Practice Test

Q1) Following are the essential elements of a partnership firm except ; Show Answer

Q2) Following is the difference between partnership deed and partnership agreement Show Answer

Q3) If the firm prefers Capital account to be shown as the amount introduced by the partners as capital in the firm then ,the entries for salary ,drawing ,interest on capital or drawing and profits are made in Show Answer

Q4) In the absence of any agreement ,partners are liable to receive interest on their loans @ Show Answer

Q5) A partner acts as a ____for the firm Show Answer

Q6) B and M are partners sharing profits and losses in the ratio of 3;2 having the capital of Rs.80,000 & Rs.50,000 respectively. They are entitle to 9 % p.a. interest on capital before distributing the profits. During the year firm earned Rs.7,800 after allowing interest on capital. Profits apportioned among B & M is Show Answer

Q7) B and M are partners having the capital of Rs.25,000 & Rs.15,000 respectively. They are entitle to 10 % p.a.Find interest on capital for both partners when profits. earned by the firm is Rs.2,400 Show Answer

Q8) B and M are partners sharing profits and losses in the ratio of 4:1 D was manager who received the salary of Rs.4,000 p.m. in addition to a commission of 5% on net profit after charging such commission .Profits for the year is Rs.6,78,000 before charging salary.Find the total remuneration of D Show Answer

Q9) The relationship between the partners who have agreed to share the profit of the business carried on by all or any one of them acting for all is known as Show Answer

Q10) Features of a partnership firm are Show Answer

Q11) Firm has earned exceptionally high profits from a contract which will not be renewed .In such a case the profit from this contract will not be included in Show Answer

Q12) In the absence of any agreement ,partners are liable to Show Answer

Q13) Interest on capital will be paid to the partners if provided for in the agreement but only from Show Answer

Q14) Partners are suppose to pay interest on drawing only when ____by the___ Show Answer

Q15) When partners is given Guarantee by the other partner , losses on such guarantee will be borne by Show Answer

Q16) Guarantee given to a partner A by the other partners B & C means Show Answer

Q17) What would be the profit sharing ratio if the partnership acts is complied with ? Show Answer

Q18) Would interest on loan be allowed in the absence of any agreement or when partnership deed is silent. Show Answer

Q19) When is the profit & loss Appropriation account prepared ? Show Answer

Q20) What time would be taken into consideration if equal monthly amount is drawn as drawing at the beginning of each month Show Answer

Q21) Where will you record interest on drawing ? Show Answer

Q22) What balance does a partner's Current account has? Show Answer

Q23) Is rent paid to partner appropriation of profits ? Show Answer

Q24) How would you close the Partner's Drawing account Show Answer

Q25) A, B and C had capitals of Rs.50,000:Rs.40,000 & Rs.30,000 respectively for carrying on the business in the partnership. The firm's reported profit for the year was Rs.80,000. As per provision of the IPA,1932,find out the share of each partner in the above amount after taking into account that no interest has been provided on an advance by A of Rs.20,000 in addition to his capital contribution Show Answer

Q26) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .profit before interest on partners ' capital was Rs.6,000 and X wanted interest on capital @ 20% as his capital contribution was Rs.1,00,000 as compared to that of Y and Z which was Rs.75,000 and Rs.50,000 respectively Show Answer

Q27) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .profit before interest on partners capital was Rs.6,000 and Y wanted interest on capital @ 24% p.a.on his loan of Rs.80,000 .There was no agreement on this point .Calculate the amount payable to X ,Y & Z respectively Show Answer

Q28) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .Profit before interest on partners capital was Rs.6,000 and Z demanded minimum profit of Rs.5,000 as his financial position was not good.There was no agreement on this point .Profit to be distributed to X ,Y & Z will be Show Answer

Q29) Following are the difference between Capital or Current Account except Show Answer

Q30) Following is the difference between partnership and Joint venture except Show Answer

Q31) Every partner is bound to attend diligently to his___in the conduct of the business Show Answer

Q32) MATCH THE PAIRS :-Partnership deed is mutual agreement between Show Answer

Q33) The liability of all the partners is Show Answer

Q34) In the absence of an agreement partners shares profit in Show Answer

Q35) Profit and Loss Appropriation Account is prepared to Show Answer

Q36) The law relating to partnership firm is contained in Show Answer

Q37) The Indian partnership act came into force on Show Answer

Q38) the Indian partnership act applies to Show Answer

Q39) Partnership is the relation between two or more persons Show Answer

Q40) the partnership can be formed Show Answer

Q41) The partnership cannot be formed Show Answer

Q42) For a valid partnership ,there must be Show Answer

Q43) Agreement to share profits Show Answer

Q44) Business of the firm must be carried on by Show Answer

Q45) The essential elements of a partnership Show Answer

Q46) which of the following is not essential features of partnership ? 1. Agreement , 2. Registration , 3.Test of mutual agency , 4. separate legal entity Show Answer

Q47) The essential elements of a partnership include Show Answer

Q48) The maximum number of partners is mentioned in Show Answer

Q49) The partnership firm does not become an illegal association, when Show Answer

Q50) The maximum number of partners in a firm carrying on banking business cannot exceed Show Answer

Q51) the maximum number of partners in a firm carrying on general business is Show Answer

Q52) The maximum limit on number of members of a joint Hindu family carrying on family banking business is Show Answer

Q53) The maximum limit on number of members of a joint Hindu family carrying on family non- banking business is Show Answer

Q54) A firm Show Answer

Q55) Which of the following is correct ? Show Answer

Q56) Which of the following is not correct ? Show Answer

Q57) The real test of partnership is Show Answer

Q58) The partnership relation exists when Show Answer

Q59) Mutual Agency is Show Answer

Q60) Sharing of profits is Show Answer

Q61) The term laid down in the partnership deed may be varied by the consent of Show Answer

Q62) Registration of a firm can be effected Show Answer

Q63) Which of the following, about registration is not true Show Answer

Q64) In case of non-registered partnership firm Show Answer

Q65) An unregistered firm cannot claim Show Answer

Q66) A partner of an unregistered firm cannot Show Answer

Q67) A partnership at will is one 1.duration not fixed , 2 .duration fixed , 3. dissolved at any time , 4.can be dissolved only on the happening of an event Show Answer

Q68) There is no provision in the partnership deed regarding the duration of partnership. this is Show Answer

Q69) A partnership at will may be dissolved by any partner by giving Show Answer

Q70) Types of partners includes Show Answer

Q71) Who does not take active part in conduct of the business Show Answer

Q72) Partner by holding out is known as Show Answer

Q73) A minor can be admitted to the benefit of partnership with the consent of Show Answer

Q74) A change in the nature of business of the firm may be made only with the consent of Show Answer

Q75) Unless otherwise agreed. Show Answer

Q76) unless otherwise agreed , every partner has right Show Answer

Q77) unless otherwise agreed , every partner must account for & pay all profits earned by the firm Show Answer

Q78) which of the following is not the right of a partner of a partner. ,which he cannot claim as a matter of right Show Answer

Q79) the general rights of continuing partners include Show Answer

Q80) in the absence of any agreement ,the partners are entitled to share profit Show Answer

Q81) in the absence of any agreement interest on advance by a partner is Show Answer

Q82) where a partner is entitled to interest on capital subscribed by him ,such interest will be payable Show Answer

Q83) interest on capital subscribed by a partners may be provided for in the partnership deed is _ Show Answer

Q84) what constitutes firm's property Show Answer

Q85) goodwill of partnership business can be regarded as Show Answer

Q86) each of the partner is Show Answer

Q87) every partner is Show Answer

Q88) the relationship between persons who have agreed to share the profit of a business carried on by all or any of them acting for all is known as Show Answer

Q89) following is the different between partnership deed & partnership agreement Show Answer

Q90) in the absence of any provision in the partnership deed , interest on capital Show Answer

Q91) in the absence of any provision in the partnership deed , interest on drawing of a partner Show Answer

Q92) which of the following is provided even if there is no provision in the partnership deed & there are no profits Show Answer

Q93) If a fixed amount is withdrawn on the first day of every month of a calendar year , the interest on total amount of drawing will be calculated for Show Answer

Q94) If a fixed amount is withdrawn on the last day of every month of a calendar year , the interest on total amount of drawing will be calculated for Show Answer

Q95) If a fixed amount is withdrawn on the middle day of every month of a calendar year , the interest on total amount of drawing will be calculated for Show Answer

Q96) If a fixed amount is withdrawn on the first day of every quarter of a calendar year , the interest on total amount of drawing will be calculated for Show Answer

Q97) If a fixed amount is withdrawn on the last day of every quarter of a calendar year , the interest on total amount of drawing will be calculated for Show Answer

Q98) If a fixed amount is withdrawn on the middle day of every quarter of a calendar year , the interest on total amount of drawing will be calculated for Show Answer

Q99) Which of the following does not appear in the profit & loss. Appropriation account Show Answer

Q100) which of the following appear in the profit & loss Appropriation account Show Answer

Q101) When the interest on capital is allowed to partners, interest on capital account is debited & Partner's Capital account credited it is called Show Answer

Q102) When the interest on drawing is charged to partners, interest on drawing account is credited & Partner's Capital account debited, it is called Show Answer

Q103) When interest on loan/advance is allowed to partners Show Answer

Q104) In the absence of an agreement partners are entitled to Show Answer

Q105) When Profit & loss appropriation account is prepared Show Answer

Q106) When guarantee is given to a partner by the other partners, loss on such guarantee will be borne by Show Answer

Q107) Guarantee given to a partner 'A ' by the other partners 'B & C' means Show Answer

Q108) Following are the factors affecting goodwill except Show Answer

Q109) Under average profit basis of goodwill is calculated by Show Answer

Q110) Under super profit basis of goodwill is calculated by Show Answer

Q111) Under annuity basis goodwill is calculated by Show Answer

Q112) Under capitalization basis goodwill is calculated by Show Answer

Q113) weighted average method of calculating goodwill should be followed when Show Answer

Q114) X and Y are partners sharing profits and losses in the ratio of 3:2 having the capital of Rs.1,60,000 & Rs.1,00,000 respectively. They are entitle to 9 % p.a. interest on capital before distributing the profits. During the year firm earned Rs.15,600 after allowing interest on capital. Profits apportioned among X & Y is Show Answer

Q115) X and Y are partners having the capital of Rs.50,000 & Rs.30,000 respectively. They are entitle to 10 % p.a.Find interest on capital for both partners when profits. earned by the firm is Rs.4,800 Show Answer

Q116) X and Y are partners sharing profits and losses in the ratio of 4:1 D was manager who received the salary of Rs.8,000 p.m. in addition to a commission of 5% on net profit after charging such commission .Profits for the year is Rs.13,56,000 before charging salary.Find the total remuneration of D Show Answer

Q117) A, B and C had capitals of Rs.50,000:Rs.40,000 & Rs.30,000 respectively for carrying on the business in the partnership. The firm's reported profit for the year was Rs.79,200. As per provision of the IPA,1932,find out the share of each partner in the above amount after taking into account that no interest has been provided on an advance by A of Rs.20,000 in addition to his capital contribution Show Answer

Q118) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .profit before interest on partners ' capital was Rs.12,000 and X wanted interest on capital @ 20% as his capital contribution was Rs.2,00,000 as compared to that of Y and Z which was Rs.1,50,000 and Rs.1,00,000 respectively Show Answer

Q119) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .profit before interest on partners capital was Rs.12,,000 and Y wanted interest on capital @ 24% p.a.on his loan of Rs.1,60,000 .There was no agreement on this point .Calculate the amount payable to X ,Y & Z respectively Show Answer

Q120) X,Y & Z are partners in the firm .At the time of division of profit for the year there was disputes between the parties .Profit before interest on partners capital was Rs.12,000 and Z demanded minimum profit of Rs.10,000 as his financial position was not good.There was no agreement on this point .Profit to be distributed to X ,Y & Z will be Show Answer

Q121) the profits of last five are Rs.1,70,000 ; Rs.1,80,000 ; Rs.1,40,000 ; Rs.2,00,000 & Rs.1,60,000 .find the value of goodwill, if it is calculated on average profits of last 5 years on the basis of 3 year's purchase Show Answer

Q122) the P&L account for the 4 years are losses Rs.20,000 ;losses Rs.5,000 ;profits Rs.1,96,000 ; Rs.1,52,000 .The average capital employed in the business is Rs.4,00,000 .the rate of interest expected from capital invested is 12% .the remuneration of partners is entitled to be Rs.2,000 p.m .the value of goodwill on the basis of two year's purchase of super profit based on there average of four years is Show Answer

Q123) total capital employed in the firm Rs.16,00,000 ; reasonable rate of return 15% ; profits for the year Rs.24,00,000 .the value of goodwill using capitalization method is Show Answer

Q124) The profits for 2003-04 are Rs 4,000: for 2004-05 is Rs 52,200:& for 2005-06 is Rs 62,400:.Closing stock for 04-05 and 2005-06 includes the defective items of Rs.4,400 & Rs.12,400 ,which were considered as having market value NIL. Calculate goodwill on average profit method Show Answer

Q125) The profits and losses for the last years are 2001-02 losses Rs.20,000 ; 2002-03 losses Rs.5,000 ; 2003-04 Profits Rs.1,96,000 & 2004-05 Profits Rs.1,52,000.The average capital employed in the business is Rs.4,00,000 .The rate of interest expected from capital invested is 12% .The remuneration of the partners is estimated to be Rs.2,000 per month .Calculate the value of goodwill on the basis of 4 years purchase of super profits based on the annuity of 4 years Take discounting rate as 10% Show Answer

Q126) The profits of last five years are Rs.85,000: Rs.90,000: Rs.70,000: Rs.1,00,000 & Rs.80,000.find the value of goodwill , if it is calculated on average profit of the last five years on the basis of 3 years of purchase Show Answer

Q127) The profits of last 3 years are Rs 42,000: Rs 39,000: Rs 45,000:.find the value of goodwill of two years purchase Show Answer

Q128) The capital of A and B sharing profits and losses equally are Rs.90,000 and Rs.30,000 respectively .They value the goodwill of the firm at Rs.84,000 , which was not recorded in the books .If the goodwill is raised now,by what amount each partner 's capital account will be debited Show Answer

Q129) Find the goodwill of the firm using capitalization method from the following information Total capital employed in the firm Rs.8,00,000 Reasonable Rate of Return 15 % .Profit for the year Rs.12,00,000 Show Answer

Q130) The capital of B and D are Rs.90,000 and Rs.30,000 respectively with the profit sharing ratio 3:1.The new ratio ,admissible after 01.04.2006 is 5:3.Goodwill valued on 02.04.2006 as Rs.84,000 will be credited to B and D's capital By Rs.__and Rs.__ Show Answer

Q131) The capital of B and D are Rs.90,000 and Rs.30,000 respectively with the profit sharing ratio 3:1.The new ratio ,admissible after 01.04.2006 is 5:3.Goodwill valued at Rs.80,000 as on that date. Amount payable by gaining partner to a scarifying partner is Show Answer

Q132) A,B & C are equal partners is admitted to the firm for 1/4th share .D brings Rs.20,000 capital and Rs.5,000 being half of the premium for goodwill. The value of goodwill of the firm is Show Answer

Q133) B & C share profit & losses in the ratio 2:1.D is admitted to the firm and new profit sharing ratio is 3:2:1..D brings Rs.4,500 as the premium for goodwill. The value of goodwill will be Show Answer

Q134) The profits and losses for the last years are 2001-02 losses Rs.10,000 ; 2002-03 losses Rs.2,500 ; 2003-04 Profits Rs.98,000 & 2004-05 Profits Rs.76,000.The average capital employed in the business is Rs.2,00,000 The rate of interest expected from capital invested is 12% .The remuneration of the partners is estimated to be Rs.1,000 per month .Calculate the value of goodwill on the basis of 4 years purchase of super profits based on the annuity of 4 years Take discounting rate as 10% Show Answer

Q135) The profits for 1998-99 are Rs 2,000: for 1999-00 is Rs 26,100:& for 2000-01 is Rs 31,200:.Closing stock for 99-00 and 2000-01 includes the defective items of Rs.2,200 & Rs.6,200 ,which were considered as having market value NIL. Calculate goodwill on average profit method Show Answer

Q136) Under average profit basis goodwill is calculated by Show Answer

Q137) Under super profit basis goodwill is calculated by Show Answer

Q138) The following particulars are available in respect of the business carried on by a partnership firm :- 2001--loss Rs.5,000 , 2002--loss Rs,10,000 , 2003 --profit Rs.75,000 , 2004--profit Rs.60,000.you are required to compute goodwill on the basis of 5 years purchase of average profit Show Answer

Q139) The profits and losses for the last years are 2001-02 losses Rs.10,000 ; 2002-03 losses Rs.2,500 ; 2003-04 Profits Rs.98,000 & 2004-05 Profits Rs.76,000.The average capital employed in the business is Rs.2,00,000 The rate of interest expected from capital invested is 12% .The remuneration of the partners is estimated to be Rs.1,000 per month .Calculate the value of goodwill on the basis of two years purchase of super profits issued on the average of four years Show Answer

Q140) A, B & C share profit & losses in the ratio 3: 2:1.they decide to change their profit sharing ratio to 2:2:1.To give effect to this new profit sharing ratio they decide to value goodwill at Rs.30,000.Pass necessary entries .If goodwill not appearing in the old balance sheet and should appear in the new balance sheet Show Answer

Q141) Goodwill brought in by incoming partner in cash for joining in a partnership firm is taken away by the old partner in their ___ratio. Show Answer

Q142) B & C share profit & losses in the ratio 5:3.D is admitted to the firm and brings Rs.70,000 cash and Rs.48,000 as goodwill. New profit sharing ratio is 7:5:4.Find the sacrificing ratio as B:C Show Answer

Q143) Goodwill brought in by incoming partner in cash for joining in a partnership firm is taken away by the old partner in their _____ ratio Show Answer

Q144) The capital of B and D are Rs.50,000 and Rs.40,000 respectively with the profit sharing equal. J is admitted on bringing Rs.50,000 capital only and nothing in goodwill. Goodwill in the balance sheet of Rs.20,000 is revalued as Rs.35,000.What will be the value of goodwill in the books after the admission of C Show Answer

Q145) In the absence of any provision in the partnership agreement ,profit & losses are shared Show Answer

Q146) A, B & C share profit & losses in the ratio 5: 3:2.they decide to share their future profit ratio to 2:3:5 what will be the treatment for workmen compensation fund appearing in the balance sheet on the date if no information Available for the same Show Answer

Q147) MATCH THE PAIRS :-Goodwill is the intangible asset of the concern which helps it to earn goodwill is expected to generate extra profits to the concern Show Answer

Q148) Number of years purchased Show Answer

Q149) Change in the profit sharing ratio means Show Answer

Q150) Average profit method Show Answer