Multiple Choice Questions (MCQs)
Select the correct alternative:
1. Written agreement among the partners is called (b) Partnership bye-laws.
(a) Partnership Deed. (d) acontract.
(c) Partnership Constitution.
2. Feature of partnership firm is
common business under an agreement.
(a) Two ormore persons carrying Partnership Act, 1932.
Profits and losses are shared in agreed ratio or as provided in the
(b)
for all.
(c) Business is carried on by allor any of them acting
(d) All of the above.
3. Interest on Capital is allowed on
(a) the opening capital. (b) the capitalat the year end.
(d) the capital in the middle of the year.
(c) average capital of the year.
4. In the absence of Partnership Deed, Interest on Capital
(b) is allowed @ 10% per annum.
(a) is allowed a 6% per annum.
(d) is not allowed.
(c) is allowed at the borrowing rate.
5. In case of fixed capitals, partners will have
(a) credit balances in their Capital Accounts.
(b) debit balances in their Capital Accounts.
(c) may have credit or debit balances in their Capital Accounts.
(d) credit balance or nil balance in their Capital Accounts.
6. Pick the odd one out of the following:
(a) Rent to Partner. (b) Manager's Commission.
(c) Interest on Partner's Loan. (d) Interest on Partner's Capital.
(CBSE Sample Paper 2020)
7. Current Accounts of partners are maintained if
(a) capitals are fixed. (b) capitals are fluctuating.
(c) capitals are fixed or fluctuating. (d) it is decided by the Partners.
8. In the absence of Partnership Deed, profit of a firm is divided among the partners
(a) in the ratio of capital.
(b) Equally.
(c) in the ratio of time devoted for the firm's business.
(d) according to the managerial abilities of the partners. (CBSE 2015)
9. Mohit and Rohit were partners in a firm with capitals of ?80,000 and 40,000 respectively. The frm earrned
profit of 30,000 during the year. Mohit's share in the profit will be
(a) 20,000. (b) ? 10,000.
(d) 18,000. (CBSE 2020)
(c) 15,000.
of
10. Relationship between the partners is
(a) Close relatives. (b) Agent and Principal.
(c) Junior-Senior Relationship. (d) Senior-Subordinate Relationship.
11. Profit &Loss Appropriation Account is prepared to
(a) Distribute profht and loss for the year among the partners.
(b) Settle the dispute among the partners.
(c) Determine the proht remaining for the year afterappropriation
(d) Distribute the profit for the year among thepartners.
12. Which Capital accountswith balances always show a credit balance?
(a) Fixed (b) Fluctuating
(c) Normal (d) Real
13. Which of the following is not an essential feature of partnership?
(a) An agreement, oralor written, should exist among the partners.
(b) Agreement should be to carry on business.
(c) Allthe partners should contribute capital in the firm.
(d) There should be at least two partners.
14. Partners have to pay interest on withdrawais (in cash or kind) only when provided by the
(a) Partnership Act. (b) Partrnership Deed.
(c) (a) and (b) both. (d) None of these.
15. Ram and Mohan are partners. They draw for personal uset 60,000 and 40,000 respectively. interest is
chargeable @6% p.a. on Drawings. What is the interest on drawings?
(a) Ram1,800 and Mohan 1,200. (b) Ram3,600 and Mohan 2,400.
(c) Ram 300 and Mohan 200. (d) None of these.
16. Mohan draws 10,000 p.m. on last day of every month for his personal use. If interest is to be charged
@5% p.a., interest chargeable from him in accounting year will be
(a) 3,250. (b) 2,750.
(c) 3,000. (d) 3,500.
interest
17. If equal amount is.withdrawn in the beginning of each month for personal use, period for which
will be charged will be
(b) 6 Months.
(a) 7 Months.
(d) 6.5 Months.
(c) 5 Months.
18. Product method is used for calculation of
(a) Distribution of Profit and Loss. (b) Distributionof Revaluation profit or loss.
(c) interest on Dravwings. (d) Interest on Capital.
19. Partner's Drawing Account is closed
(a) by transfer to credit side of the Capital Account.
(b) by transfer to credit of Current Account.
(c) either (a) or (b).
Account.
(d) by transfer to debit side of Capital or Current
Deed provides for interest on drawings at
20. Mohan, Mayank and Madan are partners, their Partnership
every month and his interest on drawings
8% per annum, Mayank withdrew fxed amount in the middle of drawings?
amount of his monthly
amounted to 24,000 at the end of theyear. What was the
(b) 25,000.
(a) 50,000.
(d) 4,00,000.
(c) 6,00,000.
21. Ramesh, Rahul and Raman are partners. Raman withdrew 20,000 per month in the middle of the rnonth
interest on drawings charged for the year was 7,200. Rate of interest on drawings is
(a) 7°% p.a. (b) 8% p.a.
(c) 9% p.a. (d) 6% p.a.
22. Interest on Capital of a partner is a
(a) Loss to the frm. (b) Gain (Profit) to thefrm.
(c) Neither loss nor gain to the frm. (d) Loss to the partner.
23. Mohan, apartner, withdraws 20,000 on 1st April, 2022 and 40,000 on 1st October, 2022. Interest on
Drawings @6% p.a. on 31st March, 2023 will be
(a)2,400. (b) 3,600.
(c)1,800. (d) 1,200.
24. When guarantee is given to partner by some partners,deficiency on such guarantee is borne by
(a) All of the other partners. (b) Partnership firm.
(c) Partner who gave the guarantee. (d) None of the partners.
25. Which of the following items is not dealt through Profit &Loss Appropriation Account?
(a) interest on Partner's Loan (b) Partner's Salary
(c) interest on Partner's Capital (d) Partner's Commission
(CBSE Sample Paper 2019)
26. Which of the following will not be shown in the debit of Profit &Loss Appropriation Account?
(a) Interest on Capital (b) Commission to a partner
(c) interest on Drawings (d) Salary to partners
27. Vidit and Seema were partners in afirm sharing profits and losses in the ratio of 3:2. Their capitals were
71,20,000 and R2,40,000 respectively. They were entitled to interest on capital @10%. The firm earned
profit of ?18,000 during the year. The interest on Vidit's capital will be
(a) 12,000. (b) 10,800.
(c)7200. (d) 6,000. (CBSE 2020)
28. XYand Zare partners in a firm sharing profits and losses in the ratio of 6:4: 1.Xguaranteed a profit of
? 15,000 to Z.The net profit for the year ending 31st March, 2019 was 99,000. X's share in the profit of
the firm will be
(a) 30,000. (b) 15,000.
(c) 48,000. (d) 45,000. (CBSE 2020C)
29. Sohan and Mohan are partners sharing profits and losses in the ratio of 2:3with the capitals of ?5,00,000
andB6,00,000 respectively. On 1st January, 2022, Sohan and Mohan granted loans of I20,000 and 10,000
respectively to the firm. Determine the amount of losS to be borne by each partner for the year ended
31st March, 2022 if the loss before interest for the year amounted to 2,500.
(a) Share of Loss: Sohan--*1,250; Mohan--1,250.
(b) Share of Loss: Sohan-- 1,000, Mohan--1,500.
(c) Share of Loss: Sohan-- 820; Mohan---21,230.
(d) Share of Loss:Sohan--*1,180; Mohan-- 1,770. (CBSE Sample Paper 2023)
30. A
and Bare partners with the capitals of t 2,00,000 and 1,00,000 respectively. Interest payable on capital is
10% p.a. Determine amount of appropriation for each partner when the profit earned by the frmisT24,000.
a) 20,000and 10,000. (b) 15,000 and 9,000.
(c) No interest will be paid. (d) ? 16,000 and 8,000.
31. A, B and Care partners sharing profits in the ratio of 5 4:1.C is given
quarantee that his share in à yed
Wil! not be less than 50,000. Proft for the vear ended 31st March, 2023 is 4,00,000. Deficiency in the
quaranteed profit of Cis to be borne by B.
Dehciency to be borne by Bis:
(a) Deficiency of C 15,.000 met by B. {b) Deficiency ofC?10,000met by B.
(c) Deficiency of C 40,000 met by B. (d) None of these.
32. XY and Zare partners in a frm sharing profts and losses in the ratio of 6: 4:1. Xguaranteed profit of
* 15,000 to Z. Net profit for the year ending 31st March, 2019 was 99,000. X's share in the profit of the
firm will be
(a) 30,000. (b) 15,000.
(c) 48,000. (d) 45,000. (CBSE 2020 C)
33. Pawan, manager of the firm, is admitted as partner wef 1st April, 2022 to manage the business. Salary paid
to him during the year ended 31st March, 2023 will be
(a) transferred to the debit of Pawan's Capital Account.
(b) transferred to the debit of Pawan's Current Account.
(c) transferred to the debit of Profit &Loss Account.
(d) transferred to the debit of Profit &Loss Appropriation Account.
34. Vihaan and Mann are partners sharing profits and losses in the ratio of 3:2. The firm maintains fluctuating
capital accounts and the balance of thesame as on 31st March, 2022 is 4,00,000 and 4,65,000 for Vihaan
and Mann respectively. Drawings during the year were 65,000 each. As per the partnership Deed, Interest
oncapital @10% p.a. on Opening Capital has been allowed to them. Calculate the opening capital of Vihaan
given that the divisible profits during the year 2021-22 was ? 2,25,000.
(a) 3,30,000 (b) 4,40,000
(c) 4,00,000 (d) 3,00,000 (CBSE Sample Paper 2023)
amount
35. A, Band Care partners. A's capital is ? 3,00,000 and B's capital is 1,00,000. C has not invested any
deed is
as capital but he alone manages the whole business. Cwants 30,000 p.a. as salary, though the
silent. Firm earned a profit of 1,50,000. How much will each partner receive as an appropriation of profits?
(a) AR60,000; B 60,000and C?30,000 (b) AR90,000; B ?30,000 and C30,000
AR40,000; B 40,000 and C 70,000
(c) (d) AR50,000; B 50,000 and C 50,000
(CBSE Sample Paper 2023)
36. Raju's comnission will be
(b) 44,000.
(a) 40,000. (CBSE Sample Paper 2023)
(d) 36,440.
(c) 36,000.
37. Puneet's share of profit will be
(b) ?1,44,000.
(a) 1,80,000.
(d) 1,60,000. (CBSE SamplePaper 2023)
(c) 2,16,000.
Profits:
sequence of the following transactions in context of Division of
38. Choose the correct
(i) Guarantee by Firm to Partners
(iü) Guarantee by Partners to Firm
Appropriation Account
(ii) Transfer of Profits to Profit & Loss
(iv) Guarantee byPartner to Partner
(b) (ii); (i); (ii): (iv)
(a) (i): (i); (iv): (i)
(d) (ii); (iii); (iv): (i) (CBSE Sample Paper 2023)
(c) (iüi); (i): (i): (iv)
fixed amount at the beginning of every month. Interest
39. Green and Orange are partners. Green draws a
interest on Green's drawings amounts to ? 2,600.
on drawings is charged @8% p.a. At the end of the year
Monthly drawings of Green were
(a) 8,000. (b) 60,000.
(c) ?7,000. (d) 5,000. (CBSE Sample Paper 2023)
40. Girdhat, a partner withdrew 5,000 in the beginning of each quarter and interest on drawings
was calculated as 1,500 at the end of accounting year 31 March, 2022. What is the rate of interest on
drawings charged?
(a) 6%p.a. (b) 8%% p.a.
(c) 109% p.a. (d) 12% p.a. (CBSE Sample Paper 2023)
41. Adil, Bhavya and Chris are partners sharing profits in the ratio of 5:4:1.Chris is given quarantee that his
share of profit in any year will not be less than 5,000. Deficiency in profit share of Chris will be borne by
Bhavya. The Journal entry to record for deficiency met by Bhavya is given below:
Date Particulars L.F. Dr. () Cr. ()
Bhavya's Capital A/c ..Dr. 1,000
To Chris's Capital A/c 1,000
(Deficiency met by Bhavya)
Profit earned during the year was
(a) ?30,000. (b) 35,000.
(c) 40,000. (d)50,000.
(Ans.: 1.(a); 2. (d): 3. (a); 4. (d); 5. (d); 6. (d); 7. (a); 8. (b): 9. (c): 10. (b): 11.
(a): 12. (a): 13. (c):
14. (b); 15.(a); 16. (b); 17. (d); 18. (c); 19., (d); 20. (a):
21.(d); 22. (c); 23. (a):
24. (c): 25. (a): 26. (c); 27. (d); 28. (c); 29. (d): 30. (d):
31. (b): 32. (c); 33. (d
34. (d); 35. (d); 36. (c); 37. (a): 38. (c): 39. (d); 40. (d);
41.(c).!
