Accounting Questions

A and B are partners without any partnership deed. B has given a loan of $\text{Rs. }2,00,000$ to the firm on 1st July 2023. B claims interest on loan @ $10\%\text{ p.a.}$ How much interest on loan will be paid to B for the year ending on 31st March 2024?

Interest on drawings of a partner has been calculated Rs. 3,000 @ 8% p.a. who has drawn equal amount in each quarter; commencing from end of the first quarter throughout the year. The amount of drawing of partner per quarter would be:

For distribution of profits among the partners, the following account is debited to allocate profits to the partners:

The contents of a Partnership Deed include which of the following?A. Names and addresses of all partnersB. Method for settlement of disputes among partnersC. A mandate stating the deed once made cannot be altered under any scenarioD. Rules regarding the operation of the firm's Bank accountE. A rule that only verbal agreements between partners qualify as a formal deedChoose the correct answer from the options given below:

In the case of the fixed capital method, which two accounts are maintained for each partner?

When the total amount withdrawn is given but the date of withdrawal is not given then interest on drawings is charged for a period of:

Opening capital balances of partners under the fluctuating capital system will be calculated by using which of the following formulas?

Comprehension:A partner withdrew money during the financial year ending March 31, 2020 from his capital account for personal use.The individual amounts withdrawn were:Rs. $12,000$ on June 01, 2019Rs. $8,000$ on August 31, 2019Rs. $3,000$ on September 30, 2019Rs. $7,000$ on November 30, 2019Rs. $6,000$ on January 31, 2020The rate of interest on drawings is $9\%$ per annum.Question: Calculate the interest on drawings specifically for the amount of Rs. $3,000$ drawn on September 30, 2019.

Sumit, a partner in Tours and Travels, withdrew $\text{Rs. }4,000$ per month at the end of each month during the year ending March 31, 2020 for his personal use. Calculate the interest on drawings at a simple rate of interest of $10\%$ per annum.

Which of the following characteristics is highlighted in the statement: "He can bind other partners by his acts and also is bound by the acts of other partners with regard to the business of the firm."

From the following information, identify when goodwill is required to be calculated.(a) Admission of a Partner(b) Amalgamation of partnership firms(c) Dissolution of partnership firm(d) Retirement and Death of any partner(e) Preparation of Balance sheetChoose the correct answer from the options given below:

Comprehension:A partner withdrew money during the financial year ending March 31, 2020 from his capital account for personal use.The individual amounts withdrawn were:Rs. $12,000$ on June 01, 2019Rs. $8,000$ on August 31, 2019Rs. $3,000$ on September 30, 2019Rs. $7,000$ on November 30, 2019Rs. $6,000$ on January 31, 2020The rate of interest on drawings is $9\%$ per annum.Question: The total cumulative amount of interest on drawings charged to the partner for the year will be:

Choose the correct statement in respect of the Fixed Capital Method for a Partnership Firm:

Which of the following is NOT a fundamental feature of a partnership?

Match List-I with List-II:List-IList-II(A) Admission of a partner(I) Executor Accounts(B) Retirement of a partner(II) Sacrificing Ratio(C) Death of a partner(III) Realisation Account(D) Dissolution of a firm(IV) Gaining RatioChoose the correct answer from the options given below:

If the partnership deed is silent, at what rate, the interest would be charged on the drawings made by the partner:

Which of the following items is not shown in the Profit and Loss Appropriation Account?

________ is the amount received as per the will of a deceased person.

Match the concepts in List I with the events in List II:List IList IIA. When a new partner joins the partnershipI. Compulsory dissolutionB. When an existing partner leaves the partnershipII. Admission of a partnerC. When the business of a firm becomes illegalIII. Prepared in the case of death of a partnerD. Executor's AccountIV. Retirement of a PartnerChoose the correct answer from the options given below:

Comprehension:A partner withdrew money during the financial year ending March 31, 2020 from his capital account for personal use.The individual amounts withdrawn were:Rs. $12,000$ on June 01, 2019Rs. $8,000$ on August 31, 2019Rs. $3,000$ on September 30, 2019Rs. $7,000$ on November 30, 2019Rs. $6,000$ on January 31, 2020The rate of interest on drawings is $9\%$ per annum.Question: Calculate the interest on drawings specifically for the amount of Rs. $12,000$ drawn on June 01, 2019.

The Partnership Deed usually contains the following details:(A) Amount of capital to be contributed by each partner(B) The accounting period of the firm(C) Profit and loss sharing ratio(D) The rights, duties and liabilities of each partnerChoose the correct answer from the options given below:

Which of the following statements regarding partnership rules is NOT true?

Ravi, one of the partners, provided a loan of $\text{Rs. }1,00,000$ to the firm. In the absence of a partnership deed, interest on this partner's loan is allowed at what rate?

Under the fixed capital method, the capital of the partners shall remain fixed unless additional capital is introduced or a part of the capital is withdrawn as per the agreement between the partners. Which among the following is NOT a feature of the fixed capital method?

Which of the following is NOT a feature of the fluctuating capital method in a partnership?

A and B are partners in a firm with fixed capitals of $\text{Rs. }4,00,000$ and $\text{Rs. }5,00,000$ respectively. After preparing the final accounts, it was discovered that interest on capital @ $10\%\text{ p.a.}$ as provided in the partnership deed was omitted. To rectify this error through an adjustment entry, A's Current Account should be:

If the total income earned by Saket Club, a Not-for-Profit organisation is Rs. $2,60,000$ and surplus earned is Rs. $85,000$, then total expenditure incurred will be:

Neha contributed $\text{Rs. }30,000$ and Saloni $\text{Rs. }90,000$ as capital. What will be Saloni's share in profits if the partnership agreement is silent regarding profit-sharing?

Calculate the interest on drawings if Ram withdrew $\text{Rs. }3,000$ per month at the beginning of each month for the whole year, with interest charged @ $9\%$ per annum.

In case partner's capital is fixed, then where interest on drawings charged will be shown?

Which of the following situations result in the reconstitution of a partnership firm?(A) Change in profit sharing ratio among partners.(B) Admission of a new partner.(C) Dissolution of a partnership firm.(D) Dissolution of a partnership.Choose the correct answer from the options given below:

Comprehension:A partner withdrew money during the financial year ending March 31, 2020 from his capital account for personal use.The individual amounts withdrawn were:Rs. $12,000$ on June 01, 2019Rs. $8,000$ on August 31, 2019Rs. $3,000$ on September 30, 2019Rs. $7,000$ on November 30, 2019Rs. $6,000$ on January 31, 2020The rate of interest on drawings is $9\%$ per annum.Question: Calculate interest on drawings specifically for the amount of Rs. $7,000$ withdrawn on November 30, 2019.

Match List-I with List-II (under the Fixed Capital Method):List-IList-II(A) Bank (fresh capital introduced)(I) Debit side of Partner's Current Account(B) Interest on drawings(II) Debit side of Partner's Capital Account(C) Bank (permanent withdrawal of capital)(III) Credit side of Partner's Current Account(D) Commission(IV) Credit side of Partner's Capital AccountChoose the correct answer from the options given below:

Which of the following statements relates to the Fixed Capital Method?(A) The capitals of the partners shall remain fixed unless additional capital is introduced or capital is withdrawn.(B) All items like share of profit or loss, interest on capital, drawings, interest on drawings, etc. are recorded in Partner's Current Account.(C) The partners' capital accounts will always show a debit balance.(D) The partners' current account may show a debit or a credit balance.Choose the correct answer from the options given below:

Which of the following is the feature of fluctuating capital:

M and R are partners sharing profits and losses in the ratio of $3:2$. Their capital A/c's showed the balance of Rs. $4,00,000$ and Rs. $3,00,000$ respectively on 1 April, 2021. M introduced additional capital on 1 August, 2021. Interest on capital is allowed @ $6\%$ p.a. Total interest on capital of both the partners is Rs. $50,000$.Calculate additional capital introduced by M on 1 August, 2021 and interest on capital earned on additional capital. Books are closed on 31 March.

In the case of dissolution of a partnership firm, unrecorded liabilities when paid are shown in:

Amitabh and Babul are partners sharing profits in the ratio of $3:2$, with capitals of $\text{Rs. }50,000$ and $\text{Rs. }30,000$ respectively. Interest on capital is agreed @ $6\%\text{ p.a.}$ Babul is to be allowed an annual salary of $\text{Rs. }2,500$. Manager is to be allowed commission $\text{Rs. }5,000$. Amitabh has also given a loan on April 01, 2019 of $\text{Rs. }50,000$ to the firm without any agreement. During the year 2019-20, the profits earned is $\text{Rs. }22,250$. What amount of profit will be transferred to Profit and Loss Appropriation account :

Identify the true statement in respect of a partnership firm:

The clauses of a partnership deed can be altered with the consent of ______

Comprehension:A partner withdrew money during the financial year ending March 31, 2020 from his capital account for personal use.The individual amounts withdrawn were:Rs. $12,000$ on June 01, 2019Rs. $8,000$ on August 31, 2019Rs. $3,000$ on September 30, 2019Rs. $7,000$ on November 30, 2019Rs. $6,000$ on January 31, 2020The rate of interest on drawings is $9\%$ per annum.Question: Calculate the interest on drawings specifically for the amount of Rs. $6,000$ drawn on January 31, 2020.

John Ibrahim, a partner in Ancient Tours and Travels, withdrew money during the year ending March 31, 2020, from his capital account for personal use. He withdrew $\text{Rs. }3,000$ per month at the beginning of every month. Calculate the interest on drawings that should be charged from John Ibrahim if the rate of interest on drawings is $9\%$ per annum.

At the time of dissolution of a firm, the Loan from a Partner Account should be:

A, V and T were partners of a law firm sharing profits in the ratio of 5:3:2. Their partnership deed provided the following:(i) Interest on partners’ capital @ 5% p.a.(ii) A guaranteed that he would earn a minimum annual fee of Rs. 6,00,000 for the firm.(iii) T was guaranteed a profit of Rs. 2,50,000 (excluding interest on capital) and any deficiency on account of this was to be borne by A and V in the ratio of 2:3.During the year ending March 31, 2019, A earned a fee of Rs. 3,20,000 and net profits earned by the firm were Rs. 8,60,000. Partner’s capital on April 01, 2018 were A - Rs. 3,00,000; V - Rs. 3,00,000 and T - Rs. 2,00,000.What is the amount of profit to be credited to V's Capital account?

How will you deal with the following items while preparing for the Bombay Women Cricket Club, its Income and Expenditure Account for the year ending 31st March 2021, and its Balance Sheet, on the same date : Donation for the Pavilion construction Rs. $12,25,000$, Expenditure incurred Rs. $10,80,000$, Total estimate Rs. $25,00,000$.

The Profit and Loss Appropriation Account is merely an extension of the Profit and Loss Account of the firm.Which among the following is NOT shown in the Profit and Loss Appropriation Account?

A, V and T were partners of a law firm sharing profits in the ratio of 5:3:2. Their partnership deed provided the following:(i) Interest on partners’ capital @ 5% p.a.(ii) A guaranteed that he would earn a minimum annual fee of Rs. 6,00,000 for the firm.(iii) T was guaranteed a profit of Rs. 2,50,000 (excluding interest on capital) and any deficiency on account of this was to be borne by A and V in the ratio of 2:3.During the year ending March 31, 2019, A earned a fee of Rs. 3,20,000 and net profits earned by the firm were Rs. 8,60,000. Partner’s capital on April 01, 2018 were A - Rs. 3,00,000; V - Rs. 3,00,000 and T - Rs. 2,00,000.What is the amount of T's deficiency in profits?

Himanshu withdrew Rs. 2,500 at the end of each month. The partnership deed provides for charging of interest on drawings @ 12% p.a. Calculate interest on Himanshu's drawings for the year ended March 31, 2017.

When drawings are made at the beginning of every month for the full year, interest on drawings is calculated for:

A, V and T were partners of a law firm sharing profits in the ratio of 5:3:2. Their partnership deed provided the following:(i) Interest on partners’ capital @ 5% p.a.(ii) A guaranteed that he would earn a minimum annual fee of Rs. 6,00,000 for the firm.(iii) T was guaranteed a profit of Rs. 2,50,000 (excluding interest on capital) and any deficiency on account of this was to be borne by A and V in the ratio of 2:3.During the year ending March 31, 2019, A earned a fee of Rs. 3,20,000 and net profits earned by the firm were Rs. 8,60,000. Partner’s capital on April 01, 2018 were A - Rs. 3,00,000; V - Rs. 3,00,000 and T - Rs. 2,00,000.What is the amount of A's deficiency of annual fee?

Identify the steps in preparation of final accounts of not for profit organisation (NPO)A. Prepare Balance Sheet of NPOB. Prepare Income and Expenditure Account from Receipts and payment AccountC. Prepare Receipts and payment AccountD. Adjust outstanding/prepaid expenditure/Income and determine surplus/ DeficitE. Prepare cash bookChoose the correct answer from the options given below:

Which of the following is the correct journal entry to transfer a net profit (credit balance of the Profit and Loss Account) to the Profit and Loss Appropriation Account?

Which of the following are shown under capital account in case capital of partner's are fixed?(A) Fresh capital introduced(B) Permanent capital withdrawn(C) Interest on capital(D) Amount of capital brought down from the previous yearChoose the correct answer from the options given below:

Match List-I with List-II:List-IList-II(A) Profit and Loss adjustment A/c(I) Changes in amount of capital(B) Profit and loss appropriation A/c(II) Generally no change in amount of capital(C) Fixed capital A/c(III) Errors and omissions found after preparation of final A/c(D) Fluctuating capital method(IV) Extension of Profit & loss A/cChoose the correct answer from the options given below:

Which among the following is NOT true about a Partnership?

For distributing profits made during a financial year among partners, which account is debited?

Which of the following events result in the reconstitution of a partnership firm?(A) Change in the profit-sharing ratio among existing partners.(B) Admission of a new partner.(C) Dissolution of a partnership firm.(D) Dissolution of a partnership due to death or retirement.Choose the correct answer from the options given below:

The following are features of the fluctuating capital method by which capital accounts of partners are maintained:(A) Under the fluctuating capital method, only one account, i.e. capital account is maintained for each partner.(B) All adjustments such as share of profit and loss, interest on capital, drawings, interest on drawings, etc. are recorded directly in the capital accounts of the partners.(C) The capital of the partners shall remain fixed unless additional capital is introduced or a part of the capital is withdrawn as per the agreement between the partners.(D) The capital account may sometimes show a debit balance.Choose the correct answer from the options given below:

Match List-I with List-II if the partnership deed is silent regarding the items provided in List-I:List-IList-II(A) Interest on Capital(I) to be shared equally(B) Interest on Loan(II) not charged(C) Interest on Drawings(III) not payable(D) Sharing of Profits(IV) @6% p.a.Choose the correct answer from the options given below:

Case StudyRead the following information to answer.Arun and Ram are partners in a restaurant business sharing profits and losses in capital ratio. Their fixed capital from the beginning of the firm was Rs. $2,00,000$ and Rs. $1,50,000$ respectively.The profit for the year ended 31 March 2022 before the appropriation of Salary and Interest on Capital was Rs. $2,20,000$. Ram is allowed a salary of Rs. $2,000$ per quarter and interest on capital @ $10\%$ p.a.Due to the further expansion of the business, they decided to enter Sanjeev as a new partner for $\frac{1}{5}$ share in profits. It was agreed that Sanjeev will bring Rs. $1,00,000$ as capital and Rs. $50,000$ as his share of Goodwill. It was decided that he will give Rs. $1,00,000$ as loan to the firm for 3 years.Interest on capital will be shown on the Dr. side of Profit and Loss Appropriation A/c and ________ side of Partner's ________ A/c.

If there are some accumulated losses in the form of a debit balance of profit and loss account appearing in the balance sheet of the firm. It should be transferred to:

Which of the following entries correctly records the withdrawal of excess capital by a partner?

Anupam and Abhishek are partners. Their capital accounts showed balances of Rs. 1,50,000 and Rs. 2,00,000 respectively on April 01, 2019. Show the interest on capital for the year ending March 31, 2020 allowed, if the partnership deed provides for interest on capital @ 8% p.a. and the firm earned a profit of Rs. 14,000 during the year:

In which of the following cases is the claim legally valid if the partnership agreement/deed is completely silent?

Which of the following is not a feature of partnership?

Which of the following are shown under the capital account in case the partners' capitals are fixed?(A) Fresh capital introduced(B) Permanent capital withdrawn(C) Interest on capital(D) Amount of capital brought down from the previous yearChoose the correct answer from the options given below:

Mohan and Shyam are partners in a firm. Which statement among the below can be claimed valid if the Partnership Agreement is silent regarding the same?

Gitansh withdrew Rs. $5000$ pm at the end of every month for ten months. Interest on drawing is charged @ $10\%$ p.a. Gitansh's interest on drawings is :

Aashish withdrew Rs. 10,000 per month from the firm for his personal use during the year ending March 31, 2017. What will be the amount of interest if the amount is withdrawn at the beginning of each month and rate of interest on drawings is 8% per annum?

There is a practical need for the valuation of a firm's goodwill under which of the following cases?(A) Admission of a new partner(B) Retirement of an existing partner(C) Dissolution of a firm involving the sale of the business as a going concern(D) Amalgamation of partnership firmsChoose the correct answer from the options given below:

Which of the following is the feature of fluctuating capital?

In a partnership firm, partners share profit and loss in the ratio of $3:2$. If the firm incurred a loss of $\text{Rs. }10,000$ during the year, then calculate the amount of loss to be shared by partners.

Saloni and Srishti are partners in a firm. Their capital accounts as on April 01, 2019 showed a balance of $\text{Rs. }2,00,000$ and $\text{Rs. }3,00,000$ respectively. On July 01, 2019 Saloni introduced additional capital of $\text{Rs. }50,000$ and Srishti, $\text{Rs. }60,000$. On October 01, 2019 Saloni withdrew $\text{Rs. }30,000$, and on January 01, 2020 Srishti withdrew $\text{Rs. }15,000$ from their capitals. Interest is allowed @ $8\%$ p.a. Calculate interest payable on capital to Saloni during the financial year 2019–2020.

Ram, one of the partners, has withdrawn ₹ $1,00,000$ from the business for personal use. If the rate of interest charged on drawings is $12\%\text{p.a.}$, find the total amount of interest on drawings to be charged from Ram:

If partnership deed is silent on the profit sharing ratio: interest @_____ per annum is allowed on loans advanced by partners-

Which from the following is not a feature of a partnership firm?

Which combination of statements is true about partnership-(A) Valid partnership can be formulated even without a written agreement between the partners.(B) Methods of settlement of disputes among the partners can't be part of the partnership deed.(C) If the deed is silent, interest at the rate of $6\%$ p.a. would be charged on the drawings made by the partner.(D) Each partner carrying on the business is the principal as well as the agent for all the other partners.Choose the correct answer from the options given below:

$X$ and $Y$ are partners sharing profits in the ratio $3:2$. The capitals introduced by $X$ and $Y$ are ₹ $1,00,000$ and ₹ $5,00,000$ respectively. Interest on capital is allowed to partners $@10\%\text{p.a.}$ The net profit of the firm for the year ending March 31st, 2025 is ₹ $30,000$. Calculate the amount of Interest on Capital to be allowed to each partner.

When capital accounts are maintained under the Fixed Capital method, additional capital introduced by a partner is recorded as a:

Arrange the following in sequence of the final Accounts for a Partnership firm.(A) Profit and Loss Account(B) Partner's Capital Account(C) Trading Account(D) Balance Sheet(E) Profit and Loss Appropriation AccountChoose the correct answer from the options given below:

Reconstitution of a partnership firm does not involve:

All adjustments in respect of partner's salary, partner's commission, interest on capital, interest on drawings, etc. are made through:

When the exact date of a partner's drawings is not specified in the records, interest on drawings is calculated for an average period of:

Match List I with List II in context of not having partnership deed.LIST IA. Interest on loanB. Interest on drawingsC. SalaryD. Profit sharing ratioLIST III. EqualII. Will not be chargedIII. @ $6\%$ p.a.IV. Will not be allowed/providedChoose the correct answer from the options given below:

Rent payable to a partner is a/an:

Yadu, Madhu and Vidu are partners, sharing profit and losses in the ratio of $2:2:1$. Their fixed capitals on April 01, 2018 were: Yadu $\text{Rs. }5,00,000$, Madhu $\text{Rs. }4,00,000$ and Vidu $\text{Rs. }3,50,000$.As per the partnership deed, partners are entitled to interest on capital $@5\%\text{ p.a.}$ and Yadu has to be paid a salary of $\text{Rs. }2,000$ per month. The net loss of the firm as per profit and loss account for the year ending March 31, 2019, amounted to $\text{Rs. }75,000$. On the basis of the profit and loss appropriation account, Partners' distribution of loss would be:

Identify the correct statement regarding a Partner's Current Account:

Which of the following facts are related to modes of reconstitution of a partnership firm.(A) Admission of a new partner(B) Dissolution of a partnership firm(C) Death of a partner(D) Change in the profit sharing ratio among the existing partners(E) Retirement of a partnerChoose the correct answer from the options given below:

Match List-I with List-IIList–I (Events)List–II (Result)(A) Profit share(I) Gaining ratio.(B) Admission of Partners(II) Different concept(C) Retirement of a partner.(III) Equally among partners(D) Dissolution of firm and partnership.(IV) Sacrifice ratio.Choose the correct answer from the options given below:

M and N are partners in a firm and agree that an interest $@12\%$ per annum should be charged on drawings. M draws $\text{Rs. }20,000$ per month at the beginning of each month. The amount of interest to be charged from M is:

Calculate interest on drawings if Ram withdrew $\text{Rs. }3,000$ per month at the beginning of each month for the whole year, and interest on drawings is charged @ $9\%$ per annum.

A firm earns a profit in last three years as follows:2020 - 21 Rs. 75,0002019 - 20 Rs. 1,20,0002018 - 19 Rs. 50,000Additional Information:Closing stock of 2020 - 21 was undervalued by Rs. 10,000.Calculate the Average Profit.

Choose the correct statement if a partnership deed does not exist.

As per Receipts and Payments Account for the year ended on March 31, 2020, subscriptions received were Rs. $2,50,000$, subscriptions outstanding on 1-04-2019 Rs. $50,000$, Subscriptions received in advance as on 31-3-2020 are Rs. $30,000$. Subscriptions for the year 2019-20 will be:

The capital accounts of partners will always show a ____ balance under fixed capital account method

Calculate net profit as per P & L A/c for the year ending 31 March, 2022 from the following information :share of profit transferred to Capital A/c's of partners :Ram Rs. $7,000$ Shyam Rs. $3,500$ Interest on capital :Ram Rs. $1,500$ Shyam Rs. $500$ Interest on Drawings :Ram Rs. $300$ Shyam Rs. $200$ Ram's salary Rs. $1,000$

From the following information, calculate interest on Capital of C, a partner for the year ended 31st March, 2022.C's Capital on 31/3/2022: Rs. $12,00,000$ Profit credited to C for the year ended 31/3/2022: Rs. $3,00,000$ Drawings made during the year: Rs. $1,00,000$ Additional Capital introduced on 1/10/21: Rs. $5,00,000$ Rate of Interest = $12\%$ p.a.

Which of the following is NOT an essential feature of a partnership?

Under the fixed capital method of a partnership concern, which two accounts are maintained for each partner?

Sameer and Yasmin are partners with capitals of $\text{Rs }15,00,000$ and $\text{Rs }10,00,000$ respectively, sharing profits in the ratio of $3:2$. The financial year closes on March 31 every year. They admit Ravi on October 1, 2019. On that same date, Sameer introduces additional capital of $\text{Rs }3,00,000$. If interest on capital is provided at $@5\%\text{ p.a.}$, calculate the amount of interest on Sameer's capital for the financial year 2019–20.