CBSE Class 12 Accountancy Accounting For Partnership Firms Worksheet Set A

Question. According to Accounting Standard -26 (AS-26):
(a) Self-generated goodwill is not accounted as an asset OR goodwill should not be raised in the books of accounts.
(b) Purchased goodwill should not be written off.
(c) Goodwill can be recorded in the books whether money or money’s worth paid for it or not.
(d) Self-generated goodwill is always shown under the fixed assets.
Answer. A

Question. Which of the following items is not dealt through Profit and Loss Appropriation Account?
(a) Interest on Partner’s Loan
(b) Partner’s Salary
(c) Interest on Partner’s Capital
(d) Partner’s Commission
Answer. A

Question. One of the partners (Mr. Dev) in a partnership firm has withdrawn Rs 4,500 at the end of each quarter. Interest on his drawings is to be calculated at the rate of 6% per annum. Interest on his drawings will be:
(a) Rs 810
(b) Rs 400
(c) Rs 405
(d) Rs 304
Answer. C

Question. The written Agreement of Partnership is most commonly referred to as:
(a) Agreement
(b) Partnership deed
(c) Partnership contract
(d) Partnership Act
Answer. B

Question. Which one of the following is the method of goodwill valuation?
(a) Average capital method
(b) Super capital method
(c) Capital intensity method
(d) Super profit method
Answer. D

Question. In the absence of Partnership Deed interest on partner’s loan is calculated at:
(a) 8%
(b) 6%
(c) 5%
(d) 7%
Answer. B

Question. If a partner withdraws Rs 10,000 in the beginning of every month and as per the partnership deed interest on drawings is to be charged @ 10% p.a. interest on his drawings will be:
(a) Rs 6,500
(b) Rs 12,000
(c) Rs 6,000
(d) Rs 7,500
Answer. A

Question. Aman and Bobby are partners with a profit-sharing ratio of 2 : 1 and capitals of Rs 3,00,000 and Rs 2,00,000 respectively.They are allowed 6% p.a. interest on their capitals and are charged 10% p.a. interest on their drawings. Their drawings during the year were Aman Rs 60,000 and Bobby Rs 40,000. Bobby’s share of net profit as per profit and loss appropriation account amounted to Rs 40,000. Net Prfofit of the firm before any appropriations was:
(a) Rs 1,22,000
(b) Rs 1,13,000
(c) Rs 1,17,000
(d) Rs 1,45,000
Answer. D

Question. Under Fluctuation Method of Capital, what is the treatment of “Interest on Capital”?
(a) Credited to capital account
(b) Debited to capital account
(c) No treatment or adjustment needed
(d) Credited to current account
Answer. A

Question. Raj and Pritam have capitals of Rs 2,00,000 and Rs 1,00,000 respectively. Interest on capital is to be allowed as per partnership deed 6% per annum. Their profit-sharing ratio is 5 : 3. The profit for the year was Rs 15,000. Actual distribution of profit & loss will be:
(a) A Rs 12,000 and B Rs 6,000
(b) A loss Rs 1,875 and B Rs 1,125
(c) A Rs 12,000 and B Rs 3,000
(d) A Rs 10,000 and B Rs 5,000
Answer. D

Question. X, Y and Z are partners in a firm. At the time of division of profit for the year, there was dispute between the partners. Profit before interest on partner’s capital was Rs 6,000 and Y determined interest @24% p.a. on his loan of Rs 80,000. There was no agreement on this point. Calculate the amount payable to X, Y and Z respectively:
(a) Rs 2,000 to each partner.
(b) Loss of Rs 4,400 for X and Z; Y will take Rs 14,800
(c) Rs 400 for X, Rs 5,200 for Y and Rs 400 for Z.
(d) None of these
Answer. C

Question. When Goodwill is not purchased goodwill account can:
(a) Never be raised in the books
(b) Be raised in the books
(c) Be partially raised in the books
(d) Be raised as per the agreement of the partners
Answer. A

Question. Z is a partner in a firm. He withdrew regularly Rs 2,000 every month for the six months ending 31st March, 2019. If interest on drawings is charged @ 8% p.a. the interest charged will be:
(a) Rs 480
(b) Rs 280
(c) Rs 200
(d) Rs 240
Answer. D

Question. A, B and C sharing profits in the ratio of 2 : 2 : 1 have fixed capitals of Rs 3,00,000, Rs 2,00,000 and Rs 1,00,000 respectively. After closing the accounts for the year ending 31st March 2019 it was discovered that interest on capitals was provided @ 12% instead of 10% p.a. In the adjusting entry:
(a) Cr. A Rs 1,200; Dr. B Rs 800 and Dr. C Rs 400
(b) Dr. A Rs 1,200; Cr. B Rs 800 and Cr. C Rs 400
(c) Cr. A Rs 800; Cr. B Rs 400 and Dr. C Rs 1,200
(d) Dr. A Rs 800; Dr. B Rs 400 and Cr. C Rs 1,200
Answer. B

Question. A partner withdraw Rs 8,000 each on 1st April and 1st Oct. Interest on his drawings @ 6% p.a. on 31st March will be:
(a) Rs 480
(b) Rs 720
(c) Rs 240
(d) Rs 960
Answer. B

Question. Ram and Shyam are partners in the ratio of 3 : 2. Before profit distribution, ‘Ram is entitled to 5% commission of the net profit (after charging such commission). Before charging commission, firm’s profit was Rs 42,000. Shyam’s share in profit will be:
(a) Rs 16,000
(b) Rs 24,000
(c) Rs 26,000
(d) Rs 16,400
Answer. A

Question. X and Y are partners in the ratio of 3 : 2. Their capitals are Rs 2,00,000 and Rs 1,00,000 respectively. Interest on capitals is allowed @ 8% p.a. Firm incurred a loss of Rs 60,000 for the year ended 31st March 2019. Interest on Capital will be:
(a) X Rs 16,000; Y Rs 8,000
(b) A Rs 8,000; Y Rs 4,000
(c) X Rs 14,400; Y Rs 9,600
(d) No Interest will be allowed
Answer. D

Question. Identify the factor that affects the valuation of goodwill:
(a) Favorable location
(b) Favorable contracts
(c) Quality of products
(d) All of these
Answer. D

Question. According to Profit and Loss Account, the net profit for the year is Rs 1,50,000. The total interest on partner’s capital is Rs 18,000 and interest on partner’s drawings is Rs 2,000. The Divisible profit as per Profit and Loss Appropriation Account will be:
(a) Rs 1,66,000
(b) Rs 1,70,000
(c) Rs 1,30,000
(d) Rs 1,34,000
Answer. D

Question. Following are essential elements of a partnership firm except:
(a) At least two persons
(b) There is an agreement between all partners
(c) Equal share of profits and losses
(d) Partnership agreement is for some business.
Answer. C

Question. Vinod and Anuj are partners sharing profits equally. Vinod get a commission on sales @ 5%. Sales were Rs 6,00,000 during the year. Commission of Vinod is to be shown in:
(a) Profit and Loss Account
(b) Trading Account
(c) Profit and Loss Appropriation Account
(d) In his capital account only
Answer. C

Question. Under what circumstances, a partner can get exemption from sharing losses in a firm?
(a) If he is a senior citizen
(b) If he is a minor
(c) If he is retiring partner
(d) All of the above
Answer. B

Question. Need of Profit and Loss Adjustment account is for:
(a) Appropriation of profits
(b) Charge against profits
(c) Rectification of errors or omissions
(d) None of these
Answer. C

Question. A partner withdrew Rs 4,000 per month from 1st July, 2016, on beginning of every month.
Accounts are closed at 31st March, 2017.
Calculate interest on drawings while rate of interest is 10% per annum.
(a) Rs 1,600
(b) Rs 1,800
(c) Rs 1,500
(d) Rs 2,200
Answer. C

Question. In a firm, 10% of net profit after deducting all adjustments, including reserve is transferred to general reserve. The net profit after all adjustments but before transfer to general reserve is Rs 44,000. Calculate the amount which is to be transferred to reserve.
(a) Rs 2,500
(b) Rs 4,000
(c) Rs 4,400
(d) Rs 2,200
Answer. B

Question. Virat and Anushka are partners in a firm sharing profit and losses in 2 : 1 ratio. Their capital balance were Rs 10,00,000 and Rs 8,00,000 respectively. The firm made profits during the year amounting to Rs 3,45,000. Both partners are allowed salary of Rs 2,500 per month. Interest on capital is allowed @ 5% on capital balance.
Calculate Closing balance of capital for Virat and Anushka.
(a) V = Rs 12,10,000, A = Rs 9,35,000
(b) V = Rs 12,35,000, a = Rs 9,10,000
(c) V = 13,10,000, A = Rs 9, 85,000
(d) None of these
Answer. A

Question. The Partnership Agreement between Mahesh and Ramesh provides that:
(i) profits will be shared equally.
(ii) Mahesh will be allowed a salary Rs 400 per month.
(iii) Ramesh is allowed a commisiion @ 10% on net profits before adjusting any remuneration.
(iv) 10% per annum interest will be charged on drawings.
(v) their annual drawings were Rs 16,000 and Rs 14,000 respectively.
Net profit before above adjustments are Rs 40,0000. Calculate profits to be distributed between partners.
(a) Rs 34,200
(b) Rs 32,700
(c) Rs 47,300
(d) Rs 29,700
Answer. B

Question. ‘A’ and ‘B’ were partners in a firm. They share profits in 2 : 3 ratio. They close their accounts on 31st Devermber every year. ‘A’ withdrew a fixed sum of Rs 2,000 at the beginning of every month starting form 1st July, 2017. You have to calculate interest on drawings while rate of interst is 12%.
(a) Rs 420
(b) Rs 720
(c) Rs 440
(d) Rs 580
Answer. A

Question. The capital balance of a partner at the end of the year (after adjusting for his drawings Rs 3,500 and his share in the profit Rs 2,300) is Rs 12,000. Interest on capital is payable to him at 5% per annum. What will be the amount of interest on capital?
(a) Rs 660
(b) Rs 600
(c) Rs 540
(d) None of these
Answer. A

Question. Find out those situations which create need for valuation of goodwill for a partnership firm?
(a) When existing partners change their profit sharing ratio
(b) When a new partner comes into partnership
(c) When an existing partner retires from partnership
(d) All of the above
Answer. D

Question. The profits for last 3 years were:
1st year = Rs 6,000 (including abnormal gain Rs 2,000)
2nd year = Rs 4,000 (after charging abnormal loss Rs 3,000)
3rd year = Rs 2,500 (including abnormal income Rs 1,500
Calculate goodwill on the basis of 3 years’ purchase of last 3 years profits and losses.
(a) Rs 12,500
(b) Rs 12,000
(c) Rs 13,000
(d) Rs 16,000
Answer. B

Question. Capital employed in a business is Rs 2,00,000. Normal Rate of Return on capital employed is 15%. During the year, the firm earned a profit of Rs 48,000. Calculate goodwill on the basis of 3 years’ purchase of Supper Profit.
(a) Rs 54,000
(b) Rs 60,000
(c) Rs 50,000
(d) None of these
Answer. A

Question. A firm earns Rs 1,20,000 as its annual profits. The normal rate of profit being 10%. Assets of firm are 14,40,000 and liabilities are Rs 4,40,000. Find value of goodwill by Capitalisation Method.
(a) Rs 4,00,000
(b) Rs 2,80,000
(c) Rs 2,00,000
(d) Rs 3,60,000
Answer. C

Question. Average profit of firm is Rs 3,00,000. Total tangible assets in the firm are Rs 28,00,000 and outside liabilities are Rs 8,00,000. In same type of business, normal rate of return is 10% of capital employed. Calculate goodwill by Capitalisation of Super Profit Method.
(a) Rs 14,00,000
(b) Rs 16,00,000
(c) Rs 18,00,000
(d) Rs 10,00,000
Answer. D

Question. 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
Answer. A

Question. Which of the following statement is true?
(a) A minor cannot 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 partnr
(d) None of the above
Answer. B

Question. 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 their name to the business
(d) contribute maximum capital of the business
Answer. C

Question. Sleeping partners are those who?
(a) take active part in the conduct of the business but provide no capital. However, salary is paid of 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.
Answer. B

Question. 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 charged on capital
(c) all loans are to be charged interest @ 6% p.a.
(d) all drawings are to be charged interest.
Answer. D

Question. The excess amount which the firm can get on selling its assets over and above the saleable value of its assets is called:
(a) Surplus
(b) Super profits
(c) Reserve
(d) Goodwill
Answer. D

Question. What is not the essential feature of the partnership firm?
(a) Two or more persons.
(b) Settlement of Disputes.
(c) Agreement.
(d) Lawful Business.
Answer. B

Question. Which is not the clause of the Partnership Deed?
(a) Business can be carried on by all or any of the partner’s acting for all.
(b) Commencement of business.
(c) Rights & Duties of Partner.
(d) None of the above.
Answer. A

Question. Oswal & Publisher were partner’s without any deed where Publisher invested the total capital and Oswal had the complete hold on the business as Publisher was the sleeping partner, but as Publisher invested complete capital demanded to share the profits in the Ratio of 5 : 1 and Oswal object’s to this.
(a) Oswal’s objection is correct.
(b) Publisher’s demand is correct.
(c) Both are wrong.
(d) As investment is of publisher he should be given interest on capital.
Answer. A

Question. The Net profits of Kala & Kand were Rs 20,000. Gulaboo the manager was to be given the commission of Rs 6,000; the distribution of profits will be done as:
(a) Rs 10,000 to each.
(b) Rs 7,000 to each.
(c) Rs 13,000 to each.
(d) None of the above.
Answer. B

Question. Gulab & Jamun are patners in a firm. Gulab is to get commission of 10% of net profit before charging any commission. Jamun is to get a commission of 10% on net profit after charging all commissions. Net Profit for the year ended 31st March, 2021 was Rs 55,000. What will be amount of Profit to be distributed to each?
(a) Rs 5,500 to Gulab & Rs 4,500 to Jamun.
(b) Rs 27,500 each.
(c) Rs 22,500 each.
(d) None of the above.
Answer. C

Question. Answer and Question are partners from 1st April, 2020, without a Partnership Deed and they introduced capitals of Rs 35,000 and Rs 20,000 respectively. On 1st October, 2020, Answer advanced loan of Rs 8,000 to the firm without any agreement as to interest. The Profit and Loss Account for the year ended 31st March, 2021 shows a profit of Rs 15,000 but the partners cannot agree on payment of interest and on the basis of division of profits. What amount of profit will be distributed between them.
(a) Rs 7,500 to each.
(b) Rs 7,380 to each.
(c) Rs 7,260 to each.
(d) None of the above.
Answer. B

Question. A, B, C, and D are partners in a firm sharing profits as 4 : 3 : 2 : 1 respectively. It earned a profit of Rs 1,80,000 for the year ended 31st March, 2021. As per the Partnership Deed, they are to charge a commission @ 20% of the profit after charging such commission, which they will share as 2 : 3 : 2 : 3. What will be the amount of commission to be paid to the partners.
(a) Rs 7,500 each.
(b) Rs 6,000; Rs 9,000; Rs 6,000; Rs 9,000
(c) Rs 12,000; Rs 9,000; Rs 6,000; Rs 3,000
(d) None of the above.
Answer. B

Question. Pen and Pencil were two partners, they drew for their personal use Rs 1,20,000 and Rs 80,000. Interest is chargeable @ 6% p.a. on the drawings. What is the amount of interest chargeable from each partner?
(a) Rs 7,200 to Pen; Rs 4,800 to Pencil.
(b) Rs 3,600 to Pen; Rs 2,400 to Pencil.
(c) Rs 3,900 to Pen; Rs 2,600 to Pencil.
(d) Rs 4,500 to Pen; Rs 3,000 to Pencil.
Answer. B

Question. Fan and Cooler are partners sharing profits equally. Fan drew regularly Rs 4,000 at the end of every month for six months ended 30th September, 2020. Calculate interest on drawings @ 5% p.a. for a period of six months.
(a) Rs 250
(b) 41.67
(c) Rs 1,200
(d) None of the above.
Answer. A

Question. Lappy and Tappy are partners sharing Profit and Loss in the ratio 3 : 2 having Capital Account balances of Rs 50,000 and Rs 40,000 on 1st April, 2020. On 1st July, 2020, Lappy introduced Rs 10,000 as his additional capital where-as Tappy introduced only Rs 1,000. Interest on capital is allowed to partners @ 10% p.a. Interest on capital for the financial year ended 31st March, 2021 will be:
(a) Rs 5,750 for Lappy & Rs 4,075 for Tappy.
(b) Rs 5,000 for Lappy & Rs 4,000 for Tappy.
(c) Rs 750 for Lappy & Rs 75 for Tappy.
(d) None of the above.
Answer. A

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