Multiple Choice Questions (MCQs)

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( Multiple Choke Question• (MCQ1) )

&lttl l ht rorrttt alternatfoe:

1. Partnership Is an anoclatlon of _ _ or more per50ns.
@ two @ seven
© ten @) twenty
2. The relationship between persons who have agreed to share prof,its of a busmess cartied on by aJI 0< art'f
of them acting for 111 Is known as
@ Partnership, @ Joint Venture.
© Association of persons. @) Body of Individual.
J. Feature of partnership firm Is
@ Two or more persons carrying common business under an agreement.
@ Profits and losses are shared In agreed ratio or as provided In the Partnership Act. 1932.
© Business is carried on by all or any of them acting for all.
@ All of the above.
4. The written agreement among the partners Is called
@ Partnership Deed. @ Partnership bye-laws.
© Partnership Constitution. @) a contract.
S. The liability of the partners In a partnership firm under Indian Partnership Act, 193.2 is
@ Limited, @ Unlimited.
© No Liability. @) Depending on the situation.
6. Interest on Capital Is allowed on
@ the opening capital.
@ the capital at the year end.
© average capital of the year.
@ the capital for the period capital remains Invested In the business.
7. In the absence of the Partnership Deed, Interest on Capital
@ Is allowed O 6911 per annum. @ Is allowed o 10% per annum.
© Is allowed at the borrowing rite. @) Is not allowed.
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MC Q.2 ,tn Aid to Ac-co111tt•1tcy-CBS£ XII

I &n,eemflll. Interest on drawings of a partner Is char

In the abstnce of Partners hi P ....,.
• IC'\
ged
~ ~ ~ per annum.
@ • ~ per annum.
© • 1~ per annum. @ No Interest Is ch1r9td. (CSSE, Foreign 2015)
.... ~ J ..__.___ ....., offd
9, In tht ,.,,.. . ...e"' .... "=....,, . Interest on loan of a partner ls allowed
@ • ~ per annum
@ 0 6'6 per annum
© No Interest Is allowed @ 0 1~ per annum
,o. In tht abseflCe of PartMnhlp Deed, profit of a firm
Is distributed among the partners
@ In tht ratio of capital
@ Equally.
© In the ratio of time dewted for the firm's buslneu.
@ acconilng to the managerial abllltlts of the part
ners. (CBSE 2015)
11. In the abse nce of agreement. part nffl are
entitled to
@ Salary.
@ Commission.
© Interest on Loans and Advances. @ Profit Share In Capital Ratio.
12. A.s per Indian Partnership Act. 1932, If Part
nership Deed does not exist partners get
@ Salary. @ Interest on Capital.
© Equal Profit Share. @ Commluion.
13. Relationship between the partners Is of
@ Oose relatives. . @ Agent and Principal.
© Junior-Senior Relationship. @ Senior-Subordinate Relationship.
14. In the absence of spedfic provision in the
partnership deed. as to salary and remuneration, amo
to him as salary and lffllUneratlon will be unt payiible
@ t 15,0 00 p.m.
@ " 20,000 p.m.
@ t 10,0 00 p.m. @ NII.
15. Profit and Loss Appropriation Account Is prep
ared by
@ Sole trader firm. @ Partnership firm.
© Both (a) and (b).
@ None of these.
16. In the absence of an agreement to the contrary,
the part ners are
@ entitled to Interest O 6'6 p.a. on their _capitals.
only if there are profits.
@ entitled to Interest • 9"' p.a. on their capitals. only
© entitled to Interest.on their capitals at the bank rate,Ifonlythere are profits.
If there are profits.
@) not entitled to interest on their capitals.
17. Profit and Loss Appropriation Account is prep
ared to
@ Distribute the profit and loss for the year amo
ng the partners.
@ Settle the dispute among the partners.
© Determine the profit remaining for distribution for the year after
appropriation.
@) Distribute the profit for the year among the partnen
.
18. Which of the following Items Is not deal
t through Proftt and Loss Appropriation Acco
unt?
@ Interest on Partner's Loan @ Partner's Salary
© Interest on Partner's Capital @) Partner's Commission (CBSESarnp/tP1'1" 20191

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 MulHplt Clroicr Q11115ffon1 Mc.:Q.3

1,. The ltlffll that wlll not be shown In the debit or Profit and Lou Approp,l•tlon Account 11
@ Interest on C1plt1I @ commlulon to • partn~r
© Interest on Drawings @ Sal1ry to partnen
lO. Pick the odd one out or the following:
@ Rent to Partner. ® Manager's Commission.
© lnwrest on Partner's Loan. @ lnternt on Partner's Gtpltal.
(C85E Sample Po(Hf 101(/J
l 1. Current Accounts of partners are malnulned If
@ capitals are fbced. @ capltals are fluctuating.
© capitals are fbced or ftuctuatlng. @ It Is decided by the PartMrs.
ll. In case of fixed capitals. partners wlll have
@ credit balances In their Capital Accounts.
@ debit balances In their Capital Accounts.
© credit or debit balances In their Capltal Accounts.
@) credit balance or nll balance In their Capltal Accounts.
23. In case of fixed capitals, Interest on capital
@ is credited to Partner's Capital Account.
@ Is credited to Partner's Current Account.
© may be credited to Partner's Capital or Current Account.
@) Is debited to Partner's Capital Account.
24. Which Capital accounts with balances always show a aedit balance7
@ Fixed @ Fluctuating
© Normal @) Real
25. Vidit and Seema were partners In a firm sharing profits and losses In the ratio of 3 : 2. Their capitals were
\' 1,20,000 and\' 2.40,000 r,espectfvely. They were entitled to interest on capital@ 10llb. The firm earned
profit off 18,000 during the year. The Interest on Vldit's capital will be
@ \' 12,000. @ \' 10,800.
@ \' 7,200. @ \' 6,000. (CBSE 1020')

26. Which of the following Is not an essentlal feature of partnership?

@ An agreement, oral or written, should exist among the partners.
@ Agreement should be to carry on lawful business.
© All the partners should contribute capital In the firm.
@ There should ~ at least two partners.
27. A manager gets S'I& commission on net profit after charging such commission. Gross prollt t S,80,000
and expenses of Indirect nature other than m,nager's commission are , 1,60,000. Commission
amount will be
@ f 21,000. @ '20,000.
@ , 15,000. @ '22,000.
 MCQ.4 Ar,Ald toAccountancy-CBSE X1J

21, X and y are partners sharing profits equally. Z was manager who recelv~ the salary of ' 8,000 p.m.
In addition to commission of S'Nt on net profit after charging such commission. Profit for the year Is
, 13.56,000 before charging salary. Find the total rfflluneratlon of Z.
@ ' 1,56,000. @ '1,76,000.
@ ' 1,52,000. @) ' 1,74,000.
29. Partners have to J>ilY Interest on withdrawals (In cash or kind) only when provided by the
@ Partnership Act. i @ Partnership Deed.
© (a) and (bl above. @) None of these.
30. Where Is Interest on Drawings shown In the Anal Accounts of the firm?
•
@ Debit side of Profit and Loss Appropriation A/c. @ Credit side of Profit and Loss Approprlatlon Ale.
© Credit side of Profit and Loss A/c. @) Debit side of Capital/Current A/c only.
31, Riim and Mohan are partners. They draw for personal use , 6,000 and , 4,000 respectively. Interest is
chargeable • 6'Nt p.a. on Drawings. What is the interest on drawings?
@ Riim, 180 and Mohan, 120. @ Ram, 360 and Mohan, 240.
© Ram , 30 and Mohan , 20. @) None of these.
. .
32. Mohan draws , 10,000 p.m. on last clay of f!VffY month for his personal use. If Interest Is to be charged
O S'N, p.a.. Interest chargeable from him In accounting year will be
@ ' 3,250. @ ' 2,750. ..
© , 3,ooo. @) , .1,soo.
33. Mohan draws, 5,000 regularly on the 1Sth of f!VffY month, for his personal use. Interest Is payable for the
year on drawings oft 60.000 (at a glwn rate of Interest) for a total period of
@ S Months. @ 6 Months.
© 7 Months. @) 6~ Months.
34. If equal amount Is withdrawn In the beginning of each month for personal use, period for which Interest
will be charged will be
@ 7 Months. @ 6 Months.
© S Months. @) 6.S Months.
35, Partner's Drawing Account Is dosed
@ by transfer to credit side of the Capital Account
@ by transfer to credit of Current "Account
© either (a) or (b).
@) by transfer to debit side of Capital or Current Account
36. Product method Is used for cakulatlon of
@ Distribution of Profit and Loss. @ Distribution of Revaluation profit or loss.
© Interest on Drawings. @) Interest on Capital.
37, Interest on Drawings of the partner Is a
@ Loss to the firm. @ Gain (profit) to the firm.
© Gain (Profit) to partners. @) Loss to bank.

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 M1dHp lt 0.ofr, Q11,stlon1 MCQ5
JI, lnterut on C1plt1I of partner Is 1
@ loss to the nm,, @ Gain (Profit) to the nrm.
© loss to partners @ loss to ta,c dep,rtm enl
39. If ~ual amounts are withdrawn In the beginning of HCh month throughout the year,
Interest on drawing s
Is akui.te d H
@ Total Drawings x Rate ~ Rate 6.S
@ Total Drawings x
·100
11
12 100 11 12
© Total Drawings x Rate .!_
11 @ Total Or1wlngs >< -
Rate
x -
5
100 12 100 12
40. Mohan. a p,rtner, withdraws , 20,000 on 1st Ap,t~ 2020 and , 40,000 on 1st Octobef, 2020.
Interest on
Drawings •~p.a. on 31st March, 2021 wtll be
@ '2,400. @ '3,600.
© ,· 1,800. @ \' 1,200.
41, Atu~ Vlpul ind lflfful are partners In a flm, without I partnership deed. Pr1fful dem1nds Interest
on loin
of' 20,000 advinced by him at the market rate of 12~ The amount of Interest received by him will be
@ ' 2,400. @ Nil
© \' 1,200. @ \' 3,600.
42. If the dlte of drawing Is not given, Interest on Toul Drawings Is calculated for
@ 4 Months. , @ 5 Months.
© 6 Months. @ 1 Year.
43. AMYi and Shyam are partners sharing profits and losses equally. Flnancllll Satemen ts are
p,epilld for
the )'Ur ended 31st March, 2021, which show I profit of\' 1,50,000 before anowlng
Interest on a loin of
\' S0.000 front Shyam O 10% p.a. Each partner is entitled to salary as follows:
Ram \' 15,l>OO pennnu m
Shyam ' 10,000 per annum
What Is Ram's total appropriation of profit for the yew ended 31st March, 20217
@ \' 77,500.
[ @ '75,000.
. @ ' 70,000.
@ '80,000.
44, A and B lie partners with the capital d, 2.00.000 and\' 1.00.000 respectlYely. lnteiest payable
on opita1 is
1~ p.a. DetennlN: Ii Itel est on c:apltal b both the plltnffl when the profit earned by the
firm is\' 2"-000.
@ \' 20,000 and\' 10,000. @ \' 15.000 and\' 9,000.
© No Interest will be paid. @ l 16,000 a_nd \' 8,000.
4S, When gu,rante e Is given to partner by some of the partners, defklency on such guarantee is
borne by
@ All of the other partners. @ Partnership flm,,
© Partnen who gave the gu1r1ntee. @ None of the partners.
46, A.Band Care partners sharing profits In the ratio ol S: 4: 1. C Is given guarantee that
his 11\Me In a year will
not be less than t 5,000. Profltfortheye1rfflded 31st Marth.2021 ls, 4'0,000. Deflclencyln1heguarantee
d
p,of1t ol C Is to be borne by B. Deficiency to be borne by BIs:
@ Deficiency of Ct 1,500 m•t by 8. @ Deficiency of C, 1,000 met by B.
© Deficiency of C , 4,000 met by 8. @ None of these.

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 MCQ.& A1t Aid to A«o111tl,,1tcy-CBS£ XII

fits In the r,tlo of 3 : 2 : 1.The parlne

47. X. Yandz .-.part nenwr ingp,o nd ••i.ry for r ol t aooo per annum . nhlp Net
~reem ent provides for lnt«ts t
on cAJ)ltal • 8' ~ annum • - profit for the year 2020-21 was
, 84,000 and bli.nc fl o1 partM n' Capital Accounts•during th• yHr were:
x-t 20,000; r-, u .000; z-t 12.000.
10 rs share of residual p,oflts l'or the year 2020-2 1 wtll be
@ ' 12,040. • @ ' 12.667.
© t 13,000. @ ' 14,000.
(Ill Total amoun t of the approp riation crtdlte d to Y's accoun t In the
ytar 2020-21 wlll be
@ t 24,080. @ ' 28,000.
© ' 33,280 . @ ' 33,333.
4& A. B. and C Wl!f'I! partne rs In a firm sharing profits and lones In the ratio
of 4 : 3 : 3. Their fixed capital s were
, 1,00,000, , 2.00,000, and , 3,00,00 0 respec tlwly. For tht year 2020-2
1, Interest on capital was credite d
to them • 10'111 p..a. lnstud ol ft p..a. Which of the followi ng entry Is l'le(fts
ary to rectify the error?
@ B's Capital Ale •.•Or. t 1,400
To A's Capital Ale ' 200
To C's Capital Ale
' 1,200
@ A's Capital Ale _.()r. , 1,400
To B's Capital Ale
'200
To C's Capital Ale
' 1,200
© B's Capital Ale _.Dr. t 1,200
Cs Capital Ale _.or. t 200
To A's Capital Ale
' 1,400
@ B's Capital Ale t 200
C's Capital Ale
' 1,200
To A's Capita l Ne t 1,400
4t. ~ Y and Z are partne rs In a firm sharing profits and losses In the ratio of 6 : 4
: 1. X guaran teed profit of
t 1S,000 to Z. Ntt profit for the year ending 31st March, 2019 was t 99,000
. X'l share in the profit of the
firm will be
@ t 30,000. @ t 1S,000.
© t 48,000. @ '4S,00 0. (CBSE 2020 Cl
SO. Pretti, Mona and Nls~ shared profits In the ratio of 3 : 2 : 1. Profits of the last
th~ee were, 1,40,000,
t 84.000 ind \' 1,06,00 0 respectively. These profits were by mimk e, shared equally Inyears
all the thTH years.
Which ol the following entry is necessary to correct the e rror?

@ Nishl's Capitl l Ale

To PreetJ's Capltl l Ale
...Df. SS,000 ' '
SS,000
@ Prtetl's Capital Ale .
To Nisha's Capita l A/c -°'· SS.000
SS,000
© Mona's Capita l Ale _.or. S5,000
To Preetl's Capital Ne 55,000
@ Prtttl's Capital A/e ....Dr. SS,000
To Mon1's Capital Ale S5,000

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M11ltiplt Clroict Qutstion.s MCQ.7
51 • X. Y and Z ~ profits of , 75,000 In the ratio of 2 : 2 : 1 but the Partnership Dttd was silent regarding
profit-sharing ratio. Which of the following Is nec~sary adjusting entryl
@ Z's Capital Ale ...Dr. , 10,000
To .It's Capital Ale 'S,000
To rs Capital Ale ' 5,000
@ .It's Capital Ale ...Dr. , 5,000
rs Capital Ale ..Dr. ' S,000
To rs Capital Ale t 10,000
© rs Capital Ale ...Or. ' 10,000
To .It's Capital Ale
' 5,000
To Z's Capital Ale
' 5,000
@ Xs Capital Ale - Dr. ' 10,000
To rs Capital Ale t 5,000
To Z's C.apital Ale
' 5,000
( Assertion-Reuon 8uecl Questions)
GiWn below are two statements (ln each question), one labelled as Assertion (A) and other labelled as Reason (R):
1. AsMrtion (A): Partnership Is the relation between persons who have agreed to share the profits of a
business carried on by all or any of them acting for all
Rauon CR): It Is defined In the Partnership Act. 1932.
In the contut ofabo\.T two statffl!ffltf, which of tht following Is corrtetl
@ Assertion (A) and RNSon (RI are correct but the Reason (R) Is not th~ correct explanation of
Assertion (A). ·
@ Both Assertion IA) and Reason (R) are correct and Reason (R) is the cooect explanation of Assertion IA).
© Assertion (A) is correct but the Reason (R) Is not cOfTKt.
@ Both Assertion (A) and Reason CR) are not correct.
2. As1 ■rtton (A): Partnership Is a separate and distinct entity from partners from the viewpoint of accounting.
Reason (Rl: According to Business Entity C.oncept. transactions of the business are recorded from the
viewpoint of the firm. Hence. It Is a separate and distinct entity from partners from the viewpoint
of accounting.
In the conttxt of abo\.T two statements, which of the following Is corrrctl
@ Assertion (A) and Reason (R) are correct but the Reason (R) Is not the correct explanation of
Assertion (A).
@ Boch Assertion IA) and Reason (Rl are toned and Reason (R) Is the correct explanation of Assertion (A).
© Assertion (A) is correct but the Reason (RI Is not correct.
@ Both Assertion (A) and Reason (Rl are not correct.
3. Auertlon (A): A firm can have minimum 2 with a maximum 50 partners.
Rauon (RI: The limit of two partners flows from the definition In the Parlnfflhlp Act. 1932. Maximum
limit of partners Is al50 prescribed In the Partnership Act. 1932.
In tht con rot ofobo\.T two sratrment.r. which of the following Is correct?
@ Assertion (A) and Reason (Rl are correct but the Reason (RI Is not the correct explanation of
Assertion (A).
@ Boch Assertion (A) and Reason (Rl are correct and Reason (Rl Is the mrrect explanation of Assertion IA).
© Assertion (Al is correct but the Reason CR) is not correct.
@ Both Assertion (Al and Reason (R) are not correct.

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MCQ.8 An /\Id to Account,mcy-CBSE XII

4. Assertl'o n (A): In a Partnership when 1proflt-sharlng ratlo Is agreed, partners share the losses also In the
same ratio.
RNson (R); Although In the defln!tfo:n It Is written that profits wlll be shared. However, ~roflts Includes
losses also.
In rhe oontext ofabo~ rwo sta~ments, •which of the following Is correct?
@ Assertion (A) and Reason (RI are correct but the Reason (R) Is not the correct explanatlon of
As.sertlon (Al.
@ Both Assertion w and Reason (R) are correct and Reason (RJ Is the correct explanation of Assertion W.
© Only Assertion (A) Is correct.
@ Only Reason (R) is correct.
s. Assertion (A): Business of the partnership should be lawful although not speclflcally Included In the
definition.
RMSOn (RI: Any unlawful activity cannot be carried In the country. Thus, business should also be lawful
to be canted out
In rhe context of al>ovt two starementJ. which of rhe following Is correctl
@ Assertion (A) and Reason (R) are correct but the Reason (RI• Is not the correct explanation of
Assertion (A). ·
@ Both Assertion W and Reason (R) are correct and Reason (R) Is the correct explanation of Assertion W.
© Assertion (A) Is correct but the Reason (RI is not correct. ·
@ Both Assertion (A) and Reason (iRI are not correct.
6, Aslattlon (A): Partnefs are prlnclpals but not the agents of other partners.
Rason (Rh As per the definition of partnership, business can be carried on by all or any of them acting
for all. Thus. they are the principals and also the agents. '
In rhe context ofabove two statements, which of the following Is CQrreCt'i
@ Assertion (A) and Reason (R) are correct but the Reason (RI Is not the correct explanation or
Assertion (A).
@ Both Assertion CAJ and Reason (R) are correct and Reason (R) is the correct explanatlon of Assertion (A).
© Ony Assertion CAI Is correct.
@ Assertion (A) is not correct but the Reason (R) is correct.
7. :\n1rt1an (AJ: Apartnership deed can havedausesthataredifferentfrom the provisions of the Part~shlp
Act. 1932 and In such situations, clauses In Partnership Deed prevail over the provisions or
the Partnership Act. 1932.
RNson (R): The provisions of the Partnership Act. 1932 apply when the partners have not agreed on a
matte, (say, profit- sharing ratio).
In tfle co11tw ofabow two statemffllS, which ~f the following It colrect1
@ Assertion (A) and Reason (R) are correct but the Reason (R) Is not the correct explanation or
Assertion IA). ·
@ Both Assertion (A) and Reason (R) are correct and Reason (R) Is the correct explanation of the
Assertion (A).
© Assertion (A) Is correct but the Reason (R) Is not correct.
.@) Both Assertion (A) and Reason (R) are not correct
8. AIMftlon (A): Only Capital Account Is maintained for each partner under Fluctuating Capital Accounts
Method.
Reuon (R): lntefest on Capital remuneration (Salary/Commission) and profit s.hare are transferred to the
credit of Partners' Capital Accounts while Interest Q!1 OraW:lngs and share of loss are traniSfefred
to the debit
 !tfllltiplt Choke Qut1Hoffs MCQ.9 .

In tht conrext of obollt' rwo stotrmtn~ which of tht following Is corr«tl

@ Assertion (A) and Reason (RI are correct but the Reason (R) Is not the correct e,cpl1natlon ot
Assertion (A).
@ Both Assertion (A) and Reason (R) ire correct and Reason (R) Is the correct txplanatlon of
Assertion (A).
© Assertion (A) Is correct but the Reason (R) Is not correct.
@ Assertion IA) Is not comet but the Reuon (R) Is correct.
t. Assertion IA): In a specified sltu1tlon, Interest on Partners'Capltal Is shown In the Pront and Loss Account.
Reason (R): Interest on Capltll Is transferred to the debit of P,ont and Loss Account. if It Is specified to
bea charge.
In ~ contm ofabove two stotemtn~ which of tht following tscorrtctl
@ Assertion (A) and Reason (R) are correct but the Reason (R) Is not the correct explanation of
Assertion (A).
@ Both Assertion (A) and RNson (R) are correct and Reason (R) Is the correct explanation d Assertion (A).
© Assertion (A) Is correct but the Reason (R) Is not correct
@ Both Assertion (A) and Reason (R) are Incorrect.
10. ASMrtlon (.A): If drawings by a partner Is on different dates and/or amounts of drawings Is not same,
Interest on drawings Is calculated using Product Method.
Reuon (R): lntetHt on Drawings Is ch¥ged for the period It is drawn by a partner. In case, the amount
of Drawings and/or period for which it is dmffl Is not uniform. average methods c111not be
applied to determine Interest on capital.
In tht contm ofabove two stattmtnts, which oltht fol/owing Is corr«t?
@ Assertion (A) and Reason (R) are correct but the Reason (R) Is not the correct explanation of
Assertion (A).
@ Both Assertion (A) and Reason (R) are correct and Reason (R) Is the correct explanation of Assertion (A).
© Only Assertion (A) is correct.
@ Assertion (A) Is not correct but the Reason (R) Is correct.
11. ASMrtlon (.A): Partners distribute profits and losses In their profit-sharing ratio and not In the ratio of
their capitals.
Reason (R): The amount of appropriations, as per Partnership Deed are men than the amount of profit
available for distribution, profit Is distributed In the ratio of appropriations.
In ~ context of a ~ two stattfMtlts. which of~ fol/owing Is corrtetl
@ Assertion CAI and Reason (RJ are correct but the Reason (RJ Is not the correct explanation of
Assertion (A).
@ Both .Asser1lon (A) and Reason (R) ate correct and Re4son (R) Is the ~ explaMtion of Assertion (A).
© Assertion (A) Is correct but the Reason (R) Is not correct.
@ Assertion (A) Is not correct but the Reason (R) Is correct.
12. Alsertion (A): Rent payable to a partner Is transferred to the credit of Partner's Capital Account and not
to Rent Payable Account
Rauon (R): Rent p,yable to a partner for letting the firm use his personal property for business Is a transaction
that Is not related to him being a partner. Therefore, It Is credited to Rent Payable Account

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MCQ.10 An Aid to Account1incy-CBSE XI1

In tht con~ of abo~ two statwnfflts. which of tht following Is contet1

@ Assertion (A) and Reason (R) are correct but the Reason (R) Is not the correct explanation of
Assertion (A).
@ Both Assertion (Al and Reason (R) aie correct and Reason (R) Is the correct explanatlon of Assertion (A).
© Assertion (A) Is correct but the Reason (Rl Is not correct.
@ Assertion (A) is not corn!Ct but the Reason (R) Is correct.
13. AsHrtton (A): Rent to a Partner Is transferred to the debit of Profit and Loss Account but Is not transferred
to the debit of Profit and Loss Appropriation Account
lleuon (R): Rent to a Partner Is an expense which Is a charge against profits and not an appropriation of
profit. Hence, It Is transferred to the debit of Profit and Loss Account
In tht contm of abow two Jtatements, whfch ofthe fol/owing is correctl
@ Assertion (A) and Reason (R) are correct but the Reason (R) Is not the correct explanation of
Assertion (A).
@ Both Assertion (A) and Reason (R) are correct and Reason (Rl Is the correct explanation of Assertion (A).
© Assertion (A) Is correct but the Reason (R) Is not correct.
@ Assertion (A) Is not correct but the Reason (R) Is correct
14. Au.tion (A): Interest on Loan to partner Is charged @ 6% p.a.. if Partnership Deed does not provide for
charging of Interest.
Reason (IQ: In the absence of Partnership Deed, provisions of the Partnership Act. 1932 apply. Thus.
Interest on Loan to Partner should be charged O 6% p.a. otherwise Interest Is allowed at the
agreed rate of Interest.
In the coo~ of abow two statfflltnts, which of tht following Is correct?
@ Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of
Assertion (A).
@ Both Assertion (A) and Reason (RJ are correct and Reason (R) is the correct explanation of Assertion (AJ.
© Assertion (A) Is correct but the Reason (R) Is not correct.
@ Both Assertion (A) and Reason (Rl are not correct.
15. Assertion (A): Interest on Loan by Partner Is allowed at the agreed rate of Interest and In the absence of
agreement. It Is allowed•~-
Renon (R): In the absence of Partnership Deed, Interest on Loan by Partner Is not allowed.
In the context ofa6cM two staremen4 which of the following Is correctI
@ Assertion (A) and Reason (R) are correct but the Reason CR) is not the correct explanation of
Assertion (A).
@ Both AssertiOn (A) and Reason (R) are correctand Reason (R) is the correct explanation of Assertion (A).
© Assertion (A) Is correct but the Reason (R) Is not correct.
@ Both Assertion (A) and Reason (R) are not correct.
16. AsMrtfon (A): Avlnash, a partner In the firm gave loan off S,00,000 to the firm without an agreement as
to rate of interest. Interest on Loan by Avlnash Is to be allowed 41> 6% p.a.
Reuon (R): In the absence of Partnership Deed, provisions of the Partnership Act, 1932 apply. Thus.
Interest on Loan to Partner should be charged• 6416 p.a.
In tht contat ofabow two stottmtn4 which of the following Is COMCt1
@ Assertion (A) and Reason CR) are correct but the Reason CR) Is not the correct explanation of
Assertion (A). ·
@ Both Assertion (A) and Reason (R) are correct and Reason (R) Is the correct explanation of Assertion (A).
© Anertion (A) is correct but the Reason (R) Is Incorrect.
@ Assertion (A) Is not correct but the Reason CR) Is correct.

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M,dHple Choitt Quutions MCQ.'11

17. Alurllon (Al: Bharat. a partner In the firm gave loan of, S,00,000 to the firm without an agreement as to
rate of lnternt. At the year end, the remaining partners agreed to allow Interest on Loan
by Bharat @" p.a.
Reuon {Rh In the absence of Partnership Deed, provisions of the Partnership Act. 1932 apply. Thus,
Interest on Loan to Partner should be charged @ Ml> p.a. and not 4P 891> p.a.
In the contfxt of obow two sta~mmfs. which of the fol/owing Is corr«t1
@ Assertion (A) and Reason (RI are correct but the Reason (R) Is not the correct e,cplanatlon of
Assertion (A).
@ Both Assertion (A) and Reason (R) are correct and Reason (R} Is the correct explanation of Assertion (A).
© Assertion (A) ls correct but the Reason (R) Is not correct.
@ Assertion (A) Is not correct but the Reason (R} Is correct.
1L Aa.tlon (A): Amit. Bharat and Charu are partners In the firm. The partnership deed pr011lded for salary
to Amit of, 60,000 p.a. Bharat and Charu also ask for salaries of, 60,000 each. Salaries to
Bharat and Charu Is to be allowed.
Reuon (R): In the absence of Partnership Deed, provisions of the Partnership Act. 1932 apply. Thus,
salaries are not to be allowed to them.
In rM contfxt of above two statements. which of the following Is co"ectl
@ Assertion (A) and Reason (R) are correct but t·he Reason (R) Is not the correct explanation of
Assertion (A).
@ Bod'I Assertion (A) and Reason (R) are correct and Reason (R) Is the correct e,cplanatlon cl Assertion IA).
© Assertion (A) Is correct but the Reason (R) ls not correct.
@ Assertion (A) Is not correct but the Reason (RI Is correct.
19. Assertion (A): Dharam, Ebrahim and Farooq are partners In the firm. The partnership deed provided for
salary to Ebrahim off 5,000 per month,. Dharam and Farooq also demand same salary, i.e.,
, 60,000 p.a. each. An agreement was reached among them and salaries to all the partners
of, 4,000 per month each are allowed.
RNIOII (Rh In the absence of Partnership Deed, provisions of the Partnership Act, 1932 apply. Thus,
salarles are not to be allowed to them.
In the conttxt ofabove two statements, which of the following is correct?
@ Assertion (Al and Reason (R) are correct but the Reason (R) Is not the correct e,cplanation of
Assertion (A).
® Both Assertion (A) and Reason (R) are mnect and Reason (R) Is the correct explanation of Asseftlon (A).
© Assertion (A) Is correct but the Reason (R) is not correct.
@ Both Assertion (A) and Reason (R) are Incorrect.
20. Assertion (A): Ganesh, Harlsh and Iqbal are partners. The partnership deed provided for salary to Iqbal of
, 5,000 per month. Ganesh and Harish demand salary of, 60,000 p.a. each. They agreed but
th, profit for the year Is , 1,20,000. Profit wm be shared by the partners equally.
Reuon (R)I They have agreed to allowing of salaries to the partners. Hence, salaries will be a l ~
to them. Since, profit Is not adequate to allow full salary to each partner, profit Is to be
distributed In the r1tlo of 6 : 6 : 6, I.e., equally.
In the conrext of obovt two statements, whldt of the following Is comet?
@ Assertion (A) and Reason (R) are correct but the Reason (R) Is not the correct explanation of
Assertion (A).
® Both Assertion (A) and Reason (R) are correct and Reason (R) Is the correct explanation of Assertion (A).
© Both Assertion (A) and Reason (R) are not correct.
@ Assertion (A) Is not correct but the Reason (R} Is correct.

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MCQ.12 An t\111 to t\n•ounf;1rr,y- <'ll!ill XII

21. AIMnlon (Al: Jlte:n, K•r•n ind L1llt al'e p,\ltnera wllh upllnlt of , ~.00,000, fl,Oll,000 •ntl , K,00,000
iespectlvely sh,rlng pt0flt1 In the r,tlo l : l : I. l'ht partnenhlll d1111d •llow11ll 1nla1y ol
, 60,000 pJi. to Jlten •nd Intl'"'' on Cnplt41l1 et S'Ni p.n. Net Prullt for lh• ye,•r 1, , U0,000.
Profit wlU be dt,trtbut•d among 1111rt11en In lhelr pron1-sh1111119 r;itlo, I.fl.. 3 : , : 1.
RH&on (RI: Dbtrlbut1ble profit for the yor Is not od,qu•t• to 1llow 111 1pp1optlat1011., Therefore, dlvl'ilbl11
profit will be distributed In tht ratio of 11pproprlatlon1, 1.,., 7 : l : 4.
In the contt.-t ofobow two starrm,nts. which of th, fol/owing /1 corr«I /
@ Anertlon (Al and RNson (Rl art correct but the Reason (RI Is 'not the com,<I e1pl1nallon of
Assertion (A).
@ Both Assenlon IN and RNson (R) are corl'l!Ct ■nd Reason (R) 11 the corrKt e•pl11111tlon of Auertlon IAJ.
© Aswtlon (A) I! comet but tllt Reason (R) Is not correct.
@) Assertion (A), Is not correct but the Reason (R} Is correct.
22. Assertion CA): Mohan, Naman and Onklr1-e partnen with nud c,pltals of, 8,00,000 H<h,The part~rshlp
deed 1llowed S1lary of, 1,00,000 p.a. to Onkar and Interest on Capltals@ 5% p.a. Net Profit
for the year Is , S,00,000. Balance profit wlll be distributed among th•m equ11lly.
RHson (IQ: Dlstrlbutable profit for the year Is 1dequ1te to 1llow Ill appropriation,. Olvblble pront wlll be
distributed among the partnen equally as Is provided In the P,rtnershlp Act 1932,
In the conrut ofabcwt two statements, which ofthe fol/owing Is camct1
@ Assertion (A} and Reason (Rl are correct but the Reason (RI Is not the correct expl1nallon of
Assertion (A.).
@ Both Assertion (A) and Rtason (RI are correct and Rtason (R) Is the correct explanation of Assertion (A).
© Both Assertion (Al and Reason (R) are not correct.
@) Assertion (Al Is not correct but the Reason (RI Is correct.
23. AINrtlon (AJ: Ptram, Qaslm and Ramesh are partners with fixed capita ls oft 8,00,000 each. The partnership
deed allowed salary of, 1,00,000 p.a. to Onkar and Interest on Capitals@ 5% p.1. Net Profit
for the year Is , 5,00,000. Amounts of appropriations wlll be credited to their respective
Capltll Accounts.
R111on (R): Whe-n Capital Accounts are fbced. all appropriations are credited/debited In the Partners'
Caprtal Accounts.
In the contot of abollt two statements, which of tM lolfowlng Is conKt1
@ AsSfftion (A) and Reason (R) are correct but the Reason (RI Is not the correct explanation of
Assertion (Al.
® Both Assertion (A) nf Reason (R) are comet nf Reason (R) Is the coirect explanation of Assertion (A).
© Anertlon (A) Is correct but the Reason (Rl Is not correct.
@ Both A55ertltn (A) and Reason (R) are Incorrect.
24. AIMrtlon (AJ: Shyam, Tarun and Umesh are pattners. The partnenhlp deed provided to charge Interest
on drawings • 6"' p.a. EKh partner withdrew , S,000 per month In the beginning of the
month. The flm1 Incurred a loss of, 1.00,000. Therefore. Interest wtll not be charged on
drawings.
Raton (R): Interest on Drawings wlll be charged• 61111 p.a. on, 60,000 for 6.5 months from nch p,rtner,
It being a wlthdrawll against anticipated profit.
In the context of above two statem,nts. which ofthe following Is correctl
@ Assertion (Al and Reason (R) are correct but the Re■son (Rl Is not the correct explanallon of
Assertion (A).
@ Both Assertion (A) and Reason (R) are correct and Reason (R) Is the correct txl)llnatlon of Assertion (A).
© Assertion IM Is correct but the Reason (RI Is not correct.
@) Assertion (A) Is not correct but the Reason (R) Is correct.
•
MulHJ'lt Chol~ Quutlo111 MCQ.13

25, A1Hftlon (Alt V1run, W1ryam ind Yogesh are partners. The partnership deed provided to charge Interest
on drawings • 6% p.J. VINO withdrew , 5.000 per month In the beginning of the month.
Waryam In the mlddle of the month whlle Yogesh withdrew at the end of the monlh .
Interest will be charged on drawings of , 60,000 from V1run for 6.5 months. Waryam for
6 months and Yogesh b 5.5 months.
RN■on (R): In~ on Drawings Is charged at the agreed rate of lntere.st, l.t., 0 6% p.a. on ' 60.000 for
the period amount Is withdrawn by I p,rtner.V1run has drawn In the beginning of the month
and therefore, Interest wUI be charged for 6.5 months from him and on the same basis from
Waryam and Yogesh b 6 months and 5.5 months respectively.
In tht context ofabove two statrmrnts. which of tht followlng Is correct1
@ Assertion W 111d Reason (R) are correct but the Re1son (RI Is not the conect nplan,t ion of
Assertion (IJ,
@ Both Assertion (A) and Rffson (R) are correct and RHson (R) Is the correct explanation d As5eftlon (R).
© Assertion (IJ Is correct but the Re1son (R) Is not correct.
@ Both Assertion (Al and Reason (RI are incorrect.
26. AIMrtlon W: Ankur, Bhaskarand Rakesharep,rtnefswithcapitalson 3,oo,ooo;,4.00.00
0and, 5.00.000
respectively. The partnership deed provided to allow remuneration to each partner ol
, 50,000 p.a. and interest on Capital O 5% p.1. Profit for the year ended 31st March, 2021 ol
f2.10,000wasdlstrtbutedwtthoutallowtngremunemlon1ndln tereston apltal.Rectifytng
entry for the above will be Dr. Ankur and Cr. Rakesh by , 5,!)00.
Reuon (RI: Remuneration and Interest to Ankur, Bhaskar and Rakesh are, 65,000, , 70,000
and , 75.000
respectively. Each partner was credited by, 70.000. As I result, Ankur was excess credited by
, 5,000 and Rakesh WIS short credited by ' S.000. Thus, Anlwr will be debited and Rakesh
will be credited by , 5,000.
In tht context ofabave two statffl)eflt1,. which of tht foJlowlng Is corr«tl
@ Assertion W and Reason (Rl are conect but the Reason (Rl Is not the correct explanation of
Assertion (Al.
@ Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct expanalion
ol Assertion W.
© Assertion (Al Is correct but the Reason (R) Is not correct.
@ Both Assertion (Al and Reason (RI are Incorrect.
27. AM1rtlo n IA): Pawan, Raman and Sharman a,e plMffl sharing profits In the ratio cA S
: 3 : 2. Raman Is
guaranteed minimum profit share ot, 1,00,000 p.a. after appt0priations to be borne by
Pawan. Net pro6t for the yearended was f 5,00,000 and after appropriations. it was f 3,00.000.
Pawan's Capital Account will be debited f 10,000 as shortfall In guaranteed profit to Raman.
lluson (R): Profit share of Raman will be, 90,000 I' 3,00,000 >< 3/101. Therefore, Pawan'5 C:.pltal Account
will be debited by , 10,000 to meet the shortfall.
In tM conttxt ol above two stattmmts. which ol tht followtng /s correct?
@ Assertion (Al and R11son (R) ■re correct but the Reason (RI ls not the correct e>tplanatlon of
Assertion (A).
@ Assertion (A) and Reason (R) are c.onect and Reason (R) Is the c.onect ~ ol Assfflion (A).

I © Assertion (Al Is correct but tht Reason (Ill Is not correct.

@ Both Assertion (A) and Reason (RI are Incorrect.

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 An Aid to Accountancy-CBS£ XII
MCQ.11

28. AsMrtlon (Al: Paru~ Prem• an u :~oflt

d NI t are partners sharing profits In the ratio of 3 : 2 : 1. Prema is
share of , 75,000 p.a. ,after appropriations. Profit for the year
gu1r1nteed mlnllmtl P •• ' 1 80 000 Profit share of Parul and Nim rat will be f 90,000 and
afterall appropra ans. w • , ' ·
f 30,000.
R (RI· ProfltshareorParullsf 75,000slnceher actual share ls f 60,000(f 1,80,000x 2/6).Balanceprofit
u.son · , l,0S,OOOwlll be distributed between Parul and Nlmrat In the ratio of3 : 1. Thus, Parut will get
, 78,750 and Nlmrat will get f 26,250.
In t~con~xtofabovt two statements. which of the fol/owing Is corr,ectl
@ Assertion (Al and Reason (R) correct but the Reason (R) Is not the correct explanation of
Assertion (A).
@ Assertion (A) and Reason (R) are correct and Reason (R) Is the c«rect explanation of Assertion (A).
© Both Assertion (A) and Reason (R) are not correct.
@) Assertion (A) Is not correct but the Reason (R) Is correct.
29. Ass-ertlon (Al: It is a necessary condition that all the partners should contribute capital in the firm.
RHson (R): The essential condition is that a written agreement exists to share profftS of the business and
the business may be carried on by all or any of themi acting for all
In the conrm ofabove two statements, which of the fol/owing Is corrtctl
@ Assertion (A) and Reason (R:) are correct but the Reason (R) is not the correct explanation of
Assertion (A).
@ Assertion (A) and Reason (R) are correct and Reason (R) Is the correct explanation of Assertion (A).
© Assertion (A) is correct but the Reason (R) is not correct
@ Both Assertion (A} and Reason (R) are not correct.
.
30. Assertion (A): It is a necessary condition that the partners sho1.1ld agree to carry on business and share

r profits arid losses.

Reason (RJ: Partnership may be carried on the basis of written or oral agreement for sharing profits but
not the losses.
In the context ofabove two statements, which of the following is correct?
@ Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of
Assertion (A).
@ Assertion (A) and Reason (R} ~re correct and Reason (R) is the correct explanation of Assertion (A).
© Assertion (A} is correct but t he Reason (R) is not correct.
@ Both Assertion (A) and Reason (R) are incorrect

( Cue Study Based Questions)

1. Amrish and Yogesh are partners since 1st October, 2017 sharing profits In the ratio of 3 : 2. Their capitals
as on 1st April, 2020 were off S,0l!l,000 and , 3,00,000 respectively.
They did not have a Partnership Deed but had agreed to allow Interest on Capital @ 511& p.a. and salary to
Yogesh Is to be allowed of f 25,000 per annum. The accountant was preparing the annual accounts for
the year and Identified that during the year Interest on Capital was not allowed but Yogesh's salary was
allowed. Profit afterYogesh's salary was-f 1.49,300. Also, provision was not made for Manager's Commission
@ s"'
of the Net Profit
Answer the following questions on the basis of the above.
(I) Profit before Yogesh's salary will be
@ f 1,41,000. @ ' 1,66,,000.
@ f 1,57,300. @ t 1,74,300.
MttlHple Oolc~ Q,ustiofll MCQ.15
(Ill Net Profit transfefftd to Profit and Lon Appropriation Account Is
@ , 1,49,300. @ , 1,82,600.
© ' 1,66,000. @) , 1,74,000.
(iii) Toni appropriation tr&nsferffli to upital Accounts of Heh partner &re
@ , 85,600 ,nd , 80,400 respectively. @ , 60,600 and , 40,400 respectively.
© ' 25,000 ,nd , 40,000 resl)KUvely. @ , 25.000 and , 15,000 respectively.
(Iv) Manager's conmlsslon Is
@ a charge ,galnst tM profit.
@ an appropriation of profit.
© a charge sometime and someUmes it Is an appropriation.
@ an el(f)ense that Is debited to Capital Accounu of partners.
M Manage(s commis.slon will be
@ , 3,800. @ 3,080.
© '8,030. @ , 8,300.
2. Amar. Binod and Chaman are In trading business of Jute and Jute products. They hive been sharing pn:iftts
equally up to the year ended 31st March, 2020. They reconstituted the firm and profit-sharing ratio was
~nged to 3 : 2 : 1. Chaman being a working partner demanded that he should be paid annual salary of
f 75,000. The partners did not agree to salary demanded by Chaman but agreed to give him minimum
guaranteed profit of, 60,000. Their capitals as on 1st Apr!~ 2020 were,
respecti~. Profit for the yur ended on 31st March, 2021 was, 3.00,000.
S,00,000, \' 4.00.000 and f 3.00,000

Answer the following questions on the basis of above.

(i) What will be partn«s' profit share If Chaman's share of profit Is guaranteed at\' 60,0007
@ \' 1,50,000, , 90,000, f 60,000. @ \' 1,90,000, , S0,000, \' 60,000.
© f 1,60,000, f 80.000, \' 60,000. @ \' 1,44,000, f 96,000, f 60,000.
(ii) What will be partners' profit share if defidency in Chaman's profit share ls to be borne by Amar and
Binod In the ratio of 4 : 17
@ \' 1,S0,000, \' 90,000, f 60,000 @ f 1,42,000, \' 98,000, f 60,000
© \' 1,44,000, f 96,000, f 60,000 @) \' 1,20,000, \' 1,20,000, f 60.000
(iil1 What will be partners' prof'rt sham, If Chaman's shire of profit Is guaranteed by Amar personally?
@ \' 1,40,000, f 1,00,000, f 60,000. @ \' 1,44,000, f 96,000, f 60,000.
© \' 1,60,000, f80,000, f 60,000. @) \' 1.20,000, f 1,20,000, f 60,000.
(iv) What will be partners' profit shatts. If CharNn's share of profit Is guaranteed after allowing lntemt on
capital O 6% p.a.
@ \' 1,09,600; f 56,400; f 60,000. @ , 89,600; f 76,400; f 60,000.
© f 99,600; f 66,400; f 60,000. @ f 1.00,800; f 67,200; '60,000.
3, Raman and Danish started a flnn on 1st May, 2020 to trade In real estate In partnership sharing pn:iftts and
losses In the ratio of 2: 3. They Introduced capbls ct, 5.00.000 and, 4,00,000 respectlvely. The business got
good response and kept both the panners busy. As a result. they forgot to settle the terms of partnership
and to have a Partnership Deed. Each partner withdrew, 10,000 per month for their personal use. Raman
made the wfthdrawal In the beginning of the month whereas Danish withdrew at the end of each month.
At the' tlme of preparing final accounu for the YH' ended 31st March, 2021, they faced the issues of
int«est on capital, salaries to partners, Interest on drawings and sharing of profit.
Show the distribution of profits/losses for the year ended 31st March 2021, In each of the following cases:
MCQ.16 An Aid to Accountancy-CBS.£ XII

II) If profit for the-year ls, 2,S0,OOOandthe Issues of Interest on Capitals, ~larles and Interest on Drawings
were not settled by them
@ Share of profit: Raman , 1,00,000; Danish , 1,50,000.
@ Share of profit Raman , 1,25,000; Danish , 1,25,000.
© Share of profit: Raman, 1,50,000; Danish f 1,00,000.
@ None of the above.
(II) If the firm Incurs loss off 1,00,000 and partnen agree to allow Interest on capltals@5% p.a.
@ Share of Loss: Raman , 50,000; Danish , 50,000.
@ Share of Loss: Raman f 40,000; Danish f 60,000.
© Share of Loss: Raman f 60,000 ; Danish , 40,000.
@ Share of Loss: Raman f 58,000; Danish f 87,000.
(Iii) If the firm eam:s profit off 1,00,000 and they agree to allow for Interest on capitals@ 6% p.a.
@ Share of Profit: Raman f 18,400; Danish f 27,600.
@ Share of Profit: Raman f 18,400; Danish f 18,400.
©
Share of Profit Raman f 40,000; Danish f 50,000.
@ No profit Is transferred to partners' capital accounts.
(iv) If the firm eams profit off 33,750 and they agree to allow for Interest on capitals@ 5% p.a.
@ Share of Profit: Raman f 15,000; Danish f 18,750.
@ Share of Profit: Raman, 13,500; Danish f 20,250.
© Share of Profit Raman f 18,750; Danish f 15,000.
@ Share of Profit Raman f 20.2S0; Danish f 13,500.
4. Akhil and Bipul were in partnership. On 1st April 2020, they had capitals off 5,00,000 and f 3,00,000
respectively, General Reserve existed in the Balance Sheet at f 50,000 and also Profit and Loss Account
(Credit} off 1.00,000 (accumulated profits). On 1st October, 2020. Akhll advanced , 1,00,000 as loan to the
firm and on the same date, the firm advanced loan of f 50,000 to Blpul. Both the loans were without an
agreement. Interest on Capital is to be allowed @ 5% p.a. as a charge. Manager's Commission off 20,000
was not yet allowed. Loss for the year before allowing and charging Interest on loans was f 50,000.
Answer the following questions on the basis of above.
(i) Interest on Capital
@ will be allowed by debiting Profit and Loss Account (Accumulated Profits).
@ will be allowed by debiting General Reserve.
© will be allowed and It will Increase the amount of loss.
@ will not be allowed.
(11) Interest on Loan lby Akhll
@ will be allowed tD 6116 p.a. and debited to Profit and Loss Account (Accumulated Profits)
because the firm has Incurred loss during the year.
@ will be allowed @ 6~ p.a. and debited to General Reserve because the firm has Incurred loss
during the year.
© will be allowed @ 6% p.a. and debited to Profit and Loss Account, which will Increase the
amount of loss.
@ will not be allowed because the firm has Incurred loss during the year.

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 M•lti1'lt Otoi« Qlltst io,u MCQ. 17

("Iii) lnmes t on loan to Bipul

@ will be charged 6~ p.a. illnd credited to Profit illnd loss Account (Accumulated Profits)
@
.
@ wm be charged @ 6~ p..a. illnd aedite d to Genffilll Reserve.
© will be charged @ 6~ p.a. illnd credite d to Profit illnd Loss Accou nt
@ \Otill not be charged.
("tV) ~ ' s Commission of , 20,000

@ wm be illllowed illnd debited to Profit illnd loss Account (Accumulated Profits).

@ will be illllowed illnd debited to Gener11I Reserve.
© wiU be illllowed and debited to Profit illnd loss AccounL
@ will not be illllowed.

5. Na~ Hitesh illnd Pawsh are l)illrtnefS sharing profits in

the nitio of 3 : 2 : 1 after allowin g interest
on apital s@ 8% p.a. and Sill!My oft 80.000 p.a. to Hitesh. Net profit
for the yea, ended 31st Match,
2021 WAS, 8.'40.000 and balances I n ~ Accounts were Nares h-t 2.00.000;
Kitesh -f 1.S0.000
and P a ~ 1,20,000. Namh expressed his desire that his son Harish
be admitted as partner w.e.f:
1st January, 2021 for one-th ird of his share. which he will forgo in his favour.
However, Pavesh objects to
his proposal citing that as per the partnership a partner annot be admitt
ed unless all the other partners
agree. Hitesh. however, has no objection to his admission. Namh and Pawsh
object to salary being
allowed to Hitesh and demand that they also be paid equal salary as Hitesh
as they were also handling
the business. Discussion was held and thereafter, it was agreed that from
the financial year, both. Naresh
and Pawsh will be paid yearly salary of, 60.000 each. As far as the CWTffl
t year ls concer ned, they wtll be
paid Commission O 5~ of net profit each.
Based on the aboYe inform ation, choose the COffl!Ct answers to the questio
ns.
Ii) Harish
@ canno t be admitted as a partne r because all the partners should agree to admitt
ing a new
partner, In the absenc e of ill clause to this effect in the Partnership Offd.
@ c.an be admitt ed as a partne r becaus e majority partne rs (Naresh and
Hitesh) do not have
objection to his admission.
© can become a partne r since Naresh ls forgoing his share of pn,flt In favour
of Harlsh. Remaining
partne rs are not affecte d by the admission.
@ can be admitted even If Hltesh and Pillvesh both obJKt to the admission of Harlsh.
(ii) Pi11VeSh's share of residual profits for the year will be
@ , 1,06,400. @ , 3,n .200.
© , 2,64,800. @ f 2,98,000.
(iii) Total amoun t of Appropriations credited to Hltesh ror the year will be
@ , 2, 12,800. @ ' 2,24,800.
© f 3,04,800. @ '3,19,600.
:
(Iv) Commission payable to Naresh. Hltesh and Pavesh for the yeillr wlll be
1 @ , 42.000. NII, , 42,000 respectively. @ NI~ NII and Nn.
© , 42,000; , 80,000; , 42,000 respectively. @ , 42,000 to Naresh and Pavesh.
j •

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MCQ .18 An Aid to Accou nt•ncy -CBSE XII

! ANSW ERS '

( Multip le Cholc. Questions (MCQ1) )

1. (al 2. (a) 3. (ell 4. (al

S. (bl 6. (d) 7. (d) 8. (dl
9. lbl 10. (bl 11. (cl 12. (c)
13. (bl 14. (dl 15. (b) 16. (cf)
17. (al 18. (a) 19. (c) 20. (d)
21. (al 22. (d) 23. (bl 24. (a)
2S. (di
a..son: Total interest on capltal = f 12,000 (Vklit) + , 24.000 (Seema) • , 36,000. However, total
distributable profits are , 18,000. Therefore, total profits of , 1B,000
will be distributed
betwee n Vklit and Seema in the ratio of their Interest on capita~ i.e.,
In the ratio of 1 : 2.
Interest on Vidit's Capital : , 18,000 x 1/3 = , 6,000.
26. (cl 27. (bl MaNger"SCommission = ('S,80,ooo - , 1,60.0001x 5/105 =f 20,000.
28. (al
Ruson : Total Remuneration of Z = Salary + Commission
: '96,000 + 5/ 10S ~ 13,S6,0 00 - f 96,000 )

29. (b)
= '96,000 +,60.000 ='
1,S6,000.
30. (b)
31. <al Since date of drawings is not given, Interest on total drlWings Is cakula
ted for 6 months.
32. lb) Interest on Drawings=, 1,20,000 x 2-.. " ~
100 12
=, 2,750.

n ~ ~ ~ 1s. ~1 ~ ~
37. (b) 38. (a) 39. (b)
40, (a) Interest on Drawings= Cl' 20,000 x 6/100) + Ct 40,000 x 6/100 x 6/12))
. , 2,.400.
41, (c) 42, (cl
43. Cc)
Wotlrhtf ,.,,_:
Net Profit (H given) ' '
1,50,000
Lns: Interest on Loan 5,000
Partners' Salaries 25,000 30,000
Correct Net Profit 1,20.000

Ram's share of profit • 1/2 of , 1,20,000 =,

60,000
Ram's total appropriation = , 60,000 (Profit) + , 15,000 (Salary) • , 75,000
.

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 M,dtiple Cltoiu Questions MCQ.19
44. (d} 4S. (c) 46, (bl
47. (il (I)

W'ortl"f Norw:
N•t Profit (Is given) '
84,000
uss: lnt~st on Capital (8/1100 C' 20,000 +, IS,000 +, 12,000)1 3,760
rs s.11ry 8,000 11,760
IOMsible profit 72,240
Zs s~re of profit = , 72,240 x 1/6 = , 12,040
(ii) le)
Cokulotions:
Amount credited to Y = , 8,000 (salary) + t 1,200 (lnte rest on capital) + f 24,080 (profit, I.e.,
t 72,240 )( 1/3) = f 33.280.
ADJUSTMENT TABLE
A 8 C firm
Particulars Dr. m Cr.(t) 0r.m er. ro Dr. (t) c,.m 0r.m er.m
Interest credited to be cancelled 10,000 - 20.000 - 30,000 - - 60.000
Interest to be paid
Shri:lg the abcM profit
- 9,000
.
- 18,000
- 27,000 54,000 -
f 6,000 (4 : 3 : 3)
- 2,400
11,400
- 1,aoo
19,800
-
30,000
1,800
28,800
6,000
60,000
-
60,000
Total 10,000 20.000
Oitreieuce '1,400 C,. , 200 Dr. f 1,200 Or.
49. (cl
flvaor.: Zs Actual share of profit= t 99,000_x 1/11 = t 9,000.
Deficiency = Guaranteed Profit~ 9.000 = , 15,000 - f 9,000 = t 6,000.
X's Share In Profit= (T 991000 x 6/11) - t 6,000 (Deficiency borne)= t 48,000.
so. (.a)
ADJUSTMENT TABLE
Particwl,rs Preetl (f) Mona(t) Nisha (t)
Profrt illre.ady aedited (t 3,30,000 in I : 1 : 1) 1,10,000 1,10,000 1,10.000

Profit to be credited It 3,30,000 in 3 : :1 : t) . 1,65,000 1,10,000 SS,000

Net Effect
{SS,000) ... 55,000

Credit Debit

51. (bJ
ADJUSTMENT TABLE
X (t) y ,,, z (') Total (f)
hrtkul¥s
30,000 30,000 15,000 7S,000
D.wt Profit already distributed In 2 : 2 : 1
25,000 25.000 25,000 75,000
Cndlt Profrt to be dlsttlbuled equally
S,000 5,000 10,000 ...
Ntt Effect
Debit D,blt Credit

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 -·-
M CQ .20 An Ai tl to Acco1ntt•11cy - C8
st
"11
( A11•rtlon•R•a1on Baaed Qu
e1tlon1 )
1. (b) 3, (c)
2. (bl 4. lb)
S. (b) 7, (bl
6. (cl) I. (a)
9. (b) , , • (1)
10 . (b) 12. (d)
11 . (b)
14 , (dl 15 , (dl 16 . kl
17 . (c)
18 , (dl 19 , (C) 20, (b)
21 , ldl
22 . (bl 23 . (dl 24 . (d)
25 . (bl
26. (bl 27 , (bl 2&. (d)
29 . (d)
30 . (c)

( case St ud y Based Questions )

1. (i) (bl
CGkulotiofll:, 1,49,300 +, 25 .00 0- , 8,300 (Manager's
Commission (f 1,74.300 x S/ 105
)1 -=, 1.66,COJ.
Oil (cl
Cakulcltions:, 1,49,300 +, 25.000 - , 8,300 l ~ S
Commission (l 1,74.300 x 5 / 1051] • , ' ~
(Ill) (a)

Amount tnn1ferred to Ca
pital Acmunts:
Am ris h- f 85,60 0 c, 2S,000, Interest on Capitill + , 60,600, profit sha
Yo ge sh -f 80,400 l' 15,000, re).
lntere.rt on Capital + , 25,00
0, Salary + f 40,~ . profit share).
(Iv) (a)

M1nage_r Is an employee of the

firm. Thus, amount payable to
against profit. him as salary or commission
Is a <NIP
M (dl
5/ 10 5 of , 1,74.300 Cf 149,3 00 +, 25,00 0 (Yogesh's Salary)) ..
, 8,300.
2. (I) (dl
Explonotlon: Chaman' sha
re of profit com es to , 50.000 t, 3,00,000 x
he will be allowed , 60,000 1/6 ). Since the re Is a stiortfll
as profit share 'being the guara
' 2.40.000 wlll be distributed nteed pro fit Balance fP"
between Amar and 81nod
in the ratio of 3 : 2.
(ii) (b)
Deficiency of ' 10,000 will
be borne by Amar (f 8,000)
f l,4·2,000 (f 1,50,0 00 - '8, and Blnod (f 2,0 00 ). HenCl:e
00 0) and Blnod will ge t, 98 , Amil win gt,
,000 Cf 1,0 0,0 00 _, 2,000),
(111) (~)
MulHpl1 Cltoitt Qw1Ho1t1 MCQ.21

(Iv) (di
Wortlnf Nm:
Profit after lntmst on capital• t 3,00,000 - t 72,000 (Interest) = t 2,28,000;
Chlm1n's sh1re of proflt • , 2,28,000 K 1/6 • t 38,000, which Is less than guaranteed profit,
I.e., t 60,000.
Profit aft.er gU1rantffd profit• t 2,28,000 - t 60,000 • t 1,681000, which Is distrusted between
Amar and Blnod In the ratio of 3 : 2.
J. (i) (al

RHson: P\'oflt sharing ratio Is agreed between the partners as 2 : 3. The profit wlll be distributed In
that ratio wtthout allowtng Interest on capltals and remunemlon and charging Interest on
draw'.,gs.
(ill (bl (Hint: lntmst on e1plt1I Is not allowed In this case.)
(iii) (a)

RHson: Interest on Clpltal to be allowed o 6% p.1 and blllnce profit to be distributed In the
profit-sharing ratio.
(iv) (c.)

RHson: Interest on Clpltal to be allowed O 5% p.1. Since, the profit to be distributed Is not
adequate to allow Interest on capital, profit will be distributed In the r1tio of their Interest
on capitals. /.e., 2S : 20.
4. (0 (c)

Interest on Clpltal Is allowed, It being a charge against profit. In this case, even If the firm has Incurred
loss. Interest will be allowed on capitals.
(ii) (cl
Interest on Loan by Akhil wtll be allowed O 6% p.a .. It being a charge against profit.
frill (di
Interest on Loan to Bipul wiU not be charged, beau.se the partners have not agreed to nste d lntl'feSt
to be charged. ln the absence of Partnership Deed, provisions of Partnership Act, 1932 apply, which
does not provide for charging interest on Loan to Partners.
(iv) (cl

Manager's Commission will be allowed, It being a charge and therefore, Is to be allowed whether the
firm eams profit or Incurs loss.
5. 01 (a), (II) (a), (Iii) (c), (Iv) (a)

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