# MCQ Chapter 2 Accounting for Partnership Basic Concepts Class 12 Accountancy

Please refer to Accounting for Partnership Basic Concepts MCQ Questions Class 12 Accountancy below. These MCQ questions for Class 12 Accountancy with answers have been designed as per the latest NCERT, CBSE books and syllabus issued for the current academic year. These objective questions for Accounting for Partnership Basic Concepts will help you to prepare for the exams and get more marks.

## Accounting for Partnership Basic Concepts MCQ Questions Class 12 Accountancy

Please see solved MCQ Questions for Accounting for Partnership Basic Concepts in Class 12 Accountancy. All questions and answers have been prepared by expert faculty of standard 12 based on latest examination guidelines.

### MCQ Questions Class 12 Accountancy Accounting for Partnership Basic Concepts

Question. Which step is not involved in valuing the goodwill according to super profit method:-
a) Ascertain Average Profit
b) Ascertain Super Profit
c)Ascertain Normal Profitd. Multiply Super Profit with Number of years purchased

A

Question. Super profit can be calculated:-
a) Average profit – Normal profit
b) Net profit – Average profit
c) Capital Employed –Net Profit
d) Net Profit – Capital Employed

A

Question. If Goodwill is Rs. 1,20,000, Average Profit is Rs. 60,000 Normal. Rate of Return is10% on Capital Employed Rs. 4,80,000. Calculate capitalized value of the firm:-
a) Rs. 6,00,000
b) Rs. 5,00,000
c) Rs. 4,00,000
d) Rs. 7,00,000

A

Question. Tangible Assets of the firm are Rs. 14,00,000 and Outside liabilities are Rs. 4,00,000, Profit of the firm is Rs. 1,50,000 and normal rate of return is 10% Calculate capital employed
a) Rs. 10,00,000
b) Rs. 1,00,000
c) Rs. 50,000
d) Rs. 20,000

A

Question. Forming a Partnership Deed is :
a) Mandatory
b) Mandatory in Writing
c) Not Mandatory
d) None of the Above

C

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.

C

Question. On 1st June 2018 a partner introduced in the firm additional capital ₹50,000. In the absence of partnership deed, on 31st March 2019 he will receive interest :
a) ₹3,000
b) Zero
c) ₹2,500
d) ₹1,800

B

Question. Sleeping partners are those who
a) take active part in the conduct 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 rati

B

Question. 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

D

Question. On 1st January 2019, a partner advanced a loan of ₹1,00,000 to the firm. In the absence of agreement, interest on loan on 31st March 2019 will be :
a) Nil
b) ₹1,500
c) ₹3,000
d) ₹6,000

B

Question. Ostensible 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

C

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

D

Question. The relation of partner with the firm is that of:
a) An Owner
b) An Agent
c) An Owner and an Agent
d) Manage

C

Question. X, Y and Z are partners sharing profits and losses equally. Their capital balances on March, 31, 2012 are ₹80,000, ₹60,000 and ₹40,000 respectively. Their personal assets are worth as follows : X — ₹20,000, Y — ₹15,000 and Z — ₹10,000. The extent of their liability in the firm would be :
a) X — ₹80,000 : Y — ₹60,000 : and Z — ₹40,000
b) X — ₹20,000 : Y — ₹15,000 : and Z — ₹10,000
c) X — ₹1,00,000 : Y — ₹75,000 : and Z — ₹50,000
d) Equal

B

Question. According to Profit and Loss Account, the net profit for the year is ₹4,20,000. Salary of a partner is ₹5,000 per month and the commission of another partner is ₹10,000. The interest on drawings of partners is ₹4,000. The net profit as per Profit and Loss Appropriation Account will be :
a) ₹3,54,000
b) ₹3,46,000
c) ₹4,09,000
d) ₹4,01,000

A

Question. Every partner is bound to attend diligently to his in the conduct of the business.
a) Rights
b) Meetings
c) Capital
d) Duties

D

Question. In the absence of partnership deed, 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

A

Question. Partnership Deed is also called
a) Prospectus
b) Articles of Association
c) Principles of Partnership
d) Articles of Partnership

D

Question. 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 partner’s drawings
c) Interest will be charged @ 6% p.a. on partner’s drawings
d) Interest will be charged @ 12% p.a. on partner’s drawings

A

Question. A and B are partners in a partnership firm without any agreement. A has withdrawn RS50,000 out of his Capital as 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

D

Question. When is the Partnership Act enforced
a) when there is no partnership deed
b) where there is a partnership deed but there are differences 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

A

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

D

Question. In the absence of a partnership deed, the allowable rate of interest on partner’s loan account will be :
a) 6% Simple Interest
b) 6% p.a. Simple Interest
c) 12% Simple Interest
d) 12% Compounded Annually

B

Question. 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 Month
d) As there is a loss in the business, interest can’t be paid

B

Question. Better quality of product will increase the sales and profit. Identify the factor:-
a) Capital Employed
b) Efficiency of Management
c) Location
d) Risk

B

Question. If Average Profit = Rs. 1, 60,000
Actual Capital Employed = Rs. 5, 00,000
If rate of Normal Profit = 20%
What is the amount of Super Profit?
a) Rs. 60,000
b)Rs. 1,00,000
c) Rs. 20,000
d) Rs. 80,000

A

Question. Which one of the following items is recorded in the Profit and Loss appropriation account
a) Interest on Loan
b) Partner Salary
c) Rent paid to Partner’s
d) Managers Commission

B

Question. A,B and C were partner in a firm sharing Profit in the ratio of 3:2:1 during the year the firm earned profit of Rs. 84,000.
Calculate the amount of Profit or Loss transferred to the capital A/c of B.
a) Loss Rs. 87,000
b) Profit Rs. 87,000
c) Profit Rs.28,000
d) Profit Rs.14,000

C

Question. Closing entry for interest on loan allowed to partners
a) Interest on partner’s loan …Dr.
To Profit and Loss A/c
b) Interest on loan …Dr.
To Profit and Loss Appropriation A/c
c) Profit and Loss Appropriation A/c …Dr. To interest on partner’s loan A/c
d) Profit and Loss Appropriation A/c …Dr.
To interest on loan A/c

C

Question. A business has earned Super profit of Rs. 1,00,000during the last few years and Normal rate of returns in 10% Calculate goodwill
a) Rs. 10,00,000
b) Rs. 54,000
c) Rs. 20,000
d) Rs. 36,000

A

Question. Rani and Shyam is partner in a firm. They are entitled to interest on their capital but the net profit was not sufficient for paying his interest, then the net profit will be disturbed among partner in
a) 0 1 : 2
b) Profit Sharing Ratio
c) Capital Ratio
d) Equally

C

Question. As per section a minor may be admitted for the benefit of the partnership if:-
a) One partner agree
b) More than one agree
c) All partners agree
d) Both (a) or (b)

C

Question. If the partner carries on the business that is similar to firm competition with the firm and profit earned from it, the profit
a) Shall be retained by the partner
b) Shall be paid to firm
c) Can be retained or gained to the firm
d) Both (a) or (b)

B

Question. The relation of the partner with the firm is that of
a) An owner
b) An agent and A Principal
c) An agent
d) Manager

B

Question. A, B, and C are partner’s sharing profits in the ratio of 5:3:2According to the partnership agreement C is to get a minimum amount of Rs. 10,000 as his share of profits every year. The net profit for the year ended 31st March, 2019 amounted to Rs. 40,000. How much amount contributed by A?
a) Rs. 1,350
b) Rs. 1,250
c) Rs. 750
d) Rs. 1,225

B

Question. A partnership firm earned divisible profit of Rs. 5,00,000, interest on capital is to be provided to partner is Rs. 3,00,000, interest on loan taken from partner is Rs. 50,000 and profit sharing ratio of partners is 5:3 sequence the following in correct way
I. Distribute profits between partners
II. Charge interest on loan to Profit and Loss A/c
III. Calculate the net profit Transfer to Profit and Loss appropriation A/c
IV. Provide interest on capital

ii, iii, iv, i

Question. Which one of the following item cannot be recorded in Profit and Loss Appropriation Account?
a) Interest on Capital
b) Manager’s Commission
c) Interest on Drawings
d) Partner’s Salary

B

Question. A and B are partner’s sharing profit equally. A draw regularly Rs. 4,000 at the end of every month for 6 months. Year ended on 30thSeptember 2018, calculate interest on drawings @ rate 5% p.a.
a) Rs. 350
b) Rs. 450
c) Rs. 150
d) Rs. 250

D

Question. Which section of the partnership act defines partnership as the relation between person who have agreed to share the profit of the business carried on by all or any of them acting for all?
a) Section 61
b) Section 130
c) Section 4
d) Section 48

B

Question. A and B are the partner sharing profit in the ratio of 2:3. They admitted C as a new partner for 1/5thshare in the profit of the firm Rs. 50,000 for the year ended 31st March 2019. What will be C’s share in profit
a) Rs. 5,000
b) Rs. 10,000
c) Rs. 20,000
d) Rs. 8,000

B

Question. Salary to a partner under fixed capital account is credited to
a) Partner’s Capital A/c
b) Partner’s current A/c
c) Profit & Loss A/c
d) Partner’s Loan A/c

B

Question. If fixed amount is withdraw on the last day of every month and interest on drawing charged is 10% p.a. Interest on drawing amounted to Rs 2,750 what will be drawing amount.
a) Rs. 2,500 p.m.
b) Rs. 10,000 p.m.
c) Rs. 7,500 p.m.
d) Rs. 5,000 per month

D

Question. A and B are partner’s sharing profit in the ratio 2:1 on 31st March 2019, firm’s net profit is Rs. 86,000 the partnership deed provided interest on capital A and B Rs. 5,000 to Rs. 7,000 respectively and Interest on drawing from charged A. Rs 1,000 per month. Calculate profit to be transferred to Partner’s Capital A/c.
a) Rs. 10,00,000
b) Rs. 95,000
c) Rs. 10,000
d) Rs. 86,000

D

Question. A firm had Assets of Rs 1,50,000 partner’s capital account showed a balance of Rs 1,20,000 and reserves constituted the rest . If normal rate of return is 10% per annum and Goodwill is valued at Rs48,000 at four years purchase of super profits , find the super profit of firm :
a) Rs 6,000
b) Rs 18,000
c) Rs 12,000
d) Rs 8,0001

C

Question. Which of the following items will be shown in Partner’s Capital A/c under Fixed Capital method? n
a) Drawings from profits
b) Drawings from capital
c) Interest on drawings
d) All of the above.

B

Question. Mohit and Rohit were partners in a firm with capitals of ₹80,000 and ₹40,000 respectively. The firm earned a profit of ₹30,000 during the year. Mohit’s share in the profit will be:
a) Rupees 20000
b) Rupees 15000
c) Rupees 10000
d) Rupees 18000.

B

Question. R and S are partners sharing profits in the ratio of 2:1. S has advanced a loan of ₹1,00,000 to the firm on 1st October, 2020. The net profit earned by the firm for the year ending 31st March, 2021 is ₹ 90,000. What amount will be credited to S’s capital account?
a) ₹60,000
b) ₹30,000
c) ₹29,000
d) ₹32,000.

C

Question. Interest on Partner’s Loan will be credited to:
a) Partner’s Loan A/c
b) Partner’s Capital A/c
c) Profit and Loss A/c
d) None of the above.

B

Question. Manager is entitled to a commission of 10% of the net profits after charging such commission. The net profit for the year is ₹1,32,000. What will be the amount of manager’scommission?
a) ₹13,200
b) ₹12,000
c) ₹10,000
d) None of the above.

B

Question. Which one of the following items is not an appropriation out of profits?
a) Interest on capital
b) Salary to a partner
c) Commission to a partner
d) Interest on partner’s loan.

D

Question. Akhil and Ravi are partners sharing profits and losses in the ratio of 7:3 with capitals of ₹8,00,000 and ₹6,00,000 respectively. According to partnership deed interest on capital is to be provided @ 8% p.a. and is to be treated as a charge. Profit for the year is ₹80,000. Choose the correct option:
a) A will be credited by ₹ 64,000 and B will be credited by ₹ 48,000.
b) A will be credited by ₹ 56,000 and B will be credited by ₹ 24,000.
c) A will be credited by ₹ 22,400 and B will be credited by ₹ 9,600.
d) A will be credited by ₹ 41,600 and B will be credited by ₹ 38,400.

D

Question. X, Y and Z are partners sharing profits and losses equally. Their capitals on March 31, 2021 are ₹80,000; ₹60,000; ₹40,000 respectively. Their personal assets are worth as follows: X- ₹20,000; Y – ₹15,000 and Z- ₹10,000. The extent of their liability in the firm would be:
a) X- ₹80,000; Y- 60,000; Z- ₹40,000
b) X- ₹20,000; Y- 15,000; Z- ₹10,000
c) X- ₹1,00,000; Y- 75,000; Z- ₹50,000
d) Equal.

B

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

C

Question. In the absence of partnership deed, interest on capital is allowed at the rate of:
a) 6% p.a. simple interest
b) 6% p.a. compound interest
c) 12% simple interest
d) None of the above.

D

Question. A and B are partners sharing profits and losses equally. They admitted C as a partner with an equal share giving him a guarantee of minimum ₹50,000 profit p.
a. The profit for the year after C’s admission was ₹1,20,000. What will be the net amount that will be credited to A’s Capital A/c?
a) ₹50,000
b) ₹40,000
c) ₹35,000
d) ₹80,000.

C

Question. Rent to a partner is shown in:
a) Dr. side of Profit And Loss Appropriation A/c
b) Cr. side of Profit And Loss Appropriation A/c
c) Dr. side of Profit And Loss A/c
d) Cr. side of Profit And Loss A/c.

C

Question. Pick the odd one out:
a) Rent to a partner
b) Manager’s commission
c) Interest on partner’s loan
d) Interest on partner’s capital.

D

Question. Can a partner be exempted to share the losses of the firm?
a) Yes
b) No
c) Yes, if partnership deed provides so
d) Never.

C

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.

A

Question. 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 profits
d) Goodwill.

A

Question. Which one of the following is not a right of a partner?
a) Right to inspect the books of the firm
b) Right to take part in the affairs of the company
c) Right to share the profits/losses of the firm
d) Right to receive salary at the end of each month.

D

Question.The relation of partner with the firm is that of:
a) An owner
b) An agent
c) An owner and agent both
d) A manager.

C

Question. Limited Liability Partnerships came into existence in India after the enactment of:
a) Indian Partnership Act, 1932
b) Limited Liability Partnership Act, 1932
c) Limited Liability partnership Act, 2008
d) Indian companies Act, 2013.

C

Question. If a partner withdraws an equal amount in the beginning of each month for a period of 10 months, what will be the average period for calculation of Interest on Drawings?
a) 6.5 months
b) 7.5 months
c) 6 months
d) 5.5 months.

D

Question. What is the minimum number of partners in a partnership firm?
a) 50
b) 100
c) 2
d) None of the above.

C

Question. X and Y are partners sharing profits and losses in the ratio of 3:2 with capitals ₹5,00,000 each. According to partnership deed, interest on capital is allowed @ 10% p.a. The profit for the year is ₹ 50,000. What amount will be credited to X and Y in such condition?
a) ₹50,000 to A and B each
b) ₹25,000 to A and B each
c) ₹30,000 to A and ₹20,000 to B
d) None of the above.

B

Question. Current accounts of partners are maintained under which method?
a) Fluctuating Capital method
b) Fixed Capital method
c) Both of the above
d) None of the above.

B

Question. P and Q are partners sharing profits and losses in the ratio of 2:1 with capitals ₹1,00,000 and ₹80,000 respectively. The interest on capital has been provided to them @ 8% instead of 10%. In the rectifying adjustment entry, Q will be:
a) Debited by ₹400
b) Credited by ₹400
c) Debited by ₹1600
d) Credited by ₹1600.

B

Question. A and B are partners. B draws a fixed amount at the end of every month. Interest on drawings is charged @15% p.a. At the end of the year interest on B’s drawings amounted to ₹8,250. Drawings of B were:
a) ₹12,000 p.m.
b) ₹10,000 p.m.
c) ₹9,000 p.m.
d) ₹8,000 p.m.

B

Question.
a) I-A; II-B; III-C
b) I-B; II-A; III-C
c) I-C; II-B; III-A
d) I-B; II-C; III-A

B

Question.
a) I-A; II-B; III-C
b) I-B; II-A; III-C
c) I-C; II-B; III-A
d) I-C; II-A; III-B.

D

Question.
a) I-A; II-B; III-B
b) I-A; II-A; III-B
c) I-A; II-B; III-A
d) I-B; II-A; III-B

A

Question.
a) I-A; II-B; III-C
b) I-B; II-A; III-C
c) I-C; II-B; III-A
d) I-B; II-C; III-A

D

Question.
a) I-A; II-B; III-C
b) I-B; II-A; III-C
c) I-C; II-B; III-A
d) I-B; II-C; III-A

C

Question. The maximum numbers of partners in case of limited liability partnership is __________.

Unlimited

Question. Interest at the rate of_______ is to be allowed on a partner’s loan to the firm.

6% p. a.

Question. In the absence of the date of withdrawal, interest should be charged for __________ month on the whole amount

Six

Question. In case of guarantee of minimum profit to a partner deficiency of guaranteed partner is from shared by remaining partner in ____________.

Answser

Agreed Ratio

Question. In the absence of partnership deed rate of interest on partner loan will be_________.

6% p. a.

Question. If drawings of equal amount are made in the beginning of every month for 9 month ending 31st March, then interest on drawing will be calculated for an average period for _________Months.

5

Question. Profit and Losses are to be shared in __________ irrespective of their capital contribution.

Agreed Ratio

Question. If partner’s capital is fixed interest on drawing will be recorded on __________.

Partner’s Current A/c

Question. Interest on loan taken by a partner is recorded on___________ of Profit and Loss Account.

Credit side

Question. Interest on Capital are under the Fixed Capital Account method is credited to ___________

Partners Current A/c

True or False.

Question. A body corporate can be a partner in partnership firm.

False

Question. Sleeping partner are those who do not take part in conduct of the business.

False

Question. The nature of Profit and Loss Account is real.

False

Question. Registration of partnership is optional.

True

Question. When the Partnership agreement is silent about the treatment of interest on capital then it will be treated as charge on profit.

False

Question. Fixed capital always shows Debit balance.

False

Question. Manager’s commission is shown in Profit and Loss Appropriation Account.

False

Question. When a partnership firm gives loan to its partner then interest on loan will be debited in profit and loss account.

True

Question. Interest as a charge means interest on capital is to be allowed whether the firm has earned profitor incurred loss.