DOWNLOAD MOBILE APPLICATION TO LEARN MORE: INTRODUCTION TO PARTNERSHIP CLASS 12
DOWNLOAD MOBILE APPLICATION TO LEARN MORE: INTRODUCTION TO PARTNERSHIP CLASS 12
Table of Contents
INTRODUCTION TO PARTNERSHIP CLASS 12
OBJECTIVE TYPE QUESTIONS
State whether each of the following statements is true or false
1. Partnership arises from status.
False
2. It is necessary to have a partnership agreement in writing.
False
3. The business of the firm can be conducted even by one partner.
True
4. At least three persons are necessary for forming a partnership.
False
5. A partnership can be formed only for a legal business.
True
6. The right to share a profit is full proof of one being a partner.
False
7. The liability of partners is limited.
False
8. Partners are mutual agents of each other so far as the business of the firm goes.
True
9. In the absence of any, agreement regarding profit sharing ratio, profit or loss must be shared equally.
True
10. In the absence of profit-sharing ratio profit and losses are shared in the capital ratio.
False
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11. Interest on money advanced by a partner as loan to be firm shall be paid even if there are losses in the business.
True
12. Interest on drawings is always calculated for full year on total drawings.
False
13 Change in the profit-sharing ratio involves almost the same adjustments as those in case of the admission of a new partner.
True
14 Under fixed capital method, any addition to capital will be shown in partner’s capital account.
True
15 Current account of partners are maintained under fluctuating capital method.
False
16 Interest on partner’s capital is allowed @ 6%.
False
17. At least three partners are necessary for establishing a partnership firm.
False
18. It is compulsory to have a partnership agreement in writing. one partner.
False
19. The business of the firm can be conducted by 4. Interest on partner’s loan is always allowed.
True
20. The liability of partners’ is always limited.
True
21. In the absence of profit-sharing ratio, profits are shared in capital ratio.
False
22. Interest on partners’ loan is credited to partners’ capital account.
False
23. The right to share profit is full proof of being a partner.
True
24. Interest on partner’s loan to the firm shall be paid even if there are losses.
True
25. Under the fixed capital method any addition to capital will be shown in partner’s capital account.
False
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FILL IN THE BLANKS
1. In the absence of agreement, the profits are shared in ………… ratio.
Ans. equal
2. In the absence of agreement, the partner’s loan will carry an interest of ………… percent.
Ans. six
3. The document containing the terms of an agreement of a partnership is known as …………
Ans. partnership deed
4. Partners are collectively called …………
Ans. firm
5. Partners current accounts are prepared when the capital accounts are ………..
Ans. fixed
6. Under the ………… capital method, capital at the beginning and capital at the end will be different.
Ans. fluctuating
7. If the date of withdrawals is not mentioned, interest on drawings should be charged for …………months.
Ans. six
8. In the absence of agreement, interest ……. paid on capitals.
Ans. is not
9. A partner………… entitled to salary if he works more than others.
Ans. is not
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MULTIPLE CHOICE QUESTIONS
1. In the absence of an agreement profit and losses are divided by partners in the ratio of
(a) capital
(b) time devoted by each partner
(c) equally
Ans. c
2. In the absence of an agreement, interest on loan advanced by a partner to the firm is allowed at the rate of
(a) six per cent
(b) five per cent
(c) twelve per cent.
Ans. a
3. In the absence of an agreement, partners shall
(a) be paid salaries
(b) not be paid salaries
(c) be paid salaries to those who work for the firm.
Ans. b
4. In the absence of an agreement to the contrary, the partners
(a) are entitled for 6% interest on their capitals only when there are profits.
(b) are entitled for 9% interest on their capitals, only when there are profits.
(c) are entitled for interest on capital at the bank rate, only when there are profits.
(d) are not entitled for any interest on their capitals.
Ans. d
5. Current accounts of the partners should be opened when the capitals are
(a) fluctuating
(b) fixed
(c) either fixed or fluctuating.
Ans. b
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6. The current account of a partner
(a) will always have a credit balance
(b) will always have a debit balance
(c) may have a debit balance or a credit balance.
Ans. c
7. Where a partner is entitled to interest on capital subscribed by him, such interest will be payable.
(a) only out of profits
(b) only out of capital
(c) out of profits or out of capital
(d) none of these.
Ans. a
8. The interest on partners’ capital accounts is to be credited to
(a) partners’ capital account
(b) profit and loss account
(c) interest account.
Ans. a
9. When interest is to be allowed on the capitals of the partners, it is calculated on the
(a) capital in the beginning of the year
(b) capital at the end of the year
(c) capital at the end less drawings if any
(d) average capital.
Ans. a
10. In the absence of agreement, profits are divided by partners in the ratio of:
(a) Capital
(b) Equal
(c) Time devoted
(d) None of these
Ans. b
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11. Interest on partners’ loan is always paid at the rate of:
(a) 4%
(b) 6%
(c) 5%
(d) 10%
Ans. b
12. In the absence of agreement, partners are not entitled to receive:
(a) Salary
(b) Commission
(c) Interest on capital
(d) All the above
Ans. d
13. Partners’ current accounts are opened when the capitals are:
(a) Fixed
(b) Fluctuating
(c) Fixed or fluctuating
(d) All the above
Ans. a
14. When dates of withdrawals are not mentioned, interest on drawings is charged for:
(a) 6
(b) 6
(c) 5
(d) 12 months
Ans. b
15. Interest on capital is calculated on the:
(a) Opening capital
(b) Average Capital
(c) Closing capital
(d) Closing balance less drawings
Ans. a
16. The current account of a partner will always have:
(a) Credit balance
(b) No balance
(c) Debit balance
(d) May have debit or credit balance
Ans. a
17. When a partner is entitled to interest or capital, it is paid:
(a) Out of profits
(b) May be out of profit or capital
(c) Out of capital
(d) None of these
Ans. a
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