Thoery MCQs of Fundamentals of Partnership chapter (Accountancy class 12)

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Looking for important theory MCQs of Fundamentals of Partnership (Accounting for partnership firms – Fundamentals) chapter of Accountancy class 12 CBSE, ISC and state boards.

We have compiled very important Multiple choice questions of chapter 2 (fundamentals of partnership) of Accountancy class 12.

Thoery Multiple Choice Questions of chapter 2 (Accounting for Partnership firms – Fundamentals) Accountancy class 12

Let’s Practice.

Features of a partnership firm are:

a) Two or more persons are carrying common business under and agreement
b) They are sharing profits and losses in the fixed ratio
c) Business is carried by all or any of them acting for all as an agent.
d) All of the above

Ans – d)

Following are essential elements of a parternship firm except:

a) Altleast two persons
b) There is an agreement between all partners
c) Equal share of profits and losses
d) Partnership agreement is for some business.

Ans – c)

In case of partnership the act of any partner is:

a) Binding on all partners
b) Binding on that partner only
c) Binding on all partners except that particular partner
d) None of the above

Ans – a)

Which of the following statement is true?

a) a minor can not be admitted as a partner
b) a minor can be admitted as a partner, only into the benefits of the partnership.
c) a minor can be admitted as a partner but his rights and liabilities are same of
adult partner
d) None of the above

Ans – b)

Oustensible partners are those who

a) do not contribute any capital but get some share of profit for lending their name
to the business.
b) contribute very less capital but get equal profit
c) do not contribute any capital and without having any interest in the business, lend
thier name to the business
d) contribute maximum capital of the business.

Ans – c)

Sleeping partners are those who

a) take active part in the consudct of the business but provide no capital. However,
salary is paid to them.
b) do not take any part in the conduct of the business but provide capital and share
profits and losses in the agreed ratio.
c) take active part in the conduct of the business but provide no capital. However,
share profits and losses in the agreed ratio.
d) do not take any part in the conduct of the business and contribute no capital.
however, share profits and losses in the agreed ratio.

Ans – b)

The relation of partner with the firm is that of:

a) An owner
b) An agenet
c) An owner and an agent
d) Manager

Ans – c)

What should be the minimum number of persons to form a partnership:

a) 2
b) 7
c) 10
d) 20

Ans – a)

Number of pertners is a partnership firm may be:

a) Maximum Two
b) Maximum Ten
c) Maximum One Hundred
d) Maximum Fifty

Ans – d)

Liability of partner is:

a) Limited
b) Unlimited
c) Determined by Court
d) Determined by Partnership Act

Ans – b)

Which one of the following is NOt an essential feature of a partnershp?

a) There must be an agreement
b) There must be a business
c) The business must be carried on for profits
d) The business must be carried on by all partners

Ans – d)

Every partner is bound to attend diligently to his __ in the conduct of
the business.

a) Rights
b) Meetings
c) Capital
d) Duties

Ans – d)

Forming a Partnership Deed is:

a) Mandatory
b) Mandatory in Writing
c) Not Mandatory
d) None of the Above

Ans – c)

Partnership Deed is also called _

a) prospectus
b) Aticles of Association
c) Principles of Partnership
d) Articles of Partnership

Ans – d)

Which of the following is not incorporated in the Partnership Act?

a) Profit and loss are to be shared equally
b) No interest is to be allowed on capital
c) All loans are to be allowed interest @6% p.a.
d) All drawings are to be charged interest

Ans – d)

When is the Partnership Act enforced?

a) when there is no partnership deed.
b) Where there is a partnership deed but there are difference of opinion between
the partners
c) When capital contribution by the partners varies
d) When the partner’s salary and interest on capital are not incorporated in the
partnership deed.

Ans – a)

In the absence of Partnership Deed, the interest is allowed on partner’s capital:

a) @ 5% p.a.
b) @ 6% p.a.
c) @ 12% p.a.
d) No interest is allowed

Ans – d)

In the absence of a partnership deee, the allowable rate of interest on partners loan
account will be:

a) 6% Simple Interest
b) 6% p.a. Simple Interst
c) 12% Simple Interest
d) 12% Compunded Annually

Ans – b)

A and B are partners in partnership firm without any agreement. A has given a loan
of ₹ 50,000 to the firm. At the end of year loss was incurred in the business.
following interest may be paid to A by the firm:

a) @ 5% per annum
b) @ 6% per annum
c) @ 6% per annum
d) as there is a loss in the business, interest can not be paid

Ans – b)

A and B are partners in a partnership firm without any agreement. A has withdrawn
₹ 50,000 out of his drawings. Interest on drawings may be charged from A by the firm:

a) @ 5% Per Annum
b) @ 6% Per Annum
c) @ 6% Per Month
d) No interest can be charged

Ans – d)

A and B are partners in a partnership firm without any agreement. A devotes more time
for the firm as compare to B. A will get the following commission in addition to
profit in the firms profit:

a) 6% of profit
b) 4% of profit
c) 5% of profit
d) None of the above

Ans – d)

In the absence of partnership dee, the following rule will apply:

a) No Interest on capital
b) Profit sharing in capital ratio
c) Profit based salary to working partner
d) 9% p.a. interest on drawings

Ans – a)

In the absence of agreement, partners are not entitiled to:

a) Salary
b) Commission
c) Equal share in profit
d) Both a) and b)

Ans – d)

Interest on capital will be paid to the partners if provided for in the partnership
deed but only out of:

a) Profits
b) Reserves
c) Accumulated Profitd
d) Goodwill

Ans – a)

Which one of the following items can not be recorded in the profit and loss appropriation
account?

a) Interest on capital
b) Interest on drawings
c) Rent paid to partners
d) Partners salary

Ans – c)

If any loan or advance is provided by partner them, balance of such loans account
should be transferred to:

a) B/S Assets side
b) B/S Liability side
c) Partner’s capital A/c
d) Partner’s Current A/c

Ans – b)

In the absence of partnership deed, partners share profits or losses:

a) In the ration of their capitals
b) In the ratio decided by the court
c) Equally
d) In the ratio of time devoted

Ans – c)

In the absence of partnership deed:

a) Interest will not be charged on partner’s drawings
b) Interest will be charged @ 5% p.a. on partners drawings
c) Interest will be charged @ 5% p.a. on partner’s drawings
d) Interset will be charged @ 12% p.a. on partner’s drawings

Ans – a)

In the absence of express agreement, interest @6% p.a. is provided:

a) On opening balance of partner’s capital accounts
b) On closing balance of partner’s capital accounts
c) on loan given by partners to the firm
d) On opening balance of partner’s current accounts

Ans – c)

Which of the following items is not dealt through profit an loss appropriation
account?

a) Interest on Partner’s Loan
b) Partner’s Salary
c) Interest on Partner’s Capital
d) Partner’s Commission

Ans – a)

Is rent paid to a partner appropriation of profits?

a) It is appropriations of profit
b) It is not appropriations of profit
c) If partner’s contribution as capital is maximum
d) If partner is a working partner

Ans – b)

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