Tag: accounting for partnership

Questions Related to accounting for partnership

A, B and C were partners in a firm sharing profits and losses in theratio of 2 : 2 : 1 respectively with the capital balance of 50,000 for A and B, for C 25,000. B declared to retire from the firm and balance in reserve on the date was 15,000 if goodwill of the firm was valued as 30,000 and profit on revaluation was 7,050, then what amount will be transferred to the loan account of B?

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. 70,820

  2. 50,820

  3. 25,820

  4. 58,820

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Correct Option: A

A, B and C were partners in a firm sharing profits and losses in the ratio of 2 :2 :1 respectively with the capital balance of Rs. 50,000 for A, Rs. 70,000 for B,for C Rs. 35,000. B declared to retire from the firm and balance in reserve on the date was Rs. 25,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,500, then what amount will be payable to B?

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. Rs. 70,820

  2. Rs. 76,000

  3. Rs. 75,000

  4. Rs. 95,000

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Correct Option: D

C, D and E are partners sharing profits and losses in the proportion of 3 :2 :1. D retired and the new profit sharing ratio between C and E is 3 :2 and the Reserve of Rs. 24,000 will be divided among the partners.

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. 4,000, 8,000 12,0000

  2. 10,000, 10,000 4,000

  3. 8,000 12,000 4,000

  4. 12,000 8,000 4,000

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Correct Option: D

Cost of abnormal wastage is _________________.

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. Charged to the product cost

  2. Charged to the profit & loss account

  3. charged partly to the product and partly profit & loss account

  4. not charged at all

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Correct Option: B

The liability of a partner in profit is ________.

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. limited.

  2. unlimited.

  3. limited to his capital.

  4. limited to his share of interest in the firm assets.

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Correct Option: B

In the case of loss to any party caused by a partner due to negligence or tort the loss shall be borne by ___________________.

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. All the partners in their capital ratio

  2. All the partners in their profit sharing ratio

  3. By defaulting partner only

  4. Managing partner only

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Correct Option: B
Explanation:

In the case of loss to any party caused by a partnerdue to negligence or tort the loss shallbe borne by all the partners in theie profit sharing ratio.

In the case of loss caused by fraud or misrepresentation made by a partner the same shall be borne by ______________.

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. All the partners in their capital ratio

  2. All the partners in their profit sharing ratio

  3. Defaulting partner only

  4. Managing partner only

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Correct Option: C
Explanation:

In the case of loss caused by fraud or misrepresentation made by a  partner the same shall be borne by defaulting partner only.

Which of these is not an implied authority of a partner in the absence of any specific provisions in the partnership deed _____________________.

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. To buy or sell goods on behalf of the firm

  2. To receive payment on behalf of the firm

  3. To sue on behalf of the firm and defend suit in the name of the firm

  4. to submit a dispute relating to the firm for arbitration

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Correct Option: D

Partner share profit or loss _______________.

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. Equally

  2. Proportionate to their capital

  3. As agreed in the partnership deed

  4. Based on qualification and experience

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Correct Option: C

Which of these provisions are found in Partnership Act regarding sharing of profit and loss by partners ? 

book keeping and accountancy accounting for partnership preparation of profit and loss appropriation account profit and loss appropriation account profit and loss appropriation account and distribution of profits among partners

  1. share the profits and losses in the ratio of their capital contributions

  2. share the profits and losses equally irrespective of any agreement between them to the contrary

  3. share the profits and losses equally in the absence of any agreement to the contrary between them

  4. share the profits and losses in the ratio of their personal effoks input

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Correct Option: C