Accounting For Partnership Basic Concepts(12th Grade > Accountancy ) Questions and Answers

Question 1.


Under which capital method, the capital in the beginning of the year shall be always different from that in the end of the year?


  1.     Fixed capital account
  2.     Current account
  3.     Fluctuating capital account
  4.     Floating capital account
Explanation:-
Answer: Option C. -> Fluctuating capital account
:
C

Under fluctuating capital account.


Question 2.


Which of the following shall have effect on the capital account of partners under fixed capital method?


  1.     Withdrawal of Capital
  2.     Interest on drawings
  3.     Interest on capital
  4.     None of these
Explanation:-
Answer: Option A. -> Withdrawal of Capital
:
A

Withdrawal of capital shall have effect on the capital account in case of fixed capital method of maintaining capital accounts


Question 3.


Under this method, only 1 account i.e. partner`s capital account is maintained. This method is :


  1.     Normal
  2.     Floating
  3.     Fixed
  4.     Fluctuating
Explanation:-
Answer: Option D. -> Fluctuating
:
D

Fluctuating capital account method.


Question 4.


If the date of withdrawal is not given, then the interest on drawings is calculated for an average period of ___


  1.     5.5 months
  2.     6.5 months
  3.     6 months
  4.     None of these
Explanation:-
Answer: Option C. -> 6 months
:
C

If the date of withdrawal is not given, then the interest on drawings is calculated for an average period of 6 months.


Question 5.


Which of the following is not included in profit or loss appropriation account?


  1.     Withdrawal of profits
  2.     Withdrawal of capital
  3.     Both A & B
  4.     None of these
Explanation:-
Answer: Option B. -> Withdrawal of capital
:
B

Withdrawal of capital is not shown in profit or loss appropriation account


Question 6.


Partner`s capital is said to be ___ if it alters with every transaction in the capital account.


  1.     Fixed
  2.     Current
  3.     Fluctuating
  4.     Both fixed and Fluctuating
Explanation:-
Answer: Option C. -> Fluctuating
:
C

Partner`s capital is said to be fluctuating if it alters with every transaction in the capital account.


Question 7.


Under ___ method, the balance of the capital account fluctuates from year to year.


  1.     Fixed capital account
  2.     Current account
  3.     Fluctuating capital account
  4.     Floating capital account
Explanation:-
Answer: Option C. -> Fluctuating capital account
:
C

Under fluctuating method, the balance of the capital account fluctuates from year to year.


Question 8.


Under ___ Method, entry is made in Capital Account only of capital introduced or existing capital is permanently withdraw by agreement.


  1.     Normal
  2.     Floating
  3.     Fixed
  4.     Fluctuating
Explanation:-
Answer: Option C. -> Fixed
:
C

Under fixed capital method, entry is made in Capital Account only of capital introduced or existing capital is permanently withdraw by agreement.


Question 9.


Partners can draw salaries if _____________


  1.     they wished
  2.     mutually agreed
  3.     both: mutually agreed they wished
  4.     none of these
Explanation:-
Answer: Option B. -> mutually agreed
:
B

Partners can draw salaries if mutually agreed.


Question 10.


Which of the following is a credit to profit & loss appropriation account?


  1.     Salaries
  2.     Interest on drawings
  3.     Interest on capital
  4.     Remuneration
Explanation:-
Answer: Option B. -> Interest on drawings
:
B

Interest on drawings is a credit to profit & loss appropriation account.


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