount of interest chargeable from each partner?

Q.

In case of interest on capital charged on deceased partner's capital account, what will be the journal entry?

1. Bank A/c Dr.

   To Deceased partner's capital A/c

2. Interest on Capital A/c Dr.

   To Bank A/c

3. Interest on Capital A/c Dr.

   To Deceased partner's capital A/c

4. Deceased partner's capital A/c Dr.

   To Interest on Capital A/c

Q. When the Interest on drawings is charged to partners, Interest on Drawing Account is credited, and Partner's Capital Account is debited. It is called __________.

1. an opening entry
2. a closing entry
3. an adjusting entry
4. an transfer entry

Q. Interest on capital is given from profit and loss appropriation account to a partner __________________.

1. Only if allowed as per agreement
2. Only if there are any profits in P&L appropriation account
3. Both a & b
4. None of the above

Q. In the trial balance are shown Debtors Rs. 2400, Bad Debts Rs 221, Bad Debts Reserve Rs 324. For creating a Reserve for Doubtful Debts @ $10\%$ on debtors, the P & L A/c will be debited by :

1. 137
2. 343
3. 240
4. 9

Q. M and N are partners in a firm. M has given a loan of Rs. 8, 000 to the firm on 1st July, 2017. The partnership deed is silent upon the question of provision of interest on partner's loan. Compute the amount of interest payable on the loan advanced by M to the firm, assuming the books are closed on 31st March each year.

1. Rs. 360
2. Rs. 460
3. Rs. 560
4. Rs. 480

Q. Girish and satish are partner in a firm.their capitals on april 1, 2016 were rs. 560000 and 475000respectively . On august 1, 2016 they decided that their capitals should be rs.500000 each. The necessary adjustment in the capitals were made by introducing or withdrawing cash . Interst on capital is allowed at 6% p.a. you are required on compute interst on capital for the year ending march 31, 2017

Q. Ram and Mohan, are partners. They Draw for private use Rs. 6, 000 and Rs. 4000 respectively. Interest is chargeable @ 6% per annum on drawings. What is the interest?

1. Ram Rs. 180 and Mohan Rs. 120
2. Ram Rs. 360 and Mohan Rs. 240
3. Ram Rs. 30 and Mohan Rs. 20
4. None

Q. When a bill is drawn by A on B, and before the maturity date, B becomes insolvent then in the books of A it is debited to _____________.

1. Bank Account
2. B's Account
3. Bills Receivable Account
4. Bank for Collection of Bills

Q. If there is no partnership deed then interest on capital will be charged at ______p.a.

1. 6%
2. 8%
3. 9%
4. NIL

Q. Interest on drawings is _________.

1. Expenditure for the business
2. Expense for the business
3. Gain for the business
4. Loss for the business

Q. John, a partner in Modern Tours and Travels withdrew money during the year ending March 31, 2016 from his capital account, for his personal use. Calculate interest in drawings if rate of interest is $9$ per cent per annum and If he withdrew Rs. $3,000$ per month at the beginning of the month.

1. Rs. $1,485$
2. Rs. $2,845$
3. Rs. $1,755$
4. Rs. $1,580$

Q. What does this adjustment means??
Deceased partner will entitled to the Amount standing to the credit of partners capital account.

Q. Nalini borrowed Rs 550 from her friend at 8% per annum. She returned the amount after 6 months. How much did she pay?

Q. If the opening capital is 50, 000 as on April 1, 2005 and additional capital introduced 10, 000 on January 1, 2006. Interest charge on capital 10% pa. The amount of interest on capital shown in Profit and Loss account as on March 31, 2006 will be_________.

1. 6, 000
2. 4, 000
3. 5, 250
4. 3, 000

Q. interest payable on mrs kusum loan 200000 @ 15percent for a month journalize

Q. One of the partner contributed Rs.30, 000 in the firm-How much interest he will get on the capital contributed ________.

1. Nil, Unless it is mentioned in partnership deed.
2. 6% of 30, 000
3. 5% of 30, 000
4. Income of the above

Q. What is the assumption regarding commision and salary paid to partners ? Charge or apporpriarion